Thailand Unveils $4.3 Billion Initiative to Support Stock Market

(Bloomberg) -- Thailand’s state investment fund plans to raise up to 150 billion baht ($4.3 billion) to help support Asia’s worst-performing stock market.

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The Vayupak Fund aims to complete the capital raising from the public in the third quarter, Finance Minister Pichai Chunhavajira told reporters Tuesday. The fund, which has assets of about 300 billion baht, will guarantee a minimum annual return and principal protection, he said.

Prime Minister Srettha Thavisin’s government has stepped up efforts to boost investor confidence after corporate scandals, irregular market trading and heightened political risk fueled foreign fund outflows of $3.3 billion from local shares this year. The SET Index has slid more than 8% so far in 2024, making it the worst performer among Asian equity benchmark gauges.

“The Thai stock market has been very volatile with large outflows of foreign funds,” said Pichai. “We hope the new investments by Vayupak Fund will help restore some confidence of Thai and foreign investors in the stock market.”

The money will be invested in Thai companies with sound fundamentals, sustainable businesses and governance, according to Pichai. New subscriptions will have a 10-year investment period and the minimum annual return for holders will be set by a panel later, Pichai said, adding that the maximum return will be also be capped.

Last month, the government approved measures aimed at supporting domestic equities by increasing tax breaks and reducing lockups for individuals investing in so-called sustainable funds.

Vayupak Fund, which was set up in 2003, is managed by Krung Thai Asset Management Co. and MFC Asset Management Pcl.

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