Investors Dump Thai Major Hotel Stocks as Omicron Fears Loom

Investors dumped five Thai major hotel brand stocks as fears over COVID-19 omicron variant in the country escalated and the Ministry of Public Health is planning to revoke the Test & Go entry scheme.

As of 15.30 hrs. local time in Thailand, the share price of Central Plaza Hotel Public Company Limited (SET: CENTEL) dropped THB1.25/share or 3.79% to THB31.75/share, with a trading value of THB99 million.

The share price of Dusit Thani Public Company Limited (SET: DUSIT) dropped THB0.05/share or 0.51% to THB9.75/share, with a trading value of THB1.7 million.

The share price of The Erawan Group Public Company Limited (SET: ERW) dropped THB0.06/share or 2.00% to THB2.94/share, with a trading value of THB31 million.

The share price of Minor International Public Company Limited (SET: MINT) dropped THB1.50/share or 5.08% to THB28.00/share, with a trading value of THB982 million.

The share price of S Hotels and Resorts Public Company Limited (SET: SHR) dropped THB0.10/share or 3.18% to THB3.04/share, with a trading value of THB30 million.

Capital Nomura Securities (CNS) said that the report of 63 confirmed omicron cases in Thailand and one local transmission case, as well as the decision whether to suspend the Test & Go entry scheme have significantly added a negative sentiment to the stock market. 

Anutin Charnvirakul, the Public Health Minister, stated in an interview with Channel 9 that the government is now considering calling off the Test & Go program and reimposing a quarantine as the outbreak in Thailand worsens.

In terms of sentiments, CNS anticipates ERW to be the hardest hit, with revenue from hotels in Thailand contributing for 96% of entire revenue, or 92% of total revenue in 2019, followed by CENTEL, which has revenue from hotels in Thailand accounting for up to 83% of total revenue, or 33% of total revenues in 2019. For MINT,  only 14% of revenue came from Thailand, or accounting for 10% of total revenue in 2019. MINT, on the other hand, has already had a sentimental effect from the omicron outbreak in Europe, driving numerous countries to continue to have record daily infections.

However, CNS maintains a “Bullish” rating on the tourist industry and chooses CENTEL as a Top Pick, stating that the company’s operations have already bottomed out and the restaurant business is on the recovery following the lifting of lockdowns.