Despite pressure from the government's fresh batch of Covid control measures and a new record high for daily infections, the SET Index still gained yesterday, closing at 1,552.09 points, up 8.42 points or 0.55%.
Many analysts said the Stock Exchange of Thailand Index is likely to continue hovering above 1,500 points and the market needs at least a week to assess how the new Covid control measures would affect the bourse's performance.
The index gradually rebounded in afternoon trading, with moderate volume valued at 85.3 billion baht, spurred by retail investors and brokerage firms, while foreign investors reported net selling.
Therdsak Thaveeteeratham, an executive vice-president at Asia Plus Securities (ASPS), said the market sentiment is one of risk as daily new infections remain high and people wait to see the impact of the government's measures.
Before the announcement of the government's measures, the index fell on market worries over the intensifying pandemic and uncertainties regarding control measures. The market quickly rebounded after the control measures were clarified.
"The number of Covid-19 patients keeps skyrocketing, depleting the capacity of the public health system," Mr Therdsak said.
He said the market may need 7-14 days to see how the new control measures affect the economy and whether the pandemic situation will improve.
The net positive figure between the number of cured Covid patients and new patients reflects the capacity of the country's public health system and can predict a downtrend in the mortality rate.
The first support line for downside moves on the SET is 1,510 points if the current situation can be maintained, said Mr Therdsak.
"If the measures cannot curb the number of daily new infections, the stock market may take longer to respond to the situation. In that case, the SET Index could drop below 1,500 points," he said.
Mr Therdsak recommends investors reserve 7% of total assets in cash and the money market, buying good stocks when their prices decline.
He suggests allocating 30% of a portfolio to Thai shares and 35% to foreign shares to take advantage of the weakening baht, which could touch 33 to the dollar if the pandemic spread does not ease. Mr Therdsak recommends investing 15% in bonds, 10% in alternative assets, and 3% in cryptocurrencies and digital assets.
Food and beverage, hotel and tourism stocks are expected to suffer the most from the new measures, followed by real estate and commercial banks.
The Securities and Exchange Commission said the capital markets have instruments and measures to help small and medium-size enterprises and startups to raise funds during the pandemic. This includes real estate investment trust (REIT) buybacks, REITs for private investors, and high-yield bonds to help businesses facing liquidity problems.