Thailand
Thailand: 10 investment tips for next year
Financial experts believe investment outlook is bright for the first half of next year although recent rallies in many markets might make equities look expensive.
Siriporn Suwannagarn, managing director and financial advisory head of banking at Private Banking Group, expressed confidence that the availability of a Covid-19 vaccine, coupled with huge liquidity and new government stimulus packages would make the global economy grow faster next year.
“In the past month, the success in developing a vaccine would be a very good game changer for next year, as the vaccine would help us reopen the economy on a broad-based basis,” she told the Nation.
Many countries in the second half of this year have started to reopen their economies after they shutdown most businesses in the first half due to the coronavirus outbreak.
For the second half, they could not fully reopen all economic sectors, as services sector businesses such as air travel and tourism are still faced with limitations because of the persisting virus threat.
Lately some countries including Thailand have resumed lockdown restrictions in some cities due to a new round of infections.
Some countries such as the United Kingdom and the United States have started mass vaccination, making people hopeful that the spread of the virus would be contained.
“In terms of economic growth, we could see a short-term spike in growth for the first half of next year, and probably a little bit of a slowdown in the second half,” Siriporn said.
She expected the huge liquidity injected by central banks globally would remain next year due to no risk of inflation.
The US Federal Reserve is expected to keep its policy rates low and the US government led by president-elect Joe Biden will continue to support the economy via large fiscal spending, she predicted.
Expecting a bright outlook for next year investors have been very active in stock markets, pushing the index of many markets back to pre-virus levels.
Asked about equities looking expensive now, Siriporn said that investors have to look at specific sectors and stocks, not just look at broad-based valuation (price to earnings of the S&P or of the SET).
Anticipating more economic stimulus packages by the new US government, the US dollar is on a weakening trend. Siriporn suggested that investors also turn their focus to non-US equities, such as Asian stocks and China’s stocks in particular and some European assets.
For fixed income products, investors should look at corporate bonds and high yield bonds, as the government bond yield is too low, she said.
She, however, warned that despite the availability of a vaccine, there are still many challenges and markets are subject to volatility, so investors are recommended to diversify their portfolios.
Meanwhile, KBank Private Banking (KPB) head Jirawat Supornpaibul said that his clients were very lucky as most of them are richer from investments in 2020 which is a challenging year for investment.
“Those who take more risks have more returns, but those who take less risk, might not get better returns,” he said, in summing up the performance of KBank Private Banking doing investment management for wealthy clients this year.
This year, the US, China and Japan markets performed very well while Europe and Thailand did not, he said.
He forecast that equities, especially Asian stocks, would be the focus of investor communities in the first half of next year. His view is shared by many fund managers.
JP Morgan is overweight on Indonesia, South Korea and Thailand, according to CNBC channel.
Jirawat, however, warned that risks were still there and investors have to balance equities with other assets. He suggested that investors also hold onto gold.
Jirawat’s 10 tips to investors for the first half of next year are:
1. Stay invested in global equities
2. Don’t miss Asian equities
3. Capture recovery with cyclical and small/mid-cap
4. Maintain portfolio balance
5. Enhance returns through emerging market high yields
6. Hold onto gold, for now
7. Complement returns through private
assets and hedge funds
8. Position for weakness in the US dollar
9. Strengthen in emerging
currencies
10. Sustainability
In terms of sustainability, Jirawat suggested that investors look at companies which take care of environment issues, and ignore businesses that pollute the world.
Source: https://www.nationthailand.com/business/30399914?utm_source=category&utm_medium=internal_referral