Thailand is preparing to launch a second environmental, social and governance fund scheme by end-March, according to the Bangkok Post, quoting Lavaron Sangsnit, the permanent secretary at the finance ministry.
He says the move is aimed at providing an alternative avenue for investors who have held the Long-term Fund (LTF) for the mandatory ten years. The compulsory holding period ended last year.
According to Lavaron, investors are still waiting to reinvest some 180 billion baht (US$5.35 billion) of the total 240 billion baht in matured LTFs.
“While investors are now eligible to sell their matured LTF holdings, many are hesitant due to average losses of 5%-10%,” he is quoted as saying in the report published on February 20.
He says the new ESG fund aims to offer a “stable and responsible option” for investors during the current market downturn.
“The investment structure and benefits are currently under discussion and may differ from the existing Thai ESG Fund. However, the focus remains firmly on domestic investment,” he says.
The new fund will offer tax incentives, like the first ESG fund which was introduced in 2023, and the LTF, which was originally launched in 2004 and then reintroduced in 2015.
Finance ministry spokespersons did not immediately respond to questions from Asia Asset Management.