KTAM heralds global equity prospects

The global equity markets are starting to look attractive again after a small retrenchment, with the asset class buoyed by the continuous global economic recovery, says Krungthai Asset Management (KTAM).

“It is not strange that there have been corrections in many stock markets as they have risen rapidly from last year, driven by rising share prices, the US economic recovery and other factors. Sales of equities for profit-taking is normal,” said Veera Vutthikongsirigool, first senior executive vice-president and chief investment officer.

KTAM still prefers investment in equities rather than fixed-income securities because of the global economic outlook, with the IMF projecting global GDP to expand by 3.7% this year and rise to 3.9% in 2019, said Mr Veera.

Given such an outlook, inflation in the US and EU will increase and the US Federal Reserve is anticipated to raise interest rates several times this year to subdue inflationary pressure, he said.

But the Bank of Thailand is not expected to embark on a rate hike this year as a means of lending support to the ongoing domestic economic recovery, said Mr Veera.

“Our concern regarding domestic factors is the baht. The baht is expected to appreciate by 6-7% this year, rising to 30 baht per US dollar by year-end,” he said.

The baht’s current value, hovering between 31.10-31.30 to the dollar, has strengthened by 5% from 33 baht at the end of last year, he said.

As the domestic stock market is forecast to move in an upward trend, the company will launch a new mutual fund called Mung Mee Sri Suk, comprising flexible investment in four mutual funds, focused on global asset allocation with different risks and returns, said chief executive Chavinda Hanratanakool.

“We want to see mutual funds that have the stability needed to serve investors who are glad to make long-term investments, starting from three years, but do not have a lot of time to monitor the market situation,” said Mrs Chavinda.

“[Other types of investors include] those who want a higher return or those who are concerned with market volatility and have no idea how to adjust their portfolios,” she said.

Krungthai Mung Kung will invest 75% in equity, 15% in fixed income securities and 10% in alternative investments, setting a 9% benchmark return.

Krungthai Mee Sup will invest 50% in equity, 40% in fixed income securities and 10% in alternative investment, targeting a 7% benchmark return.

Krungthai Sri Siri will invest 25% in equity, 65% in fixed income securities and 10% in alternative investment, targeting a 5% benchmark return.

Krungthai Suk Jai will invest 10% in equity, 80% in fixed income securities and 10% in alternative investment, aiming for a 3% benchmark return.

The four mutual funds will place their initial public offerings from March 20-28, with 1,000 baht as minimum investment.