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SET shows signs of recovery as investors slowly buy back stocks

May 29. 2020
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By The Nation

The Stock Exchange of Thailand (SET) Index rose to over 1,300 points in the second quarter as retail and institutional investors bought back stocks worth Bt133 billion and Bt68.3 billion respectively, though foreign investors sold stocks worth almost Bt200 billion. 

Monrat Phadungsit, president of Land and Houses Fund Management, said investors were buying back stocks at this time because they have a large amount of cash in hand. 

“Most investors have 10 to 15 per cent of cash in their investment portfolios now, compared to just 5 per cent under normal conditions,” he said, adding that the economy is likely to recover as the Covid-19 situation is improving and many countries are gradually easing lockdown measures. 

“We expect the index next year to hit 1,550 points, while this year it is expected to move between 1,300 and 1,450 points,” he said.

“However, investors must be careful because the index could drop below 1,200 points due to uncertainty following the second wave of Covid-19 infections, creating an outbreak that may be worse than the first one.” 

Somchai Amornthum, executive vice-president at Krung Thai Asset Management said the index gained positive sentiment from lockdown easing measures, progress in the search for Covid-19 vaccine, central banks’ moves to inject liquidity and governments issuing Covid-19 relief measures.

“We expect the index at the end of the year to be at 1,350 points as it will rely on the Covid-19 outbreak and when the vaccine is completed,” he said. 

Chai Sophonpanich, chairman of Bangkok Insurance, said his company expected the index in the next three months to drop to 1,200 points due to uncertainty over the country’s political situation.

“We expect the index at yearend to be 1,340 points, less than 1,500 points in the previous year, though the index should rise to 1,900 points in the next two years,” he said. 

He added that in the next three months, the company aims to buy stocks in the food and energy industries as they have a greater chance to grow and will sustain less impact.

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