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Published on January 10, 2008

"The steep fall in the Thai stock market was prompted by fears over the US economic slowdown and local politics. ING then has lowered its stock investment weighting from 98 per cent late last year to 90 per cent [of net asset value] and increased cash holdings from 2 per cent to 10 per cent," Maris Tarab, managing director of ING Funds (Thailand), said yesterday.

Foreign investors are still keeping an eye on the country's political direction and policies under the next government, he said.

Nasu Chunsom, head of equity investment for Ayudhya Fund Management, said that although the firm is staying with stock-oriented investment, it would adopt a selective play strategy, particularly income stocks.

The firm will focus on commerce, tourism and banking stocks while it will be cautious on energy stocks, he said.

The US economic slowdown, record high oil prices and political uncertainty will put pressure on the Thai stock market this year, he added.

Visit Tantisunthorn, secretary-general of the Government Pension Fund, said earlier that the fund would not increase holdings in the stock market at the moment, citing the selling spree by foreign investors. The GPF is the country's largest pension fund.

Meanwhile, global fund managers suggest investors diversify their investments to reduce risks from the global stock market volatility.

Archan Chamapun Assitant, vice president of EFG Bank Singapore Branch (Merchant Bank), said it was difficult to predict global stock markets due to a spate of uncertainties. Stock investment should be medium to long term and investors must accept the risks, he said.

His company's portfolio is 30 per cent in equities, 20 per cent in debt instruments, 20 per cent in alternative investments such as hedge funds and 20 per cent in cash.

Investors who buy into his company's funds hold them 10-20 years on average. The funds last year provided an average 10-per-cent return.

Ratchtawan Mahasaranond, director of The Quant Group, said foreign investors were still optimistic despite the political uncertainty. They are likely to increase the investment weighting of Thai shares.

She said her company, a private equity fund, offered 20-per-cent returns. Its investment policy focuses on acquisitions and adding value to the acquired companies.

 Siriporn  Chanjindamanee

 The Nation