16/11/2009
Bangkok Post
Economics
By Darana Chudasri and Somruedi Banchongduang
Similar questions echoed throughout the giant exhibition hall over the four-day annual SET in the City exhibition, as the sharp gyrations of the financial markets over the past year has raised public anxiety and awareness of the importance of personal investment planning to new heights.
At the lavish booths sponsored by Kasikornbank, more than 200 people registered for K-WE Plan consulting services on the first day of the fair, a figure that jumped to well over 500 on Friday.
Umapan Charoenying, a KBank first vice-president, said personal investment services were a popular theme at this year's fair.
"Most of our clients are asking about tax planning and checkups about their financial health. Some are also asking about education and investment plans," she said.
Nearby, Rapee Sucharitakul, the executive chairman of Kasikorn Asset Management, said investors should be sure to keep some portion of their wealth in stocks to benefit from the economic recovery.
"As the economy improves, oil prices will rise and fan inflation. When considering asset allocations, stocks should definitely be in your portfolio. Overall, stocks are an investment class that typically can beat inflation rates," he said.
A conservative investor might consider allocating 20% to 30% of a portfolio to stocks, he said.
K-Asset currently forecasts the Stock Exchange of Thailand index to reach 800 points within the next 12 months, representing a potential upside gain of more than 14% from current levels.
Another 60% to 70% of one's portfolio might be held in fixed-income securities, with an emphasis on shorter-dated bonds and debentures to minimise the risk from rising interest rates. Mr Rapee said investors should also have some positions in alternative assets, such as commodities or even derivatives.
Investment allocation of course is all about balancing potential risk against potential reward.
Investors also have different financial priorities at different stages of life - a retiree typically should focus on capital preservation and steady returns while a new college graduate can afford to take on the additional risk and volatility inherent in stocks in planning their retirement savings.
For working professionals, one of the more obvious investment choices are long-term equity and retirement mutual funds, thanks to generous tax incentives offered by the government on contributions.
All across the exhibition hall, local fund managers pushed the latest promotions and incentives to urge investors to open new retirement savings accounts. A number of asset management companies tied to local banks also adopted a similar strategy this year by offering LTF or RMF contributions to be made using a credit card.
At KBank, banners promoted the benefits of using a credit card to finance fund contributions, including the added loyalty card points and special interest charges of 0.69% per month for three- or six-month terms. Cash-back offerings also offer up to 12,000 baht in rebates and vouchers for investors charging their annual fund contributions to their cards.
Wirawat Panthawangkun, a KBank first senior vice-president, said investors normally begin to think about LTF or RMF contributions only at the end of the year.
While charging fund contributions to a credit card might seem to be contradictory behaviour in terms of financial discipline, Mr Wirawat said the service helps investors enjoy tax incentives even if they lacked the immediate cash to make contributions.
"I think investors who invest in LTFs and RMFs in the first place are quite knowledgeable about investment and financial discipline. They are thinking about maximising returns, so I don't believe that charging to a credit card will really be a problem," he said.
Other banks, including Bangkok Bank, Siam Commercial Bank and United Overseas Bank, offered similar incentives for card charges.
Adisorn Sermchaiwong, an SCB executive vice-president, said the service gives added convenience to fund investors in managing their liquidity and cash needs.
He added that the bank's core advice was clear, that investors should use cards as a short-term tool and promptly pay off their balances rather than run up revolving debt and interest charges.
Voravan Tarapoom, the chairwoman of the Association of Investment Management Companies, said LTFs and RMFs were a main factor driving growth of the asset management industry.
As of June 30, local asset managers reported a total of 1.53 million individual accounts, representing 2.31% of the population. In contrast, local brokerages had 580,000 accounts.
"I think that given past growth, we will see the number of fund accounts rise to 5% of the population within the next four years without much difficulty," said Mrs Voravan, also the managing director of BBL Asset Management.
Of the current mutual fund base, around 800,000 are accounts holding fixed-income funds, including popular Korean bond foreign investment funds. Equity funds include another 580,000 accounts, with the rest split across various fund categories, including balanced funds, mixed and property funds. LTFs cover 300,000 accounts and RMFs 188,000 funds.
For investors at the fair, the promise of additional credit card loyalty points or simple discount coupon giveaways can be enough incentive to bring out a wallet or chequebook.
Somchai Kitudomrat, a 55-year-old state enterprise employee, sat at the SCB booth at lunchtime waiting to receive a dinner coupon after investing in an LTF.
"I don't really have a lot of time to look around and compare between the various booths. I invest in insurance, LTFs and RMFs every year up to the full limit for the tax benefits," he said.
"The promotions aren't really that much of an influential factor. But I do appreciate receiving the discount coupons."
Sukanya Panyavinich, a 42-year-old entrepreneur, also came to SET in the City to open an LTF and RMF account.
"The promotions definitely help. I invested using both cash and credit cards, depending on the promotions offered," she said.
For Attavit Chongvibul, it was his second visit to the investment fair in as many days.
"Yesterday I came to survey the various offerings and collect information, and today I'm looking for the right fund," he said.
Mr Attavit said he typically focuses on fixed-income funds thanks to the relatively low risk but returns that outpace bank deposits.
"I used to invest in gold bars, but I've stopped since prices nowadays are moving very quickly. And I'm not interested in stocks," said the 48-year-old.
"For me, mutual funds are the best option. You benefit from both the tax deductions and gain better returns than keeping money in the bank."
Bangkok Post
Economics
By Darana Chudasri and Somruedi Banchongduang
Where should I put my money? Is gold really a good investment? What about stocks
or foreign investment funds?
Similar questions echoed throughout the giant exhibition hall over the four-day annual SET in the City exhibition, as the sharp gyrations of the financial markets over the past year has raised public anxiety and awareness of the importance of personal investment planning to new heights.
At the lavish booths sponsored by Kasikornbank, more than 200 people registered for K-WE Plan consulting services on the first day of the fair, a figure that jumped to well over 500 on Friday.
Umapan Charoenying, a KBank first vice-president, said personal investment services were a popular theme at this year's fair.
"Most of our clients are asking about tax planning and checkups about their financial health. Some are also asking about education and investment plans," she said.
Nearby, Rapee Sucharitakul, the executive chairman of Kasikorn Asset Management, said investors should be sure to keep some portion of their wealth in stocks to benefit from the economic recovery.
"As the economy improves, oil prices will rise and fan inflation. When considering asset allocations, stocks should definitely be in your portfolio. Overall, stocks are an investment class that typically can beat inflation rates," he said.
A conservative investor might consider allocating 20% to 30% of a portfolio to stocks, he said.
K-Asset currently forecasts the Stock Exchange of Thailand index to reach 800 points within the next 12 months, representing a potential upside gain of more than 14% from current levels.
Another 60% to 70% of one's portfolio might be held in fixed-income securities, with an emphasis on shorter-dated bonds and debentures to minimise the risk from rising interest rates. Mr Rapee said investors should also have some positions in alternative assets, such as commodities or even derivatives.
Investment allocation of course is all about balancing potential risk against potential reward.
Investors also have different financial priorities at different stages of life - a retiree typically should focus on capital preservation and steady returns while a new college graduate can afford to take on the additional risk and volatility inherent in stocks in planning their retirement savings.
For working professionals, one of the more obvious investment choices are long-term equity and retirement mutual funds, thanks to generous tax incentives offered by the government on contributions.
All across the exhibition hall, local fund managers pushed the latest promotions and incentives to urge investors to open new retirement savings accounts. A number of asset management companies tied to local banks also adopted a similar strategy this year by offering LTF or RMF contributions to be made using a credit card.
At KBank, banners promoted the benefits of using a credit card to finance fund contributions, including the added loyalty card points and special interest charges of 0.69% per month for three- or six-month terms. Cash-back offerings also offer up to 12,000 baht in rebates and vouchers for investors charging their annual fund contributions to their cards.
Wirawat Panthawangkun, a KBank first senior vice-president, said investors normally begin to think about LTF or RMF contributions only at the end of the year.
While charging fund contributions to a credit card might seem to be contradictory behaviour in terms of financial discipline, Mr Wirawat said the service helps investors enjoy tax incentives even if they lacked the immediate cash to make contributions.
"I think investors who invest in LTFs and RMFs in the first place are quite knowledgeable about investment and financial discipline. They are thinking about maximising returns, so I don't believe that charging to a credit card will really be a problem," he said.
Other banks, including Bangkok Bank, Siam Commercial Bank and United Overseas Bank, offered similar incentives for card charges.
Adisorn Sermchaiwong, an SCB executive vice-president, said the service gives added convenience to fund investors in managing their liquidity and cash needs.
He added that the bank's core advice was clear, that investors should use cards as a short-term tool and promptly pay off their balances rather than run up revolving debt and interest charges.
Voravan Tarapoom, the chairwoman of the Association of Investment Management Companies, said LTFs and RMFs were a main factor driving growth of the asset management industry.
As of June 30, local asset managers reported a total of 1.53 million individual accounts, representing 2.31% of the population. In contrast, local brokerages had 580,000 accounts.
"I think that given past growth, we will see the number of fund accounts rise to 5% of the population within the next four years without much difficulty," said Mrs Voravan, also the managing director of BBL Asset Management.
Of the current mutual fund base, around 800,000 are accounts holding fixed-income funds, including popular Korean bond foreign investment funds. Equity funds include another 580,000 accounts, with the rest split across various fund categories, including balanced funds, mixed and property funds. LTFs cover 300,000 accounts and RMFs 188,000 funds.
For investors at the fair, the promise of additional credit card loyalty points or simple discount coupon giveaways can be enough incentive to bring out a wallet or chequebook.
Somchai Kitudomrat, a 55-year-old state enterprise employee, sat at the SCB booth at lunchtime waiting to receive a dinner coupon after investing in an LTF.
"I don't really have a lot of time to look around and compare between the various booths. I invest in insurance, LTFs and RMFs every year up to the full limit for the tax benefits," he said.
"The promotions aren't really that much of an influential factor. But I do appreciate receiving the discount coupons."
Sukanya Panyavinich, a 42-year-old entrepreneur, also came to SET in the City to open an LTF and RMF account.
"The promotions definitely help. I invested using both cash and credit cards, depending on the promotions offered," she said.
For Attavit Chongvibul, it was his second visit to the investment fair in as many days.
"Yesterday I came to survey the various offerings and collect information, and today I'm looking for the right fund," he said.
Mr Attavit said he typically focuses on fixed-income funds thanks to the relatively low risk but returns that outpace bank deposits.
"I used to invest in gold bars, but I've stopped since prices nowadays are moving very quickly. And I'm not interested in stocks," said the 48-year-old.
"For me, mutual funds are the best option. You benefit from both the tax deductions and gain better returns than keeping money in the bank."
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