The crisis is expected to persist for a longer period as a second wave of the pandemic and higher infection rates worldwide come about, weakening major economies despite their monetary stimulus measures, says Krungsri Asset Management.
As the crisis continues to unfold, the value of the US dollar is poised to depreciate and interest rates will stay at a low level over the next 1-2 years, said Jaturun Sornvai, vice-president and chief of the global investment department at Krungsri Asset Management.
Central banks around the world will continue to inject liquidity into their economic systems, while funds will move towards the stock market with an emphasis on technology and healthcare equities and to other assets such as short-term bonds and gold, Mr Jaturun said.
Buying investment-grade corporate bonds for the medium to long term is recommended because of higher bond yields, he said.
The Thai bond market has seen sentiment improve, especially for government bonds, while corporate bonds also saw good development over a month's time, in contrast with the fragile confidence detected in non-rated and high-yield corporate bonds, Mr Jaturun said.
Earlier in the crisis, two fixed-income funds under TMBAM Eastspring catalysed a major redemption in Thailand's mutual fund industry, to the point where the selling spree nearly sparked a liquidity crunch.
Net sales of Thai bonds by asset management firms totalled 35 billion baht on March 20 and 30.5 billion baht on March 27, according to data from the Thai Bond Market Association.
Local financial authorities, namely the Finance Ministry, the Bank of Thailand and the Securities and Exchange Commission, on March 22 issued urgent measures to address a liquidity problem in the mutual fund industry.
Stock markets will, however, move in a narrow frame until a vaccine is successfully developed, Mr Jaturun said.
Asian bourses will be the strongest market to recover from the pandemic in the next 6-12 months, due to how the outbreak has been kept under control in most countries, while vaccine development seems to be on a par with progress in the US, he said.
Stocks with a global investment theme are generally linked to technology businesses and healthcare services.
Local stocks, healthcare services and information technology are the strongest businesses that have suffered the least impact from the pandemic, said chief equity investment officer Wiput Uaanant.
The Stock Exchange of Thailand index is expected to move in a narrow range in the coming period, pressured by Thailand's economic slowdown and limited progress in vaccine development.
Investment diversification into multiple asset classes is recommended for managing portfolios as uncertainties intensify, according to Krungsri Asset Management.