SCB-Julius Baer Securities Co., Ltd. recently organised an exclusive seminar for its ultra-high-net-worth (UHNW) clients titled “Market Outlook 2023: Opportunities amidst Uncertainty”.
The seminar covered the bank’s economic outlook for 2023, expectations of lower inflation and slower economic growth, key investment highlights, and long-term investment themes.
Commenting on global economic outlook and why a global recession is unlikely, SCB-Julius Baer Securities Co., Ltd. Chief Executive Officer Ms. Lalitphat Toranavikrai said, “2022 featured unprecedented stagflation, tight monetary policies, geopolitical conflicts, and domestic political issues – an unpredictable year in terms of inflation and interest rates. Our Market Outlook for 2023 suggests a “Year of the Cool-Down” with trends of the past year expected to slow, and economic growth and inflation rates slowing due to the tight monetary policy and fading pandemic impacts on supply chains. Without a need for sharp interest hikes, following money policy normalisation, the global economy in 2023 is expected to grow by 2%, with a recession in the US economy widely expected due to the tight monetary policy, and high interest rates, which will lead to a consumption slow down. Economic forecasts are difficult, especially short-term, but we believe a global recession is unlikely, thanks to a robust employment rate and domestic consumption in industrial countries.”
On how investors should position themselves this year and over the long-term, Ms. Lalitphat added, “Investors should take this opportunity to invest in quality fixed income bonds as their prices are lower, so yields are more attractive than the average value in the past years. The focus should be on quality equities with strong pricing power and high cash flow and to seek cyclical opportunities in line with an expected economic recovery in 2024, especially in sectors such as automobiles, electricity generating and automation, machinery and equipment, and transportation. For long-term investment themes, we remain positive and in favour of energy transition and future mobility, digital infrastructure like robotics and cloud computing, as well as lifestyle shifts toward wellness and healthcare like research in genomics for the treatment of chronic diseases.”