Thai stocks tumble as China virus adds to economic woes

Thai stocks tumble as China virus adds to economic woes

SET index hits lowest level in more than 3 years

The Stock Exchange of Thailand index slumped on Monday amid concern China's ban on all group tours would damage the vital tourism industry, adding to the problems of a struggling economy.

Tourism is a key driver of Thai growth and a bright spot in Southeast Asia's second-largest economy, which is growing at its slowest pace in years. Chinese tourists are Thailand's biggest source of visitors.

The SET index slid as much as 3% to its lowest in more than three years, with Airports of Thailand Plc (AOT) down as much as 6% to a more than seven-month low, and Minor International Plc (MINT) sliding as much as 9%.

The index closed 45.40 points or 2.89% lower to close at 1,524.15, in turnover worth 69 billion baht. AOT shares plunged 2.75 baht or 3.85% to 68.75 baht, while MINT stocks dipped 2.25 baht or 6.72% to 31.25 baht.

"It's a combination of factors," said Natapon Khamthakrue, a strategist at Yuanta Securities (Thailand), citing the virus and the delayed government budget bill among them.

"These mean there is no hope now," he said. "We had expected the budget to help the economy and tourism to grow".

China has halted all group tours from Monday, as it seeks to curb the spread of a deadly virus. Thailand on Sunday confirmed an eighth case of the virus.

"This is a big deal. I think about 90% of Chinese tourists will disappear each month," Chairat Triratanajaraspon, president of the Tourism Council of Thailand, told Reuters.

"If the situation drags on, our Chinese tourist target will be missed," he said.

The council earlier predicted about 11 million Chinese tourists this year, after 10.99 million in 2019.

In 2019, Chinese tourists accounted for 28% of overall foreign tourists, and their spending was 544 billion baht.

Charnon Boonnuch, an economist at Nomura in Singapore, said the virus outbreak could be another downside risk to his economic growth forecast of 2.7% this year, a sluggish recovery from a forecast of 2.5% in 2019, a five-year low.

However, Deputy Prime Minister Somkid Jatusripitak said he expected the coronavirus would have only a short-term impact on tourism, as China should be able to handle the situation.

He also sought to calm investors unnerved by the market sell-off, saying battered stocks would later rise.

"Investors should not panic. Take it easy," Mr Somkid said. "Do believe that our economic fundamentals are still good".

Do you like the content of this article?

Numbers in Phuket tourism revival bid low but 'encouraging'

Visitors to Phuket in July were at just 1% of pre-pandemic levels, an official told Reuters, as a bid to revive international tourism gets off to a slow start amid the country’s biggest Covid-19 outbreak yet.


Kanchanaburi closes 1 retailer, 1 factory over Covid fears

KANCHANABURI: A Siam Global House branch and a famous frozen food factory have been ordered to close for two weeks from Wednesday amid fears the two places might spawn new coronavirus clusters.


Man arrested for 'alternative vaccine' scam

Technology Crime Suppression Division police have arrested a man for taking orders on Facebook for "alternative vaccines" against Covid-19, failing to deliver them and allegedly pocketing about 200,000 baht.