TMB – strong baht hits foreign investment funds

TMB Bank are reporting that the strong baht has cut the value of the foreign investment fund under fund management, falling by 27 billion baht from 1.2 trillion baht at the start of the year.

TMB said the drop reduced the fund’s return by 0.47%. The least impacted funds are those covering oil investment, gold, and property funds, at 0.53%, followed by a balanced fund.

Naris Sathaphondecha, the senior director of the TMB economic analysis centre, said that the baht’s appreciation not only affected the export market and tourism businesses but investors’ portfolios – especially the FIF. The currency has risen 5.8% this year.

The 1.2 trillion baht earlier valuation for the existing FIF funds comprised 836 billion baht in fixed income, 243 billion baht in equities, and 30 billion baht in commodity and property funds.

“The baht’s appreciation widely affects every sector related to business. When investing in US dollars, inventors find returns have less value in baht. The strong baht affects the returns on funds as investors are concerned about the exchange rate. The investment markets have gone down, especially the stock market. Investors will soon know that they are losing profits because of exchange rate. ” he said.

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