Kaohoon Morning Brief – 16 June 2023

1) KSS expects fluctuation of foreign flows could drag SET Index down

Krungsri Securities (KSS) expected the Thai stock market to move between 1,550-1,570 points. Global markets are speculating that the Fed’s hike cycle is nearly at its end, while the economy in other countries showed that inflation started to slow down. Meanwhile, China is trying to boost its economic recovery as seen by the attempt to cut its one-year medium-term lending facility (MLF). However, fluctuation of foreign fund flows could drag the Thai stock market down.


2) ECB raises borrowing costs to 22-year high and signals for more

The European Central Bank raised its borrowing costs to a 22-year high on Thursday and stated that more will come in the meeting next month and beyond.

It was the eighth consecutive interest rate hike by the European Central Bank as it delivered another 25 basis points, which brought the eurozone’s borrowing costs to 3.5%, the highest level since 2001 amid stubbornly high inflation rate.

ECB President Christine Lagarde said that the ECB has not reached its destination and still has ground to cover.


3) China to issue $140 billion worth of special treasury bonds

China is considering a series of measures to bring back its economy and one of those measures is an issuance of special treasury bonds worth $140 billion, according to the report by The Wall Street Journal.

Beijing has lost its strong growth momentum since its short-lived gain after abruptly ending zero-Covid policy. Economic data showed weaker growth since then, and now the authorities are considering issuing special treasury bonds valued at one trillion yuan (approx. $140 billion) to boost business confidence and fund infrastructure plans.

Other measures also include removing bans on purchases of second homes in small cities to help its property sector.