SET slumps over MSCI’s decision to cut Thai investments, new Covid infections, pending court verdict on PM
The Stock Exchange of Thailand (SET) Index fell almost 30 points on Monday due to global investment firm MSCI’s decision to reduce investments in Thai stocks, worries over rising Covid-19 cases in Thailand and the pending Constitutional Court ruling in a case against Prime Minister Prayut Chan-o-cha, experts said.
The SET Index closed at 1,408.31 on Monday, down 29.47 points or 2.05 per cent. Total transactions amounted to Bt120 billion with an index high of 1,435.04 and a low of 1,408.02.
Foreign and institutional investors made net sales of Bt4.37 billion and Bt2.98 billion respectively, while securities accounts and general investors made net buys of Bt725.71 million and Bt6.62 billion, respectively.
Therdsak Thaveeteeratham, Asia Plus Securities executive vice president for research, said SET faced short-term correction on Monday as domestic and foreign investors sold off stocks to reduce their risks from the new Covid-19 cases in Chiang Mai and Chiang Rai, as well as the pending court ruling in Prayut’s case on Wednesday.
“The Constitutional Court’s ruling on Prayut could affect Thailand's economy in terms of policy continuation, because he may be removed from office at a time when the economy is recovering gradually,” he said.
He said he expects SET to move upwards as foreign funds are still flowing into Asian markets.
“If there is no negative sentiment, we expect Thailand's deposits of Bt15.5 trillion to flow into the stock market due to low interest offered on deposits,” he said, adding that SET is expected to hit 1,550 points next year.
He advised investors to buy stocks that are likely to rise next year, such as commercial banks that will benefit from the economic recovery and construction stocks that would benefit from the government’s investment in various projects.
Kitichan Sirisukarcha, CGS CIMB Securities senior vice president for research, said SET fell on Monday due to MSCI's move to reduce investment in Thai stocks from 1.9 per cent to 1.87 per cent, worries over rising Covid-19 cases and Washington’s move to ban another four Chinese firms as well as Thai and foreign investors' move to speculate after the index skyrocketed by 243 points or 20 per cent in the previous month.
“However, we expect foreign funds to flow into the stock market as positive news of Covid-19 vaccine will help boost Thailand’s economy and SET-listed companies’ profits next year," he said.
He advised investors to buy petrochemical, oil refinery, energy and commercial bank shares.
