Finance Ministry to launch new 100 billion baht investment fund

Plans are underway at the Finance Ministry to establish a new investment fund similar to the previous state-controlled Vayupak Fund, aimed at bolstering Thai shares with strong fundamentals. This initiative is expected to be finalised within two weeks.

Finance permanent secretary Lavaron Sangsnit announced that the new fund is projected to attract a minimum of 100 billion baht into the capital market. The ministry is considering two potential approaches for this fund.

One possibility is to create an entirely new, third Vayupak Fund. As it stands, there are two existing Vayupak funds: Type A, which is open to public investment and is valued at 150 billion baht, and Type B, which consists of units held by the Finance Ministry and state agencies, amounting to approximately 350 billion baht.

The alternative option, deemed more feasible due to its expedited process, involves raising additional capital to augment the existing funds. Establishing a new fund would necessitate new regulations, potentially causing delays.

Lavaron highlighted the necessity of a new Vayupak Fund to invigorate the stock market. He noted that although the ministry has enhanced the investment conditions for the Thai ESG Fund—allowing purchasers to benefit from income tax deductions—the actual investment in Thai ESG Funds is only anticipated by year-end, leaving a temporary gap in market stimulation.

“The improved conditions for the Thai ESG Fund will be proposed to the Cabinet within the next two weeks.”

The finance secretary further explained that the Vayupak Fund can mobilise resources and invest in the stock market more swiftly compared to waiting for the year-end investments in the Thai ESG Fund, which investors typically seek for tax benefits.

“The improved Thai ESG Fund conditions might not meet the immediate need to stimulate investment.”

Regardless of the chosen method, Lavaron emphasised that the new capital infusion into the market is expected to exceed 100 billion baht. He believes the current decline in stock prices presents a lucrative investment opportunity, with the Vayupak Fund focusing primarily on stocks with solid fundamentals, reported Bangkok Post.

“Government measures to stimulate the capital market are only one way to build up investor confidence. Strong regulations by the Stock Exchange of Thailand and the Securities and Exchange Commission are crucial to create sustainable investor confidence.”