Thailand’s SET Drops Below 1,600-Level amid Broad Sell-Off in Big-Cap Stocks

The SET index in Thailand dropped below the 1,600-level in early trading on Wednesday, following losses in regional markets and due to a broad sell-off in big-cap stocks. The baht also briefly weakened to THB38.00 per dollar.

As of 10.09 a.m. Thai time, the SET index was at 1,596.87, dropping 13.71 points or 0.85%, with a trading value of THB9,555 million.

The stock and bond markets both saw outflows, which combined to further weaken the Thai baht. World Bank growth projections for East Asia and the Pacific have been reduced due to weakening global demand, rising debt, and inflationary pressures.

The bank said on Tuesday in a report that growth in East Asia and the Pacific, which includes China, would drop to 3.2% in 2022, down from its 5.0% forecast in April, and the previous year’s growth of 7.2%. However, the pace of expansion will pick up next year.

Meanwhile, the World Bank raised Thailand’s growth forecast to 3.1% this year, citing private consumption and exports, but lowered its projection for 2023 to 4.1%.

Another risk to the region’s prospects is the aggressive interest rate hikes that central banks around the world are doing to tackle growing inflation. According to the World Bank, they have resulted in currency devaluations and outflows of capital.

Maybank Securities (Thailand) (MST) said that the key event to watch today is the Bank of Thailand’s Monetary Policy Committee (MPC) meeting. The market expects it to raise interest rates for the second time this year to cool the high inflation down. They give it a 78% chance to raise the interest rate by +0.25%, while the other 22% look to +0.5% hike.