On short term cash management.
Here is a recent member article excerpt, today released to all registered users, where I give views on how one can increase returns on short term cash held -as an alternative to bank savings accounts. During these SET relative high valued stock times.
You can go to most Bangkok Bank branches and register there so you can hold short term high quality paper for days or months, currently around 2.4% yield (check/update). There are usually 2-3 few choices, yet very similar. They do not carry interest rate risk because they are very short term to maturity. One can buy and sell them through most ATM machines, with a next day after 12 PM, cash settlement into your savings account.
This way one can increase tax free yield. Say around 2.3%, vs. ½ % paid in your Thai bank savings account. Of course this only makes sense if you place at very least 100,000 Baht at a time.
These short term funds offered by different portfolios names and likely by several major banks in Thailand are invested in high quality (short term due), corporate’s (rated A or better), commercial paper, bank or government bills and notes as so have ultra low risk on top of very short maturity.
For Bangkok Bank, the country’s biggest, they are called “Bualuang Treasury Open end Fund”, or “Bualuang Thanatavee Open-end Fund” or “Bualuang Fixed Income Fund”.
Unlike dividends or interest received from banks, there is no tax withheld at the source as they are mutual funds, i.e. tax withholding exempt so you get additionally the 10 to 15% on dividend/interest paid withholding tax!
Most brokers also pay interest on the cash they hold for you, if any, but anyway it will be well less then the above short term paper described.
Most individual investors tie a dedicated Thai bank savings book to the in-out activity of buy/sell of shares, besides receipt of dividends. Hence, no money is held by the broker, only ones' shares but those are held by the TSD, a quasi government organization which holds all shares in trust.
Here are some comments to help digest some good stock gains on hand presently and into the near future while at the same time sharing some views on older choices and bringing new ones to registered members attention.
Best Regards,
Paul A. Renaud.
