AS the US Federal Reserve has indicated that it will likely hike interest rates sooner this very month such a move will lead to the Thai stock market fluctuating as money flows out in the short term with the SET Index’s March range to be 1,530 to 1,550 points, Thai News Agency quoted KTB Securities Thailand (KTBST) as saying today (March 5).
Win Udomrachtavanich, KTBST’s executive chairman, pointed to US President Donald Trump’s address to the joint session of Congress on March 1 where he said he is taking steps to spur the US economy as promised while campaigning and will be investing 1 trillion dollars in a national infrastructure program and will also be reforming taxes with this being positively received by the market as both US dollar and the Dow Jones Futures rose.
This could also be the reason why the US Federal Reserve will likely hike interest rates at its next meeting on March 14-15. The market pricing of a March hike has risen from 52 to 80%.
.According to KTBST’s assessment, if the Fed does hike rates this month it could lead to investment funds flowing out of emerging markets including Thailand.
The would have an overall impact but it would not be substantial with KTBST’s advise to investors being to increase their cash holding and wait to buy stocks when the SET index drops lower than 1,550 points.
The couple of weeks before the Fed meeting the market will be more turbulent than usual but it is also affected by other factors such as the outlook of oil price, election in France and any new economic policies this government introduces and for this reason KTBST expects the SET Index to move in the range of 1,530-1,550 points in March.
Top: An artistically designed image of the directions of stock markets. Photo and design: http://401kcalculator.org (CC-BY-SA-2.0)
Inset: KTBST’s Win advises investors to wait and buy stocks at the expected upcoming dip. Photo: Thai News Agency