Free visa policy to boost Thai tourism stocks amid Chinese arrivals

An agreement for a free visa policy between Thailand and China is set to greatly boost seven Thai tourism-related stocks, as projected by brokerages. This policy, signed earlier this week, is anticipated to cause a significant uptick in Chinese arrivals in Thailand this year.

The Tourism Authority of Thailand (TAT) set a target of attracting 8.2 million Chinese tourists in 2024, a huge leap from last year’s 3.5 million. The visa exemption policy for nationals of both countries, which allows stays of up to 30 days, is believed to be a key factor in achieving this goal.

From March 1, the policy is expected to positively impact seven Thai stocks connected with tourism, according to Globex Securities. These include Airports of Thailand (AOT), Asia Aviation (AAV), Minor International (MINT), Central Plaza Hotel (CENTEL), Erawan Group (ERW), Siam Wellness Group (SPA), and Sky ICT (SKY).

Wilasinee Boonmasungsong, Globlex’s research director said Thai tourism has the opportunity to continue growing this year. Wilasinee also noted that factors such as the tensions in the Middle East need to be closely monitored.

Thailand saw the highest tourist arrivals in Southeast Asia last year, up to 28.1 million from 11.1 million in 2022, according to Sudawan Wangsuphakijkosol, Tourism and Sports Minister.

Meanwhile, Tisco Asset Management (AM) has suggested that investors opt for top global stocks that can grow despite market volatility. They recommend investing through the Tisco Global Quality Equity Fund (TGQUALITY), which includes investments in companies like Microsoft, Apple, Nvidia, Visa, Meta, and Alphabet.

Diversification strategies

Thanachart Securities has advised investors to diversify their portfolio to equity funds and foreign fixed-income funds in response to the end of the interest rate hike cycle.

The Thai stock market’s valuation is currently quite low, but there are several quality stocks for investors to consider as long-term investments, said Adisak Phupiphathirungul, vice-president of Thanachart Securities. He noted that the GDP growth is expected to fall to 2.4% this year from 2.6% in 2023, reported Bangkok Post.

However, the easing inflation and interest rates pressure, coupled with the likelihood of the government starting to inject money into the economy from May, offer some optimism. Thanachart Securities recommends a focus on portfolio diversification and finding additional opportunities such as equity funds and global bond funds.

For long-term investment, stocks listed on Chinese exchanges, clean energy funds, and high-quality, long-term debt funds that are expected to yield good returns as interest rates trend down are interesting, Adisak said.

To assist investors, Thanachart Securities is introducing a portfolio advisory tool called ZEAL that provides comprehensive analysis. This service targets long-term returns of 3-10% per year.