Forecast sees chance of drop below 1400
The Thai stock market plunged 80.60 points or 5.44% on Monday to close at 1401.78 points with trading worth 129.44 billion baht caused by the new surge of Covid-19 in Thailand.
Prospects of a nationwide spread and lockdowns in some areas may send the SET Index down to below 1400 points, said analysts.
The most traded stocks on Monday were Kasikorn Bank, down 7.56% with trade worth 6.2 billion baht, followed by Banpu which declined 3.54% with trade worth 4.45 billion baht, while PTT decreased 5.26% with trade worth 4.44 billion baht.
Foreign investors were net buyers at 3.79 billion baht, suggesting their confidence in Thai stocks’ fundamentals.
Pakorn Peetathawatchai, SET president, said trading on Monday was normal although the turnover was very high.
The market doesn’t require any supporting measures at this time but SET will monitor the situation closely, he added.
KTB Securities (Thailand) (KTBST) said the resurgence of Covid-19 will affect the Thai stock market as the 14-day lockdown in Samut Sakhon and high probability of the Covid-19 spread curbing investor sentiment.
Mongkol Puangpetra, KTBST’s executive vice-president, foresees stocks will suffer the biggest blow from the lockdown, especially those of businesses with branches in Samut Sakhon such as Dohome, Central Pattana (CPN), Central Retail Corporation (CRC), Siam Global House (GLOBAL), Home Product Center (HMPRO), Berli Jucker (BJC), CP All, Major Cineplex Group (MAJOR), MC Group (MC), Ekachai Medical Care (EKH), Thai Union Group (TU) and Asean Sea Corporation (ASIAN).
“Additional lockdowns may be imposed in several provinces as cases surge. Stocks that will be most affected by the pandemic are likely to be shopping centres and malls, restaurants and businesses that employ a lot of Burmese workers including energy drinks, cinemas and public transport,” Mr Mongkol said.
Stocks that are expected to be less impacted by the situation include JWD Infologistics (JWD), a provider of cold storage and warehouse services which will enjoy longer demand for warehouse leasing, and MEGA Lifesciences (MEGA) which will be boosted by increased demand for vitamin supplements.
ICT stocks’ sales revenues are also expected to rise thanks to the trend towards remote working and new normal lifestyles while data usage also increases.
SCB Securities (SCBS) research said there would be more lockdowns in many areas due to spreaders from Samut Sakhon that will cause the economy to slow down.
It recommends investors gradually sell stocks until the end of the year and expects the SET Index will decline to 1,350-1,400 points.
SCBS recommends SCG Packaging (SCGP), which has potential of earnings’ growth for 2021 after successful mergers with Vietnamese packaging manufacturers drove its market share from 7% to 13%.
Terdsak Taweethiratham, executive vice-president of Asia Plus Securities, said he will maintain the 2021 SET Index target previously projected at 1,550 points at the time. Even in the worst-case scenario, the index is unlikely to drop below 1,400 points.
He said the government should focus more on controlling the number of infected zones instead of cases because the figure will certainly rise due to more comprehensive testing.
