Bloomberg News

Thai 10-Year Bond Yield Falls to Two-Week Low on Capital Inflows

November 26, 2012

Thailand’s government bonds rose, sending the 10-year yield to the lowest level in more than two weeks, after global investors added to holdings amid optimism the local economy is improving. The baht weakened.

Imports climbed 22 percent in October, beating the median forecast in a Bloomberg survey for a 9.6 percent gain, official data showed yesterday. Overseas purchases fell 7.7 percent in September. Foreign funds purchased $655 million more local debt than they sold this month through yesterday, according to data from the Thai Bond Market Association.

“A big increase in imports indicates the strong domestic demand in Thailand,” said Tohru Nishihama, an economist at Dai- ichi Life Research Institute Inc. in Tokyo. “Funds continue to flow into the Southeast Asia region, including Thailand and especially to the bond markets.”

The yield on the 3.65 percent bonds due December 2021 fell one basis point, or 0.01 percentage point, to 3.38 percent as of 8:45 a.m. in Bangkok, the lowest level since Nov. 8, according to data compiled by Bloomberg.

The baht slipped 0.1 percent to 30.70 per dollar, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected moves in exchange rates used to price options, held steady at 4.3 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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