PATTAYA, Thailand – Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed plans for the establishment of the second Thai ESG fund to accommodate funds from the Long-Term Equity Fund (LTF) still pending in the system. The primary aim of launching this new fund is to slow down short-term selling pressure, which has been weighing on the overall market. The process is expected to move forward quickly, with the establishment of the previous Thai ESG fund taking only about a month. The Ministry of Finance is set to meet with relevant agencies soon to discuss the details of the fund to attract investors.
Currently, the total amount of LTF funds still pending in the system is approximately 180 billion baht.
Regarding the government’s plan to offer a tax deduction of up to 500,000 baht per individual, it is believed that this measure would cover most LTF investors, as calculations are based on the outstanding value for each individual. Once implemented, this is expected to reduce the pressure to sell these funds, which could ease market concerns. However, some investors with outstanding amounts over 500,000 baht may still sell, though this group is considered to be a small percentage. The presence of Thai ESG fund purchases and other buyers should help balance the market.
Kobsak mentioned that, while the initial details of the plan appear promising, further adjustments may be made through consultations between the Ministry of Finance, the Securities and Exchange Commission (SEC), the Association of Mutual Funds, and other related agencies to refine the tax incentives and make the process more attractive and easier for investors.
Nevertheless, this measure is seen as a short-term solution to delay investor sell-offs, and it is necessary to implement other long-term strategies simultaneously. In addition to short-term selling pressure, there is an ongoing issue with long-term investor confidence in the market.
Kobsak emphasized the importance of measures to make it easier for companies to buy back their own shares, which could enhance investor confidence. He also suggested initiatives such as the Stock Exchange of Thailand’s Jump+ program to elevate listed companies, build investor confidence, and highlight the potential and future of these companies.
Lastly, he stressed the importance of supporting new businesses and future industries entering the Thai capital market. Efforts are being made to push for the startup law (Start-up Act) to build an ecosystem in Thailand that fosters the creation of future-focused businesses.
“I believe we need to build long-term confidence in the market as a whole. The selling pressure is not only from domestic investors but also from foreign investors. What they want to see is whether Thailand can move forward with its reforms. The implementation of various measures that show we can progress with transforming the country will be key,” he said.
Additionally, fostering long-term confidence also involves simplifying and improving the complex regulations in Thailand’s capital markets. These issues have led to hidden costs in various processes, and changes in regulations would reduce service costs, making the Thai capital market more competitive with global markets.
