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Derivatives

Thai Asset Manager Mulls Derivatives Debut

Thai Farmers Asset Management, the asset management arm of Thai Farmers Bank with over THB130 billion (USD2.9 billion) under management, is looking to pull the trigger on its first derivative contract in the next few weeks, eyeing such products as asset-swaps and credit-linked notes. "We're looking at new possibilities to enhance returns," said Yingyong Nilasena, first senior v.p. of fixed income in Bangkok. The asset manager has conducted research into derivatives products over the last year and has been discussing with regulators which instruments it is permitted to use. The fixed-income fund is not permitted to invest outright in convertibles but Thailand's Securities and Exchange Commission allows such funds to invest in the debt portion if they strip out the equity component with derivatives.

Nilasena added that the firm is also planning to invest in credit-linked notes this year, likely within six months. He noted that it will look to invest in domestic names, with a total minimum investment size of USD50 million.

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