Kot bond market booklet q4 fy2015

KINGDOM OF THAILAND BOND MARKET FINANCING THAILAND’S FUTURE & CONNECTING ASEAN

Highlights “Dr. Pimpen Ladpli on The Issue of Liquidity & Regional Financial Market Integration” “ThaiBMA Best Bond Awards 2014 : Deal of the year”

Progress Update

» Committing to FY2015 Fund Raising Plan » GOVT Bond Auction Schedule Q4/FY2015 » GOVT Bond Auction Results » Bond Switching Program Q4/FY2015 : LB15DA » PDMO Bond Calendar FY2015 Basic & Essentials

» Bond Market Development Strategy » Public Debt Outstanding and Its Composition » Bond Market Capitalization and Its Composition » Baht Bond Outstanding and its Market Share » Non-Resident Holding in Domestic Bond Public Debt Management Office, Ministry of Finance, Kingdom of Thailand

Q4/FY2015

Thai GOVT Bond Market Overview Highlight Interviews

“Dr. Pimpen Ladpli on the Issue of Liquidity & Regional Financial Market Integration” Dr. Pimpen Ladpli (Executive Director of Bond Market Development Bureau)

“ThaiBMA Best Bond Awards 2014 : Deal of the year”

Progress Update

 Bond Switching Program Q4/FY2015 : LB15DA

9 10 11 12 13 14

 PDMO Bond Calendar FY2015

16

 Committing to FY2015 Fund Raising Plan

 T-Bill Plan Q4/FY2015  GOVT Bond Auction Schedule Q4/FY2015  GOVT Bond Auction Results  Greenshoe Option: Privilege for MOF Outright PD

Basic & Essentials Public Debt Outstanding (as of May 2015) Bond Market Capitalization (as of June 2015)

5,687,008 THB Mil. (42.58% of GDP) 9,609,526 THB Mil. (70% of GDP)

22 23

Total GOVT Debt (Direct + FIDF) (as of May 2015)

3,988,029 THB Mil. (40 Bond Series )

25

*Excluding Foreign Debt

Well-Developed Bond Market Improved GOVT Direct Debt Profile Dramatically (as of Jan 2015)*Excluding FIDF » Average-Time-to-Maturity (ATM) 11yrs 3mths » Average Cost 3.84% » Well-Balanced Fixed : Floating Ratio 89 : 11 » Well-Distributed Maturity Profile 41:18:41 (<5 : 6-10 : >10yrs)

25

Liquidity & Secondary Market Trading

80% of Trading Volume (Outstanding > 100,000 THB Mil.)

26

Baht Bond Outstanding and its Market Share (as of June 2015)

85,574 THB Mil.

29

Non-Resident Holding in Domestic Bond (as of June 2015) » Annual Capital Flow (YTD)  GOVT Bond :  BOT Bond : » NR Holding in THB Bond  GOVT Bond :  BOT Bond :  Others :

-53,042 THB Mil. -29,783 THB Mil. -23,259 THB Mil. 630,304THB Mil. (6.56% of Thai Bond Market Cap.) 595,700 THB Mil. (16.5% of GOVT Bond Outstanding) 33,722 THB Mil. (1.2% of BOT Bond Outstanding) 882 THB Mil.

30

1

Interview with Dr. Pimpen Ladpli on the next tasks in FY 2016 ..Enhancing Liquidity towards the longer end of the curve & Strengthening ASEAN Bond Market Integration..

Question: You’ve been in charge of PDMO’s bond market development since 2007. Can you give an assessment on the key strategies for progress?

Dr. Pimpen: Developing the bond market into a sustainable funding source became a National Agenda after the 1997 financial crisis. Through an active cooperation between Ministry of Finance and regulating agencies including, Bank of Thailand, Securities and Exchange Commission as well as primary dealers and investors, significant progress has been made.

Dr. Pimpen Ladpli Executive Director of Bond Market Development Bureau

PDMO’s role in bond market development is to create debt issuance program that supports market deepening.

In the initial stage, we focussed on the construction of an efficient government yield curve through consistent issuance of benchmark bonds. Then to further enhance the market’s accessibility and efficient pricing, we encouraged liquidity by enlarging outstanding size. We also later began to promote product diversification through innovations to better respond to needs of specific groups or more sophisticated investors.

Some of which include the inflation linked bonds that we are now extending its yield curve to 20-30 years through longer tenor issuance. And amortize bonds that has been popular with local life insurance companies since its inaugural 25 year issuance in 2012, recently captured the interest of nonresident bond holders. While, infrastructures such as prefunding mechanism and newly introduced bond switching program, were developed to strengthen our debt management capability in reducing refinancing risk from large size bonds.

The progress made has resulted from a mutually planned path of development. I cannot emphasize enough how important regular dialogue with regulating agencies and the market is to our progress. As policy makers, I believe our role is to accommodate rather than to direct how the market should grow. And through these dialogues we listen, exchange views and build development plans together.

I am proud that the Thai bond market has matured in all aspects including size, liquidity and product diversification and is now a vital funding source for both government and private sector that supports the development of the nation.

2

“We want to strengthen our capacity as a reliable partner for our neighbors, especially CLMV countries, to raise funds for their national development and support inclusive growth.”

Question: What are the goals that you would like to achieve going forward?

Dr. Pimpen: There are two issues that I would like to achieve in the near future 1) financial integration and 2) liquidity enhancement of longer tenor bonds in the secondary market. AEC at year end undeniably brings both opportunities and challenges for Thailand and our bond market. We need to fulfill the “missing links” in infrastructure to enhance connectivity in the region. We have announced a transport investment package of 1.9 trillion baht to be implemented over the next 8 years, a majority of which will be funded with domestic debt issuance. I believe we are more than ready in terms of financing, as we have product diversification, a liquid market and fiscal space.

For ASEAN to achieve regional integration, all member countries must grow together. PDMO has an important role to play in this issue. We have initiated the Baht Bond program to enable cross border fund raising that will support financial integration and inclusive growth. We have allowed CLMV countries that have limited domestic capital available to raise funds in Thailand for their infrastructure investments.

Lao PDR government and state own enterprise, EDL-GEN, are among our recent issuers, while Myanmar and Bhutan have contacted us to express interest in fund raising in our bond market. In addition, Thailand was the selected regional pilot destination for ASEAN Bond Market Initiative (ABMI) program on facilitating the cross border fund raising through AMBIF’s single submission form, using Mizuho’s baht bond issuance. We hope that its success along with Laos PDR’s and EDL-GEN’s continued issuance will serve as case studies that will attract more countries to the Thai bond market and help us strengthen our capacity as a reliable partner for our neighbors to raise funds for their national development. In regards to knowledge transfers, we are also prepared to provide technical assistance to countries that want to further develop their own domestic bond market. In the past we have supported many training programs held by international agencies and welcomed individual government visits at our office.

… and what are your plans to enhance liquidity in the secondary market?

Dr. Pimpen: Another important goal for us is to further enhance liquidity in the secondary market. A liquid bond market reflects a well-functioned bond market and helps create benchmarks for local borrowers.

The system of benchmark bond issuance program has clearly improved our market’s liquidity. Today our 5 year benchmark bonds are the highest secondary trading every year with the turnover ratio of around 2.5-4.2 times.

Thanks to our 14 MOF-outright primary dealers who play active role as market makers, I am pleased to say that 12 Thai government bond series are included in JPMCB Index, of which are all below 15 years maturity.

I believe that the inclusion of Thai benchmark bonds in key indices enhances our presence in international financial markets and with current low interest rate levels; this is an opportunity to push longer tenor bonds into indices. Our target is to boost liquidity for our 20 year bonds. We have already open dialogue with primary dealers on the issue and will work closely with them to ensure that our goal can be achieved.

3

â&#x20AC;&#x153;The inclusion of Thai government benchmark bonds in key indices enhances our presence in international financial markets.â&#x20AC;?

Question: Given global market increased volatility and potential rates hikes in the US together with low interest rate environment in Thailand, do you have any concerns about capital flow and nonresident bond holders?

Dr. Pimpen: We encourage diversity as each group of investors brings unique contributions. This is why we continue to develop new products as each adds value by further broadening our investor base and deepening our market. This is also the case for non-resident investor (NR). Over the years the share of NR has gradually increased with greater exposure and recognition of Thai bonds among international investors.

We like NR participation for 2 reasons; firstly they are active investors and so they help increase trade and turnover and secondly they tend to be more aggressive as we often observe tighter price when there is more NR participation.

Our main concern in managing debt is its effects on macro stability. However, our experience has showed that even during times when NR share was high, volatility was minimal or has been at manageable level. For the past few years NR has steadied between 15-20%. I would like to stress that the important issue for us is to be able to raise funds at acceptable cost and while we welcome NR bond holders even in times of high volatility, our financial obligations can still be met as we have a rather deep bond market. On the issue of measures for restriction, we do NOT wish to interfere with the market. Close market monitoring and regular dialogues among policy makers and the market together with a deep domestic bond market can immune us from external shocks. So far our domestic market has showed resilience and has kept us away from imposing drastic measures.

4

“I cannot emphasize enough how important regular dialogue with other policy makers and the market is to our progress..”

Question: How important is an open dialogue with market players to PDMO’s bid in achieving goals?

Dr. Pimpen: I believe that the success in bond market development would not have been possible without the commitment from all market participants. Over the years, we have developed a trusting relationship that has resulted from close dialogue, long term planning and most importantly commitment to our promises. Every year PDMO organizes an annual market and quarterly primary dealer dialogues, semi-annual long term investor meetings and domestic and international roadshows. From time to time, PDMO join exhibitions like Money Expo and SET in the City both in Bangkok and major provinces to meet with retail investors who share about 5 percent of our investor base.

The main dialogue ,which is when we invite all market participants, takes place in the last month of the fiscal year in September. This annual dialogue draws about 200 participants who come to listen to funding needs and fund raising strategies of the government and state agencies.

These meetings provide an opportunity for us to exchange information and receive feedback that guides us in the planning for future bond market development. They also help us align expectations and ensure that there are no unpleasant surprises for the market!

We work hard to be committed regarding bond supply every year and will continue to do so.

I believe this has been a key factor that has helped build investor’s confidence in PDMO and in turn makes the Thai bond market more reliable and attractive. Even during times of crisis, we have been able to meet entire financing requirement with minimal effect on cost, reflecting our market’s strength and resilience.

Finally, as this is the last quarter of FY2015, I would like to thank all the stakeholders for your efforts in the developing the domestic bond market. We look forward to working with you to build on the success.

5

6

MOF’s Bond Switching “Deal of the Year ” ThaiBMA Best Bond Awards 2014 The successful first launch of Bond Switching transaction in November 2014, in an amount of 76,235 billion THB

Deal of the Year

Mr.Sommai Phasee, Minister of Finance (middle) Nattakarn Boonsri, Director of Government Bond Market Development Division and representatives from Bangkok Bank, Kasikorn Bank and Standard Chartered Thailand

Mr. Sommai Phasee, Minister of Finance, (left) gives the “Deal of the Year” award to Mr. Nattakarn Boonsri, (right) on behalf of PDMO Mr. Theeraj Athanavanich, Deputy Director General of PDMO and representatives from Standard Chartered Thailand, Bangkok Bank and Kasikorn Bank at the Best Bond Awards press conference

7

Progress Update  Total Fund Raising Plan FY2015  T-Bill Plan Q4/FY2015  GOVT Bond Auction Schedule Q4/FY2015  GOVT Bond Auction Results  Greenshoe Option: Privilege for MOF Outright PD  Bond Switching Program Q4/FY2015

 PDMO Bond Calendar FY2015

8

Benchmark Bonds Inflation-Linked Bonds Amortized Bond

ALL FY2015 Government Bond 445,xxx MB

Actual Total Benchmark Bonds

(announced Sep 2014)

350,xxxMB 95,xxxMB 5

FY15 Total

Top-up

300,000

1

2

3

4

5

8

9

10

12

14

14,000 7,000 20,000

83,308 MB

113,000 (25.5%)

442,962 MB (99.5%)

Top-up

Top-up 15

LB316A LB326A

LBA37DA LBA37DA

Top-up

Top-up 7

15

Top-up

10

LBF14NA LB14DA LB155A LB157A SB15NA LB15DA SB165A LBF165A SBST166A LB167A LB16NA SB16DA LB171A LB175A LB176A LB17OA LB183A LB183B SB189A LB191A LB193A LB196A LB198A LB19DA LB206A LB206A LB213A LB214A LB21DA LB21DA ILB217A LB22NA LB233A LB236A LB244A LB24DA LB25DA LB25DA 0

359,654 MB

12,000

30

5

0

20,000

25

15

LB267A LB27DA ILB283A ILB283A LB283A LB296A

100,000

FY15 Total

50

New-Issue

200,000

Q4 40,000

Top-up

Innovative Bonds

Series NEW 5-yrs (LB206A) 5-yrs (LB21DA) 10-yrs (LB25DA) Loan Bonds 15-yrs (LB296A) 30-yrs (LB446A) 50-yrs (LB616A) ILB (ILB283A) Innovative Bonds LBA (LBA37DA)

17 19

20

23

25

LB616A

THB Mil.

Total

5-yrs (LB21DA) 10-yrs (LB25DA) 15-yrs (LB296A) 30-yrs (LB446A) 50-yrs (LB616A) ILB (ILB283A) LBA (LBA37DA)

LB383A LB396A LB406A LB416A

Series

Loan Bonds

442,962 MB

(expected Sep 2015)

LB446A LB446A

Total Benchmark Bonds

: 5-10-15-30-50-yrs : ILB 15-yrs : LBA 25-yrs

27 29 30

40

47

9

FY 2015

T-Bills Plan Q4/2015

THB Mil.

Basis Points

75,000

7.5

Q1

60,000

Q3

Q2

Q4

6.0

45,000

4.5

30,000

3.0

15,000

1.5

0

0.0 -0.6

-15,000

-0.8 -1.1 -1.4 -1.3

-0.2

-0.3 -0.6 -0.9 -1.1

-0.4 -0.9

-1.5

-1.5 -1.9

-30,000

-2.5

-1.9 -2.2

-2.6 -3.2 -3.6

-1.6

-2.7

-2.3

-2.6-2.6 -3.3

-3.4 -3.9

-45,000

-3.0

-3.4 -3.7-3.8

-4.5

-4.4

-60,000

-5.3

-5.6

T-bill (Allocated Amount) Participated Amount (Excess Demand) Spread [AAY-Yield(T-1)]

-6.4

-75,000

10

-6.0

-7.5 Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

Apr-15

May-15

Jun-15

Jul-15

Aug-15

Sep-15

11

5,000

9,000

LB446A 30-yrs

7,000

LB616A 50-yrs

10,000

29,000

Total

LB446A = LB616A =

LB206A = LB25DA = LB296A = LBA37DA =

26-Jun-2020

2.55%

Coupon

Maturity Date

40,000

Total

30 September 2015 20,000

Re-open

Re-open

Re-open

12-Dec-2025

3.85%

Re-open

22-Jun-2029

4.875%

12,000

Re-open

12-Dec-2037

4.26%

20,000

14,000

7,000 29-Jun-2044

4.675%

Re-open

17-Jun-2061

4.85%

113,000

-

6,000

6,000

23 September 2015

10,000 -

10,000

15,000

7,000

16 September 2015

9 September 2015

2 September 2015

26 August 2015

19 August 2015

20,000

6,000

11 August 2015

12 August 2015

-

5 August 2015

10,000

10,000

LBA37DA 25-yrs Amortized Bond

10,000

6,000

LB296A 15-yrs

29 July 2015

10,000

LB25DA 10-yrs

-

20,000

20,000

LB206A 5-yrs Exclusivity

Government Bond Auction Schedule for Q4/FY2015

22 July 2015

15 July 2015

8 July 2015

1 July 2015

Auction Date

New

FY 2015 Government Bond Auction Result

GOVT Bond Auction is decoupled from political situation

Classified by Quarterly Auction Schedule

Short-term Benchmark Bond (<10 yrs) Long-term Benchmark Bond (>10 yrs) Inflation-linked Bond Amortized Bond Participated Amount (Excess Demand) Not Fully Allocated or Subscribed Spread [AAY-Yield (T-1)]

THB Mil.

MPC 1.75%

MPC 1.50%

11th Mar 2015

29th Apr 2015

bps

100,000

25

80,000

20

75,696

60,000

15 44,090

40,000

34,055

6.0 20,000

T-1= 0-

3.3 20,000

3.9

17,026

4,000

16,085

36,610

8.2

10

28,293

5.9

8.9 2.6 13,950

22 3,028 6,525 4,030 4,350

41,142

10.5

30,164

14,194 15,275

1,802

17,766 3,840

7,600

15,480

13,496

10,725 12,010

18,438 2.7 15,250

22,145

17,845

8,563

562 5,212 7,978 5,972 9,000 12,000 4,000 9,000 9,000 23,976 14,198 9,000 6,000 5,000 6,160 23,803 10,000 5,000 14,000 9,000 24,000 9,000 7,000 13,000 8,000 10,000 23,779 7,000 5,000 3,788 4,438 4,000 5,970

1.3

1.5 -1.8

-0.2

-0.4

-1.1

-20,000

-3.6

-4.1

-5.2

0

0.2

-0.6

-0.9

5

1.7

10,060

-1.4

-2.4

-2.7

-3.4

-5.6

-5

-6.1

-6.7

-6.4

-7.9

-40,000

-10

-9.8 -60,000

-15 -15.5 24 Jun 2015

03 Jun 2015

27 May 2015

20 May 2015

20 May 2015

06 May 2015

29 Apr 2015

22 Apr 2015

22 Apr 2015

08 Apr 2015

25 Mar 2015

18 Mar 2015

25 Feb 2015

03 Mar 2015

18 Feb 2015

11 Feb 2015

11 Feb 2015

21 Jan 2015

04 Feb 2015

21 Jan 2015

14 Jan 2015

07 Jan 2015

17 Dec 2014

09 Dec 2014

03 Dec 2014

03 Dec 2014

26 Nov 2014

19 Nov 2014

29 Oct 2014

12 Nov 2014

29 Oct 2014

21 Oct 2014

-20 21 Oct 2014

-80,000

Q1-Q3 FY2015 GOVT Bond Auction Results Classified by Tenor Benchmark Bond 5 – 10yr

Million Baht

5yr

100,000

Benchmark Bond 15 – 50yr

10yr

(Exclusivity)

15yr

Bps

30yr

50yr

80,000

20

60,000

15

40,000

10 5.9 3,976

20,000

3,803

4,000

8.9

3,779

2.7

1,802

3.9 22

T-1= 0 -

20,000 20,000 20,000 20,000 20,000

-1.8

-20,000

12,000 14,198 14,000 13,000

-0.6

-1.4

9,000

1.3 6,160

3,028

0.2

9,000

9,000

9,000 10,000 8,000

-0.4

5,972

5,212 3,788

6,000

7,000

7,000

0

-0.9

-5

-3.4

-3.6

-9.8

-80,000

1.5

3,840

-2.4

-40,000

-60,000

7,978

5

6.0

1.7 -0.2

12

25

-5.6

-6.1

-6.4

-10 Short-term Benchmark Bond (<10 yrs) Long-term Benchmark Bond (>10 yrs) Greenshoe Amount Not Fully Allocated or Subscribed Average Accepted Yield

-15

-20

Greenshoe Option

Privilege for MOF Outright PDs In FY2015

Series

LB21DA (5-Yr Benchmark Bond .. Exclusivity)

Accepted Rate

Average Accepted Yield (AAY)

Maximum Amount

Additional 20% of the allocated amount

Exercise Period Settlement Date

T (After Auction Period between 11.00-11.30 a.m.)

T+2

-Done-

-Done-

-Done-

-Done-

3,976 MB.

3,803 MB.

4,000 MB.

3,779 MB.

Greenshoe

Greenshoe

Greenshoe

Greenshoe

LB21DA

LB21DA

LB21DA

LB21DA

LB21DA

1st auction 20,000 MB. 21 Oct 14

2nd auction 20,000 MB. 14 Jan 15

3rd auction 20,000 MB. 25 Feb 15

4th auction 20,000 MB. 22 Apr 15

5th auction 20,000 MB. 3 Jun 15

0 - 4,000 MB.

Auction + Greenshoe = 100,000 - 116,000 MB.

 LB21DA

6th auction

4,442MB.

Greenshoe Option will begin in January 2015 regarding to the readiness of the BOT’s add-on electronic auction system

13

14

• Reduce Refinancing risk • Lengthen Time-to-maturity • Enhance Liquidity

Bond Switching Transaction for LB15DA

: 132,000 THB Billion  : 6 mths  : New Issued =

68,040 THB Billion 11 yrs mths 63,960 THB Billion

THB Mil. 350,000

Bond LB183B LB206A LB25DA LB296A LBA37DA Total

Source Bond Destination Bond Switched Amount 300,000

250,000

TTM 2 Yrs. 9 months 5 Yrs. 10 Yrs. 6 months 14 Yrs. 22 Yrs. months

New Issued Amount (THB Mil.

Percentage

, 9, 1, ,

100

200,000

LB15DA

150,000

-63,960 THB Mil

100,000

LB616A

LB446A

LB416A

LB406A

LB396A

166,985 LB383A

LBA37DA

LB326A

LB316A

134,672 LB296A

LB27DA ILB283A LB283A

96,198 LB267A

LB25DA

LB244A

LB24DA

LB21DA

LB22NA LB233A LB236A

LB213A LB214A ILB217A

LB206A

LB19DA

LB191A LB193A LB196A LB198A

LB183B

LB17OA LB183A

LB16NA LB171A LB175A LB176A

LBF165A LB167A

LB157A

0

LB15DA

,

86,632

50,000

Every Group of Investors has participated in Bond Switching Foreign Investor

Bond Switching Participated amount classified by Investor

6% Financial Long-term Institution Investor

38%

56%

Investor

Amount THB Mil.

Percentage

Long-term Investor

35,707

56%

Financial Institution

4 290

38%

Foreign Investor

3,963

6%

Total

63,960

100%

Investor Segmentation in Bond Switching classified by Destination Bond LB206A

LB183B

Yrs. months

12,848 Mil.

6,487 Mil

8,100 Mil

70%

81%

1,552 Mil. 19%

1,606 Mil. 9%

Long-term Financial Foreign Investor Institution Investor

Long-term Financial Foreign Investor Institution Investor

LBA37DA

Yrs.

Yrs. months

8,800 Mil 83%

84%

3,837 Mil. 21%

LB296A

LB25DA

Yrs.

Yrs. months

14,970 Mil 86%

1,152 Mil 12%

404 Mil 4%

Long-term Financial Foreign Investor Institution Investor

1,580 Mil 12%

200 Mil 2%

Long-term Financial Foreign Investor Institution Investor

2,223 Mil 13%

201 Mil 1%

Long-term Financial Foreign Investor Institution Investor

15

16

Q2

Q1

Mar 2015

Feb 2015

Jan 2015

Dec 2014

Nov 2014

Oct 2014

Auction T-bill

Auction T-bill

23

16

9

2

23

16

9

2

26

Auction T-bill

Quarterly PD Market Dialogue

Auction T-bill

MOF Outright PD Committee : Quarterly PD's Evalution First day of submission for Baht Bond Application (2/2015)

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

24

17

10

3

24

17

10

3

27

Auction T-bill

Auction LB446A (30y) : 10,000 MB

Auction T-bill

Auction T-bill

Auction LB21DA (5y) : 20,000 MB

Auction LB446A (30y) : 10,000 MB

New Year's Eve

Auction LB616A (50y) : 9,000 MB

Constitution Day

Auction LB25DA (10y) : 12,000 MB ILB283A (15y) : 4,000 MB

Auction LB446 (30y) : 9,000 MB

Auction LBA37DA (25y) : 10,000 MB

Auction ILB283A (15y) : 4,000 MB

MPC

LB616A (50y) : 9,000 MB

Auction LBA37DA (25y) : 9,000 MB

25

18

11

4

25

18

Auction LB25DA (10y) : 14,000 MB

Auction ILB283A (15y) : 5,000 MB

Makha Bucha Day

Auction LB21DA (5y) : 20,000 MB

Auction LB296A (15y) : 10,000 MB

ILB283A (15y) : 5,000 MB

11 Auction LB616A (50y) : 6,000 MB

4

28

ILB283A (15y) : 5,000 MB

21 Auction LB25DA (10y) : 16,000 MB

20

19

(5y and 10y) : 100,000 MB

14

31

24

17

10

3

26

19

12

5

Retail 13 Only

Auction LB296A (15y) : 9,000 MB

Wed

29 Auction LB296A (15y) : 8,000 MB

22

15

8

12 First day Issue Special Saving Bond

Auction T-bill

30

23

16

9

2Retail Only

25

18

11

4

28

ILB283A (15y) : 4,000 MB Roadshow Debt Switch : Announce Destination Bonds

21 Auction LB21DA (5y) : 20,000 MB

14

7

1

7

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Issue Regular Saving Bond 2/2015(3y) : 4,000 MB (1 Dec 14 - 31 Mar 15)

Auction T-bill

Auction T-bill

Auction T-bill

First day of submission for Baht Bond Application (1/2015)

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Tue

6

5

29

22

15

8

1

24

17

10

3

27

20

13

6

Mon

MPC

MPC

26

19

12

5

26

19

12

5

29

22

15

8

1

MPC 25

18

11

4

27

20

13

6

30

23

16

9

2

MOF Outright PD Committee : Annual PD's Evalution

Chulalongkorn Day

Thu

New Year's Day

Quarterly PD Market Dialogue

PDMO Bond Calendar FY 2015

Public Holiday

Baht Bond 1/FY2015

H.M. the King's Birthday

Last day of submission for Baht Bond Application (1/2015)

Quarterly Macroeconomics Report (FPO)

Fri

27

20

13

6

27

20

13

6

(5y and 10y) : 100,000 MB 30 Quarterly Macroeconomics Report (FPO)

23 Last day Issue Special Saving Bond

16

9

2

26

19

12

5

28

21

14

7

31

24

17

10

3

28

21

14

7

28

21

14

7

31

Retail 24 Only

17

10

3

27

20

13

6

29

22

15

8

1

25

18

29

22

15

8

1

22

15

8

1

25

18

11

4

28

21

14

7

30

23

16

9

2

26

19

12

5

Sat Sun

11

4

17

Jul 2015

Jun 2015

May 2015

Sep 2015

Q4 Aug 2015

Q3

Apr 2015

28

21

14

7

31

24

17

10

3

27

20

13

6

29

22

15

8

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Quarterly Macroeconomics Report (FPO)

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

Auction T-bill

29

22

15

8

1

25

18

11

4

Coronation Day

New 5Y

Last Day of submission for MOF Outright PD's Application

Songkran Festival Day

Last day of submission for Baht Bond Application (2/2015) First Day of submission for MOF Outright PD's Application

Auction LB296A (15y) : 6,000 MB

Auction T-bill

28

21

14

7

30

23

16

9

2

1

Visakha Bucha Day

26

12 Retail Only

5

25 25 Auction T-bill

Auction T-bill Public Holiday

28

21

14

19

Auction T-bill

Auction T-bill

Auction T-bill

Songkran Festival Day

11 Issue Regular Saving Bond 2/2015(3y) : 4,000 MB (11 May - 31 Aug 15) 18

4

27

20

13

7

6

Chakri Day

31

30

Songkran Festival Day

Auction LB296A (15y) : 9,000 MB

Auction LB25DA (10y) : 13,000 MB

Auction LB616A (50y) : 7,000 MB

Auction LB25DA (10y) : 10,000 MB

Auction LB206A (5y) : 20,000 MB LB446A (30y) : 9,000 MB

Mid-year Bank Holiday

Auction LB616A (50y) : 7,000 MB

Quarterly PD Market Dialogue

MPC

Auction LB21DA (5y) : 20,000 MB 2-4 ADB @Philippines

30

23

16

9

2

26

19

12

5

Auction LB296A (15y) : 6,000 MB

MPC

Auction LBA37DA (25y) : 10,000 MB

Auction LB25DA (10y) : 10,000 MB LB446A (30y) : 5,000 MB

Auction LB616A (50y) : 7,000 MB

Auction LB206A (5y) : 20,000 MB

H.M. The Queen's Birthday

MPC

Last day submission for Baht Bond Application

29 Auction LBA37DA (25y) : 10,000 MB

22

15

8

1

24

17

10

3

27

ILB283A (15y) : 5,000 MB 26-28 CGIF MOC Meeting 25-29 Bond Switching Roadshow

20 Auction LB446A (30y) : 8,000 MB

13

6

29

LBA37DA (25y) : 9,000 MB

22 Auction LB21DA (5y) : 20,000 MB

15

8

1

MPC

28

MOF Outright PD Committee : Final Review

Asarnha Bucha Day

Bond Switching Transaction on LB15DA First day of submission for Baht Bond Application (3/2015)

Euro Money BKK

27 Auction

Quarterly Macroeconomics Report (FPO)

Long-term Investor Meeting

Auction T-bill

Baht Bond 2/FY2015

24

+ MOF Awards

17 Annual PDMO-Market Dialogue

10

3

27

20

13

6

30

23

16

9

2

25

18

11

4

28

21

14

7

30

23

16

9

2

National Labour Day (Only Bank closes)

Auction T-bill

Baht Bond 3/FY2015

Buddhist Lent Day

26

19

12

5

29

22

15

8

1

25

18

11

4

27

20

13

6

30

23

16

9

2

25

18

11

4

27

20

13

6

30

23

16

9

2

26

19

12

5

28

21

14

7

31

24

17

10

3

26

19

12

5

Remark : Royal Ploughing Ceremony Day- waiting for an annoucement This schedule is subject to change without prior notice.

25

18

11

4

28

21

14

7

31

24

17

10

3

26

19

12

5

MOF Outright PD Committee : Quarterly PD's Evalution 29 29 Auction T-bill

22

15

8

1

24

17

10

3

18

Basic & Essentials  Bond Market Development Strategy  Public Debt Outstanding

 Bond Market Capitalization  Total GOVT Debt (Direct + FIDF)

 Liquidity & Secondary Market Trading  Baht Bond Outstanding and its Market Share  Non-Resident Holding in Domestic Bond

19

 Funding Infrastructure Investment  Connecting ASEAN

Domestic Bond Market in Transition

Funding Infrastructure Investment Connecting ASEAN Ongoing Project (2013 - 2016)

Market Deepening Oriented (2010 - 2012)

Market Infrastructure

2,400,000 THB Mil. Long-Term Infrastructure Inv’t

Thai Khem Khang (350,000 THB Mil.)

Full Funding Capacity : 1,150,000 THB Mil.

Regional Connectivity / AEC

Debt Folio Enhancement

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

Water Decree (350,000 THB Mil.)

Sustainable Source of Fund

Credit Guarantee Investment Facility (CGIF) Foreign Currency Bond Baht Bond (CLMV)

Baht Bond (Foreign Issuers 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 / Bond Switching Bond Switching (1st execution: 28 Nov 14)

Appointed 14 MOF-Outright PD

Strengthening PD system

Activated Public Debt Management Fund

(Exclusivity, League Table, Greenshoes Option)

STRIPS Bond Scripless Retail Savings Bond  Liquidity

Innovation / Product Development

Market Consultation

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

Super- Size Inaugural 25-yr Back-End Amortized Bond

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

Re-open ILB 7-yr or Launch ILB-30yr

Electronic Retail Savings Bond (3-5-yr)

STRIPS Transaction

20

Quarterly PDMO one-on-group “MOF Outright PD” Dialogue

Quarterly PDMO one-on-one PD Dialogue 30

Building Yield Curve / Enhancing Liquidity

Annual PDMO Market Dialogue

Annual PDMO Market Dialogue

15 10 7 5 3

50

20

8 Tenors of Benchmark Bonds

300,000 MB

Liquidity-Oriented

150,000 MB Outstanding Amount 3 5 7 10 15 20

30

50

FY 2012-2016

FY 2011

FY 2007-10

FY2007 – FY2016

Innovation of GOVT Debt Securities

30-yr Benchmark Bond

• 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

Bond Switching & Consolidation

Upgrade PD Privileges

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

PDDF Activated

15-yr ILB 30-yr ILB

(Public Debt Restructuring and Domestic Bond Market Development Fund)

CGIF Activated

Baht Bond

(Credit Guarantee and Investment Facility)

Equilibrium of Domestic Bond Market Issuers

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

Credit Rating

• 99 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) CGIF 0.03%

Domestic Bond Market (Classified by Credit Rating)

Baht Bond 1%

1 BB & Non-rated %

BBB 3%

23%

Government

AA 4%

12% Government

38%

SOEs

SOEs 8%

8% BOT

Total of 9.6 THB Trillion

Source : ThaiBMA (End of June 2015)

NR 17% 17%

Insurance Insurance and and Other OtherCorporation Corporation

36 40%%

38% BOT

30%

30%

Household and Non-profit

5% BOTBOT 6% NR 5%

A Corp Bond

Government Debt Securities (Classified by Types of Investors)

Total of 9.6 THB Trillion

Source : ThaiBMA (End of June 2015)

Depository Corporation Depository Corporation %

33

33%

Total of 3.5 THB Trillion

Source : BOT (End of May 2015)

21

Public debt Outstanding (as of June 2015) = 5.69 THB Trillion (42.58% of GDP)

Components of Public Debt 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

Public Debt Outstanding

Units : THB Mil.

3,031,854* 1,031,568 1,049,090 568,364 6,132

5,687,008

Autonomous Agency Debt

0.11% Special Financial Institutions Guaranteed Debt

0.006 THB Trillion

9.99

% 0.57 THB Trillion

*including 75,393 THB Mil. of External Debt

Non-Financial State Enterprise Debt

18.45% 1.05 THB Trillion

GOVT Debt 53.31% 3.03 THB Trillion

GOVT Debt (for FIDF)

18.14

% 1.03 THB Trillion

Source : Information Technology Centre, PDMO

22

Bond Market Cap. = 9.6 THB Trillion ($286 Bil.)*

% Share of GDP

GOVT Bond = 3.6 THB Trillion ($108 Bil.)*

Domestic Bond Market Classified by Issuer

140% 128% 120%

104%

100%

96% 80%

70% 60% 40%

Asian Fin. Crisis

20%

24% 12%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Jun2015

0%

Bank Loan /GDP

Equity/GDP

Bond Market / GDP

Maturity Profile BOT vs GOVT Bond BOT ATM = 5mths GOVT ATM = 9yrs 6mths *End of Jun 2015

9% 78%

≤1

18% 22%

16%

24%

33%

1<yr≤3

3<yr≤5

5<yr≤10

10<yr≤50

End of June, 2015

*Source: BOT Exchange rate as End of Jun 2015

1,150,000 THB Mil. per Year

Full Capacity* of All Government Funding Instruments

($34 Bil.)**

* Under favorable market liquidity + using All funding instruments

%

5.00 4.75 4.50

4.25

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

($4.4 Bil.)** ($3.5 Bil.) ($2.4 Bil.) ($2.4 Bil.) ($1.8 Bil.) ($1.8 Bil.) ($0.9 Bil.) ($0.6 Bil.)

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.

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

GBI-EM Global JP Morgan

iBoxx Asia ex Japan Markit

7.7%

Asian Local Markets HSBC

9.5%

7.9%

Benchmark Bond

Last Update : Jun 2015

4.00

50

30

3.75

20

3.50

15

3.25 3.00

10

2.75

7

2.50

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

5

2.25

Infrastructure

2.00 liquidity

1.75 1.50

3

Benchmark Bond

1.25

($17.7 Bil.) ($3.0 Bil.) ($3.0 Bil.) ($2.4 Bil.)

Benchmark Bond

~600,000THB Mil. (52%)

Savings Bond

~100,000THB Mil. (8%)

Amortized Bond

~100,000THB Mil (8%)

Inflation-Linked Bond

~80,000THB Mil. (7%)

($1.2 Bil.) ($0.9 Bil.) ($5.9 Bil.)

Promissory Note

~40,000THB Mil. (4%)

($34 Bil.)

Total

Floating Rate Bond Bank Loan

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

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

TTM Source: ThaiBMA Government Bond Yield Curve (End of Jun 2015)

**Source: BOT Exchange rate (End of Jun 2015)

23

Keep our word… to get investors confidence for the plan Unit : Million Baht

1,250,000

Lower-than-expected disbursement of Water Decree

Lower-than-expected disbursement of Water Decree

1,000,000 Economic Recovery

750,000

Delay of Infrastructure Investment Plan

Higher-than-expected revenue collection

Stimulus package to ease: US financial crisis

Pro-Active Debt Management: Bond Switching

-6%

500,000

-1% 0% 250,000

0

+5%

-3%

74% end of June 2015

+2%

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)

Actual

Plan Actual

Plan Actual

Benchmark Instruments are Benchmark Bonds : Standard Loan Bond (LB) tenors 5-10-15-30-50yr (in FY 2015) + Innovative Products : Inflation-linked Bond (ILB) + Amortized Bond (LBA) Regular issuance/ Consultation with PDs/ Pre-announced auction table

Other Instruments : Saving Bond, Floating Rate Bond, Promissory Notes, Bills and Bank Loan

24

 Average-Time-to-Maturity (ATM) = 9yrs6mths  Average Cost = 3.87%  Fixed : Floating = 88 : 12 As of May 2015

Total Domestic GOVT Debt = 3.99* THB Trillion * Excluding 75,393 THB Mil. of Foreign Debt

Assumptions : 6 months BIBOR = 1.79%, 6 months Fixed Deposit Rate = 1.23%, Inflation = -1.27%

Maturity Profile

128,000

57%

10%

0

10 yrs +

0

6-10 yrs 0

0

0

0

0

0

0

0

0

0

0

0

Next 5 yrs

0

74,000 28,198

71,000

40,000 69,000

101,800

37,900

136,863

126,850

33% 25,000 81,958

36,730 67,537

6,731 17,440

100,000

= 4yrs 8mths = 3.93% = 87: 13 = 10%

0

GOVT Debt (for FIDF) = 1,031,568 THB Mil.

200,000

0

ATM Avg. Cost Fixed : Floating Callable

0

300,000

   

FIDF 3

0

FIDF 1

400,000

TTM Fiscal Year

Budget Deficit

On-lending Loan

Water Decree

Maturity Profile

41%

41%

151,902

0

0

10 yrs +

0

6-10 yrs

0

0

0

0

27,800

0

0

0

29,800

0

76,000 12,000

0

0

20,000

95,936

13,000 149,985

5,500

6,500

9,000

0

41,900

0 33,581 35,000

24,700 125,672

2,200

239,798

0

59,141

43,000

79,50018,900

50,664

Next 5 yrs

0

20,000 265,325

11,836 100,872

381,367

4,233

= 11yrs 3mths = 3.84% = 89: 11 = 6%

18%

16,000 13,423 150,539

164,297

81,974

80,000

200,000

0

TKK

ATM Avg. Cost Fixed : Floating Callable

GOVT Direct Debt (exclude FIDF) = 2,956,461** THB Mil.

158,348

86,63030,385 10,000

300,000

100,000

T-Bill

22,000

400,000

   

TTM Fiscal Year

ebt

(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

Note : Government Direct Debt = 2.96 THB Million (exclude FIDF)

As of Dec 2007

ATM

Average-Time-to-Maturity LENGTHENED by 6yrs

Avg. Cost LOWERED by 66 bps.

As of May 2015

11yrs 3mths

ATM

5yrs 3mths

Avg. cost

4.5%

(While ATM Lengthened by 6yrs)

Avg. cost

3.84% Floating

Well-Balanced Fixed/Floating Ratio (Target : Fixed/Float ratio = 85 : 15)

10%

Fixed

Fixed

90%

89%

54%

Well-Distributed Maturity Profile

Floating

28%

18%

41%

11%

41%

18%

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

next 5 yrs year 6 -10

10 yrs +

next 5 yrs year 6 -10

10 yrs +

25

Tier 1 > 100,000 THB Mil. in Size (80% of Trading Volume)

Total GOVT Bond = 40 Series (End of June 2015)

THB Mil. 350,000

Tier 2 > 50,000 THB Mil. in Size

FY2015 Q3 Market Share of Trading Volume in Secondary Market Tier 2 Tier 1

Tier 1: >100,000MB (10 Series)

5 300,000

Outstanding size (THB Mil.)

(15% of Trading Volume)

15%

80% 0

250,000

LBA

100

Tier 2: 50,000 – 100,000MB

25

200,000

50

5%

(15 Series)

50 15

150,000

ILB 15 10

100,000 100,000

30

LB267A LB24DA LB175A LB316A LB171A LB214A LB19DA LB157A LB244A LB22NA LB183A LB406A LB206A LB396A LB383A

LB416A LB183B LB446A LB446A LB17OA LB27DA LB193A LB213A LB326A LB15DA LB191A LB283A LB16NA LB198A LB167A LB233A

0

LB21DA LB21DA LB196A LB176A LB236A LBA37DA LBA37DA LB616A LB616A LB296A LB296A ILB283A ILB283A LB25DA LB25DA ILB217A

50,000

FY 2015 on-the-run Benchmark Bond FY 2015 on-the-run Innovative Bond

Source : ThaiBMA

The outstanding size of loan bond maturing in the next 5 years

Well-Distributed Bond Maturity Profile

is 1,257,041 THB Mil. (38% of Total GOVT Bond)

(End of June 2015) THB Mil.

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

350,000

FY 2015 on-the-run Benchmark Bond

5

FY 2015 on-the-run Innovative Bond

300,000

250,000

LBA 200,000

25 50 15

150,000

ILB 10

15

100,000 100,000

30

1

26

Source : ThaiBMA

2

3

4

5

6 – 10 years

11 – 50 years

LB616A LB616A

LB267A LB27DA ILB283A ILB283A LB283A LB296A LB296A LB316A LB326A LBA37DA LBA37DA LB383A LB396A LB406A LB416A LB446A LB446A

LB25DA LB25DA

LB213A LB214A ILB217A LB21DA LB21DA LB22NA LB233A LB236A LB244A LB24DA

TTM0

LB157A LB15DA LB167A LB16NA LB171A LB175A LB176A LB17OA LB183A LB183B LB191A LB193A LB196A LB198A LB19DA LB206A

50,000

FY2015 Secondary Trading Volume

Top 10 Turnover Ratio includes 3 series of on-the-run Benchmark Bond ( 5-10-15-yr )

Classified by Turnover Ratio As of June 2015

THB Mil.

Turnover Ratio 3.5

350,000

12 GOVT Bond series are included in JPMCB Index 300,000

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

3 of which are on-the-run Benchmark Bond (5-10-15-yr)

3.1 3.0

3.0

FY 2015 on-the-run Benchmark Bond FY 2015 on-the-run Innovative Bond Bond Switching : Source Bond

250,000

GBI-EM Thailand - JPMCB

2.5

2.5

Turnover Ratio (time)

2.1

200,000

2.0 1.9 1.7 1.7

150,000

1.5

100,000

1.0 0.7 0.6

15

30

0.5

15

Turnover Ratio 0.1 – 2.0

25

LB214A

LB267A

LB19DA

LB244A

LB213A

LB198A

LB183A

LB326A

LB22NA

LB383A

LB316A

LB283A

LB396A

LB24DA

0.0 LB416A

LB157A

LB171A

LB616A

0.1 0.1 0.1 0.1

LB175A

LB233A

LB183B

LB406A

LB167A

LBA37DA

0.2 0.2 0.2 0.2 0.2 0.2

LB27DA

ILB283A

LB206A

0.3 0.3

LB16NA

0.4 0.4 0.4

LB17OA

LB446A

LB193A

LB296A LB296A

10

LB236A

5

LB191A

LB176A

LB25DA LB25DA

BS

LB196A

LB15DA

0

LB21DA LB21DA

0.5

ILB217A

50,000

50

Nearly No Trading

Source : ThaiBMA

27

FY2008-FY2014 Key Success Indicators

1. Trading Volume 3. Demand Concentration

Benchmark Bond 5 yrs and Below : Highest secondary trading volume in every year Unit: % Share of Market Trading Volume

5-yr Benchmark Bondâ&#x20AC;&#x2122;s Higher Turnover Ratio : Even with higher outstanding size, turnover ratio is still more than 2 times Unit: Times

LB155A LB133A

29%

28%

27% 9

21%

20%

20%

26%

LB145B 4.2 LB133A

3.1

1.5

7% FY07

FY08

FY09

FY10 FY11

FY12

FY13

FY14

FY07

FY08

LB15DA

4.2

FY10

FY11

LB196A LB196A

2.9

2.8

2.4

FY09

LB176A

FY12

FY13

3.2

FY14

Top 10 GOVT Bond Series : Accounted for 90% of all GOVT bond trading volume in secondary market

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

Unit: % Share of Secondary Trading Volume

Unit: USD Bil. +0.9 bps

90% 90%

75% FY07

76% FY08

77%

80%

92%

+1.4 bps

84%

12.8

FY10

16.5

15.9

13.7

14.6

223363 +1.2 bps

7.5 7.5 FY09

+3.2 bps

14.7

FY11

FY12

FY13

FY14

FY08

-0.2 bps

-0.4 bps FY09

To be Updated

28

2. Turnover Ratio 4. Auction Price

FY10

FY11

FY12

FY13

-2.7 bps FY14

Linking CGIF & BAHT BOND to the Development of Bond Market 10,000

Total Outstanding 9,609,526 THB Mil.

CGIF

9,000 8,000 7,000

5,000

2,850

4,000

Baht Bond

Inaugural (Noble, Hong Kong)

6,000

BAHT BOND

End of June 2015

(Foreign Issuers Bond)

(For Asian Bond 0.03% CGIF Market Initiative)

THB Mil.

85,574

Updated: In June 2015, Ministry of Finance Lao PDR issued 12,000 THB Mil. of 3-year, 5-year and 10-year baht bonds, with 3.56%, 4.32% and 5.00% of interest rate, respectively.

1%

THB Mil.

3,000 2,000 1,000

Corp Bond

23%

SOEs Bond

8%

0

2013 2014 2015 2016 2017 2018 2019 2020

BOT Bond

Inv’t Grade

IBRD

111111 Natural Hedging

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

30%

Lao PDR CABEI

(21,590 MB)

Hana

ING

(18,000 MB)

(10,000 MB)

Targeted Industry

GOVT Bond

2

KEXIM (30,700 MB)

ADB

38%

Woori

(10,500 MB)

Citi

IBK

(13,000 MB)

(11,553 MB) (12,300 MB)

What next?

Why now?

 Broadening Issuer Base : CLMV

91,374 THB Mil. 1/3 of Baht Bond Outstanding

THE OUTSTANDING BAHT BOND Laotian Issuers :

 Entering ASEAN Economic Community (AEC)

(Cambodia, Lao PDR, Myanmar and Vietnam)

 Becoming bond market the region (as ofleader June of 2015)

(PDDF.)

Classified by issuers based on TTM

Baht Bond Outstanding (as of June 2015)

85,574 THB Mil. IFIs

1%

(1,000 THB Mil.)

THB Mil. 30,000

Others

23%

Korean Issuers

Laotian Issuers

(36,500 THB mil.)

(19,984 THB mil.)

26%

(22,409) NOBLE

33%

20,000

AFD CBA

12% (10,100) 10,000

CA-CIB

Hana

KEXIM

IBK 0

2015

(28,090 THB Mil.)

ING

12%

CABEI

(10,066)

KEXIM

7%

KEXIM

(5,668) Woori Lao PDR

43%

CITI

Woori

ADB

Lao PDR 2017

Korean Issuers

7%

Lao PDR 2018

9%

KEXIM

7%

(8,000)

Woori

(5,701)

Lao PDR

CABEI KEXIM EDL-Gen

(6,330) Hana Woori EDL-Gen

CABEI

2016

12% (10,000)

Lao PDR 2019

Laotian Issuers

KEXIM

3%

2% KEXIM

2021

2022

IFIs

(2,800)

(3,000)

KEXIM

EDL-Gen

2023

2024

(1,500)

Lao PDR 2020

3% Lao PDR Year

2025

Others

Source : PDMO (as of June, 2015)

29

Annual Capital Flow classified by GOVT & BOT Bond (2007 – 2015)

-53,042 THB Mil. (2015YTD)

THB Mil.

350,000 300,000

250,000

+93,249

-53,042

200,000

THB Mil.

+84,003

150,000 +23,052

100,000

+196,463 +129,454

50,000

0

0

-50,000

+30,216

-29,783 THB Mil.

+96,738 29,642

-1,598

-2,793

-22,494

GOVT Bond

+117,144

-7,506

-53,807

-27,157

-100,506

BOT Bond

-23,259 THB Mil.

-100,000 -150,000 2007

2008

2009

2010

2011

2012

2013

2014

2015 YTD

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

2015 Weekly

As of 26th Jun, 2015

Net Change in Non-resident Holding (YTD) BOT Bond vs GOVT Bond

(The past 25 weeks)

As o

THB Mil. 60,000

Accumulative NR Holding GOVT Bond VS BOT Bond

45,000

30,000

(Since 1 Jan – 26 Jun 2015)

15,000

0 0

BOT Bond -23,259 THB Mil.

-15,000

(26th Jun 2015)

-53,042 THB Mil

.

-30,000

GOVT Bond

-29,783 THB Mil.

-45,000

(26th Jun 2015)

30

WK25

WK24

WK23

WK22

WK21

WK20

WK19

WK18

WK17

WK16

WK15

WK14

WK13

WK12

WK11

WK9

WK10

WK8

WK7

WK6

WK5

WK4

WK3

WK2

WK1

-60,000

As of 26th Jun, 2015

T

2015

Non-Resident Holding in THB Bond = 630,304

Outstanding

6.56%

THB Mil.

Thai Bond Market Cap. =9,609,526 THB Mil.

Baht Bond

1%

(Foreign Issuers Bond)

CGIF Market Initiative) 0.03% (For Asian Bond

GOVT Bond GOVT Bond

574,063 595,700

BOT Bond Bond BOT

118,177 33,722

SOE Bond Bond SOE

0-

Corp Bond Corp Bond

630,304

7.53% 6.56%

692,906

23%

GOVT Bond Outstanding 3,613,545

8%

SOEs Bond

BOT Bond Outstanding 2,914,883

THB Mil.

THB Mil.

Non-Resident 33,722 THB Mil.

Non-Resident 595,700THB Mil.

BOT Bond

6.24% 6.20% 1.390% 1.28% 0.35% 1.28 0.00% 0.01 0.01% 0.01%

882 666

TOTAL TOTAL

Corp Bond

% of Thai Thai Bond Bond Market Market Cap. % Share of (9,202,573 THB Million)

Non-Res i dent Hol di ng Non-Resident Holding (THB Mi l l i on) (THB Million)

Issuer Issuer

of Bond Market Cap.

30%

2,914,883 THB Mil. GOVT Bond

Domestic Investors

Domestic Investors

38%

2,881,161 THB Mil.

3,017,845 THB Mil.

98.8

83.5

%

%

3,613,545 THB Mil.

As of 26th Jun, 2015

Peers Comparison

Non-Resident Holding in Thai GOVT Bond is 595,700 THB Mil. or 16.5% of Total GOVT Bond Outstanding

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

40 %

Indonesia

38.13% Mar’ 15

Malaysia 31.85%

30 %

Dec’ 14

Peak @ 19.1% (Apr’ 13)

Thailand

16.5%

20 %

As of 26th Jun,15

Korea 10.59% Dec’14

10 %

Japan 8.85% Sep’ 14

2008

2009

Source : AsianBondsOnline, ThaiBMA

2010

2011

2014

Jun-15 Jun-

Mar-15

Sep-14

Dec-14

Jun-14

Dec-13

2013

Mar-14

Sep-13

Jun-13

Dec-12

2012

Mar-13

Sep-12

Jun-12

Mar-12

Dec-11

Sep-11

Jun-11

Mar-11

Dec-10

Jun-10

Sep-10

Mar-10

Dec-09

Jun-09

Sep-09

Mar-09

Dec-08

Jun-08

Sep-08

Mar-08

0%

2015 As of 26th Jun, 2015

31

Mission

Transparency, Discipline, Trustworthiness, Driving Social and Economic Development

Values

Professional in public debt management for sustainable development

Vision

Pro-active Debt Management

Develop Domestic Bond Market to be a Sustainable Source of Funding for the Stability of Thailandâ&#x20AC;&#x2122;s Financial System

Foster Strong and Effective Organization

3 PDMOâ&#x20AC;&#x2122;s Strategies

Formulate sound public debt management policies and strategies as well as conduct, monitor and evaluate public debt management operations under the relevant legal framework and guidelines

Source: Public Sector Development Group, PDMO

32

Teeralak Sangsnit

Executive Director

Wisut Chanmanee

Executive Director

Phimonphan Tanwattana

Sittan Sathianphattanakool

Economist

Nattakarn Boonsri, Director

Pimpen Ladpli

Fund Management and Bond Market Infrastructure Development Division

Acting Executive Director

Wanthanee Phongam

Economist

Siree Jongdee

Senior Economist

Chakrit Phothisuk

Senior Economist

Paroche Hutachareon, Director

Pimpen Ladpli, Senior Expert

Government Bond Market Development Division

Economist

Sunee Eksomtramate Executive Director

Bond Market Development Bureau Executive Director

Acting Executive Director

Phacharaporn Khotnarin

Economist

Puttipong Kanna

Economist

Chotika Uesampantakit

Economist

Nakarin Prompat, Acting Director

International Bond Market Policy Division

Front Office Middle Office Back Office Support Office

Ekaraj Khuankhunsathid Secretary

Office of the Secretary

Pothirat Kijsriopak

Economist

Chanikarn Chaiyasena

Economist

Sophida Sritomya, Director

Financial Product Development Division

Sirasa Kanpittaya Executive Director

Jindarat Viriyataveekul

Anchana Wongsawang

Public Infrastructure Project Financing Bureau

Payment Administration Bureau

Information Technology Center

Legal Advisory Group

Public Sector Development Group

Internal Audit Group

Wisut Chanmanee Acting Bond Market Advisor

Public Debt Advisor

Public Infrastructure Project Management and Evaluation Bureau

Ace Viboolcharern

Policy and Planning Bureau

Theeraj Athanavanich

Deputy Director-General

Director-General

Deputy Director-General

Bond Market Development

Debt Management Bureau 2

Debt Management Bureau 1

Ace Viboolcharern Acting Public Debt Advisor

Bond Market Advisor

For Further Information : Pimpen Ladpli

pimpen@pdmo.go.th

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

Nattakarn Boonsri

nattakarn@pdmo.go.th

Director of Government Bond Market Development Division

Sophida Sritomya

sophida@pdmo.go.th

Director of Financial Product Development Division

Paroche Hutachareon

paroche@pdmo.go.th

Director of Fund Management and Bond Market Infrastructure Development Division

Nakarin Prompat

nakarin@pdmo.go.th

Acting Director of International Bond Market Policy Division