Monday, May 25, 2020

Amid global recession fears, SET Index buoyed by new fund, likely new stimulus

Apr 02. 2020
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By The Nation

The Stock Exchange of Thailand (SET) Index rose by 9.97 points, or 0.90 per cent, to 1,115.48 in the morning session on Thursday (April 2).

A stock analyst at Krungsri Securities expected the SET Index to slump between 1,075 and 1,090 before rebounding.

"Investors are concerned about a severe economic recession due to the spread of Covid-19, especially in the US and Europe, while the number of Covid-19 cases worldwide has increased to over 910,000 people,” the stock analyst said.

“Meanwhile, US President Donald Trump has warned Americans to prepare themselves for an aggravation in the next two weeks, while the death toll in the US may rise to between 100,000 and 240,000, causing uncertainty among investors.”

The analyst said that the decline in crude oil price after the US weekly oil stocks rose by 13.8 million barrels would pressure energy stocks and the index.

“However, sales of Super Savings Fund (SSF) until June this year and hopes for the government’s third phase of economic relief measures would support the index to rebound,” the stock analyst said.

The analyst recommended investors to make a selective buy from three groups of stocks:

● Food stocks, which would benefit from the weakening baht and profit growth in the first quarter of this year, such as CPF and TU.

● ICT stocks, which benefit from work from home trends, such as ADVANC, INTUCH, and DTAC.

● Defensive stocks, which would pay high dividends, such as TTW and BCPG.

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