Market Roundup 21 July 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,529.25 points, increased 8.07 points or 0.53% with a trading value of 51 billion baht. The analyst stated that the market was buoyed by political development after the Move Forward Party officially handed over the right to form government to the Pheu Thai Party, coupled with a boost from positive earnings of the banking sector and the energy sector from rising oil prices. The analyst recommended investors to monitor political development and Fed’s meeting next week.


2) Japan’s core inflation reaccelerates to 3.3% in June, continuing above BOJ’s target for 15 months

Japan’s core consumer inflation rate accelerated again in June and remained above the central bank’s 2% target for the fifteenth consecutive month, according to data released on Friday, building to recent indications of expanding price pressures.

Consistent with the forecasts of the experts polled by Reuters, the core consumer inflation index increased 3.3% year-over-year in June. This was somewhat higher than the 3.2% increase seen in May.

The data comes ahead of the Bank of Japan’s (BOJ) closely watched policy meeting next week, at which the board will generate new quarterly forecasts and discuss whether conditions are ripe for the bank to begin phasing out its massive stimulus.

Kazuo Ueda, governor of the Bank of Japan, recently gave a signal that the central bank might keep its ultra-loose monetary policy in place for the time being, telling Reuters, “there was still some distance to sustainably and stably achieving the central bank’s 2% inflation target.”


3) SCB records nearly THB12 billion of net profit in 2Q23 as interest income surges 18%

SCB reported a net profit of net Baht 11.9 billion for the second quarter of 2023, up 18.1% YoY, from strong top-line growth, effective cost control and prudent risk management. For the first half of 2023, net profit increased 13.8% YoY to Baht 22.9 billion.

For the second quarter, net interest income rose 18.1% YoY to Baht 30.8 billion from quality loan growth strategy and expansion in consumer finance business.

Fee and other income increased 0.8% YoY to Baht 11.1 billion, reflecting a rebound in transactional banking and loan-related fee. Investment and trading income also increased 50.5% YoY to Baht 2.4 billion from mark-to-market valuation on investment portfolios.

Operating expenses went up 6.8% YoY to Baht 17.0 billion while total revenue grew 14.5% YoY. As a result, the cost-to-income ratio for the second quarter at 38.4% showed a further decrease from the previous quarter.

In light of the fragile economic recovery and higher risk factors arising from both domestic and external headwinds, the Company proactively set aside provisions of Baht 12.1 billion, up 18.0% YoY, to strengthen operations of banking and unsecured consumer finance business. Therefore, the provisioning raised the non-performing loan (NPL) coverage ratio for the quarter to 170.6%.

The overall loan quality remained under control at the end of June 2023 as the NPL ratio stood at 3.25%, down marginally from 3.32% at the end of March 2023. The capital adequacy ratio remained strong at 18.7%.