Funds stabilise as "vanished" cash returns

       Thailand's fund industry has returned to normal, with net assets under management industry-wide projected to exceed 1.82 trillion baht in 2010, according to Pichit Akrathit, the president of MFC Asset Management.
       The figure would represent a 3.73%increase from the 1.75 trillion baht now managed by local funds, and is based on a 2010 target for the Stock Exchange of Thailand index of 820 points.
       Portfolio assets held by the asset management industry would fall to around 1.804 trillion baht assuming the SET index stayed at around 750 points in 2010.
       he index closed yesterday at 730.52 points, up 6.15, in trade worth 32.5 billion baht.
       Dr Pichit said that from August to November 2008,130 billion baht in assets vanished from the local fund industry.
       The funds have since returned over the past four months, he said, adding that there was a 60% correlation between the SET and net asset values for the fund industry.
       Local stocks also still have room to move upward, even with the more than 60% gain posted by the SET for the year to date.
       Dr Pichit noted that over the past year, foreign investors had injected 40 billion baht in funds into local stocks,representing just 20% of the total outflows seen during the global crisis.
       He added that Thailand's financial system had also shown signs of growing maturity, with fund assets now accounting for 27.8% of total bank deposits compared with 20% before the global financial crisis.
       By the end of 2010, total net assets held by local funds is projected to rise to 28.8% of bank deposits.
       Narongchai Akrasanee, the chairman of MFC Asset Management, agreed that global financial markets have largely normalised.
       "Still, there remains a number of risk factors that deserve close monitoring,including the extent of financial losses post-crisis and the speed in which the real sector recovers," he said.
       Supakorn Soontornkit, a senior executive vice-president at MFC Asset Management, cautioned that local stocks could see a short-term correction on profit-taking that could push the index to 680 to 700 points.
       MFC plans to launch several new funds over the next few months, including a commercial property fund now in the filing process with the Securities and Exchange Commission.
       The company also expects to see progress under the Thailand Creativity Fund,a new fund to be placed with institutional investors and emphasising investments in innovative companies.