Retail Stocks Fall Dramatically after the 22-day-Shutdown Measures from BMA!

The new measures to contain the spread of coronavirus in Thailand, especially in Bangkok, had been implemented by the Bangkok Metropolitan Administration (BMA) by ordering to temporarily shut down commercial properties for 22 days.

 

On the first trading day after the announcement of the new measures, stocks in the commerce sector fell dramatically due to fears of losing income from the shutdown.

As of 10:46 (GMT+7) local time in Thailand, the share price of Home Product Center Public Company Limited (HMPRO) fell ฿1.55/share or 13.60% to ฿9.85/share. The highest price was ฿9.95/share and the lowest was ฿9.70/share.

The share price of MBK Public Company Limited (MBK) dipped ฿1.30/share or 8.67% to ฿13.70/share. The highest price was ฿14.00/share and the lowest was ฿13.70/share.

Dohome Public Company Limited (DOHOME) lost ฿0.80/share or 14.29% to ฿4.80/share. The highest price was ฿4.92/share and the lowest was ฿4.76/share.

Siam Global House Public Company Limited (GLOBAL) plunged ฿1.50/share or 13.04% to ฿10.00/share. The highest price was ฿10.10/share and the lowest was ฿9.90/share.

Central Retail Corporation Public Company Limited (CRC) plunged ฿3.50/share or 14.17% to ฿21.20/share. The highest price was ฿21.40/share and the lowest was ฿21.00/share.

 

Earlier today, Maybank Kim Eng still has a “Neutral” perspective on Thailand Retail & Retail property, saying that the temporary closure of shopping malls in Bangkok and vicinities affect operators selling non-essential consumer goods. The impact will be more or less depending on the closure period.

Operators that Maybank expects to be positively impacted are CPALL and BJC because their stores are still opened, with increasing sales from stockpiling. Hypermarkets, supermarkets and convenience stores can still open as usual, such as 7-Eleven, BigC, Tesco, Makro, Tops and FamilyMart. Sales are likely to increase significantly from stockpiling and close to home purchase.

Maybank forecasts 7-Eleven’s SSSG should recover from a negative to be positive in March, just like BigC. Makro tends to post even higher SSSG from around 5% during 2M20. However, sales to HORECA customers may decrease due to fewer tourists and restaurant-goers.

What should be followed after this are the growth opportunities of selling products online which currently represents no more than 5% of sales in the retail sector. But given the Covid-19 outbreak, coupled with the operators turned to focus on the online sales to offset the impact of closing stores, offering a discount coupon, and/or free delivery, this may result in consumers’ behaviour changing to buy products online after the situation has been resolved.