Market Roundup 31 August 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,565.94 points, decreased 10.73 points or 0.68% with a trading value of 86 billion baht. The analyst stated that the Thai stock market edged lower, following the negative trend in the regional market after their three-day winning streak and pricing in the positive sentiment from the new government. There was a selloff in the energy sector after the government expected to cut gas and electricity prices.


2) UBS shares hit 15-year high

UBS shares jumped 4.9% to a 2008 high after the one-month delayed Q2 profit reported at $28.88 billion. It is the first quarter earnings report of the largest Swiss bank after acquiring the stricken Credit Suisse, while its subsidiaries’ still at loss over $10.54 billion in Q2.

UBS paid a discounted $3.4 billion to acquire Credit Suisse in March. The Swiss bank noted that the goodwill or a fair value of assets from acquisition had gone negative at $28.93 billion after the acquisition. Its profit before tax, which excludes negative goodwill and acquisition costs, came in at $1.1 billion.

A $28.88 billion net profit for the second quarter was higher than a net profit of $12.8 billion forecast by analysts in a Reuters poll.


3) Cooler PCE data could change Fed’s hawkish stance

The second revision of U.S. 2Q23’s PCE was at the year low of 2.5%, less than 4.1% in the previous quarter and 7.5% peak in 1Q2022. Meanwhile core PCE or PCE excluding the volatile food and energy price was at 3.7%, compared to 4.9% in the previous quarter and the 6.1% peak in 2Q2021.

If the trend continues, The US central bank should see a sign of the cooling down and might think about lowering the rate earlier than expected as the current stance is to stand the rate or might increase slightly. The CME FedWatch Tool still predicts 88.5% probability of the central bank maintaining its rates at 5.25% to 5.50% on this upcoming 20 Sep FED meeting and the earliest rate cut would be on 1 May 2024 with 35.8% probability on 5.00 to 5.25% rate.