Monday, December 09, 2019

Insurance firms brace for fluctuating stock and bond indices

Jul 18. 2019
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By The Nation

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Insurance companies believe that the Thai stock and bond indices will continue fluctuating after the second quarter due to external pressure.

Thai Life Insurance Corporation has decided to keep cash on hand for future investment opportunities, while Tokyo Marine Life Insurance (Thailand) Corporation has decided to invest in government bonds and private stock that offers returns of 4 per cent.

Weena Chaiyawan, a member of Thai Life Insurance Corporation’s board of directors and vice president of the managing board, said the stock and bond indices were still fluctuating violently due to the US-China trade war. Hence, she said, the company’s investment strategy for this year will not focus on new assets. Instead, its plan is to hold cash on hand received from selling stocks until the time is right for investments again. 

Once the interest rates drop, the stock market will improve and the total returns this year might be better than expected. 

As of May, there has been a drop in bond index investment from 88.3 per cent to 87.4 per cent, while common stock and unit trust funds have risen from 11.7 per cent to 12.6 per cent compared to the same period last year. Common stock investment from foreign exchange has risen 1 per cent due to fluctuating stock prices in foreign markets in the first four months of this year. 

Yuwadee Chalermsripinyorach, vice president Tokyo Marine Life Insurance’s financial board, said the investment market has shifted unpredictably, especially due to the ongoing trade war. The corporation aims to maintain total return index at 4 per cent until the end of the year 

Investment plans are focusing on the over 30-year government bonds and private sector stocks that promise a return of 4 per cent, with spending focused mostly on 90 per cent of government and corporate bonds and 5 per cent on common stock. 

The Office of Insurance Commission has reported investment of Bt3.3 trillion, showing a growth of 6.3 per cent, in the first quarter. Of this, 80 per cent of the investments focused on bonds and savings, while stock investment stood at 10 per cent. The other investments are funds, assets, lottery and bank loans

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