Kaohoon Morning Brief – 25 May 2023

1) KSS expects SET Index to move within 1,525-1,545 range

Krungsri Securities (KSS) expected Thailand’s SET Index to move within the range of 1,525-1,545 points. The latest report of Fed signalling to maintain interest rates at the June meeting and higher crude oil stocks after the U.S. reported lower inventories would be positive factors to the market. However, the negotiation to raise U.S. debt ceiling and outflow from the Thai market could also pressure the main index to fluctuate.


2) Fitch warns U.S. of potential downgrade if lawmakers fail to raise debt ceiling

Fitch Ratings put the U.S. on notice for a downgrade in credit ratings if the Congress failed to raise the debt ceiling before it runs out of money to pay its obligations, the so-called X-date.

Fitch put the “AAA” rating of the world’s largest economy on a negative watch in a precursor to a possible downgrade. This is a warning sign for a prompt action that the ratings agency did not take in 2011. During the extended debt ceiling negotiation more than two decades ago, Fitch Ratings did not downgrade the U.S. credit rating, while S&P cut rating to AA+ from AAA.


3) Chinese stocks lose all gains in 2023 amid strong headwinds

The CSI 300, which is the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, closed down 1.4% Wednesday, erasing all of its gains this year amid weaker-than-expected economic data.

Investors are losing interest in Chinese stocks after a sharp spike coming out of the world’s stickiest lockdown measure during the Covid pandemic.

Unfavorable economic data prompted leading financial firms such as JPMorgan Chase & Co. or Barclays Plc to cut China’s 2023 growth forecasts. A weaker Chinese yuan and developers’ financial woes added to persistent worries over growth and geopolitics, especially with Western countries.