• 
• 

Published on October 26, 2007

The Government Pension Fund is expected to offer returns of 9-10 per cent this year after yielding 9.01 per cent for the first nine months.

The GPF's return for January to September amounted to Bt25.38 billion, raising its net assets to Bt375.44 billion, its secretary-general Visit Tantisunthorn told reporters yesterday.

Of the total investment portfolio, 67.03 per cent is in local debt instruments, 12.37 per cent in local equity, 12.36 per cent in overseas debt instruments and equity, and 3.87 per cent in property funds.

The GPF in the third quarter alone yielded 33.47 per cent from equity investments, 6.23 per cent from local debt instruments, 4.27 per cent from overseas debt instruments and equity, 4.55 per cent from property funds and 15.26 per cent from other investments.

The main Stock Exchange of Thailand Index has shot up more than 30 per cent so far this year.

Visit said the GPF's 12-month return - between October 31, 2006 and September 30, 2007 - stood at 9.42 per cent, far above the 12-month term-deposit account rate offered by the five largest commercial banks, at 3.63 per cent.

The hefty returns from stock investments, with less volatility in the yield curve of debt instruments, was the main cause of the handsome return for the first nine months of the year, he said.

Visit added that the GPF this quarter would still focus on local debt instruments and equity on the expectation that economic conditions will improve following the general election. The fund expects a return of 9-10 per cent this year, above the original estimate of 7-8 per cent.

"The Thai stock market at the moment has potential because its return is on a par with other stock markets, so the fund will maintain its investment in the Thai market at 12-13 per cent of the portfolio," he said.

He said the draft amendment of the Government Pension Fund Act had already received approval from the National Legislative Assembly. It should come into effect in the next few months.

The amended Act will widen the investment ceilings in equity and overseas from 20 per cent to 25 per cent and from 15 per cent to 25 per cent, respectively.

The new Act will allow fund members to increase contributions from 3 per cent to 15 per cent of salary, and those who are retired to keep their contributions to the fund.

Visit estimated this would raise the country's savings by between Bt2 billion and Bt3 billion.

On the report that PTT is keen on buying an additional stake in IRPC from other shareholders, he said the GPF had no plan to divest its investment after the silent period, which ends on December 13.

The fund owns 10 per cent of IRPC, Southeast Asia's largest fully integrated petrochemical complex.

Siriporn Chanjindamanee

 The Nation