Friday, July 03, 2020

Thai stocks lower as market awaits easing of lockdown

Apr 16. 2020
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By The Nation

The Stock Exchange of Thailand (SET) Index shed 13.48 points, or 1.09 per cent, to 1,222.62 as of 10.21am on Thursday (April 16).

A stock analyst at Krungsri Securities expected the index would fall to the support level at 1,220 as investors had begun to pay attention to the economy, including financial statements for the first quarter of the year which will be announced soon.

“The US economy in March dropped sharply as retail sales contracted 8.7 per cent and the industrial production index contracted 5.4 per cent,” the stock analyst said.

“In addition, there is uncertainty about banks’ financial statements. Investors expect profits to decrease due to slowdown in bank loans, while non-performing loans [NPL] will tend to increase.”

The analyst said that energy stocks would be under pressure after crude oil price dropped below US$20 per barrel, the lowest in more than 18 years due to the decline in demand and US crude oil stocks rose by 19.2 million barrels, rising for 12 consecutive weeks.

“However, the index would rebound as investors expect the government would ease the lockdown measure because the Covid-19 situation in Thailand was stable,” the stock analyst said.

The analyst recommended that investors make selective buys from three groups of stocks:

● Stocks that would benefit from the decline in oil cost, such as TASCO, EPG, and IVL.

● ICT and food stocks that have escaped the severe impact from the outbreak, such as ADVANC, INTUCH, DTAC and CPF.

● Defensive stocks with consistent income and high dividends, such as TTW and BCPG.

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