Within a span of two weeks, the Finance Ministry aims to finalize a proposal for a new fund modeled after the previous Vayupak Fund, a government-controlled investment fund concentrating on stable Thai shares.
Expected to inject a minimum of 100 billion baht into the capital market, the new fund will have two potential pathways as outlined by finance permanent secretary Lavaron Sangsnit.
One route involves the creation of a distinct third fund, whereas the alternative option entails raising additional capital for the existing funds, a more feasible choice due to expedited procedures. Establishing a new fund would require fresh regulations, leading to potential delays.
The ministry views a new Vayupak Fund as a catalyst for invigorating stock market investments, particularly amid improvements made to the Thai ESG Fund’s investment conditions. While enhancements to the Thai ESG Fund are set to encourage stock market participation by allowing income tax deductions, tangible investments in the fund are anticipated towards the year-end.
To expedite market stimulation, the Finance Ministry deems the Vayupak Fund’s ability to swiftly raise and invest funds in the stock market advantageous, especially since investors seek tax benefits.
Mr. Lavaron expressed concerns that the improved conditions of the Thai ESG Fund might not promptly fulfill the need to galvanize investments.
Irrespective of the chosen strategy for fund establishment, a substantial injection of new capital exceeding 100 billion baht is anticipated to rejuvenate the market, leveraging the current stock price dips as investment opportunities. The Vayupak Fund will primarily target fundamentally strong stocks.
While government interventions play a role in bolstering investor confidence, Mr. Lavaron underscores the critical importance of stringent regulations by bodies like the Stock Exchange of Thailand and the Securities and Exchange Commission to cultivate enduring investor trust.
