Strategy Note /

Thai: Thai Market Strategy - Alpha plays for (near) the end of the mini Ice Age

  • 2022 multiverse of madness—the end is in sight

  • Follow the light …

  • …and embrace sustainability in 2023’s multipolar world

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
13 December 2022

Global equity markets have been roiled by the battle between the economic downturn and the last rate hike. But the end is in sight. We expect inflation to materially decelerate in 2023 and economic headwinds to ease enough to avoid a deep recession. That could rekindle risk appetites, sparking the new equity bull run in 2023.

2022 multiverse of madness—the end is in sight

Peak inflation? Growth recession? Fed pause (pivot)? These uncertain-ties have caused market turbulence throughout 2022. Looking to 2023, the start of a new equity bull run is close, we believe. US headline CPI probably peaked in 2Q22; we expect that headline CPI peaked in Thai-land in 3Q22 and will peak in the EU in 4Q22, suggesting that the US Federal Reserve’s tightening cycle will peak soon and economic headwinds will ease. That may be enough to avoid a hard landing, as the US labor market remains strong—the Fed’s last Open Market Committee projected unemployment at 4.4% for both 2023 and 2024 (below the average for past recessions of 5.7%). And there would be scope for upside if the Fed were to pivot sooner than expected.