SCBAM eyes Bt420 bn in mutual funds

During the period, SCBAM will begin to introduce corporate-debenture funds as a new investment choice alongside South Korean bond funds.

A China equity fund and new property funds will also be gradually launched this year and next.

Adisorn Sermchaiwong, executive vice president of Savings and Investment Products Division at Siam Commercial Bank, yesterday said Korean bond funds had been very popular this year, providing the company with new investment of Bt110 billion.

It is, however, time to provide another investment option.

"Four or five corporate-debenture funds, worth Bt2 billion each, will be gradually launched during the rest of this year and into next year. Each fund will invest in four or five companies in Thailand with good credit ratings. The ratings must be at least BBB+, but most of the companies are ranked at the A level - for example, Charoen Pokphand Foods, Mitr Phol and Bangkok Expressway," said Adisorn.

Investors must commit for five years with a minimum investment of Bt10,000, and they will receive a return of 5 per cent per annum.

Although interest rates are now on an up-trend as the economy is recovering, Adisorn does not believe they will exceed 5 per cent in the next five years. This is because recovery of the United States and Japan will be slower than most of Asia, thus affecting the global economic rebound.

Therefore, he said, investors will definitely receive a better return than depositing in a savings account, which now offers just 0.75 per cent per annum.

However, it is also dependent on how much the government decides to issue in bonds next year.

During the rest of this year, SCBAM expects to gain additional investment of Bt8 billion in long-term equity funds and retirement mutual funds, Bt8 billion-Bt10 billion in corporate-debenture funds and Bt8 billion-Bt10 billion in Korean bond funds.

The company has assets under management of Bt390 billion.

SCBAM will also launch a China equity fund on November 16, as it has confidence in the Chinese economy. Adisorn said the country had the highest foreign reserves in the world and was therefore able to manage its economy very well, having invested in domestic infrastructure during the global economic crisis.

"We will only introduce this fund to private banking customers, as the bank [Siam Commercial] wants to screen only for investors who are knowledgeable and able to take the risk," he said.

He said the firm's property funds launched earlier had received a good response from investors. One is invested in the Q House office building and the other in retail buildings of the Central Pattana Group.

Next year, the bank will launch three or four more property funds, offering an average annual return of 8-10 per cent. The total fund size will be between Bt10 billion and Bt20 billion.

"A property fund to be launched at the beginning of next year will invest in a logistics warehouse, which still has growth opportunity in Thailand," said Adisorn.

Since the beginning of the year, SCBAM has expanded its assets under management by Bt70 billion-Bt80 billion, while the bank's deposits have increased by Bt30 billion-Bt40 billion.

He believes Thais have been more concerned about saving money during the economic crisis, as reflected in the expansion of deposit-taking and mutual-fund business.