Thailand to set up long-term equity fund to support flagging market

BANGKOK : Thailand's government plans to set up a long-term equity fund to support the Thai stock market, the finance minister said on Tuesday, as the bourse has been the worst performing market in Asia so far this year.

The fund could be set up in an existing environmental social governance fund, or ESG, and investors will receive similar tax breaks for five years, Pichai Chunhavajira told reporters.

The fund is expected to help slow down selling from long-term funds, which has added pressure to the market, he said, adding details were expected to be announced soon.

The main stock index rose 0.48 per cent on Tuesday but has still dropped about 9 per cent since the start of the year.

With the fund, "investors who want to sell will stop and think whether to sell or not because they are in the ESG fund, they will also receive tax benefits," Pichai said.

There are about 188 billion baht ($5.52 billion) worth of long term fund units that can be redeemed, industry data showed.

($1 = 34.07 baht)