Eastspring Asset Management (Thailand) sees high potential for foreign stocks to grow, launching funds to invest specifically in the US and China, expecting a recovery for the latter is on the horizon.
Chief investment officer Yingyong Chiaravutthi said China's economy has begun to show signs of recovery over the past month after Beijing quickly issued stimulus measures, using both monetary and fiscal policies.
One policy aims to support the stock market as investor sentiment continues to recover, he said. As a result, funds have continued to flow into China's stock market, particularly H-shares, which represent companies from the mainland that are listed on the Hong Kong bourse or other foreign stock exchanges.
The valuation of these shares is interesting, with a forward price-to-earnings (P/E) ratio of 8.5 times, said Mr Yingyong.
The positive trend is supported by a government economic growth target of 5%, exceeding analysts' estimates, he said.
"This makes us believe the government might offer additional measures to stimulate the economy," said Mr Yingyong.
As for the US, Eastspring's view is the economy is highly likely to have a soft landing, with profits of listed companies stronger than expected in the first quarter. Technology stocks, in particular, are growing steadily, supported by artificial intelligence (AI) trends.
AI stocks recorded profit growth of 13.3% and luxury goods tallied 39.3%, while communications stocks registered 42.5% profit growth in the first quarter.
Any future interest rate cut by the Federal Reserve is likely to be less than expected and later than estimated, which has already been absorbed by the market, so the downside regarding interest rate cuts is now limited, he said.
In a related development, Kasikorn Asset Management (K-Asset) is launching a new fund -- K Guaranteed Step-up A Fund (KGSTEPA) -- under a policy to diversify investments around the world, comprising government and corporate bonds as well as equities.
The fund features a principal guarantee, along with a mechanism to receive returns in steps as an opportunity to earn higher profits.
K-Asset is working with two large companies based in Europe: Amundi Asset Management, which manages the fund, and Credit Agricole, which is responsible for insuring the fund's investments. KGSTEPA's launch period is from May 20-28 and the minimum starting investment is 500 baht.