Tisco advises gradual accumulation of stocks in bearish market

A stock analyst at Tisco Securities said that the Stock Exchange of Thailand (SET) on Monday (March 9) almost called for the “circuit breaker” after the SET Index hit the lowest level at 1,249.31 or 8.4 per cent.
When the market is beset by high fluctuations, the SET will automatically use the “circuit breaker” to allow investors to follow news that affects investment for 30 minutes when the index falls more than 10 per cent and for one hour when the index falls more than 20 per cent.
“The SET has used the circuit breaker three times. The first time was on December 18, 2006, when the Bank of Thailand shocked both the currency and equity markets with its announcement that foreign inflows would be subject to a 30 per cent reserve requirement, resulting in the SET Index on December 19, 2006 hitting the lowest level by 19.5 per cent,” the stock analyst said.
“The second and third times occurred on October 10 and 27, 2008 due to the global economic crisis, also called “Hamburger Crisis”, resulting in the SET Index falling by 10.1 per cent and 10.5 per cent, respectively.”
The analyst said that after the three events, the SET Index took about five to seven months to recover.
“The first time took about five months, while the second and third time took about seven months,” the stock analyst said.
“Irrespective of whether the circuit breaker measure will be used in this period, we believe the bearish SET Index would have a limited downside at 1,220 based on the lowest level of the bear market in the past.”
The analyst suggested that investors gradually buy stocks during fluctuations in the stock markets.
“Large and stocks with good fundamentals that fell sharply have a chance to recover first and have lesser risk than medium and small stocks,” the stock analyst added.
“We recommended buying BTS with base value at Bt15.1 per share, KBANK at Bt154, VGI at Bt10.7, AP at Bt8.6, and KKP at Bt85.”