Bualuang Asset Management (BBLAM) has increased its cash holding in its equity portfolio as it waits for the right time to purchase undervalued shares.
Chief executive Peerapong Jirasevijinda said BBLAM holds cash of around 13-14% of the total general equity portfolio worth nearly 200 billion baht, including mutual funds, provident funds, long-term equity funds, and retirement mutual funds.
The portion of cash has increased from 8-10% since the beginning of this year, he said.
There is a sign suggesting that medical tourism has seen a recovery this year and the tourism industry is expected to be a key economic driver propelling Thailand's growth, said Mr Peerapong.
"Hospital stocks have been falling for many companies but they are too cheap to pick up, so our fund managers are reserving cash and waiting for panic selling as the range-bound stock trade still remains," he said.
BBLAM analysts are also waiting to see whether private consumption recovers.
If it does, commercial stocks could be attractive to invest in, he added.
BBLAM has new capital inflows into mutual funds of around 20 billion baht this year, including 6.4 billion baht worth of capital flowing into general equity funds.
Mr Peerapong said foreign capital inflows channelling into emerging markets have been quite excessive this year, except for Thailand's stock market which has underperformed.
"Thai equities are underperforming this year as the country's GDP growth only just exceeded 3% and economy drivers are not fully functioning," he said.
"Thailand's GDP growth has improved, but it is still lower than neigbouring countries such as Indonesia at 5.5%, India at 7% and China at 6%," said Mr Peerapong.
Exports have shown signs of growth this year although such growth has not been broad based, reflecting the second quarter earnings of listed companies which are lower than market expectations, said Mr Peerapong. This could pull down the price of many stocks, he added.
