Tuesday, September 29, 2020

Thai investors urged to look overseas for higher returns

Jul 24. 2020
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By The Nation

Bualuang Securities, a subsidiary of Bangkok Bank, is advising investors to look abroad in order to manage risk and achieve higher returns than are available in the Thai stock market.

Chaiyaporn Nompitakcharoen, deputy managing director of Bualuang Securities' Non-Institutional Broking Group, said the Stock Exchange of Thailand (SET) now has a limited upside, adding that investors should consider alternative stocks not available on the SET, such as shares in e-commerce, software, and healthcare businesses.

"The company is cooperating with overseas partners to enable investors to invest in places such as the US, Vietnam, and Hong Kong stock markets," he said. "Aside from selective investments, investors can also make themed investments or invest in the Exchange Traded Fund [ETF]."

He expects the Thai stock market in the second half of this year to move between 1,280 and 1,450 points amid the economic slowdown, slow tourism recovery, and decline in listed companies' profits.

"By the end of this year, we expect the SET Index to be at 1,360, but we believe it will be more than three years before the index recovers to its pre-Covid-19 level of 1,520."

He recommended investors spread risks by incorporating 40 per cent in bonds or currency markets, 12 per cent in gold, 7 per cent in the Real Estate Investment Trust (REIT) and property funds, 10 per cent in the Thai stock market, and 31 per cent in foreign stock markets.

Meanwhile, Santi Thananiran, chief investment officer at BBL Asset Management (BBLAM), said he was confident the Thai stock market had a limited upside and downside, adding that the market would recover in 2021 but not above 2018 levels.

"Returns of up to 7 per cent can be expected from the SET if the Thai economy expands by up to 4 per cent," he said.

"However, the Thai stock market is still under pressure from listed companies facing economic-cycle risks, such as banks' policies, fuel prices, and changes in technology."

He recommended investing in technology, healthcare, and Chinese stocks, while spreading investment in line with personal objectives and risk levels.

"For those who can tolerate risks and aim to invest for more than 10 years, we advise investing 75 per cent in Thai and foreign stocks and the other 25 per cent in bonds, REIT, property funds, basic infrastructure, and gold," he said. "They should focus on investment in the long term and buy assets when prices are cheap, but they should not take profit in the short term."

He added that aside from spreading investment, investors must plan their moves well since liquidity was important to escape impacts of the Covid-19 outbreak and economic slowdown.

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