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New Covid-19 cases in Asia, tight valuation rein in SET

Jun 17. 2020
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By The Nation

The Stock Exchange of Thailand Index dropped by 8.00 points, or 0.59 per cent, to 1,359.13 on Wednesday morning (June 17).

A stock analyst at Krungsri Securities expected the index to fluctuate between 1,360 and 1,380 before falling.

“The market gained positive sentiment from the US retail sales in May increasing by 17.7 per cent, while the US government prepared to spend US$1 trillion on infrastructure to stimulate the economy,” he said.

“In addition, energy stocks gained positive sentiment from rising crude oil price after the International Energy Agency raised its oil demand forecast for this year to 91.7 million barrels per day in response to several countries easing lockdowns.”

The analyst said that the index, however, would be under pressure from tight SET valuations and uncertainty following the second wave of Covid-19 cases in many countries, such as US, China, and Japan.

He recommended investors to buy:

▪ Energy stocks that benefit from the rising crude oil price, such as PTT, PTTEP, TOP, PTTGC, IRPC, SPRC, and IVL.

▪ Stocks whose second-quarter performance will improve, such as CKP, TASCO, STA and RS.

▪ Stocks that benefit from the Cabinet’s three tourism stimulus packages, such as MINT, CENTEL, ERW and AOT.

The SET Index rose sharply by 25 points on Tuesday, or 1.87 per cent, closing at 1,367. Total transactions were worth Bt68 billion.

Net buy by foreign investors amounted to Bt423 million in stocks, while net sale of bonds was Bt626 million. There were 9,109 net short TFEX SET50 contracts.

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