Bangkok--6 Sep--KTAM
Khun Somchai Boonnamsiri, Chief Executive Officer of Krung Thai Asset Management PCL., announced the company will launch the IPO of KTAM World Property Fund (KT-PROPERTY) during September 12th — 21st, 2011. KT-PROPERTY on average will invest at least 80% of its Net Asset Value (NAV) in the master fund, Henderson Global Property Equities Fund .The master fund is managed by Henderson Global Investors with GBP 11.9 billion asset under management (as of December 31, 2010). The master fund’s investment objective is to seek long term capital appreciation by investing in the quoted equity securities of companies or Real Estate Investment Trusts (or equivalents) listed or traded on a regulated market which derives the main part of their revenue from the ownership, management and/or development of real estate, throughout the world. The fund is managed by experienced team with valuable local expertise.
Khun Somchai added that KTAM World Property Fund is interesting because the fund invests in Real Estate Investment Trusts or REITs, which is similar to the structure of property fund in Thailand. The fund not only offers a channel for investors to receive return features like rent payments and capital appreciation from high quality assets around the world, but it also helps reduce inflation risk and can be a valuable diversification tool to an existing portfolio of fixed income and equities. KT-PROPERTY is a time-saving alternative to gain exposure to real estate markets with more flexibility and less capital.
The fund manager will consider using currency derivatives for the purpose of hedging against foreign currency risk to Thai Baht. The fund may also pay dividend up to 4 times per year. This fund launch is an extension of series of successful sector funds managed by leading global fund houses, such as KTAM World Energy Fund, KTAM World Agriculture Fund, and KTAM World Metals and Mining Fund.
Khun Pavin Rodloytuk, Retail Banking Director, Citibank, N.A. said global stocks markets corrected lower by 20% from their 2011 peaks, questioning the sustainability of current corporate earnings and pricing in a global EPS contraction next year. History shows that after a 20% fall, global equities follow one of two paths. The first is an extended bear market, where stock prices fall on average a further 20%. The second path is stock prices rebound back and make gains of around 20% over the next twelve months.
Citi analysts believe a rebound in stocks prices is the most likely outcome from here. While the risks to global corporate profits are rising, we still believe the probability of a big downturn in earnings is currently low. Extended bear market declines occur almost exclusively around a corporate profit recession which EPS falls by 10% or more. GDP forecasts are in the process of coming down to levels consistent with sluggish growth, but not a global recession. This slowdown in economic growth is not enough to reverse global profits, in our view. Valuations for global equities look cheap with plenty of bad news already discounted and we believe there is an upside potential.
“Again this property fund offers investors yet another avenue of long-term growth outside the broader markets. However diversification is key, investors should always take a disciplined investment approach in building a diversified portfolio and realign their portfolio with changing goals and the economic environment. Dollar cost averaging may be a sensible approach for investors who are keen to pick up good bargains”, Khun Pavin concluded.