Tuesday, March 31, 2020

SET Index edges up but still under pressure from Covid-19

Feb 27. 2020
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By The Nation

The SET Index rose slightly after Covid-19 virus patients, who did not inform medical authorities about visiting a high-risk area, were discovered in Thailand.

As of 11am on Thursday (February 27), the Stock Exchange of Thailand Index rose by 1.95 points or 0.14 per cent to 1,368.36.

Krungsri Securities has predicted that the SET Index will fall between 1,340 and 1,345 points due to uncertainty following the Covid-19 outbreak, falling oil prices and unstable politics in the country.

A stock analyst at Krungsri Securities said that the Covid-19 virus was still widespread in many countries.

“In Thailand, Covid-19 virus patients who had lied about visiting a high-risk area have increased the risk of the virus spreading,” the stock analyst said.

“Meanwhile, crude oil price fell sharply below US$50 per barrel due to contraction in demand following economic conditions, which will be a negative sentiment on energy and petroleum stocks.”

The stock analyst added that anti-government protests held by students following the dissolution of the Future Forward Party (FWP) will be another pressure on investment direction at this time.

“However, we expect that the index will rebound after His Majesty the King endorses the 2020 Budget Act worth Bt3.2 trillion, which will be a positive sentiment to boost the country’s economy in the future,” he added.

Four types of stocks are recommended:

● Exporters and food stocks, who will benefit from the weakening baht, such as KCE, HANA, DELTA, CPF, and TU

● Financial stocks, which will benefit from reduced financial costs after the Monetary Policy Committee cut the interest rate by 0.25 per cent, such as MTC, SAWAD, and KTC

● Defensive stocks which are expected to pay high dividends, such as ADVANC, INTUCH, and TTW

● Stocks that Morgan Stanley Capital International (MSCI) will boost investment in on February 28, such as CRC, BTS, and BDMS.

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