Sunday, August 09, 2020

SET Index rises but limited upside scope

Mar 20. 2020
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By The Nation

The Stock Exchange of Thailand (SET) Index rose by 26.13 points, or 2.50 per cent, to 1,070.32 in the morning session on Friday (March 20) after falling at close on Thursday.

A stock analyst at Krungsri Securities explained that the SET Index fell on Thursday by 3.96 points, or 0.38 per cent, to 1,044 with total transaction of Bt62 billion due to uncertainty over the rapid spread of Covid-19 and the decline in crude oil price to its lowest point in 18 years.

“However, we expected the index to rebound due to positive sentiment from the European Central Bank, which announced it would buy assets with a limit of 750 billion euros, and the Thai Ministry of Finance preparing a proposal for additional measures to the Cabinet next week,” the stock analyst said.

“Foreign investors made net sales of Bt3.125 billion in the stock market and Bt6.166 billion in the bond market. There are 15,430 net short TFEX contracts.”

The analyst expected the index on Friday would rise to between 1,060 to 1,065 points before falling again, as the number of infected people and deaths are still rising, especially in Europe and the US, causing the global economy to fall.

“However, central banks and governments around the world, such as the US, Europe, and United Kingdom are taking recourse to monetary and fiscal measures to inject money into the system in order to relieve the Covid-19 impact on the economy, which will help relax short-term investment,” the stock analyst said.

“Besides, the rebounding of crude oil price due to the US move to purchase crude oil for the Strategic Petroleum Reserve would be a positive sentiment for energy stocks and the index.”

The analyst recommended three groups of stocks for investors:

● ICT stocks which are defensive and pay high dividends, such as ADVANC, INTUCH, and DTAC.

● Retail stocks, which benefit from people hoarding products during the Covid-19 situation, such as CPALL and BJC.

● Food stocks, which would benefit from the weakening baht, such as CPF and TU.

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