Look beyond the SET Index for opportunities

Every time the index drops, a sizeable number of investors wait for the right moment to take advantage of the cheaper market. More careful observation, however, shows that opportunities in the Thai stock market do not solely reside in the rise and fall of the SET Index. 

Opportunities that are more interesting than the index are stocks yielding good returns amid turbulence. They can be classified as follows. 

 

All-around robust stocks. These are the stocks with solid, dynamic contributing factors. They are related to daily-life items. So even with a slow economy, these stocks would be very lightly affected. Included in the group are stocks of food and food-related companies with good financial stability and constant strong flows of cash; of transport companies, especially those in the capital city; and of telecom companies, constituting service providers and telecommunication devices, which are expected to benefit from the upcoming auction of fourth-generation cellular licences.

 

Stocks boosted by AEC. Thriving international trade resulting from the advent of the Asean Economic Community is a boon for stocks of transport and logistics companies, which are expected to grow from increasing economic activities, and of those companies with a better competitive edge waiting to gain from freer trade with neighbouring countries.

 

Stocks riding on economic stabilisation. A slowing economy and increasing household debt reflect the need to spend among people and households. This should be good for microfinance businesses and thus their stocks.

 

Dividend stocks. These stocks are always interesting, especially when the interest rate is low. In this time of market turbulence, apart from presenting investors opportunities for some nice dividends, these stocks serve as a cheap access to investment that can be sold at a rebounded price later on. However, not everyone is able invest at the right moment. Gradual investment is then a good way to spread your risk. And, as always, a thorough study of the stocks you are to invest in will significantly increase the possibility of gains. 

 

Investments contain risk. Investors should study the prospectus before making a decision to invest.

 

Asset Plus Fund Management contributed this article.