Thailand’s Biggest Pension Looks to Slash Bond Allocation


Thailand’s largest public pension fund is looking to slash its bond allocation (which currently sits at 77 percent of the fund’s assets) and invest a higher percentage of assets in equities and alternatives.

Yields on Thai government debt are at their lowest levels since 2009.

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Thailand’s biggest government pension fund is seeking approval to reduce sovereign debt holdings as it buys local shares amid falling valuations.

The Social Security Office, which manages 1.2 trillion baht ($36.5 billion) in pension contributions from local workers, started boosting holdings of Thai shares last month after correctly predicting in October the market would retreat. The fund, which had about 77 percent of assets in local government bonds as of Sept. 30, is asking its board to approve a greater shift toward equity and alternative assets, said Win Phromphaet, the SSO’s head of investments.

Thailand’s benchmark equity index fell in December by the most in 16 months as oil’s retreat dragged down energy companies, while yields on government bonds sank to the lowest level in five years. The slump in shares has left valuations trading near the cheapest since August versus developing-nation peers, according to data compiled by Bloomberg.

“The SSO has an urgent need to boost investment in other assets than local bonds, whose returns keep falling,” Win said in a telephone interview yesterday. “The current correction in Thai equities makes them more attractive.”

The Social Security Office manages $36 billion in assets for the country’s public workers.


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