This week investors led by Thai commercial banks and fund managers bought up government bonds after the yields surged markedly in the previous week. They had special interest on LB06DA, LB077A and FIDF bonds. Investors gained more confidence as yields declined gradually and the Bank of Thailand continued to intervene by buying treasury bills from primary dealers in order to push for investors' holding of longer term bonds, the transaction volume of which was still thin. It is expected that next week investors are likely to focus more on the primary market than the secondary one. In the second half of the month, some Baht 16,500 million of bonds will be put on auction.
Investors are more confident as yields have been retained for a certain period.
The yield curve has been quite steep and liquidity in the system is as high as Baht 600,000 million. The trade of FIDF bonds this week accounted for 12.5 per cent of the total as investors considered that the premiums were still high. By the end of the week, yields on FIDF031A declined 20 bps from the previous week, and those on FIDF061A fell 18 bps. The trade of state enterprise bonds accounted for 8.2 per cent of the total. The trade of corporate bonds accounted for 5.5 per cent of the total.