Market Roundup 27 March 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,593.37 points, increased 1.52 points or 0.10% with a trading value of 36 billion baht. The analyst stated that the Thai stock market moved in a sideways direction as investors were monitoring the financial crisis in Europe, Thai economic outlook and the upcoming monetary policy meeting. The analyst noted that the SET Index now has a strong base as risks over European banks have subsided.


2) First Citizens Bank agrees to buy SVB’s deposits and loans

First Citizens Bank agreed to purchase the deposits and loans of Silicon Valley Bank, the U.S. Federal Deposit Insurance Corporation announced on Monday.

About $90 billion in securities and other assets would stay “in receivership for disposition by the FDIC,” while another $72 billion will be purchased at a discount of $16.5 billion.

As part of the deal, the FDIC “received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million,” according to the statement.

First Citizens has approximately $109 billion in assets and $89.4 billion in total deposits.


3) Analysts expect Thai market to respond positively should Pheu Thai wins election

Maybank Securities and CGS-CIMB expect positive market reactions should the Pheu Thai party win the Thai general election on May 14. Based on previous general election responses, the May election will provide an uplift to the stock market.

CGS-CIMB bases this optimism on the assumption that the Pheu Thai Party would win the general election, which it says is highly likely based on polls.

Based on a 12-month future price-to-earnings ratio of 17.5 times, CGS-CIMB maintains its SET index target of 1,830 by end-2023.

Maybank Securities said that investor sentiment in Thailand’s stock market has generally improved during election cycles due to expectations of economic stimulus measures.

According to Maybank, the SET index has grown by 3.4% in the three months before an election and 5.4% in the month after each of the last five elections since 2001.


4) Energy sanction hits Germany hard as cities paralyzed by largest strike in decades

Transportation in Germany was paralyzed on Monday morning as the largest strike in decades hit Europe’s biggest economy.

The 24-hour walkout called by the Verdi trade union and railway and transport union EVG is the latest action of protest from the industrial workers that have been struggling with higher food and energy prices from inflation, causing living standards to plummet.

The strike caused two of the largest airports in Germany, Munich and Frankfurt, to suspend flights. Meanwhile, long-distance rail services were cancelled on Monday.

Workers are calling for a wage increase to offset the impact from inflation that recently reached 9.3% in February. High inflation in Germany is caused by the termination of Russian gas exports that the European largest economy has been relied heavily on for energy.