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Stimulus, rate cut to boost SET index this week

Feb 11. 2020
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By THE NATION

Kasikorn Research Center predicted that the government's economic stimulus package and the Monetary Policy Committee's direction would boost the SET index this week (February 11 to 14) while the baht was expected to move in the range of Bt31.00 to 31.50 per US dollar.

The research center estimated that Stock Exchange of Thailand (SET) Index would have support at 1,525 and 1,515 with resistance at 1,540 and 1,550.

The index dropped sharply at the beginning of last week over concerns of the coronavirus outbreak, before staging a rebound after China pledged measures to offset impact of the virus crisis on its economy. 

The index closed at 1,535.24 points last Friday, up 1.39 per cent from the previous week with an average daily trading value of Bt61,841.92 million, down by 0.44 per from the week before. 

The research center said the SET was supported by the latest economic stimulus package and the MPC’s cut in policy rate.

However, it pared gains somewhat at the end of the week on sell-offs of telecommunication shares, and lingering concerns about the novel coronavirus outbreak.

Key matters to watch this week include 4Q-19 corporate earnings results, progress on the vote of Thailand’s 2020 budget bill, plus the coronavirus development. 

External factors are key US indicators: January CPI, Retail Sales and Industrial Production.

In regard to the baht's movement this week, Kasikorn expected the currency to move between Bt31.00 to 31.50 per US dollar.

The baht retreated last week after Bank of Thailand (BOT) decided to cut its policy rate to 1.00 per cent .

In addition, the currency fell on net foreign stock and bond selling orders, while the US dollar rose on strong US economic data, including manufacturing and service PMIs, as well as private-sector employment.

The baht on Friday (February 7) closed at Bt31.28 per US dollar, compared to Bt31.16 per US dollar on January 31.

The research center suggested that key factors to be monitored relative to the baht were the vote of Thailand’s 2020 budget bill, the virus situation, China’s January economic indicators, plus Fed Chairman's testimony to the US congress.

The US economic data to be released this week would involve its January CPI, Retail Sales, Industrial Production, Import-Export Price Index, February Consumer Sentiment Index (Preliminary), plus weekly Initial Jobless Claims.

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