KSAM sheds CP All after SEC fine

KSAM sheds CP All after SEC fine

Share sale based on corporate governance

Krungsri Asset Management (KSAM) has unloaded most of its shareholding in CP All, whose top executives were involved in insider trading.

After the share sale in December, the company is no longer one of the top five holdings in KSAM's funds, said Supaporn Leenabanchong, acting chief investment officer, without naming CP All.

"We don't consider only profit in our portfolio decisions but also good corporate governance. We've not seen any response from the company's board of directors, so we decided to sell the stock. We don't know when we can buy it back again," she said.

The Krungsri Dividend Stock LTF's (KFLTFDIV) portfolio data showed CP All (CPALL) was the top stock in its portfolio in September at 8% of net asset value. But it was not in the top five at the end of December.

The fund was CPALL's 14th-largest shareholder as of May 7, 2015, according to Stock Exchange of Thailand (SET) data. 

The Securities and Exchange Commission early last month announced four CP All executives -- executive chairman Korsak Chairasmisak, vice-chairman Piyawat Titasattavorakul, vice-chairman Pittaya Jearavisitkul and Athueck Asvanund, a vice-chairman and group counsel of True Corporation -- were fined a combined 33.3 million baht for using inside information to purchase shares of cash-and-carry giant Siam Makro Plc ahead of the 7-Eleven operator's notice it would buy out Makro at above-market value.

Even though both local and foreign institutional investors pressured CP All's board to take appropriate action against these executives, the company's audit committee and independent directors have said they would take no further action against them.

Voravan Tarapoom, chairwoman of the Association of Investment Management Companies (AIMC), recently said the AIMC would wait until the end of this month to see whether CP All's board would review its stance on the four guilty executives.

Separately, Mrs Supaporn said KSAM has a policy to buy good stocks during market downturns, and the healthcare, tourism, and construction and material sectors that will benefit from government infrastructure projects are its investment focus this year.

Prudent investment practices helped KSAM's equity funds outperform the market for three consecutive years, she said.

KSAM had assets under management (AUM) of 320 billion baht at the end of last year, up 3.8% from a year before. Net inflow was mainly seen in foreign investment funds (FIF) and resulted in a 220% surge in FIFs' AUM to 39 billion baht.

Mrs Supaporn forecast the SET will rise to 1,432 points by the end of 2016, with the downside limited following the recent fall.

"The SET should not plunge below 1,200 points as its fundamentals are still strong. The forward market P/E at year-end is around 14 times, lower than its regional peers. Listed company earnings growth is forecast at 10%," she said.

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