Thailand market among Asean best
Thailand has been one of the better-performing markets in Asean, a region that has done well for investors in times of volatility, say analysts from Principal Financial Group.
The US-based group held its annual Principal Asia Summit in Bangkok yesterday, telling investors they could find opportunities in an environment of uncertainty, volatility and heightened risk. Bangkok was the second stop on the summit tour of Asean, following Kuala Lumpur and ahead of Singapore and Hong Kong.
"There is an opportunity to tap into pension financial security here, which may lead to the growing potential expansion of retirement initiatives," said Jumpon Saimala, chief executive of Principal Asset Management (PAM) Thailand, a subsidiary of PFG.
"We are very excited about the current and future opportunities and possibilities for Southeast Asia. It is one of the most dynamic economic regions in the world, and we are here to stay to serve the region and Thailand for the better."
Win Phromphaet, chief investment officer of PAM Thailand, said Thai investors should look to Vietnam because the country is seeing high growth due to factories moving from China to Vietnam as a result of the US-China trade war. Exports from China to the US have grown 27% this year.
While Thailand has seen some factories relocate from China based on industrial estate purchases, this has yet to have an effect on export growth, Mr Win said.
"When investing in Thailand, we recommend investors put money in commerce, hospitals and some power plants, while also investing in some real estate to take advantage of factories moving to the country from China," he said. "However, Thailand is still behind Vietnam, but we might see exports increase once the new factories are up and running."
Within Asean, Singapore remains a safe bet for investors because of its high-yield component, and Mr Win advises investors to look to the tech sector for high growth.
Patrick Chang, chief investment officer for equities at PAM Malaysia, said Thailand can be seen as a barometer of how much more resilient to volatility Asean has become since the 1997 Asian financial crisis.
Mr Chang said Thailand is one of the best-performing and defensive markets in Asean because of its high current account surplus of 8%, a strong currency and fixed-income returns of 10.5%.
Since the Asian crisis, Asean has actually outperformed during times of market volatility.
"Asia is the anchor of growth for the entire world, and Asean is driving growth inside Asia," said Jesse Liew, chief investment officer for fixed income at PAM Malaysia. "If monetary policy remains easing, then the fixed-income market will remain positive and stability in returns on fixed income will in turn provide less volatility in the markets."
Part of Asean's stability, Mr Liew said, is because central banks in the region still have room to lower policy rates, unlike in the US, Europe and Japan, where some rates are near zero or even negative.
He sees policy rates either continuing to ease or remaining accommodative for investors.