The high level of household debt has continued to pressure economic growth and is holding back investors' decision on whether or not to invest more, a recent survey conducted by the Association of Investment Management Companies (AIMC) has found.
Fund managers believe that the Bank of Thailand will maintain interest rates at 2.5% throughout 2024 as the economy is recovering.
Meanwhile, they are concerned about domestic political uncertainties and the global economy that could potentially deteriorate due to ongoing wars, geopolitical conflicts and inflation rates, while GDP growth has decelerated in some major economies, said AIMC chairwoman Chavinda Hanratanakool.
A survey in July found that Thai institutional investors hold opinions similar to those expressed in a survey carried out earlier this year, but they now have greater concerns regarding global economic conditions.
"Most fund managers believe Thailand's policy interest rate will remain at 2.5% throughout 2024 in order to ensure the overall economy grows sustainably and to its full potential," she said.
In terms of arranging their investment portfolio in their home countries, fund managers expressed a neutral to overweight view, stressing the importance of diversifying investments across a variety of assets including debt instruments, equity instruments, real estate and infrastructure, and gold.
They recommend focusing on investing in medium to large-cap stocks and the industries with significant potential are commerce, medical services, tourism and travel, food and beverages, technology and communication, and electronics.
In addition, fund managers also placed importance on sustainable or ESG (environmental, social and governance) investment.
Domestically, they will focus on stocks and bonds of large companies, especially those that place importance on environmental factors.
The global interest rate direction will be an important positive factor for economic growth. In the US, policy interest rates will gradually decrease to 5-5.25% by year-end and fall to 4.0-4.25% by the end of 2025.
"Interest is the main factor that helps the world economy improve in the medium term. As for the global investment weighting, it is still believed that the impact of the world economy is not equal in each region," said Mrs Chavinda.
Most fund managers are optimistic about investment in developed markets, while there is a neutral-negative view for emerging markets, she added.
In terms of attractive investment assets for the next 12 months, fund managers see debt instruments as being more attractive than other risky assets, particularly medium- to long-term debt instruments of the US, Europe and China.
The focus of stocks should be large-cap stocks in developed countries rather than emerging market countries. Areas that offer interest in terms of investment are the US, Europe and India.
The outstanding and interesting business groups identified are information technology, communications services, consumer goods, luxury goods and medical services. For alternative assets, fund managers emphasise real estate investment trusts that focus on infrastructure, while another useful alternative asset is gold.
"The survey of Thai institutional investors' views aims to provide a guideline for investment allocations and savings so business operators, investors and the public can benefit and create sustainability through investment of the business or one's own," Mrs Chavinda said.