Low-priced bonds offer good returns: Suchada

Present internal and external factors have discouraged investors from seeking high returns like they did before. But there is always a chance, even in tough times.

Suchada recently said investing in the bond market was the most attractive channel

nowadays for investors, particularly for highnetworth persons wanting to diversify their risk.

"The fixed income is a secure investment channel, and many investors have become increasingly familiar with it," she said.

Investors can still take advantage of the cheap price of bonds. Prices are likely to increase if the central bank has a concrete neutral stance and the number of bond issues increases.

Markets expect the central bank to leave the policy interest rate unchanged at its next meeting, due to a decline in inflationary pressure. They are also concerned about risks to economic growth from gloomy consumption and investment.

The bond-yield curve apparently declined after the last meeting of the Monetary Policy Committee.

But the central bank said inflationary pressure remained, because oil prices could fluctuate.

The Organisation of Petroleum Exporting Countries plans to cut its capacity, in order to keep prices high.

The bond market, however, is not yet an easytoaccess way of investment. Many people have no idea where they can buy bonds and so still depend largely on bank deposits.

Moreover, there is presently a limited supply to serve rising demand, particularly at a time when depositors want to shift their money out of banks.

Suchada said bond access would become easier, as the Finance Ministry planned to issue Bt460 billion worth of government bonds in fiscal 2009.

Those who do not want to put money directly into bonds can select fixedincome mutual funds offered by various assetmanagement companies, she said. Investors will obtain similar returns to deposits but not be subject to income tax.

Suchada recommended risk lovers to diversify their money into the stock market, with the Stock Exchange of Thailand Index dropping at a lower pace than last year.

"If they invest in longterm funds or retirement mutual funds, they will also receive a tax rebate," she said.

Investors who want liquidity can park their cash in moneymarket funds, which provide higher returns than do deposits.