As the global economy experiences a slowdown, UOB Thailand advises clients to focus on building defensive portfolios with lower-risk core allocations in diversified multi-asset strategies and investment-grade bonds. Those with an appropriate risk appetite can then capture targeted tactical opportunities in Top Ideas -- Global Healthcare and Asia-ex Japan/ASEAN/China. The seminar also closely examines Asia-ex Japan becoming more independent from Developed Markets (DM), making it prime for investment opportunities.
Thai Economy - Resilience Amid Challenges
According to Mr Enrico Tanuwidjaja, Economist at Global Economics and Market Research, UOB, the Thai economy has shown strength in its recovery from the pandemic. He said, "We expect the positive trend to continue, with projected growth of at least 3 per cent this year and even stronger growth of around 3.5 per cent in 2024. The recovery in the tourism sector will contribute to a current account surplus, supporting Thailand's external sector. We are optimistic about the country's economic outlook with stable fiscal conditions and ongoing monetary policy measures."
Mr Tanuwidjaja further added that the Thai economy is forecasted to encounter less significant inflationary pressure this year. Compared to the 6 per cent high in 2022, the average for this year is expected to be around 2.7 per cent, falling within the central bank's goal range of 1 to 3 per cent for 2023. As the supply chain disruptions are improving, the inflation rate is expected to decrease and reach an average of 2.2 per cent in the upcoming year.
While challenges such as the ageing population and household debts persist, Mr Tanuwidjaja believes that the Thai economy can address these by exploring new sources of growth opportunities, such as competitive food exports, the digital economy, and e-commerce.
Strategies for Portfolio Resilience
Mr Abel Lim, Head of Wealth Management Advisory and Strategy, UOB, highlighted the need for robust portfolios to meet long-term financial goals. He added, "The first half of 2023 was a mix of expected outcomes and unexpected surprises for investors. We have been confronted with a crisis of confidence in the banking sector that led to the failure of three US regional banks, both within and outside the US. As Developed Market economies move into a slowdown, volatility is expected to persist into the second half of 2023. During this time, we focus on ideas and solutions that help clients build robust portfolios to meet long-term financial goals."
With inflation reaching its peak and the global monetary policy tightening cycle nearing its end, Mr Lim suggested that now is an opportune time for clients to secure higher yields by investing in investment-grade bonds. He highlighted the potential benefits of longer-duration bonds, as attractive coupons may become scarce in the coming years. Bonds also tend to outperform stocks during economic slowdowns and recessions, offering the potential for both higher yields and capital gains.
Regarding the Top Ideas, Mr. Lim recommended Global Healthcare for clients with a risk appetite for stocks. He pointed out the industry's defensive characteristics, supported by the secular trend of an ageing global population and technological advancements. While acknowledging short-term headwinds in the Asia-ex Japan/ASEAN/China region, primarily due to China's uneven economic recovery and declining exports across Asian economies, Mr Lim remained positive about the medium-term prospects. He cited resilient regional consumption and lower valuations as factors contributing to this optimism.
Digital Advancements and Wealth Management Solutions
Mr Gidon Jerome Kessel, Head of Deposit and Wealth Management, UOB Thailand, emphasised UOB's commitment to digital capabilities and personalised services. He said, "At UOB, we believe in combining human expertise with data and technology to deliver optimised and comprehensive services to our clients. Our upcoming wealth advisory tools, including the proprietary digital portfolio advisory tool (PAT), will empower our customers to monitor, manage, and optimise their investment portfolios effectively."
UOB provides a wide range of quality investment strategies in onshore and offshore mutual funds. Specialised advice tailored to personal goals and additional privileges and benefits for existing customers cater to various life stages and market conditions.
Investors must be aware of their risk appetites and maintain a diversified portfolio to mitigate risks due to unforeseen events. UOB's team of dedicated client advisors and specialists, together with a comprehensive suite of wealth advisory tools and investment products both onshore and offshore, offer expert advice built around what matters to each investor. Before making any investment decisions, investors should always ensure that they are clear about what they are investing in and have considered the potential risk factors.
Source: UOB Thailand
