Labour Minister Phiphat Ratchakitprakarn advised the Social Security Fund (SSF) yesterday against investing directly in equities, saying it should shift to more low-risk assets inside and outside the country to avoid repeating a previous mistake that resulted in massive losses.
"I've stressed to the fund that it does not have a policy of purchasing individual stocks on the Stock Exchange of Thailand [SET] and that it had better invest through various funds or in properties in Bangkok and other provinces [with good potential] such as Phuket," said the minister.
The SSF has had problems investing in some stocks in the past, ultimately suffering a large loss. This should never happen ever again, Mr Phiphat said, adding the SSF should also maintain good asset allocation by dividing its portfolio among different types of investments and placing an emphasis on low-risk assets in Thailand and overseas.
The minister said he expects the Social Security Office (SSO) to regularly submit to him a report on the outcome of the SSF's investment.
According to the latest report published by the SSO, the SSF had, at the end of the third quarter of last year, recorded a total investment value of 2.58 trillion baht.
The majority of this, or about 70.69%, was in long-term funds with high investment security, while the rest was in high-risk investments, which promised higher gains, the report showed.
Among these highly secure funds were 1.35 trillion baht (52.52%) in bonds issued by the Thai government, the Bank of Thailand and a number of state enterprises which were guaranteed by the Ministry of Finance.
Another 320.15 billion baht (12.38%) was invested in highly rated foreign bonds and 78.54 billion baht (3.04%) in securitised debts, while the rest was in savings, the report stated.
As of Sept 30, the SSF logged 48.71 billion baht in total investment returns, 31.65 billion baht from bond investments and 17.06 billion from equities.