Bloomberg News

Thai Bond Yields Hold at Two-Month Low on Inflows; Baht Steady

October 24, 2012

The yield on Thailand’s five-year government bonds held at a two-month low after foreign funds pumped money into the nation’s debt. The baht was little changed.

Overseas investors bought $338 million more Thai sovereign notes than they sold this week through yesterday, according to data from the Thai Bond Market Association. The Federal Reserve said yesterday it will maintain stimulus after last month committing to a third round of debt purchases, a policy that boosts the supply of dollars which can be invested in emerging- market assets. The Bank of Japan also expanded its asset-buying program in September.

“There’s plenty of liquidity provided by central banks in advanced nations,” said Tohru Nishihama, an economist at Dai- ichi Life Research Institute Inc. in Tokyo. “Fiscal problems for developed nations remain a concern and therefore, investors are willing to put more money into emerging-market bonds than stocks.”

The yield on the 3.25 percent securities due June 2017 was steady at 3.09 percent, the lowest level since Aug. 13, according to data compiled by Bloomberg. The yield has dropped 22 basis points, or 0.22 percentage point, this month.

The baht traded at 30.71 per dollar, compared with 30.72 yesterday, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, held at 4.27 percent.

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

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net


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