KBank Private Banking and Lombard Odier expect the global economy to slow down in a soft landing manner, suggesting investment portfolios to cope with the downward trend in interest rates, indicating that the risks have not disappeared, emphasizing investment diversification and asset risk management.
KBank Private Banking, together with Lombard Odier, a global private banking business partner from Switzerland, organized a seminar on ‘Repositioning Portfolio To Embrace Rate Cuts’ to analyze the global economy in the second half of 2024. It is expected that there is a high chance that the global economy will slow down in a soft landing manner and the economy will not enter a recession. Therefore, it is estimated that risky assets such as stocks have a chance to continue to increase. However, there are still many risks affecting the capital market that investors must keep an eye on, such as interest rates that may continue to be high (Higher for Longer), conflicts in both physical wars and trade wars, and the
upcoming US election at the end of the year that may affect the overall economy. It is recommended to divide investment funds to create long-term returns, emphasizing risk-based investment that spreads investments in major assets around the world, spreading investments in stocks, debt instruments, and alternative investments to accumulate wealth in the long term.
Ms. Kattiya Indaravijaya, Chief Executive Officer of Kasikornbank, revealed that 2024 is considered a good year for investment. The global stock market has continuously provided good returns since 2023. This can be seen from the return on risky assets such as the MSCI All Country World Index, which increased by +11.5%, as a result of the global economy recovering well from the performance of listed companies that have recovered and grown in many industries, such as technology, consumer goods, and luxury goods. However, there are still many challenging factors for the investment market that investors must keep an eye on, such as when the US Federal R
eserve will start cutting interest rates, who will win the US presidential election, which will significantly affect global economic and political policies, and international conflicts, whether in the form of wars using weapons and manpower or trade and technology wars.
Mr. Homin Lee, Senior Asia Macro Strategist, Lombard Odier (Singapore), said that in the second half of 2024, it is estimated that the overall investment market, especially the US stock market, has the opportunity to continue to increase because it is believed that the US economy is still strong, led by the industrial sector, especially the chip manufacturing industry, which is in demand from around the world. In addition, even though the US Federal Reserve (FED) has slowed down the interest rate cut, which is later than the market expected, it is expected that the FED will likely cut interest rates twice this year. In addition, the labor market has begun to cool down somewhat, from the number of job openings, wages that have increased at a s
lower rate, and the unemployment rate that has begun to increase, which should not affect inflation to the point of affecting interest rate cuts in the future. Another important event to watch for in the US in the second half of the year is the election, which the survey found that there is a chance that Mr. Donald Trump will return as president again. Trump 2.0 may lead to changes in many areas, both in the labor market, economy, and international relations. In Europe, after the European Central Bank (ECB) has already cut interest rates and is expected to cut interest rates twice more, it will have a positive effect on the business sector, especially small and medium-sized businesses. and will help drive the European economy to recover well.
While China continues to face challenges, in addition to the real estate sector, there are also risks from abroad, especially this year with the US election, which may escalate the trade war. Since 2018, the share of Chinese imports to the US has decreased significantly
, and foreign investment has also decreased. Important events to watch out for are the third Plenum of the Communist Party of China Central Committee and the Politburo meeting in July, where the Chinese government is expected to introduce additional measures to support the real estate sector, which investors will have to keep an eye on.
Ms. Siriporn Suwannakarn, Senior Managing Director, Financial Advisory Head, Private Banking Group, Kasikornbank, recommends dividing investment funds to accumulate and grow wealth in the long term into 2 parts: the core portfolio, accounting for 50-70%, investing by selecting a mixed fund with a Risk-based approach that distributes investments in various assets, including stocks, bonds, commodities, including volatility (VIX Index) that uses systematic investment management principles with clear rules, not depending on market or fund manager forecasts; the satellite portfolio, accounting for 30-50%, divided into investments in growth stocks, such as US stock funds. Although
the price has increased significantly, it is supported by strong net profit growth. The current stock price, measured by fundamentals (Valuation), is still not expensive and still has room to grow; investment in debt instruments, such as long-term government bonds, from the US bond yield that has remained high and has the opportunity to decrease in the future when the FED’s interest rate cut trend becomes clearer, making returns in the form of interest rates more attractive; and alternative investments, such as alternative funds with strategies for trading major world currencies. Focusing on investing in major currencies that are expected to strengthen.
Source: Thai News Agency
