June 2018

EDITORIAL: All smiles – for now

George_MittonAssisted by private banks, rich Thais have always found ways to move their money offshore. The rest of the nation – those with thousands, not billions to invest – used to buy funds from Thai banks that invested almost solely in Thai assets, largely bonds. Loosened regulations and changed consumer tastes have altered things. As our cover story explains, domestic fund companies have channelled about $35 billion into offshore “feeder” funds – up from $2 billion three years ago – to meet domestic investors’ desire for foreign exposure. For foreign asset managers, Thailand is now as tempting as mango and sticky rice. A booming population of 70 million has money to spare and a taste for offshore investment. But regulations may become less supportive in future. Bond funds, which currently enjoy a tax advantage compared with direct bond investment, may soon become subject to tax. Another problem is finding a distribution partner. The local banks are dominant distributors in Thailand and tend to sell their own funds. It is not easy for a newcomer to displace the market-leading foreign firms, such as JP Morgan Asset Management and Pimco, which provide many of the feeder funds for local banks’ existing offshore offerings. A move to an “open architecture”, in which local banks offer funds from many providers and not just their own branded products, would help foreign firms break into the Thai market. But it is not clear that banks have an incentive to change. Thailand is an incredibly tempting market, but accessing this rich nation of palm trees and pagodas – often referred to as “the Land of Smiles” – will take patience. George Mitton is Editor of Funds Global Asia ©2018 funds global asia

Executive Interviews

INTERVIEW: Operational challenges

Jun 09, 2018

Caroline Higgins of Northern Trust tells George Mitton about A-share inclusion, ETF Connect and why Cayman funds predominate in the region.

INTERVIEW: Making a name

Apr 18, 2018

Formed by a merger in 2012, Old Mutual Global Investors was little-known in Asia. Carol Wong, managing director for Asia-Pacific, is changing that. She talks to George Mitton.

Roundtables

SINGAPORE ROUNDTABLE: Optimism versus caution

Oct 23, 2018

The impact of financial technology, developments in Asian passporting and the promise of new markets in Thailand were among the topics discussed by our panel. Chaired by George Mitton in Singapore.

HONG KONG ROUNDTABLE: a long-term project

Jun 09, 2018

Our panel discussed robo-advisers, ETF Connect, and why the mutual recognition of funds (MRF) scheme will take time to develop. Chaired by George Mitton in Hong Kong.