Oct. 11--MFC Asset Management expects to see inflows of at least 2 billion baht through the end of the year into its long-term equity and retirement mutual funds (LTFs and RMFs) thanks to the upward trend of the equity markets.

Supakorn Soontornkit, an MFC senior executive vice-president, said buying volume in the first five months of the year was weak, in line with the uncertainties over the global recession and domestic politics.

"This year has been the year of the unexpected," he said.

But the Stock Exchange of Thailand index, which fell by nearly half in 2008, has roared back strongly since March, and is up nearly 66 percent for the year to date.

Mr Supakorn said that despite the rally in the local market, investment in long-term equity funds remains relatively low, due in part to ongoing uncertainties and the fact that most investors will wait until the end of the year to invest in order to lock in their tax deductions.

According to the Association of Investment Management Companies, net assets held in 52 LTFs industry-wide stood at 68.6 billion baht as of Oct 2, compared with 42 billion at the end of 2008. Retirement mutual funds held 48.65 billion baht as of Oct 2 in 79 funds, compared with 37.49 billion in 80 funds at the end of 2008.

Mr Supakorn said MFC was bullish on the local market, and believed the index would trade between 792 and 858 points next year. The estimate is based on the assumption of 23 percent profit growth for listed companies, with a market valuation of 12-13 times earnings and a dividend yield of 4 percent.

The index, which closed on Friday at 746.87 points, should test 750 in the short term.

But he acknowledged that further gains may be difficult, considering the sharp rally already for the year to date. "Still, it is better to buy LTFs now rather than later, considering that market liquidity remains quite high. Any correction should not see the index fall below 700 points," Mr Supakorn said.

According to AIMC data, MFC held a market share of 1.01 percent at the end of September in LTFs, with assets of 688.83 million baht held in four funds, compared with 437.2 million or a share of 0.96 percent at the end of 2008. With a market share of 8.85 percent, it is the country's fourth largest asset manager overall, with 156.64 billion baht under management as of Sept 25.

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