Analysts warn that Thailand's private bond market is facing the risk that new bond issues rolled over to repay maturing ones may fail, after Thai government bond yields rose in line with global yields. Companies with low credit ratings or no credit rating in particular may be unable to raise the full amount they seek, which could lead to more liquidity problems and defaults. The situation comes amid concerns over Thailand's economy, which is expected to grow no more than 2%, as the finance minister previously stated. Meanwhile, foreign investors have returned to selling Thai stocks more heavily. Yesterday the index fell to 1,559.01 points, down 35.29 points, on turnover of 121 billion baht. The main pressure came from bond yields above 5%, reflecting two concerns: the fiscal crisis of the US government, which must issue a massive amount of new bonds, and persistent inflation that keeps interest rates high for a long time. As a result, borrowing costs have surged across the board, with US mortgage rates jumping past 7-8%, causing households to slow consumption and businesses to slow borrowing to expand operations.
Thai government bond yields rose in line with global yields, with the main pressure from bond yields above 5%.
US fiscal crisis requiring massive new bond issuance and persistent inflation keep US yields elevated, pushing the 10Y yield up.
