Strategy

UBS Wealth’s Asia CIO Upbeat On Thailand

Tara Loader Wilkinson, Asia Editor, 24 July 2011

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Pu YonghaoUBS Wealth Management’s chief
investment strategist for Asia Pacific, has upgraded Thailand stocks to buy and believes there is around a 10 per cent
upside in Thai equities, according to an interview with Bloomberg Television.   

Pu recently upgraded Thailand on the basis that companies are underpriced and that the recent election paved the way for economic growth.

“Thailand’s exports have been doing well and the Central Bank is going to control inflation. It is in a unique position with its a strong commodity line. Thailand has been trading at a relative discount to the region because of political risk.”

He estimated there is around 10 per cent upside to be gained in the region.

He told the newsagency that Chinese interest
rates are so low, investors’ “only choice” is to buy equities in the region. He said: “On the
micro front, the Government has set interest rates so low, you have to invest,
you have to consume. Otherwise inflation will take your money away.”

“This is why on a relative scale, equities
look so attractive. Dividend yields are mostly in line (with estimates),” said Pu.

He said he would not read too much into the
contraction in China’s economy, announced recently by HSBC analysts, and that
in fact a slowdown should be taken in a positive light.

“It is good news that China will decelerate to sacrifice growth to achieve lower inflation,” he added.

Pu is overweight on China and North Asia in
general, since South Asian stocks have had a good run in recent weeks, he said. 

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