The yields have been on my mind for the past few months and it’s been rather confusing.

  1. The 10 yr Thai gov is @ 2.5% vs the US 10 yr gov bond @ 2.8%
  2. The yield on the SET is now at 2.59%

So:

  • Is the Thai market safer?
  • Less risky?
  • More attractive for capital flows vs the US market?
  • Or does it just demonstrate the amount of liquidity that is within Thailand itself?
  • An increasing capital account surplus – though I have read something interesting that argued the CA surplus could be partially made up – credit ML @ MBKET šŸ˜‰ – that continues to drive more liquidity to Thailand and its domestic capital markets and thus explains the strengthening THB/USD
  • Or is this a temp blip and we’ll experience what happened in 2Q16 and see Thai yields blow out? – though there was no impact on the market during this period, however the THB went from 34.9 to 35.6…peanuts.
  • I don’t know, there said it, though I wouldn’t be against increasing cash weightings at this time.

 

Colour codes:

  • White – US 10 yr
  • Yellow (shirt) – Thai 10 yr
  • Red (shirt) – SET dividend yield

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