Bloomberg News

Thai Baht, Bonds Rise as Overseas Investors Buy Nation’s Assets

October 12, 2011

Oct. 12 (Bloomberg) -- Thailand’s baht strengthened, reversing earlier losses, and government bonds climbed after global funds added holdings of the nation’s assets this week.

International investors purchased $42 million more Thai equities and $173 million more government debt than they sold in the first two days of this week, according to data from the stock exchange and the Thai Bond Market Association. The currency earlier declined after the finance ministry this week cut its growth forecast for Southeast Asia’s second-biggest economy to 3.7 percent this year due to the nation’s worst floods in more than half a century. That compares with a range of 3.8 percent to 4.3 percent it had forecast last month.

“The sell-offs of Asia’s emerging-market assets seem to be stalling now although the financial markets remain quite volatile due to the lingering debt crisis in Europe,” said Satoshi Ushijima, vice president of the treasury division at Mizuho Corporate Bank Ltd. in Bangkok. “The baht market is very thin as companies are sidelined due to the flooding in the country.”

The baht rose 0.4 percent to 30.85 per dollar as of 4:01 p.m. in Bangkok after falling as much as 0.3 percent earlier, according to data compiled by Bloomberg. The currency may trade between 30.80 and 31.20 this week, Ushijima said.

The floods, which have forced companies including Honda Motor Co., Canon Inc. and Nikon Corp. to suspend production, have damaged 762 factories in 28 provinces, deputy government spokesman Chalitrat Chandrubeksa said yesterday.

The yield on the government’s 5.25 percent bonds due May 2014 slumped 12 basis points, or 0.12 percentage point, to 3.32 percent, according to data compiled by Bloomberg.

--With assistance from Suttinee Yuvejwattana in Bangkok. Editors:

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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