Eastspring Asset Management (Thailand) is to prioritise its investments in China, the rest of Asia and the US in the second quarter, with a focus on tech and high-growth stocks that would continue the growth from the first quarter.
Chief executive Darabusp Pabhapote said the company may shift investment to the US, China and European stock markets on expectations that these markets would continue to expand in the second quarter.
In the first three months, the US, China and European markets reported good returns, with those of the S&P500 surging 7.03%, along with increases of 4.63% on China's CSI300 and 7.75% on Europe's STOXX 600. That compares to negative performances on the stock markets of Thailand, India and Indonesia over the same period.
The Stock Exchange of Thailand index was down 3.57% in the first quarter, as India's SENSEX dropped 3.04% and the JCI index of Indonesia lost 0.66%, according to Bloomberg data as of March 31.
"The S&P500 gave good returns, especially technology stocks that generated the highest returns of 21.4% among the growth stocks. Communication stocks ranked second with a 20.1% return, followed by the luxury group at 15.7%," she said.
The industries that recorded the lowest returns during the period were the financial group (-6.05%), energy group (-5.57%) and health group (-4.72%), Bloomberg data showed.
Ms Darabusp said Eastspring still believes that the tech industry and growth stocks would continue to grow from the second quarter, amid market volatility and concerns in the financial markets.
"We estimate that inflation will gradually decrease as the public loses confidence in the financial market after the problem with Silicon Valley Bank and Credit Suisse, prompting the authorities to step in to help stabilise the situation," she said.
The US money market fund reached a record high of US$5.19 trillion, which was higher than the Covid-19 period of $4.78 trillion, she said, citing data from Bloomberg.
"We expect volatility in the money market will drag on. But what's interesting is that the authorities of each country have already stepped in to solve the problem quickly to prevent the situation from escalating. That makes us believe a severe recession might not occur this year," Ms Darabusp said.
In terms of fixed income assets, Eastspring recommends investing in foreign government and private debt securities of investment grade. Assets investors should be cautious of focus on the manufacturing sector and those sensitive to economic cycles, namely banking and energy industries as well as high-yield bonds.
"Investors looking to speculate on gold prices also need to be cautious as the current price is considered high," she said.
Currently, gold is traded at $1,969 an ounce, 4% lower than the previous high, and if the Federal Reserve cuts interest rates further, gold prices may fall.