Thai listed companies to get a boost as Chinese economy starts to roll
At least 45 Thai listed companies in the manufacturing sector would benefit from economic activities resuming in China as the Covid-19 outbreak has been contained.
Economic activities in China resumed at the beginning of April and it is monitoring the situation to guard against a re-emergence of the pandemic.
This is a good signal for Thai listed companies in the manufacturing sector that do business with China if the buying power and supply chain in China return to normal, experts said.
Thai exports to China were worth US$29 billion, accounting for 12 per cent of Thai exports worldwide.
The products with the highest export value are plastic beads and chemicals, rubber and rubber products, and electronic products, which made up 40 per cent of the export value to China.
Thailand's imports from China were worth US$50 billion, accounting for 21 per cent of total imports.
The products with the highest import value were machinery, home appliances and chemicals, which accounted for 40 per cent of the import value from China.
Recovery in the supply chain in China would be a positive sentiment for listed companies in the production sector, while the service sector would benefit after the Covid-19 outbreak in countries worldwide is under control.
At the end of 2019, 45 companies in production sector listed on the Stock Exchange of Thailand were doing business with China. As of March 26 this year, these listed companies’ stocks had a market capitalisation totalling Bt2.4 trillion, accounting for 20 per cent of the SET.
However, listed companies may or may not report foreign investments or foreign income if the companies consider it not significant to the overall performance, while the market still has high volatility.
Therefore investors should study the information of listed companies carefully before making investment, experts advised.
