Stocks from rubber industry companies, such as Sri Trang Argo (STA), Thai Rubber Latex Group (TRUBB) and North East Rubber (NER), surged simultaneously on Wednesday’s trade due to an increase in the price of rubber.
The Rubber Authority of Thailand (RAOT) revealed that the price of rubber continued to move up until it surpassed 60 baht/kg on Tuesday, which is its highest reach in three years.
The ribbed smoked sheets (RSS) surged in accordance with domestic demand in the trade term. The highest price of 60.05 baht/kg was recorded in the Songkhla, Suratthani and Nakhon Sri Thammarat rubber markets.
As of 2:54 p.m., STA shares were at 27.00 baht, increasing by 1.25 baht or 4.85 per cent, with a transaction value of 565.3 million baht. Meanwhile, its subsidiary STGT was at 67.00 baht, up 0.50 baht or +0.75 per cent.
TRUBB, another rubber company, had shares that stood at 1.62 baht, rising by 0.21 baht or +14.89 per cent and hitting the ceiling, with a transaction value of 109.2 million baht.
Meanwhile, NER share was at 3.42 baht, increased by 0.10 baht or +3.01 per cent, with a transaction value of 565.3 million baht
Kingsford Securities said in the report that the rising prices might result from the growing manufacturers in China and the US, as the factors that could affect stock rubber group are rising crude oil prices and lower rubber production due to the COVID-19 pandemic.
Maria Lapiz, the Head of Institutional Research at Maybank Kim Eng Thailand, said that the rubber price had been on the rise since July. The surge is tied to the resumption of the auto tire industry only in China and ASEAN countries.
“The price could stay high typically until October this year,” she added.
According to Kasikorn Securities, STA is expected to earn strong earnings in the second half of 2020 thanks to the continued growth of market demand. Analysts rate STA as ‘Buy’ at a target price of 43 baht.
