Thailand’s Ministry of Finance plans a long-term equity fund to support its struggling stock market, integrating tax-exempt ESG investments to attract and retain investors amid ongoing market challenges.
Thailand’s Ministry of Finance plans a long-term equity fund to support its struggling stock market, integrating tax-exempt ESG investments to attract and retain investors amid ongoing market challenges. The fund aims to bolster confidence in the domestic equity market by prioritizing sustainable and socially responsible investments, aligning with global trends.
Officials believe that offering tax incentives for ESG-focused portfolios will not only stabilize market performance but also encourage long-term participation from both local and international investors. This initiative comes as part of broader efforts to revitalize the economy and enhance the competitiveness of Thailand’s financial sector in the region.
Thailand’s New Long-Term Equity Fund
The Thai Ministry of Finance is preparing to launch a long-term equity fund to support the struggling Thai stock market, Asia’s weakest performer this year. The ministry plans to revise the Long-Term Equity Fund (LTF) structure for funds nearing expiration to attract investors. Initially created for tax benefits and as a savings plan, the LTF now faces investor divestment due to market losses.
Investor Incentives and Market Impact
Finance Minister Pichai Chunhavajira announced integration plans of a potential fund into an ESG fund, providing five-year tax exemptions. This move aims to alleviate long-term fund outflows affecting the market. Although the main stock index gained 0.73% on Tuesday, it has dropped around 9% this year. The new fund might pause investor divestment, appealing with ESG alignment and tax perks. There are approximately 188 billion baht in long-term fund units eligible for redemption.
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