A Thai stock market rally is expected during the new government formation because of anticipated economic stimulus measures, says Land and Houses Fund Management (LH Fund).
Based on an initial assessment, a rally of Thai equities occurred before the March 24 general election and another is expected during the new government formation period, said managing director Monrat Phadungsit.
Equities poised to benefit from such rally are those associated with infrastructure, property and consumer spending as the new administration is expected to implement economic stimulus measures, said Mr Monrat.
LH Fund will estimate its target for the Stock Exchange of Thailand (SET) this year after the second quarter in order for earnings per share to stabilise following the amendment of the Labour Protection Act affecting the net profit of SET-listed firms, he said.
The bourse's price-to-earnings ratio is projected at 16 times in 2019, said LH Fund.
The company's total assets under management (AUM) were 70 billion baht at the end of March, and its AUM is expected to increase by 10-20 billion this year, said Mr Monrat.
LH Fund does not plan to issue new investment funds, but rather aims to manage existing funds efficiently, he said.
In related news, LF Fund together with LH Bank yesterday signed a memorandum of understanding with Invesco Asset Management, an independent asset management company, to enhance investment opportunities in the global markets and strengthen capability in technology and investment services.
Mr Monrat said a well-managed asset allocation plan will help unit-holders to optimise their benefits, especially during financial fluctuations or when stock markets are drastically hit by uncertainties.
Global stock markets have been volatile on the back of concerns over a global economic slowdown, the Sino-US trade disputes and divergence in global monetary policies.
"A well-managed asset allocation fund is flexible enough to adjust to a changing environment, capable of volatility analysis, and dynamic enough to offer investment in different asset classes to yield a better risk-adjusted return," he said.
Invesco will have its representatives join LH Fund's fund managers and representatives in the asset allocation committee under LH Bank's product management. Technology will be transferred to LH Fund's investment products.
