Bloomberg News

Thai Mutual-Fund Assets to Accelerate in 2012 on Infrastructure

February 21, 2012

Feb. 17 (Bloomberg) -- Thailand’s mutual-fund assets this year will probably expand at more than three times the pace in 2011, boosted by sales of infrastructure and property funds, an industry group said.

Mutual fund assets may expand by about 8 percent in 2012, said Voravan Taraphum, chairwoman of the Association of Investment Management Companies. They rose 2.5 percent to 2.08 trillion baht ($67.5 billion) last year, said Voravan, who oversees about $5 billion in assets as chief executive officer of BBL Asset Management Co.

Thailand has promoted the sales of infrastructure funds for the construction of power plants, tollways and other public projects to ease the government’s finances and offer investment alternatives for investors. Tesco Pcl, the U.K.’s largest grocery chain, plans Thailand’s largest initial share sale of a property fund to finance its store expansion in the Southeast Asian nation.

“Infrastructure funds will have a very high potential because of support from the government,” Voravan said in a telephone interview today from Bangkok. “Property funds have also gained more interest from domestic investors because of better returns than bonds.”

Prime Minister Yingluck Shinawatra has pledged to spend 350 billion baht on infrastructure. The finance ministry approved the tax incentives for state-controlled companies to raise money from the public through the infrastructure funds, according to a statement on the ministry’s website dated Nov. 15. The funds are aimed at helping build public projects including mass transit, electricity networks, water utility and ports, it said.

Bank Competition

Tesco plans to raise about 17 billion baht by selling shares in a Thai property fund, the company’s local unit said on Feb. 9. Tesco, also Thailand’s largest hypermarket operator, will meet investors on Feb. 20 to market the fund, it said.

Money inflow into fixed-income funds, the Thai mutual-fund industry’s biggest sector, may slow further this year as most commercial banks, which need funds for loan expansion, have competed for investors’ savings, said Voravan.

Total assets of fixed-income funds declined 1.3 percent to 1.24 trillion baht in 2011, according to data on the association’s website. Assets of property funds climbed 19 percent to 101.9 billion baht.

Kasikornbank Pcl, Siam Commercial Bank Pcl and Bank of Ayudhya Pcl have announced plans to raise a combined 62 billion baht from selling bonds to individual investors this month, according to data compiled by Bloomberg.

--Editors: Tomoko Yamazaki, Andreea Papuc

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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