Total investment in environmental, social and governance (ESG) funds is projected to exceed 100 billion baht in the second half of this year, including transfers from maturing long-term equity funds (LTFs), says the Association of Investment Management Companies (AIMC).
AIMC chairwoman Chavinda Hanratanakool said the new Thai ESG Extra (ESGX) fund could attract new investments of roughly 30 billion baht, while the total outstanding value of all existing Thai ESG funds is roughly 30 billion baht.
When transfers from LTFs to Thai ESG funds are included in the calculation, the value of all Thai ESG funds should exceed 100 billion baht, she said.
All investment management companies are expected to launch Thai ESGX funds in either April or May, said Mrs Chavinda.
"From the perspective of institutional investors, we are ready to invest in Thai stocks because we see the growth of listed Thai companies' earnings. Although some investors are worried, I believe the Thai stock market is not that bad and the economy will recover," she said.
"The Stock Exchange of Thailand [SET] presents low risk with upside opportunities. If investors do not return to buy Thai stocks in time, they will lose this opportunity."
Krungthai Asset Management (KTAM), which manages the state-controlled Vayupak Fund 1, has continued to invest gradually, but cannot buy against the market because the fund guarantees a 3% return for the first three years of investment.
"The fund invests in stocks with good fundamentals and high dividends. Investors should not worry," said Mrs Chavinda, who is also chief executive of KTAM.
"The SET is being hurt by global conditions. We have to wait for the turning point. Every time the market drops significantly, it is followed by a sharp increase."
Maybank Securities said stocks likely to benefit from Thai ESGX funds are those heavily weighted in ESG-focused portfolios with strong earnings growth potential. These include Bangkok Dusit Medical Services (BDMS), Advanced Info Service (ADVANC), Central Pattana (CPN), Praram 9 Hospital (PR9), True Corporation (TRUE) and Bangkok Bank (BBL).
Asia Plus Securities said stocks benefiting from LTF transfers to Thai ESGX funds are: PTT Exploration and Production (PTTEP), CP All (CPALL), SCB X (SCB), Krungthai Bank (KTB), Kasikornbank (KBANK), BBL, BDMS, CPN, CRC, TMBThanachart Bank (TTB), Charoen Pokphand Foods (CPF) and Siam Cement (SCC).
The brokerage said the stocks that should benefit from portfolio rebalancing (switching to stocks with ESG ratings in each sector) are: KCE Electronics (KCE), Hana Microelectronics (HANA), BDMS, Bangkok Chain Hospital (BCH), Jaymart Group Holdings (JMART), Central Plaza Hotel (CENTEL) and Muangthai Capital (MTC).