Thai equities and bonds attractively priced, says expert
Thai investors could pick up more equities and bonds, as the two asset classes are available at attractive prices amid global clues of peak inflation and recession, said Eastspring Investments, a leading Asia-based asset manager.
Speaking at a seminar titled "Investment Outlook: Different World, Different Playbook" on Tuesday, the chief investment officer of Eastspring Asset Management (Thailand), Yingyong Chiravutthi, said that economic and investment outlooks are related but not on the same page.
It means that even though the situation of the current global economy appears quite dim, there is always some path to profit from the market, said Yingyong.
He said that equities and bonds are beginning to trade at attractive prices. During this time, investors are advised to diversify and invest more in equities, whether in the US, China, Vietnam or Thailand, as opposed to bonds.
"Regarding equities, we retain a positive view of US shares, particularly growth stocks. We believe that peaking inflation and interest rates present opportunities to buy longer-duration bonds. After the interest rates were raised 2-3 times, the market has started to recover and generate good returns," said Yingyong.
He added that when inflation and interest rates start to decrease, growth stocks tend to perform better.
In Chinese equities, the company believes that investors will continue to benefit from low-interest rates and the Chinese government’s supportive measures.
Still, concerns may loom over China’s real estate debt over the next 3-6 months.
"Vietnamese equities are suitable for long-term investment while we are quite positive on Thai equities, especially low-volatility and high-dividend stocks, since they will be less affected by the global economic slowdown as well as global political issues," Yingyong noted.
Niwet Hemavachirawarakorn, a leading investment expert in Thailand who spoke at the seminar, concurs with the advice to invest in Vietnamese equities. He described Vietnam as one of the most promising markets for long-term investment due to the fast-growing economy, low-cost skilled labour, and high consumption market.
Eastspring Investments chief investment officer Bill Maldonado noted that inflation had started to decline, a little accomplishment for the US Federal Reserve which jacked up interest rates to curb high inflation.
In this scenario, Maldonado suggested that investors consider low volatility, value and dividend-paying stocks, while the peaking inflation presents opportunities to buy longer-duration bonds.
Regarding Chinese equities, he predicted more aggressive fiscal and monetary policies in the second half of 2022, which will benefit China's A-share market.
As for the overall Asian economic outlook, Maldonado said that consumption is likely to continue to shift from goods to services as Covid restrictions are eased.
He pointed out that Asean economies should benefit from the reopening boost which is especially positive for Thailand whose economy is highly reliant on tourism. Commodity-based economies like Malaysia and Indonesia should also see good GDP growth in 2022.
Meanwhile, during times of high market volatility and high inflation, real assets, such as gold, are attractive havens.
He warned that the major risk over the next 6 to 12 months would be geopolitical tensions continuing to cause market volatility.
Meanwhile, global economic growth will also continue to be affected by supply chain disruptions and interest rate hikes.
Arm Tungnirun, director of the Chinese Studies Centre, Chulalongkorn University, and Wit Sittivaekin, an economics expert, shared their perspectives, providing broader information about the global economy in the years ahead.
Arm said investors should keep their eyes on the annual meeting of the Communist Party of China in October, which will give investors a hint of China's policy and economic direction.
Meanwhile, Wit suggested that investors monitor the United States' mid-term elections to the House and Senate in November.
Yingyong concluded that investors should not only keep track of global movements, but also diversify portfolios by not putting too much weight on a single asset. This is a good investment strategy that will reduce volatility in any situation.
