The Stock Exchange of Thailand (SET), boosted by the prospect of a 1.9 trillion baht economic relief package, manages to hold its ground on Wednesday despite a weak regional market.
SET closed at 1,205.77 points, down 9.18 points or 0.76 per cent yesterday, while being supported by gains in financial and tourism shares.
Financials saw broad-based gains while major banks rose by 3.5-4.5 per cent. The tourism sector outperformed, even though the country recorded 111 new confirmed coronavirus cases on Wednesday.
Investors were excited when Thailand dropped to 38 cases on Tuesday, leading them to buy back shares from the tourism sector. However on Wednesday, there were more than 100 confirmed cases and 30 recorded deaths. The infection has now spread to 66 out of 77 provinces.
Maybank Kim Eng Securities said the outbreak will continue to hit Thailand’s hospitality, food services and tourism, along with those companies that supply to them in the foreseeable future.
Shutdown of commercial and entertainment venues, restaurants and pubs will most likely last until April 30. Income has been tightening for over 50 per cent of the population which means that purchasing power will continue to be low.
The Airports of Thailand (AOT) has also reported international traffic, combining inbound and outbound, has declined by 98.7 per cent year-on-year during April 1-5.
Oil pressure also continued Wednesday as prices dropped by 9 per cent on Tuesday. But things are changing overnight as prices surge following a statement from Algeria’s oil minister that OPEC+ would discuss a massive cut that could reach 10 million barrels per day at a virtual meeting on Thursday.
WTI subsequently jumped as much as 12 per cent before then losing some of those gains to settle at 6.18 per cent higher at US$25.09 on Wednesday. International benchmark Brent crude’s gains were less, at only 3.04 per cent to $32.84 per barrel.
For the SET, Krungsri Securities sees the index positively while trading in range of 1220-1230 on Thursday as oil prices have increased on Wednesday. The US Federal Reserves has also indicated they will keep their rates at near 0 to 0.25 per cent “until policymakers were confident that the economy had weathered recent events,” according to the March 15 meeting’s minutes that was released Wednesday.
With the largest economy in the world being supported by both fiscal and monetary policy and while oil prices could still be increasing, positive sentiments are coming from abroad, the firm said. Other bourses in the region were already responding this morning, as Japan’s Nikkei, China’s SSE Composite, Hong Kong’s Hang Seng, and South Korea’s Kospi have all traded up at their opening on Thursday.
Capital Nomura Securities, on the other hand, expects the index to be in the range of 1193-1238 on Thursday as their quarterly results came out negatively, which will continue to add pressure on oil shares.
