Bangkok: Thai Stock Strategy for the Second Half of the Year highlights the potential of dividend-paying stocks to capitalize on technical turning points. Although many investors may have been disappointed by the Thai stock market in what seemed like a lost decade, Pawawit Klinpratum believes that the market has now passed its lowest point and is showing clear technical signals indicating the beginning of an uptrend.
According to Thai News Agency, technically, the Thai stock market has been oversold for a long time and is now starting to reverse into an uptrend, contrary to the general sentiment that the economic fundamentals are still weak. Mr. Pawawit points out this is a once-in-a-decade opportunity to acquire large-dividend-yielding stocks at their lowest prices. Many stocks have very attractive valuations and offer dividend yields as high as 5%.
For stock selection, Mr. Pawawit recommends focusing on businesses that are sustainable and have a semi-monopolistic characteristic in their respective segments. Within the Thai market, he identifies the retail and wholesale group as strong due to consumer spending, the energy sector as benefiting from high global energy prices, and the banking group as stable due to consistent dividend payments and cautious lending practices. However, he advises caution regarding the real estate sector, which continues to struggle with high costs and stringent lending criteria.
Mr. Pawawit also warns about the potential risks in international markets, particularly with technology and AI stocks, suggesting a possible global economic crisis following major infrastructure investments. He notes that AI companies' revenues are largely derived from B2B trading rather than direct consumer sales, making current investments in international technology stocks speculative, with a clear exit strategy being essential.
He further advises considering alternative assets like gold and Bitcoin. Gold appears to be in a downtrend, while Bitcoin is gaining stability and being viewed as "digital gold" due to reduced volatility from institutional involvement.
Mr. Pawawit emphasizes the importance of using "cold money" and patience in the second half of the year, focusing on accumulating fundamentally sound stocks that pay high dividends. He believes that if the economic fundamentals improve as supported by technical signals, the Thai stock market has the potential to reach 1,500 points or higher, rewarding those who have maintained their investments since the beginning of the cycle.