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Thai 5-Year Bonds Gain Before Final 2012 Debt Sale; Baht Steady

Thailand’s sovereign notes rose, snapping a four-day decline, before the final bond sale of 2012 and after overseas investors bought the most debt in more than two weeks. The baht was little changed.

The Bank of Thailand is set to sell 30 billion baht ($979.4 million) of securities due in 2014 today and short-term bills on Dec. 25, according to the auction schedule compiled by Bloomberg. Foreign funds bought the equivalent of $190 million more of the nation’s debt than they sold yesterday, data from the Thai Bond Market Association show.

“Yields will continue to go lower especially because of the New Year, when foreign inflows tend to pick up seasonally,” said Rohit Arora, a Singapore-based fixed-income strategist at Barclays Plc. There are market expectations that there’ll be no supply in the first two weeks of next year, he said.

The yield on the 5.125 percent bonds due March 2018 dropped three basis points, or 0.03 percentage point, to 3.27 percent as of 9:40 a.m. in Bangkok, according to data compiled by Bloomberg. Thai government securities have returned 2.5 percent this year, compared with more than 5 percent in the previous two, an index compiled by HSBC Holdings Plc shows.

The treasury issued 19 billion baht of 2017 debt yesterday at an average yield of 3.19 percent and 8 billion baht of notes maturing in 2041 at 4.30 percent. Five-year securities in the U.S. yield 0.76 percent, while those in Japan pay 0.18 percent.

The baht traded at 30.63 per dollar in Bangkok, compared with 30.61 yesterday, according to data compiled by Bloomberg. The currency has advanced 3.1 percent this year.

One-month implied volatility, a measure of expected exchange-rate swings used to price options, slipped three basis points to 3.89 percent. The rate has dropped 264 basis points this year.

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

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

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