Invest in foreign bonds, REITs, healthcare, and tech stocks for 2024, advises Tisco bank

Tisco Bank’s Head of Wealth Advisory, Nattakrit Laotaweesap, advises investors to focus on foreign bonds, real estate investment trusts (REITs), and healthcare and technology stocks in the next year as a safeguard against potential downturns. The global economy’s pace is anticipated to decelerate next year due to the impact of tighter monetary policies, which could result in a potential downgrade in global listed companies’ profits, Nattakrit said.

“Investors should consider investment strategies that yield profits despite negative factors.”

Tisco anticipates an end to the cycle of interest rate hikes, predicting that central banks will gradually lower their policy interest rates throughout the next year. This expected move will lead to a decrease in government bond yields.

According to Tisco, bonds and REITs are likely to emerge as asset winners due to their capacity to consistently generate cash flow. Investments in bonds offer the potential for a high rate of return if held until maturity and could also increase from the coupon rate following a central bank interest rate cut.

Tisco suggests investing in funds focusing on government bonds, high-credit-rated private-sector debt instruments, and those offering medium to long-term maturity. Developed nations like the United States and Europe are projected to provide a yield of more than 5%, making their bonds attractive investment options.

Meanwhile, REITs have seen a price drop of 20-30% between 2022-23 due to high inflation and continuous interest rate hikes by central banks. However, the valuation of REITs in the United States, Singapore, and Thailand is again attractive, with their price-to-book ratios being at their lowest in five years.

Economic conditions

Tisco Bank also recommends healthcare and technology stocks, as they are typically less affected by economic conditions. Healthcare shares have seen modest growth in the past, but the trend for next year is expected to reverse with a projected sector growth of 18.8%, the highest among all sectors. For technology stocks, those related to artificial intelligence (AI) are favoured due to their increased adoption in various industries.

In terms of geographical focus, Tisco believes Asian countries, especially South Korea, Taiwan, and Vietnam, have the potential for growth and higher earnings per share. The North Asian economies are home to several technology and semiconductor industries, with South Korea’s government having developed an innovation system that supports industry expansion.

Meanwhile, the Vietnamese stock market is anticipated to benefit from declining interest rates as investors shift towards riskier assets, reported by Bangkok Post.

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