Thailand Financial News

Fitch Ratings-London/Bangkok/Singapore-27 December 2006: Fitch Ratings (Thailand) Limited has today affirmed National fund ratings of ‘AAA(tha)’/'V1+(tha)’ on TMB Treasury Money Fund. The ratings reflect the fund’s highest standards for credit quality, conservative investment policies and the safety of principal relative to other bond funds in Thailand in terms of portfolio assets, diversification, investment management and operational capabilities.

Portfolio monitoring reports are submitted to Fitch weekly. The objective of TMB Treasury Money Fund is to provide stable returns consistent with the preservation of capital and maintenance of high liquidity by investing exclusively in high-quality money market instruments. The fund’s investment policy is to maintain at least 90% of the fund’s net asset value (”NAV”) in treasury bills, government bonds, Bank of Thailand (”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 cannot invest in any corporate debt instruments. The fund maintains a weighted average maturity (”WAM”) of a maximum of 60 days, and only invests in instruments that have a maximum remaining maturity of 92 days. More than 90% of the fund’s total NAV has been invested in ‘AAA(tha)’ rated assets, while the rest of them has been invested in assets rated ‘A(tha)’ or ‘F1(tha)’ and above. Liquidity has been managed by employing a ladder strategy in which WAM has been maintained between 45 to 50 days. Risk of high redemption from large investors has been mitigated by the fund’s high liquidity and its close relationship and active communication with them to better forecast cash outflows and redemption requirement. Additionally, good compliance, monitoring procedures and a prudent investment decision-making process are also in place to ensure the fund satisfies required investment practices. As at 15 December 2006, the fund’s total net asset value was THB12.3bn; 88.7% of the portfolio was invested in Thai Treasury bills, 7.0% in BoT’s short-term bonds, 3.5% in bank savings with counterparties rated ‘A(tha)’ or higher, and the remainder in other assets such as accrued interest, receivable and payable from sales and purchases of investment. The fund’s WAM was 45 days. The largest unit holder accounted for 5.0% of the portfolio, and top five unit holders accounted for 19.1% of the portfolio. TMB Asset Management Limited was founded in October 1996 as a local asset management company. In December 2006, it ranked fourth in the mutual fund business with the asset under management of THB103bn, 78% of which are fixed income funds. The major shareholder is Thai Military Bank, Thailand’s fifth-largest bank, holding 51%. Fitch’s benchmark guidelines for ‘AAA(tha)’ and ‘AA(tha)’ rated money market funds require that the portfolios cannot hold any securities below “Tier 1″. Tier 1 securities consist of those rated ‘A(tha)’ or ‘F1(tha)’ and above, or those having ratings equivalent to Fitch’s rating of ‘A(tha)’ or ‘F1(tha)’ and above. 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.
CONTACT: Napachak Phasukavanich, +662 655 4758; Lertchai Korcharoenrattanakul, +662 655 4760; Vincent Milton, +662 655 4759 Media Relations: Ching-Yuen Lock, Singapore, Tel: +65 6238 7301.