Market Roundup 22 May 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,529.24 points, increased 14.35 points or 0.95% with a trading value of 55 billion baht. The analyst stated that the Thai stock market moved wildly in today’s session, plunging sharply in the morning and finished higher at the closing from a buyback in big-cap stocks after a series of decline last week. The signing of MOU for the coalition government had a positive impact on the market as some public controversies were left out, giving the opportunity to form the government.


2) Economists now expecting Fed’s rate cut in 2024

Economists’ expectations have shifted toward the US Federal Reserve’s stance on monetary policy, with the majority of respondents now predicting that the central bank will cut its target rate in the first quarter of next year, the survey released by the National Association for Business Economics showed on Monday.

In the NABE survey, opinions were divided on whether the US economy could fall into a recession. However, the majority of respondents expected that the economy would continue to grow at a modest rate until 2024, with a growth rate of 0.4% predicted between 4Q22 to 4Q23.

Economists predict a 3.3% annual increase in inflation for consumer prices in 2023, up from their previous forecast of a 3.0% rise.


3) Thailand’s foreign investment in 1Q23 surges 115%

The Board of Investment (BOI), foreign investment agency, stated that investment applications between January and March rose 77% from the same period of last year, reaching 186 billion baht, led by projects in the electronics, food and automobile sectors.

Foreign investment accounted for 155 billion baht of the total investment amount in the first quarter of 2023, up 115% from last year.

South Korea was the biggest investor during the period, pledging 31.4 billion baht in the quarter, followed by Singapore, China and Japan.


4) Thai banking system remains resilient with robust capital, liquidity

The Bank of Thailand said on Monday that the country’s banking system is still resilient thanks to high levels of capital, loan loss provision, and liquidity, all key drivers for bolstering the country’s economic recovery.

In 1Q23, loan growth in the banking sector slowed to 0.5% YoY due to government, major businesses, and soft credit facility loan payback and bank portfolio management. However, mortgage, consumer, and finance and trading corporate loans grew.

With continued loan portfolio management and assistance for debtors undergoing debt restructuring, the total amount of non-performing loans (NPLs) in Thailand fell to THB498 billion, or an NPL ratio of 2.68%.

Loan expansion and the interest rate hiking cycle offset fund expenses from rising deposit rates and FIDF fee normalization, BOT added. Net profit fell 4.0% QoQ due to increasing cost of capital and the high base effect from banks’ sale and transfer of consumer loans to subsidiaries.

The debt serviceability of highly leveraged households with poor income recovery, as well as the recovery of private sectors, should be continually tracked going forward. There was no change in the ratio of household debt to GDP, but the ratio of corporate debt to GDP continued to fall.

Companies’ profits may have decreased, but their financial situations are still in good shape, according to the Bank of Thailand.