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Thai Bonds Advance, Baht Weakens as Data May Show Exports Fell

Thailand’s three-year government bonds advanced and the baht retreated from near a five-month high before data that economists predict will show declining overseas sales.

Exports fell 5.9 percent in August, the biggest slide this year, after a drop of 4.5 percent in July, according to the median estimate of analysts in a Bloomberg survey before a government report due Sept. 24 or Sept. 25. International investors pumped $658 million into sovereign notes this week through yesterday, according to data from the Thai Bond Market Association. Three-year debt from the Southeast Asian nation yielded 2.87 percentage points more than Treasuries.

“Exports are a concern amid weak global demand,” said Tsutomu Soma, manager of the investment trust and fixed-income business unit at Rakuten Securities Inc. in Tokyo. “Bonds in Asia will probably receive a lot of funds due to their relative safety and higher yields.”

The yield on the 3.625 percent bonds due May 2015 dropped one basis point, or 0.01 percentage point, to 3.22 percent as of 8:34 a.m. in Bangkok, according to data compiled by Bloomberg.

The baht lost 0.1 percent to 30.82 per dollar, according to data compiled by Bloomberg. The currency touched 30.66 on Sept. 17, the strongest level since March 27. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 4.27 percent.

Export growth this year may be lower than previously forecast, according to minutes of the Bank of Thailand’s Sept. 5 meeting released yesterday. The monetary policy committee voted 3-2 to maintain the benchmark interest rate at 3 percent on that day, with two members absent, they showed.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.

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