Foreign investors dump Thai bonds to the tune of 635 million dollars, the most in six months

Money & Banking··THUS·Read original
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Foreign investors net sold 635 million dollars of Thai bonds in September, the largest monthly outflow from the bond market since March, or the biggest in six months, amid a surge in US government bond yields and expectations of interest rate hikes that reduced the appeal of Thai debt. In the same month, foreign investors also net sold 781 million dollars of Thai equities. The selling pressure came as government bonds worldwide posted their worst quarterly performance since 2024, after oil prices hit 100 dollars a barrel. The yield spread between 10-year Thai government bonds and same-maturity US government bonds widened, with Thai bond yields sitting 298 basis points below US yields, close to a record high. Meanwhile, the baht swap market reflected expectations that Thai interest rates could rise by a total of about 42 basis points over the next 12 months, up from just 25 basis points expected at the end of August, as inflation pressure led investors to increase the weight they place on the chance that the Bank of Thailand will raise interest rates for the first time in three years.

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