Fitch sees growing importance of Thai money market fund ratings

 At ‘The Value of Fund and Asset Manager Ratings’ conference in Bangkok, Orawan Karoonkornsakul, Fitch’s senior director in Fund and Asset Manager Ratings/Structured Finance in Thailand, said that Thailand’s MMF industry accounted for almost one-fifth of the fixed-income mutual fund market at end-2011, highlighting the growing importance of MMF ratings to market participants.
 "In assessing MMFs, Fitch focuses its analysis on the capability of the fund to preserve principal and provide liquidity to investors. All Fitch-rated MMFs are subject to ongoing surveillance,” she said.
 Fitch insisted that under standardised mesure, a fund may not be rated as an MMF by Fitch if its investment guidelines are not consistent with the agency’s criteria.
 Key rating considerations in assessing MMFs include a review of the fund’s investment policy and portfolio holding regarding credit, market, and liquidity risks as well as the capabilities of its asset manager and sponsor. Fitch differentiates MMF ratings from ratings on higher-risk bond funds by adding the ‘mmf’ suffix to MMF ratings.
 The conference included a panel discussion on “Characteristics of Good Asset Managers” with Charuphan Intararoong, director of Monitoring and Inspection Department of the Securities and Exchange Commission, Triphon Phumiwasana, director of Foreign Investment and External Fund Management of Government Pension Fund (Thailand) and Orawan. The discussion highlighted key factors in evaluating asset management companies from the perspective of a regulator, an investor and a rating agency. Panelists emphasised staffing, governance, investment discipline and operational efficiency as critical factors, which are integral to Fitch’s criteria for rating asset management organisations.
 The conference was attended by over 50 senior executives and officials across the government and asset management companies, institutional investors, as well as members of the media.