2024-03-26 12:50:00
SCB WEALTH reveals that from the beginning of 2023 – March 2024, global investment flows into the money market. US dollar currency is the highest, followed by private sector debt instruments. Government bonds and stocks, with inflows denominated in US dollars over the past 5 years being approximately 3.6 trillion US dollars. If the Fed cuts interest rates will move to invest in other assets that give better returns Advise investors to find opportunities to invest in foreign debt instruments. that will mature in 1-3 years for the opportunity to receive good returns and may also receive returns from the price difference. As for the stock market, it is suggested that the timing of the correction will gradually accumulate in Japanese and South Korean stocks. As for the US and European stock markets, you can continue to invest, but returns may not be as high as last year.
Mr. Sornchai Suneta, CFA Deputy General Manager Head of Investment Office and Product, Wealth Business Group, Siam Commercial Bank, revealed that from the market expecting that the US Federal Reserve (The Fed) will begin cutting the policy interest rate in June 2024 after being confident that it can control inflation within the target range of 2% and this year as a whole. It is expected that interest rates will be cut approximately 3-4 times during which interest rates will begin to decrease. This will cause the return on holding cash in US dollars to decrease. and the returns are not better than other assets
Since the beginning of last year until the beginning of March 2024, global investment continues to flow into the money market, with the US dollar being the highest, followed by private sector debt instruments. Government bonds and stocks, in the money market, are denominated in US dollars. If you count all the past 5 years, it is found that there has been a total of 3.6 trillion US dollars flowing in. This means that when interest rates begin to decrease, the money in the money market is denominated in US dollars. This part tends to move to invest in various assets, therefore, for the opportunity to generate good returns. Investors should look for ways to invest in other interesting assets, including debt instruments with maturities of approximately 1-3 years, as well as increasing opportunities to invest in attractive stock markets in Asia such as Japan and South Korea.
In this regard, investing in foreign debt instruments, it is considered that debt instruments with maturities in the next 1-3 years still provide high returns. It’s an interesting group. You may also receive returns from the price difference during the period when interest rates decrease during the 2nd-3rd quarter. As for investing in stocks, it was found that over the past 1 year, developed stock markets such as the US stock market and European stock markets All have good operating results. Benefiting from the increase in large stocks that have quite a lot of weight in the index, such as the S&P500 index of the United States since the beginning of 2024 (YTD), it has increased by approximately 7-8%. The return comes from large stocks in the 7 Angels group. Approximately 6% and the remaining not more than 2% is the return of other stocks in the market, clearly reflecting the concentration of returns coming from large stocks. The European stock market When looking at the STOXX 600 index, it is found that since the beginning of 2024 (YTD) it has increased by 4.5%, with nearly 4% of the performance from 7 large stocks, with only a small portion remaining coming from small stocks.
For stock markets in Asia, it is considered that the Japanese stock market And the South Korean stock market is interesting, with the Japanese stock market since the beginning of 2024 (YTD) giving returns of 15-16%, but returns concentrated in large stocks in the luxury goods group. and technology is the main and the Japanese stock market has measures to reform good governance. Encourage companies to put large amounts of stored cash on their balance sheets. Go out and buy back shares. This will give the stock price a chance to rise, driving up EPS and being able to pay higher returns to shareholders. It will help increase the return on equity (ROE) of the Japanese stock market. Compared to the current level, which is still lower than the US and European stock markets with ROE of more than 20%.
As for the overall picture of the Japanese economy Inflation began to increase. Employment is better Especially in the service sector As for wages, they increased in line with inflation. This helps improve consumption in Japan. And it will result in more investment from Japanese investors. Therefore, we view the Japanese stock market as interesting in the medium to long term. only in the short term The Japanese stock market rose significantly. There may be some adjustments. Investors may wait for the market to correct in order to invest again.
The South Korean stock market It currently has a very low share price to book value (P/BV) ratio in almost every business sector and has a lot of cash on its balance sheet. The South Korean stock market is trying to increase company value similar to the Japanese stock market. through share repurchases and dividend payments to investors. In addition, the ROE of the South Korean stock market tends to move in line with the cycle of South Korea’s merchandise exports. which are mostly groups electronics semiconductors, so when the world economy recovers better South Korean exports should recover, causing the ROE of the South Korean stock market to improve. As for earnings per share, it is likely to improve following exports. In addition, price to earnings per share (P/E) is still cheap, with P/E over the next 12 months at 10.6 times or -0.3 SD, low. than the 5-year average, making the South Korean stock market It is an interesting market to invest in. Opportunistic Portfolio, which is a supplementary investment portfolio For increasing the opportunity to receive returns in the 2nd quarter.
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