The Thai private sector is expected to issue bonds worth more than 510 billion baht ($16 billion) this year, which will cross the earlier record bond issue of 509 billion baht ($15.9 billion) in 2012, said the Thai Bond Market Association.
As of October 15, the private sector has already issued bond worth 485.5 billion baht, which is higher than total value of bond issued in 2013. Another 25-billion-baht bond issue is planned in the second half of October, said the association’s president Tada Phutthitada.
“The interest rate should stay low until the second quarter of next year making it a perfect time for the private sector to issue bonds,” he added.
While the bond supply is increasing, it is still falling short of the demand. Thai appetite for bonds is slated to touch 863 billion baht ($26.9 billion) annually.
This increased demand is a direct result of the Fiscal Policy Office’s announcement regarding the reduction of the deposit guarantee ceiling from 50 million baht per depositor, per bank to one million baht in August, 2016. This announcement has made the bond and stock investments much more attractive for the investors. “Currently, the supply is much less than the demand, so both the private sector and the government sector can raise funds via bond for their projects,” he added.
(Edited by Yamini Dhall)