Bond issuers to raise Bt34 bn from Thai market

Local and foreign bond issuers, led by Charoen Pokphand Foods (CPF), last week filed plans to raise a total of Bt34 billion in the Thai bond market.

Among local issuers, CPF will raise Bt12 billion, according to a filing to the Securities and Exchange Commission.

Other local issuers include Central Pattana (Bt4 billion), Bangkok Expressway (Bt4 billion), and Bangkok Dusit Medical Services (Bt2 billion).

The Export-Import Bank of Korea will mobilise up to Bt8 billion, with TMB Bank as its financial adviser. The bank's baht bonds, with maturity of 3-10 years, offer a coupon rate of 3.81 per cent to 4.34 per cent.

Southeast Asia's bond sales will rise as much as 20 per cent from last year - $101 billion of local and dollar-denominated notes - according to CIMB Group Holdings, the top underwriter of domestic debt in the 10-member Asean.

DBS Group Holdings and Maybank Kim Eng Holdings see a repeat of last year's 48-per-cent gain. PTT Global Chemical and PT Bank Rakyat Indonesia, the country's third-biggest lender, are lining up to sell debt.

The combination of higher yields, faster economic growth, and an expanding pool of wealthy investors is proving irresistible to the world's biggest fund managers. New bond issues increased five-fold since 2000 as Asean governments transformed markets since the crisis 15 years ago and as their companies learn to avoid excessive foreign borrowing.

There were 3.37 million millionaires in the Asia-Pacific region in 2011, more than in North America for the first time, according to a June report by Capgemini SA and RBC Wealth Management.

The Thai bond market has reportedly witnessed huge foreign capital inflows. According to Thai Bond Market Association (Thai BMA), turnover in the secondary bond market last month reached Bt1.96 trillion, or Bt89.2 billion daily on average, increasing 31 per cent from the previous month's average of Bt68.0 billion. More than 68 per cent of average daily trading, or Bt60.23 billion, was in bonds maturing in less than one year, while 32 per cent or Bt28.96 billion was in bonds maturing in more than one year.

The major investors in the bond market were still asset management companies with 56 per cent of turnover and foreign investors with 19 per cent, or Bt234.23 billion. Foreign investors' net buy position was Bt107.80 billion in the month. Foreign investors have been net buyers for 16 months.