Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Debt Capital Markets

THAI CDS USD SR 5Y D14 / Debt Capital Markets

<ul>
<li>Here we are revisiting the Thai bond market, as per requests from our Thai readers, to see the impact of the global rate trajectory on Thailand.</li>
<li>The Thai bond market will remain unattractive to foreign institutional investors, in our view.</li>
<li>The attempt to increase yield should involve a material change in Thailand’s financial structure and regulatory mindset.</li>
</ul>


Here we are revisiting the Thai bond market, as per requests from our Thai readers, to see the impact of the global rate trajectory on Thailand.
The Thai bond market will remain unattractive to foreign institutional investors, in our view.
The attempt to increase yield should involve a material change in Thailand’s financial structure and regulatory mindset.


Bond Market Monitor: Thai Bonds Are for Issuers

Macroeconomics

<ul>
<li>Thai equities lack growth and innovation. Big corporations continue to have unfair advantages in terms of access to bank financing and business opportunities.</li>
<li>Thailand is an aging society with rising income disparity and a stalling education system. Hence, we have questioned how Thailand will escape the middle income trap in the near term.</li>
<li>We expect more disruptions and policy blunders which could impair Thai stock performance. We do not believe Thailand can correct its cause in the near term.</li>
</ul>


Thai equities lack growth and innovation. Big corporations continue to have unfair advantages in terms of access to bank financing and business opportunities.
Thailand is an aging society with rising income disparity and a stalling education system. Hence, we have questioned how Thailand will escape the middle income trap in the near term.
We expect more disruptions and policy blunders which could impair Thai stock performance. We do not believe Thailand can correct its cause in the near term.


<ul>
<li>We are now in late July and Thailand still does not have a new Prime Minister (PM) yet.</li>
<li>We believe the future is very uncertain from now until next May when the senate power to elect the PM ends.</li>
<li>The uncertainty is by no means positive for Thailand’s capital market and our view toward any Thai assets remain negative in the near term.</li>
</ul>


We are now in late July and Thailand still does not have a new Prime Minister (PM) yet.
We believe the future is very uncertain from now until next May when the senate power to elect the PM ends.
The uncertainty is by no means positive for Thailand’s capital market and our view toward any Thai assets remain negative in the near term.


Thematic (Sector/Industry)

<ul>
<li>Going into a third week after Thailand’s general election on May 14th, the Thai stock market softened and the bond yields rose on uncertainty over the government coalition.</li>
<li>We believe the Move Forward Party (MFP)’s victory signifies a movement to reform, not just a political campaign.</li>
<li>The muddle-through scenario could see Thailand without the new government until May 2024</li>
</ul>


Going into a third week after Thailand’s general election on May 14th, the Thai stock market softened and the bond yields rose on uncertainty over the government coalition.
We believe the Move Forward Party (MFP)’s victory signifies a movement to reform, not just a political campaign.
The muddle-through scenario could see Thailand without the new government until May 2024


We initiate our coverage of Thailand’s Thai Baht (THB)-denominated corporate bond market. In the report, we review the country’s THB bond market with a focus on corporate bonds, excluding commercial papers, in terms of market composition, participants (issuers &amp; investors), and rating agencies. We also describe major hindering points for the development of the THB bond market and compare the THB bond market with Singapore’s SGD bond market where we see as the next milestone for the THB corporate bond market.
Here we see the size of THB bond market to be quite small relative to Thailand’s GDP (and bank loans). The fact that individual investors account for the majority of corporate bondholders does not mean individual investors are more interested in investing in bonds or have more access to the corporate bonds than institutional investors. Rather, we believe it is a lack of investment opportunities available to individual investors which has left investors with bonds (other than bank deposits) to invest to receive fixed income. Also, a lack of high-yield bond analysis among institutional investors, an absence of hedge funds, and regulators’ risk averse opinion on high-yield bonds all lead to limited corporate bond holding by institutional investors.  
Our subsequent research report(s) on the THB bond market will reflect on liquidity, valuation (including pricing &amp; benchmark), and benefits/concerns for international investors looking to diversify its bond portfolio and/or seeking to increase exposure in THB financial assets.
We note that a high-yield bond sector on an international scale comprises THB bonds with a rating of A+/A+(Tha)  with lower ratings on Thailand’s national scale (See Rating Agencies sector).  As a result, we aim to cover Thailand’s THB corporate bond market rated A+/A+(Tha) or lower on a national scale by TRIS Ratings and/or Fitch Ratings (Thailand) as well as unrated bonds issued through both public offering and private placements as long as we can obtain sufficient public material information to make recommendations. Our analysis on the rated bonds will be focused on our opinion on the existing local and international rating(s) and expected rating actions. Our analysis on unrated bonds will be, on the other hand, an attempt to suggest how the market should perceive the bonds’ implied credit ratings. In both cases, we aim to provide valuation to help investors make judgments whether they receive sufficient returns for the credit and liquidity risks they are taking on.

We initiate our coverage of Thailand’s Thai Baht (THB)-denominated corporate bond market. In the report, we review the country’s THB bond market with a focus on corporate bonds, excluding commercial papers, in terms of market composition, participants (issuers &amp; investors), and rating agencies. We also describe major hindering points for the development of the THB bond market and compare the THB bond market with Singapore’s SGD bond market where we see as the next milestone for the THB corporate bond market.
Here we see the size of THB bond market to be quite small relative to Thailand’s GDP (and bank loans). The fact that individual investors account for the majority of corporate bondholders does not mean individual investors are more interested in investing in bonds or have more access to the corporate bonds than institutional investors. Rather, we believe it is a lack of investment opportunities available to individual investors which has left investors with bonds (other than bank deposits) to invest to receive fixed income. Also, a lack of high-yield bond analysis among institutional investors, an absence of hedge funds, and regulators’ risk averse opinion on high-yield bonds all lead to limited corporate bond holding by institutional investors.  
Our subsequent research report(s) on the THB bond market will reflect on liquidity, valuation (including pricing &amp; benchmark), and benefits/concerns for international investors looking to diversify its bond portfolio and/or seeking to increase exposure in THB financial assets.
We note that a high-yield bond sector on an international scale comprises THB bonds with a rating of A+/A+(Tha)  with lower ratings on Thailand’s national scale (See Rating Agencies sector).  As a result, we aim to cover Thailand’s THB corporate bond market rated A+/A+(Tha) or lower on a national scale by TRIS Ratings and/or Fitch Ratings (Thailand) as well as unrated bonds issued through both public offering and private placements as long as we can obtain sufficient public material information to make recommendations. Our analysis on the rated bonds will be focused on our opinion on the existing local and international rating(s) and expected rating actions. Our analysis on unrated bonds will be, on the other hand, an attempt to suggest how the market should perceive the bonds’ implied credit ratings. In both cases, we aim to provide valuation to help investors make judgments whether they receive sufficient returns for the credit and liquidity risks they are taking on.

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THAI CDS USD SR 5Y D14 (CTHAI1U5 CORP)

Bond Market Monitor: Thai Bonds Are for Issuers

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Thailand is in an odd situation where the collective voice of 250 appointed senators can override the whole election process.

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Thailand: The Baht Bond Bandwagon

We initiate our coverage of Thailand's THB corporate bond market with market composition, participants, and rating agencies.

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