Kaohoon Morning Brief – 28 August 2023

1) FSS expects SET Index to continue on a positive trend as market hopes for stimulus measures

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to continue moving in a sideways-up trend to test the resistance level of 1,560-1,570 points. The mid and long-term outlook would be positive if the market can break this resistance level. The analyst expected domestic-play stocks to continue supporting the market in anticipation of the new government’s stimulus measure to boost Thailand’s economy from 4Q23 throughout 2024.


2) Markets expect Fed’s first rate cut in January 2024 after final hike in November

Federal Reserve Chair Jerome Powell on Friday called for more rate tightening to fight inflation, warning that additional rate hikes could be coming.

At the Jackson Hole Symposium, Powell acknowledged that progress has been made, saying the central bank will act carefully moving forward. The chairman said inflation is still above where policymakers feel comfortable as the target is set at 2%. He noted that the Fed will remain flexible and will use economic data to decide the monetary policy.

Currently, market expectations for the path of the Fed Funds Rate are a pause in September, a 25bps hike in November, before a pause in December and a first cut in January for a quarter point. The next cut is expected to be in June 2024.


3) China Evergrande plunged 90% after resuming trade in Hong Kong

China Evergrande Group saw nearly a 90% plummet at the open on Monday, the first trading day after being suspended since March 21, 2022.

China Evergrande was last traded at 1.65 Hong Kong dollars per share. Shares fell to as low as 22 Hong Kong cents at the open.

The company reported a revenue of 128.81 billion yuan for its six months ended June 2023, rising from 89.28 billion yuan in the same period of last year. China Evergrande still reported a total net loss of 39.25 billion yuan for the first half of this year, but smaller when compared to 86.17 billion yuan of net loss in the first half of last year.