Thursday, October 01, 2020

Gloomy US economic data pulls SET down

Jul 31. 2020
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By The Nation

The Stock Exchange of Thailand (SET) Index fell by 7.49 points, or 0.57 per cent, to 1,308.25 in the morning session on Friday (July 31).

A Krungsri Securities stock analyst expected the index to fall to 1,305 in response to weak US economic data after the country's second-quarter gross domestic product (GDP) contracted 32.9 per cent, the lowest in almost 70 years, due to lockdown measures.

"In addition, the US initial jobless claims increased to 1.4 million positions. The number of US initial jobless claims rose over 1 million positions for 19 consecutive weeks, showing that the US economy has not fully recovered," the analyst said.

"Moreover, the increasing number of US Covid-19 cases would pressure the index as well."

However, the analyst said the index would rebound from mass buy-ups in stocks whose second-quarter performance will improve.

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 whose second-quarter performance will improve, such as TOP, PTTGC, SPRC, BGRIM, CKP, CPF, TU, TASCO, STA, STGT, SPALI, AP, PRM, PTL, AJ, STARK, CBG, TQM, and JMT.

The SET index fell by 22.61 points, or 1.69 per cent, closing at 1,316 at yesterday's close (July 30), while transactions amounted to Bt67 billion.

The SET and other foreign indices fell as the US Federal Reserve did not issue more economic stimulus measures, while Germany's second-quarter GDP contracted 10.1 per cent, the lowest in their history.

In addition, mass sell-offs in stocks to reduce risks before the announcement of listed companies' second-quarter performance caused the index to fall sharply.

Foreign investors made net sales in stocks worth Bt1.962 billion and net buys in bonds worth Bt1.060 billion. There were 9,013 net short Thailand Futures Exchanges contracts.

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