BANGKOK • Thailand’s Government Pension Fund (GPF) plans to boost its overseas investments, especially in the technology sector, as domestic equities offer limited options for the 1 trillion baht (RM133 billion) asset manager.

“Disruptions in the technology and digital industries will still be the major driving force in the post-pandemic world,” Srikanya Yathip, secretary general of GPF, said in an interview at her office last Thursday. “Those sectors should deliver very good returns, which are easier to find in international markets than in Thailand.”

South-East Asia’s second-biggest economy and other regional peers have lagged the global equity rally due to their underexposure to the tech industry, including online gaming, automation and e-commerce.

The 50 largest stocks in the 603-member SET Index account for 71% of total market value. Information and communication techno- logy companies account for about a tenth of Thailand’s market capitalisation, data compiled by Bloomberg show, compared to industry weightings of about a third for the S&P 500 Index and about a fourth of the MSCI Asia Pacific Index.

The gauge of Thai phone operators, game developers and other technology companies has dropped 13% this year compared to a 9.7% gain in the MSCI Asia Information Technology Index.

Srikanya’s plan to step up international investments is a continuation of the fund’s recent strategy. About 9.5% of total assets are now in foreign equities, almost double the 5.1% at the end of March, she said, without identifying specific holdings. The proportion of domestic shares is little changed this year at 4%, she said.

The fund has “positive” gains from its investments so far this year, which faced very “tough” investment climate, Srikanya said, without elaborating. It posted a return of 5.7% in 2019, compared to an average annual gain of 4.3% in the previous five years, according to its website.

Still, the investment team faces a challenge to generate higher returns because about 78% of GPF holdings are in local and overseas bonds, on which yields have slumped, she added. — Bloomberg