Equities remain attractive during the ambiguous economic outlook as the asset class still offers higher returns than bonds or deposit accounts, with supporting factors predicted in the second half, says BBL Asset Management (BBLAM).
The supporting factors are prolonged low global interest rates, excess financial liquidity from central banks' monetary stimulus measures and progress on a Covid-19 vaccine, said BBLAM chief executive Peerapong Jirasevijinda.
The market expects a Covid-19 vaccine to be successfully produced and available from mid-2021, while global central banks will maintain their relaxed monetary policies and inject further liquidity into the economic system to shore up growth momentum, Mr Peerapong said.
With high volatility still prevailing in the global financial markets, BBLAM recommends diversifying investment assets into the international market through foreign investment funds to enhance investment return, with China identified as having the greatest potential gain.
Businesses focusing on digital technology and e-commerce will also have long-term growth potential.
On the domestic front, all industries have been affected by the Covid-19 crisis because businesses are still operating on traditional platforms, said BBLAM chief investment officer Santi Thananiran.
The country has no strong tech-based sector that can reap benefits through greater digital use during the pandemic, Mr Santi said.
Since the market has factored in the pandemic's impact on SET-listed companies' earnings over the next six to 12 months, businesses that are likely to gain from the contagion are retail, hospitals and energy.
These sectors are part of daily essential needs and have good growth potential, Mr Santi said.
BBLAM aims for its assets under management (AUM) to rise by 5% this year to about 950 billion baht from 910 billion baht at year-end 2019.
AUM fell to 831 billion baht as of the end of June as the coronavirus outbreak ravaged the fixed-income industry, with massive redemptions in local fixed-income funds seen in March.