The Stock Exchange of Thailand (SET) index could have an upside of 50-80 points from the offering of Vayupak Fund 1 (VAYU1) units, scheduled to start investment in Thai securities from Oct 1, says InnovestX Securities.
VAYU1 plans to issue investment units totalling 100-150 billion baht to the public during Sept 16-30, referred to as Type A unitholders, for listing on the SET. For institutional investors, defined as Type B unitholders, they can subscribe to the units from Sept 23.
InnovestX predicts the SET's average daily trade will increase by 30-44 billion baht after the fund's investment units are traded. Investment risks and current market conditions differ now from 2003-2004 when the Vayupak Fund was originally launched, said the brokerage.
At that time, Thai GDP growth exceeded 6%, while growth now hovers around 2-3%, resulting in lower gains for listed companies' profits. This phenomenon has prompted many Thai investors to look overseas instead of the SET, according to InnovestX.
The Vayupak Fund invests in securities listed on the SET as well as non-listed assets. The investment proportion by type of security is 88.4% common stocks, 7.01% Bank of Thailand bonds and 1.48% Treasury bills.
Stocks that are likely to meet investment criteria of the fund include stocks with dividends of more than 3.5% per year, stocks in the SET 100 that have ESG and CG ratings, and those whose financial performance is expected to grow next year, said InnovestX.
The brokerage expects stocks targeted by the Vayupak Fund are Advanced Info Service (ADVANC), Bangkok Bank (BBL), TMB Thanachart Bank (TTB), Kasikornbank (KBANK), Krungthai Bank (KTB), Thanachart Capital (TCAP), Home Product Center (HMPRO), Bangchak Corporation (BCP), Thai Oil (TOP), Bangkok Commercial Asset Management (BAM), Osotspa (OSP), Sansiri (SIRI), AP Thailand (AP), Land and Houses (LH) and PTT.
The existing fund's current top holdings include energy conglomerate PTT Plc, SCB X, KTB, TTB and Bangchak Petroleum (BCP), fund data shows.
According to Thanachart Securities, the Vayupak Fund had a return of 5.53% last year.
