Kasikorn Asset Management (KAsset), the largest mutual fund company by assets under management (AUM), reports a healthy start to the year with net inflows of more than 30 billion baht in the first quarter.
The arm of Thailand's fourth-largest bank by assets is bullish on the Chinese market, which is expected to yield good returns following the country's reopening.
This year KAsset is targeting Kasikornbank's (KBank) medium- and high-income clients as well as younger investors keen on investing through digital platforms to drive its growth, said executives.
KAsset, under the leadership of new executive chairman Adisorn Sermchaiwong, aims to add millions to its investor base to significantly increase AUM via the digital channels of both K Plus and K-My Funds.
The company's total AUM was 1.45 trillion baht in the first quarter, with net inflows registered worth 31.2 billion baht, accounting for half of the industry's total inflows of 60.7 billion.
Most of KAsset's net inflows were in K China Equity Fund (K-CHINA), a foreign investment fund, followed by its two balanced funds: K Plan 2 Fund (K-PLAN2) and K Plan 3 Fund (K-PLAN3).
The total of 1.45 trillion baht comprises 1.01 trillion in mutual funds, 229 billion baht in provident funds, and 212 billion in private funds.
KAsset aims to grow its AUM to 1.55 trillion baht this year, in line with industry targets.
A GIANT AWAKENS
KAsset is more optimistic about the Chinese stock market than other bourses because the company believes the country's economy is on a clear recovery path.
"This year, I recommend investing mainly in China. This is where we are likely to see the highest economic growth after the Covid situation normalises," said Mr Adisorn.
In addition to a significant economic rebound, China is the only major economy without inflation-related problems, he said. A recovery in the technology and real estate sectors makes investments in China more attractive, said Mr Adisorn.
The Chinese economy expanded sharply after lifting its zero-Covid policy and reopening the country, prompting economists to revise their growth forecasts for the mainland after a 4.5% first-quarter uptick beat forecasts. For example, Bank of America now expects China's economy to expand by 6.3% this year.
KAsset expects the Chinese stock market to be bullish in 2023. The company recommends investing in that nation through three of its funds: K-CHINA, which broadly focuses on all markets (All China); K Chinese Equity Index Fund (K-CHX), which focuses on economic growth via the top 50 stocks from the FTSE China A50 Index; and the K China Controlled Volatility Fund (K-CCTV), which focuses on Chinese A-Share stocks that invest in both the Shenzhen Stock Exchange and the Shanghai Stock Exchange.
The brokerage is confident Chinese GDP growth will tally at least 5% this year, while the International Monetary Fund predicts an expansion of 5.2%, citing a surge in the Purchasing Managers' Index for manufacturing and services as well as the retail sales index.
Moreover, Chinese authorities have signalled the lifting of strict control measures on the technology and real estate sectors. The move is expected to boost the profits of listed companies by more than 10% this year, said KAsset.
The company recommends Chinese equity funds make up no more than 20-25% of their portfolio, depending on their ability to withstand risk.
KAsset said the apps K Plus and K-My Funds offer new tools for initial investment of only 500 baht.
THAI MARKET
The brokerage has a positive outlook for the Stock Exchange of Thailand (SET) and expects the SET Index to hit 1,800 points this year based on the country's economic recovery.
"There is a clear recovery momentum in the tourism sector and domestic consumption," said Mr Adisorn.
"The Bank of Thailand forecasts foreign tourist arrivals to top 28 million this year and reach 35 million in 2024."
The Thai bond market already reflects future interest rate hikes to around 2.00-2.25%, up from 1.75% at present, he said.
At the current level, Mr Adisorn said the Thai bond market is still attractive for investments.
However, short-term factors that influence the local stock market need to be monitored, he said. These include the first-quarter operating results of listed companies, the global pace of inflation, economic trends, the Thai national election in mid-May, and the tourism recovery, particularly in the second half of the year.
During the Songkran holiday, flight traffic across the country increased 59% year-on-year, partially attributed to China's reopening.
For Thai equity funds, KAsset recommends K STAR Equity Fund (K-STAR), a mixed fund; K-PLAN2; K-PLAN3; K Fixed Income Plus Fund (K-FIXEDPLUS); as well as fixed-income funds where investors can choose the term to hold them. Among the last group, the brokerage suggests K SF Plus Fund (K-SFPLUS), which investors must hold for at least 3-6 months, K Corporate Bond Fund (K-CBOND), which investors should hold for at least 9-12 months, and K-FIXEDPLUS to hold at least one year.
MAINTAINING LEADERSHIP
As for strategies to ensure KAsset remains Thailand's largest mutual fund company, Mr Adisorn said it aims to be "No.1 in customer's minds" under its "Top of Mind Investment House" concept.
In addition, the company will focus on the environmental, social and governance (ESG) theme to help the Thai capital market expand as more wealthy investors put their money into mutual funds.
He said ESG is an important mechanism to ensure the stock market grows sustainably.
Mr Adisorn said KAsset's 2023 strategic plan focuses on five areas, starting with creating returns by developing guidelines for funds to consistently offer outstanding returns.
Second, the company wants to build greater credibility among investors by providing appropriate and up-to-date investment advice. Third, KAsset plans to seek partners with understanding to develop products to suit the various needs of investors.
Portfolio management for institutional investors is going to stress increasing efficiency and liquidity, he said.
Finally, the company wants to offer a wide range of options to meet the retirement goals for members of provident funds, private funds and fund dealers, said Mr Adisorn.
He said KAsset enhanced its digital investment platforms to attract more customers.
At the end of 2022, the company had 357,086 investor accounts via digital channels, mostly through the K Plus and K-My Funds apps, accounting for 43% of clients. Some 136,842 accounts are new investors.
"We aim to grow investment through online channels, especially trading through the K Plus and K-My Funds apps, targeting medium- to high-income customers," said Mr Adisorn.
"We plan to be an agent for all types of mutual funds, including from other asset management firms, by providing fund investment analysis to reflect the market outlook and arrange portfolio investment."
This year, KAsset will focus on KBank customers as well as targeted wealthy individuals, he said.
"If we can add roughly 10% of KBank depositors as customers, our fund value will increase significantly," said Mr Adisorn.
He has been chief executive of KAsset since Jan 3 this year, working previously at Eastspring Asset Management (Thailand).
