Bloomberg News

Baht Falls After Funds Cut Holdings of Thai Stocks; Bonds Steady

May 30, 2012

Thailand’s baht fell to a four-month low after international investors cut holdings of the nation’s equities on concern Europe’s debt crisis will hurt global growth. Government bonds were steady.

Global funds sold $32 million more Thai shares than they bought in the first two days of this week, taking net sales this month to $505 million, exchange data show. The baht has declined 3.4 percent in May, headed for its biggest drop since September, as Spain’s 10-year bond yields approached the 7 percent threshold that heralded bailouts in Greece, Ireland and Portugal.

“Investors are worried about Spain now, which is reducing risk appetite and weighing on regional currencies,” said Amonthep Chawla, a Bangkok-based analyst at Kasikornbank Pcl.

The baht slid 0.4 percent to 31.84 per dollar as of 3:18 p.m. in Bangkok and touched 31.89 earlier, the weakest level since Jan. 17, according to data compiled by Bloomberg. One- month implied volatility, a measure of exchange-rate swings used to price options, was little changed at 4.52 percent.

Thailand’s current-account deficit widened to $1.98 billion in April from $1.52 billion in March, according to the median estimate of economists in a Bloomberg News survey before a central bank report tomorrow.

The yield on the government’s 3.25 percent bonds due June 2017 was little changed at 3.62 percent, according to data compiled by Bloomberg.

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 in Hong Kong at shendry@bloomberg.net. NI THAI NI FRX NI BON NI EM NI GBN NI ASIAX NI ASIA NI FXMARKETS NI FX


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