Outflows could weaken baht to 34 per greenback next quarter: KBank
SUCHEERA PINIJPARAKARN
THE NATION

BANGKOK: -- THE BAHT COULD depreciate to 34 against the US dollar next quarter because funds are moving out of emerging markets to developed economies, according to Kasikornbank.

"The baht's movement in 2014 is hard to predict, but when fund flows are changing from emerging markets to developed markets, one thing that will happen is that the cost of US dollar funds will increase," Thiti Tantikulanan, head of capital markets business at KBank, said yesterday.

Excluding the Indonesian rupiah and the Indian rupee, the baht and yen depreciated the most at 2.8 per cent a month ago, followed by the ringgit at 2.3 per cent and the Singapore dollar at 1.3 per cent.

The baht was driven to 33 by the uncertainty in the home market, especially the political unrest.

That was faster than the market expected. KBank had expected the baht to hit 33 by the end of next year.

The baht was at 34 in September 2009. Bank of Thailand Deputy Governor Pongpen Ruengvirayudh said the baht-dollar exchange rate next month was expected to be volatile because of the political instability. Foreign-capital inflows are tapering off as investors wait on the sidelines to see what develops politically. The baht is still weakening from the continuing outflows, but less capital is leaving, partly because of the New Year season.

The baht's movement next year will dependent mainly on the domestic situation, Pongpen said.

The unclear political picture must be closely tracked because this will greatly influence where the baht is heading next month, she added.

However, Thiti of KBank said liquidity in the local market was not a problem despite the capital outflows, as foreign holdings in Thai bonds have stayed steady at Bt700 billion, even thought the 10-year yield here was not as attractive as the corresponding US yield. Foreign holdings in Thai bonds surged to Bt700 billion this year from Bt70 billion in early 2011.

"Thailand in one of the investment-index markets for foreign investors. They might prefer their investment meeting the benchmark rather than getting an absolute return, while Thai bond holdings by foreigners are low at only 11-12 per cent," he said.

The market should closely track the economic figures of the United States and that country's tapering of its quantitative easing programme in the next two months. If US economic figures improve, its Federal Reserve might taper its bond buying more than it said it would, and the tapering might happen quicker than expected.

The US central bank early this month said it would reduce its US$85-billion-a-month bond purchases by $10 billion starting in January.

The baht might appreciate if US economic figures do not show improvement, such as the unemployment rate.

Thai corporations are planning to issue bonds even though their cost of funds is likely to rise. New bond issues next year are expected to total Bt350 billion, Thiti said.

The high cost of the dollar is also an issue for the Fed because the recovery in the US economy is not guaranteed to be strong.


-- The Nation 2013-12-26

so the tip is just wait till just before the next quater then change your euro`s and make a nce profit?

Excellent. Time for me to start planning my trip.

so the tip is just wait till just before the next quater then change your euro`s and make a nce profit?

Yup its as easy as that. nothing but quality money advice ever on TVisa.

The only good thing that Suthep has done.

Finally some good news!!

The country is burning, but the expats are getting richer.

Thailand had its time, now it is our turn!!

so the tip is just wait till just before the next quater then change your euro`s and make a nce profit?

No. The tip is to buy buy more euro now.

Here we go. Should be a good ride for those who are prepared. I've got my eye on a grossly overvalued 150 square metre condo in Bangkok. Best case would be the housing market and then Baht both collapse.

Here we go. Should be a good ride for those who are prepared. I've got my eye on a grossly overvalued 150 square metre condo in Bangkok. Best case would be the housing market and then Baht both collapse.

Just remember when it comes to real estate and civil war the # one rule is location, location, location, and don't forget about vantage point and fortifications.

Here we go. Should be a good ride for those who are prepared. I've got my eye on a grossly overvalued 150 square metre condo in Bangkok. Best case would be the housing market and then Baht both collapse.

Just remember when it comes to real estate and civil war the # one rule is location, location, location, and don't forget about vantage point and fortifications.

Indeed. The place I'm looking at is very close to various embassies (and a major hospital), so it should be OK

Well, I hope this Kbank wild guess forecast is right but back in the early part of this year a Kbank forecast had the baht ending 2013 at 28.5 baht/USD but its now approaching 33.....still a few more days for their forecast to come true for 2013 but my hope and wild guess is it won't.

I have a tentative target of 35 by mid-next year. No doubt the political situation is not helping the currency. But the greater macro influence is the return of funds to Europe.

Interesting ... guess, I should hold off bring money into the Kingdom for a little while, just to see if the trend continues.

KBank's guess is no better than anyone else's guess. What I do is bring in 50k baht a month and put it in the bank at these favorable rates. It's a hedge against the $ going down again which it may or may not do.

Here we go. Should be a good ride for those who are prepared. I've got my eye on a grossly overvalued 150 square metre condo in Bangkok. Best case would be the housing market and then Baht both collapse.

what about beer price and bar fines?

Here we go. Should be a good ride for those who are prepared. I've got my eye on a grossly overvalued 150 square metre condo in Bangkok. Best case would be the housing market and then Baht both collapse.

This maybe so, but one should study thai economics 101, if the THB goes down the pan, they will increase the price of the grossly overvalued condo even more to make up for the short fall

So 40 is out of the question? I was really crossing fingers for that.

So 40 is out of the question? I was really crossing fingers for that.

It can go to 60 but that ain't going to help you if thailand ends up in a state of civil war

at superrich the rate is today (see their webpage) 32.75 / 32.80. It took the baht a bit over a week to weaken by 0.8 baht. Other Asian currencies have also nicely weakened by about 7-8% this year alone.

My take is that the Thai bankers overstate the influence of domestic politics. The 2014 withdrawal from Afghanistan will help European and US budgets plus the recovery is there, slow but it is real. Unfortunately, not all participate but for the foreign exchange rates it hardly matters.

The Thai bankers hope for 34 baht might come true by january not at the end of the year and 35 and above are well within reach.

If the condo bubble bursts depends on how well the banks have checked their customers this time around. If those can withstand losses for some time the landing might be softer than many expats would hope. The banks have not much real estate on offer at attractive prices that is. If someome has better info please let us know. It is an importan topic for almost of all us or at least most of us.

so the tip is just wait till just before the next quater then change your euro`s and make a nce profit?

Most of you should remember what I said about the market gold and the dollars. The dreams were wrong yes I feel sorry for ones that did not listen Now I say

So 40 is out of the question? I was really crossing fingers for that.

It can go to 60 but that ain't going to help you if thailand ends up in a state of civil war

The Farangs with Thai Wives and Thai GF's are going to suffer the most as the families of their love one will need much more money.

These should leave at once to save the little what they have.

The Farangs and ones who have the balls to give nothing are safe to stay.

You known who you are

I am not sure I understand correctly but if there is 700 billion in 10 year Thai bonds that is paying less than the

US 10 year bond rate I can't imagine that money remaining here in Thailand very long. Maybe I just misunderstand

what that part of the article was saying.

It is difficult to make predictions. Especially about the future...

Just remember never bring any money to Thailand you might want to take back. It's a one way trip like sugar to the elephant.

Think of Thailand like one of those cruise ships out of Miami around the Caribbean. A great experience but you won't show a profit.

I love the Land of Smiles but would never commit more than 10% of my assets.

I have no sympathy for the stupid ex pats who have lost all their money in Greece and Spain.

Eggs and baskets.

Sell high and buy low and the bahts dropping everyday. Now nearing 54 and likely to be back to 70 to the pound before we know it.

How will they tell the farmers the rice pledging scheme was a scam and they have wrecked the market for Thai rice?

All those buildings that have shot up like mushrooms will soon echo 1997.

High speed rail....Who remembers the Hopewell mass transit system?

http://en.wikipedia.org/wiki/Bangkok_Elevated_Road_and_Train_System