New fund to boost Thai stock market by 90 points this year

A significant new fund is set to begin investing in the Stock Exchange of Thailand (SET) in the latter half this year, potentially boosting the index by approximately 90 points, according to Bualuang Securities (BS).

The Vayupak Fund, which promises a minimum return of 3%, is anticipated to start with a minimum value of 100 billion baht. Around 90 billion baht, or 90% of the fund’s total portfolio, typically completes each investment within one to two months, BS reported in a research note.

Earlier this month, Finance Minister Pichai Chunhavajira announced that the government plans to expand the Vayupak mutual fund by 100 billion baht, raising its total to 150 billion baht by October. This expansion aims to stimulate investment in stocks and support the Thai bourse.

Currently, there are two Vayupak funds: Fund Type A, available for public investment, valued at 150 billion baht; and Fund Type B, consisting of investment units held by the Finance Ministry and state agencies, with a combined value of approximately 350 billion baht.

The SET has seen an 8.6% decline this year, making it Asia’s worst-performing market.

BS identified potential investment targets for the Vayupak Fund, which, based on historical data, include state enterprise stocks, essential public services, and stocks related to central infrastructure sectors such as energy, banking, transportation, ICT, and construction.

The brokerage recommends three stock picks for the Vayupak Fund: Advanced Info Service (ADVANC), benefiting from the synergy with GULF-Intouch Holdings (INTUCH) and Gulf Energy Development (GULF), which have growth opportunities in electrical and communications sectors; and Bangchak Corporation (BCP), which is positively influenced by the US economy.

Thanachart Securities observed that foreign funds accumulated Thai stocks for three consecutive days early last week.

“Although the investment value is not substantial, it indicates positive trends supported by the baht’s appreciation.”

Future support for the SET is expected to come from increased government spending and investment, the 10,000-baht digital handout, and reduced short-selling pressure.

The top 20 stocks that saw the most foreign accumulation between July 15-19 include those with strong individual supporting factors and solid fundamentals that remain attractively priced.

Thanachart Securities recommends stocks such as GULF, Delta Electronics (Thailand) (DELTA), Charoen Pokphand Foods (CPF), Bangkok Expressway and Metro (BEM), ADVANC, Star Petroleum Refining (SPRC), and Bumrungrad Hospital (BH).

This strategic influx of funds and the government’s proactive measures could potentially revitalise the SET and support its recovery in the coming months, reported Bangkok Post.