Investors urged to diversify portfolio
CIMB Securities (Thailand) advises Thai investors to divide their equity portfolio into three tiers to reduce risk from another volatile year for the stock market because of policy divergence in global economies.
The US is hiking its funds rate, while central banks in Japan and the European Union are expected to keep their rates unchanged and inject quantitative easing into their economies to prop them up.
Thailand cannot avoid the turbulence from these deviations in monetary policy, Kasem Prunratanamala, director and head of research for the brokerage, said yesterday at CIMB Thai Bank’s seminar for the bank’s customers on the ultimate investment strategy under policy divergence.
The first tier should contain stocks in the healthcare, infrastructure and tourism industries.
The healthcare sector has beaten the Stock Exchange of Thailand Index numbers over the past five years, and this year this sector is expected to repeat that performance.
The government will speed up investment this year, making stocks in this sector attractive.
Buying and holding stocks in the tourism industry offers a high chance for gaining profits for equity investors.
The second tier is for the energy sector. However, energy stocks should be purchased when the SET is below 1,300 points and investors should buy and hold these equities this quarter.
The middle of this year is the time to pick up stocks in the banking sector, while stocks in the telecommunications sector should wait until the end of this year.
"The high cost from 4G auction licences will pressure the profitability of telecom operators over the next one to two years," he said.
The securities house sees the SET this year moving in the range of 1,250-1,450 points.
Sutee Losoponkul, senior executive vice president and head of the treasury group at CIMB Thai Bank, said that for investors who are risk averse but still look for higher returns than from deposits, government and private bonds are the choice.
Amonthep Chawla, head of research for the bank, said FDI is equivalent to 15 per cent of gross domestic product (GDP), higher than 4 per cent for local private investment.
The bank forecasts GDP growth this year at 3.3 per cent, but |the actual figure could sink below |3 per cent if export growth plunges to 4 per cent.
