Spread risks abroad, especially in Europe and China, fund analyst says
PHILLIP SECURITIES (Thailand) is still positive on investment in equities despite the current fluctuations and recommends that investors spread out their risks abroad, especially in Europe and China.
The firm recommends that if 60 per cent of an investor’s portfolio is in equities and 40 per cent in bonds, half of those equity investments should be foreign and the other half Thai.
Sanupong Suthadtumakul, a fund analyst at Phillip Securities, said euro-zone stocks were interesting because the overall economy in that region is improving with the prospect of more quantitative easing by the European Central Bank.
Meanwhile China’s downside risk is now limited – the market has acknowledged the intended slowdown in growth and the yuan is more stable, so there might be a chance for an upside in the economy, with positive short-term outlooks for Chinese equities.
“If you are looking for long-term investment over the next three years, then Chinese stocks are even more interesting in this aspect,” he said.
He noted that H-shares – mainland Chinese shares listed on the Hong Kong Stock Exchange – currently had a P/E (price-earnings) ratio of around 9 times, while A-shares (those in the Shanghai and Shenzhen stock exchanges) had a P/E ratio of around 12-13 times. “The Shanghai-Hong Kong Stock Connect channel means investing in H-shares will be safer, but if you are looking for investment in the long term, both markets are interesting.”
Sanupong said investors should hold on to their US and Japanese shares and wait for more clarity on the various economic and monetary changes that might affect those countries’ economies and listed companies, while new money should wait and see.
Healthcare funds, whose prices have fallen recently, are perfect for long-term equity investment, since there will definitely be more old people in the next 10-20 years. New investment in gold, besides that done to spread risk in the portfolio, should be avoided. As for oil equities, buy when crude is priced at US$40 a barrel and sell when it hits $55, he advised.
He said Phillip Fund SuperMart’s assets under management (AUM) had increased by 10 per cent from the end of 2014 to Bt11 billion now, with 8,500 customers’ investment accounts. The firm expects to reach the AUM target of Bt12 billion by the end of this year.
