The outlook is bullish for stock exchanges in Thailand, China and Vietnam, according to Jitta Wealth Asset Management, as those three bourses offer the top investment returns among global peers for 2023.
The Stock Exchange of Thailand (SET) should benefit from the planned general election next year and the rapid tourism recovery, with the support of a diversified domestic bond market, said Trawut Luangsomboon, chief executive of the private fund management company.
China's stock market should be helped by the country's reopening in next year's second quarter, boosting other Asian economies, he said.
Vietnam's share prices have dropped by 30% as of November this year and have an opportunity to rebound in 2023, said Mr Trawut.
"These three stock markets are recommended to have stable returns in 2023," he said.
Next year, the US economy is likely to realise the impact of high interest rates as the Federal Reserve has made clear the US policy rate would be around 5.00-5.25%.
"We could see the Fed signalling a rate cut by the end of 2023. When the rates are stable and tend to decline, it is a golden opportunity to invest in the bond market, especially in US bonds and quality corporate bonds with investment-grade credit ratings or higher for good, stable returns," said Mr Trawut.
Even though the US may face a recession next year, some stocks can stay afloat, such as healthcare or technology equities, whose prices have declined sharply this year, he said.
Beijing has gradually moved away from its zero-Covid policy and could possibly reopen the economy in the second quarter of 2023, providing a boost to the global economy, said Mr Trawut. Investors should start accumulating Chinese stocks today in order reap the benefit of the projected recovery next year, he said.
The Japanese stock market should also see a rebound thanks to an increase in tourism, said the asset manager.
In Vietnam, currency depreciation and higher interest rates caused the price-to-earnings ratio to fall to 10.8, which is relatively cheap, said Mr Trawut. Supported by a young population and low wages, Vietnam remains an attractive location for companies to relocate their production bases, meaning the bourse offers ample investment opportunities in the long run, he said.
Mr Trawut said Jitta advises diversifying investment risks in markets around the world, including Thailand, comprising stocks, corporate bonds and government bonds to enjoy the expected recovery next year.
