Market Roundup 1 March 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,619.98 points, decreased 2.37 points or 0.15% with a trading value of 59 billion baht. The analyst stated that the Thai stock market dropped sharply at the closing and broke the resistance level of 1,620 points amid weak 2022 and 4Q22 earnings results.

The analyst expected the market to revise estimates of listed companies’ performance down after missing expectations last year.


2) Joint business group expects Thailand to avoid recession despite weak exports outlook

Thailand’s economy could avoid technical recession this year on the support from a rebound in tourism, despite the country suffering a minor slowdown in the fourth quarter of 2022, said the joint business group on Wednesday.

The Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) anticipated that the Thai economy will not suffer a technical recession in 2023, owing to a strong recovery in the tourism industry, which allowed the economy to recover in the first quarter of this year and put it back on track for growth.

However, due to sluggish global demand, Thai exports are likely to fall by -1% to 0%, compared to a previously estimated growth of 1% to 2%. Apart from Thailand, export rivals such as South Korea and Taiwan are also hurt by the global manufacturing slowdown.

In 2023, the Thai government predicted that the country would receive 25-30 million tourists internationally, which would improve GDP growth by 3.0%-3.5% and keep headline inflation at 2.7%-3.2%.


3) BofA Expects Fed to Raise Rates to 6% as US Economy Dipping into Recession in 3Q23

The U.S. Federal Reserve may attempt to increase its policy rate above market’s consensus to nearly 6%, the Bank of America Global Research said, citing that strong U.S. consumer demand and tight labor market would put pressure on the central bank to extend its fight with inflation.

The figure estimated by BofA was much higher than a peak of 5.4% by September anticipated by the market.

The bank wrote in a note that aggregate demand needs to weaken significantly for inflation to return to the Fed’s target, which would be around 2%. Meanwhile, further supply-chain normalization and a slowdown in the labor market will help, but only to a certain level.

BofA also added that the processes are taking longer than the bank and markets anticipated.

The bank expected the U.S. economy to dip into recession by the third quarter of this year.


4) Goldman Sachs expects 50 bps rate hike by European Central Bank in May

Goldman Sachs revised up its prediction for the European Central Bank’s next interest rate hike, expecting that the central bank would lift a rate by 50 basis points at the meeting in May. As a result, the terminal rate would peak at roughly 3.75% by June.

The bank had previously estimated that the ECB would raise rates by 25 basis points in May, reaching a maximum of 3.5% in June.