Brokerages have identified seven tourism-related stocks on the Thai bourse that should be major beneficiaries of the Thailand-China free visa policy signed earlier this week, which is expected to significantly increase arrivals from the mainland this year.
The Tourism Authority of Thailand set an ambitious target of attracting 8.2 million Chinese tourists in 2024, rising from 3.5 million last year, aiming to rekindle its appeal to visitors from China.
The two countries agreed to implement a visa exemption policy for their nationals, allowing stays of up to 30 days.
Starting from March 1, the measure is expected to benefit seven Thai stocks related to tourism, said Globlex Securities.
Globlex research director Wilasinee Boonmasungsong recommends investors opt for Airports of Thailand (AOT), Asia Aviation (AAV), Minor International (MINT), Central Plaza Hotel (CENTEL), Erawan Group (ERW), Siam Wellness Group (SPA) and Sky ICT (SKY).
Thailand topped Southeast Asia for tourist arrivals last year, rising to 28.1 million from 11.1 million in 2022, said Tourism and Sports Minister Sudawan Wangsuphakijkosol.
Vietnam logged 12.1 million visitors last year, a surge of 344% from 3.66 million a year earlier, while Singapore posted a 130% increase to 12.4 million arrivals.
Cambodia recorded 5.45 million tourists last year, up 140%, while the Philippines and Brunei welcomed 5.45 million and 82,109 tourists, respectively.
"Thai tourism has the opportunity to continue growing this year," said Ms Wilasinee. "But some factors need to be monitored, including tensions in the Middle East."
Saharat Chatsuwan, deputy managing director of Tisco Asset Management (AM), said the global economy continues to slow this year and the outlook of the Thai economy remains uncertain.
Tisco AM recommends investors choose top global stocks that can grow amid market volatility by investing through the Tisco Global Quality Equity Fund (TGQUALITY). The master fund invests in Microsoft, Apple, Nvidia, Visa, Meta and Alphabet.
Thanachart Securities advised investors to diversify their portfolio to equity funds and foreign fixed-income funds as the interest rate hike cycle has come to an end.
Adisak Phupiphathirungul, vice-president of Thanachart Securities, said the valuation of the Thai stock market is quite low at present, but there are several quality stocks for investors to grab as long-term investments.
"Investing in the Thai stock market last year was difficult while many major exchanges around the world offer reasonably good returns, partly because the economy and financial results of Thai listed companies were lower than expected," said Mr Adisak.
He said GDP growth is expected to fall to 2.4% this year from 2.6% in 2023.
However, pressure from high inflation and interest rates have been gradually easing and the government is likely to begin injecting money to stimulate the economy from May, said Mr Adisak.
Thanachart Securities recommends investors focus on portfolio diversification and finding additional opportunities, such as equity funds and global bond funds.
"Asset allocation is important for sustainable returns in the long term," he said.
Among global assets that are interesting for long-term investment are stocks listed on Chinese exchanges, clean energy funds and high-quality, long-term debt funds that are expected to yield good returns as interest rates trend down, said Mr Adisak.
The brokerage is introducing a portfolio advisory tool called ZEAL that provides in-depth analysis for investors who don't have time to analyse stocks by themselves.
For the service, Thanachart's analysis team provides information to investors with a target of long-term returns of 3-10% per year, he said.