Thai government pension funds consider increasing their equity investment in China and India, where the resurrection of companies that focus on new technology and the environment can provide high potential returns.
Microchips manufacturers and Chinese renewable energy equipment and IT India companies and drug makers are one of the top prospective shares for state funds of 1.1 trillion ($ 33 ​​billion), according to the Secretary General of the GPF Yathip Srikanya.
“Our funds continue to grow in such a way that it is very difficult to find a good investment in the domestic market,” said Srikanya in a telephone interview.
“The growing market like China and India must offer a view for better returns because of their economic resilience during a pandemic.” Plans to add more Chinese and Indian shares will help the GPF diversify its equity portfolio, where most investments are in advanced areas such as US and Europe.
It also appeared after the performance of new funds was influenced by a lower increase from debt securities.
The GPF gave a total of 3.25 percent in total from September 30, 2021, compared with 4.73 percent by 2020, according to its website.
Domestic and foreign debt accounts for around 64 percent of its assets.
The Thai Cabinet last month approved a proposal to raise the ceiling on GPF’s foreign assets under management up to 60 percent of the total, up from 40 percent.
Final approval by the Ministry of Finance is most likely in this half-year, Srikanya said.
Pension funds, which manage around 1.2 million government and retirees, are currently investing around 13 percent of their assets in foreign stocks, Srikanya said.
It also has around 25 percent of total assets in foreign debt securities, carrying foreign ownership near 40 percent ceiling, he said.
While declining to determine the target of foreign investment, Srikanya said GPF planned to increase its efforts related to environmental, social and good practices.
This will avoid companies that do not meet the ESG standards needed, he said.
Overall, Thailand’s international financial assets jumped 23 percent from the end of 2020 to $ 135 billion in mid-2021.
That was the most suitable at the Bank of Thailand in financial institutions, mutual funds and individuals from 2015.