Stock analysts are expressing their approval for the Finance Ministry’s initiative to establish a new fund aimed at investing in Thai stocks, citing the potential to boost trading activity in the upcoming months.
In efforts to revitalize the bearish stock market, Finance Minister Pichai Chunhavajira revealed plans to explore the creation of a new fund similar to the previous Vayupak Fund, which previously invested in Thai stocks with strong fundamentals. The proposed initiative involves setting up two funds totaling 500 billion baht, of which 150 billion baht would be made available to the public.
Mr. Pichai indicated that further details regarding the plan would be finalized by the third quarter of the year. Additionally, he mentioned revisions to Thai ESG funds, including an increase in tax incentives up to 300,000 baht and a reduction in the holding period from eight years to five years.
Experts in the field foresee the Vayupak-style fund sparking demand within the stock market from the fourth quarter onward, potentially bolstering the Stock Exchange of Thailand (SET) index by 20-30 points for every 10 billion baht invested in the fund.
Asia Plus Securities (ASPS) predicts that the updated Thai ESG fund could attract annual investments worth 60-70 billion baht to the SET, particularly from institutional investors seeking to enhance their portfolios.
ASPS also noted that the revised Thai ESG fund could prompt institutional investors to allocate funds for portfolio enhancement during the mid-year period, potentially leading to increased investments in the SET.
Overall, the adjustments to the Thai ESG fund are seen as timely, given the current market conditions and valuation. These changes are expected to provide much-needed support to the market, especially during times of lower activity, such as in the fourth quarter.
