FOREIGN funds will flow back to the Thai stock market if US President-elect Donald Trump’s economic policies disappoint investors, Thai News Agency quoted CIMB Principal Asset Management as saying today (Jan.18).
CIMB Principal’s Chief Investment Officer Win Phromphaet said investors are watching the implementation of the new American leader’s economic policies and if he fails to push them all through as promised during campaigning they would be disappointed and the US dollar weaken.
Investors would then move their funds back to emerging markets including Thailand, he said, adding that the Thai bourse has advantages over many countries because it is among those offering the highest returns with the PE ratio being 14 times with this being lower in other regional countries.
Moreover the Thai stock market’s returns have grown steadily and should remain at around 12%.
This is why the Thai bourse is still of interest to foreign investors as can be seen from inflow of funds from Asian investors, particularly those in Hong Kong, Singapore and South Korea, since the start of the New Year.
This is also why American and European investors will be picking up stocks here even though the ratio of foreign investment has dropped from 2012 onwards. Previously the highest point was 36% but today it is 29% with this being the lowest level in 12 years, Mr Win added.
In choosing stocks investors are urged to focus on some key factors among which are that they give good dividends, have the potential to grow, have good cash flow, have the ability to rake in profits and have good corporate governance in place.
Also boosting stock investment is that interest rates will be staying low this year with the Monetary Policy Committee expected to keep these rates at 1.50% throughout the year.
Top: Charging Bull, which is sometimes referred to as the Wall Street Bull or the Bowling Green Bull, is a bronze sculpture, originally guerilla art, by Arturo Di Modica that stands in Bowling Green Park in the Financial District in Manhattan, New York City. Photo: Sam Valadi (CC-BY-2.0)