This year saw an unexpected stock market crash followed by predictable trends that allowed savvy investors to make back their investments by betting on technology, healthcare and the timeline of a new vaccine.
Markets saw massive trading volume around the world as those with money sought to find the best yield amid a pandemic, even as the global economy shut down at times.
Through all the turmoil, the baht continued to appreciate, irking financial regulators and hampering an already ailing export sector.
BACK IN BLACK?
2020 marks one of the most volatile years in stock history as the Covid-19 outbreak unleashed global economic shockwaves.
In the domestic market, sudden drops drove the Stock Exchange of Thailand (SET) to implement three circuit breakers, or a temporary halt of trading for 30 minutes, during the first half of 2020 on March 12 and 13.
This was the fourth time the measure has been used and the first since Oct 27, 2008, the year the Thai economy was affected by the subprime mortgage crisis.
The SET in 2020 witnessed a new high of 1,600.48 points (Jan 17) and a new low of 969.08 points on March 13, when investors panic-sold large-cap stocks in energy, commodity and banking, moving investments into safer assets such as gold. Some of this activity created a record high for technology equities.
Listed firm performance dropped significantly during the lockdown and economic contraction, and central banks of all countries responded with monetary easing policies.
The government continues to use fiscal policies, including measures to support tourism, while the central bank has eased monetary policies and extended debt payments to banks.
On Nov 9, when Pfizer announced it developed a vaccine with a 95% efficacy rate and started production for the public, fund flows returned to stocks and bonds from safe-haven assets, especially in emerging markets in Asia.
Around the same time, Joe Biden won the US presidential election, leading investors to believe the nation's trade war with China will calm down and stability will return to Asian supply chains.
Since then the SET Index has recovered sharply, from -37% following the lockdown to -9% in mid-December.
Assets related to technology, whether stocks, indices or digital assets, had the highest returns this year.
Many analysts adjusted their SET Index targets for 2021 to rise to 1,550-1,600 points and increased listed firms' earnings by roughly 20%.
As an investment theme in 2021, Finansia Syrus Securities continues to overweight technology, consumer and healthcare stocks.
The mutual fund industry took a massive blow in 2020 with the closure of four fixed-income funds under the management of TMB Eastspring Asset Management, which resulted in 500 billion baht in funds flowing out of the industry.
The Bank of Thailand set up the Bond Support Fund with a 1-trillion-baht reserve to redeem investment-grade bonds that could help boost market confidence and stop redemptions without using fund reserves.
However, investors are still not very interested in high-yield bonds or non-investment-grade bonds.
Peerapong Jirasevijinda, chief executive of BBL Asset Management (BBLAM), said stocks will likely offer the highest returns in 2021 because of increased fund flows into Asia, while the interest rate is expected to remain low, supporting stock investment.
In addition, most central banks around the world are likely to continue quantitative easing to inject liquidity into the economic system.
Foreign investment funds (FIFs) will be the most popular product next year, with a focus on China and Asia, where there is high economic growth, he said. Other trends include new economy stocks dealing with technology and consumption.
FIFs will help Thai investors diversify assets into the global market, giving them a chance to earn high returns, Mr Peerapong said.
The risk factors in 2021 are the extent and speed of the domestic and global economic recovery, listed firms' performance, and a second or third Covid-19 outbreak, he said.
Positive factors for markets include a speedy roll-out of vaccines, and a calming of political tensions at home and abroad, according to BBLAM.
However, as a resurgence of Covid-19 is driving the number of infections to more than 1,000, with confirmed transmissions spreading to many provinces, analysts must revise their outlooks again in a few weeks if the outbreak cannot be contained.
If the situation worsens, the SET Index target and listed firms' earnings projection for 2021 will all be scaled down, said Mr Peerapong.
SAFE BETS
Nuttachart Mekmasin, an analyst at Trinity Securities, recommends taking an overweight position on equities by allocating about 40% of the portfolio to global shares and 20% to domestic shares.
More weight on global equities is recommended because the economies of many countries have already recovered to pre-Covid levels, while Thailand's has not, he said.
Meanwhile, Mr Nuttachart recommends allocating only 20% to bonds to sidestep risks and market fluctuation -- not a significant portion as global interest rates are expected to remain low throughout 2021.
A major concern for bond investment during the outbreak is credit risk, he said.
"While I do not worry about government bonds, I recommend investing in corporate bonds with ratings over A-," Mr Nuttachart said.
"Investors also need to take into consideration whether the issuers' businesses are related to sectors hard hit by the pandemic such as tourism."
In addition to equities and bonds, Trinity recommends allocating the remaining 20% to alternative investments such as real estate investment trusts (REITs), gold and cryptocurrencies.
"The US dollar is expected to remain in a downtrend, thus other assets that can store value while inflation increases are recommended," he said.
The REIT is an alternative asset that has been popular for many years as its dividend returns are relatively higher than stock dividends, and dividend payment is quite regular.
The asset also grants investors opportunities to earn extra returns from capital gains if REIT prices climb.
"I prefer foreign REITs because they offer more choices of assets such as data storage, and other properties related to the new economy," said Mr Nuttachart. "With Thai REITs, most properties are tourism-related businesses, which are facing a slump."
He recommends allocating about 5% of the portfolio to cryptocurrencies such as bitcoin and about 5-10% to gold in case the global economy tumbles again on any new challenges.
Jirayut Srupsrisopa, founder of Bitkub, the country's most active digital exchange, said funds allocated to bitcoin should be risk-bearing money, not life savings.
"Bitcoin just hit a new all-time high in late December, breaking 822,000 baht in Thailand," he said.
"We expect 2021 will be a golden year for bitcoin, but I strongly recommend against borrowing money for buying bitcoin as it should be a long-term investment."
Mr Jirayut said the bitcoin surge was buoyed by growing demand in the midst of low supply.
Nattapong Hirunyasiri, chief executive of MTS Gold Group, said gold surged this year thanks to its appeal as a hedge against inflation.
"Inflation is expected to rise next year, spurred by money pumping and the low interest rate," he said.
"That's why people must reserve gold in their portfolio to protect their fund against inflation."
HOT BAHT
The baht is expected to continue moving in a firmer trend against the US currency in 2021, pressured by the country's current account surplus and a weakening US dollar, which could dampen Thailand's economic recovery because of its reliance on exports.
Kasikorn Research Center, the research house of Kasikornbank, predicts the local currency will appreciate to 29-29.25 to the dollar by the end of 2021.
The local currency surged past the sentimental level of 30-per-dollar to its strongest rate in over seven years at 29.83 baht on Dec 16.
The baht's depreciation was mainly caused by the release of a US Treasury Department report that placed Thailand on a "monitoring list" of 10 countries labelled potential currency manipulators.
The other nine countries on the list were China, Japan, South Korea, Germany, Italy, Singapore, Malaysia, Taiwan and India.
The report titled "Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US" was released on Dec 16.
The Bank of Thailand responded to the report, saying Thailand has no intention of using the exchange rate as a tool to gain an unfair trading advantage or competitiveness over trading partners.
The central bank recently liberalised foreign currency deposits by increasing the investment limit on foreign securities for Thai individual investors and established a bond pre-registration system as part of efforts to curb the rapid appreciation of the baht and forge a new foreign exchange ecosystem.
The Economic Intelligence Center (EIC), a research house under Siam Commercial Bank, forecast the baht's appreciation to continue until the end of 2021 as a result of the weaker US dollar and Thailand's current account surplus, with an export recovery potentially tempered by the strong local currency.
The baht's value against the greenback is expected to be in a range of 29.50-30.50 at the end of 2021, said Yunyong Thaicharoen, first executive vice-president of EIC.
Tak Bunnag, head of global markets at Bank of Ayudhya (BAY), said the local currency's value is forecast to hover between 29.50 and 30.50 baht per US dollar, with an appreciation bias expected throughout every quarter of 2021.
Recently BAY predicted the baht would appreciate to 30 baht per dollar in the first quarter of 2021 before strengthening to 29.75 in the second quarter.
The local currency's value is forecast to strengthen further to 29.50 and 29.25 against the greenback in the third and fourth quarters, respectively.