Fund makes life easier for kbank investors

The scheme, a collaboration between Kasikorn Securities and Kasikorn Asset Management (KAsset), allows KBank customers to use K-Treasury, a bond fund that invests 95 per cent of its capital in government bonds, to park their earnings from stocks or use the fund for further investment.

"Whereas most investors put their money in a cash account, which has relatively low yield of 0.75 per cent per annum, they could benefit from K-Treasury's annual yield of 2.65 per cent [as of May 30, 2008]," said executive vice chair Wiwan Tharahirunchote.

Wiwan added that the K-Treasury Fund, with a net asset value (NAV) of Bt75 billion, has the right liquidity and stability for a stopover fund. KAsset's other money market fund, K-Money, has a NAV of only Bt3.5 billion.

Wiwan said that due to the increased financial literacy of retail investors, K-Treasury had never been so popular.

Its NAV at the end of last year was just Bt15 billion.

However, Wiwan said that K-Treasury's NAV would not exceed Bt100 billion.

Central to this scheme is the customer's bank account, which acts as the middle ground in transactions.

When buying stocks with the K-Stock 2 Fund programme - settlement, as with any stock transaction, takes three days or T+3.

So for instance, a customer orders 10,000 shares from ABC Company at Bt100 per share; two days later they will receive an SMS message and Bt1 million will be deducted from their K-Treasury account, said Kasikorn Securities executive director Natthalin Talthong.

On the third day, the money will be transferred to the customer's cash account to pay for the stock purchase.

The same process applies to selling.

While using money market or government bond funds as a stopover is nothing new, the

catch with K-Stock 2 Fund is

that all these transactions from fund to bank account and vice versa are commission-free, said Natthalin. So, besides the higher yield generated from inactive money, it would be more convenient for investors to move their money around with fewer transactions, she added.

There are currently 4,700 KBank automatic transfer system accounts. Natthalin said she wants that number to rise by 2,300 within the third fiscal quarter.