Investment Strategy for Q 2 2015

Investment Strategy for Q 2 2015 

 

Thailand’s 2015 GDP growth forecast may be slashed. The sluggish economy of trading partners has directly affected the export sector, thus weakening household consumer confidence. Discontinued stimulus from the government investment projects is another hindering factor. At the same time, domestic political tension is intensifying, especially regarding the drafting of the new charter, which is a key to an election. 

In addition, the market’s net profit forecast in 2015 may be revised down slightly by 1% from the initial forecast as a result of the policy rate cut (mainly affecting the banking and insurance sectors) and lower-than-expected Dubai crude oil price (affecting the energy and petrochemical sectors). 

FY2015 EPS growth is estimated above 35% due to a low base in 2014, which is higher than regional and global peers’. Accordingly, an expected P/E ration at SET Index of 1,514 pts is 14.6x, which is close to those of neighboring markets. Hence, the Thai stock market is still attractive for investment. 

We recommend putting 50% of portfolio in stocks, focusing on those with low P/E ratio and high  dividend yield: AIT and ASK and growth stocks: DEMCO, IRPC, SAMART, SALEE, THCOM, and TMB. 

For global investment, we recommend Dollar General, which will benefit from reviving consumption in the US, and Ping An Insurance, which has grown following the Chinese economy. Investors can also invest through mutual funds: KF- HEUROPE, which focuses on European stocks, and K-INDIA, since the Indian GDP growth is projected to beat Chinese in the future.