Thai tourism stocks rise despite first case of Omicron variant

Although Thailand reported its first case of the Omicron variant on Monday, hospitality and travel stocks are on the rise with Asia Aviation (AAV) and Minor International (MINOR) leading the pack.

On Tuesday, AAV gained 7.14 per cent to 2.70 baht, and MINT surged 6.30 per cent to 29.50 baht.

Following the local three-day holiday, the Stock Exchange of Thailand (SET) showed a rebound from last week when it faced a sell-off pressure caused by concern over the Omicron variant. The stocks most affected were tourism-related.

“The market impact should be limited given current views from medical experts that the variant leads to mild symptoms,” said analyst Rakpong Chaisuparakul at KGI Securities in a note about the Omicron variant. “The US stocks also recovered strongly overnight, after chief medical advisor to US President Anthoni Fauci confirmed that the severity of Omicron is low.”

Rakpong, however, warned that the discovery of the Omicron variant in Thailand could result in some volatility to the market.

Thai authorities detected the first case of the Omicron coronavirus variant in a U.S. citizen who had travelled to the country from Spain in late September. The patient had only mild symptoms, but it sparked fear that the government might move to shut down the country once again. 

The SET may also benefit from a spike in crude oil prices. Rakpong added that Saudi Arabia raised crude selling prices to the US and Asian clients, citing this as an indication that demand for oil remains strong. 

Krungsri Securities’ analysts expect Central Plaza Hotel (CENTEL) to be among the hotel operators who see the fastest post-Covid recovery thanks to its diversified portfolio which includes its food unit. 

CENTEL rose by 6.25 percent from its prior closing  to 34 baht by midday.

Despite concern that the country would see a significant shift backwards, analysts are urging the public to avoid sounding the alarm bells just yet. 

“The impact is likely small as investors have already responded to the news, and mortality rates from the Omicron variant have not climbed,” Krungsri analysts wrote. 


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