Tourism stocks surge as China removes travel curbs

Tourism stocks surge as China removes travel curbs

Thai tourism stocks soared yesterday on news that Beijing is lifting travel curbs earlier than expected, boosting hopes that Thailand's tourism sector, trade and spending would recover much faster than the previous forecast.

The move, set to take effect from Jan 8, marks the first time that quarantine measures for those travelling abroad would be lifted. China has clearly signalled that its Covid-19 measures would be gradually eased further, said Asia Plus Securities (ASPS).

But arriving passengers still have to do a PCR test 48 hours before boarding from the country of origin. According to policies announced earlier, China will relax protective measures from the highest level (Category A) to the lowest level (Category B).

As soon as the lifting was announced, the number of international flights from China surged by more than seven times, data from Bloomberg showed. The reopening would support the Chinese economy to expand faster next year. The International Monetary Fund expects China's economy to grow 4.4% in 2023.

"China's reopening from the beginning of next year would support the Thai tourism sector and exports to recover faster than expected. It will encourage both Thai and Chinese economies to expand continuously amid the US and EU recession risks while geopolitical risks are closely monitored and could be more pronounced next year," ASPS said in its research.

The Tourism Authority of Thailand forecast 20 million arrivals next year. Pre-Covid, Chinese tourists made up to 30% of the total international arrivals, or about 11 million in 2019.

Tourism stocks that benefit from China's reopening are Airports of Thailand (AOT), Central Plaza Hotel and Erawan Group, it added.

Exports would also get a boost. In 2019, exports to China accounted for 12% of total overseas shipments. In the first 10 months of 2022, exports to China dipped 6% year-on-year.

Top five exports to China are fresh fruits, frozen and dried fruits, rubber products, plastic resin, cassava products, and computers and components. Once China reopens, Thailand's trade with China will become more active.

Listed firms that rely on exports to China are North East Rubber (NER), Sri Trang Agro-Industry (STA), Hana Microelectronics, KCE Electronics, and Taokaenoi Food and Marketing (TKN).

Do you like the content of this article?
COMMENT

Qatar investors 'plan bid for Man U'

LONDON: Qatari investors are planning to make a huge bid to buy the Premier League club Manchester United, the Daily Mail newspaper has reported, citing unnamed sources.

18:42

Yala durian registered as GI product

A type of durian unique to the southern border province of Yala has been given official geographical indication (GI) designation, which should help sales and increase growers’ income, according to Deputy Commerce Minister Sinit Lertkrai.

18:20

Sonthaya 'group of 12' to join Pheu Thai

A group of 12 politicians led by veteran Chon Buri politician and former Pattaya mayor Sonthaya Kunplome will contest the general election under the Pheu Thai Party banner.

18:00