Thailand’s Government Pension Fund (Thailand GPF) is bearing in mind to enhance its equity investments in China and India, where the surge of firms concentrating on new-fangled technologies and the corporate ecosystem may facilitate high returns.
The Thailand GPF’s investment in China and India
According to the Thailand GPF Secretary-General, Dr Srikanya Yathip, Chinese microchips and renewable-energy gears manufacturers and Indian IT companies and drug manufacturers are among the top stock contenders for the THB 1.1 trillion (USD 0.033 trillion) state fund.
Dr Yathip stated that the Thailand GPF constantly strived to mature effectively. As a result, finding suitable investments in the regional market, she indicated in a phone interview. However, developing markets such as China and India would offer the fund an outlook with enhanced returns due to those economies’ resiliency during the pandemic, she stated.
The strategy to include more Chinese and Indian shares would assist the Thailand GPF to expand its equities portfolio. Most of its investments are in industrialised territories like the United States and Europe. It also arrives after the fund’s current performance is affected by lower debt securities profits.
According to its website, the Thailand GPF facilitated a total return of 3.25% in 2021 through September 30, 2021, related to the 4.73% return in 2020. National and international debt reported for approximately 64% of its assets.
In January, the Thai Cabinet permitted a proposal to extend the limits on GPF’s foreign assets within management to 60% of the total, a jump from 40%. Final approval by the Finance Ministry is most likely to be in the dusk of 2022, Dr Srikanya stated.
Dr Srikanya indicated that the GPF, which manages money for approximately 1.2 million government employees and retirees, presently invests around 13% of its assets in international stocks. She said that it also possesses around 25% of comprehensive assets in international debt securities, bringing its foreign holdings close to its 40% threshold.
While refuting to specify international investment goals, Dr Srikanya stated that the GPF is strategising to augment its environmental, social, and good governance practices. She declared that it would evade firms that don’t meet obligatory ESG standards.
Thailand’s overseas financial assets surged 23% from the dusk of 2020 to worth USD 135 billion at mid-2021. That is the maximum on record in Bank of Thailand figures on fiscal entities, individuals, and mutual funds dating back to 2015.