Vayupak Fund enjoys optimistic launch

The 150-billion-baht state-run Vayupak Fund (VAYU1), which debuted on the Stock Exchange of Thailand (SET) on Monday, is expected to boost the daily trading value of Thai stocks and prevent falling prices amid unfavourable external factors led by growing tensions in the Middle East.
Chavinda Hanratanakul, managing director of Krungthai Asset Management, in the capacity as the fund’s manager, said VAYU1 would draw new investments to the Thai stock market.
“Stock markets go up and down as normal. I personally believe that the SET is not less attractive than other regional bourses as the continued recovery of the tourism sector and additional economic stimulus to be launched by the government will drive the SET index to finish at 1,470 points by the year end,” she said.
VAYU1 has received strong interest from investors since its inception, having been able to mobilise 130 billion baht from institutional investors and 20 billion baht from retail investors. The fund began investing in Thai equities at the start of this month by focusing on stocks with good fundamentals, strong corporate governance, and the long-term value of the companies.
Currently, half of its investment portfolio is in SET50 stocks, 40% in government bonds, and the remainder in corporate debentures with a credit rating of A or higher, added Ms Chavinda.
VAYU1 soared 1% in morning trade on Monday to finish at 10.10 baht by midday, outpacing the SET’s 0.3% increase overall, with a trading value of 2.55 billion baht. The increase, however, lagged Pluk Phak Praw Rak Mae (OKJ), which debuted on the SET last Friday and jumped 10.4% to close at 13.7 baht by midday.
Apichart Phubancherdkul, head of strategy research at Tisco Securities, shared a similar view as Ms Chavinda, saying VAYU1 would help stabilise Thai stocks when the market is under a portfolio adjustment among foreign investors due to overseas factors.
“Foreign investors are now adjusting their portfolio after they gained a profit of nearly 20% due to the recent appreciation of the baht. Now, the Thai currency is depreciating as the dollar is now traded at a two-month high and the US bond yield is at 4% after stronger than expected employment data eased recession fears of the US economy,” he pointed out.
Also, intensified tensions in the Middle East have prompted foreign capital outflows from emerging markets including Thailand, Mr Apichart added.
According to Asia Plus Securities, foreigners were net sellers in Asian stock markets in the month to date, with outflows of US$2.5 billion from the Indian stock market, $877 million from Taiwan, $156 million from South Korea, $114 million from Indonesia, and $330 million or 11 billion baht from Thailand.
Finance Minister Pichai Chunhavajira said VAYU1 has drawn significant interest from investors, demonstrating that trust and confidence have returned to the Thai stock market.
He believes that more capital will 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. However, the 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 investments from both local and foreign investors.”
Mr Pichai also mentioned that China has recently used a similar approach to the Vayupak Fund and has been highly successful. This shows that this approach is a “win-win solution” for the government, the market, and investors, he noted.
He is also feeling bullish that in the near future there is likely to be more investment flowing into the SET from both domestic and international sources, as there are still a lot of funds that have been kept in other forms of deposits, and investors are believed to now analyse how to adjust their investment portfolios.
“Nevertheless, I believe that more capital will come in [to the stock market], especially given the 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 added that global investors are now closely watching the stock markets in the Asia-Pacific and Southeast Asian regions, which have become major targets for investment.