Despite a short-term boost for the local stock market from inflows into extra units of Super Savings Funds (SSFs), the second-quarter investment outlook remains dampened by the pandemic, says Asia Plus Securities (ASP).
Apart from investment inflows into extra SSF units and recently unveiled aid measures to mitigate the virus outbreak, there are no positive developments for the stock market amid rising infections globally, said Therdsak Thaveeteeratham, executive vice-president for research at ASP.
The Securities and Exchange Commission has allowed 18 SSFs to sell extra units. Investors must purchase these investment units between April 1 and June 30 and hold them for at least 10 years, starting from the date of unit purchase.
The launch of the extra SSF units seemingly failed to rev up the market, as the SET index yesterday fell by 1.8% or 20.35 points to close at 1,105.51.
The outbreak has caused outflows from the equity and bond markets, Mr Therdsak said.
Year-to-date net outflows amount to 126 billion baht for the local stock market and 108.5 billion baht for the bond market, according to data from the Stock Exchange of Thailand and the Thai Bond Market Association.
The baht has depreciated by 8% year-to-date against the dollar as a result of heavy fund outflows, Mr Therdsak said.
The prolonged outbreak in Thailand will take a heavy toll on every economic segment, from tourism and international trade to domestic consumption, resulting in a 1.4% contraction for the economy this year, according to ASP.
The company has revised its net profit projection for listed firms on the SET and the Market for Alternative Investment to a combined 780 billion baht this year, down 16.5% from 930 billion baht in 2019. The most affected sectors in terms of lower net profit are petrochemicals, banks and hotels.
The Bank of Thailand will likely reduce the policy interest rate again this year to shore up economic growth momentum, ASP said.
The central bank has already cut the benchmark rate twice this year, with a 25-basis-point reduction each time, to a record of low 0.75%.