The economic impact from lockdowns may cause Thai GDP to drop by 300 billion baht or 1.7 percentage points, while listed companies' earnings price per share are expected to decline by 4% this year, as reflected in recent decreases in share prices, according to Kasikorn Securities.
The Thai government has extended the lockdown until at least Aug 2 and increased the number of provinces under lockdown and curfew.
Although factories are allowed to remain open under special circumstances, the stock prices of many companies continue to decline.
However, while some stocks are suffering from the measures, others are less affected by the lockdown, even enjoying an upside such as electronics, food and beverage, agriculture, rubber gloves, container ships, low-rise housing developers, asset management companies and hospitals.
Kasikorn said the impact will be greater when Thailand announces full lockdowns nationwide.
Analysts at the brokerage said the SET Index will rise to around 1,540 points if lockdowns remain in place for one month. However, it will drop to 1,480 points if they are prolonged.
SCB Securities (SCBS) research stated the government is preparing to reintroduce spending stimulus measures such as the "Khon la Krueng" co-payment scheme, "Ying Chai Ying Dai" (the more you spend, the more you get) e-voucher cashback scheme, and the "Shop Dee Mee Kuen" (shop and payback) programme, with the limit increased to over 100,000 baht this time.
The reintroduction of these measures is aimed at stimulating economic activity and injecting at least 100 billion baht into the economy within one quarter.
These measures will predominantly benefit businesses in the retail and IT sectors, said SCBS.
However, if the lockdown is extended up to three months, travel restrictions will heavily impact tourism-related businesses.
SCBS estimates the number of tourists travelling to Thailand will total only 1.2 million, down 82% from the previous year, with revenue dipping by 74%.
If the pandemic cannot be contained even after the lockdown, the tourism industry will remain in a slump during the fourth quarter this year, said the brokerage.
SCBS recommends investment in safe stocks such as those with high dividends, power plants, and the medical and ICT industries.
The brokerage warns investors to be cautious concerning equities related to shipping and agricultural products, which are expected to be more volatile.
In addition, investors should monitor outbreaks in provinces other than those deemed dark red zones and factory clusters, which are increasingly becoming severe, as they will affect the supply chain in the short term, analysts from SCBS said in a statement.