Corporate issues on fire
New corporate bond issues will likely reach 450 billion baht this year, breaking the record of 390 billion baht in 2010, says the Thai Bond Market Association.
President Niwat Kanjanaphoomin said the first nine months of 2012 saw the issue of 360 billion baht in long-term corporate bonds, up by 145% year-on-year.
Total government bonds issued this year amount to 507 billion baht, up by 38%, out of which 194 billion was for state enterprise bonds, up by 532%.
"Bond instruments are popular again. The value of bonds issued is rising in all sectors, especially banks, which raised subordinate bonds to strengthen their second-tier capital," said Mr Niwat.
In the first nine months, the banking sector had a 33% share of long-term bonds issued in terms of value, followed by energy (22%) and property (11%).
Mr Niwat said trade volume in the secondary bond market is liquid in the short term, as the market expects a trend of lower interest rates. The long-term one-year maturity bond is active with average trade volume of 20.7 billion baht, up by 103% year-on-year.
Bonds remain popular among foreign investors, with total outstanding through September of 703 billion baht, up by 67%.
Despite net selling of 2 billion baht by foreigners in the bond market after Wednesday's policy rate cut, the long-term prognosis remains bullish.