“SCB Julius Baer Securities Co., Ltd.” (SCB Julius Baer) is a joint venture between “Siam Commercial Bank,” the first commercial bank in Thailand, and “Julius Baer,” a leading global wealth management firm from Switzerland. The company has revealed its “Global Economic Outlook for the Second Half of 2022” (Market Outlook Mid-Year 2022) prepared by Julius Baer, highlighting key factors affecting investments in the latter half of the year amid a globally uncertain economic environment. Current inflation rates are near a 40-year high, with rising energy prices attributed to the Russia-Ukraine conflict seen more as a consequence of war than a supply crisis. The recession indicator developed by Julius Baer remains at 20%. Investors are advised to diversify their portfolios to mitigate risks, with profitable technology companies that have strong cash flows still being attractive, along with a positive outlook on healthcare stocks, Swiss equities, Asian dividend stocks, and energy transition themes. Real assets such as real estate and commodities can also be part of an investment portfolio that offers interesting risk-adjusted returns in an inflationary environment.

          Ms. Lalitpat Thoranawikrai, CEO of SCB Julius Baer Securities Co., Ltd., stated, “From the global economic outlook for the second half of 2022 prepared by Julius Baer, it is evident that the global economy is facing inflation nearing record highs not seen in over 40 years, which is the most significant pressure on investment this year. Therefore, during periods of high inflation, we still believe that real assets such as commodities and real estate will continue to provide good returns. Meanwhile, the soaring energy prices due to geopolitical issues between Russia and Ukraine suggest that the US is likely to become an oil exporter in the future, helping the global oil market gain leverage from supply shortages from Russia. We believe that oil is not running out but is facing a price crisis due to war rather than a supply crisis, and once everything stabilizes, the high oil prices will gradually adjust downwards.”

 

            Another point of concern is the recession, with Julius Baer's current recession indicator remaining at 20%, while historically it must exceed 60% to indicate a recession. In the US economy, employment figures remain strong after the economy stagnated for over two years due to the COVID-19 pandemic, with people starting to travel again. These factors, combined with higher cash levels in US households, indicate that the US economy remains robust. The S&P 500 index in the US entered bear market territory in mid-June, having dropped 20% from its peak, with the technology sector heavily impacted from last year to the present, and it is expected to affect the broader market. Julius Baer believes that companies with profits, strong cash flows, and high liquidity remain more attractive for investment than newly established technology firms.

            “Given the aforementioned factors, we believe there are still investment opportunities amid the current uncertainty, particularly in healthcare, Swiss stocks, and Asian dividend stocks, as well as energy transition themes that remain interesting for creating a diversified investment portfolio. SCB Julius Baer has an Expert Advisory team with knowledge and experience in wealth management standards equivalent to Julius Baer, ready to provide advice and consultancy to key clients to help them manage their portfolios flexibly and sustainably in the long term,” Ms. Lalitpat concluded.