CIMB THB Weekly Fixed Income Commentary for 17 Apr 2015

Attached is the weekly market highlights for Apr 17, 2015:

Market Roundup

• It was a quiet week in the Thai bond market with only Thursday and Friday being trading days. And volume on those two days was razor thin. Govvies yields fell within 1-2bps range as we step closer to the month-end MPC meeting, but on our part we don’t’ expect  BoT to act just as yet. Onshore IRS rates also fell by similar small margins.
• This week macro data due is foreign reserves and next week we have March custom exports numbers. Custom exports fell by 6.14% yoy in February whilst imports rose by 1.47% yoy.  This week auctions comprise LB21DA (Bt20 billion) and longer term LB37DA (Bt9 billion).
• Our short term outlook remains. We see the 3-year benchmark to hover near 2.00% whilst the 5X5 year swap spread to widen to as much as minus 15bps after MPC on assumption BoT maintains the policy rate at 1.75%.
• Corporate bonds were seen moderately firm, particularly along the short to medium dated papers. Tranches from CP ALL were in the limelight, contributed a combined volume of Bt139 million on Friday. We continue to like bonds with tenors in between 3-5 years, after the yields compressed decently along the front end of the curves. We think CPALL248A at 4.62% is a laggard at 4.62%, for instance vis‐à‐vis CPALL243A at 4.00%.
•