Asia Plus Securities (ASPS) recommends investing in high-dividend and rubber glove stocks to avoid economic risks from the Omicron strain.
The new wave of the pandemic from the Omicron variant is pressuring bourses around the world, just as some were hoping for a short-term rebound.
The pandemic has a high probability of escalating after the New Year holiday as Omicron is reportedly resistant to non-mRNA vaccines and not many people have access to vaccine booster doses, said the brokerage.
ASPS said the SET Index dropped 1.98% since the new variant was discovered last month, significantly lower than the global average of a 3.41% contraction. This suggests the Thai bourse may have a better chance of weathering an impending economic slump, said the brokerage.
The company believes the support range for the SET Index is 1,590-1,600 points and the lowest point in the range of concern for Omicron is 1,568 points.
ASPS analysts said the sectors likely to be heavily affected by the Omicron outbreak are transport, banking, tourism, construction and media, while the beneficiaries will be personal products, pharmaceuticals, rubber gloves and electronics.
The brokerage said domestic cases of Omicron are expected to rise until after the Christmas and New Year holidays, causing the SET Index to remain volatile during that period.
For short-term investment strategy, ASPS recommends investing 20% in cash and focusing on stocks with high dividend yields, such as Advanced Info Service and M.C.S. Steel, or those with unique supporting factors such as Central Pattana.
Chaiyot Jiwangkul, a technical investment analyst at Krungsri Securities, said the government announced a new array of stimulus packages yesterday, including the fourth phase of the co-payment scheme, which caused investors to return to retail and IT shares as they are expected to benefit from such measures.
He said investors need to closely follow the results of the Thai Monetary Policy Committee meeting today, which will signal the direction of the Thai economy next year, as well as monitor the pandemic situation in Europe and the US.
Daily Covid infections in Thailand are still below 3,000 cases, but more Omicron cases will start to emerge after the New Year holiday and investors should brace themselves for the impact, said Mr Chaiyot.
