State Street Investment ManagementPrivate± Mixed
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Impact on stocks 0
Theme Impact
Off-coverage companies 2
Western Asset ManagementPrivate± Mixed
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A Bloomberg survey expects the yield on Thailand’s 10-year government bonds to decline by about another 0.25% by mid-2027 amid sustained buying interest. The latest auction of 10-year bonds drew a bid-to-cover ratio of 2.18 times, the highest in nearly a year, while today’s auction of bonds maturing in 2029 posted a ratio of 2.13 times, the highest since January. Desmond Fu, head of investment management at Western Asset Management in Singapore, said the firm has a positive view on Thai government bonds in the second half of the year, given still-low economic growth and limited inflationary pressures, which open the door for the Bank of Thailand to pursue more accommodative monetary policy than some regional central banks. Thai government bonds have been the strongest performers in Asian emerging markets since the United States and Iran signed a peace agreement on June 12, with the 10-year yield already down 19 basis points to around 2.02% as of Wednesday. Another factor weighing on yields is the government’s expectation of issuing fewer bonds than planned this fiscal year, with total issuance over the 12 months through September estimated at about 1.26 trillion baht, down roughly 3% from the original plan of 1.3 trillion baht. Slowing inflation is also supporting the market, with the June consumer price index decelerating to 2.42% from 2.79% in May. Bank of Thailand Governor Vithai Rattanakorn expects inflation this year to likely come in below the previous estimate of 2.8%, so there is no need to raise interest rates in the near term. Kheng Siang Ng, head of Asia-Pacific fixed income at State Street Investment Management, said Thai government bonds are likely to remain strong as the market expects the Bank of Thailand to keep its policy rate low.