Good time to buy stocks via SSF, say experts
Thai investors are being advised to enter the stock market via the Super Savings Fund (SSF) as share prices are dropping and long-term investments are attractive at this time.
The Stock Exchange of Thailand (SET) Index is currently at the 1,200 level, having dropped by more than 20 per cent compared to last year due to the Covid-19 outbreak.
It is difficult to predict when the market will bottom out, but this is the time to invest, said Pote Harnasuta, CEO of One Asset Management (ONEAM).
He suggested that investors put their money in SSF mutual funds, promoted by the Finance Ministry, for the long term as they can get tax deductions on 10-year investments.
He added that compared to the peak of 1,800, Thai stocks are now 33 per cent cheaper and if Covid-19 cases flatten or drop, the index could climb to between 1,300 and 1,400.
However, if the number of Covid-19 cases rise and the price of oil drops then the index could drop to below 1,000, he said, adding that this will be the time to buy stocks again.
Though it is unlikely that the SET Index will go below 800, but if it does then there will be a severe crisis lead to mass sell-offs.
Since the SET 50 has high liquidity, investments should be made in companies that will benefit from the end of the Covid-19 pandemic and from the global economy returning to normal. Such companies are in the medical and hospital sectors, e-commerce and telecom.
If the share prices of airport operators drop, then investors should buy, though they should avoid tourism-related businesses and energy.
Globally, he said, investment in China is promising if investors go for the long haul or 10 years, under the SSF scheme. ONEAM can offer investors opportunities in SET 50 as well as global and Chinese stocks, he added.
Meanwhile, Asia Plus Securities Co predicted that the profits of telecom companies – ADVANCE, DTAC and TRUE – will be adversely affected because the National Broadcasting and Telecommunication Commission (NBTC) is demanding that they bring down mobile phone and internet service charges by 10 to 30 per cent to help users affected by Covid-19 crisis.
Asia Plus has two scenarios: The best is that their profit will only drop by 3.9 per cent or Bt2.1 billion from the estimated combined profits of Bt53 billion this year, and the worst case scenario that profits can drop by 29.3 per cent or Bt16 billion.
