Strong baht hits foreign investment fund returns, TMB say

[webfact]

Strong baht hits foreign investment fund returns, TMB say

By The Nation

 

 

The strong baht has cut the value of the foreign investment fund (FIF) under fund management, falling by Bt27 billion from Bt1.2 trillion at the start of the year, TMB Bank said.

 

TMB said the drop reduced the fund’s return by 0.47 per cent. The least impacted funds are those covering oil investment, gold, and property funds, at 0.53 per cent, followed by a balanced fund.

 

Naris Sathaphondecha, the senior director of the TMB economic analysis centre (TMB Analytics), said that the baht’s appreciation not only affected the export market and tourism businesses but investors’ portfolios - especially the FIF. The currency has risen 5.8 per cent this year. 

 

The Bt1.2 trillion earlier valuation for the existing FIF funds comprised Bt836 billion in fixed income, Bt243 billion in equities, and Bt30 billion in commodity and property funds.

 

“The baht’s appreciation widely affects every sector related to business. When investing in US dollars, inventors find returns have less value in baht. The strong baht affects the returns on funds as investors are concerned about the exchange rate. The investment markets have gone down, especially the stock market. Investors will soon know that they are losing profits because of exchange rate. ” he said.

 

However, the effect of baht appreciation is mostly felt on the fund that has low protection for currency risk, also known as a totally naked protection fund. These fund risk lower net asset values (NAV) or losses on investment. “The most affected fund since early this year has been a mixed fund on gold and oil investments. It received a lower return at 0.53 per cent. Also affected are the discretionary risk prevention groups and partial risk prevention groups, with fund returns dropping 0.44 per cent,” Naris said.

 

However, the debenture fund was largely unaffected by the appreciation because of risk prevention measures. The fund’s return dropped by 0.21 per cent.

 

“If you look closely, the return was reduced by Bt27 billion from the value of the fund. The stock dropped by Bt16 billion and the mixed fund fell about Bt6.8 billion. Why did the AUM (assets under management) fall dramatically? It depends on the AUM’s base investment. If there are large investments, the imports will be massive. Therefore, when investors hold investment units, they must consider the impact of a lower exchange rate affecting the returns and whether baht appreciation will occur in the future” Naris added.

 

Source: https://www.nationthailand.com/business/30373282

 

-- © Copyright The Nation Thailand 2019-07-22

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[bluesea]

And what will happen if Donald Trump devalues the USD as he says he is by 20% ?? that will make the baht even more stonger.

[Chang_paarp]

Now this is how to get the rich and powerful to listen!

 

Point out that a high Baht is affecting their income and investments. Although, a reported drop of 0.53% - 0.21% in returns might not get them up in arms just yet.

[soalbundy]

18 minutes ago, bluesea said:

And what will happen if Donald Trump devalues the USD as he says he is by 20% ?? that will make the baht even more stonger.

You have a zero too many, at 20% everything blows up and everyone devalues in one big race to the bottom. Anyway Trump himself hasn't the power to devalue anything except himself.

[FarFlungFalang]

Nothing fixes a strong Baht better than a strong Baht!The economic managers will be judged by the return to earth wether it is a crash,a bumpy landing or a smoothly controlled landing.Time to return to your seats fasten your seatbelt and stow loose luggage under the seat in front of you!

[blazes]

My heart bleeds for the impoverished Hi-So of Bangkok....

[FarFlungFalang]

40 minutes ago, bluesea said:

And what will happen if Donald Trump devalues the USD as he says he is by 20% ?? that will make the baht even more stonger.

What should happen is that he gets done for currency manipulation,as it seems America frowns on that sort of thing when they are not doing it.

[FarFlungFalang]

3 minutes ago, blazes said:

My heart bleeds for the impoverished Hi-So of Bangkok....

No need to worry they will be in a prime position to make the most of any corrections in the markets if they are clever enough.

[hashmodha]

51 minutes ago, bluesea said:

And what will happen if Donald Trump devalues the USD as he says he is by 20% ?? that will make the baht even more stonger.

I think they will let it float.... allowing to finding its true value....I reckon... because it is linked to £,US dollar and Euro all together.£ 65..... Euro.....39....US 34.... Just thinking a loud .!

[hashmodha]

13 minutes ago, FarFlungFalang said:

What should happen is that he gets done for currency manipulation,as it seems America frowns on that sort of thing when they are not doing it.

This should have been done 5 years ago when they BOT started their leveraging!?

[morocco]

Thailand is shooting itself in the foot. And they will feel that pain when their exports and tourism drops drastically because of the over inflated baht.

[marcusarelus]

1 minute ago, hashmodha said:

I think they will let it float.... allowing to finding its true value....I reckon... because it is linked to £,US dollar and Euro all together.£ 65..... Euro.....39....US 34.... Just thinking a loud .!

The baht is no longer pegged to the USD that stopped in 1997 when the baht was floated.  Google Asian Contagion it was the last time Thailand tried to control the price of the baht and was unable to do so.   

[Isaan sailor]

Exports down. Tourism greatly diminished. Expats furious (as usual).  Hasn’t Bank of Thailand inflicted enough pain with their hot money foreign inflows?  Was it really worth it—to collapse the economy?

[mikebell]

11 minutes ago, hashmodha said:

£ 65

I'd be happy with 50 at the moment.  My UK State pension has been frozen for the last 11 years whilst inflation in Thailand has continued ever upwards.

[Isaan sailor]

Thailand will miss out on the great manufacturing shift away from communist China.  Taiwan, Vietnam, India and South Korea stand to prosper.  Perhaps Thailand shouldn’t have signed so many bilateral trade agreements with the ChiComs...

[peter14]

as well  as the fact that they make it so hard to  get a tourist  visa anymore 

[RotBenz8888]

The band is still playing while the ship is sinking.

[holy cow cm]

It really hurts everyone except the Elite who can probably swipe returns going another way.  For me ok for the long haul, but one of my big concerns is the long term stayers who really take plunge on the matter and can't recover.

[Farang99]

37 minutes ago, hashmodha said:

I think they will let it float.... allowing to finding its true value....I reckon... because it is linked to £,US dollar and Euro all together.£ 65..... Euro.....39....US 34.... Just thinking a loud .!

That's a sweet dream. It was there 15 years ago, but not since.

[marcusarelus]

36 minutes ago, morocco said:

Thailand is shooting itself in the foot. And they will feel that pain when their exports and tourism drops drastically because of the over inflated baht.

The baht has stayed the same.  The pound and Aussie dollar have dropped.  More like a deflated pound and Aussie dollar rather than an inflated pound.  

[marcusarelus]

1 minute ago, holy cow cm said:

It really hurts everyone except the Elite who can probably swipe returns going another way.  For me ok for the long haul, but one of my big concerns is the long term stayers who really take plunge on the matter and can't recover.

Do the Elite not own exporting businesses, hotels and shopping centers?  

[Neeranam]

I took all the money I had in my TMB SET 50 find out 3 years ago. I made 18% that year.

I bought bitcoin and Xrp, best decision I ever made, changed my life.

[DPKANKAN]

'also known as a totally naked protection fund'

 

Sounds like something you buy on Soi Buakhao!! 555 ????????????????

[holy cow cm]

7 minutes ago, marcusarelus said:

Do the Elite not own exporting businesses, hotels and shopping centers?  

The top 1/2%? Yes on one note the do, but on the on the other note they can also run the system both ways to not get hurt in the matter such as in place contingencies. If they lose a million here they will gain it over there.

[marcusarelus]

2 minutes ago, holy cow cm said:

The top 1/2%? Yes on one note the do, but on the on the other note they can also run the system both ways to not get hurt in the matter such as in place contingencies. If they lose a million here they will gain it over there.

No they don't.  If there are no guests in the hotel or sales in the mall they don't make it back.  It's gone because all of the costs of doing business remain but no offsetting sales.  

[Sticky Wicket]

17 minutes ago, holy cow cm said:

The top 1/2%? Yes on one note the do, but on the on the other note they can also run the system both ways to not get hurt in the matter such as in place contingencies. If they lose a million here they will gain it over there.

Also there is elite and ELITE................ if you know what I'm saying!!

[hotchilli]

When Thailand realises what's really happening it will be too late to turn the clock back.

Tourism will be affected, no matter how much they try to say otherwise as will spending by those who are over here. Trade will suffer hitting Thai companies who are trying to remain competitive.

China will reap the rewards of a high baht.

 

[Rimmer]

Some off topic posts and replies have been removed

[Millcx]

1 hour ago, morocco said:

Thailand is shooting itself in the foot. And they will feel that pain when their exports and tourism drops drastically because of the over inflated baht.

They are feeling it now but the greed of some will milk the cow dry and live of the fat while the workers starve

[KKr]

6 hours ago, webfact said:

The investment markets have gone down, especially the stock market. Investors will soon know that they are losing profits because of exchange rate.

if I read this correctly, the assets bought have been going down and therefore it is due to the more expensive Baht that money was lost.....

so either I have to go back to find my books, or someone has to learn how to translate Thai into English instead of Thai into Thai using English words.