Many forums on international shares trading have, over recent years, encouraged new and experienced investors alike to move more towards Asian markets. This is especially important amongst Australian investors, whose portfolios are generally reeling from a strong home country bias. Asian stocks tend to be younger and thus more vibrant as compared to their more mature counterparts, such as the American market.
One of the Asian markets that has been peaking the interest of investors all over the world in recent years is the Thai stock market. With a market capitalisation of about USD 581 billion, Thailand’s economy is, for the most part, driven by its exports of agricultural products and foodstuffs such as cassava, grains, rubber and sugar. The export of these and other goods and services accounts for about 78% of the country’s Gross Domestic Product (GDP), making it the second largest exporter of food in Asia, after China. Thailand has also always been a major tourist hub in the region, and this has contributed to more than 7% of the country’s GDP. However, in recent years the tech manufacturing industry has really gained traction in the South-East Asian country. The export of high-tech units, including automotive engines and integrated circuits, has become a major booster of the country’s economy.
The above and much more makes Thailand an ideal destination for investors looking for a budding financial market to buy into. There are, however, some few tips that can allow for you to have a smoother entry into this market, avoiding losses and maximising on returns.
Consider Thailand’s strengths
Before engaging in offshore trading, you must always conduct your due diligence about the market in which you would like to invest in. It is important to learn the dominant industries in the market and the factors that affect them so as to make informed decisions as to where to put you hard earned money. As a rule of thumb, you should only ever trade in things that you understand. If you cannot find the time to conduct a detailed research on the market then do not hesitate to seek out a broker that offers a similar service.
Seeing as Thailand has an export-driven economy, focusing on the agricultural sector as well as the tech manufacture sector can be a good place to start when growing a strong international portfolio. Companies such as KCE Electronics which are dominating the Thai stock market can be strong buys for offshore traders. Airports of Thailand may also be a buy worth your consideration, if you are interested in the tourism sector.
Trade with discipline
After understanding the market that you are looking to trade in, it is of paramount importance that you set out a solid trading plan that dictates what you wish to trade in, your entry points, your exit points and even how much you are willing to risk on a trade. Once you have written this down, you must always keep it handy when making trading decisions. This will allow for you to cut short your losses and let your good trades run.
If you are trading online, making use different order types such as stop-loss orders can help mitigate losses by selling of losing shares when they reach a pre-set price limit.
Keep exchange rates in mind
When investing in international stock trading, it is important to keep an eye out for fluctuations in exchange rates as this can really eat into your returns. The same applies to investing in Thai stocks. With some trading platforms one is obliged to convert their earnings to Australian dollars as soon as they hit their account. However, using a platform that allows for you to hold the earnings in Thai bahts for future investments will help you avoid losses due to the fluctuating exchange rate.
Other tips may include finding a broker that fits your goals and trading personality, and also making use of the tools such as technical and fundamental reviews, made available through the internet. Keeping the above in mind will ensure that you start your Thai investment journey on the right foot and with minimal hiccups.