GPF posts 7.8% return for first nine months

       The Government Pension Fund reported a 7.8% investment return for the first nine months of the year, thanks to recovering local and global financial markets.
       The country's largest pension fund posted a return of 24.742 billion baht to Sept 30, a sharp turnaround from losses of 16.997 billion, a 5.17% decline, in the first nine months of 2008.
       Net assets excluding reserves totalled 348.15 billion baht at the end of September. Annualised returns for the 12 months ending in September were 7.3%.
       Sathit Limpongpan, the GPF chairman and permanent secretary of the Finance Ministry, said three factors drove the turnaround in the fund's performance.
       First was the improving global economy, driven by expansionary fiscal policies. Second was the recovery of Thai exports, domestic consumption and private investment. Third was the turnaround in investor confidence and a rebound in the local capital market, including a nearly 60% gain for the Stock Exchange of Thailand index over the first three quarters of the year.
       The GPF, which manages retirement assets for 1.17 million civil servants,maintained 69.3% of assets in Thai debt instruments as of Sept 30, with another 5.6% held in foreign debt.
       Deputy secretary-general Variya Wongpreecha said Thai equities accounted for 8.9% of the fund's portfolio, with foreign equities of 8.6%, Thai property assets 4.1% and alternative investments 3.5%.
       "Our investment strategy for the rest of the year will remain conservative,"she said."We will continue to closely monitor trends in the money and capital markets, as well as risk factors related to economic recovery."
       "This includes the effect of fiscal stimulus programmes across the globe, oilprice and inflation trends and the possible tightening of monetary policy."
       She said that in anticipation of higher interest rates next year, the GPF's bond portfolio now had an average duration of 2.4 years, compared with three years at the end of 2008. Average duration over the first nine months was 2.6 years.
       Investors will typically shift their fixedincome investments to shorter terms if interest rates are likely to rise to mitigate their future risk.
       Mrs Variya said domestic political stability remained another major risk factor that could undermine investor confidence going forward.
       The GPF meanwhile is continuing its search for a new secretary-general.
       Mr Sathit said the GPF's board will ask a recruitment agency retained to assist in the search to submit two new names for consideration within 30 days.
       A previous list was rejected as the suggested candidates failed to meet GPF criteria. The process was complicated further when the chairman of the recruitment panel retired this past month,forcing the GPF to appoint a new panel.
       Mr Sathit said the GPF would place ethics high on its list of criteria for the new secretary-general.
       "The new secretary-general must not use the position to invest in the Stock Exchange of Thailand for personal gain.This is a new requirement that we have added for this appointment," he said.
       The GPF board fired Visit Tantisunthorn as secretary-general in June for violating fund regulations. A Public Sector Anti-Corruption Commission investigation accused Mr Visit of personally investing in stocks also related to shares invested in by the GPF, a practice known in the industry as front-running.