Bangkok--21 Nov--KASIKORNBANK
In anticipation of a global economic recovery in 2014, KASIKORNBANK advises investors to focus their investment in equities, particularly those in the US and China, while stocks in Thailand and Europe as well as property funds remain attractive. To mitigate risk from volatility, investment diversification in many regions, industries and companies is recommended.
According to Mr. Jirawat Supornpaibul, KASIKORNBANK Private Banking Business Head, improving economic signs have been experienced in many parts of the world including the US, Europe, Japan and China. With a slow economic recovery, rising bond yields already reflect future economic prospects. As liquidity in the Thai financial market will tend to decline next year with rising interest rate trends over the long term; several companies have decided to issue debentures within this year-end.
In light of this, the Bank has introduced a 2014 investment plan for private banking customers with asset allocation comprising three parts: first, savings for life security or cash for emergencies accounting for 15-20 percent of the total; second, inflation-proof long-term investments amounting to 60-70 percent; and third, an investment for aspiration with high potential returns in accordance with personal risk appetite, representing 15-20 percent. Investors are recommended to mitigate risks by diversifying their investment in many regions, industries and companies.
Amid recovery in major economies, equities are considered the best potential performers. The most attractive stocks are those in the US and China, wherein recovery, economic reform and capital inflows will fuel their equity bourses next year. Moreover, investors are recommended to invest in the second-best choice, Thai and European stocks, as well as property and infrastructure funds with quality underlying assets and high dividends, which remain attractive and help mitigate risks from stock volatility. Mr. Jirawat added that investments in money, debt and commodity markets, e.g., gold and oil, would generate returns that are lower than in the past several years, as their prices are declining to correction levels.
As for 2014 investment in Thai stocks, Kasikorn Securities Pcl. recommends buys for ADVANC, BJC, KTB, MC, PTTGC, SCC, SPCG and TUF.
Nevertheless, market volatility to be caused by short-term capital flows amid expectations of tapering of the US Federal Reserve’s quantitative easing (QE) may impact investment value. Investors are advised to place emphasis on appropriate asset allocation in tandem with their own risk appetite.