KASIKORNBANK (KBank) has assessed impacts on investment of retail investors during 1H22. Close attention should be paid to three negative factors that are pressuring the Thai and global economy. They include production capacity that has fallen short of rising consumption during the country’s reopening, which has sent goods prices soaring, ongoing surges in oil prices, and the Russia-Ukraine war. To beat the rising inflation, investors are advised to adjust their portfolios via dollar cost averaging (DCA) while holding gold for risk diversification. Amid the rising trend of interest rates, focus should be on stocks in business sectors such as financial institutions and commodities, as well as mutual funds.
Dr. Pipatpong Poshyanonda, KBank President, said that 2022 has been a challenging year for investment due to pressure from three important factors: 1) Production capacity has yet to return to normalcy. The production sector is still reeling from the impact of COVID-19, meaning manufacturers cannot run their production at full capacity despite increased demand for goods after the government opened the country to international tourists; 2) Skyrocketing global oil prices, buoyed by increased demand amid limited production capacity, which will lead to stagflation; and 3) The Russia-Ukraine conflict as seen in the ongoing battle between the two nations. Presently, EU member states are considering an oil embargo on Russia after the US imposed its own such measure. This is an issue that must be monitored closely, as many European countries are heavily dependent on energy and oil imports from Russia.
Dr. Pipatpong said in closing, “The Thai economy will be most impacted by soaring inflation, expensive goods, rising energy costs and high operating expenses. Meanwhile, Thailand’s money and capital markets will encounter heightened volatility. For this reason, investors should adjust their investment approach in order to get returns that can beat the present inflation, while gradually adopting dollar-cost averaging (DCA) or holding gold 5-10 percent of portfolio for risk diversification. Amid the rising trend of interest rates, KBank recommends investing in stocks in business sectors such as financial institutions and commodities, as well as mutual funds.”