Bangkok--22 Feb--Fitch Ratings
Fitch Ratings (Thailand) Limited says in a newly published special report that the liquidity and principal preservation are the key rating considerations in rating money market funds (MMFs) in the Thai market.
"In assessing Thai MMFs, Fitch follows global MMF rating criteria with adjustments based on the local context. Key rating considerations include a review of the fund's investment policy and portfolio holding regarding credit, market, and liquidity risks as well as the capabilities of its asset manager and sponsor. All Fitch-rated MMFs are subject to ongoing surveillance," says Orawan Karoonkornsakul, Senior Director in Fitch Thailand's Fund and Asset Manager Ratings group.
The report also discusses the money market fund industry in Thailand and compares the Thai regulatory framework with Fitch's investment criteria. While Fitch's criteria for MMFs differ from those of the Securities and Exchange Commission Thailand, both parties share the same stance that a MMF's main investment objectives should be low-risk and high liquidity.
"Regardless of its legal registration status or market positioning, a fund may not be rated as an MMF by Fitch if its investment guidelines are not consistent with the agency's criteria," adds Ms Karoonkornsakul.
The report entitled 'Assessing Thai Money Market Funds - Principal Preservation and High Liquidity are Key' is available at www.fitchratings.com, or by clicking on the link above.