Kaohoon Morning Brief – 3 May 2023

1) KSS expects pullback in SET Index before going into 4-day holiday

Krungsri Securities (KSS) expected Thailand’s SET Index to weaken to the range of 1,510-1,520 points, pressured by concerns over recession from the Fed’s rate hike, declining crude oil prices, banking crisis in the U.S. and the selloff to lower the risks before a 4-day holiday in the Thai stock market.

The analyst recommended GPSC, BGRIM,GULF, SCC, SCGP and TASCO that should benefit from lower crude prices and also banking stocks as 2Q23 results are expected to continue growing.


2) Market is still pricing in 25bps rate hike despite U.S. banks going down

U.S. lawmakers called out to the Federal Reserve to stop hiking interest rates as the FedWatch Tool is pricing in an 84.7% odds of 25 basis points rate hike tonight despite three regional banks going down in 2023.

Morgan Stanley expects a 25 bps rate hike today and then a pause for the balance of the year.


3) Eurozone manufacturing activity in April falls at a faster pace

The Eurozone manufacturing activity declined in April, its first time since January and the fastest deterioration since May 2020, according to the final purchasing managers’ index (PMI) data released on Tuesday.

The reading came in at a 35-month low of 45.8, down from 47.3 in March and below 50, which separates growth from contraction.