January 12, 2021 | By Jessada Sukkit | The Key Indicators Column
–
3
–
Open 3 investment perspectives in 2021, what will the global stock market be like? Will the Thai stock market recover this year?
3 viewsInvestmentThe main for the year 2021 World stock marketWill it go into a continuous bull run? Debt instrumentAre about to lose their charm because of what And will the Thai stock market really recover? Let’s go see it.
1.World stock markets are likely to enter Bull Run
The year 2021 was the year of the revival ofWorld economyWith an average recovery trend of about 6% after a contraction in 2020, which is an event-driven recession, like a nightmare, turned out to be good, the recession lasted only 2 quarters and began Recovery in the second half of the year
In 2020, stock markets around the world have picked up mainly due to Valuation’s rise, but by 2021, the stock market will rise mainly on the back of a profit recovery after a slowdown in corporate earnings this year.
Since we are only at the beginning of the cycle of economic recovery. As a result, central banks around the world decided to continue to inject money with QE, which resulted in high liquidity in the system which would benefit the fund flow to the stock market in the next year.
Besides monetary policy, there is also a fiscal policy to support. Especially from the US Biden will be able to pack a package of stimulus more easily when he becomes president early next year.
Both components of the economic recovery And turnover Along with stimulating the financial Therefore, next year should be a good year for world stocks to enter a bull run from this year.
The interesting long-term investment theme continues to be the technology theme that is creating a network effect, benefiting from the massive user population, including the ESG theme. Related to clean energy Or businesses that help reduce carbon emissions into the environment
In the short term, the first half of the year money should flow into cyclical investment. Such as the power bank group, which has dropped significantly this year.
2. Debt instruments are not used to diversify their investments as well as used to.
We live in a time when policy interest rates are very low. Including negative interest The US 10-year bond yield is just under 1%, while that of Japan. And Europe is close to zero and negative, while Thailand’s 10-year bond yields only around the top 1%.
In the past year, investment funds flowed heavily into private debt instruments, pushing the credit spread level down to a near record low as well, for example, that of US Investment Grade, the spread was 1 % While US High Yield is below 4%.
Credit margin And the low yield on government bonds means overall bond investment is likely to show lower total returns over the next 1-2 years to just 1-3% per annum.
In addition, debt instruments will act to reduce overall portfolio volatility. Because when the stock market fluctuates Money will not flow to government bonds due to low yields. And the central bank itself doesn’t have room to cut interest rates any lower than this.
Organizing investment portfolios in the next 1-2 years is suitable for using gold. Real Estate Fund Infrastructure funds as a diversification tool rather than debt instruments
3. Tourism does not revive Thailand does not revive
Despite having the vaccine from many camps But the Covid-19 epidemic will still terrify people. Do not dare to travel as usual People will still have a long look at whether the vaccine is effective or not Do germs have mutations? Causing people around the world to not dare to travel as before
While Thailand does not have such strong technology stocks as in China or the United States, the tourism sector accounts for more than 15% of GDP and is predominantly foreign tourism. The recovery of the tourism sector is therefore one of the most important factors for the country’s economic recovery.
Recently, the Bank of Thailand has only looked at the growth trend for Thailand at 3.2% next year, which is a very small recovery compared to other countries in the world. Therefore, the Thai stock market at the 1,500 +/- zone level is likely to be a good zone for a portfolio downgrade of Thai stocks to increase investment in foreign stocks.
In the end, it will be a major risk factor in 2021, as the market has now predicted that the world will have an effective vaccine. Therefore, if there is a case of a mutated pathogen as seen in the UK and the vaccine becomes ineffective, then the vaccine will become ineffective. It will immediately become a major risk factor for the world economy.
– .
