Market Roundup 5 September 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,547.86 points, decreased 0.82 points or 0.05% with a trading value of 42 billion baht. The analyst stated that the Thai stock market moved narrowly throughout the day after its previous hike at the end of August, resulting in limited upside. Meanwhile, the market was also pressured by higher inflation data in August and slowing down China’s PMI. Regional markets were also trending downward as well, the analyst added.


2) Fitch expects global slowdown to constrain growth in Thailand, banking system remains stable

Fitch Ratings said Thailand’s economy is constrained by a global slowdown, while the new government’s stimulus could lead to higher debt.

Meanwhile Fitch expects Thai banks to have some ratings headroom due to their improving performance, expectations of government and shareholder support.

Fitch noted that Thailand is not immune to the global backdrop, with exports contracting since October 2022, while tourist arrivals remain below pre-pandemic levels.

The rating agency believes the government could encourage policymaking, but the wide-ranging coalition will complicate and delay the budget for the fiscal year ending September 2024.

Thailand’s fiscal consolidation will be constrained by the government’s pledges to raise social spending, according to Fitch’s view. This would support growth in the short term, though it will put pressure on government debt to GDP unless the government can sustain a new uptrend in growth.


3) Thai inflation rises 0.88% in August

Thailand’s headline inflation rose higher-than-expected in August and also up by 50 basis points from the previous month, according to the report from the commerce ministry on Tuesday.

Consumer Price Index rose 0.88% in August from a year earlier, accelerating from a 0.38% increase in July. The reading was higher than the 0.61% expected in a Reuters poll.

The average inflation for the eight months is 2.01%, still within the target range of the central bank of 1-3%.

Meanwhile, the core inflation which excludes volatile food and energy prices, came in at 0.79% from last year, slightly lower than the forecast of 0.82% and 0.86% from last month.


4) Country Garden makes coupon payment to narrowly avoid default

China’s leading property developer, Country Garden, has announced that it made a late interest payment to creditors, cutting it close before the 30-day grace period on August 7 and avoiding a default.

The developer became the main focus last month after it missed coupon payment on two debentures totaling $22.5 million that had been sold in U.S. dollars.

Earlier, China announced further mortgage easing policies nationwide to boost its slumping economy, especially the residential property market. The measure came after the latest development in the property market that saw one of its biggest property developers Country Garden flagging for its first-ever default.