The Stock Exchange of Thailand saw a continued downturn in March; however, the decrease was significantly less pronounced compared to the first two months of the year.
The SET index began March at 1,203.72 points and concluded the month at 1,158.09, experiencing a decrease of 45.63 points, which equates to a decline of 3.8%.
The primary factor dampening the market was anxiety stirred by the escalation of the trade conflict under US President Donald Trump’s leadership. Early in March, Trump declared imminent 10% tariffs on imports from Canada, Mexico, and China, which amplified concerns across the global markets, including within the United States.
In Thailand, political tensions escalated due to a no-confidence debate held at the end of March. Despite the fact that the alliance parties remained largely unchanged, internal disputes became more apparent during this period.
On March 28, a major earthquake centered in Myanmar impacted Bangkok. This event undermined confidence, particularly within the vulnerable real estate sector, and also cast a shadow over the tourism industry due to prevailing negativity.
The Stock Exchange of Thailand ended lower by 1.5% on the final trading day of March. The average daily traded value dropped significantly by 26%, falling to 38.1 billion baht compared to the previous month.
On April 2, Trump declared new tariff rates affecting over 80 nations, which sent shockwaves globally. The maximum rate set was 49%, with an initial 10% baseline applied universally.
Thailand encounters a 36% tariff rate for all products imported from the U.S., significantly surpassing what most economists anticipated and going beyond the levels imposed on numerous other nations.
The recently implemented tariff rates reignited a trade conflict set to commence on April 9th involving numerous nations. Several impacted countries assembled negotiation groups and initiated discussions with Washington, yet significant advancements seemed unlikely.
Beijing swiftly responded by imposing a 34% tariff on goods coming from the U.S., mirroring the original 34% tariff imposed on Chinese imports into the United States. In response, Trump raised the tariff on China to 104%, which further cooled investor confidence.
On April 9, investors breathed easier following Trump’s announcement of a 90-day suspension on retaliatory tariffs for every country except China.
Every asset class has taken a significant downturn, particularly global stock markets and oil prices. The ongoing trade conflict is fueling concerns about an impending economic recession across the globe.
Thailand is next in line for talks, yet if the tariff rate remains at 36%, the nation’s GDP growth might drop to approximately 1.5% this year since exports make up 80% of its GDP and the U.S. accounts for 18% of overall export values.
Additionally, the latest earthquake might further drag down the GDP since several tourists have already canceled their trips to Thailand.
APRIL STOCK PICKS
Our present investment strategy centers around equities with strong foundations, companies primarily operating within their own countries, and promising short-term prospects. Among our selections are the trading company Berli Jucker (BJC), the shopping center developer Central Pattana (CPN), the home improvement store operator HomePro (HMPRO), and Siam City Cement (SCCC).
Our top choice in the retail industry is BJC. Since last year, they have shifted their emphasis to perishable goods with the aim of enhancing profit margins, which we think was a strategic move. For this fiscal period, we anticipate further margin improvements ranging from 20 to 40 basis points. Additionally, cost-cutting measures are projected to lower the proportion of selling and general administration costs relative to total revenue by 10 to 20 basis points. To boost operational effectiveness, the firm intends to open seven new big-box Big C locations, establish around 200 smaller outlets, and refurbish 17 current ones. Furthermore, the upcoming phase of the governmental digital payment voucher program is likely to influence business performance positively during mid-year.
The prominent property and shopping center developer CPN has finished refurbishing several of its centers with an aim for a sustained compound annual growth rate of 10% over time. The company’s leadership stated that their newly launched facility in the Lat Phrao district won’t draw customers away from neighboring malls but instead seize emerging opportunities as local demand stays robust. Additionally, CPN plans to keep incorporating properties into its real estate investment trust biennially, targeting an enhancement of asset valuation by around 20 billion Thai Baht annually.
In the realm of home improvements, HMPRO has recently declared a share repurchase program worth up to 7 billion baht for approximately 800 million shares, which is expected to enhance investor confidence in the stock’s value. Additionally, we anticipate that HMPRO could see an uptick in business due to reconstruction needs following recent earthquakes that left numerous homes and apartments severely compromised and requiring upgrades. For this fiscal year, the company aims for a same-store sales increase between 2–3%, coupled with overall revenue expansion within the range of 5–7%. While growth may remain steady during the initial six months of 2025, stronger gains are anticipated towards the latter part of the year.
After recent hikes in cement prices exceeding 400 baht per tonne, SCCC has come into the limelight. Despite these increases potentially being temporary, they should provide the firm with short-term gains. Additionally, SCCC stands to profit from heightened demand following earthquakes. We anticipate that the government’s investments in infrastructure initiatives will further boost economic activity this year. Furthermore, SCCC is recognized for offering substantial returns, projecting nearly a 7% annual dividend yield.
Provided by Syndigate Media Inc. ( Syndigate.info ).
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