BANGKOK (Reuters) - Thailand will increase the size of a state mutual fund by between 100 billion baht and 150 billion baht ($2.8 billion-$4.3 billion) to invest in local stocks, officials said on Tuesday, in a bid to support Asia's worst performing market this year.
The Vayupak Mutual Fund will offer new units to the public by September, Finance Minister Pichai Chunhavajira told reporters. "The project should restore confidence in the capital market", Pichai said, adding the government was also considering other support measures.
Thailand's main stock index has fallen 8.4% so far this year, with foreign investors selling 120 billion baht ($3.4 billion) worth of shares. The market slumped 15% last year, dragged by a sluggish economy, weak currency and political uncertainty.
Lavaron Sangsnit, the finance ministry's permanent secretary, said the new fund units would have a maturity of 10 years and would be registered on the exchange. Other details will be announced later, he added.
The fund will mainly invest in securities listed on the Thai stock market, focusing on companies with good returns, long-term stability and good corporate governance, Lavaron said.
The Vayupak fund currently has an asset value of about 322 billion baht and its top holdings include Thailand's largest energy firm, PTT, financial group SCBX and Krung Thai Bank, fund data showed.
($1 = 35.17 baht)