US RETIREMENT FUND: Thailand back in Calpers’ good book

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Consultant revises list of emerging markets for investment

A consultant to the California Public Employees’ Retirement System (Calpers) said Thailand was among four emerging nations eligible to join the biggest US pension fund’s list of emerging markets for investment, a fund spokesman said on Tuesday.

Brad Pacheco, a spokesman for the US$177 billion (Bt6.812 trillion) Calpers, said Thailand, Argentina, Sri Lanka and Turkey were among 19 countries that Wilshire Associates says have met Calpers’ emerging-market investment requirements for this year.

The four failed to receive passing grades from Wilshire Associates last year, said Pacheco. He said that Argentina and Turkey improved their scores enough to be included in Calpers’ list of permissible emerging markets for investment after the fund last year granted the two countries one-year “cure periods” to raise their scores.

The other 15 countries to receive passing grades from Wilshire Associates were Brazil, Chile, the Czech Republic, Hungary, India, Israel, Jordan, Malaysia, Mexico, Peru, the Philippines, Poland, South Africa, South Korea and Taiwan.

The announcement of Calpers’ decision to invest in Thailand should add further to the buoyant sentiment to the Thai stock market, which is likely to stage a stronger showing this year. Last year the Thai market was one of the region’s worst performers, falling by about 13 per cent compared to a gain of 117 per cent in 2003.

This year, analysts estimated that the Thai market should stage a return of 10 to 15 per cent at least due to strong earnings growth and a rebound from last year’s sluggish performance.

Finance Minister Somkid Jatusripitak welcomed Calpers’ announcement, saying it reflects a better understanding about the Thai market by foreign investors.

“It’s a good thing [that they have made the announcement]. But I have not received any details yet. This news should add to the foreign investors’ better understanding about Thailand, particularly after the tsunami disaster,” Somkid said.

Calpers downsized its portfolio investment in Thailand before withdrawing completely in early 2002, citing its concern over human rights and corporate governance.

In spite of efforts by Thai officials’ to woo Calpers’ return, the pension fund did not respond after deciding to invest only in emerging markets according to its strict investment standard, which takes into account human rights and other conditions.

Wilshire Associates is an adviser for Calpers, helping it make decisions on investments in emerging markets.

Published on February 03, 2005

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