As foreign investors exit bond market, Thai government faces fund-raising challenge

[snoop1130]

 

The Thai government may find itself bearing a higher cost of borrowing due to unfavorable conditions in the local debt market.

 

More 34.3 billion baht of capital has flown out of the Thai bond market in the first quarter this year as foreign investors sold government bonds. Outstanding government bonds held by foreign investors dropped to 900 billion baht, just 5.3 per cent of the total outstanding 17 trillion baht, according to the Thai Bond Market Association (ThaiBMA).

 

The wide gap between local and US rates is one of the factors making Thai government bonds less appealing. The Bank of Thailand has set the policy rate at 2.5 per cent against the US’s 5.25-5.5 per cent. The temptation of far higher returns in US government bonds has led to foreign investors leaving the Thai bond market. For example, a 2-year Thai government bond yield is 2.15 per cent, while the yield on US government bonds is more than double at 4.59 per cent at the end of the first quarter.

 

Full story: Thai PBS 2024-04-11

 

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[Mike Lister]

Rate differentials is only one aspect, foreigners don't want to be holding THB when the government gives away 500 bill to the people because the value of THB will fall.

[SingAPorn]

And if all the immigration harassment continues, it's not only the bond investors who will leave but also the foreign retiree home owners who bring in lots of money in Thailand.

Edited April 11 by SingAPorn

[hotchilli]

13 hours ago, snoop1130 said:

Thai government bond yield is 2.15 per cent, while the yield on US government bonds is more than double at 4.59 per cent at the end of the first quarter.

Thailand not so attractive at the moment.. 

[Maitdjai]

Producing photocopies, as a major economial factor, monpolism, corrupt and inefficient beurocracy, the repeatedly announcing of big plans (dreams), often not even halfway achieved.

"Destroying" the tourism sector, and thelr (natural) assets, by a relentless concrete mania, and the incapability to plan 3 month ahead, are other indicators for investors, to think twice.

[brianthainess]

Thailand is Broke, more begging is needed urgently.

[john donson]

how come you get to little interest from banks/government bonds, compared to 5-6% in usa, uk, australia

 

thai bank better ? safer ?  an imported car is tax 308%

[Mike Lister]

4 minutes ago, john donson said:

how come you get to little interest from banks/government bonds, compared to 5-6% in usa, uk, australia

 

thai bank better ? safer ?  an imported car is tax 308%

Bond yields are directly linked to current and future interest rates, US interest rates are twice that of Thai rates.