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Q1 investment continues to soar

New generation urged to invest in stock market

Q1 investment continues to soar

Investment in the first quarter of this year continues to show an impressive rise, with nearly Bt100 billion poured into Thailand’s industrial and farming sectors, according to new figures released last week by the Board of Investment (BOI).

The figures have served to reinforce the optimism of BOI Secretary-General Somphong Wanapha, who has said that investment for the year 2004 is certain to hit BOI’s target of Bt290 billion.

The first quarter figures show that the electronics industry is continuing to receive the highest proportion of investment.

Somphong also stressed that the current unrest in the southern border region was not having an adverse effect on investment figures.

“In the first quarter, investment in the southern region grew by 20 percent, compared with the same period of last year, with 20 investment projects. Most of these concern investment in the rubber and seafood sectors. This shows clearly that the problems in the south have not had an adverse impact on investment. The investors that put their money in this region do so directly, and on a long-term basis,” he said.

Nonetheless, he admitted that a continuance of unrest in the region could eventually serve to dent investment.

Requests for investment concessions in the first quarter of 2004 stood at Bt93.8 billion, up 25 percent from the same period in 2003.

The total number of projects for which investment concessions were requested stood at 353, an increase of 36 percent.

The electronic and electrical goods industries took the bulk of investment, with Bt32.4 billion, most of which went into companies producing hard disc drives and electrical circuit boards.

Agro-industry and agricultural products enjoyed the second highest amount of investment, with Bt17.7 billion.

Interestingly, given Thailand’s avian flu crisis at the start of the year, a considerable proportion of this money went towards farms and factories involved in chicken production and processing.

Trailing in third were small and medium-sized enterprises (SMEs), with investment of Bt4 billion.

The largest proportion of foreign investors over the first quarter continued to come from Japan, with the Japanese putting their money in automobile parts and electronics industries.

Second were the Taiwanese, who were mainly involved in the petrochemical, paper, and plastic industries. (TNA)

New generation urged to invest in stock market

People of the new generation should set aside some of their savings to invest in the stock market since returns remain more attractive than deposits, given the country’s strong economic growth, according to top executives at leading organizations.

Speaking at a seminar on “Financial Management for People of the New Generation,” former commerce minister Suvarn Valaisathien said how best to invest savings for greater returns depends on the age of each person.

“Currently, deposit rates are very low. People aged between 20-40 years could earmark 50% of their savings to invest in the capital market because they are still young, and could have time to earn incomes in case they lose their investment in the market,” he said.

He conceded that uncertainties are high in investment in the stock market.

But he believes investing in the market still gives higher returns than deposits, since average returns offered by listed companies are now five or six times greater than from deposits.

He said the country’s economic position remains very strong although there is a spate of anti-privatization protests by the Electricity Generating Authority of Thailand (EGAT)’s staff and violence in the South.

He suggested people aged 40 years or above should set aside 30% of their savings to invest in the stock market and the remaining 70% to buy bonds.

“Now, foreign investors still view long-term investment in Thailand as being attractive, given the stability in exports, baht value, and politics, as well as higher returns offered by listed companies.”

Nives Hemvachiravorakorn, senior vice president of Siam City Bank Plc, said investors should not rush to cut losses, although the Stock Exchange of Thailand (SET) index has dropped quite significantly in the first quarter.

Instead, they should hold their investment position in return of dividends.

He said the SET index rallied greatly late last week because the country’s economic position remained sound and foreign investors were still confident of the market.

He projected that the SET index was likely to reach 800 points within this year. (TNA)