Stock investors find the silver lining
The closure of public venues to try and contain the spread of Covid-19 has benefited retail and ICT stocks.
The anti-virus measure triggered a rush to stockpile foods and other needed goods, a boon to retailers, and many ICT firms (information and communications technology) ordered employees to work from home, hiking purchases of the required equipment.
Both retail and ICT stocks reaped benefits, although prices decreased slightly due to volatile market conditions.
On the Stock Exchange of Thailand from March 16-24, retail stock prices dropped by 9.5 per cent, somewhat deeper than the index’s 9.25 per cent decline, while ICT stocks rose by 1.42 per cent.
Other stock prices were also falling with the notable exception of insurance stocks, which rose by 2.63 per cent.
Nuttawut Wongyaowarak, an analyst at Globlex Securities, has advised investors to gradually buy stocks that gain benefit during the crisis, such as Siam Makro (MAKRO), Berli Jucker (BJC), CP All (CPALL), Thai Union Group (TU) and Thai President Foods (TFMAMA).
On the ICT side he recommends Advanced Info Service (ADVANC), Intouch Holdings (INTUCH), Total Access Communication (DTAC), True Corporation (TRUE), Jasmine International (JAS), Jasmine Broadband Internet Infrastructure Fund (JASIF), Digital Telecommunications Infrastructure Fund (DIF), Com7 (COM7), SiS Distribution (Thailand) (SIS) and Synnex (Thailand) (SYNEX).
But the closing of popular public venues for 22 days has meanwhile disrupted economic activities and pressured listed companies’ profit forecasts, says an analyst at Asia Plus Securities.
“Our research department cut listed companies’ profit forecasts this year by Bt207 billion, to Bt793 billion, of which Bt110 billion has been cut on energy and petroleum stocks, Bt54 billion on commercial bank stocks, Bt47 billion on air transport and hotel stocks, and Bt10 billion on ICT stocks,” he said.
