B150bn Vayupak investment fund starts trading

The 150 billion baht-state investment fund, Vayupak Fund (VAYU1), began trading on the Stock Exchange of Thailand on Monday, drawing significant interest from investors, demonstrating that trust and confidence have returned to the Thai stock market, according to the finance minister.
Finance Minister Pichai Chunhavajira said he believed more capital would flow into the stock market in the foreseeable future.
“Over the past year, especially in the first half, there were significant uncertainties, leading to considerable volatility in the capital market, causing fundraising and trading to decrease significantly. This was compounded by concerns about whether the trading system provided equal opportunities for all investor groups.
“The Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) have worked together to address these issues, bringing back understanding and restoring confidence,” he said.
“I believe that the Vayupak Fund 1 will help rebuild trust and revive investment by both local and foreign investors.”
At 2.36pm, the fund was trading at 10.10 baht, having risen 1% from 10 baht at launch.
Mr Pichai said the Finance Ministry was ready to support efforts to boost confidence in investment in the SET and position it as a leading investment hub in the region.
Mr Pichai was bullish in expecting that in the near future more investment would flow into the SET from both domestic and international sources. There were still a lot of funds kept in other forms of deposit, and investors were believed to now be figuring out how best to balance their portfolios.
“Nevertheless, I believe that more capital will come in (to the stock market), especially given declining interest rates. As a result, those who have kept their money in fixed-income assets are likely to shift towards floating-income assets or capital market assets. The Vayupak Fund is a hybrid fund, meaning it is part fixed-income and part floating-income,” he said.
Mr Pichai said global investors were now closely watching the stock markets in the Asia-Pacific and Southeast Asian regions, which have become major targets for investment.
He said the downward trend in interest rates was not only happening in Thailand, but globally. As interest rates decrease, investors naturally adjusted their portfolios, reducing fixed-income assets and increasing floating-income assets.
If Thailand could attract more high-tech investment it would further boost confidence in the country’s economy, he added.
Asked about coming discussions with the Bank of Thailand (BoT), Mr Pichai said the two parties would likely discuss the inflation target. Current inflation was lower than expected and might fall below the lower target range. They would need to discuss whether to expand the inflation range beyond 1-3% to accelerate economic growth, he said.
Mr Pichai said neighbouring countries tended to have higher inflation targets than Thailand, with their median ranges averaging 2-3%.
He said the government would likely prefer a higher target range than the current one, although it was unclear how much higher it should be.
Mr Pichai also said the government’s intention to inject 145 billion baht in the first phase of its cash distribution scheme to vulnerable groups was unlikely to significantly raise inflation. This amount was small when compared to the overall economy.