Bloomberg News

Thai Baht, Bonds Gain as Foreign Investors Boost Asset Holdings

October 26, 2011

Oct. 26 (Bloomberg) -- Thailand’s baht rose for a second day and government bonds advanced after international investors boosted holdings of the nation’s assets.

Global investors bought $194 million more Thai equities and $114 million more government debt than they sold yesterday, according to data from the stock exchange and the Thai Bond Market Association. Gains in the baht may be limited on concern the nation’s worst floods in five decades will hurt economic growth as a deluge of water approaches the capital, according to Bangkok Bank Pcl.

“We saw quite big fund inflows to our stock and bond markets,” said Norawit Suparinayok, a foreign-exchange trader at Bangkok Bank. “In the medium-term, the baht has a chance to get stronger. The market may remain thin as some companies reduced transactions and some have closed operations as their factories were flooded.”

The baht added 0.2 percent to 30.79 per dollar as of 4:27 p.m. in Bangkok, according to data compiled by Bloomberg. The currency has advanced 0.7 percent this week.

Thailand’s economy will grow less than 3 percent this year because of the impact of flooding, central bank Governor Prasarn Trairatvorakul said yesterday. The disaster will cut growth by about one percentage point this year, he said.

The yield on the 5.4 percent bonds due July 2016 dropped eight basis points, or 0.08 percentage point, to 3.18 percent, according to data compiled by Bloomberg.

--With assistance from Supunnabul Suwannakij in Bangkok. Editor: Sandy Hendry, Andrew Janes

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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