Published: October 7, 2024 14:24
Small and Medium Finance Minister Pichai Chunhavajra told reporters about the Vayupak fund, which will start trading on Monday. (Photo: Wichit Chanthanusornsiri)
Vayupak Fund (VAYU1), a state-owned investment fund with a total value of 150 billion baht, began trading on the Stock Exchange of Thailand on Monday, attracting great interest from investors and adding trust and confidence to the Thai stock market, according to the Finance Minister. The finance minister said that showed that the economy is back. .
Finance Minister Pichai Chunhabazira said he was confident more money would flow into the stock market in the foreseeable future.
“There has been significant uncertainty over the past year, particularly in the first half of the year, leading to significant volatility in capital markets and a significant reduction in funding and trading. This was further exacerbated by concerns about whether they were providing adequate opportunities.
“The Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) have worked together to address these issues, restore understanding and restore trust,” he said.
“We believe Vayupak Fund 1 will help rebuild confidence and revive investment by domestic and international investors.”
As of 2:36 p.m., the fund was trading at 10.10 baht, up 1% from the opening price of 10 baht.
Mr. Pichai said the Ministry of Finance stands ready to support efforts to increase confidence in investment in SET and position it as a leading investment hub in the region.
Pichai was bullish, predicting more investment would flow into SET from domestic and international sources in the near future. It is believed that much money is still held in other forms of deposits and investors are now looking at how best to balance their portfolios.
“Nonetheless, we believe we will see more money flowing into (the stock market), especially given lower interest rates. As a result, people who have traditionally parked their money in fixed income assets will move away from floating rate and capital market assets. There is a high possibility of transferring funds. The Vayupac fund is a hybrid fund, meaning it is partly fixed rate and partly floating rate,” he said.
Pichai said global investors are currently keeping a close eye on stock markets in the Asia-Pacific and Southeast Asia regions, which are key investment destinations.
He said the trend of lower interest rates was occurring not only in Thailand but worldwide. As interest rates fell, investors naturally adjusted their portfolios, reducing fixed-income assets and increasing variable-rate assets.
If Thailand can attract more high-tech investment, confidence in the country’s economy will further increase, he added.
Asked about future talks with the Bank of Thailand (BoT), Pichai said the two parties were likely to discuss inflation targeting. Current inflation is lower than expected and may be below the lower end of the target range. He said there was a need to discuss whether to increase inflation beyond 1-3% to accelerate economic growth.
Pichai said neighboring countries tend to have higher inflation targets than Thailand, with a median of 2% to 3% on average.
He said the government would likely prefer the target range to be higher than currently, but it was unclear how much higher it should be.
Pichai also said the government’s intention to inject 145 billion baht in the first phase of the cash distribution plan to vulnerable groups was unlikely to cause inflation to rise significantly. This amount was small compared to the overall economy.
