GPF GETS BACK TO POSITIVE TERRITORY

       The Government Pension Fund's return on investment was 7.8 per cent in the first nine months of the year, with its outlook now dependent on the future pace of economic recovery.
       The return on the GPF's investment portfolio - mainly comprising bonds, equities and property - surged to Bt24.74 billion between January and September, Sathit Limpongpan, chairman of the board of directors, said at a press conference yesterday.
       A recovery in both the world and local economies has contributed to the positive returns, said Sathit, who is also permaฌnent secretary at the Finance Ministry.
       The fund last year lost 5.17 per cent, or Bt16.99 billion, due mainly to the global financial crisis. The loss led to the sacking of its secretarygeneral, Visit Tantisunthorn.
       The 7.8-per-cent return to date this year is close to the annual average return of 7 per cent since the GPF's formation in 1997, said Variya Wongpreecha, acting secretary-general.
       However, should a stockmarket correction take place over the rest of the year, it could have an adverse impact on the return for the full year, said Variya.
       The Stock Exchange of Thailand Index rose 59.36 per cent in the first nine months of the year, rebounding strongly from a sharp drop of 46.6 per cent last year. The main US bourse climbed 12.04 per cent against loss of 34.65 per cent last year, she added.
       With the SET Index rallying to test the 750-point level, many analysts predict the high probability of a market correction.
       "The GPF's return in the short term will depend on volatility. As long as we aim to beat the inflation rate, investment in the stock market is essential for the return to override inflation, " said Variya, referring to the GPF's bad experience last year.
       The GPF will remain cautious on investment, not increasing its equity portfolio, she said.
       The fund's asset allocation as of endSeptember was: Thai fixed income (mainly government bonds) at 69.3 per cent; foreign fixed income at 5.6 per cent; Thai equity at 8.9 per cent; foreign equity at 8.6 per cent; property at 4.1 per cent; and alternative investment at 3.5 per cent.
       Variya said that for the remainder of the year, the return would depend on the state of the global and Thai economies.
       "Economists are still debating whether economic recovery will be Vshaped -picking up sharply - or Wshaped, recovering but slowing down later," she said.
       As its rate of return has become positive, the GPF's 1.17 million members do not need to worry about their own returns this year, according to Variya.
       The GPF allows members who retire from the civil service to leave their money in the fund for longer if they want to offset negative returns in a bad year, she said.
       Responding to a question about the delay in appointing a new secretarygeneral, Sathit said previous candidates identified by the consulting firm were not qualified for the top job.
       The consulting firm must propose a new list of candidates within the next 30 days, he said. The board will then make a final decision.
       To prevent the new secretarygeneral from abusing their authority or using inside information, Sathit said they would be banned from personal investment in stock markets.