Bonds in Thailand

[ESCAPIS]

Are government bonds available to expatriates?

More important are they trustworthy?

Sent from an Apple gadget.

[jbaldwin]

Are government bonds available to expatriates?

More important are they trustworthy?

Sent from an Apple gadget.

Yes. Can buy purchased by foreigners whether resident or not.

Not sure what you mean by trustworthy.....but Thai Government Bond are rated investment grade by all major credit agencies. The average rating is BBB, which is similar to Russia, Italy or Spain.

[Patronus]

How could you think that a Thai government was anything other than 100% trustworthy ??

[SantiSuk]

Default risk probably negligible when compared to the currency risk if you hail from a stable currency area, like say Germany or the US. If you are from a politically stable but economically strapped country like mine (UK) then go right ahead. Much more likely you would gain on the currency. If you are from a politically unstable and economically strapped country, what took you so long to get to this point?

[koo]

Just took a short look and seems that the Thai bonds are yielding about 4% annual interest. The country may be rated as BBB, but I guess it would be a safer investment than the "AAA rated USA" which yields only 0,4% annually and is pondering whether or not it is bankrupt or not.

The rating agencies are the biggest joke in the world!

[chiangmaibruce]

Yes they are generally available to foreigners, but don't be surprised if you are told otherwise. The following is a quote from my book 'Your Investment Guide to Thailand':

"There is considerable confusion surrounding the issue of the eligibility of foreigners to make various forms of debt-related investment in Thailand. This applies, in particular, to establishing savings or term-deposit bank accounts, and to buying Thai bonds. This confusion appears widespread, and is not limited to junior customer service staff. It is also clear that the standard or "default" response by many Thai staff when asked about foreigners' ability to undertake certain investment activities is "No, cannot."

Reports in online expat forums suggest that potential investors are being advised (usually by bank staff) that they cannot buy bonds. The local media also plays a role in disseminating misinformation. To give an example, several newspaper articles asserted that the "Strong Thailand" savings bonds released in July 2009 were only available to Thais. I sought to clarify this issue by contacting various organizations. Of those that responded, the Bank of Thailand, Thai Bond Management Association, the Asian Development Bank, and Siam Commercial Bank all confirmed that there are no general restrictions on foreigners investing in the Thai bond market. Others, including a staff member at the Ministry of Finance, provided conflicting information. Obtaining a definitive answer necessitated locating and translating original documentation from the website of the Thai Public Debt Management Office. Based on this information, it appears that there are a small number of specific bond issues (or portions thereof) that are reserved for Thai citizens. This is why there were discrepancies regarding the "Strong Thailand" savings bond-a small portion of its bond issues were reserved for Thais, but other issues were available for purchase by foreigners.

It should be noted that any foreigner wishing to buy Thai bonds is required to have Thailand resident status and/or a Thai address and savings deposit account in order to make a purchase."

Edited October 16, 2013 by chiangmaibruce