TMBAM initiates rebates for 4 cancelled funds

TMBAM Eastspring began allocating the first rebate of investors’ money yesterday after terminating four fixedincome funds last week, with hopes the process will be completed within 90 days.

The rebate is divided by the proportion of maturing debt securities or the liquidity the company has during that day, said Boonchai Kiattanavith, acting managing director of TMBAM Eastspring.

The return ratio will be divided according to the ratio of debt securities in each fund, said Mr Boonchai.

For example, TMB ThanaPlus Fund (TMBTHANAPLUS) invested in a lot of short-term debt securities, while the remaining three funds focused on investing in medium to long-term debt securities.

Yesterday’s maximum rate of rebate was not more than 10% of asset value.

“We made a schedule to pay back the minimum amount to investors for each fund, ranging from two weeks to three months of payments,” he said.

“This schedule can be found on the TMBAM Eastspring website.”

The company will assess the ability to allocate the rebate every two weeks, said Mr Boonchai, adding investors should expect to receive rebates of no more than 20% of asset value after a one-month period.

The company will gradually sell off bond holdings once the bond market settles, he said.

The rebate process must be completed within 90 days, but the company may ask the Securities and Exchange Commission for an extension if the debt securities assets cannot be sold in time, said Mr Boonchai.

Four fixed-income funds managed by TMBAM Eastspring have ceased all transactions and operations amid heavy redemption that nearly sparked a liquidity crunch for Thailand’s mutual fund industry.

Of the four fixed-income funds, the two funds in the spotlight are TMB Ultra-Short Bond Fund (TMBUSB) and TMB Aggregate Bond Fund (TMBABF).

The two other funds are TMBTHANAPLUS and TMB Bond Fund (TMBBF).

Units of TMBUSB and TMBABF, which invest heavily in foreign debt securities, were among those in the sell-off spree.

Redemption of investment units for both funds occurred two weeks ago, with more than half of total investment units in each fund cashed out in panic-selling.

The move reached a fever pitch when a sell-off was seen in the fixed-income funds of other companies as well.

The madness settled after the central bank agreed to a special facility to provide liquidity for mutual funds through commercial banks.

‘‘ We made a schedule to pay back the minimum amount to investors for each fund. BOONCHAI KIATTANAVITH Acting managing director, TMBAM Eastspring