Japan baht speculation suspected
- Published: 26/03/2013 at 04:53 PM
- Online news:
The baht reached its lowest level in a week on Tuesday, on speculation companies from Japan, the biggest foreign investor in Thailand, are sending profits home before the end of the fiscal year on March 31.
Japanese firms accounted for 64 per cent of projects approved by the Thai Board of Investment in 2012, data compiled by the Japan External Trade Organisation show. The baht reached its strongest level since 1997 last week and has appreciated 4.3 per cent against the dollar this year, the most in Asia, as overseas investors pumped a net $9.3 billion into the nation's debt, Thai Bond Market Association data show.
"We have a lot of Japanese companies in Thailand and this is the end of their fiscal year, so Japanese companies sending money back home puts some downward pressure on the baht," said Pareena Phuangsiri, a Bangkok-based analyst at Kasikornbank. Inflows will continue and the baht will probably stay near the current level, she said.
The baht dropped 0.2 per cent to 29.35 per dollar as of 3:12pm in Bangkok, according to data compiled by Bloomberg.
It touched 29.41 earlier, the lowest level since March 19.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose seven basis points, or 0.07 percentage point, to 5.21 percent.
Emerging-market stocks rose for a second day as brokerages advised buying shares in South Korea and Thailand, offsetting concern that Chinese efforts to cool property prices will curb economic growth.
Samsung Electronics Co, South Korea's biggest company, climbed to its highest level in more than a week after Credit Suisse Group AG said the nation's stocks are under-owned by overseas investors.
Kasikornbank Pcl (KBANK) gained 2.4 per cent in Bangkok as Deutsche Bank AG said a drop in Thai shares is an opportunity to buy.
The SET Index (SET) rose 0.9 per cent, adding to Monday's tjree per cent rally after losing 7.5 per cent last week.
About the author
- Writer: Bloomberg News
Position: News agency