Thailand’s PDMO to auction 5-year bonds worth THB25 billion for first time in 2017

Thailand’s Public Debt Management Office (PDMO) is expected to auction 5-year bonds worth THB25 billion for the first time in 2017 on Wednesday. Following touching the peak in late December last year, ThaiGB yields

After touching to a peak level in late December, ThaiGB yields have retraced lower as the global cues turn more conducive amid a rebound in U.S. Treasuries and a weak dollar index.

Pressure from the surge in external yields has eased since late December. With this, ThaiGB yields are lower by 10-15 basis points. The THB is also trading better, up 1.3 percent to-date in January against the USD as the latter retraces lower. Similar to last year, much of the volatility in the ThaiGB market will likely continue to emanate from the external front, especially the US, as the market awaits more clarity on Donald Trump’s economic policies after his inauguration on 20 January, reported ANZ in its research note.

With this, we expect the environment to be conducive for onshore bond investors. For foreign investors, after net selling in November-December, their exposure to the ThaiGB market was scaled back to USD15.8 billion or 14.1 percent of total outstanding bonds at end-2016 from a high of USD17 billion or 14.9 percent of outstanding bonds. There are signs that foreigners have returned as net buyers in January, they added.