Krungthai Asset Management (KTAM) aims for 18-per-cent growth in assets under management (AUM) to Bt650 billion this year, driven by property funds, real estate investment trusts (REITs) and infrastructure funds.
As of the end of last year, KTAM had total AUM of Bt550 billion, higher than the previous target of Bt516 billion because the values of its funds had increased, especially property funds, which rose to Bt60 billion.
Chief executive officer Somchai Boonnamsiri attributed the rising value of property funds under KTAM management to the increased capital of such funds as Tesco Lotus Retail Growth Freehold & Leasehold Property Fund (TLGF), Thai Commercial Investment Freehold and Leasehold Fund (TCIF) and Thai Retail Investment Fund.
The debut of CP Tower Growth Leasehold Property Fund (CPTGF), the country’s largest property fund with assets of Bt9.82 billion, last year also drove up the value of KTAM’s AUM.
Somchai said the company this year targeted new AUM of Bt100 billion.
KTAM expects to manage property funds, REITs and infrastructure funds worth a total of Bt55 billion. The rest are mutual funds worth Bt31 billion, private funds worth Bt6 billion and Vayupak Fund assets worth Bt20 billion.
Somchai said the outlook for the stock market was supported by the expected economic recovery in key markets, while low interest rates also backed investment in the capital market.
He said KTAM believed the Stock Exchange of Thailand’s average price-to-earnings ratio (P/E) remained attractive to foreign funds.
However, sentiment in the first half will be gloomy because of the domestic political turmoil, the fact that foreign interests have reduced their investment in emerging markets overall, and the US Federal Reserve’s plan to reduce its bond purchases. The SET is expected to recover in the second half, based on the assumption that the political problems will be resolved.
Stocks with P/E below 11 times are reasonable for long-term investment, he suggested. and pointed out KTAM targets SET index as end of this year at 1,590 points.
KTAM expects that the central bank will maintain the policy rate of 2.25 per cent throughout the year. However, if the government is hamstrung from setting the 2015 fiscal budget because of prolonged political turmoil, the Bank of Thailand might decide to cut the benchmark interest rate in the second half of this year, Somchai said.