Following a decline of over 1.5% yesterday, the Stock Exchange of Thailand (SET) dropped below the 1,450 factors mark. This follows mounting apprehensions regarding escalating public debt and financial progress after the World Bank scaled down its forecast for the Thai GDP.
Daol Securities (Thailand) noted selling pressure from the majority of investor groups due to persisting worries in regards to the Federal Reserve’s potential interest rate hike. The baht, in response to the continual appreciation of the US bond yield and dollar, has fallen to an 11-month low, dipping below 37 baht (US$1).
The Thai bourse, closely reliant on power shares, has also been impacted by a decline of over 2% in world oil costs.
Daol Securities famous that as buyers progressively scale back dangers, we foresee a continued decline within the SET index because no constructive factors have been noticed within the Thai market recently.
The brokerage additional famous that investors’ preference to hold money represents a adverse pattern for the inventory market. On the home front, there are concerns concerning the high degree of household debt and the potential growth of the common public debt ceiling.
Unconventional revised its Thai GDP forecast for 2023 from three.6% to 3.4%, and its 2024 outlook from 3.7% to 3.5%, attributing it to an export slowdown and growing public debt doubtlessly pressurising private and non-private investments, reported Bangkok Post.
Oil pipeline
Meanwhile, following a six-month closure, Turkey plans to reopen the oil pipeline from Iraq this week, potentially rising the oil supply. Energy consultancy Rapidan Group means that Saudi Arabia may ramp up oil production as soon as the Brent crude worth surpasses US$90 per barrel.
Globlex Securities’ analysis director, Wilasinee Boonmasungsong, pointed to a number of negative elements at present burdening the Thai stock market. Most notably, the World Bank has expressed concern over growing household debt, which now approaches 80% of GDP, the highest within the region.
Foreign traders have offered Thai stocks value 157 billion baht this year, while other investor types have been internet patrons.
Investors are suggested to watch government policies and Commerce Ministry-released export figures and trade information this week, based on Wilasinee. She additionally urged investors to track third-quarter financial institution earnings reports, set to be gradually introduced in mid-October.
Asia Plus Securities (ASPS), nevertheless, believes that the SET index is unlikely to rebound, although the downside is comparatively low.
ASPS maintains that the updated Thai GDP forecast from the World Bank, still higher than different institutions, will barely have an result on the SET index.
It anticipates that financial stimulus measures will start displaying outcomes from the fourth quarter of this 12 months, with GDP predicted to peak within the second quarter of subsequent yr.
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