Bangkok: CIMB sees US-China talks as positive for capital markets but still highly volatile, expects MPC to cut interest rates again, keeps an eye on trade war, recommends portfolio adjustments to diversify low-risk assets, expects secondary retail bonds to grow by 60 billion baht in 2025, targets 30% market share, focuses on long-term savings.
According to Thai News Agency, Mr. Phudinan Setthanan, Assistant Managing Director of CIMB Thai Bank, stated that the trade war situation has impacted the capital market. There was previously negative news about the US increasing tariffs. However, when the US reached a tariff reduction negotiation with England and China, market conditions, including the stock market and equity funds, showed significant improvement. Despite this, they remain highly volatile, prompting investors to monitor the situation closely and make timely portfolio adjustments.
The easing of tensions is causing a downward trend in gold prices, presenting an opportunity for accumulation. However, the ongoing trade war involves alternating periods of tension and easing. Investors are advised to adjust their portfolios by reducing high-risk assets in favor of medium or low-risk assets to achieve better diversification.
Bonds are seen as low-risk assets and typically comprise 30-50% of investment portfolios. In the current scenario, high-risk portfolios can be reallocated to bonds, particularly given the declining policy interest rate. The latest Monetary Policy Committee (MPC) meeting on April 30th cut the policy interest rate by 0.25% to 1.75% per year. It is expected that interest rates will continue to fall, benefiting the domestic bond market, especially bonds with investment-grade reliability.
There is significant growth potential in secondary market bonds for retail investors. It is anticipated that by 2025, growth will reach 10-20%, surpassing 60 billion baht, compared to 50 billion baht in 2024. CIMB Thai Bank aims for a 30% market share or approximately 20 billion baht, emphasizing long-term savings over profit-driven trading.
Ms. Kasira Klonganan, Senior Vice President, Independent Financial Advisory Team, CIMB Thai Bank, revealed that the bank is advancing its Wealth Management business by offering investment products, particularly secondary market debentures. CIMB is a pioneer and leading service provider in the current market. Customers can independently invest in debentures through the bank’s robust Wealth Platform, the CIMB THAI application. The bank is also recruiting Independent Financial Advisors (IFAs) to broaden access to quality investment products, especially for new customers interested in diversifying from deposits, funds, and insurance to debenture investments.
IFAs are independent financial advisors licensed to present investments without affiliation to any financial institution, bank, securities company, fund management company, or insurance company. The bank offers opportunities for all, from the new generation to retirees, with expert teams supporting IFAs who engage clients. IFA clients receive benefits equivalent to bank clients. Training is provided to enhance skills, with a goal to recruit 500 IFA positions by 2025.