The Social Security Office (SSO), Thailand’s largest fund operator, plans to raise its investment in overseas assets in an effort to escape the impact of the volatility in the local stock market, weighed down by the political turbulence hurting listed companies' earnings and the economy.
The SSO will increase its offshore assets from 3% of its portfolio to as much as 37% in the long run while lowering local assets to 63%, said head of investments Win Phromphaet.
Equity fund manager Amnaj Rajitganok said it can manage risks and invest in various kind of overseas assets.
The SSO has assets under management of about 1.1 trillion baht, of which 90 billion has been put in 40 stocks listed on the Stock Exchange of Thailand (SET).
Even though the fund's investment ratio in local equities remains below its 12% ceiling, it has no plan to increase its investment amid heightening political uncertainties and the faltering economy, Mr Amnaj said.
The SSO's returns last year and in the first two months this year outperformed the SET index.
Mr Amnaj predicted that the SET index will reach 1,500 points by the end of this year, while gross domestic product (GDP) will grow by 3%. The projections will be revised if political tensions drag on.
The SSO has downgraded local energy, bank and property plays as these stocks directly feel the impact from the political situation.
Sombat Narawuttichai, secretary-general of the Government Pension Fund (GPF), said the fund's returns on investment are still positive this year even though global and local markets are in wild swings.
The GPF has ploughed about 15% of its portfolio or more than 70 billion baht into overseas assets, with Thai shares accounting for 10% or about 50 billion baht.
"Political unrest remains a main risk that dents investment and consumption and results in a decline in profitability of listed firms," Mr Sombat said.
Vorapol Socatiyanurak, secretary-general of the Securities and Exchange Commission, said the securities watchdog plans to announce listing rules for foreign firms in the second quarter and companies from China, Laos, Cambodia and Australia are showing interest in listing on Thai bourses.
Six institutional investors have managed assets worth more than a combined 8 trillion baht. They comprise the SSO, the GPF, the Association of Investment Management Companies, the Association of Securities Companies, the Thai Life Assurance Association and the General Insurance Association.