Three Significant Factors to Greatly Affect Thai Stock Market before Year-End

Only 10 days left before the trading of 2018 ends. We have seen a high time at the beginning of the year when the Stock Exchange of Thailand (SET) hit 1,838.96 points on January 24, 2018. There was also a low time of the year in October, started with a 10-year high bond yield and a change of mind of investors to seek for safe assets instead of a risky investment in stock markets. The sinking in oil price and back and forth tariff hikes between US-Sino trade war were the reasons behind the slump in the second half of 2018.

Although the stock markets made some recovery in December, wild sessions in daily trade still roller-coaster now and then. As the year is coming to an end, there are a few things that must be closely watched as the results will likely have some effects on the Thai market.

 

Fed’s Rate Hike
The Federal Reserve (Fed) is almost certain to raise interest rates by 0.25% for a fourth time this year at the conclusion of its two-day policy meeting at 2:00 PM ET (19:00 GMT) on Wednesday. The fourth rate hike is expected by the market, but the most important issue will come afterward as Fed Chair Jerome Powell will hold a press conference, which is believed to contain a clue on how he views inflation trends and the economy and how that will impact the pace of monetary policy tightening next year.

Fed’s rate hike may reflect a negative outcome for SET as foreign investors have been pouring over ฿28.5 billion while seeking elsewhere for their investment.

 

Thailand MPC Rate Hike
Thailand Monetary Policy Committee (MPC) will be holding a meeting to consider a rate hike on Wednesday as well. An expectation from this meeting was believed to conclude with 0.25% hike, but as the inflation rate recently came out considerably low, while the liquidity of commercial banks is very high, MPC may maintain the interest rate as it is.

 

U.S. 3Q GDP
This Friday, December 21, 2018, the U.S. Commerce Department is to release final figures on third-quarter economic growth at 8:30 AM ET (13:30 GMT). The final estimate of the US 3Q GDP confirms 3.5% growth in the three months ending September 30, 2018, as forecast, while the GDP grew 4.2% in the previous quarter.

Lukewarm inflation, a steep drop in oil prices and dwindling effects from President Donald Trump‘s tax cuts have underlined concerns that the robust economic growth in the U.S. over the past year may be coming to an end.

 

There are only two weeks left for happy holidays, but the stock markets may or may not finish the year as bright as what has been expected.