Thai Life Insurance Plc has earmarked 1 billion baht for investment in the US, mostly in equities, and another 500 million in the BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF) in a bid to ensure a 5% return this year.
Executive vice- president Varang Chaiyawan yesterday said the move is aimed at diversifying risk and increasing returns amid high volatility in the local stock market.
The company will immediately pile up unit trusts of the BTSGIF once the bourse's sentiment improves.
Thai Life is ranked the country's third-largest life assurance company by total premiums.
Thai Life Asssurance Association data show the company had an 11.9% market share in the first half of this year, after AIA at 24.1% and Muang Thai Life Assurance at 14%.
The company has already put 1 billion baht into the BTSGIF, and the new investment will raise the infrastructure fund's ratio in its investment portfolio to 1.25%, said Ms Varang.
"Investment in this infrastructure fund offers good returns, as it has a steady revenue stream, high dividend yields and growth, and low risk," said Ms Varang.
The BTSGIF is the country's only infrastructure fund available in the Stock Exchange of Thailand (SET) at the moment.
The fund is backed by net farebox revenue of the skytrain's 23.5-kilometre main routes.
The company's 1-billion-baht budget for direct investment in the US is awaiting an official announcement by the Office of the Insurance Commission of the new investment regulations governing investment by insurers.
Thai Life has already opened accounts to trade stocks in US markets.
Data indicating a modest economic recovery in the US have prompted investors to flee to stock markets there to take full advantage of an expected full recovery.
As well, it will boost its investment proportion in local shares to 6-7% of its portfolio from 5.22% now.
The SET's situation is the main factor in the timing of the new investment in the local bourse, as the market has been highly volatile in recent months.
Ms Varang admitted the company unloaded 300 million baht worth of stocks in June to lock in profit.
The SET index extended a five-day winning streak yesterday, rising by 1.29% to close at 1,411.18 points in moderate trade worth 44.2 billion baht.
The main index surged 8.28% over the past five trading sessions, regaining some losses after plunging to the year's intraday trough of 1,260.08 points last month.