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Investors could start piling up equities from Asia excluding Japan this month in the belief that the global economy would bottom out by the end of this year, Korawut Leenabanchong, chief investment officer at UOB Asset Management (Thai), said recently.

Equities "is the first asset that is very sensitive to the economic recovery. The bottom [in Thailand] has already passed by. The bottom was at around 380 points last November," he said.

Historically, the stock market always rebounds six months ahead of the economic bottom.

That means the buying spree in stocks should start around May or June, he said.

The economy this year would con¬tract 5 per cent, he said.

Private consumption is the key engine driving economic growth.

The government's spending to stimulate the economy has had a lim¬ited effect, as it accounts for a mere 14 per cent of gross domestic product.

The local political conflict would not hurt the economy if the protests were staged peacefully.

"I consider that the current euphoria in the stock market is the bear market rally, … it would correct (after the rally) but it is impossible to break through the 400 barrier if there is no significant incident. I think if Thai shares fall to around 440 points, investors should begin accumulating stocks," he said.

However, stock investment is suitable for holding at least six months to one year, not for trading.

UOBAM has raised its weighting in equities from 10 per cent early this year to 40 per cent now and plans to increase it to 60 per cent next quarter.

Of the 60 per cent, half should be invested in local stocks and half in Asian stocks to diversify risk, he said.

"Investors should stick to Asia rather than the US and euro zone as they still have risk," he said.

Local bank and energy stocks are UOBAM's top picks.

Communications, food and enter¬tainment are also the mutual fund company's favourite stocks while property and construction are its least favourite.

Demand in the property sector remains low while the business of private sectororiented construction firms is less promising than public sectorfocused ones, he said.

For those who are still risk averse, corporate bonds with three to fiveyear maturities are still an attractive choice at the moment as their coupon rates are better than bank deposit rates.

"Investors should be concerned about their financial liquidity and around three to fiveyear terms are appropriate, while corporate bonds with around seven to 10year terms are too long for individuals," he said.

Investors should analyse an issuer's repayment ability before subscribing to its corporate bonds. Their servicing capability could be seen from their credit rating.

However, returns from debt instruments would hit bottom in the coming months. Investors were recommended to loosen up their conservative strategy and shift to equities.

The Monetary Policy Committee (MPC) would slash the oneday repurchase rate by 25 basis points twice this year to 0.75 per cent and the rate would stay there for at least six months, he said.

The MPC last week unexpectedly ended a series of cuts in the key policy rate by keeping the rate unchanged at 1.25 per cent.

However, it expressed the view that monetary easing might be adopted again if the economic climate deteriorated.

In commodities, UOBAM is bullish about oil but neutral towards gold.

"The crude oil price will tend to go up in the future. If the global economy in 2011-2012 rebounds, demand for oil will rise," he said.

Crude oil has climbed up from the year's trough at marginally below US$40 per barrel to around $60 a barrel at the moment.

Gold would not fall through the $1,000psycholical level within one year as its price typically moves inversely with the economy.

"The gold price should not move more than 30 per cent from the current level within a couple of years," he said.