Investing In Thailand’s Stock Market? 8 Tips to Follow in 2016
Thailand’s economy isn’t meeting the government’s growth projections, but this hasn’t hindered the country’s stock market too much. There are still a lot of companies available that can be seen as major national companies that are experiencing growth in 2016.
Eight tips to follow when investing in Thailand’s stock market include:
1. REITs Are Hot
REITs have picked up steam in Thailand, and many of these trusts offer substantial returns to investors. Being a hotspot for tourists, REITs are a safe bet for a diversified portfolio.
2. Professional Services Are in Their Prime
Data shows that the most promising SET sub-industry belongs to the THAI Professional Services. The SETPROF index is up 28.8% on the year, making it a smart sector to invest in. But keep in mind that this sector is down 36.9% over the last 12 months.
3. Food and Agriculture
Agriculture and food is another industry that continues to perform well in Thailand. Many stocks in this sector are booming, and a rise in demand for products from Vietnam will help this sector continue to perform well into the foreseeable future.
The SETAGRO index is up 12.4% this year despite drought conditions.
4. Tourism-Related Companies Are a Safe Bet
If Thailand is known for anything, it is tourism. Tourism brings in 10% of the country’s GDP with forecasts of 32 million people traveling to the country this year alone. Several categories to investigate are: tour companies, hotels and restaurants.
5. Oil Prices Need to be Watched
Thailand’s market struggles when oil prices fall, like most of the world’s economies, but this is a prime time to purchase stocks in the country. The drag of oil prices will allow investors to secure cheaper stock.
6. Long-term is Ideal
Thailand is still in a transitional phase, and the presence of the junta is likely to remain for the coming years. Short-term investments aren’t the preferred choice in the country. Short-term markets are volatile.
Aim to invest the majority of your portfolio in long-term stocks.
Long-term stocks in any market are less susceptible to rapid declines and will provide portfolio stability.
7. Diversification is Key
Investing in foreign markets always requires diversity. REITs, technology stocks and bonds should all be in your portfolio. Thailand’s bonds are not performing at ideal levels, but short-term bonds still provide decent returns.
8. Choose National Companies
There are several big brands and companies in Thailand with impressive earnings reports and billions in revenue. The country’s four biggest companies, include:
- Charoen Pokphand
- Siam Cement Group
- Thai Oil
Thai Oil and PTT should be considered with caution as oil continues to slump across the world. Siam and Charoen are two safe bets. Airports of Thailand may not be ranked as highly as the four companies listed above, but the country’s airline industry is another great investment portal.
Thailand’s slow GDP growth has many investors worried, but the country is bound to bounce back soon and be on par with other Asean countries achieving GDP growth of 5% of higher annually.