Bangkok--9 May--KTAM
Khun Somchai Boonnamsiri, Chief Executive Officer of Krung Thai Asset Management PCL., announced the company will launch the IPO of KTAM World Agriculture Fund (KT-AGRI) during May 12th — 25th, 2011. KT-AGRI on average will invest at least 80% of its Net Asset Value (NAV) in the master fund, BlackRock World Agriculture Fund .The master fund is managed by BlackRock with $3.56 trillion asset under management (as of December 31, 2010). The master fund invests at least 70% of its NAV in the securities of companies around the world that are engaged in agriculture, agricultural chemicals, equipment and infrastructure, agricultural commodities and food, bio-fuels, crop sciences, farm land and forestry. BlackRock has one of the largest and most experienced Natural Resources teams in the industry.
Khun Somchai added that KTAM World Agriculture Fund is attractive because the fund invests in agriculture stocks around the world, which can provide inflation protection and valuable diversification tool. There are varieties of agriculture businesses that may benefit from rising commodity prices and some that may not be negatively impacted from falling commodity prices. Furthermore, growing world population especially in emerging market countries with more purchasing power and higher demand will drive substantive growth in agriculture sector.
This fund launch is an extension of series of sector funds that the company has successfully introduced to investors. KTAM World Energy Fund (KT-ENERGY), also managed by BlackRock, is the company’s first sector fund that invests in global energy stocks delivering performance since inception (3 July 2009) of 60.43% versus the benchmark of 38.11% (data as at 31 March 2011). We expect KT-AGRI to offer attractive returns in the long run as well.
Khun Vijay Sivaraman, Retail Banking Director, Citibank N.A. said a key driver behind the rally in equity and commodity prices continues to be the high level of liquidity injected by G10 central banks. Overall, the ongoing global recovery with strong EM growth, a weak USD and the prospect of higher demand for commodities for inflation protection are all medium term positives for commodity prices. However, a downside risk is the withdrawal of monetary stimulus in the developed world especially in the US.
Citi analysts remain constructive on equity markets and believe stock prices will continue to grind higher from here. Our view is that global equities will track global EPS in 2011. This has been the case in 1Q11, despite plenty of macro concerns. Global equities are on track to hit our year-end target of 360 for the MSCI AC World benchmark. Volatility should offer more favorable entry points. However, along the way, we’ll see more pullbacks. During previous “Grind Higher” phases we have seen rallies average 18% and subsequent corrections of about 9%. We continue to forecast markets that take “two steps forward, one-step back” which has been consistent with previous “Grind Higher”.
“Again this agriculture fund offers investors yet another avenue of long-term growth outside the broader markets. However investors should always take a disciplined investment approach in building a diversified portfolio and realign their portfolio with changing goals and the economic environment”, Khun Vijay concluded.