The investment outlook remains volatile in 2023 due to monetary policy tightening and geopolitical risks, but China and the rest of Asia will likely benefit from the reopening of borders, says Eastspring Asset Management (Thailand).
"The global economic and investment outlook this year will likely remain volatile, based on international monetary and fiscal policies as well as geopolitical risks. However, we believe that Asia will have better economic growth rates than other markets this year," said Darabusp Pabhapote, chief executive of Eastspring Thailand.
Speaking at an Eastspring event yesterday on the outlook for investment, Ms Darabusp credited China's reopening policy as well as its relaxation of control measures against tech firms for generating economic momentum in Asia-Pacific. Meanwhile, the upcoming general election will provide Thailand with an additional boost.
"Countries such as Singapore, Vietnam and Thailand are benefitting from growth in tourism," she said, adding that India and Indonesia would benefit from diversifying their supply chains to reduce their reliance on China.
"We are starting to see more Chinese tourists returning to Thailand. The country's general election will also be held in the middle of this year, and the equity market usually generates positive returns before and after the elections, especially large caps that benefit from foreign capital inflows."
Eastspring is launching the Eastspring Global Low Volatility Equity Fund (ES-LOVE), which aims to invest in global equities with low volatility to capture the upside in bullish markets and hedge against market downturns. The fund's initial public offering will be offered to the public between Feb 14-20.
"Eastspring Thailand's latest fund launch is a testament to our commitment to empowering investors with access to innovative investment opportunities, to support them in achieving their financial goals," Ms Darabusp said.
Bill Maldonado, chief investment officer at Eastspring Investments (Singapore), said Asia would play a growing role in developing businesses focused on renewable energy and conservation.
He expects growth in the number of companies implementing environmental, social and corporate governance (ESG) policies.
"Asia will play a more significant role in environmental management," said Mr Maldonado. "All industries will direct more focus and financing towards innovative solutions such as electric vehicles and renewable energy to achieve net zero emissions, resulting in large investments in infrastructure development."
Eastspring's investment strategy this year will focus on generating returns from a variety of investments, both domestic and global. The foreign funds will include defensive stocks such as dividend stocks, low volatility stocks, and value stocks with strong revenue and cash flow. Additionally, it will include Asian markets, quality global bonds, and ESG investments.
On the domestic front, the strategy will include dividend and large-cap stocks, corporate and government bonds, and Thai Real-Estate Investment Trusts that will likely benefit from borders reopening and stable bond yields, with an estimated yield of 6.5% and a spread yield of 3.5%.
