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Thai Baht Weakens as Investors Cut Stock Holdings; Bonds Gain

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Oct. 24 (Bloomberg) -- Thailand’s baht fell toward a three-week low as concern that the global economy is slowing deters risk-taking, leading international investors to cut holdings of the nation’s stocks. Government bonds advanced.

Global funds sold $40 million more of Thai equities than they bought on Oct. 22, boosting net sales this month to $300 million, according to exchange data. The MSCI Asia Pacific Index of shares declined for a fourth day as earnings that trailed estimates at companies including DuPont Co. and Kawasaki Heavy Industries Ltd. fanned concern the international economy is worsening.

“We are seeing weaker earnings, which makes investors worry about the global economic slowdown and hurts market sentiment,” said Tsutomu Soma, manager of the investment trust and fixed-income business unit at Rakuten Securities Inc. in Tokyo. “Companies and investors who are selling emerging-market stocks will repatriate funds in the fourth quarter, weighing on the regional currencies.”

The baht declined 0.1 percent from Oct. 22 to 30.77 per dollar as of 3:08 p.m. in Bangkok and touched 30.79 earlier, according to data compiled by Bloomberg. That was near the three-week low of 30.80 reached on Oct. 22. Onshore markets were shut yesterday for a public holiday. One-month implied volatility, a measure of exchange-rate swings used to price options, held at 4.27 percent.

DuPont, the most valuable U.S. chemical maker, posted a smaller profit than analysts estimated, while Japan’s Kawasaki Heavy missed its profit forecast by almost half. Of the 61 companies on Asia’s benchmark equity index that have reported quarterly earnings since Oct. 1, more than half missed analyst profit projections, while almost two-thirds lagged sales estimates, according to data compiled by Bloomberg News.

The yield on the 3.25 percent bonds due June 2017 slipped five basis points, or 0.05 percentage point, to 3.08 percent, according to data compiled by Bloomberg.

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