ASSET MANAGEMENT / BUSINESS PLANS

KTAM aims to lift assets by 67%

KRISSANA PARNSOONTHORN

Krung Thai Asset Management (KTAM) targets to raise its net assets under management by 67% this year to 320.59 billion baht. The company, a unit of state-owned Krung Thai Bank, plans to launch a number of new money market and bond funds this year.

Sripop Sarasas, the company's president and CEO, said the company would focus on the money market and short-term bond funds to attract depositors seeking higher returns compared with bank deposits.

''There's a big opportunity for the money market and bond funds as local interest rates are going to decline this year,'' he said.

KTAM planned to launch money-market funds worth up to 50 billion baht and bond funds of 77 billion baht, Mr Sripop said. Currently, money-market funds can generate returns of between 3.8% and 4.5%, when compared to 0.75% for basic savings rates.

The low-profile asset management firm hopes to be one of the top three players in the industry this year. It has spent a few years preparing itself for the launch of money-market funds, which can replace bank savings.

KTAM has worked with Krung Thai Bank, its parent's company, to help educate depositors over the past two years, while bank staff, who will serve as salespeople for KTAM funds, are well educated and well trained.

Mr Sripop said that if the bank deposit insurance law took effect this year, depositors would turn to other channels to seek higher returns for their money now that bank deposits would not be fully guaranteed by the government.

''Depositors may shift to investing in fund products and if this happens, our 2007 growth target may be too low,'' he said.

When classifying the business structure at KTAM this year, the assets of its mutual-fund business will rise to 183.03 billion baht from 100.23 billion baht at the end of 2006. Provident funds, which had an NAV of 69.29 billion baht at the end of 2006, the highest in the industry, will grow to 81.04 billion baht. Property funds will see assets grow to 53.23 billion baht from 15.2 billion baht last year.

The launch of new property funds will be delayed as the impact from capital controls still lingers. Foreign investors, who were the major buyers of property funds last year, are required to place a 30% reserve with the central bank when investing in this kind of fund.

''We will wait until the situation is more stable. When interest rates are going down, property funds are attractive and we believe there is still demand as property funds can yield as high as 8-9%,'' Mr Sripop said.

He noted that KTAM would also introduce long-term equity funds and foreign investment funds (FIFs) this year.

An FIF, to be launched next month, will invest in bonds in emerging Asian markets such as Vietnam. KTAM will work with Goldman Sachs and investors will be offered capital protection and a guaranteed minimum return.

Thailand News : Business News
Bangkok Post
Friday January 26, 2007