Market Roundup 31 May 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,533.54 points, decreased 1.27 points or 0.08% with a trading value of 90 billion baht. The analyst stated that the Thai stock market fluctuated as investors continued to monitor the progress of debt ceiling bills, while being pressured by weaker-than-expected China’s PMI. Still, the Thai central bank maintained its positive outlook on the Thai economy. The MSCI Rebalance Index will lead to an inflow to the Thai stock market. The analyst expected SET Index to recover tomorrow.


2) Thai central bank votes unanimously to increase rate by 25bps to 2.00%

The Monetary Policy Committee (MPC) on Wednesday unanimously voted to raise Thailand’s policy rate by a quarter point, bringing the terminal rate to 2.00% from 1.75%. This increase is effective immediately. 

This announcement was consistent with market forecasts.

Economists believe May’s rate hike will be the final time in this cycle. Despite inflation has returned to the target range, a rise in interest rates will provide the central bank with greater flexibility to manage a potential economic downturn in the near future, said economists at Krungsri Capital Securities.


3) China’s May factory activity drops faster than expected on weak demand

China’s factory activity contracted quicker than anticipated in May, registering at 48.8, below the 50-point threshold that separates growth from contraction, official data showed on Wednesday.

In April, the official manufacturing purchasing managers’ index (PMI) reported by the National Bureau of Statistics (NBS) dropped to 48.8 from 49.2 in April, marking its lowest reading in five months. The PMI also failed to meet expectations of rising to 49.

The official services PMI dropped to 54.5 in May from 56.4 in April, showing that non-manufacturing activity expanded at its slowest pace in four months.