Thai Bond Market Outlook and Trend
22 February 2018
Sakda Pongcharoenyong President TRIS Rating Co., Ltd.
Debt Securities in Thailand
0.7 1.1 1.3 1.5 1.7 1.8 2.1
2.5 2.6 3.0 3.3 3.4
3.7 4.0 4.3
0.4
0.4 0.5
0.5 0.5 0.5
0.5 0.5 0.5
0.6 0.7 0.8
0.8 0.8
0.9
0.2
0.3
0.6 0.9
1.4 1.5
1.8
2.4 2.6
3.1 2.8 2.7
2.8 3.1
3.0
0.4
0.4
0.5
0.6
0.7 0.8
1.0
1.1 1.4
1.5 1.6 1.8
2.1
2.5
2.7
-
2
4
6
8
10
12
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
THB Trillion
Foreign Bond
Commercial Paper
Corporate Bond
State Agency Bond
State Owned Enterprise Bond
Treasury Bill
Government Bond
% of total
38%
1%
8%
27%
23%
2%
1% Average cumulative annual
growth of 13.67%
Source: Thai BMA
Size of Government Bond and Corporate Bond Markets (as of Q3/2017)
239
143 153 159
83
162
44
91
101 27
140
20
103
2
0
50
100
150
200
250
300
350
Thailand Hong kong,China
Indonesia Malaysia Philippines Singapore Viet Nam
USD billion
Government bonds Corporate bonds
Total330
Total244
Total299
Total180
Total265
Total103
Total46
Source: Asian Development Bank
20.8 19.0 30.1
2.7
75.4
46.6
6.6
33.7
0.9
14.5
0
20
40
60
80
100
120
140
160
180
200
Thailand China,People's
Rep.
Hongkong,China
Indonesia Korea,Rep.of
Malaysia Philippines Singapore Viet Nam Japan
%
Corporate bonds/GDP
GDP 12,097.96
GDP 334.89
GDP 987.1
GDP 1,466.54
GDP 299.64 GDP
210.53
GDP 4,798.58
Size of Corporate Bond Market to GDP (as of Q3/2017)
Source: Asian Development Bank
GDP 435.34
GDP 301.71
GDP 303.94
54.9 49.0
42.7
15.5
53.8 52.7
27.7
53.3
20.9
197.6
0
20
40
60
80
100
120
140
160
180
200
Thailand China,People's
Rep.
Hong kong,China
Indonesia Korea,Rep.of
Malaysia Philippines Singapore Viet Nam Japan
%
Government bonds/GDP
GDP 435.34
GDP 12,097.96 GDP
334.89
GDP 987.1
GDP 1,466.54
GDP 301.71
GDP 299.64
GDP 303.94
GDP 210.53
GDP 4,798.58
Size of Government Bond Market to GDP (as of Q3/2017)
Source: Asian Development Bank
** GDP = USD billion
Size of Thailand Corporate Bond Market
Source: Thai BMA
0.38
1.10
2.67
0.09
0.29
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2003 2010 2017
THB Trillion
Short-term
Long-term
Total 2.96
Total 1.19
Total 0.38
679% growth over a span of 14 years
Distribution of Rating Categories (based on principal amount of outstanding bonds)
AAA AA A BBB Below BBB Non-reted
2003 27.3 31.8 27.4 13.5 0 0
2010 19.2 18.8 49.5 12.5 0 0
2017 8.1 28.4 38.8 19.7 1.6 3.4
27.3
31.8
27.4
13.5
19.2
18.8
49.5
12.5 8.1
28.4
38.8
19.7
1.6
3.4
0
10
20
30
40
50
60
As
a p
erc
en
tage
(%)
of
tota
l ou
tsta
nd
ing
corp
ora
te b
on
ds
Source: Thai BMA
1M 3M 6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 11Y 12Y 13Y 14Y 15Y 16Y 17Y 18Y 19Y 20Y
29-Dec-10 2.20 2.28 2.48 2.81 3.34 3.69 3.87 4.00 4.31 4.41 4.52 4.67 4.75 4.77 4.92 5.03 5.10 5.12 5.16 5.22 5.29 5.36 5.40
30-Dec-17 1.21 1.32 1.57 1.76 1.95 2.26 2.44 2.67 2.90 3.11 3.26 3.40 3.70 3.79 3.84 3.96 4.14 4.28 4.33 4.33 4.32 4.33 4.38
0
1
2
3
4
5
6
%
Thailand Average Corporate Bond Yields for “A” Rated Issues
Source: Thai BMA
Number of Outstanding Rated Issuers & Corporate Bond Issues
153 163 175 197 204 218 250
472
560 619
776
980
1,222
1,415
0
200
400
600
800
1000
1200
1400
1600
2011 2012 2013 2014 2015 2016 2017
Number of Issuers/Issues
Rated Bond Issuers
Corporate Bond Issues
Issue Size Comparison
16,000
20,636
84,900
60,000
3,647 1,688 1,630 1,523
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2003 2010 2016 2017
THB Million
Average Issue Size
Source: Thai BMA
Largest Single Issue
Thailand Corporate Bond Investors
Financial
Institutions
5%
Institutiona
l Investors
50%
Corporation
9%
Individual
31%
Others
5%
2017
Financial
Institution
s
6%
Institutional
Investors
32%
Corporation
5%
Individual
45%
Others
12%
2010
Financial
Institution
s
20%
Institutional
Investors
33%
Corporation
6%
Individual
31%
Others 10%
2003
Source: Thai BMA
Thailand Corporate Bond Lead Underwriters
13,569
14,560
16,000
17,267
22,281
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
5
4
3
2
1
THB mln
Rank 2003
SIAM COMMERCIAL BANK
STANDARD CHARTERED BANK (THAI)
KASIKORN BANK
ABN AMRO Bank N.V.
DEUTSCHE BANK AG.
17,111
21,183
26,294
33,103
59,640
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
5
4
3
2
1
THB mln
Rank 2010
KASIKORN BANK
SIAM COMMERCIAL BANK
BANK OF AYUDHYA
STANDARD CHARTERED BANK (THAI)
BANGKOK BANK
53,426
89,963
111,323
119,808
140,175
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
5
4
3
2
1
THB mln
Rank 2017
KASIKORN BANK
SIAM COMMERCIAL BANK
BANK OF AYUDHYA
KRUNG THAI BANK
BANGKOK BANK
Source: Thai BMA
Bond Market vs Loan Market
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
100.0
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sep-17
% Baht Billion
Corporate loans in THB Billion Corporate Bonds in THB Billion
Corporate bond growth (YOY) Corporate loan growth (YOY)
Bond market is going to overtake corporate loan market in size
Source: Thai BMA, Bank of Thailand
Estimated Corporate L-T Bond Issuances in 2018
263,969 254,203
540,329
444,308
568,886 572,424
772,300 800,661
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
THB Million
+3–5%
Bond Issuances 2015-2017 by Sectors
193,723
91,508
99,550
138,025
142,952
172,620
185,500
208,054
235,649
245,785
301,069
Others
Consumer Finance
Transportation
Leasing
Energy
Agri/Food
Telecom
Construction Material
Property
Retail
Banking
- 50,000 100,000 150,000 200,000 250,000 300,000 350,000
THB Million
Source: Thai BMA, TRIS Rating