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Baht/$ 33.40/43
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INVESTING
CHADAMAS CHINMANEEVONG
For many investors, the past month has been an absolute nightmare, as the Stock Exchange of Thailand index has gone into a free-fall over political and economic woes. But Somjin Sornpaisarn, the managing director of One Asset Management, believes investors should see the light behind the clouds, and begin increasing their positions in long-term equity and retirement funds.
''Investors shouldn't wait until the index bottoms out, since no one knows when the bottom will occur. I think it's the right time to begin buying,'' he said at a conference hosted by the Thailand Securities Institute yesterday.
Dr Somjin noted the market was now relatively cheap with a price-to-earnings ratio of 11 times and dividend yields of over 4%. Investors should reshuffle their holdings to give equal weight to cash, equities and mutual funds, with a time horizon of over one year.
Poor market sentiment will also help increase competition for clients among fund managers, leading to more innovations in terms of products and services that benefit investors in the long run.
''Structured products, for instance, are quite interesting but remain relatively new for local investors. Time is needed to educate investors about the risks and features involved,'' Dr Somjin said.
One Asset said it planned to develop structured product funds for its private-fund clients first before developing mutual funds for a broader market.
Foreign investment funds (FIF), particularly funds focused on sovereign debt, have grown sharply in popularity over the past two years as investors seek to diversify country risk.
Dr Somjin said FIF investors needed to focus on country, currency and market risks in selecting a fund. Fund size, management experience, past performance, fee structure and liquidity were other key factors in choosing a fund.''An aggressive investor may focus 60% on high-risk assets, 30% on medium-risk assets and the rest on low-risk assets, while moderate investors may split equally among the three,'' Dr Somjin said.
Out of the 151 FIFs registered in Thailand, 51 invest solely in equities, 89 in bonds and the rest have a mixed investment strategy.
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