MAJOR LOCAL institutional investors are showing great interest in the Thailand Future Fund (TFF), Chavinda Hanratanakool, chief executive officer, Krungthai Asset Management Plc, said.
“After talking to investors from major institutions within the country, we found their responses to our TFF investment opportunity better than expected,” Chavinda said at the Thailand Future Fund press conference yesterday.
The TFF initial public offering is a method for the government sector to raise capital to invest in developing transportation infrastructure in the Bangkok region. Up to 45 per cent of revenue from the Chalong Rat and Burapha Withi expressways in the next 30 years will fund the TFF units.
“Our investors say they have been waiting for the TFF to finally enter the capital market and that they expect investment returns from this project to be very good,” she said.
“The TFF investment units are attractive to investors because we have been seeing continual revenue growth from both the Chalong Rat and Burapha Withi expressways in the past 20 years while never experiencing any financial loss,” said Varah Sucharitakul, executive director, Finansa Securities Ltd.
“Furthermore, in the past three years, the revenue growth rate of the two expressways are up to 5 per cent on average”, he said.
The TFF should be attractive to investors because it has huge potential to grow in value as the government also has plans to use both motorways route 7 and 9 to fund the TFF units, Chavinda added.
“Hence, the TFF units have very high growth prospects in the future with the potential to exceed current estimated values,” Chavinda explained.
Funding these projects with the TFF will also reduce the government sector’s financial burden on the annual government budget, government loans, or the accumulated income of state enterprises, said Prapas Kong-ied, director-general, State Enterprise Policy Office.
Residential areas have been developing rapidly in the northern part of Bangkok in the past decade. The Chalong Rat expressway will link these residential areas to the business and commercial districts in the centre of Bangkok, said Suchart Chonsakpipat, deputy governor for Construction and Maintenance, Expressway Authority of Thailand.
Meanwhile, the Burapha Withi expressway will pass through various industrial, commercial, business districts and most importantly, it will connect these areas to Suvarnabhumi Airport, Suchart said.
“We believe the TFF will continue to grow in value in the future, as the government does not want to become dependent on loans or overspending the annual budget. Hence the TFF serves as a favourable alternative to raise capital to fund the development of Thailand’s infrastructure in the future," Prapas said.