Bloomberg News

Baht Touches 1-Week High After Global Funds Boost Stock Holdings

October 27, 2011

Oct. 27 (Bloomberg) -- Thailand’s baht advanced to its strongest level in a week as international investors boosted holdings of the nation’s equities.

Global investors bought $228 million more Thai equities than they sold this week through yesterday, taking this month’s net purchases to $804 million, according to exchange data. They were net sellers of shares in August and September. The baht’s gains may be limited on concern the nation’s worst floods in five decades will hurt economic growth, according to Mizuho Corporate Bank Ltd.

“The baht got some support from fund inflows as investors bought back Thai shares after selling quite a lot through September,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank in Tokyo. “There’s concern about the impact from the floods and trade surplus may decrease in the future.”

The baht gained 0.4 percent to 30.67 per dollar as of 3:19 p.m. in Bangkok, according to data compiled by Bloomberg. The currency reached 30.63 earlier, its strongest level since Oct. 19.

Government bonds rose after the central bank slashed its forecast for gross domestic product. The floods will cut economic growth by about 1 percentage point this year to less than 3 percent, Bank of Thailand Governor Prasarn Trairatvorakul said on Oct. 25.

The yield on the 5.25 percent notes due May 2014 dropped four basis points, or 0.04 percentage point, to 3.2 percent, according to data compiled by Bloomberg.

--With assistance from Supunnabul Suwannakij in Bangkok. Editors: Ven Ram, Simon Harvey

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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