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Thailand pension industry assets rise 7.08% in January through August

October 4, 2019

Thailand's pension industry assets grew 7.08% between January and August as more workers contributed to the non-mandatory provident fund system, which is targeted at private sector employees.

The industry had 1.21 trillion baht (US$37.86 billion) of total assets as at August 31, up from 1.13 trillion baht at the end of 2018, according to figures posted on the website of the Association of Investment Management Companies.

The group, which comprises 25 licensed mutual fund companies in Thailand, including foreign firms, typically publishes the data without analysis.

The number of pension contributors grew 0.3% to 3.31 million over the eight-month period from 3.30 million at the end of last year.

A fund manager at a Thai asset management firm says the increase in assets is also driven by the growth of equity assets, which rose 14.42% to 220.46 billion baht between January and August, from 192.67 billion baht at the end of 2018.

"Thailand's equity market has been one of the better performers in Southeast Asia this year, and it is expected to remain stable over the coming months, backed by the country's stable economic growth and currency," the Bangkok-based fund manager tells Asia Asset Management, speaking on condition of anonymity.

According to the AIMC’s data, 87% of the pension industry’s assets is invested in securities, including stocks and bonds, and the balance in bank deposits, promissory notes and other assets.

The industry’s allocation to debenture bonds or asset-backed debt issued by companies was up 4.78% to 346.08 billion baht between January and August.

The share of assets in government bonds and treasury bills rose 6.50% to 337.08 billion baht, and the share in bank deposits dropped 2.17% to 140.34 billion baht.

Pension contributors can channel between 2% and 15% of their monthly salaries to their accounts, which is matched by employers. The total contribution for each member is capped at 500,000 baht a year.