MACROECONOMICS WEEKLY UPDATE

 CPI +5.98% YoY (exp. 6%) decreased from +6.41% YoY in September, due to reduction in oil price and fresh food price. 10-month average is +6.15% YoY

Core CPI +3.17% YoY (exp. 3.20%) increased from +3.12% YoY in earlier month, 10-month average is +2.53% YoY

While PPI +9.90% YoY, continue decreased for 4 months and be the lowest of 8 month

 Expect downtrend on inflation to continue to November because high base from last year, price adjusted from PPI and flood situation is better now

 The lower inflation is for good for TH Baht and make foreign flow to come to market

INDUSTRY   

PROPERTIES 

The Thailand Cabinet has approved a plan to allow high-income foreigners to buy landed houses of not more than 1 rai in exchange for making a 40 millions Baht investment with a minimum 3-year period in Bangkok and Pattaya area. They have withdrawn this topic from the meeting now because of the public’s concern.

AGRICULTURE 

Livestock demand recovered after flooding and tourism recovery. The domestic chicken price held stable at Bt45.5/kg, while the domestic pork price has rebounded 1.9% to Bt108/kg since late October. 

The demand for pork meat climbed higher on recovering tourism business and the easing of the flood situation. Overall, this is favorable to CPF’s local livestock business and to GFPT’s profitability. 

The Thailand corn price has fallen by 0.6% to Bt12.23/kg due to higher output after the end of the rainy season. Meanwhile, the CBOT prices of soybean and soymeal have risen by 4.0% and 0.6% to USD 14.52/bu and USD 420.4/ton on supply disruption in Brazil and growing export sales to China. 

The  soybean oil price has risen 7.9% from two weeks ago to USD0.77/lb on additional concerns about tight global vegetable supplies. This is unfavorable to feed producers but slightly positive to TVO.

TOURISIM 

AOT reported that international passengers in the Nov 1-7 period declined by 47.1% from the pre-COVID-19 level, which was a lower decrease compared to a decline of 55.8% in Oct. International flights fell 43.6% YoY. 

It is  expected to see a strong recovery in international passengers after the government canceled the Thailand Pass system in July and allowed foreign passengers to enter the country as they had before the COVID-19 pandemic. 

Domestic passengers fell 18.3% in the Nov 1-7 period, a lower decline compared to a drop of 19.3% in October. 

The AOT reported domestic flights fell 22.7% YoY, a higher decline compared to a decrease of 17.1% in Oct, which indicates a higher load factor for airline operators during the period.

BANK AND FINANCE

Thailand Baht has fallen volatile as it  fell early in the week along with other Asian currencies following the CNY’s sell-offs after Chinese PMI surveys for October came out weaker than expected. However, the Baht rebounded before the FOMC meeting, which was expected to send signals of a slower tightening cycle. Nevertheless, it pared gains somewhat after the FOMC meeting. Although the Fed raised its benchmark rate to 3.75-4.00% as expected, the Fed Chair’s remarks over concerns about inflationary pressure signaled that the Fed would not pause its rate-hike cycle in the near future.

The Baht recovered later in the week in line with net foreign bond buying-orders, particularly short-term bonds, while the US dollar fell on position adjustments ahead of the release of the US job market data for October

Thailand SET Index

SET index trade in 1600 – 1650 with PE 15.7X

Foreign investors were net buy in both equities and derivatives market.

Slowdown trend on inflation in TH and US is catalyst for investment.