INSURERS BACK GOVERNMENT FINANCE BONDS

The Thai Life Assurance Association has backed the Thai Finance Ministry’s plan to issue between THB10bn and THB20bn ($321m to $621m) in “megaproject” bonds. Sara Lansam, president of the Association, said that “the life insurance industry has investment assets worth more than THB600bn. We are willing to participate in the scheme if the duration of the proposed insurance bonds and the risk match the nature of the life insurance business, which promise long-term savings for people”. Mr Sara said that most assurers’ investment assets were currently in fixed-income instruments. He added that it was possible that life assurers would invest more in equities, “especially liquid stocks with good fundamentals that offer high dividends”, nothing that “the most important thing is that life insurers are looking for investment assets that match their long-term liabilities”. He said that it would be excellent if the government could come up with bonds of a 20-year to 30-year maturity. Pongpanu Svetarundra, director-general of the Public Debt Management office, said this week that Thailand could issue 30-year bonds to finance the mega-projects, because the country’s public debt was still low, at 38% of Gross Domestic Product.