Tourism and retail stocks stand to benefit from reopening plans

Thai Prime Minister Prayut Chan-ocha announced on Wednesday his plans to reopen the country by October 14. The news is likely to benefit many of the listed tourism-related companies.

Prayut sets October reopening target for Thailand (Read more here)

Despite lingering concerns over vaccinations and the Delta variant of Covid-19, Prayut said that he was taking a calculated risk to help those whose livelihoods had been affected and to halt the free fall of the economy.

Thailand must step up vaccine program to meet October reopening deadline (Read more here)

Regardless of Delta and vaccine concerns, several sectors will likely see a boost from he prime minister’s announcement.

Thursday Beneficiaries

Tourism-related companies, whose shares have suffered for over a year due to Covid-19 restrictions, looks set to be the immediate beneficiaries of Prayut’s new plan.

AOT, CENTEL, CRC, CPALL, ERW, BA, MINT and SPA all stand to benefit from the reopening with tourism investors finally seeing light at the end of the tunnel, Krungsri Securities told its clients early this morning.

Airports of Thailand Plc (AOT), Central Plaza Hotels Plc (CENTEL), Central Retail Corp Plc (CRC), CP All Plc (CPALL), Erawan Hotels Plc (ERW), Bangkok Airways Plc (BA), Minor International Plc (MINT), Siam Wellness Group Plc (SPA) along with the Central Pattana Plc (CPN), CPN Retail Growth Leasehold Reit (CPNREIT), Major Cineplex Plc (MAJOR), and MK Restaurant Group Plc (M) are stocks that analysts say will benefit from Wednesday’s announcement.

Retail stocks including CPNREIT, CPN, MAJOR, M, CRC and SPA are also set to benefit from the reopening with people able to move about freely and spend, Maria Lapiz Managing Director of Maybank Kim Eng Thailand said to clients.

She said that among the other players that could benefit from news of reopening are industrial estate operators such as WHA Corp. Plc (WHA) and Amata Corp Plc (AMATA) because it is believed that when Thailand reopens Chinese investors will come rushing in and signing land purchase deals.

Meanwhile Krungsri Securities added that restaurants are likely to benefit from the possible lifting of restrictions that is slated to be undertaken tomorrow. 

Krungsri also says that the financial sector could benefit from the easing and inflow of tourism despite the sell-off previously seen due to the fear of interest rate cuts.

Meanwhile today’s trading is likely to focus on some key stocks as crude oil has slipped while Baltic dry index (BDI) rose by 5% which could push shipping stocks such as Precious Shipping Plc (PSL) and Regional Container Lines Plc (RCL) higher. 

The fall in crude oil prices would mean that some big market capitalized stocks such as PTT Plc (PTT), PTT Exploration & Production Plc (PTTEP) and Indorama Ventures Plc (IVL) are likely to be sold while information technology stocks that have benefited from the work from home (WFH) will also see some easing as people may start to return to offices as the country starts to reopen.

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