THURSDAY, March 28, 2024
nationthailand

Bt5.6 bn in net outflow from Sept 1-12

Bt5.6 bn in net outflow from Sept 1-12

The net outflow of foreign capital between September 1 and 12 amounted to Bt5.6 billion, said Suchart Thanathitiphan, assistant director of the Thai Bond Market Association research and development division.

Of that total, Bt4 billion was in short-term bonds, comprising Bt3 billion in sales and Bt1 billion in matured bonds.
Sale of long-term bonds was Bt1.6 billion. As of yesterday, net foreign capital inflow since January 1 amounted to Bt22.5 billion. Capital outflow amounted to Bt11 billion from short-term bonds, divided as short-term bond purchases of Bt180 billion amid Bt190 billion in matured bonds and purchase of long-term bonds at Bt33.5 billion. 
Currently, foreign investors hold Bt732 billion worth of local bonds, of which 21 per cent are short-term and 79 per cent long-term. 
Even though the US Federal Reserve could end its quantitative easing programme next month, its latest decision to retain its low-interest-rate policy at 0-0.25 per cent until mid-2015 should keep foreign capital flowing to Asian financial markets, including Thailand. Some volatility in short-term bonds is expected to continue. 
Suchart said foreigners had been investing in long-term Thai bonds for the past three years, rising from Bt150 billion three years ago to Bt650 billion today. The long-term bond market had been quite stable relative to short-term bonds between September 1 and 12. The liquidation of some long-term bonds was part of normal profit-taking following a huge influx of funds in the past three months. The rate of return has been quite steady, with an average increase of 0.01-0.02 per cent. 
Meanwhile, the government aims to generated about Bt445 billion in funds in fiscal 2015 via the bond market. This is close to the average in preceding years of Bt400 billion to Bt500 billion. For the first quarter of the 2015 fiscal year (October to December), new bond issues could drop to about Bt98 billion as opposed to the normal average of about Bt120 billion per quarter, which could boost demand and push up bond prices slightly, Suchart said. 
So far this month, debenture issues amounted to Bt5.5 billion, compared with Bt421 billion so far this year (as of yesterday). 
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