Thailand’s benchmark SET Index of stocks dropped as much as 1.4% as Prime Minister Prayut Chan-o-cha said he’s concerned about a new wave of Covid-19 infections sweeping the nation’s capital and hinted at fresh control measures to stem the outbreak that’s already forced the closure of dozens of nightlife entertainment venues.
Gen Prayut chose to hold the weekly cabinet meeting on Wednesday via video conference after Transport Minister Saksayam Chidchob, secretary-general of the Bhumjaithai Party, tested positive for Covid-19 and several cabinet ministers remained in home quarantine. The prime minister has tested negative so far, he told reporters on Wednesday.
Shares of hotels, restaurants and retailers tumbled on concerns of tougher measures hurting sales. But Sri Trang Gloves Thailand Plc, the nation’s biggest glove maker, jumped as much as 6% on speculation the new outbreak will fuel demand for its products.
“Although the impact on the economy will probably be less severe compared with the previous outbreak, the surge in new cases may raise concern whether the infections will jump further and probably reach a new peak,” said Padon Vannarat, the head of research at Yuanta Securities Co. “We advise investors to be cautious about equity investments.”
The control measures ahead of the Songkran festivities next week threaten to undermine a nascent recovery in Southeast Asia’s second-largest economy and can potentially derail plans to gradually lift curbs on vaccinated foreign tourists. The central bank sees tourism, a key driver of the economy, as key to returning the nation to growth after it shrank by 6.1% last year.
“The situation is worrisome. The fresh wave will likely hit hard private consumption, which just showed signs of a strong recovery in March,” said Naris Sathapholdeja, an economist at TMB Bank Plc in Bangkok. “It also poses risk to the overall economic recovery.”
Thailand saw nearly 800 new cases in the past three days, almost half of which were traced to the new clusters in Bangkok. The country reported 334 new infections on Wednesday, taking the total to 29,905.
A Covid-19 panel of officials refrained from recommending blanket measures to tackle the outbreak and advised provinces to issue targeted steps to contain the pandemic, said Apisamai Srirangsan, a spokeswoman for Centre for Covid-19 Situation Administration. The health and interior ministries will discuss the need for further measures to stem infections tied to the Bangkok clusters, she said