Wednesday, September 30, 2020

SET dips in morning session out of worries over US economy, unemployment

Jul 24. 2020
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By The Nation

The Stock Exchange of Thailand (SET) Index fell 11.23 points, or by 0.83 per cent to 1,348.42 during the morning session on Friday (July 24), with a Krungsri Securities stock analyst saying he expected the index to fall to between 1,350 and 1,355 before rebounding.

“Despite the US easing lockdown restrictions, the number of unemployment claims in the country has risen to 1.4 million, rising by more than a million people for 18 consecutive weeks,” he said.

“Meanwhile, investors have sold off their stocks to reduce risks before the four-day holiday due to uncertainty as the US economy continues to slowdown and the number of Covid-19 cases there continue rising.”

However, the analyst said the index should rebound from mass buy-ups of stocks whose second quarter performance showed improvement, as well as over hope that the US will issue economic stimulus measures worth $1 trillion.

He recommended that investors buy:

- Food and electronic stocks that benefit from the weakening baht, such as CPF, GFPT, TU, TFG, ASIAN, KCE, DELTA, HANA and SVI.

- Stocks that have shown improved second-quarter performance, such as TOP, PTTGC, SPRC, SCC, BGRIM, CKP, CPF, TU, TASCO, STA, STGT, SPALI, AP, PRM, PTL, AJ, STARK, CBG and TQM.

The index closed on Thursday (July 23) at 1,360, up 3 points or 0.19 per cent. Total transactions amounted to Bt70 billion.

The SET index still faces volatility from the US-China tensions after a Chinese consulate was closed in Houston within 72 hours to allegedly protect American intellectual property. In retaliation, China will close the US consulate in Wuhan.

Foreign investors made net sales in stocks worth Bt2.054 billion and net buys in bonds worth Bt860 million. There were 5,147 net short Thailand Futures Exchanges contracts.

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