After the House of Representatives passed the 2020 budget bill, all of construction companies, leading by 3 big group such as CH. Karnchang Public Company Limited (CK), Italian-Thai Development Public Company Limited (ITD) and Sino-Thai Engineering and Construction Public Company Limited (STEC), and other small and medium companies like Unique Engineering and Construction Public Company Limited (UNIQ), Nawarat Patanakarn Public Company Limited (NWR), Pylon Public Company Limited (PYLON) and Seafco Public Company Limited (SEAFCO), are currently laying a hope on this budget as it worth about 3.2 trillion baht.
Therefore, all of construction corporations were expected the Government to launch several big projects. Although there are few obstacles, but the 2020 budget has already been effective. And resulting a speculation in the constructions’ equities previously.
However, the epidemic of Covid-19 since the beginning of this year until now has spread more widely causing the Government to prioritize over the preventive measures against virus outbreak.
The budget that is supposed to spend on large projects may have to be suspended, and the suspension could last until the end of the year because the measures enforced by the Government at this time are just measures to “sustain” the economy, not to stimulate the economy.
The construction shares hence still be on a dream as the Government might not released any new projects soon. It could inferred that even 2019 was a bad year, but the year 2020 could be much worse. Moreover, many investors are gathering to sell those shares to ease the consequence risk.
What is the construction stocks waiting for…?
Proving the share price of construction stocks to be in a coma, especially ITD that within a week the price has lowered by 37.17% and decreased totally 54.19% in a month, while STEC dropped by 32.77% in a week and 39.70% in a month. CK fell 28.83% in a week and decreased 39.19% in a month.
Meanwhile UNIQ slashed 43.10% in a week and 55.10% in a month, NWR fell 23.33% in a week and 50.00% in a month whist PYLON dropped 33.48% in a week and 40.00% in a month, and SEAFCO decreased 26.42% in a week and dropped 37.60% in a month.
Right now, it quite impossible to tell when these stocks to be recovered because there still no positive factors or sign helping to revive, and any prayer might not help neither. Be happy and embrace tightly all cash then will be safe.