Equities expected to attract more investment in 2016: asset managers
ASSET MANAGERS EXPECT Thai equities to attract more investment next year thanks to the expansions of public investment and tourism.
“Thailand’s market next year should be better than this year because of the increase in the clarity and commitment of the government’s investment on basic infrastructure.
“But there are still external risks from China’s GDP slowdown to about 6.5 per cent in five years, which causes fluctuation in the capital market,” Adithep Vanabriksha, chief investment officer of Aberdeen Asset Management (Thailand), said last week.
Thailand’s shares are more interesting than those in neighbouring peers after the US Federal Reserve hiked interest rates this month since other equities in the region have been hit much harder.
This is a good time to invest in Thai shares.
“China’s markets have not performed recently but it is a good time to consider investment long term. There's |no need to wait for the market to pick up, then invest in Chinese equities.
“The company still prefers H-shares (shares of a company incorporated on the mainland and listed on the Hong Kong Stock Exchange or other foreign bourse),” he said.
Triphon Phumiwasana, director of Maybank Asset Management (Thailand), the government’s invitation for foreign investors from around the world to come and receive Thailand’s investment information next year at the “Thailand Focus 2015” seminar, has provided foreign institutional investors with more clarity on the government’s investment in infrastructure in 2016.
“Besides, the economic confidence that has been built the government has also provided confidence in terms of the political situation via reforms. These have projected a good image for investment in Thailand next year,” he said.
Equities will continue to provide a better return than other assets and they will be able to provide a high return in the long term.
Maybank Asset is expected to launch one Thai equity fund next year with a target value of Bt6 billion-Bt7 billion. The fund will focus on small and mid-capitalisation stocks from the government’s promotion, while small and mid-caps do not react too much to negative external and internal factors compared to large-caps.
Kasikorn Asset Management (KAsset) and Kasikorn Research Centre expect gross domestic product to pick up by 2.5-3.5 per cent.
The forecast the stock index at about 1,500-1,550 points with a forward price-to-earnings ratio of 15.3-15.8 times.
The management house will concentrate on industries that are expected to gain from government’s investment on mega projects including construction, logistics and hotels, from the expectation that the tourism industry will continue to outperform next year.
Other industries that continue to expand during an economic slowdown such as hospitals, consumer products and retail are also on KAsset’s radar next year.
