Market Roundup 20 September 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,507.90 points, decreased 15.06 points or 0.99% with a trading value of 54 billion baht. The analyst stated that the Thai stock market faced a selloff to lower the risk before the Fed’s meeting, while also keeping an eye on any signals for the outlook in the next gathering in November. Rising oil prices also resulted in investors taking profit in the energy sector, which weighed on the index. Foreign investors’ concerns over the new economic policy by the new government also pressure the market as well.


2) China’s housing crisis poses risks to global growth as ADB cuts Asia GDP to 4.7%

The Asian Development Bank (ADB) cut its growth forecast for Asia in 2023 to 4.7% from the 4.8% forecast in July. As for the growth forecast of the Asian economy next year, which consists of 46 countries in the Asia Pacific that exclude Japan, Australia and New Zealand, is slightly increased to 4.8% from 4.7% previously.

ADB has lowered its Asia growth forecast for the East, South and Southeast region this year. China and India are expected to grow 4.9% and 6.3%, respectively, slightly lower than July’s estimates of 5.0% and 6.4%. ADB said in the report that “China’s real estate crisis poses risks and may hinder regional growth”. It also maintained its 2024 growth forecasts for China and India at 4.5% and 6.7%, respectively.

The analyst warned regional governments of the challenges they will face in the future, such as food insecurity. This is despite this year inflation in developing Asia that has been falling to 3.6% from 4.4% last year, and will continue to slow to 3.5% in 2024, which will make central banks of each country continue to raise and ease their monetary policy at different rates.


3) UK inflation shrinks to 6.7% as market braces for 25bps rate hike

Inflation in the United Kingdom came in at 6.7% in August, showing a slight drop from the previous month and also below expectations.

Prices in the UK came down from 6.8% in July and surprised the market that forecast for a 7% increase, according to a Reuters poll.

On a monthly basis, the headline inflation rose 0.3%, lower than the 0.7% expected by economists and 0.4% decline in July.

Core inflation, which excludes volatile food and energy prices, came in at 6.2% YoY, a drop from 6.9% a month prior and 6.8% estimated.

The Bank of England will announce its next monetary policy decision this Thursday as the market is pricing in another 25 basis points hike, which would take the rate to 5.5%, the highest level since December 2007. However, the latest report showed that the market is now expecting a 47% chance that BOE will maintain rates at 5.25%, which raised from a 20% probability to pause prior to the inflation report.