ThaiBMA says rising bond yields pressure fund outflows, full-year bond issuance seen touching 800 billion baht

Thunhoon··THUS·Read original
3▲0 ▼1Impact / 5
Summary · why it matters

Ariya Tiranaprakij, Managing Director of the Thai Bond Market Association, or ThaiBMA, said US bond yields are likely to stay elevated as the Fed is expected to raise rates another one to two times this year, widening the interest rate gap between Thailand and the US and raising the prospect of fund outflows from the Thai bond market. She believes any outflows will be short-term, however, because the country's fiscal position is strong and its international reserves are high. In the first nine months of 2026, most of the outflows came from selling short-term bonds, totaling 34.2 billion baht, while long-term bonds drew 25 billion baht of buying, leaving net selling of just 9.21 billion baht. The 10-year Thai bond yield is expected to move in a range of 2.33% to 2.43%, close to the third quarter, after rising about 0.60 to 0.70 percentage points from the start of the year, less than the more than 1 percentage point rise in US bond yields. Bond issuance in the first nine months of 2026 totaled 629 billion baht, down 1.6% from the same period a year earlier, due to three factors: some large, highly rated companies did not file to issue, such as PTT, which had 15 billion baht of bonds maturing; four Thai companies, KBANK, BBL, ADVANC and TIDLOR, issued a combined 86 billion baht of bonds overseas; and some companies turned to bank loans with lower financing costs. As a result, full-year issuance this year may fall short of ThaiBMA's forecast of 880 billion baht. But if the roughly 172 billion baht of bonds maturing in the fourth quarter of 2026 are fully rolled over, issuance this year could touch 800 billion baht. As for bond defaults over the rest of this year, more are possible from the same companies that have already had problems, but no new companies are expected to default.

Impact on assets 6

Financials▲
Cloud & Digital Infrastructure▲
Digital Finance & Tokenization▲
Energy Transition & Power Demand▲
Others▼
％Thailand 10 Year Government Bond
TH-10Y
▼ NegativeMonetaryrelevance

ThaiBMA says US bond yields stay elevated on expected Fed hikes, widening the rate gap and pressuring fund outflows from the Thai bond market, keeping the 10-year Thai yield elevated.