Global Funds Pump Record $1.2 Billion Into Thai Bonds After Fed

Global funds pumped a record 37.1 billion baht ($1.2 billion) into Thai bonds today after the Federal Reserve maintained stimulus that’s buoyed emerging-market assets.

International investors bought more local debt than they sold for an eighth day and today’s inflow was the biggest in data going back to March 2010, figures from Thai Bond Market Association compiled by Bloomberg show. Fed Chairman Ben S. Bernanke said Sept. 18 that the U.S. central bank is concerned a rapid tightening will hurt the world’s largest economy.

The Fed announcement will help improve investor sentiment in Asia with Thailand’s local debt and Malaysia’s securities standing out as “key beneficiaries,” HSBC Holdings Plc analysts led by Andre de Silva wrote in a research note yesterday. The Bank of Thailand held its benchmark interest rate at 2.5 percent on Aug. 21 as inflation slowed to 1.59 percent last month, the least since October 2009.

“Thailand bonds remain a key overweight in our Asia-Pacific portfolio,” de Silva wrote in the report. “The Bank of Thailand also stands out as the only central bank in Asia which sufficient justification to ease monetary policy as growth has disappointed while inflation has fallen to a four-year low.”

The yield on the government’s 3.625 percent bonds due June 2023 fell 37 basis points, or 0.37 percentage point, this week in the biggest drop since August 2011 to 4.01 percent as of 6 p.m. in Bangkok, data compiled by Bloomberg show. The rate declined three basis points today.

The baht rallied 2.9 percent from a week ago to 30.964 per dollar, the biggest advance since 2000, according to data compiled by Bloomberg.

The nation’s foreign reserves climbed to $169.1 billion on Sept. 13, from $168.9 billion two weeks earlier, central bank data showed today.

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