A source from the Thai Ministry of Finance (MOF) has disclosed that the Thai ESG 2 Fund is set to be proposed to the Cabinet for approval, which could be as early as this week (March 10-14, 2025) or by the next Cabinet meeting the following week.
This proposal results from discussions between the MOF and the Securities and Exchange Commission (SEC), with the SEC expected to ease conditions related to transferring investments from Long-Term Equity Funds (LTF) to the Thai ESG 2 Fund.
Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO) and Vice President of the Thai Listed Companies Association, expressed that the government’s idea to offer tax deductions of up to THB 500,000 per person for investments in the Thai ESG 2 Fund, which will accept funds transferred from LTFs, should cover the remaining of approximately THB 180 billion in LTFs. This figure is based on calculations from outstanding values per investor.
Once implemented, this measure is expected to reduce the LTF sell-off pressure. Meanwhile, additional buying from the Thai ESG Fund and other sources should stabilize the Thai stock market.
The key issue now is to halt the sale of LTFs to prevent further declines in the market, Kobsak stated, expressing confidence that the Thai ESG 2 Fund will be approved and announced via the Royal Gazette shortly, similar to the Thai ESG Fund, which was implemented within a month.
Kobsak further mentioned that FETCO plans to meet with Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, soon to discuss strategies for sustainable growth in the Thai capital market.
He noted that the government’s transparency regarding the Thai ESG 2 Fund is a positive step and urged the MOF to develop a long-term plan to promote the Thai stock market.
Confidence remains that if the government enacts both short-term and long-term measures simultaneously, the Thai stock market can grow sustainably, Kobsak concluded.
