A state-controlled Thai fund that raised US$4.5 billion from domestic retail and institutional investors to shore up the South-east Asian nation’s capital market rose on its first day of trading.
The units of Vayupak Fund I advanced to as high as 10.20 baht (S$0.38) each on the Stock Exchange of Thailand on Monday (Oct 7) before trading at 10.10 baht at lunch break. The fund listed about 15 billion Type-A investment units at a par value of 10 baht each.
The fund, now available for trading to foreign investors as well, guarantees an annual return of at least 3 per cent with the maximum returns capped at 9 per cent. The principal will be returned after 10 years. The fund didn’t provide a breakdown of the type of investors who subscribed for the units last month.
The latest offering raised the assets under management of Vayupak – set up by former leader Thaksin Shinawatra in 2003 to raise funds from the public to acquire finance ministry’s investments in major listed companies – to about 500 billion baht (S$19.4 billion). The fund began investing the new capital in constituents of the SET 100 Index or other local stocks with high ESG scores from Oct 1.
The fund-raising, conceived by the government to buoy Thailand’s capital market sentiments after a sell-off earlier this year, had seen demand exceed the number of units on sale because of assured returns and protection of the principal.
Thai stocks have rebounded from being one of the world’s worst performers earlier in the year after a new government led by Thaksin’s youngest daughter Paetongtarn Shinawatra implemented a raft of measures to revive investor confidence. The benchmark SET Index has gained about 14 per cent from its 2024 low in early August when political turmoil and corporate scandals led to an exodus of foreign funds.
Vayupak’s new offering has similar characteristics of some fixed-income instruments with its principal protection, guaranteed returns and dividend limits, said Somjin Sornpaisarn, president of Thai Bond Market Association. That helped create strong demand from retail investors, he said.
Goldman Sachs Group last month upgraded Thai stocks to market weight from underweight and raised its 12-month forecast for the benchmark SET Index to 1,550 from 1,450, citing expected inflows from the Vayupak Fund. The bank expected Vayupak’s new offering to support both sentiment and liquidity, helping attract foreign capital.
“Vayupak’s new offering is one of the key steps that the government has taken to restore investors’ confidence in the Thai capital market,” Finance Minister Pichai Chunhavajira said at an event to mark the fund’s trading debut on Monday. “The fund has demonstrated its success in bolstering the market sentiment, with the overall share prices moving higher and lifting trading activities.” BLOOMBERG
