A new fund is projected to start investing in the Stock Exchange of Thailand (SET) in the second half of 2024, boosting the index by about 90 points, says Bualuang Securities (BS).
The Vayupak Fund, which guarantees a minimum return of 3%, is expected to have a minimum value of 100 billion baht, of which about 90 billion or 90% of the total portfolio generally completes each investment within 1-2 months, BS said in a research note.
Finance Minister Pichai Chunhavajira said early this month that the government planned to increase the size of its Vayupak mutual fund by 100 billion baht to 150 billion baht to invest in stocks by October to help boost the Thai bourse.
Currently there are two Vayupak funds: Fund Type A, which allows the public to purchase investment units and has a value of 150 billion baht, and Type B, which consists of investment units held by the Finance Ministry and state agencies with a combined value of around 350 billion baht.
The SET has declined by 8.6% this year to date, becoming Asia's worst performing market.
BS said stocks that are expected to be the targets of the Vayupak Fund, based on past records, are state enterprise stocks, stocks of essential public services and those related to central infrastructure such as energy, banking, transportation, ICT and construction.
The brokerage recommends three stocks picks for the Vayupak Fund, comprising Advanced Info Service (ADVANC), which will benefit from the synergy from GULF-Intouch Holdings (INTUCH) and Gulf Energy Development (GULF), which have new growth opportunities from both electrical and communications businesses, and Bangchak Corporation (BCP), which benefits from the US economy.
Thanachart Securities noted foreign funds accumulated purchases of Thai stocks for three consecutive days early last week.
Even though the investment value is not huge, it showed good signs, supported by the baht's appreciation.
In the future, the SET will receive support from accelerated government spending and investment, the 10,000-baht digital handout and reduced short-selling pressure.
The top 20 stocks that foreigners have accumulated the most during July 15-19 are stocks that have supporting factors individually and good fundamental stocks that are still cheap.
Thanachart recommends GULF, Delta Electronics (Thailand) (DELTA), Charoen Pokphand Foods (CPF), Bangkok Expressway and Metro (BEM), ADVANC, Star Petroleum Refining (SPRC) and Bumrungrad Hospital (BH).
