Bangkok--18 Nov--Fitch Ratings
Fitch Ratings (Thailand) Limited has today affirmed TMB Treasury Money Fund’s (TMBTM or “the fund”) National Fund Credit Ratings at ‘AAA(tha)’, and its National Fund Volatility Rating at ‘V1+(tha)’.
Money market funds in this rating category meet the highest standards for credit quality, conservative investment policies and safety of principal, relative to other bond funds in Thailand. The ratings affirmations are based on the credit quality, diversification and liquidity of the fund’s assets as well as the capabilities of TMB Asset Management Company Limited (TMBAM) in managing the fund. During the past year TMBAM has been able to manage TMBTM in line with the fund’s investment guidelines. The credit quality of the fund has been strong, with the majority of its assets invested in treasury bills and bonds issued by government and the Bank of Thailand (BoT). The market risk of the fund has remained low given its high proportion of investment in short-term liquid assets. As at 30 October 2009 TMBTM had approximately THB27.1bn in net asset value (NAV) with ‘AAA(tha)’-rated assets accounted for 97.7% of the portfolio. Portfolio’s weighted average maturity (WAM) was 39 days. The five largest unit holders accounted for approximately 13.7% of the portfolio.
TMBTM’s objective is to provide stable returns consistent with the preservation of capital and maintain a high level of liquidity by investing exclusively in high-quality money market instruments. The fund’s investment policy is to maintain at least 85% of its NAV in treasury bills, government bonds, BoT bonds and other debt instruments guaranteed by the government or the BoT. The remainder is invested in bank deposits for liquidity support purposes. The fund has to invest exclusively in securities with at least Fitch’s Short-term rating of ‘F1(tha)’, or its equivalent. In addition, at least 50% of the fund’s NAV must be invested in securities with Fitch’s Short-term rating of ‘F1+(tha)’ or its equivalent. The fund sets a WAM at a maximum of 60 days, and only invests in instruments that have a maximum remaining maturity of 95 days. Cash reserve is set at a range of 3%-5% of NAV, with a minimum of THB200m.
TMBAM was founded in 1996 to operate a mutual fund business. The major shareholder is TMB Bank (‘A+(tha)’/Stable Outlook/'F1(tha)’), Thailand’s sixth-largest commercial bank, with a 75% stake. As at end-September 2009, TMBAM ranked fifth in terms of market share in the mutual fund business with 64 funds under its management representing THB126.9bn worth of assets under management. Fitch views that TMBAM has adequate compliance, monitoring, investment decision-making processes and fund support in place to ensure consistent performance in required investment practices.
Fitch’s benchmark guidelines for ‘AAA(tha)’ and ‘AA(tha)’-rated money market funds state that the portfolios not hold any securities below “Tier 1”. Tier 1 securities consist of those rated ‘A(tha)’ or ‘F1(tha)’ and above, or its rating equivalent. The ‘V1+(tha)’ rating is assigned only to money market funds that should not experience loss of principal value even in adverse interest rate environments.
Disclosure: TISCO Asset Management Company Limited and Kasikorn Asset Management Company Limited each hold 10% of the shares in Fitch Ratings (Thailand) Limited. No shareholder, other than Fitch Ratings Limited of the UK, is involved in the day-to-day operation of, or credit rating reviews undertaken by, Fitch Ratings (Thailand) Limited.
Contacts: Pramook Malasitt, Orawan Karoonkornsakul, Vincent Milton, Bangkok, +662 655 4755.
Note to Editors: Fitch’s National fund credit ratings are assigned on a scale of ‘AAA(tha)’ to ‘D(tha)’, on a rating scale similar to that of Fitch’s Long-term National credit ratings. Meanwhile, the volatility ratings are assigned on a scale of ‘V1+(tha)’ (least volatile) through ‘V10(tha)’ (most volatile). The ratings assigned to the fund are National ratings, and as such, they provide a relative measure of creditworthiness and total return stability only in comparison with other funds in Thailand. They are therefore not internationally comparable.
Additional information is available at www.fitchratings.com