Kaohoon Morning Brief – 21 June 2023

1) FSS sees negative momentum for SET Index after breaking support level yesterday

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move in a sideways to sideways-down trend as the index broke the support level of 1,540 points, making the overall outlook turning negative.

Meanwhile, the next step for the political situation in Thailand is opening the parliament meeting to elect the chairman of the parliament within 15 days after the approval of the Election Committee. The main focus should be the voting to elect a prime minister and forming the coalition government as the market expected to be completed within August. The completion should boost market sentiment, in FSS’ view.


2) Britain could slip into recession if BoE raises rate to 6%

Economists expect Britain to slip into a shallow recession if the Bank of England continues to raise its benchmark lending rate to 6% as the market has anticipated.

An analysis from Bloomberg Economics showed that gross domestic product would shrink about 0.3% this year and by 1.4% in the following year, on an assumption that the central bank raised a total of 1.5 percentage points of interest rate by next February to 6%. The Bank of England is currently on its quickest tightening cycle in four decades.


3) Morgan Stanley’s strategist expects the bull market to end soon

Morgan Stanley’s top strategist Mike Wilson said that a slump in economic growth could stop the recent rally in the stock market.

He reiterated his view that the economy will stagnate in the second half of this year, which he expects will chip away listed companies’ earnings and pressure stock prices.

The market has been buoyed by tech stocks such as Nvidia and Microsoft as investors jumped on the AI-hype train. However, Wilson did not expect the early-2023 bull market to last long and would dry out eventually.

Noted that Wilson has been one of Wall Street’s most bearish voices in 2023.