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Equity funds posted a 1.12% average return while mixed-asset funds gained 2.16% on average. A rebound in the Thai bourse in the month of August lifted the performance of equity Thailand funds, which posted an average gain of 2.50%. JUMBO 25, which was up 4.35% in August, was the best equity fund performer.
Bond funds and money market funds gained an average of 0.23% and 0.28%, respectively. The Thai Monetary Policy Committee raised its policy interest rate by 25 basis points to 3.75% in August, but the falling crude oil price eased inflation pressure. The market expected the inflation rate was already off its peak, bringing bond yields down in all maturities. The 10-year government bond yield fell by 62 basis points to 4.50% in August, which in turn fuelled the returns of bond funds and pushed Thai bond funds up 0.35% on average.
Among the disappointments were commodities funds, which suffered an average loss of 5.20%, mainly due to commodities prices capitulating. Protected funds posted an average loss of 0.11%, mainly due to losses from protected gold-linked funds after prices of commodities fell.
The Thai economy grew at the slower rate of 5.3% in the second quarter from the same period the year before. However, the off-peak inflation rate, which dropped from 9.2% in July to 6.4% in August, was the catalyst for a more market-friendly sentiment despite the countryÆs political troubles. The past weeks have been particularly difficult die to the continued anti-government demonstrations, a declaration of a state of emergency, plus the stepping down of the prime minister and the election of a new one.
Last month, Thailand's ruling politicians elected Somchai Wongsawat as their new prime minister. The People's Power Party (PPP) at first wanted to reinstate Samak Sundaravej, who was ousted from the job after a constitutional court ruled that appearing as a guest on a television cooking show represented a serious conflict of interest. However, some members of the coalition refused to support Samak, because even before his ousting, there was mounting pressure for him to step down.
Average performance of fund groups registered for sale in Thailand in August was:
Mixed assets +2.16%
Money market +0.28%
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.