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The new-high crude oil price drove up both commodity prices and the impressive commodities funds return of 10.99% in February.
The average returns of equity funds and mixed-asset funds shot up 6.63% and 5.03%, respectively, because of the rebound in the stock markets.
Returns of low-risk-exposure funds such as money market funds and bond funds were as low as 0.05% and 0.10%, respectively - lower than in the previous month.
On the local front, the Stock Exchange of Thailand Index rose 7.85% to 845.76 points in February, boosted by the establishment of the new government. Thailand's new government has approved a stimulus package to boost a sluggish economy.
Finance Minister Surapong Suebwonglee has said the approved tax measures should help boost economic growth this year to 6%. The measures were announced less than a week after former Prime Minister Thaksin Shinawatra returned to Thailand after 17 months of exile.
Positive news of the launching of several economic stimulus packages and the lifting of the 30% reserve capital control measure drew foreign capital flow to invest in the domestic market.
Foreign investors posted a substantial net buy of Bt31 billion in February, while institutional investors and local investors sold out Bt19 billion and Bt12 billion, respectively. The upward trend in February saw the SET index outperform in the regional markets. However, the threat of US economic recession continued to affect investor sentiment.
The fourth quarter gross domestic product growth rate of 5.7% shows the Thai economy has been improving, up from 4.8% in the previous quarter. The main elements boosting economic growth were the continued export growth and substantial public expenditure amid weak private domestic demand, according to Suthee Luangaramkul, a Bangkok-based analyst at Lipper.
However, the economic indicators in January showed private domestic demand gained momentum after political easing and revitalisation of consumer and investor confidence. In January the private consumption index increased 8.5%, the private investment index ended up 4.6%, and the manufacturing production index improved to 12.5%.
ôEconomic outlook is showing an enhanced sign, and abolishing the 30% reserve capital control has sent a friendly welcome policy for foreign investment. Fear factors include the threat to resolve the coalition government parties, the elevated oil prices devastating economic stability, and the unease over US economic recession and financial turmoil,ö says Luangaramkul.
Average performance of fund groups registered for sale in Thailand in February:
Mixed Assets +5.03%
Money Market +0.05%
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.