Kaohoon Morning Brief – 4 August 2023

1) KSS sees negative trends in Thai stock market over outflows and U.S. credit ratings

Krungsri Securities (KSS) expected Thailand’s SET Index to move between 1,520-1,540 points as the outflow continued to weigh on the market amid negative sentiment from the downgrade on the U.S. credit ratings by Tris Ratings, resulting in a rise in U.S. bond yields over 4%. Meanwhile, the prolonged process of forming a new government. Still, a rise in crude oil price could support the Thai bourse, which was dominated by the energy sector, to bounce back.


2) BoE raises interest rates to 5.25% amid stubbornly high inflation

The Bank of England approved the decision to raise interest rates by 25 basis points on Thursday to combat stubbornly high inflation.

Inflation, partly buoyed by strong wage growth, remained stubbornly high at 7.9% in June despite a slump in energy prices that eased burden on households. Still, the reading was  well-above the target of 2% by the central bank, which allows the Bank of England to continue raising interest rates.

The decision to raise rates on Thursday by the Bank of England brought its benchmark lending rates to 5.25%, the highest level since February 2008 and also marked the 14th consecutive hike since the starting of this cycle in December 2021.


3) Saudi Arabia to extend voluntary cut of oil production into September

Saudi Arabia will extend its voluntary crude oil output cut by one million barrels per day into September for the third straight month as OPEC’s top oil producer looks to stabilize oil prices at a higher level.

According to the state media from Riyadh, the kingdom will produce approximately 9 million barrels per day of crude oil in September 2023.

The cut also added up to a total of 1.66 million barrels per day of other voluntary productions from the group that is expected to keep it in place until the end of 2024.