How should I invest? When entering the second half of the year?

Situation of investment in risky assets in the second half of the year Giving less hope that it will be bright If you do not continue to incline towards the downtrend. It may move within a narrow frame. On the side of safer assets such as debt instruments It still faces the impact of rising interest rates in line with the central bank's policy.

The first half of 2565 has flown by like a lie. And in the first half of the year, many stories happened in the investment industry. It also leaves stories to follow in the second half of this year.

Review important events in the first half of the year

• Fighting in Eastern Europe and commodity prices surge. Continuing from the end of 2564, when Russia began moving troops closer to the Ukrainian border. Tensions continued for several months, until on February 24, 2565, Russia moved into Ukrainian territory. This marked the official start of hostilities in Eastern Europe. And because Russia is the world's largest crude oil exporter. and Eastern Europe is a growing area for important food crops such as wheat.

Therefore, the prices of various commodities have simultaneously increased sharply due to market concerns and difficulties in logistics management in the region. From the beginning of the year until June 28, 2565, the price of Brent crude oil has increased by approximately 50%, while the price of wheat has increased by approximately 30%, with the route reaching a high of more than 70%.

• Record-breaking high inflation and change in monetary policy direction. The rapid increase in the prices of main commodities Therefore, it is inevitable that this will result in global inflation rising to the highest level in decades. with economic recovery following COVID-19 has been resolved as a leading base since the end of 2564, resulting in an economically important country like the United States The policy interest rate had to be raised by a total of 150 basis points in the last 3 meetings, and the Monetary Policy Committee (FOMC) began measures to reduce asset holdings (QT) from 1 June 2565 onwards.

The European Central Bank (ECB) is also aware of inflationary pressures, sending a clear signal at its meeting on June 9, 2565 that the ECB will likely raise policy interest rates at its July 2565 meeting and will start using it. QT policy with no additional net purchases From July 2565 onwards as well.

Part of the Bank of Thailand At the last meeting on June 8, 2565, although the policy interest rate was maintained at 0.50%, it was passed by a vote of 4:3, with 3 votes agreeing to increase it immediately. along with signals that the need for accommodative monetary policy has decreased.

• Prices of risky assets are falling sharply around the world, but Thailand is still strong. From the above reasons, risky asset prices have continued to decline in the past. The Dow Jones Industrial Average dropped 14.8% from the beginning of the year and the NASDAQ index dropped 28.5%. As for the digital asset market, Bitcoin price dropped 56.1%, while Ethereum dropped 68.9% due to the UST-Luna problem. aggravate

However, our SET Index is considered to be lowly affected by foreign factors. which decreased by only 4.2% and if looking at the SET Total Return Index that includes dividends and various rights I've come in too. It decreased only 2.2%.

Perspective on the world and Thai economy in the second half of the year

• The World Bank has published the Global Economic Prospects report, June 2565 issue, estimating that the global economy throughout 2565 will grow by 2.9%, but what is worrying is that this is a reduction from the level of 4.1% that was expected in January 2565, which is mainly due to the COVID situation. -19 which still has a considerable impact on the economy This is further compounded by fighting in Eastern Europe that has driven up commodity prices and disrupted global supply chains.

At the regional level The World Bank estimates that Developed countries and emerging/developing market groups The economy will grow at 2.6% and 3.4%, respectively, but the estimates have been revised down from the original 3.8% and 4.6%, respectively. In the overall picture, it can be seen that Even though the world economy in 2565 is still likely to expand But the World Bank's latest view is that growth in the second half of the year will grow at a slower rate than before.

• However, the Bank of Thailand has published a Monetary Policy Report on June 22, 2565, estimating that the Thai economy in 2565 will grow 3.3%, which has been revised up from the level of 3.2% previously estimated as of March 2565, with positive reasons from the likely number of foreign tourists. Increased as the country opens faster. Including private consumption that has clearly recovered.

• The appropriate level of the Fed Funds Rate in 2565, according to the opinion of the US FOMC committee from the last meeting on June 15, 2565, has an average of 3.4%, while the view in the March 2565 meeting is at approximately 2.0%. XNUMX%

Compared to the current level of 1.50-1.75%, it shows that the FOMC committee estimates that the Fed Funds Rate will need to be increased by approximately 200 basis points for the remainder of this year.

Forecasting investment impacts

From the clear trend of policy interest rate increases from both the FOMC, ECB and the Thai MPC, as well as the clarity of the QT measures in an environment where prices of major commodities and inflation remain generally high. which has had a negative effect on foreign stock markets continuously in the first half of the year together with the reduction of world economic growth figures. Situation of investment in risky assets in the second half of the year Therefore giving less hope that it will be bright.

If you do not continue to incline towards the downtrend. It may move within a narrow frame. On the side of safer assets such as debt instruments It still faces the impact of rising interest rates in line with the central bank's policy.

However, the Thai economy according to the predictions of the Bank of Thailand There is a brighter trend than before. And the Thai stock market in the first half of the year also showed strength when compared to other major world stock markets.

Investment advice for the second half of the year

• Investors who emphasize the stability of their investments. and who may be ready to accept opportunities from inflation that remains at a high level Recommended bond funds as follows:

1. ASP-DPLUS (Asset Plus Debt Daily Plus Open Fund) focuses on investing in debt instruments with an average remaining maturity of 3 months to 1 year, with a return in the past 1 year of 0.62%, in the past 3 years an average of 1.13%. year

2. KTILF (Krungthai Inflation Reference Fund) focuses on investing in debt instruments with returns that vary with inflation. There is a return for the past 1 year of 8.00%, the past 3 years is an average of 3.25% per year.

• Investors who want the opportunity to receive higher returns. Focusing on investing in securities with potential in Thailand. Recommended equity funds as follows:

1. TLMSEQ (Talis MID-SMALL CAP Equity Fund) focuses on investing in equity instruments of small and medium sized companies within the country with good fundamentals and business growth trends. There is a return for the past 1 year of 31.4%, the past 3 years average 25.7% per year, volatility for the past 1 year is 18.8%.

2. ASP-SME (Asset Plus Small and Mid Cap Equity Fund) focuses on investing in equity instruments of small and medium sized companies within the country that have good fundamentals and a tendency for economic growth. business There is a return in the past 1 year of 5.7%, in the past 3 years an average of 17.2% per year, volatility in the past 1 year of 13.5%.

*Funds recommended by Treasury Securities Group. Information as of June 28, 2565.

*Information gathered by Sasin Saetia, an investment advisor licensed by the SEC Office.