Kiatnakin Fund Management is bullish on commodities and will potentially set up a mutual fund to invest in silver.
Gold prices this year were quite volatile with a range of US$1,540-1,795 per ounce. Gold opened this year around $1,600 per ounce and bottomed out at $1,540 per ounce around May or June on worries about the QE3 scheme. It then rebounded and is returning 6-7% for the year, compared to 20% in 2011.
Supakorn Soontornkit, managing director of Kiatnakin Fund Management, projected gold might hit $1,920 per ounce next year, up by around $200 from the current spot price of $1,750 per ounce.
"Many factors including excess liquidity in the global market and the downgrade of many countries such as France from AAA to AA are making investors re-allocate their investment portfolios," he said.
Prices of soft commodities are expected to increase as farm cultivation will be affected by drought caused by El Nino.
Mr Supakorn said the silver price is expected to move up in parallel with the gold price. "We are studying the potential to launch a silver mutual fund for retail investors," he added.
Regulators do not allow asset management companies to launch mutual funds that invest directly in commodities or assets that have no index or benchmark price. Thus, fund management companies are unable to launch mutual funds that invest in silver or even soft commodities. They have to launch a feeder foreign investment fund that invests in a master fund issued by foreign asset management companies.
Mr Supakorn said the Thailand Futures Exchange (TFEX) now has silver futures, which were launched last year and could be the index for mutual funds investing in silver.
He also has a positive view on equity investment, projecting the SET will reach 1,450 next year. Earnings-per-share (EPS) growth next year is forecast to be around 15% plus a dividend yield of 3%, lower than this year with EPS growth of around 30% and a dividend yield of 3.5%.