OREANDA-NEWS. Fitch Ratings (Thailand) Limited held a briefing in Bangkok today for more than 50 executives, including corporate treasurers, institutional investors and asset managers, where it presented its criteria for rating money market funds (MMFs), bond funds and asset managers, as well as provided an overview of global and domestic fixed-income markets.

Mr. Tak Bunnag, First Executive Vice President and Head of Global Markets at Bank of Ayudhya, was the guest speaker at Fitch's event. He discussed the market outlook for 2016, giving his view on currencies, interest rates and volatility.

Mr. Vincent Milton, Managing Director of Fitch Ratings (Thailand), said, "Fitch serves investors by providing longer-term risk indicators that could impact a fixed-income fund's performance, as well as helping to improve transparency and accountability of asset managers. The lowering of the amount per depositor per institution covered by bank deposit insurance to THB1m in August 2016 and higher national income levels should lead to continued growth of the asset management industry in the medium term. Over 60 asset managers globally and three of the leading Thai asset managers or their funds - SCB Asset Management, Krungsri Asset Management and TMB Asset Management - are rated by Fitch."

Mr. Lertchai Kochareonrattanakul, Senior Director of Corporates/Funds, said that U.S. corporate treasurers actively use MMFs for liquidity management. According to the U.K.'s Association of Corporate Treasurers, more than 75% of U.S. companies have used MMFs to manage liquidity. In Thailand, MMFs currently make up only 10% of total assets under management (AUM), with bond funds accounting for about 45% of AUM.

Fitch's approach to analysing MMFs addresses principal preservation and investor liquidity by focusing on credit, market and liquidity risks. In assessing these three factors, Fitch analyses a fund's credit quality and diversification; interest-rate and credit-spread risks; portfolio liquidity and investor redemption levels. For bond funds, the agency analyses credit and volatility risks, assigning each fund a Credit Rating and a Volatility Rating. More broadly, Fitch assesses asset managers by reviewing five key factors - company, control, investment, operations and technology - to determine operational risk and investment standards.