SCB WEALTH Hosts "Solutions Amidst Uncertainty" Seminar for FIRST Customers, Featuring Expert Insights on the Thai Economy and Investment Strategies

Ms. Kasree Ayuttga, Senior Vice President of Investment Research, CIO Office at Siam Commercial Bank, presented on the topic "Thailand Market Update" and shared her outlook for the Thai economy in 2025. She projected that GDP growth may be limited to just 1.5%, primarily due to an expected contraction in exports during the second half of the year and a continued decline in private sector investment. GDP growth in the latter half of the year is anticipated to average below 1%. While the Thai economy expanded by 3.1% in the first quarter surpassing expectations this was largely driven by a temporary boost in exports ahead of the U.S. import tax implementation, as well as increased government investment. However, economic momentum is expected to slow in the second half, with exports set to contract and additional pressure anticipated on the manufacturing sector from an influx of Chinese goods, further weighing on private investment. Notably, before trade negotiations began, Thai exports to the U.S. were subject to tariffs as high as 36%, placing Thailand 20th among 185 U.S. trading partners and compounding the challenges facing the country's already fragile manufacturing base.

On monetary policy, Ms. Kasree expects the Bank of Thailand's Monetary Policy Committee (MPC) to cut the policy rate two more times this year, bringing it down to 1.25% to help cushion the impact of escalating trade tensions and a weakening domestic economy. She noted that during the first U.S.-China trade war, the real policy rate in Thailand averaged just 0.3%, with indirect effects on the economy. In contrast, the current environment features a more severe and direct impact on Thailand, yet the real policy rate stands at 0.85%, suggesting further room for rate cuts. Moreover, inflation remains subdued. In April, headline inflation (CPI) turned negative, mainly due to a sharp decline in energy prices. SCB Economic Intelligence Center (EIC) anticipates that CPI may remain negative in the second quarter due to the low base effect, further supporting the case for additional monetary easing.

Thai bond yields are expected to continue trending downward, driven by anticipated policy rate cuts by the MPC throughout the remainder of the year. Previously, yields had not fully reflected the rate-cutting cycle, as the MPC maintained a cautious tone to preserve policy space. Meanwhile, rising U.S. bond yields, stemming from concerns over the U.S. fiscal deficit, have led to capital outflows from U.S. bonds into emerging market bonds, including Thai bonds, which continue to see investment inflows. The strengthening Thai baht, alongside a weakening domestic growth outlook, further supports the likelihood of persistently low Thai bond yields. Against this backdrop, the SCB CIO recommends investments in Thai government bonds and short- to medium-term investment-grade corporate bonds.

The Thai equity market remains attractively valued. The current SET Index P/E ratio stands at 12.9x, below its 5-year average. The SET earnings yield gap relative to the 10-year Thai government bond yield is above +1 standard deviation, indicating relatively favorable equity valuations. Furthermore, the market's dividend yield is currently high at 4.4%. Nevertheless, the SCB CIO highlights the need to closely monitor ongoing trade negotiations and forthcoming government stimulus measures, both of which will be key catalysts for market direction in the near term. In addition, an increasing number of Thai listed companies have announced share repurchase programs this year, signaling management's confidence in the intrinsic value of their shares. These buybacks are particularly meaningful when stock prices trade below fair value and may serve to boost investor confidence in a market currently perceived as undervalued.

However, there is a possibility that the earnings per share (EPS) of the Thai stock market will be revised downward due to the impact of U.S. import tariffs on the export sector. The extent of the revision will depend on the actual tariff rate imposed and the duration of trade negotiations. Under SCB CIO's base case scenario, assuming Thailand is subject to a 15% U.S. import tax, market EPS is projected to be revised down from 90 baht to 82 baht per share, representing a decline of approximately 9% from the current estimate.

Following this, a seminar titled "Global Market Outlook & Solutions Amidst Uncertainty" was held, jointly led by experts from SCB WEALTH and BlackRock. The session featured Mr. Roongroj Seksunwiriya, Senior Vice President of Investment Product Selection at Siam Commercial Bank; Mr. Nikhil Mehra, Managing Director, Head of APAC Multi-Asset Strategies & Solutions at BlackRock; Mr. Mark Fuszard, Director, APAC Multi-Asset Strategies & Solutions at BlackRock;and Mr. Thanapol Itthinithipak, Head of BlackRock's Thailand Business.

Together, they shared insights on the global economic outlook and investment strategies tailored for navigating periods of heightened market uncertainty. BlackRock emphasized that recession risks are rising, and several key indicators, such as import tariffs, unemployment rates, consumer spending, and corporate earnings, must be closely monitored to assess the full economic impact. While holding cash during periods of volatility may help reduce short-term risk, it often results in missed opportunities during sharp market recoveries, which have occurred repeatedly in the past. As such, BlackRock continues to advocate the "Stay Invested" approach, encouraging investors to maintain consistent exposure to markets rather than attempting to time them, an approach that supports long-term wealth creation.

Furthermore, BlackRock's research has identified a rising correlation between equities and bonds, leading to more synchronized movements in returns and reducing their effectiveness in portfolio diversification. As a result, it is increasingly important to incorporate return sources that are independent of traditional market movements. Flexible portfolio management strategies, such as Multi-Asset and Liquid Alternatives, which diversify across equities, bonds, and alternative liquid assets, offer a long-term solution for managing volatility and preserving capital, particularly during bear markets and times of elevated global uncertainty.

Mr.Roongroj Seksunwiriya added that the SCB Global Multi-Asset Core Portfolio (SCBGMCORE) fund risk level 5 is a fund developed in collaboration with BlackRock, this fund is specifically designed to align with the investment needs of SCB clients. It is a point of pride that BlackRock has brought its global investment management expertise to Thailand for the first time through this initiative. The fund allocates 25% of its assets to an Absolute Return strategy aimed at diversifying risk and reducing portfolio volatility ,serving as a key feature for modern investment portfolios. The remaining 75% is invested in a diversified mix of ETFs covering equities, bonds, gold, REITs, and TIPS. BlackRock serves as the fund manager, applying an active and flexible investment approach with an integrated volatility control mechanism. This strategy is designed to help mitigate risks and enhance return potential across various market conditions. The fund is tailored to elevate the investment experience for SCB clients,supporting them in achieving their long-term financial goals and building sustainable wealth , in line with the guiding principle : Your Success. Our Success.

Disclaimer

• Investment involves risks. Investors should fully understand the product features, return conditions, and associated risks, and are advised to seek additional information or consult with licensed investment professionals before making any investment decision.
• SCB Global Multi-Asset Core Portfolio (SCBGMCORE(A)) is classified as Risk Level 5: Medium to High Risk. Please consult SCB Asset Management for full fund details.
• The fund does not fully hedge against foreign exchange risk. Investors may experience gains or losses from exchange rate fluctuations and receive a redemption value lower than their initial investment.
• SCBGMCORE(A) invests in foreign assets managed by BlackRock (Singapore) Limited under an investment management agreement, as stipulated in the fund's management scheme by SCB Asset Management Co., Ltd.,
• Past performance is not indicative of future results.
• This fund is not suitable for investors seeking consistent returns or capital preservation. Investors are advised to carefully assess and ensure that the investment aligns with their risk tolerance.
• Investor should carefully study all relevant information before making an investment decision. Details of the master fund and prospectus of the participating fund are available on the Asset Management Company's website : www.scbam.com.
• For more information, please contact the SCB Call Center at 02-777-7777.

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