1) FSS recommends accumulate while market corrected
Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move positively within 1,570-1,590 points as the situation regarding the banking crisis eased and regulators came out to reassure their support, resulting in fund flows leaving safe assets to riskier assets.
The analyst recommended investors to accumulate stocks while the market is correcting, focusing on Domestic Play.
2) Rate hike in May back on the table
Expectations for an interest rate hike in March have returned ahead of the last day of the Fed’s meeting on Wednesday. The base case now shows an 85% probability of a 25 basis points rate hike and also a 60% chance for another 25bps hike in May. Just last week, the base case showed no more rate hikes ahead.
According to the CME FedWatch Tool, there is a 84.9% chance that the Fed will hike rates by 25bps today and only 15.1% chance that the central bank will pause.
Billionaire Stanley Druckenmiller stated that once inflation gets above 5%, it never comes down unless the Fed Funds rate has gotten above the CPI, which is now currently at 6%.
3) First Republic rushes to raise cash by selling business units
First Republic is examining how it can downsize and sell parts of its business units, including some of its loan book, to raise cash and cut costs, according to the report by Reuters on Tuesday.
Several reports stated that U.S. regulators and Wall Street leading banks are in talks to aid First Republic, while exploring the possibility of a government backstop that would help overcome the issue of the bank’s unrealized losses.
However, some people are getting nervous that if the government steps in, there might not be anything left for shareholders.
Shares of First Republic Bank dropped 9% in after hours trading.
