Despite the volatility of stock markets and recent outflows of foreign funds, Tisco Asset Management recommends investors invest in cheap domestic stocks.
Senior vice-president Saharat Chudsuwan, who is also head of the marketing and wealth advisory, mutual and private fund business, said the Stock Exchange of Thailand (SET) index has already bottomed out this year after foreign investors sold off stocks to take profits.
Saharat: Market liquidity is adequate
"The market price-to-earnings ratio of 13.5 times next year is relatively low compared with others in the region, indicating a chance to make a profit if you buy at this price," he said.
"Our SET index target is 1,650 points. Current market liquidity is enough to drive the trading momentum of the local bourse, although foreign investors are not returning to the market."
Mr Saharat said Thailand's export sector, one of the main economic drivers, will improve in the second half of this year, in line with the recovery of the world's large economies including the US and Japan.
However, as an investment strategy over the next 3-6 months, he suggests investors focus on global stocks, especially US stocks that will offer returns in the near term.
"US stock markets will likely be bullish in the short term," said Mr Saharat.
He said emerging countries may lose their attraction for a while, in line with China's faltering economy.
However, in the long term he is confident that emerging markets will return to become a hot destination for foreign investors.
"China remains good for investors, as its markets have passed the big correction period when stock prices were near the 2008 crisis level," Mr Saharat said.
"Investors may have to wait a little further as prices haven't bottomed out yet."
Investors should not invest in gold now, with the market expected to move sideways in a changing environment.
Gold was regarded as a good asset and a safe haven while the US and euro zone struggled economically and assets in those countries were considered high risks.
But gold is no longer an attractive asset, as currencies in those areas have gradually appreciated, said Mr Saharat.
"The US and Japan have seen the light at the end of the tunnel after struggling all these years," he said.
"I would say bonds are not interesting at all, especially long-term bonds. The good time for the bond market is over, as the yield of the US Treasury is no longer nearly at zero."
About the author
- Writer: Darana Chudasri
Position: Business Reporter