"There are not many good underlying assets left. So, in the future we will probably see property funds launched with a mix of underlying assets," said CB Richard Ellis Thailand's head of valuation and advisory services, Annop Sangprasit. "For example, office buildings, shopping malls and hotels may be brought as the underlying assets to set up a fund."

Currently, there are 13 property funds in the market, together worth Bt41.1 billion.

Annop said that as far as he knew, five new property funds were in the pipeline for launching this year. However, the Bank of Thailand's currency control measures caused a hiccup and he expects only two or three funds will join the market in the first half of the year.

"If the fund managers want to launch their funds amid tight measures like these, they may need to restructure their products by adjusting the proportion of foreign institutional and retail investors to match the market sentiment," he said, adding that the size of each fund should be about Bt1.5 billion.

Meanwhile, the Stock Exchange of Thailand has named KGI Securities and One Asset Management - KGI's wholly owned asset-management firm - as the consortium to set up Thailand's first Equity Exchange Traded Fund (ETF). The fund is expected to be launched in the second or third quarter.

KGI will act as a participating dealer, facilitating the creation and redemption of ETF units in the primary market. It will also act as the market-maker, providing liquidity in the secondary market. KGI and One Asset Management expect assets under management to reach about Bt2 billion in the first year.

They project 30-50 per cent annual growth in the second and third years.

KGI said it was confident of achieving the target. It has a 20-per-cent share of trading volume on the Stock Exchange of Thailand and a 36-per-cent share of trading volume on the Thailand Futures Exchange.

Piyarat Setthasiriphaiboon

The Nation