Thai tourism stocks beckon as Asean seen as trade-war shelter

Thai tourism stocks beckon as Asean seen as trade-war shelter

Tourists visit Wat Phra Chetuphon (Wat Pho) in Bangkok on March 2, 2018. (Photo by Dave Kendall)
Tourists visit Wat Phra Chetuphon (Wat Pho) in Bangkok on March 2, 2018. (Photo by Dave Kendall)

SINGAPORE: As a US-China trade war threatens to wreak collateral damage on the globally-connected North Asian economies, Southeast Asia’s domestically-focused and relatively cheap stocks are looking more appealing.

“Asean would act as a relative safe haven during a trade war,” said Nader Naeimi, the Sydney-based head of dynamic markets at AMP Capital Investors Ltd., which oversees around $130 billion. More domestic-focused stocks, relatively low exports to the US and a bigger reliance on commodities are the reasons to own Southeast Asian shares at the moment, he said.

Thailand’s SET Index had fallen only 0.1% since Thursday’s close as of 1.29pm in Bangkok, while the Kuala Lumpur Composite Index was down 1.1%. That compares with drops of 4.2% in the Shanghai Composite Index and 2.4% in the Kospi Index.

Given the diversity within Southeast Asia, investors will need to take a discerning approach to find the best defensive plays. Thai tourism companies, Singaporean financials and Malaysian auto stocks are some of strategies favoured by some asset managers.



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