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SET Index slides amid global recession fears

Apr 03. 2020
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By The Nation

The Stock Exchange of Thailand (SET) Index dropped by 1.98 points, or 0.17 per cent, to 1,136.29 in the morning session on Friday (April 3).

A stock analyst at Krungsri explained that the SET Index on Thursday (April 2) closed at 1,138, up 32.76 or 2.96 per cent, with Bt69 billion transaction volume, as crude oil price rose after China prepared to buy crude oil for strategic reserve.

“Meanwhile, PTT Oil and Retail Business filed an application for listing securities to the Securities and Exchange Commission (SEC) and there are hopes of the economic Cabinet considering the third phase of stimulus measures, encouraging investors to buy energy, petroleum, and commerce stocks,” the stock analyst said.

“However, foreign investors made net sales of Bt634 million in stocks and Bt1.329 billion in the bond market, while there are 5,966 net short TFEX contracts.”

The analyst expected the index would rise between 1,155 and 1,165 before falling.

“The market gained positive sentiment from the rising crude oil price by approximately 25 per cent after US President Donald Trump believed that Russia and Saudi Arabia would halt the oil price war and expected that oil production capacity would be reduced by 10 to 15 million barrels to maintain oil price stability,” the stock analyst said.

“Also, investors expect the Cabinet to issue the third phase of measures, including a Bt1-trillion loan to stimulate the economy in the meeting today.”

The analyst said the index would fall due to uncertainty following the Covid-19 pandemic and threat of recession.

“Recently, the number of Covid-19 cases worldwide rose over 1 million people with over 51,000 deaths,” the stock analyst explained.

“Meanwhile, the number of people who registered for unemployment welfare in the US spiked to 6.6 million people, which would pressure the market direction.”

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

● Energy and petroleum stocks, which benefit from rising crude oil price, such as PTT, PTTEP, TOP, PTTGC and IVL.

● 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 pay high dividends, such as TTW and BCPG.

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