SET to rebound if spread of virus is contained
The coronavirus outbreak might have a strong impact on the tourism industry and the Stock Exchange of Thailand, but the SET index is expected to rebound if the number of infected people remains stable, said TISCO Economic Strategy Unit (TISCO ESU).
Komsorn Prakobphol, head of the unit, said China might be able to control of 2019 novel coronavirus (2019-nCoV) crisis faster than the time it took for the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003, thanks to advanced medical technologies.
“China has responded to the situation quickly by notifying the World Health Organisation (WHO) within 23 days after the first case of infection. On the contrary, China only opened up on SARS 86 days after emergence of the virus,” he said.
“In addition, the new coronavirus is less intense. Preliminary information indicated that infected people have a mortality rate of about 3 per cent of the total, much lower than the 10-per cent of SARS".
He added that the coronavirus outbreak will hit the tourism industry hard, saying that the SARS outbreak which caused 8,000 cases of infection and 800 deaths worldwide, resulted in a 40-per cent fall in the number of tourists visiting Thailand in the second quarter of 2003 with arrivals from China plunging by 79 per cent.
“If the coronavirus outbreak continues, it may have a bigger impact on tourism than SARS, given the growing number of Asian tourists, especially from China. Chinese tourists currently account for 30 per cent of all arrivals, compared to 7 per cent in 2002 ,” he said.
He said Thai stock prices have dropped, especially in tourism which have fallen approximately 18 per cent from the day the disease was publicly announced. Thai stock index fell 10 per cent at the start of SARS outbreak in 2003 and recovered rapidly when the number of infected people was declining.
“Therefore, we estimated that the Thai stock index will fall in limited downside since investors are still monitoring the number of infected people,” he said.
“During the past 3-4 days, the number of infected people has increased by approximately 1,700-2,000 people a day worldwide. If the number of infected people remain stable, it will be a positive sign that the stock market will rebound soon.”
The Shanghai SE Composite Index fell 238.34 points (8 per cent) to 2,737.36, while the Shenzhen SE Component Index gave up 844.50 points (7.91 per cent) to 9,837.48 at the end of the morning session.