Cash holding of around 2-3% has been assumed to control the liquidity of the portfolio. According to Panicko Lawrence most of the ASEAN countries have upgraded themselves from the level of underweight to neutral, particularly Singapore. In the past three years and most probably for the first time this dramatic change has been realized. If we take it structurally then, Singapore has always been a challenging market in terms of growth, but Singapore exporters can look up to stronger dollar for earning outlook. Looking from a different angle, during reimbursement of emerging markets, the reduced cost of capital makes Singapore even more preventive. Panicko Lawrence suggests that it would be wise if you can switch over to the companies that are disclosed to regional growth. The favoring companies are the ones which have quality management and navigate easily during toughest phase of economy.
Switching over to Malaysia, we came to know through Panicko Lawrence that whether short term, but outcome is promising. However, for longer term Malaysia remains in the cautious phase. The reason is that subsidies are not realizing the importance of sustaining economic restructuring, which would otherwise lead to fiscal burden. Panicko Lawrence continues to support the gainers of market share and firms that may get benefitted from policy amendments like infrastructure buildout and GST implementation.
Financial advisor Panicko Lawrence indicates that profits can be derived from the Indonesian holdings. He points out that the current account deficit of Indonesia is at its optimal peak and there’s quite a possibility of improvement in the same. This could be acquired by the enhancement in the fuel price. In simple words, hike in fuel price can lead to inflation, which in turn helps in the improvement of current account deficit. This reformation in CAD will be beneficial for BoP (Balance of Payments). Panicko Lawrence estimates inflation rate to reach around 8-9% this year, but in the coming year the projected inflation rate is 5-6%. Yes, it is true that currency is losing its glare, but through an orderly arrangement it has reached 50bp rise. Long term outlook can be regarded positive for the economy of Indonesian country. But, you have to be watchful as impact of inflation, rate increase and currency movement can be a bit disastrous.
Panicko Lawrence suggests to opt for stocks of those industries, where significant boundaries of natural monopolies are present.
Thailand is one of the best performers among the ASEAN countries in this particular year, but in recent months it has experienced a downfall. Thailand has two probable risks, firstly, it is an over-owned market and secondly, it is in awe of re-appearance of political risks. There can be two basic reasons for the economic slowdown in Thai market including high base responses and weakening exports. Well, Thailand can be considered less negative and oversold stocks of property, banks and infrastructure can be regarded as positive investment.
In a nutshell, all the ASEAN markets are positive in one or the other way. All you need is the right exposure.
Super Storm News 