Thai Bonds, Baht Advance After Global Investors Boost Holdings

Thailand’s government bonds rose for a fourth day and the baht advanced after foreign funds added to their holdings of the nation’s sovereign debt that offers higher yields than in developed nations.

The five-year yield dropped to its lowest level in almost a month and the baht touched an almost seven-month high as data from the Thai Bond Market Association showed global investors bought $304 million more government notes than they sold in the first three days of this week. Thailand’s 10-year rate is 3.49 percent, compared with 1.63 percent for similar-maturity Treasuries and 0.77 percent for Japan’s securities. The U.S. is due to release employment data on Oct. 5.

“Investors like to put money in Thailand but because risk sentiment is not so strong, they prefer to put money into the bond markets,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. (BBL) “We are waiting for non-farm payroll data out of the U.S. this week.”

The yield on the 3.25 percent bonds due June 2017 fell one basis point, or 0.01 percentage point, to 3.25 percent, as of 3:11 p.m. in Bangkok, according to data compiled by Bloomberg. That was the lowest level since Sept. 9.

The baht strengthened 0.3 percent to 30.57 per dollar and reached 30.56 earlier, the most since March 9, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 4.27 percent.

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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