TISCO Asset Management sees US financial stocks as attractive for investment after surer signs for further rises in US interest rates, while CIMB Principle Asset Management is urging investors to diversify into debt instruments across the world amid an upward trend in interest rates.
Saharat Chudsuwan, head of marketing at Tisco Asset Management, said that the US financial stocks were promising, given the recovery in the world’s largest economy and the uptrend trend for US interest rates. Other support for such stocks comes from the policies of President Donald Trump, who is pushing for a relaxation of regulation in the banking sector, he said.
The US economy and its financial sector had gained more stability after stricter rules for loan extension with periodic stress tests which assess the banking sector's strength to cope with a future crisis, Saharat said.
The US Federal Reserve was expected to raise its benchmark rate three times next year and the trend would likely continue in 2019. Every 1 percentage point rise in the US benchmark rate is expected to boost the US financial sector by 2.4 per cent, he said.
Win Phromphaet, chief investment officer of CIMB Principal Asset Management, also saw global interest rates in a rising trend after the Fed gradually increased its rate this year and will likely keep on this path next year.
Diversifying investment into debt instruments across the world – particularly in emerging-market countries - could give opportunities for returns when interest rates are rising, Win said.
In Thailand, stocks in the retail, tourism, banking and energy sectors are forecast to see earnings growth in the fourth quarter of this year, according to Asia Plus Securities.
Retail firms will likely grow courtesy of the traditional late-year spike in spending, and these firms have benefited from a sustained recovery in the consumer confidence index and thanks to the government's stimulus measures, the brokerage house said.
Tourism-related and hotel operators are moving into high season with a boost from the government's stimulus measures, while commercial banks - particularly the larger ones - will go for a new round of investments, it noted.
Energy companies will likely recover, aided by higher crude prices and more oil usage in the winter, the brokerage firm said.
Finansia Syrus Securities also expected retail groups to see higher profit in the last quarter of 2017, thanks to a recovery in people’s purchasing power and the government's shopping tax incentives.
Growth in this group is expected to continue next year, the brokerage house said.