By PHUWIT LIMVIPHUWAT
A report forecast that the Kingdom’s high-net-worth individuals (HNWI) – those with assets exceeding US$1 million – are expected to make more offshore investments, focusing on equities and mutual funds in the next five years.
The SCB Julius Baer Wealth Report Thailand 2019 said the combined worth of the top tier in the economy was US$341 billion in 2018 and would see a healthy gain to $401 billion in 2020.
SCB Julius Baer aims to capture 10 per cent of the Thai HNWIs in the next five years with what it calls its holistic wealth management service. It also plans to increase its number of relationship managers from 14 to 50 in the next two years, said the company’s chief executive officer Jiralawan Tangitvet.
Jiralawan was speaking yesterday at a press conference on Thailand’s HNWIs held by SCB Julius Baer. She was joined by Pearlyn Wong, head of investment publishing Asia at Julius Baer, and Mark Matthews, head of research Asia at Julius Baer.
“Thailand’s HNWI wealth is estimated to grow by 9.9 per cent from 2015 to 2020, reaching a combined worth of $401 billion at the end of next year,” said Wong, citing growing household wealth, economic development and a buoyant property and stock market as the key drivers behind this growth.
She said that in 2010 the HNWI Wealth/Nominal GDP ratio in Thailand stood at 62.7 per cent. This is set to increase to 71 per cent in 2020.
Wong and Matthews project that offshore investment in stocks, as well as in mutual funds, will be a rising trend for Thai HNWIs.
The wealth report surveyed 350 HNWIs in Thailand and categorised their participants into three age groups: millennial entrepreneurs (aged under 40), mature investors (41 to 60) and techie retiree investors (aged 61 years and older).
The report found Thai HNWIs are still under-invested compared to their global counterparts when it comes to offshore investments and predicted that more offshore investments will be made in the upcoming years.
The report said that of the respondents, 40 per cent hold at least one offshore investment, including investments in foreign equities, mutual funds and direct real estate. However, up to 65 per cent of them surveyed indicated a lack of understanding when it came to accessing offshore investments.
Stocks were among the most popular investment destinations, making up at least 17 per cent of the portfolio allocation for all three age groups. This is followed by investment in mutual funds, which attracted at least 15 per cent of the respondents’ total investments.
The trend in the next five years is that there will be more investment by Thai HNWIs in these two areas, with offshore investments becoming increasingly popular, Wong said.
Matthews said rich Thais are starting to seek more opportunities to make offshore investments, especially in the US market as well as the Swiss market.
This is because the US is still by far the largest market to invest in, more than twice the size of the Chinese or UK markets. Meanwhile, the Swiss market may be seen as an attractive investment destination for investors because of its stability, Matthews said.
The report found that for respondents, when asked to mention offshore investment providers, US brands topped the list by making up to 25.5 per cent of total mentions followed by Swiss brands at 19.9 per cent.
SCB Julius Baer is a strategic wealth management joint venture between Siam Commercial Bank and Julius Baer, a Swiss wealth management group and one of the four largest private banks in Asia. The joint venture was formed in 2018 and was licensed for its Thai operations in April this year.
The firm offers wealth management products such as funds and alternative investments as well as products and security recommendations.