Kingdom of thailand bond market financing thailand's future & connecting asean 2014 q1 final

Kingdom of Thailand Bond Market

Financing Thailand’s Future & Connecting ASEAN

Looking Forward FY2014 (Oct 2013 - Sep 2014) FY2014 - 2020 : Financing Thailand’s Future FY2014 Funding Needs & Benchmark Bond Supply Q1/FY2014 Government Bond Auction Schedule Bond Market Infrastructure Development MOF Outright PD License Granted to a New Member – CIMB Press Released on 2013 Annual PDMO Market Dialogue

Q4/FY2013 Highlights Q & A with Director General Chularat : Impact of QE3 Announcement on ILB Thai Bond Market as ASEAN Destination : Twin Inaugurals (CGIF/Laotian) The First Decade of Baht Bond/ Pilot Project of CGIF

Basic & Essentials • •

Bond Market Capitalization and Its Composition Equilibrium of Domestic Bond Market

• •

Government Benchmark Bond Performance Public Debt Outstanding and Its Composition

•

Non-Resident Holding in Government bond

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Domestic Bond Market Development A. Looking Forward FY2014 (Oct 2013 – Sep 2014) • FY2014 - 2020 : Financing Thailand’s Future  Domestic Bond Market : From 1997 - 2014  Full Capacity of Government Funding Instruments • FY2014 Funding Needs & Benchmark Bond Supply  Funding Need 2014 - 2020  2014 Funding Instruments  Revolving 1-month Treasury Bill  To Facilitate Budget Balance Policy • Q1/FY2014 Government Bond Auction Schedule • Bond Market Infrastructure Development  Bond Switching  Bond Consolidation • MOF Outright PD License Granted to a New Member – CIMB

1

• Press Released on 2013 Annual PDMO Market Dialogue

B. Q4/FY2013 Highlights • Impact of QE3 Announcement on Thai Bond Market  Volatile of Government Yield Curve  Jumped 29 - 62 bps  Government Bond Auction Sensitive on QE3  Sharply Increase in ILB Yield Curve  Shifted Up 115 bps • Thai Bond Market as ASEAN Destination – Twin Inaugurals (CGIF/Laotian) • The First Decade of Baht Bond/ Pilot Project of CGIF

19

C. Basic & Essentials • Bond Market Capitalization and Its Composition (As of Sep 2013) = 8,919,666 THB Mil. • Equilibrium of Domestic Bond Market • Government Benchmark Bond Performance • Public Debt Outstanding and Its Composition (As of July 2013) = 5,211,194 THB Mil. (44.11% of GDP) • Non-Resident Holding on Thai Bond Market  NR Holding on THB Bond (As of Sep 2013)  770,967 THB Mil. (GOVT Bond : 574,987 THB Mil., BOT Bond : 195,132 THB Mil., Corp Bond : 848 THB Mil.)  Net Change in NR Holding (Oct 2012 - Sep 2013)  55,868 THB Mil. (GOVT Bond : Net Buy 72,029 THB Mil., BOT Bond : Net Sell 16,161 THB Mil.)

This booklet is produced and printed in-house by Bond Market Development Bureau Public Debt Management Office , Ministry of Finance, Kingdom of Thailand This booklet can be downloaded at www.pdmo.go.th

e-book

26

A. Looking Forward FY2014 (Oct 2013 - Sep 2014) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

•

FY2014 - 2020 : Financing Thailand’s Future 



•

2014 Funding Strategy  



• •

Funding Need 2014 - 2020 2014 Funding Instruments Revolving 1-month Treasury Bill  To Facilitate Budget Balance Policy

Q1/FY2014 Government Bond Auction Schedule Bond Market Infrastructure Development  

• •

Domestic Bond Market : From 1997 - 2014 Full Capacity of Government Funding Instruments

Bond Switching Bond Consolidation

MOF Outright PD License Granted to a New Member – CIMB Press Released on 2013 Annual PDMO Market Dialogue

011

Bond Markethas HasDeveloped Developed Rapidly and Efficiently The Domestic Thai Bond Market Rapidly and Efficiently Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

2007 - 2009:

2010 - 2012:

Next Step 2013 - 2020:

Development Oriented  Regular Benchmark Issuance  New Product Development  Regular Market Dialogue with BOT and PD

(Market Deepening Oriented)  50-yr Bond, 10-yr LB, ScriplessRetail Savings Bond  Upgrade PD Privileges  8 Benchmark Bonds create reliable reference yield curve

(Financing Thailand & Connecting ASEAN)  25-yr Amortized Bond, 15-yr ILB  Bond Switching & Bond Consolidation  Regional Linkage (CGIF)  Foreign Currency Bond

Post Crisis – 2000 :

% of GDP

THB Trillion

74%

Volume Oriented  Bond Market Capitalization Tripled  Government Bonds Outstanding grew by 50 times  Government Bond Market Share jumped from 3% in 1997 to 44% in 2000

2013

Pre-Crisis - Illiquid Bond Market - Absence of Benchmark Bond - Dominated by SoE’s Bonds

July 2013

Domestic Bond Market in Transition

 Funding Infrastructure Investment  Connecting ASEAN Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Market Deepening Oriented (2010 - 2013)

Funding Infrastructure Investment Connecting ASEAN (2014 - 2020)

Sustainable Source of Fund Regional Connectivity / AEC Debt Folio Enhancement Market Infrastructure Innovation / Product Development

Water Decree (350,000 THB Mil.)

Long-Term Infrastructure Inv’t (2,000,000 THB Mil.)

Thai Khem Khang (350,000 THB Mil.)

Private Sector Participation in Infrastructure Inv’t

Baht Bond (Foreign Issuers Bond)

Credit Guarantee Investment Facility (CGIF) Foreign Currency Bond

ATM Lengthened

Well-Distributed Investor Base

Cost Lowered

Well-Balanced Fixed-Floating Ratio

FIDF Decree Passed = 70,000 THB Mil. Fiscal Space

Well-Distributed Maturity Profile

Appointed 13 MOF-Outright PD

Bond Switching

Activated Public Debt Management Fund

Bond Consolidation

Inaugural 10-yr Inflation-Linked Bond (10-yr)

Extending ILB yield curve to 15-20-30-yr by 2015 Super- Size Inaugural 25-yr Back-End Amortized Bond

Long-term Fixed Promissory Notes (25-35-45-yr)

Scripless Retail Savings Bond  Liquidity

Electronic Retail Savings Bond (3-5-yr)

Long-term Zero Coupon Bond

30

Building Yield Curve / Enhancing Liquidity

15

50

150,000 MB

10 7 5 3

Liquidity-Oriented

20

8 Tenors of Benchmark Bonds

Outstanding Amount 3 5 7 10 15 20

02

30

50

Full Capacity* of All Government Funding Instruments

1,150,000 THB Mil. per Year ($40 Bil.)

* Under favorable market liquidity + using All funding instruments

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

%

LB 3 yrs LB 5 yrs LB 7 yrs LB 10 yrs LB 15 yrs LB 20 yrs LB 30 yrs LB 50 yrs

150,000 THB Mil. 120,000 THB Mil. 80,000 THB Mil. 80,000 THB Mil. 60,000 THB Mil. 60,000 THB Mil. 30,000 THB Mil. 20,000 THB Mil.

($5.0 Bil.) ($4.0 Bil.) ($2.8 Bil.) ($2.8 Bil.) ($2.0 Bil.) ($2.0 Bil.) ($1.0 Bil.) ($0.8 Bil.)

Thailand’s Loan Bonds (LBs) weighting in international indices

GBI-EM Global JP Morgan

iBoxx Asia ex Japan Asian Local Markets Markit HSBC

7.3%

7.8%

7.6%

Benchmark Bond

50

30

20 15 10

7 5

The “Missing Composition” of Leader role in the Bond Market Government Funding Instruments

3

Benchmark Bond

~600,000THB Mil. (52%)

Savings Bond

~100,000THB Mil. (8%)

Amortized Bond

~100,000THB Mil (8%)

liquidity

($20.4 Bil.) ($3.5 Bil.) ($3.5 Bil.) ($2.8 Bil.)

Inflation-Linked Bond

~80,000THB Mil. (7%)

Promissory Note

~40,000THB Mil. (4%)

Benchmark Bond

($1.4 Bil.) ($1.0 Bil.) ($7.0 Bil.)

Infrastructure

Floating Rate Bond Bank Loan

($40 Bil.) Total

~30,000THB Mil. (3%) ~200,000THB Mil. (18%)

1,150,000 THB Mil. (100%)

TTM (yrs.)

Source: ThaiBMA Government Bond Yield Curve End of September 2013

013

2014 - 2020

Government Funding Needs

690,000 THB Mil. per Year Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

New Borrowing

Plan Disbursement

Roll Over

8,255MB

500MB

2,500MB

New Borrowing

756,xxxMB

400,000MB

Water Decree 9,xxxMB

(2014-2020)

Rollover 290,000-0MB

318,xxxMB

Insurance Decree 47,000 MB

137,xxxMB

Infrastructure Bill

Per year

2,000,000MB

Deficit Bill 58,940

200,666

14

13,529MB

344,084

300,000

250,000

150,000

B u d g e t 75,000

-0-

B a l a n c e -0-

-0-

-0-

GOVT 6,300

Per year (2014-2020)

FIDF 37,900

2014

756,xxx THB Mil.

Total Fund Raising Plan

(~25 Billion USD)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Planned Disbursement

9,xxx MB

as of Sep 2013

Water

9,xxx

(As of Sep 25th,2013)

 Savings Bond

New Borrowing

Infrastructure

137,xxx

(As of Sep 25th,2013)

Bank Loan

 Dollar Bond

6 mths – 4 yrs

 Non-Benchmark  New Product

Savings Bond and Others

Deficit

250,000

123,000

Amortized Bond – 25 years

55,000

Inflation Linked Bond

25,000

387,xxx MB

Roll Over

Benchmark Bond

360,124 MB

(5 - 15 - 30 - 50-yr)

Rollover Govt Debt

231,000

Rollover FIDF Debt

129,124

278,000 82,000

Benchmark Bond (10-yr) Promissory Notes

47,124

By Instruments

By Bills

7 Fixed Coupon Bonds

ALL FY2014 Government Bond

5 Benchmark Bonds Series 1 Inflation-Linked Bond 1 Amortized Bond Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

5-yr

PD Survey

10-yr

(9/13 responded) BBL BNPP DBBK HSBC JPMCB KBANK KTB RBS SCBT

B

A

300,000MB $10 Billion

B

C

A

B

To be achieved

To be achieved

By 2018

By 2018

A

LB616A

ILB15 15

LB446A

10

LBA37DA

5

ILB283A LB296A

LB186A LB196A LB203A

Outstanding

B

LB236A LB246A

C

A

LBA25

30

50

015

16

Government Bond Auction Schedule for Q1/FY2014 Exclusivity MoF Outright PD Only

Auction Date

Unit : Million Baht LB196A LB196A 5-yr

2-Oct-2013 9-Oct-2013 16-Oct-2013 23-Oct-2013 30-Oct-2013 6-Nov-2013 13-Nov-2013 20-Nov-2013 27-Nov-2013 3-Dec-2013 11-Dec-2013 18-Dec-2013 25-Dec-2013 Total Coupon Maturity Date

Amortized Bond

Inflation-Linked Bond

LB236A

ILB283A ILB283A

LB296A

LBA37DA LBA37DA

10-yr

15-yr

15-yr

25-yr

20,000

LB446A 30-yr

LB616A

7,000 5,000 13,000 5,000 5,000

20,000

8,000 12,000

40,000 3.875% 13-Jun-2019

Total

50-yr

13,000 5,000 7,000 12,000 5,000 13,000 3.625% 1.25% 4.875% 4.26% 4.85% 16-Jun-2023 12-Mar-2028 22-Jun-2029 12-Dec-2037 29-Jun-2044 17-Jun-2061

27,000 5,000 13,000 5,000 5,000 28,000 12,000 95,000

1. LB196A = พันธบัตรรัฐบาลเพือ่ การบริหารหนี้ในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 1/พันธบัตรในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 1 (Re-open พันธบัตรรัฐบาล ในปีงบประมาณ พ.ศ. 2552 ครัง้ ที่ 13) 2. LB236A = พันธบัตรรัฐบาลเพือ่ การปรับโครงสร้างหนี้ในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 1 (Re-open พันธบัตรรัฐบาลเพือ่ การปรับโครงสร้างหนี้ (พ.ร.ก.ช่วยเหลือกองทุนเพือ่ การฟืน้ ฟูฯ ระยะที่สอง) ในปีงบประมาณ พ.ศ. 2553 ครัง้ ที่ 1) 3. ILB283A = พันธบัตรรัฐบาลประเภทอัตราดอกเบี้ยแปรผันตามการเปลีย่ นแปลงของเงินเฟ้อ ในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 1 (Re-open พันธบัตรรัฐบาลประเภทอัตราดอกเบี้ยแปรผันตามการเปลีย่ นแปลงของเงินเฟ้อ ในปีงบประมาณ พ.ศ. 2556 ครัง้ ที่ 2) 4. LB296A = พันธบัตรรัฐบาลเพือ่ การบริหารหนี้ ในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 2 (Re-open พันธบัตรรัฐบาล ในปีงบประมาณ พ.ศ. 2553 ครัง้ ที่ 2) 5. LBA37DA = พันธบัตรรัฐบาลประเภททยอยชาระคืนเงินต้น ในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 1 (Re-open พันธบัตรรัฐบาลประเภททยอยชาระคืนเงินต้น ในปีงบประมาณ พ.ศ. 2556) 6. LB446A = พันธบัตรรัฐบาลเพือ่ การบริหารหนี้ ในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 4 (ประกาศอัตราดอกเบี้ยในวันที่ 25 พฤศจิกายน 2556) 7. LB616A = พันธบัตรรัฐบาลเพือ่ การบริหารหนี้ในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 3/พันธบัตรในปีงบประมาณ พ.ศ.2557 ครัง้ ที่ 2 (Re-open พันธบัตรรัฐบาล ในปีงบประมาณ พ.ศ. 2554 ครัง้ ที่ 9)

Website http://www.pdmo.go.th/

Exclusivity

FY2014 Indicative Benchmark Bond LB446A (30-yr Benchmark Bond)

-To Be Announced-

7

18

2014

T-Bill Reissuance

 Facilitate Budget Balance Policy  Response to market demand

Objective  Facilitate Budget Balance Policy 

Policy-Oriented

Issuing Revolving T-bill, amount 100,000 MB, over the whole year

Objective  Response to market demand

To develop short term bond market

Market-Oriented

Revolving T-Bill Issuance : “Regularly – Continuously – Sufficiently”

A

Tenor

:

1 Month (the only tenor of T-bill that MOF can completely replace BOT 1 Month Market, BOT will not issue 1 Month BOT Bill in order to avoid investor’s confusion)

B Auction Frequency C Auction Size

: :

Every week 20,000 - 25,000 MB (To meet the existing Market Demand)

2014 25,000MB

Q1

Q2

Q3

Q4

2013

Quarter 4 T-Bill Auction Result Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

C-Bill

Million Baht

bps

T-Bill

80,000

16

60,000

12

40,000

8

28,000

28,000

28,000

28,000

28,000

28,000

28,000

28,000

20,000

T-1=0 -

2,554 25,446

1.03 27,135

25,000

25,000

25,000

3 Sep 13 10 Sep 13

17 Sep 13

24 Sep 13

-20,000

-40,000

1.08

4

0

-4

July July

Aug Aug

Sep Sep

-8

Q4/2013

019

Bond Consolidation

Reduce Refinancing Risk

Enhance Liquidity Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Government Bond Classified By Size

BS

BC

10

LB616A

LB27DA

LB326A

ILB283A

LBA37DA

5 7

LB416A

3

LB236A

100,000

LB176A LB196A LB21DA

Outstanding size (THB Mil.)

Bond Switching

10

30

50

15

20

15

25

End of Sep 2013

2014: Organizing Debt Folio

+ Enhancing Liquidity

Bond Switching Reduce Refinancing Risk ≥ 50,000 MB Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Example

LB

Bond Switching

A B C D

Reduce Refinancing Risk ≥ 50,000 MB

Outstanding

Coupon

(MB )

(% per year)

TTM (yr)

LB145B

121,035

5.25

0.8

LB155A

152,572

3.625

1.8

LB15DA

132,000

3.125

2.4

LB183B

86,632

5.125

4.6

5-yr

Top-up

LB236A

82,000

10-yr

Top-up

Million Baht

0

TTM

1

2

3

2014: Organizing Debt Folio

4

5yr

6

+ Enhancing Liquidity

7

8

9

10yr

Bond Consolidation Enhance Liquidity ≤ 50,000 MB Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Example

Outstanding

Coupon

(MB )

(% per year)

LB25DA

43,000

3.85

12.4

LB316A

41,900

3.65

17.9

LB383A

5,000

5.50

24.6

LB396A

5,500

5.00

25.9

LB406A

20,000

5.00

26.9

LB

A B C D E

Bond Consolidation Enhance Liquidity ≤ 50,000 MB Million Baht

TTM (yr)

200,000

50-yr 50,000

60,000

50,000 LB416A

LB616A

5,500 20,000 LB396A

LB446A

5,000 LB383A

LB326A

LB316A

LB306A

LB296A

LB283A

LB27DA

LB267A

2025

LBA37DA

41,900

50,000

C D

-

LB25DA

E

B

LB406A

A 43,000

50,000

Top-up

60,000

100,000

Top-up

25-yr LBA

150,000

2061 11

1 new Member of MOF Outright PD

Duties - Privileges - Monitoring Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

MOF Outright Primary Dealers  Bangkok Bank PCL.  BNP Paribas, Bangkok Branch  Citibank N.A., Bangkok Branch  Deutsche Bank AG., Bangkok Branch  The Hongkong and Shanghai Banking Corporation Limited  JPMorgan Chase Bank, Bangkok Branch  Kasikornbank PCL.

 Krung Thai Bank PCL.  Siam Commercial Bank PCL.  Standard Chartered Bank (Thai) PCL.  TMB Bank PCL.  KGI Securities (Thailand) PCL.  CIMB Thai Bank Public Company Limited

Duties 1. Primary Market  Maintain at least 5% share of total issue size of selected tenor 5-yr , 10-yr and ILB  Participate in every auction  Submit bid at least 10% for exclusivity tenor : 5-yr

3. Bond Market Development

2. Secondary Market

 Maintain at least 5% share of market trading value  Submit daily end-of-day price to ThaiBMA

 Being MOF, BOT, SET and ThaiBMA Partner in developing bond market

Privileges

  

Exclusivity in 5-yr tenor of Government Benchmark Bond MOF Preferred Counterparty Quarterly dialogue with MOF to plan Bond Auction Schedule

 

Yearly Evaluation (fiscal year) with half-year review Regular one-on-one or one-on-group meeting

 

BOT outright counterparty Benefit from Incentive program of SET

Monitoring

The 1st PD’s Privileges : Exclusive Right for 5-yr Benchmark Bond (LB196A)

All 13 PDs Participated but… Not All are Allocated

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

5%

Participated (Classified by number of PDs and their % of total participated size)

13/13

PDs

13/13

PDs

35,623MB

1%

11%

77%

12/13

1/FY2013

PDs

13/13

PDs

35,480MB

2%

31%

13,000MB

12

1%

18%

34%

1%

(Classified by number of PDs and their % of total allocated size)

5%

16%

16%

24,480MB

Allocated

3%

1%

8/13

PDs

14,000MB

2/FY2013

13/13

PDs

25,006MB

8/13

PDs

PDs

21,769MB

1%

2%

19%

13/13

14% 34%

12/13

PDs

11/13

PDs

14,000MB

14,000MB

12,000MB

3/FY2013

4/FY2013

5/FY2013

13

14

15

16

Bond Consolidation

Bond Switching Reduce Refinancing Risk

Enhance Liquidity Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

BC

15

LBA37DA

50

LB326A

30

ILB283A

LB27DA

10

LB416A

5 7

LB616A

3

LB236A

100,000

LB176A LB196A LB21DA

Outstanding size (THB Mil.)

BS

20

15

25

End of Sep 2013

17

18

B. Q4/FY2013 Highlights Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

•

Impact of QE3 Announcement on Thai Bond Market   

• •

Volatile of Government Yield Curve  Jumped 29 - 62 bps Government Bond Auction Sensitive on QE3 Sharply Increase in ILB Yield Curve  Shifted Up 115 bps

Thai Bond Market as ASEAN Destination – Twin Inaugurals (CGIF/Laotian) The First Decade of Baht Bond / Pilot Project of CGIF

QE 3

Yield Curve of GOVT Bond Jumped 29 - 62 bps End of Sep 2013 Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

6%

5.57%

5.40%

2008

today

(25 Apr 2008)

(30 September 2013)

4.92%

4.72%

5% 4.45% 3.94%

4%

4.27%

3.50% 3.83% 3.05%

3%

2%

2.57% 2.50%

2.96%

3.32%

45 bps

QE 3 (22 May 2013)

62 bps

2.67%

29 bps

“

QE 3 : Rising cost ”

1%

0%

Yield Curve of GOVT Bond

1 Month

19

Uncertainty on QE3 Tapering

Higher GOVT Yield Volatility Public Debt Management Office, Ministry of Finance

18th Sep 13 Tapering QE3 DELAYED

22nd May 13 Tapering QE3

%

4.91

5.00

4.73

4.87

4.65

4.50

4.27 4.23 4.18

4.00

3.84

3.91 3.59

3.50

3.31 2.98

3.00

2.50

2.50

20

Oct-13

Sep-13

Aug-13

Jul-13

Jun-13

May-13

Apr-13

Mar-13

Feb-13

Jan-13

LB616A 50-yr

LB416A 30-yr

LB236A 10-yr

LB196A 5-yr

MPC 2.00

FY 2013 GOVT Bond Auction Results

GOVT Bond Auction is Sensitive to QE3

Classified by Quarterly Auction Schedule

Public Debt Management Office, Ministry of Finance

3-5-7-10 yr Benchmark Bond Amortized Bond

15-20-30-50 yr Benchmark Bond Inflation-linked Bond

Not Participated /Unallocated Amount Million Baht

Basis Points 12.5

20,000

Tapering QE3

10.0

15,000 8.4

7.5

8.3

8.3

7.2

10,000

6.0

5.0 4.8

5.0

4.7

4.5

2.5

3.3 1.9

1.61.5

1.1

T-1= 0.00

0.3 -0.7

1.4

0.0

1.5

0.30.5

-0.2 -0.8 -0.9-0.9

-1.2

-2.5

2.1

1.5

-2.3

-0.9

-1.4 -1.7 -2.8

-0.5

-0.7

-2.4 -2.2 -3.0

-5.0

-5.5 -6.2

-6.3

-5,000

-2.6

Tapering QE3

-4.4 -4.8

-5.1

0

-1.0 18 SEpt

-3.6

-7.5

5,000

3.8

3.2

-6.6

DELAYED

-6.9

-10,000 -7.6

-8.0

-15,000

-10.0 -10.2 -11.6

Q1

Q2

Q4

Q3 A B

FY 2013 GOVT Bond Auction Results Classified by Tenor

-20,000

LB616A LB326A LB196A LB236A LB27DA LB416A LB176A LB21DA LBA37DA LB616A LB236A ILB283A LB196A LB416A

LB21DA LB416A LB176A LB27DA LB236A LB616A ILB283A LB326A LB196A LBA37DA LB21DA LB416A LB176A LB27DA

LB236A LB616A LB326A LB196A LB27DA LB21DA LB416A LB176A LB236A LBA37DA LB196A LB616A LB326A

LB176A LB27DA LB616A ILB217A LB21DA LB236A LB416A LB196A LB326A LB616A LB27DA LB21DA LB176A LB416A

-12.5

3-to-5-yr Benchmark Bond: Avg.Accepted LOWER than Market Price 20-yr Benchmark Bond: NOT fully Allocated or Subscribed Public Debt Management Office, Ministry of Finance

Basis Points 12.5

Benchmark Bond 3 – 10yr

3yr

5yr

7yr

Benchmark Bond 15 – 50yr

10yr

15yr

20yr

30yr

50yr

(Exclusivity)

10.0

7.5

B 5.0

2.5

T-1= 0 -2.5

A

-5.0

-7.5

-10.0

-12.5

Auction Results Below The Market Price

21

22

 First & Only ILB in ASEAN  Scarcity Value

Instrument to Hedge Asian Inflation

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

EM ILB Outstanding : $ 274.1 Bil.

ILB weighting in Barclays EMTILasIndex of Jan 2013

as of Sep 2013

as of Sep 2013

Thailand approx. 4.9%

Thailand 1.8% South Korea $ 7 Bil.

Other Emerging Markets 98.2%

Japan $ 35 Bil. Thailand $ 5.0 Bil.

Hong Kong $ 3.9 Bil.

Remarks: - Other Emerging Markets include Argentina, Bolivia, Chile, Mexico, Peru, Poland, Russia, South Africa, Thailand, Turkey and India.

Source: HSBC

Remarks: - Others includes Brazil, Mexico, Turkey, Israel, South Africa, Chile, Poland and South Korea Source: Barclays Index Enquiries Helpdesk, as of Sep 2013

Thaila

Peer G

Thailand Inflation is inline with Asian Inflation

6.8%

5.6% 3.5%

3.0%

Source: Bloomberg

5.5%

4.6%

1.3%

2.8%

0.7%

3.3%

3.5%

3.6%

3.2%

3.2%

1.6%

-0.8%

Aug 2013

Thailand Inflation Rate (%)

Peer Group Average (Indonesia, Malaysia, Philippines, and Singapore)

Forward Looking : Inflation-Linked Bond by 2015

 Extend ILB Yield Curve  Continue to Enhance Liquidity Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

July 2011

March 2013 1. Extending ILB yield curve to 15-yr 2. Enhancing liquidity - Benchmark size : PDMO will build up appropriate size to enhance secondary market liquidity - Market Making : Primary Dealers are encouraged to participate in auctions & secondary market - Setting up Inflation-Linked Fund : KTB Inflation-Linked Fund designed to expand investors base

Inaugural 10-yr ILB 1. Macro Economic : Price stability 2. Bond Market Development : innovation 3. Funding Source : Broadening investor base

15 10

100,000MB 5,000MB 5,000MB 5,000MB 5,000MB 5,000MB

55,000MB (September 2013)

Maturity

30

Sky Rocketed ILB curve resulted in NO Auction Allocation Q&A with Khun Chularat Suteethorn Director-General of Public Debt Management Office

Q

: Why did PDMO cancel the 15-year ILB auction on Sept 11th, 2013?

Figure_1: Conventional bond and ILB Yield Movement in 2013 LB27DA

ILB283A

5.00

Chularat : It was NOT a cancellation of 15yr-ILB auction (LB283A).

%

The auction took place as scheduled on 9/11 but PDMO has chosen NOT to allocate ILB to any bidder at the primary market auction.

Although PDMO appreciated BCR of 1.6 times but the bidding range was unusually wide (40 bps in range). On top of this, the ILB curve has risen drastically by about 115 bps during the past month prior to the auction day. (from 1.56% on Aug 16th – to 2.71% on Sept 11th shown in Figure_1) This hike of 115 bps is “unusual” compare to conventional 15yr benchmark bond (LB27DA), its yield rose only 20 bps during this same period. We took the “market volatility” into consideration but comparing to the movement of conventional bond, the wide bidding range of ILB has inevitably resulted in NO allocation.

4.26

LB27DA

3.92 4.00

4.49 4.50

24 bps

3.00

2.71

2.00

1.17

1.56 1.56

ILB283A

1.00

115 bps

0.00 Jan 2013

Feb 2013

Mar 2013

Apr 2013

May 2013

Jun 2013

Jul 2013

Aug 2013

Sep 2013

We would like to assure the market participants that under this volatile market condition, we are being very precautious about the auction allocation of government bond in the primary market. In light of this, we would like to keep communication channel opens as market feedback is most precious in the time like this.

Q Figure_2: NR investment and ILB Yield Movement in 2013

outflow of Non-Resident?

Past 4 weeks = +115 bps 2.71

20,000

Million Baht

Chularat : We witnessed the series of capital outflow which 3.00

%

16,904

15Y-ILB (ILB283A)

14,023 12,093

1.13

10,000 7,312

6,972

1.56

1.52

1.50

9,425

8,689

7,429

7,714

6,167 4,645

3,765

2,663

2,380

1,104

0

0.00 -1,025

-959

-921

-1,304

-1,429

-2,267

-1,682

-1,765 -2,656 -3,330

-3,156 -4,185 -4,465 -5,641

-6,186

-8,844

-10,000

-1.50 -11,538

Tapering QE 3

-15,226

Week 36

Week 35

Week 34

Week 33

Week 32

Week 31

Week 30

Week 29

Week 28

Week 27

Week 26

Week 25

Week 24

Week 23

Week 22

Week 21

Week 20

Week 19

Week 18

Week 17

Week 16

Week 15

Week 14

Week 13

Week 12

Week 9

Week 11

Week 8

Week 10

Week 7

Week 6

Week 5

Week 4

Week 3

Week 2

-3.00 Week 1

-20,000

2013

Q

leads to higher government yield curve in both conventional bond and ILB. But the outflow didn’t just start in the past month, it began since the announcement of Tapering QE3 in May which was 4 months ago. (Figure_2)

7,701

5,159

-680

: Did the hike up in ILB yield curve come from the continued

During the first 3 months of outflow, the ILB yield curve moved up only 40 bps which is inline with the conventional bond. But in the last month alone, the ILB curve went up 115 bps, while the conventional bond moved only 20 bps further up.

At the Annual Market Dialogue on September 12nd, 2013, PDs and investors did point out that the past month inflation rate was not in line with the market expectation. This may have added onto the additional spread between ILB and conventional bond. In light of this, PDMO will keep a close watch to all matters surrounding ILB in order to ensure that ILB reflects realistic rate of inflation.

: As the ILB performance has been heavily affected by the recent market

condition, how will this affect the development path of ILB?

Chularat : We have quite fruitful comments from the market at the annual Market Dialogue which took place just a day after “NO” ILB allocation incident.

We acknowledged that the demand of ILB is adversely affected from the outflow BUT as a leader in ASEAN ILB market, we are committed to maintain the supply of ILB in fiscal year 2014.

(Oct 2013-Sept 2014) However, in order to secure the overall performance of our funding plan, we have decided to cut the auction size of ILB in half in fiscal year 2014 to 5 billion Baht per auction from 10 billion Baht per auction in fiscal year 2013. In fact, this is a recommendation from the market.

In light of this, PDMO will closely monitor all movements in the global financial market and consult with PDs and investors on regular basis to ensure that our funding plan will be supported by the market.

23

Twin Inaugurals

Thai Bond Market as ASEAN Destination 10,000

CGIF

9,000 8,000

150,000

Total Outstanding THB 8,919 THB Bil.

Inaugural (Noble, Hong Kong)

7,000 6,000 5,000

Baht Bond

1%

(Foreign Issuers Bond)

2,850

4,000

BAHT BOND

End of September 2013

100,000

(For Asian Bond

CGIF Market Initiative) 0.03%

THB Mil.

116,474

Inaugural (Lao PDR)

THB Mil.

Updated: In 2013, Laotian Government issued 1.5 billion baht of 3-year baht bonds, with 4.5%of interest rate

3,000 2,000

50,000

1,000

0

Corp Bond

20%

SOEs Bond

8%

2013 2014 2015 2016 2017 2018 2019 2020 0

2005 2006 2007 2008 2009 2010 2011 2012 2013 IBRD

KEXIM (28,700 m)

Natural Hedging

Inv’t Grade

33%

BOT Bond

Hana

CABEI

(18,000 m)

AFD

Woori

KDB

(13,000 m)

ING

Targeted Industry

(10,000 m)

GOVT Bond

IBK ADB

38%

(10,500 m)

Citi

(12,300 m)

(11,553 m)

Why now?

What next?

Thailand (PDMO) is a Board member  Set criteria  Select corporate

 Toward becoming regional hub  Increasing AAA Supply  Broadening Issuer Base : Lao PDR

(PDDF.)

Timeline For Baht Bond Application Process

Approval

Nov

Dec

SUBMISSION

CONSIDERATION

Jan

Feb

1

1st

2nd

Progress Report

Progress Report

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Jan

Feb

Mar

Apr

May

Issuance Period 9 months (Jan - Sep)

SUBMISSION

CONSIDERATION

2

Issuance Period 9 months (May - Jan)

SUBMISSION

CONSIDERATION

3

Issuance Period 9 months (Sep - May)

SUBMISSION

APPLICATION PROCESS: 3 rounds per year (9-mth issuance period for each round)

24

Dec

CONSIDERATION

1

Issuance Period 9 months (Jan - Sep)

116,474 THB Mil.

THE OUTSTANDING BAHT BOND Classified by issuers based on TTM

6%

60% Due within Y2015

(6,600 THB Mil.)

(70,590 THB Mil.)

28

% (32,874 THB Mil.)

31%

THB Mil.

(36,690) SEK

66%

24%

ING

(27,900) CA-CIB

Citi

Woori KEXIM

CA-CIB

KEXIM

5%

(77,000 THB Mil.)

19%

ENBD

(21,975)

IBK

KDB

3%

(6,000) Hana

CBA KEXIM

KDB

5% (6,500)

(3,874)

Hana

2%

4%

2%

(5,000)

(3,000)

1%

(2,235)

(1,500)

2%

2%

(2,800)

(2,000)

IBRD

Korean Issuers

IFIs

Others

Expired (As of Sep 2013)

Source: PDMO End of Sep 2013

To Enhance Our Cooperation To Achieve Our Targets

Development Direction of Baht Bond (2012 – 2016) To Enhance Our Cooperation : 2013

Arranger BOT Deregulation of Swap Obligation

• Facilitating issuers & investors in Baht Bond • Providing market updates in one-on-one meetings

Extension of Approval Period

To Achieve Our Targets : 2015 Issued amount (per year)

Number of issuers (per year)

Outstanding size (% share of BOND market capitalization)

2004-2011 between 5,000

2012-2016

– 27,000 MB

between

2 – 6 clients

1%

minimum

15,000 MB

minimum

4 clients 3% 25

C. Basic & Essentials Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

• • • •

Bond Market Capitalization and Its Composition (As of Sep 2013) = 8,919,666 THB Mil.

•

Non-Resident Holding on Thai Bond Market

Equilibrium of Domestic Bond Market Government Benchmark Bond Performance Public Debt Outstanding and Its Composition (As of July 2013) = 5,211,194 THB Mil. (44.11% of GDP)  

NR Holding on THB Bond (As of Sep 2013)  770,967 THB Mil. (GOVT Bond : 574,987 THB Mil., BOT Bond : 195,132 THB Mil., Corp Bond : 848 THB Mil.) Net Change in NR Holding (Oct 2012 - Sep 2013)  55,868 THB Mil. (GOVT Bond : Net Buy 72,029 THB Mil., BOT Bond : Net Sell 16,161 THB Mil.)

1997 Asian Financial Crisis

The Rude Awakening Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

% Share of GDP

128%

Balanced 102% 98%

74% 8.9 THB Trillion July 2013

24% Asian Fin. Crisis

12%

July 2013

Source : ThaiBMA

26

Bond Market Cap. = 8.9 THB Trillion ($297 Bil.)

GOVT Bond = 3.4 THB Trillion ($112 Bil.)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

% Share of GDP

Domestic Bond Market Classified by Issuer 128%

Baht Bond

102%

1%

(For Asian Bond CGIF Market Initiative) 0.03%

98%

74%

Corp Bond

20%

SOEs Bond

8%

BOT Bond

33%

24% Asian Fin. Crisis 12%

2,920,425 THB Mil. Maturity Profile BOT vs GOVT Bond BOT ATM = 8mths GOVT ATM = 8yrs 4mths*

GOVT Bond 38% 3,371,827 THB Mil.

*End of July 2013

11% 20%

67% BOT

32%

MOF 28%

17% 1%

24%

End of Sep 2013

BOT Bond Supply Rose Dramatically (2004 – Sep 2013)

 Market share rose by… 3 Folds  Outstanding size rose by… 10 times Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

% Share of Domestic Bond Market

54%

(1,286,620 THB Mil.)

Domestic Bond Market 2013 Classified by Issuer

38% GOVT BOT 33%

Baht Bond (Foreign Issuers Bond)

CGIF

1% 0.03%

Corp Bond

20%

SOEs Bond

8%

BOT Bond 2,920,425 THB Mil.

33%

Corp Bond 20%

GOVT Bond 3,371,827 THB Mil.

13%

(312,340 THB Mil.)

2004

38%

SOEs Bond 8%

Baht Bond

Sep 2013 End of Sep 2013

27

FY2007 – FY2014

Innovation of GOVT Debt Securities Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

• Lengthen average-time-to-maturity of Total Government Debt Portfolio • Meet Long-term investors’ demand

Floating Rate Bond

• Increase floating debt ratio of Total Government Debt Portfolio • Promote BIBOR (Bangkok Interbank Offered Rate)

Step-up Savings Bond

• Broaden investor base – Retail investors • Low interest burden at the initial periods of bond

Fixed Rate Promissory Note

• Broaden investor base – Insurance / Long-term investors • Non-Benchmark tenors

50-yr Benchmark Bond

• Combat low interest rate + Lengthen average time-to-maturity • 4th country in the world (1st : UK 2nd : France 3rd : China)

10-yr Inflation-Linked Bond (ILB)

• Strong anti-inflationary signal • Deepen the Development of the Bond market • 1st country in Emerging Asian Economies

Electronic Retail Savings Bond

• Lower Minimum Amount to Purchase / Offer throughout the year • Develop the retail bond into an electronic form  Scripless System • Can be purchased via ATM, in addition of Bank Retail Branches

Amortized Bond

• Suitable financing instrument for the government’s investment mega-project in the form of PPP • Pay back the bond principal by installments  Promote the government’s fiscal discipline

FY 2012-2014

FY 2011

FY 2007-10

30-yr Benchmark Bond

Bond Switching & Consolidation

• Allow both issuer and investors to improve their portfolio • Larger outstanding size + Less bond series  more liquidity in the secondary market

PDDF Activated

Upgrade PD Privileges

(Public Debt Restructuring and Domestic Bond Market Development Fund)

15-yr ILB

Baht Bond

CGIF Activated

(Credit Guarantee and Investment Facility)

Equilibrium of Domestic Bond Market Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Issuers

• 79 percent of Thailand’s debt securities are issued by Government, Bank of Thailand and State-Owned Enterprises

Credit Rating

• 96 percent of Thailand’s debt securities are classified as Investment Grade

Investors

• Thailand’s government debt securities are held by a wide group of investor types

Domestic Bond Market (Classified by Issuers)

Domestic Bond Market (Classified by Credit Rating)

Baht Bond

CGIF 0.03%

A

20%

6%

Government

38%

8%

AA 5%

Government

38%

SOEs 8%

BOT

BOT

33%

33%

Total of 8.9 THB Trillion

Source : ThaiBMA (End of Sep 2013)

28

4%

4%

Corp Bond

SOEs

Non-rated

BBB

1%

Government Debt Securities (Classified by Types of Investors)

Total of 8.9 THB Trillion

Source : ThaiBMA (End of Sep 2013)

NR 17% Household and Non-profit

BOT 6% Insurance and Other Corporation

36%

8% Depository Corporation

33% Total of 3.4 THB Trillion

Source : BOT, PDMO (End of Aug 2013)

Keep our word… to get investors confidence for the plan

Unit : Million Baht Lower-than-expected disbursement of Water Decree

Lower-than-expected disbursement of Water Decree

Economic Recovery

756,xxx MB Higher-than-expected revenue collection

Stimulus package to ease: US financial crisis

-6%

0%

-3%

+5%

+2%

Plan Actual

Plan Actual

Plan Actual

Plan Actual

Plan Actual

Plan

Plan: Actual:

Announced Government’s funding need at PDMO’s Annual Market Dialogues in September Actual fund raising at the end of fiscal year (calculated from announced auction)

--------------

The difference between ‘’the announced’’ and ‘’the actual’’ supply of benchmark bond (% share)

Benchmark Instruments are (1) Benchmark Bonds : Standard Loan Bond (LB) tenors 5-10-15-30-50yr (in FY 2014) Regular issuance/ Consultation with PDs/ Pre-announced auction table

(2) Innovative Products : Inflation-linked Bond (ILB) + Amortized Bond (LBA) Other Instruments : Saving Bond, Floating Rate Bond, Promissory Notes, Bills and Bank Loan

29

FY2008-FY2013 Key Success Indicators

1. Trading Volume 3. Demand Concentration

2. Turnover Ratio 4. Auction Price

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Short-term Benchmark Bond : Highest Secondary Trading

5-yr Benchmark Bond’s Higher Turnover Ratio : Even the higher outstanding in site, Turnover Ratio is still more than 2 times

Volume in every year Unit: % Share of Market Trading Volume

Unit: Times

LB155A LB133A

9

29%

28%

27% 20%

LB145B

20%

7%

LB15DA

3.1

LB133A

21%

4.2

LB176A

2.8

2.4

1.5

4.2

LB196A

2.9

Top 10 GOVT Bond Series – Accounted for 90% of all GOVT Bond trading in Secondary Trading Volume

Well-Developed Benchmark Bond pays off : Even with greater size of issuance, the cost of funding is still at market rate

Unit: % Share of Market Trading Volume

Unit: USD Bil. +0.9 bps

90% 90% +1.4 bps

84% 75%

30

76% 77%

80%

+1.2 bps

7.5

+3.2 bps

14.7

12.8 -0.4 bps

16.5

15.9

13.7

-0.2 bps

Tier 1 > 100,000 THB Mil. in Size (87% of Trading Volume)

FY2013 Q4 Total GOVT Bond = 44 Series (2,888,XXX THB Mil.)

Tier 2 > 50,000 THB Mil. in Size

(10% of Trading Volume)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Million Baht

Tier 1: >100,000

FY2013 Q4 Market Share of Trading Volume in Secondary Market Tier 1 Tier 2

(8 Series)

3 5

7 10% 3%

87% 50

100

Tier 2: 50,000 – 100,000

10

(16 Series)

30

100,000

50

ILB283A

LBA37DA

25

LB326A

15

LB27DA

5 7

LBA

LB616A

3

ILB

LB416A

TTM (Year)

Source : ThaiBMA

20

LB236A

15

LB176A LB196A LB21DA

Outstanding size (THB Mil.)

0

10

30

50

15

20

15

25

FY 2013 on-the-run Benchmark Bond

End of Sep 2013

The outstanding size of loan bond maturing in the next 5 years is 1,134,019 million baht. (39.3% of Total GOVT Bond)

Profile of GOVT Bond (as of Q4/FY 2013)

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Million Baht Outstanding ≥ THB 100 Bil. Current Outstanding = THB 50-100 Bil. Current Outstanding ≤ THB 50 Bil.

3 5

7

FY 2013 on-the-run Benchmark Bond

10 30

100,000

50

1

Source : ThaiBMA

2

3

4

5

6 – 10 years

ILB283A

LB27DA

LB236A

LB21DA

LB176A

TTM

LB196A

15

20 LBA 25

LB416A LB616A

ILB

LB326A LBA37DA

15

11 – 50 years

End of Sep 2013

31

Public Debt Outstanding (as of July 2013) = 5.2 THB Trillion (44.11% of GDP) Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Components of Public Debt

Units : THB Mil.

1. Government Debt (excluded FIDF) 2. Government Debt (for FIDF) 3. Non-Financial State Enterprise Debt 4. Special Financial Institutions Guaranteed Debt 5. Autonomous Agency Debt

Special Financial Institution Guaranteed Debt

2,537,086** 1,103,982 1,077,723** 491,569** 834**

9.4

% 0.49 THB Trillion Autonomous Agency Debt 0.02% 0.001 THB Trillion

Public Debt Outstanding (as of July 2013) 5,211,194 *Including 71,267 THB Mil. of External Debt

Non-Financial State Enterprise Debt

GOVT Debt

20.7%

48.7%

1.08 THB Trillion

2.54 THB Trillion

GOVT Debt (for FIDF)

21.2% 1.10 THB Trillion

Source: Information Technology Center, PDMO

Forecast Public Debt to GDP % of GDP 70%

61.7% 60.9%

60%

50%

40%

Sustainability Framework Public Debt to GDP < 60%

60.6% 56.9% 52.2% 50.6%

48.3%

51.0% 43.5%

35.6%

45.5% 41.7% 46.3% 42.6%

45.2% 39.6% 37.3%

30%

20%

14.6% 9.12%

10%

10.87%

12.52%

11.54% 11.26%

12.61% 10.20%

4.84%

9.98%

7.41%

0%

Public Debt to GDP

Repayment Budget/Budget Expenditure

Source: Policy and Planning Bureau, as of 12 July 2013, Public Debt Management Office, Ministry of Finance

32

As of March 2013  Average-Time-to-Maturity (ATM) = 8yrs 4mths  Average Cost = 4.26%  Fixed : Floating = 85 : 15 As of July 2013

Total GOVT Debt = 3.57* THB Trillion (68% of Public Debt) * Excluded 71,267 THB Mil. of Foreign Debt

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand Assumptions : 6 months BIBOR = 2.67%, 6 months Fixed Deposit Rate = 1.99%, Inflation = 2.60%

FIDF 1

FIDF 3

 ATM = 4yrs 9mths  Avg. Cost = 4.3%  Fixed : Floating = 84: 16

 Callable

GOVT Debt (for FIDF) = 1,103,982 THB Mil.

= 18% Maturity Profile

61%

32% 7% next 5 yrs

year 6 -10

10 yrs +

TTM Fiscal Year

Budget Deficit

TKK

On-lending Loan

 ATM = 9yrs 11mths  Avg. Cost = 4.2%  Fixed : Floating = 86 : 14

Water Decree

 Callable

= 6.5% Maturity Profile

42%

GOVT Debt (exclude FIDF) = 2,465,819** THB Mil.

33%

25%

next 5 yrs

year 6 -10

10 yrs +

TTM Fiscal Year

**Excluded 71,267 THB Mil. of Foreign Debt

(1) (2) (3) (4)

Well-Developed Bond Market Improved

GOV’T Direct Debt Profile Dramatically

ATM Lengthened Cost Lowered Well-Balanced Fixed-Float Ratio Well-Distributed Maturity Profile

Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Note : Government Direct Debt = 2.47 THB Million

As of Dec 2007

As of July 2013 ATM

Average-Time-to-Maturity LENGTHENED by 5 yrs

9yrs 11mths ATM

5yrs 3mths Avg. cost

4.5%

Avg. Cost LOWERED by 30 bps.

(While ATM Lengthened by 5 yrs)

Avg. cost

4.2% Floating

Well-Balanced Fixed/Floating Ratio (Target : Fixed/Float ratio = 80 : 20)

10%

Fixed

Fixed

90%

86%

Maturity Profile as of Dec 2009

61% Well-Distributed Maturity Profile

24%

(Maturing Debt in the next 5 yrs is less than 50% of Total Debt) next 5 yrs

Floating

year 6 - 10

Maturity Profile as of July 2013

42%

15% 10yrs +

14%

25%

next 5 yrs year 6 -10

33%

10 yrs +

33

NR Holding

Non-resident Holding in THB Bond = 770,967 THB Million (8.65% of Thai Bond Market Capitalization of 8,919,666 THB Million)

(% share of Bond Market)

Thai Bond Market Cap. = 8,919,666

THB Million (Classified by Issuer at 30th September 2013)

Baht Bond

1%

(Foreign Issuers Bond)

CGIF Market Initiative) 0.03% (For Asian Bond

Corp Bond

20%

SOEs Bond

8%

GOVT Bond

574,987

BOT Bond

195,132

6.45% 6.121% 2.19%

SOE Bond

0

0.00%

Corp Bond

848

0.01%

GOVT Bond Outstanding

BOT Bond Outstanding

3,371,827THB Mil.

2,920,425THB Mil.

Non-Resident 574,987 THB Mil.

BOT Bond

% Share of Thai Bond Market Cap. (8,919,666 THB Million)

Non-Res ident Holding (THB Million)

Issuer

End of Sep 2013

33%

Non-Resident 195,132 THB Mil. %

%

2,920,425 THB Mil. GOVT Bond

Domestic Investors

38%

Domestic Investors 2,725,293 THB Mil.

2,796,840 THB Mil.

82.9

93.3

%

3,371,827 THB Mil.

%

MOF: Net Buy72,029 MB Sell -77,733 MB Buy 149,762 MB BOT: Net Sell 16,161 MB Sell -220,261 MB Buy 204,100 MB

Net Change in Non-Resident Holding THB Million

300,000

Non-resident Net Buy/Sell in GOVT Non-resident Net Buy/Sell in BOT Bond

93,249

250,000

84,003 200,000

BOT 23,052

150,000

55,868 MB

GOVT Bond

100,000

72,029

GOVT

50,000

30,216 -22,494

0

-50,000

-100,000

-1,598 -2,793

-7,506

129,454

117,144

196,463

BOT Bond

-27,157 2007-09 : Net outflow = 43,xxxMB

-16,161

2010-12 : Net inflow = 650,xxxMB 2013 YTD (27 Sep 2013)

34

Net Change in Non-resident Holding BOT Bond vs GOVT Bond End of Sep 2013

(The past 39 weeks)

Peak @

120,000

103,421Mil.

Peak @ 85,782Mil.

BOT Bond

As of Sep 27th, 2013 72,029Mil.

4 Measures of Capital Control

80,000

40,000

0

-16,161Mil.

GOVT Bond -40,000

Baht Verbal 16 year high Intervention (20 Mar 2013)

Tapering QE3 (22 May 2013)

(12 - 30 Apr 2013)

-80,000

Jan

Feb

Apr

Mar

Weekly 40,000

May

Jun

BOT = 35,081 MB GOVT = 25,616 MB

NR Net Buy 60,697 MB

BOT Bond NR Net Buy 35,081 MB

End of Sep 2013

GOVT Bond

40,000

Tapering QE3 DELAYED

Sep

Aug

Jul

Since Tapering QE3 Delayed

(The past 39 weeks)

NR Net Buy 25,616 MB

Tapering QE3 DELAYED

30,447

24,546 23,024

22,805

20,000

19,300

22,968

19,645

20,000 17,110

16,904 15,183

14,023

8,689 7,501

4,081

3,345 1,368

9,425 7,714 7,701

6,972 6,167

5,159

4,634

4,645 3,765 1,104

0

0 -160

0

-1,540 -3,297

-4,942

-4,055

-680 -959

-1,025

-921 -1,429 -2,267 -4,185

-3,156

-3,525

-4,205

-5,006

-1,304 -1,682 -1,765

-2,656 -3,330

-474

-4,465

-6,186

-5,641 -6,186

-5,760 -7,658

-9,241

-8,844

-11,749 -13,432

2,649

2,663

2,380 1,387

330

0

7,429 7,312

5,847 3,549

-11,538

-13,616

-14,157

-13,188 -15,226

-16,884

-20,000

-18,212

-20,000

-18,641

-21,640 -23,166

2013 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Jan

Sep

Feb

Mar

Apr

2013 May

Jun

Jul

Aug

Sep

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14 Week 15 Week 16 Week 17 Week 18 Week 19 Week 20 Week 21 Week 22 Week 23 Week 24 Week 25 Week 26 Week 27 Week 28 Week 29 Week 30 Week 31 Week 32 Week 33 Week 34 Week 35 Week 36 Week 37 Week 38 Week 39

-40,000

-40,000

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14 Week 15 Week 16 Week 17 Week 18 Week 19 Week 20 Week 21 Week 22 Week 23 Week 24 Week 25 Week 26 Week 27 Week 28 Week 29 Week 30 Week 31 Week 32 Week 33 Week 34 Week 35 Week 36 Week 37 Week 38 Week 39

4 Measures of Capital Control

12,093

Verbal Intervention

Verbal Intervention

Weekly

35

Peers Comparison

NR Holding in Thai GOVT Bond

End of Sep 2013 is 574,987 THB Million or 17.1% of Total GOVT Bond Outstanding

Relatively “moderate” share of NR holding by region average 50%

Percentage share of Non-resident Holding in Local Government Bond (Jan 2008 - Present)

“Diversified” Investor Base Jun

46.8% Malaysia 40%

30%

Aug

30.9% Indonesia Peak @ 19.1% (Apr)

20%

Jul 18.2%

Government Debt Securities (classified by Types of Investors)

Korea

Thailand 10%

Total of 3.4 THB Trillion

17.1

(Aug’13)

May % 12.8% End of Sep 13

0%

Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13

Philippines

Source : ThaiBMA, Standard Chartered Research (Thailand : risk of capital flow measures 25th April 2013) modified with author’s permission

36

Source : PDMO, BOT (End of Aug 2013)

ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LI NKED BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIP LINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC D EBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED BOND PIONEER PD DF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMITMENT B OND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMITMENT BOND MARKETDEVELOPM ENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATIO N-LINKED BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DI SCIPLINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBI LC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED BOND PIONEER PDDF CGIF DEDICATION BE NCHMARK BOND FISCAL DISCIPLINE COMMITMENT BOND MARKET DEVELOP MENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLAT ION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PU BILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED BOND PIONE ER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINET COMMMITM ENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMEN T OFFICE INNOVATION INFLATION-LINKED BOND PIONEER PDDF CGIF DEDICATIO N BENCHMARK BOND FISCAL DISCIPLINE COMMITMENT BOND MARKET DEVE LOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION IN FLATION-LINKED-BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FI SCAL DISCIPLINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMEN TS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED BOND P IONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMM ITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGE MENT OFFICE INNOVATION INFLATION-LINKED BOND PIONEER PDDF CGIF DEDI CATION BENCHMARK BOND FISCAL DISCIPLINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATIO N INFLATION-LINKED BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BON D FISCAL DISCIPLINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVE MENTS PUBILC DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED-BO ND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND ACHIEVEMENTS PUBIL C DEBT MANAGEMENT OFFICE INNOVATION INFLATION-LINKED BOND PIONEER PDDF CGIF DEDICATION BENCHMARK BOND FISCAL DISCIPLINE COMMITMENT BOND MARKET DEVELOPMENT ACHIEVEMENTS PUBILC DEBT MANAGEMENT OF FICE INNOVATION INFLATION-LINKED BOND PIONEER PDDF CGIF DEDICATION BE37

Bond Market Development Bureau, Public Debt Management Office Ministry of Finance, Kingdom of Thailand

For Further Information : Chularat Suteethorn

+662 265 8050 ext. 5100

chularat@mof.go.th

Director-General, Public Debt Management Office

Suwit Rojanavanich

+662 265 8050 ext. 5104

suwit@pdmo.go.th

+66 2271 7999 ext. 5802

pimpen@pdmo.go.th

Deputy Director-General Acting Bond Market Advisor

Pimpen Ladpli

Acting Senior Expert on Bond Market Development Acting Executive Director of Bond Market Development Bureau

Nattakarn Boonsri

+66 2271 7999 ext. 5803

nattakarn@pdmo.go.th

Director of Government Bond Market Development Division

Sophida Sritomya

+66 2271 7999 ext. 5804

sophida@pdmo.go.th

Director of Fund Management and Bond Market Infrastructure Development Division

Nakarin Prompat

+66 2271 7999 ext. 5812

nakarin@pdmo.go.th

Acting Director of International Bond Market Policy Division

Chakrit Phothisuk

+66 2271 7999 ext. 5818

chakrit@pdmo.go.th

+66 2271 7999 ext. 5806

kasirat@pdmo.go.th

+66 2271 7999 ext. 5816

phimonphan@pdmo.go.th

+66 2271 7999 ext. 5809

kittiya@pdmo.go.th

+66 2271 7999 ext. 5801

pathida@pdmo.go.th

Economist

Kasirat Suwanpen Economist

Phimonphan Tanwattana Economist

Kittiya Chaithep Economist

Pathida Rattanapinyo Economist

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