Thai bond market ‘unaffected’ by second-wave contagion

ThaiBMA president Tada Phutthitada said the pandemic would not trigger debt-payment defaults since debtors can request loan or debt moratoriums.

Meanwhile he did not expect foreign funds to flow into the bond market, explaining that the US 10-year bond yield has risen to 1.12 per cent compared to the Thai bond yield of 1.34 per cent, while foreign investors were focusing on risk assets whose value was increasing, such as Bitcoin and tech shares.

"From January 1 to January 13, foreign investors made net sales in bonds worth Bt8.26 billion, compared to net sales of Bt6.4 billion at the end of 2020," he said.

The total value of Thai bonds issued this year will rise to Bt750 billion from Bt680 billion last year, he added.

"Meanwhile, the bond market’s total outstanding value this year will be Bt14.13 trillion, up 4.5 per cent from Bt13.52 trillion last year thanks to the increase in government bonds," he said.

Tada added that the number of corporate bond issuances would decline as companies turned to loans from financial institutions at attractive interest rates.

"However, we expect private companies will still want to issue long-term bonds to deal with uncertainty," he added.