Baht, bonds up on signs of China recovery
- Published: 31/10/2012 at 12:21 PM
- Online news:
Thailand's baht and government bonds headed for monthly gains as signs of a pickup in China's economy helped improve demand for regional assets.
Global funds bought US$1.9 billion more local sovereign debt than they sold this month, according to data from the Thai Bond Market Association. Reports this month showed exports and investment gathered pace in China, the biggest buyer of goods shipped from Thailand. The Southeast Asian country's overseas sales rose 0.2% in September after a 7% drop in August, data showed on Oct 24. Ten-year bonds yield 3.33% in Thailand, compared with 1.74% in the United States.
"Funds are flowing into Asia as its economy is more solid than other regions and still offers higher yields than developed nations," said Tsutomu Soma, manager of the investment trust and fixed-income business unit at Rakuten Securities Inc in Tokyo. "Fund inflows are supporting regional currencies."
The baht, little changed on Wednesday, strengthened 0.3% this month to 30.70 per dollar as of 8.33am in Bangkok, according to data compiled by Bloomberg. The currency was headed for a fifth monthly advance, the longest winning streak since October 2010.
One-month implied volatility, a measure of exchange-rate swings used to price options, held steady today and this month at 4.27%.
The yield on the 3.25% notes due June 2017 dropped 24 basis points, or 0.24 percentage point, to 3.07% from the end of September, according to data compiled by Bloomberg. That’s the largest monthly drop in a year. The rate slid one basis point on Wednesday.
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