After the rally, baht bonds still far from a bear market

Two factors can prompt a bear bond market: the new administrationÆs management of banking NPL, and planned bond issuance this quarter.

Bangkoks earlier than expected announcement of its intention to issue seven-year baht bonds by the end of the first quarter hardly dented last weeks rally of baht government bonds.

The local bond market actually rallied strongly, with 10-year yields moving from 5.8% to 6.10%. Mostly this was due to the 50 basis point bp Fed cut on 31 January, as well as a downward reduction of Thailands 2001 GDP growth forecast to 4.5%.

The...

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