Kaohoon Morning Brief – 26 August 2021

Morning brief of major stories since the closing of Thai stock market on 26 August 2021.

1) U.S. crude inventories fell in the latest week

The Energy Information Administration (EIA) stated that U.S. crude stockpile fell 2.98 million barrels last week, compared with analysts expectations for a drop of 2.68 million barrels. Meanwhile, crude stocks at Cushing, Oklahoma, rose by 70,000 barrels.

West Texas Intermediate (WTI) closed 1.2% higher at $68.36 per barrel, while the international benchmark Brent crude closed 1.7% higher at $72.25 per barrel.


2) Goldman Sachs says BOT new support measures are favourable for Thai banks

Goldman Sachs expects the new support measures, introduced by the Bank of Thailand last week, will benefit Thai banks as the lowering of the Financial Institutions Development Fund (FIDF) fee of 0.23% will help ease the burden on their margins. Goldman Sachs estimated that the extension of FIDF to late 2022 will come with a policy rate hike to mitigate earnings pressures on the banks.

The Thai banking sector gained a total of 7.39% after the announcement of BOT’s new measures.


3) U.S. 10-year yield rose to one month high

The U.S. 10-year Treasury note rose as high as 1.352% on Wednesday, reaching its highest level since earlier in the month when it yielded as much as 1.364%.


4) JPMorgan expects Thai market to bounce back

JPMorgan has a bullish outlook on Thai market after outperforming EM/AxJ region by 7-8% over the last one month, seeing five catalysts to drive the market: 1) gradual easing of pandemic; 2) swift vaccination rate; 3) booming exports; 4 )fiscal policy; and 5) growth potential.


5) Pfizer-BioNTech and Oxford-AstraZeneca vaccine show less effectiveness after two doses

400,000 people under the study in the U.K. who had received both shots of the Pfizer-BioNTech vaccine found its effectiveness fell to 74% after five or six months. Meanwhile, a study in 700,000 people who had received both doses of the Oxford-AstraZeneca vaccine showed that the effectiveness of the vaccine fell to 67% after four to five months.


6) Bank of Korea hikes base rate 25bps to 0.75% as expected

The Bank of Korea is the first major economy in Asia to hike rates in the Covid-19 pandemic era by 25bps to 0.75%. The Korean stock market fell slightly by 0.13% after the announcement.

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