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Domestic outbreak, QE tapering will sap Thai stock market in Q3: ASP


Covid-19 restrictions at home and QE tapering abroad will pressure the Stock Exchange of Thailand (SET) in the third quarter this year, Asia Plus Securities (ASP) said on Thursday.

ASP executive vice president Therdsak Thaveeteeratham said the US Federal Reserve’s plan to taper its quantitative easing programme at the end of August would trigger outflow of foreign funds from the SET.

Meanwhile, the latest outbreak of Covid-19 in Thailand, which has led to the temporary closure of restaurants, entertainment venues and construction sites, would shrink GDP in the second and third quarters, both quarter-on-quarter and year-on-year, he said.

"However, we believe that the country's GDP will stand at 1.7 per cent this year as the export sector has recovered significantly, while the government is making efforts to distribute Covid-19 vaccines to provinces nationwide," he said.

He pinpointed the SET’s support level at 1,510 points, advising investors to buy stocks with good fundamentals that gain positive sentiment and are attractive to domestic investors, including BLA, BDMS, TFG, MCS, GPSC, BJC and CENTEL.

Meanwhile, ASP’s head of investment advisory Padorn Suksawad advised investors to keep an eye on the global Covid-19 situation and countries’ key economic indicators, such as GDP, unemployment rate and Purchasing Managers Index.

He also advised diversifying investment to countries witnessing economic recovery, such as the US and China, to escape risks in carrying Thai stocks pressured by the Covid-19 outbreak.

Published : July 01, 2021

By : The Nation