Kot bondmarket booklet q2 fy2016

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

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

Basic & Essentials

» Committing to FY2016 Fund Raising Plan » GOVT Bond Auction Results » T-Bill Plan Q2/FY2016 » GOVT Bond Auction Schedule Q2/FY2016 » SOE Bond Auction Schedule Q2/FY2016 » PDMO Bond Calendar FY2016 » New Allotment Framework for NCB

» Bond Market Development Strategy » Public Debt Outstanding and Its Composition » Total Domestic Public Debt » Bond Market Capitalization and Its Composition » Supporting Inclusive Growth Through ASEAN Bond Market Integration » Non-Resident Holding in Domestic Bond

Quick Facts

Public Debt Outstanding (as of Oct 2015)

5,867,373 THB Mil. (43.80% of GDP)

16

Well-Developed Bond Market Improved GOVT Direct Debt Profile Dramatically (as of Oct 2015) » Average-Time-to-Maturity (ATM) 11yrs 3mths » Average Cost 3.85% » Well-Balanced Fixed : Floating Ratio 88 : 12 » Well-Distributed Maturity Profile 40:20:40 (TTM<5 : 6-10 : >10yrs)

17

Bond Market Capitalization (as of Dec 2015)

10,086,082 THB Mil. (75% of GDP)

18

Liquidity & Secondary Market Trading

92% of Trading Volume (Outstanding > 100,000 THB Mil.)

19

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

88,474 THB Mil. (1% of Bond Outstanding)

21

Non-Resident Holding in Domestic Bond (as of Dec 2015) » Annual Capital Flow (YTD)  GOVT Bond :

-110,461 THB Mil.

 BOT Bond :

» NR Holding in THB Bond  GOVT Bond :  BOT Bond :  Others :

24

-70,952 THB Mil. -39,509 THB Mil.

572,804 THB Mil. (5.7% of Thai Bond Market Cap.) 554,532 THB Mil. (14.2% of GOVT Bond Outstanding) 17,470 THB Mil. (0.6% of BOT Bond Outstanding) 802 THB Mil.

Progress Update  Total Fund Raising Plan FY2016  T-Bills Plan Q2/FY2016

 GOVT Bond Auction Results  GOVT Bond Auction Schedule Q2/FY2016

 SOE Bond Auction Schedule Q2/FY2016  PDMO Bond Calendar FY2016  New Allotment Framework for NCB

1

2

2016 - 2022

Government Funding Needs

86MB

2,XXXMB

New Borrowing

4,XXXMB 59,XXXMB

350 - 450 THB Bil. Per year

Deficit Bill

700 - 950 THB Bil. per Year

Insurance Decree

1,XXXMB 61,XXXMB 63,XXXMB

Substitution for foreign currency bond On-Lending

390,000

58,940

(2016-2022)

200,666

344,084

300,000

250,000

250,000

378,000

363,700

346,700

187,771

150,539

403,367

217,000

304,100

Repayment of SOE Debt (consists of 93% of Restructuring and 7% of New Debt)

GOVT

Rollover 350 - 500 THB Bil. Per year

52,000

-0-

149,209

FY 2016

113,014

340,122

191,095

129,124

FY2011

FY2012

FY2013

FY2014

307,945

187,898

59,374 FY2015F

112,708

98,400

104,236

264,863

106,958

101,800

37,900

109,000

-0-

FY2017F

FY2018F

FY2019F

FY2020F

FY2021F

FY2022F

FY2016

937,XXX MB * Include Infrastructure Investment

-Tentative1,xxx

Substitution for Foreign Currency On-lending

61,xxx 63,xxx

Savings Bond Promissory Notes and Others

390,xxx

Deficit

Bond Supply (Uncommitted) Bond Switching (LB176A) Inflation-Linked Bond

Debt Refinance (Bond Switching)

Roll Over 422,XXX MB

62,442

FY2016F

Total GOVT Fund Raising Plan

Insurance Decree

515,XXX MB

231,000

FIDF

(2016-2022)

New Borrowing

80,XXXMB

Repayment of SOE Debt (BAAC)

Rollover Govt Debt

50,xxx 40,xxx

50,xxx 80,xxx 188,xxx

Loan Bond 5-10-15-20-30-50 yrs

460,xxx

Rollover FIDF Debt

104,xxx By bills

By Instruments

Benchmark Bond (Committed)

500,XXX MB

FY2016 GOVT Fund Raising Plan = 937,xxx MB

Demand – Tools – Liquidity 148%

Liquidity

128%

1,390,000MB

1,500,000

Tools

113%

Demand

100%

937,xxx

1,200,000MB Fx Bond

1,055,200MB MB

Co-op & Non-profit

50,000

TL

51,600

1,000,000

200,000

Existing Liquidity

PN 70,000 Mutual Fund

ILB 80,000

(from maturing debt)

250,400

675,000

LBA 100,000 SB 100,000

500,000

0

Insurance & GPF & SSO

Issuing New Debt

LB

298,200

515,000

New Liquidity

Rollover of Maturing Debt 422,000

Household Deposit 455,000

600,000

715,000

Rollover + Deficit + Repayment + Bond Switching

New Demand for Fixed-income investment

Full Capacity of GOVT Funding Instruments

Liquidity for GOVT & SOE Borrowing

ThaiBMA

PDMO

Estimated by :

(from econ. growth)

BOT

(June 2015)

(July 2015)

Bond Supply has remained unchanged for two years THB mil.

13% increase in FY2016

Amount of Benchmark Bond to Actual Fund Raising (FY2009 – FY2016)

1,000,000

750,000

-11% 500,000

43%

1%

13%

-0.5%

2% 10% 49% 250,000

0

3

ALL FY2016

Benchmark Bond is approximately 500 Bil.

53% of FY2016 Funding Needs 937 Bil.

THB Mil.

500,000

Benchmark Bonds

Auction Size

5-yrs (LB206A) 10-yrs (LB25DA) 15-yrs (LB296A) 20-yrs (LB366A) NEW 30-yrs (LB446A) 50-yrs (LB666A) NEW

20,000 – 25,000 12,000 – 14,000 10,000 – 12,000 10,000 – 12,000 8,000 – 10,000 8,000 – 10,000

400,000

ILB

Total

(85%)

40,000Mil. (15%)

5,000 – 10,000

500,xxx MB

Total Benchmark Bonds

300,000

460,000Mil.

-TentativeTop-up

15 10

Top-up

Top-up

5

30

15

Top-up

Top-up

5

100,000

Top-up

200,000

20

5

TTM

10

15

-

New-Issue -

40

-

LB666A LB666A

LB616A

LBA566A

LB446A LB446A LB453A ILB453A

30

-

-

50

 Low Cost of Funding  High Volume of Short-term Demand

FY2015

THB Mil.

New-Issue

New-Issue

20

T-Bill Auction Result

FY2015-16

30

LBA37DA LB383A LB396A LB406A LB416A

ILB353A ILB356A LB366A LB363A

LB316A LB326A

LB27DA ILB283A ILB283A LB283A LB296A LB296A

LB15DA LBF165A LB167A LB16NA LB171A LB175A LB176A LB17OA LB183A LB183B LB191A LB193A LB196A LB198A LB19DA LB206A LB206A LB213A LB214A ILB217A ILB217A LB21DA LB22NA LB233A LB236A LB244A LB24DA LB25DA LB25DA LB267A

0

New-Issue

50 20

FY2016

Basis Points

75,000

Q3

Q4

9.5

Q2

Q1

60,000

8.0 6.5

45,000 5.0 30,000 3.5

-

15,000

2.0 0.5

T-1= 00

0.4 -0.4

-0.6 -0.8

-1.2

-15,000 -1.9

-1.6

-2.7

-2.6-2.6

-3.3 -3.4 -3.7-3.8

-3.9

-1.9

-2.3 -2.2

-2.2

-30,000

MB

-2.1

-2.6 -3.0

-2.9 -3.4

-2.4

0.1

0.00.1

-0.2 -0.6 -1.0

-1.0 -2.5

-2.1 -2.6

-3.1

-4.0

-3.6

-4.2 -4.2

-4.4

-0.9

-4.4

-5.5 -45,000

-5.5

-7.0 -60,000

-75,000

T-bill 1 month T-bill 6 months R-bill 3 months Apr-15

4

May-15 Jun-15

T-bill (Allocated Amount) Participated Amount (Excess Demand) Not Fully Allocated or Subscribed Spread [AAY-Yield(T-1)]

Jul-15

Aug-15

Sep-15

Oct-15

-8.5 -8.4

-10.0 Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

FY 2015-2016 GOVT Bond Auction Results Classified by 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)]

Basis Points

THB Mil. 100,000

25

FY2015

80,000

FY2016

75,696

,

20

64,588 60,475

58,919

60,000

15

44,090

40,000

41,142 34,055

20,000

3.3

10

36,610

28,293

5.9

8.9

22,145

3.9

17,026

22 6,525 3,028 4,030 2,100

T-1= 0 -

8.2

10.5 30,164 6.0

18,438 17,845 17,766 15,275 16,085 1,802 13,496 15,480 15,250 2.613,950 12,010 14,194 10,060 3,840 10,725 8,563 7,600 562 5,212 1.3

1.5

-1.8

-0.2

-0.4

-1.1

-0.6

-0.9

-3.6

13,200 14,365 10,120 11,800

16,555 15,650

0.4

-0.1 0.2

-0.5

-0.8

-2.2 -1.9-1.9

-2.8

-6.7

-5.2

-5.3

-6.1

-5

-4.0

-4.1

-5.6

-6.4

-7.9

-40,000

5 0

-0.4

-2.7

-3.4

24,420 21,525 22,472 15,895 16,761 15,407

4,255 0.5

-1.4

-4.1 -5.2

5.4

-1.0 -2.4

-20,000

24,909 19,580

1.7

0.2

28,602

-9.8

-10

-9.4

-9.9 -11.3

-15

-60,000 -15.5

21 Oct 2014 21 Oct 2014 29 Oct 2014 29 Oct 2014 12 Nov 2014 19 Nov 2014 26 Nov 2014 3 Dec 2014 3 Dec 2014 9 Dec 2014 17 Dec 2014 7 Jan 2015 14 Jan 2015 21 Jan 2015 21 Jan 2015 4 Feb 2015 11 Feb 2015 11 Feb 2015 18 Feb 2015 25 Feb 2015 3 Mar 2015 18 Mar 2015 25 Mar 2015 8 Apr 2015 22 Apr 2015 22 Apr 2015 29 Apr 2015 6 May 2015 20 May 2015 20 May 2015 27 May 2015 3 Jun 2015 24 Jun 2015 8 Jul 2015 8 Jul 2015 15 Jul 2015 28 Jul 2015 11 Aug 2015 19 Aug 2015 26 Aug 2015 2 Sep 2015 2 Sep 2015 9 Sep 2015 23 Sep 2015 21 Oct 2015 21 Oct 2015 28 Oct 2015 11 Nov 2015 18 Nov 2015 25 Nov 2015 2 Dec 2015 8 Dec 2015 23 Dec 2015

-80,000

-20

FY2015 – Q1FY2016 GOVT Bond Auction Results Classified by Tenor Benchmark Bond 5 – 10yr

Million Baht

5yr

100,000

Benchmark Bond 15 – 50yr

15yr

10yr

(Exclusivity)

Bps

30yr

20yr

50yr

25

85,705

75,696

80,000

20 , 60,475 58,919

60,000

15

44,090 41,142

40,000

36,610

10

34,055 30,164

19,580 24,420 15,250 11,800

1,802 5.9

2.7

T-1= 0

1.7

-

-0.4

-0.2 -0.6 -1.8

-1.0 -2.4

28,602

-0.5 -1.9

-1.4

13,950

200

0.5

16,55521,525 15,407 13,49610,120

1.3 3,840

17,026 6.0

10,725

0.4

0.2

-9.8

-60,000

-80,000

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

22,145

15,275

18,438

5 14,365

3,0285,212

500

3.9

-0.8

0

1.5 -0.4

0.2

-0.1

-0.9 -1.9

-2.2

-3.4

-3.6 -5.6

-40,000

15,895

8,563

-2.8

-20,000

16,761

8.9

24,909

16,085

4,405 3,707

3,9763,8034,0003,779

20,000

28,293

-6.1

-5

-5.3 -5.2 -6.4

-10

-9.4

-9.9 -11.3

-15

-20

5

6 17-Jun-2036

Re-open Re-open Re-open

22-Jun-2029

LB296A = LB366A = LB446A = LB666A =

Re-open Greenshoe Option)

12-Dec-2025

Re-open

MOF Outright PD

26-Jun-2020

3.40%

LB25DA =

LB206A =

Maturity Date

4.875%

2.55%

Coupon

3.85%

21,000

20,000

11,000

LB366A 20-yrs New

20,000

MPC

10,000

MPC

10,000

LB296A 15-yrs

Total

27,000

13,000

14,000

LB25DA 10-yrs

10,000

20,000

LB206A 5-yrs Exclusivity

30 March 2016

23 March 2016

16 March 2016

9 March 2016

2 March 2016

24 February 2016

17 February 2016

10 February 2016

3 February 2016

27 January 2016

20 January 2016

13 January 2016

6 January 2016

Auction Date

-

Re-open

29-Jun-2044

4.675%

10,000

10,000

LB446A 30-yrs

17-Jun-2066

4.00%

20,000

10,000

10,000

LB666A 50-yrs New

118,000

10,000

10,000

10,000

13,000

-

10,000

20,000

-

10,000

11,000

10,000

14,000

Total

Auction Schedule for Q2/FY2016 Q2/FY2016 GOVTGovernment BondBondAuction Schedule (Jan â&#x20AC;&#x201C; Mar 16)

7

21

28

4

Wk 3

Wk 4

Wk 5

มีนาคม

(Mon, 22)

Makha bhucha

(Mon.8)

17

24

31

Wk 11

Wk 12

Wk 13

Total

10

3

25

18

Wk 10

Wk 9

Wk 8

Wk 7

11

14

7

Wk 2

Wk 1

Chinese New Year Wk 6

February

January

3,000

2

2,000

3,000

-

7

Guaranteed by GOVT Gauranteed and Serviced by GOVT Partially Guaranteed by GOVT

MG GG (P)

Sources of Fund

23,300

MPC

GG23,300

6

Term Loan

3,000

MG

5

SOE Bond

-

4

Not Guaranteed by GOVT

-

3

NG

20,000

GG10,000

NG2,000 GG10,000

1

Borrowing Instruments

3,000

NG

Thu. Less than 1

Tenor of Term Loan and Bond (year)

760

MPC

NG590 MG170

8

1,000

10

-

1,000

NG

NOTE :

-

9

4,000

-

More than 15

EXAT _Auction Thu BAAC _Auction Thu NHA _Syndication Tue BAAC _Syndication Thu PWA _Auction Thu EGAT _Auction Thu PEA _Syndication Tue

4,000

NG

11-15

Q2/FY2016 SOE Bond Auction Schedule (Jan – Mar 16) -

57,060

-

-

-

4,000

10,000

-

3,000

-

23,300

1,000

12,000

3,760

Total

Quarter 2

Quarter 1

8

Mar 2016

Feb 2016

Jan 2016

Dec 2015

Nov 2015

Oct 2015

Makha Bucha Day

22

21

29

15

14

28

8

7

Quarterly PD Market Dialogue

1

23

22

29

16

15

9

2

1

8

26

25

12

11

19

5

4

18

29

28

15

22

Baht Bond 1/FY2016

8

21

14

H.M. The King's Birthday observed

1

30

7

24

23

Last day of submission for Baht Bond Application (1/2016)

17

10

16

9

3

First day of submission for Baht Bond Application (1/2016)

20

13

2

Auction T-bill

Retail Only

Auction T-bill

6

27

Auction T-bill

Auction T-bill

19 Issue Regular Saving Bond 1/2016(3y) : 50,000 MB (19 Oct 15 - 29 Feb 16) 26

12

5

Mon

First day of submission for Baht Bond Application (2/2016)

MOF Outright PD Committee : Quarterly PD's Evalution

Quarterly PD Market Dialogue

Action LB446A (30Y) : 10,000MB

MOF Outright PD Committee

Tue

30

23

16

9

2

24

17

10

3

27

20

13

6

30

23

16

9

2

25

18

11

4

28

Action LB366A (20Y) : 10,000MB NEW 20Y

MPC

Action LB296A (15Y) : 10,000MB

Action LB666A (50Y) : 10,000MB NEW 50Y

Action LB25DA (10Y) : 13,000MB

Action LB446A (30Y) : 10,000MB

Action LB206A (5Y) : 20,000MB

MPC

Action LB296A (15Y) : 10,000MB

Action LB366A (20Y) : 11,000MB NEW 20Y

Action LB666A (50Y) : 10,000MB NEW 50Y

Action LB25DA (10Y) : 14,000MB

Action LB206A (5Y) : 27,000MB

MPC

Action LB296A (15Y) : 13,000MB

Action LB666A (50Y) : 9,000MB NEW 50Y

Action LB366A (20Y) : 11,000MB NEW 20Y

Action LB25DA (10Y) : 13,000MB

MPC

Action LB296A (15Y) : 13,000MB

LB446A (30Y) : 9,000MB

21 Action LB206A (5Y) : 24,000MB

14

7

Wed

31

24

17

10

3

25

18

11

4

28

21

14

7

31

24

17

10

3

26

19

12

5

29

22

15

8

1

PDMO Bond Calendar FY 2016

Last day of submission for Baht Bond Application (2/2016)

New Year's Eve

Constitution Day

Thu

1

25

18

11

4

26

19

12

5

29

22

15

8

1

25

18

11

4

27

20

13

6

30

23

16

9

2

Quarterly Macroeconomics Report (FPO)

New Year's Day

Quarterly Macroeconomics Report (FPO)

Chulalongkorn Day

Fri

2

26

19

12

5

27

20

13

6

30

23

16

9

2

26

19

12

5

28

21

14

7

31

24

17

10

3

27

20

13

6

28

21

14

7

31

24

17

10

3

27

20

13

6

29

22

15

8

1

25

18

11

4

Sat Sun 3

Quarter 3

Quarter 4

9

Sep 2016

Aug 2016

Jul 2016

Jun 2016

May 2016

Apr 2016

21

28

5

20

27

4

2

1

20

27

26

6

5

19

30

29

13

23

22

12

16

15

9

26

25

8

19

18

12

14

13

11

7

6

First day of submission for Baht Bond Application (3/2016)

31

30

24

23

10

3

17

MOF Outright PD Committee : Quarterly PD's Evalution

Labor Day observed

16

9

2

26

25

12

5

19

Long-term Investor Meeting

Baht Bond 2/FY2016

18

11

4

Asalha Bucha

28

21

14

7

31

24

17

10

3

27

20

13

6

29

22

15

8

1

25

18

11

4

27

20

13

6

Buddhist Lent Day

Quarterly PD Market Dialogue

Songkran Festival Day

Chakri Day

MOF Outright PD Committee : Final Review

Baht Bond 3/FY2016

Coronation Day

Last Day of submission for MOF Outright PD's Application

Songkran Festival Day

First Day of submission for MOF Outright PD's Application

29

22

+ MOF Awards

15 Annual PDMO-Market Dialogue

8

1

25

18

11

4

28

21

14

7

30

23

16

9

2

26

19

12

5

28

21

14

7

H.M. The Queen's Birthday

24

17

10

3

27

20

13

6

30

23

16

9

2

25

18

11

4

28

21

14

7

30

23

16

9

25

18

11

4

28

21

14

7

31

24

17

10

3

26

19

12

5

29

22

15

8

1

24

17

10

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

30

23

16

9

2

26

19

12

5

Quarterly Macroeconomics Report (FPO)

Mid-year Bank Holiday

Visakha Bucha

Last day submission for Baht Bond Application

29

22

15

8

1

24

17

10

3

27

20

13

Quarterly Macroeconomics Report (FPO)

Songkran Festival Day

12 - 15 May 2016: Money Expo

6

29

22

15

8

Peers Comparison

BOND market capitalization Source : Asian Bond online (ADB) 250%

BOND mkt. cap : GDP

222%

Government BOND Yield Curve

Hundreds

200%

10%

Public Sector (GOVT + CB + SOE) Private Sector 150%

129% 95%

100%

75%

8%

Vietnam

53%

50%

Indonesia

9%

7%

20% 6%

0%

Philippines Malaysia

5%

Thailand Share of PUBLIC sectorâ&#x20AC;&#x2122;s Bond to Total BOND mkt. cap. % : BOND mkt. cap.

4%

USD Billions 300

99%

100% 86%

Japan

60%

57%

109

1%

150

USD Billions

107 37

0%

SOE 22

86

BOT 78

Philippines

Thailand

USD Billions

Korea

2%

GOVT

0%

2.51% 2.16%

50%

147

161

Singapore

Malaysia

-1%

Te n o r

0

Vietnam

Indonesia

China

USA Singapore

3%

84% 75%

3.85%

3.59%

As of December 30th ,2015

Government BOND Yield Matrix

ASEAN & Peers

As of December 30th , 2015

6m

1 yr

2 yr

3 yr

4 yr

5 yr

6 yr

7 yr

8 yr

9 yr

10 yr

20 yr

30 yr

40 yr

Japan

-0.10

- 0.04

- 0.03

- 0.01

0.01

0.03

0.04

0.06

0.12

0.19

0.27

1.00

1.28

1.41

Korea

1.59

1.64

1.66

1.68

1.76

1.84

1.89

1.94

1.99

2.04

2.10

2.18

USA

0.47

0.64

1.08

1.36

1.58

1.80

1.97

2.14

2.20

2.25

2.31

2.69

3.04

-

1.01

1.07

1.34

1.61

1.88

2.02

2.16

2.29

2.43

2.57

2.90

2.97

Thailand

1.50

1.50

1.57

1.73

1.87

2.16

2.26

2.37

2.46

2.51

2.51

3.16

3.59

3.72

3.85

China

2.25

2.30

2.42

2.54

2.62

2.70

2.80

2.84

2.84

2.83

2.83

3.48

3.62

3.68

3.74

Malaysia

2.76

2.61

2.91

3.24

3.36

3.48

3.78

4.09

4.13

4.17

4.21

4.68

4.90

Philippines

2.93

3.17

3.02

3.68

3.90

4.30

4.45

4.60

4.44

4.27

4.10

5.50

Vietnam

-

4.97

5.31

5.82

6.22

6.61

6.78

6.94

7.03

7.11

7.20

Indonesia

7.61

8.19

8.56

8.74

8.82

8.85

8.86

8.87

8.88

8.90

8.92

Singapore

9.14

9.21

Brunei Cambodia Laos Myanmar

10

below 1%

2.01% - 3%

over 4%

1.01% - 2%

3.01% - 4%

no data

50 yr

New Allotment Framework for NCB NCB Bidding Amount Individually Bidding Amount

NCB Issue Amount / Auction

Minimum

Maximum

Before January 2013

20%

4 THB mil.

40 THB mil.

From January 2013 to present

20%

4 THB mil.

100 THB mil.

New Bidding Amount

20%

4 THB mil.

Not exceed 20% of auction amount

Begin January 2016

NCB Allotment Step 1 : Allocate bids for the first 100 million baht Step 2 : Allocate amount over 100 million baht by Pro-rata Begin : January 2016

11

12

 Funding Infrastructure Investment  Connecting ASEAN

Domestic Bond Market in Transition

Funding Infrastructure Investment Connecting ASEAN (2013 - 2016) 2016 Highlights

Market Deepening Oriented (2010 - 2012)

Sustainable Source of Fund

Water Decree (350,000 THB Mil.)

Full Funding Capacity : 1,200,000 THB Mil.

Thai Khem Khang (350,000 THB Mil.)

1,900,000 THB Mil. Long-Term Infrastructure Inv’t

Baht Bond (Foreign Issuers Bond)

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

Regional Connectivity / AEC

Foreign Currency Bond

Debt Folio Enhancement

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

Market Infrastructure

Strengthening PD system

Activated Public Debt Management Fund

(Exclusivity, League Table, Greenshoes Option)

STRIPS Bond

Innovation / Product Development

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

Scripless Retail Savings Bond  Saving Habit 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 Annual PDMO Market Dialogue

Annual PDMO Market Dialogue

Market Consultation

Quarterly PDMO one-on-group MOF Outright PD Dialogue

Quarterly PDMO one-on-one PD Dialogue

50

30

Building Yield Curve / Enhancing Liquidity

15 10 7 5 3

Monthly PDMO one-on-one MOF Outright PD Dialogue

Liquidity-Oriented

300,000 MB

20

8 Tenors of Benchmark Bonds

150,000 MB Outstanding Amount

3 5 7

10

15

20

30

50

Equilibrium of Domestic Bond Market Issuers

• 75 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)

Domestic Bond Market (Classified by Credit Rating) 1% Non-rated

CGIF 0.03% Baht Bond 1%

12% Government

39%

SOEs

8%

BOT 5%

4%

Government

24% BOT

SOEs 8%

28% Total of 10.0 THB Trillion

Source : ThaiBMA (End of December 2015)

Household and Non-profit

BBB

A Corp Bond

Government Debt Securities (Classified by Types of Investors)

39% BOT

28% Total of 10.0 THB Trillion

Source : ThaiBMA (End of December 2015)

6%

NR 15%

Insurance and Other Corporation

41% Depository Corporation

33% Total of 3.9 THB Trillion

Source : BOT (End of November 2015)

15

Public Debt Outstanding (as of Oct 2015) = 5.87 THB Trillion (43.80% of GDP) Components of Public Debt

Units : THB Mil.

3,257,114 998,791 1,054,888 538,201 18,379

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

Autonomous Agency Debt

0.31% Special Financial Institutions Guaranteed Debt

9.18

% 538,201 THB Mil.

5,867,373

Public Debt Outstanding

18,379 THB Mil.

Non-Financial State Enterprise Debt

17.98% 1,054,888 THB Mil.

GOVT Debt 55.51% 3,257,114 THB Mil.

GOVT Debt (for FIDF)

17.02% 998,791 THB Mil.

Source : Information Technology Centre, PDMO

Portion of Public Debt Serviced by The Government Public Debt Components “All”

Public Debt Components “serviced by the government ”

5.87 THB Trillion

3.71 THB Trillion

Autonomous Agency Debt

Special Financial Institutions Guaranteed Debt 9.18% 538,201 THB Mil.

Non-Financial State Enterprise Debt

17.98% 1,054,888 THB Mil.

0.31% 18,379 THB Mil.

Special Financial Institutions Guaranteed Debt

serviced by the government

Autonomous Agency Debt

serviced by the government 0.04%

7.80%

GOVT Debt 55.51%

GOVT Debt 53.31 % % 54.65

3,257,114 THB Mil.

GOVT Debt (for FIDF)

17.02% 998,791 THB Mil.

As of Oct 2015

16

Non-Financial State Enterprise Debt

100%

serviced by the government

0.80%

63%

Total Domestic Public Debt = 5.43* THB Trillion * Excluding Foreign Debt

Assumptions : 6 months BIBOR = 1.76%, 6 months Fixed Deposit Rate = 1.23%, Inflation = -0.77%

Non-financial SOEs

400,000

Autonomous-Agencies

98%

2%

TTM Fiscal Year

Next 5 yrs

FIDF 1

400,000

74,000 28,198

126,850

Next 5 yrs

Budget Deficit

22,000

T-Bill

106,702

3,000

196,379

Water

RW

10%

6-10 yrs

10 yrs +

= 11yrs 3mths Ext. Guaranteed Debt  ATM  Avg. Cost = 3.85%  Fixed : Floating = 88: 12 THB Mil.

DPL

 Callable

= 6%

Maturity Profile

3,900

40%

165,902

27,600

29,400

20,000 5,500

98,255

12,000 95,936

35,000

41,900

2,400

33,581

239,798

161,252

29,656 43,000

59,141

2,800

53,664

76,700 18,900

286,104 3,717

87,381

1,381

408,438

86,630

13,688 12,743

= 4yrs 4mths = 3.99% = 90: 10 = 7% Maturity Profile

13,000

24,700

11,836100,872

0

20,000

16,000

100,000

130,452

200,000

On-lending Loan

(Excluding foreign debt 83,422.72 THB mil. ) 3,633

176,164

5,091 17,784

TKK

GOVT Direct Debt (exclude FIDF) = 3,173,691

3,000 20,000

146,713

300,000

10 yrs +

31%

TTM Fiscal Year

400,000

0%

6-10 yrs

 ATM  Avg. Cost  Fixed : Floating  Callable

59%

71,000

40,000 69,000

101,800

25,000

128,000 77,059 25,000

131,981

23,232 64,771

0

FIDF 3

GOVT Debt (for FIDF) = 998,791 THB Mil.

300,000

100,000

Maturity Profile

2,600

8,000

10,400 2,987 8,000

400

0

200,000

= 1yrs 9mths = 2.94% = 54: 46 = 46%

8,000 25,000

150,782

181,869

10,842

11,780

Excluding Not serviced by GOVT 835,481 THB Mil. External SOE debt (Serviced by GOVT) 61,466 THB Mil. External SOE debt (Not-Serviced by GOVT) 207,824 THB Mil. 71,000

100,000

financial SOEs

SOE Debt (Serviced by GOVT) = 506,696 THB Mil.

300,000

200,000

As of Oct 2015

 ATM  Avg. Cost  Fixed : Floating  Callable

TTM Fiscal Year

Next 5 yrs

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

Well-Developed Bond Market Improved

GOV’T Direct Debt Profile Dramatically

40%

20% 6-10 yrs

10 yrs +

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

Note : Government Direct Debt = 3,173,691 THB Mil. (exclude FIDF and external debt)

As of Dec 2007

ATM

Average-Time-to-Maturity LENGTHENED by 6yrs

Avg. Cost LOWERED by 65 bps.

As of Oct 2015

11yrs 3mths

ATM

5yrs 3mths

Avg. cost

4.5%

(While ATM Lengthened by 6yrs)

Avg. cost

3.85% Floating

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

10%

Fixed

Fixed

90%

88%

54%

Well-Distributed Maturity Profile (Maturing Debt in the next 5 yrs is less than 50% of Total Debt)

Floating

28%

Next55yrs yrs year 6-10 yrs next 6 -10

40%

40% 20%

18% 10 10 yrs yrs ++

12%

Next 5 yrs

6-10 yrs

10 yrs +

17

Bond Market Cap. = 10 THB Trillion

GOVT Bond = 3.9 THB Trillion

($108 Bil.)*

($277 Bil.)*

% Share of GDP

Domestic Bond Market Classified by Issuer

140% 128%

Baht Bond

120%

1%

99% 99%

100% 80%

75%

Corp Bond 24%

60% 40%

24%

20%

12%

Oct-15

0%

Bank Loan /GDP

Equity/GDP

Bond Market / GDP

Maturity Profile BOT vs GOVT Bond BOT ATM = 5mths GOVT ATM = 11yrs 3mths *End of Oct 2015

4% 78%

≤1

2% 22%

20%

1<yr≤3

3<yr≤5

36%

38%

5<yr≤10

10<yr≤50

end of Dec 2015

*Source: BOT Exchange rate as end of Nov 2015

Full Capacity* of All Government Funding Instruments

1,200,000 THB Mil. per Year

* Under favorable market liquidity + using All funding instruments

% 5.00 4.75 4.50

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. 50,000 THB Mil. 50,000 THB Mil.

($4.2 Bil.)** ($3.3 Bil.) ($2.2 Bil.) ($2.2 Bil.) ($1.6 Bil.) ($1.6 Bil.) ($1.4 Bil.) ($1.4 Bil.)

($33 Bil.)**

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

GBI-EM Global JP Morgan

iBoxx Asia ex Japan Markit

9.0%

Benchmark Bond

Asian Local Markets HSBC

9.8%

7.9%

Last Update : Dec 2015

4.25 4.00

50

3.75

30

3.50 3.25

20

3.00

15

2.75

10

2.50

7

2.25

5

2.00 1.75 1.50

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

3

Government Funding Instruments Infrastructure

liquidity Benchmark Bond

($17.9 Bil.) ($2.8 Bil.) ($2.8 Bil.) ($2.2 Bil.)

Benchmark Bond

~650,000THB Mil. (54%)

Savings Bond

~100,000THB Mil. (8%)

Amortized Bond

~100,000THB Mil (8%)

Inflation-Linked Bond

~80,000THB Mil. (7%)

($1.1 Bil.) ($0.8 Bil.) ($5.5 Bil.)

Promissory Note

~40,000THB Mil. (3%)

($33 Bil.)

Total

Floating Rate Bond Bank Loan

~30,000THB Mil. (3%) ~200,000THB Mil. (17%)

1,200,000 THB Mil. (100%)

1.25

TTM

18

Source: ThaiBMA Government Bond Yield Curve (end of Dec 2015)

**Source: BOT Exchange rate (As of Dec 30th ,2015)

Tier 1 > 100,000 THB Mil. in Size (92% of Trading Volume)

Total GOVT Bond = 40 Series (End of December 2015) THB Mil.

Tier 2 > 50,000 THB Mil. in Size

Tier 1: >100,000MB

350,000

(6% of Trading Volume)

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

(12 Series)

300,000

Outstanding size (THB Mil.)

92%

6%

2%

250,000

0

200,000

50

100

Tier 2: 50,000 – 100,000MB

15

(13 Series)

10

150,000

30 5 100,000 100,000

50,000

20 50 LB267A LB24DA LB175A LB316A LB214A LB171A LB19DA LB244A LB22NA LB183A LB406A LB366A LB666A LB396A LB383A

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

LB21DA LB196A LB176A LBA37DA LB236A LB296A LB616A LB25DA LB446A LB206A ILB283A ILB217A

0

FY 2016 on-the-run Benchmark Bond GBI-EM Thailand - JPMCB

Source : ThaiBMA

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 December 2015

Turnover Ratio

THB Mil. 350,000

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

12 GOVT Bond series are included in JPMCB Index 3 of which are on-the-run Benchmark Bond (5-10-15-yr)

1.2

FY 2016 on-the-run Benchmark Bond

300,000

1.4

1.2

GBI-EM Thailand - JPMCB Turnover Ratio (time)

250,000

1.0

200,000

0.8

0.8

150,000

0.6

0.6

0.4

100,000 100,000

0.4 0.4

0.4 0.4 0.3 0.3 0.2

50,000

0.2 0.2

0.1

0.1 0.1 0.1

0.1

0.1 0.1

5 20

50

10

15

LB383A

LB396A

LB406A

LB316A

LB416A

LB171A

LB183A

LB198A

LB22NA

LB175A

LB214A

LB244A

LB283A

LB233A

LB213A

LB616A

LB326A

LB267A

LBA37DA

LB167A

LB19DA

LB24DA

LB183B

LB16NA

LB193A

LB27DA

ILB217A

LB446A

LB17OA

LB191A

ILB283A

LB296A

LB236A

LB176A

LB25DA

LB666A

LB21DA

LB196A

LB366A

-

LB206A

0

30

Turnover Ratio 0.1 – 2.0

Nearly No Trading

Source : ThaiBMA

19

Linking CGIF & BAHT BOND to the Development of Bond Market

0

Total Outstanding 10,086,082 THB Mil.

CGIF

0

0

0

Inaugural (Noble, Hong Kong)

0

0

THB 2,850 Mil.

0

BAHT BOND

(As of December 25th, 2015)

Baht Bond (For Asian Bond CGIF Market Initiative)

THB 88,474 Mil.

1% 0.03%

0

0

0

Corp Bond

24%

SOEs Bond

8%

0

2013 2014 2015 2016 2017 2018 2019 2020

111111 Natural Hedging

Inv’t Grade

BOT Bond

KEXIM

28%

(THB 27,000 M) CABEI (THB 4,474 M)

Targeted Industry

Lao PDR

GOVT Bond

Why now?

What next?  Broadening Issuer Base : AEC  Becoming bond market leader of the region

 Entering ASEAN Economic Community (AEC)

(PDDF.)

20

39%

(THB 21,590 M)

2016 - 2025

Baht Bond’s Maturity Profile (Classified by Issuers) Public Debt Management Office, Ministry of Finance

THB Mil.

CLMV

30000

88,474 THB Mil.

32

%

28,090 THB Mil.

26

7%

%

25% ADB

Mizuho (23,066)

AFD

l.

Baht

Government

International

25%

Credit Rating & CGIF

(21,590 THB Mil.)

68%

Size : 3,000 THB Mil. Issue: Sep 28th, 2015

CBA

IFIs ,

(6,500 THB Mi )

(23,066)

(22,409)

20000

Non-Gov’t

(60,384

NOBLE

)

THB Mil.

KEXIM ING

11

%

10000

%

KEXIM CABEI Woori

Lao PDR (Gov’t)

Today

7

7

%

%

CITI

Woori

Hana Woori

Lao PDR (Gov’t)

KEXIM

Lao PDR

EDL-Gen

(Gov’t)

Lao PDR (Gov’t)

(8,000)

7

%

(6,330)

(5,668)

CABE

0

9

(10,000)

Woori

KEXIM CABEI Lao PDR (Gov’t)

KEXIM

(5,701)

2

%

EDL-Gen Lao PDR (Gov’t)

(1,500)

3

%

(2,800) KEXIM

3

%

(3,000)

Lao PDR (Gov’t)

EDL-Gen

KEXIM

Source : PDMO (As of December 25th, 2015)

21

2007 - 2015

Growth of Corporate Bond Outstanding has Accelerated Total Outstanding 10,086,082 THB Mil.

Baht Bond Outstanding Corporate Bond Outstanding

(As of December 25th, 2015)

% Share of Corporate Bond Outstanding to Bond Market Capitalization % Share of Baht Bond Outstanding to Bond Market Capitalization

Baht Bond

1%

88,474 THB Mil

24% 19%

000

(For Asian Bond CGIF Market Initiative)

25%

Corp Bond

88,474 THB Mil.

18%

0.03%

24%

2,078,650 THB Mil 20%

2,078,650 THB Mil.

8%

SOEs Bond

000

782,680 THB Mil.

15%

BOT Bond

000

10%

29%

2,881,487 THB Mil.

000

5%

000

1.3%

0.6%

1%

GOVT Bond

38%

3,912,414 THB Mil.

0

0% End of Dec 2015

Source : ThaiBMA (As of December

25th,

2015)

Corporate Bond & Baht Bond Outstanding (Classified by TTMs)

Average size per issuance:

2,133 THB Mil. % Share of total Corporate bond outstanding

THB Mil.

50%

1,000,000

41% 874,521

Total Outstanding :

2,167,124 Number of Corporate Bond + Baht Bond: 1,016 Average size per issuance:

2,133

THB Mil.

(Series) THB Mil.

Baht Bond Corporate Bond

25%

500,000

16% 350,905

13% 272,137

14% 307,929

13% 290,982

3% 70,650 TTM (Years) 0

0%

Source : ThaiBMA (As of December 25th, 2015)

22

-

-

-

-

Remark : Excluded Commercial Papers (less than 1 year at issue)

30%

Corporate Bond & Baht Bond Outstanding (Classified by Size) THB Mil. 200000

Corporate Bond

Outstanding (THB Mil.)

are 6 Major Corporates No. of Issuers

% Share of Outstanding

A Rated Group (AAA, AA, A) B Rated Group (BBB, BB)

CPALL PTT SCC

≥ 50,001

6

30%

10,001 – 50,000

53

56%

≤ 10,000

122

14%

Total

181

100%

Unrated

Baht Bond 150000 Baht Bond Lao PDR (Gov’t)

BahtLaoBond PDR (EDL-Gen)

100000

CPF

Lao PDR (Gov’t) 50000 50,000

THAI BAY

(BBB+) 21,590 THB Mil.

Lao PDR (EDL-Gen) (BBB+) 6,500 THB Mil.

10,000 0

Issuer 1

Issuer 181

Source : ThaiBMA (As of December 25th, 2015)

Remark : Excluded Commercial Papers (less than 1 year at issue)

50%

Corporate Bond & Baht Bond Outstanding (Classified by Credit Rating)

is A Rated

200000 THB Mil.

Corporate Bond CPALL PTT

Rating

AA Rated

SCC

A Rated BBB Rated

150000

Outstanding (THB Mil.)

AAA Rated

% Share of Outstanding

No. of Issuers

AAA

345,260

16%

15

AA

377,978

17%

30

1,078,622

50%

49

BB Rated

A

Unrated

BBB

309,286

14%

47

BB

21,121

1%

2

Baht Bond Baht Bond

Baht Lao Bond PDR (Gov’t)

Unrated

Lao PDR (EDL-Gen)

Total

34,857

2%

38

2,167,124

100%

181

100000

CPF

Lao PDR (Gov’t) 50000 50,000

THAI

BAY

(BBB+) 21,590 THB Mil.

Lao PDR (EDL-Gen) (BBB+) 6,500 THB Mil.

10,000

0

AAA

AA

Source : ThaiBMA (As of December 25th, 2015)

A

BBB

BB

Unrated

Remark : Excluded Commercial Papers (less than 1 year at issue)

23

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

-110,461 THB mil.

(2015YTD)

THB Mil.

350,000 300,000

250,000

+93,249

200,000 +84,003

150,000 +23,052

100,000 +129,454

50,000

0

0

-50,000

-110,461 THB mil

+196,463

+30,216 -22,494

-2,793

+117,144

.

+96,738

GOVT Bond 29,642

-1,598 -7,506

-70,952 THB mil.

-53,807

-27,157

-100,506

-100,000

BOT Bond

-39,509 THB mil.

2015 YTD

-150,000

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

2015 Weekly (The past 51 weeks)

As of 25th Dec, 2015

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

THB Mil.

125,000

100,000

As o

(1 USD/ THB)

Accumulative NR Holding = -110,461 THB mil.

28 29

(Since 1 Jan – 25 Dec 2015) 75,000

30

50,000

31

25,000

32

0

33

0

BOT Bond

-25,000

-39,509 THB mil.

GOVT Bond

-50,000

34 35

-70,952 THB mil.

-75,000

36 1 USD = 36.0980 THB

-100,000

Foreign Exchange (USD/THB)

NR Holding in GOVT Bond

NR Holding in BOT Bond

WK1 WK2 WK3 WK4 WK5 WK6 WK7 WK8 WK9 WK10 WK11 WK12 WK13 WK14 WK15 WK16 WK17 WK18 WK19 WK20 WK21 WK22 WK23 WK24 WK25 WK26 WK27 WK28 WK29 WK30 WK31 WK32 WK33 WK34 WK35 WK36 WK37 WK38 WK39 WK40 WK41 WK42 WK43 WK44 WK45 WK46 WK47 WK48 WK49 WK50 WK51

-125,000

37

24

38

As of 25th Dec, 2015

T

2015

Non-Resident Holding in THB Bond = 572,804 THB Mil.

Outstanding

Thai Bond Market Cap. =10,085,998 THB Mil.

% 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

GOVT Bond GOVT Bond

574,063 554,532

BOT Bond Bond BOT

118,177 17,470

SOE Bond Bond SOE

00

Corp Bond Corp Bond

6.24% 5.52% 1.390% 1.28% 0.17% 1.28 0.00% 0.00% 0.01 0.01% 0.01%

802 666

572,804

TOTAL TOTAL

7.53% % 5.70

692,906

GOVT Bond Outstanding 3,912,414

BOT Bond Outstanding 2,881,487

THB Mil.

THB Mil.

Non-Resident 17,470 THB Mil.

Non-Resident 554,532 THB Mil.

Domestic Investors

Domestic Investors

2,864,017 THB Mil.

3,357,882 THB Mil.

99.4

85.8

%

%

As of 25th Dec, 2015

Peers Comparison

Non-Resident Holding in Thai GOVT Bond is 554,532 THB mil. or 14.2% of Total GOVT Bond Outstanding

(C

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

40%

Indonesia

37.67% Sep’ 15

Malaysia 30.50%

30%

Sep’ 15

Peak @ 19.1% (Apr’ 13)

Thailand

20%

14.2%

As of 25th Dec,15

Korea 9.96%

10%

Sep’15

Japan 9.20% Jun’ 15

Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 DecDec-15

0%

2008

2009

Source : AsianBondsOnline, ThaiBMA

2010

2011

2012

2013

2014

2015

As of 25th Dec, 2015

25

Source: Public Sector Development Group, PDMO

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

Mission

Transparency, Discipline, Trustworthiness, Driving Social and Economic Development

Values

Professional in public debt management for sustainable development

Vision

For Further Information : Upama Jaihong

upama@pdmo.go.th

Executive Director of Bond Market Development Bureau

Nattakarn Boonsri

nattakarn@pdmo.go.th

Acting Senior Expert on Bond Market Development Director of Government Bond Market Development Division

Paroche Hutachareon

paroche@pdmo.go.th

Director of Fund Management and Bond Market Infrastructure Development Division

Oraporn Thomya

oraporn@pdmo.go.th

Acting Director of International Bond Market Policy Division

Nakarin Prompat

nakarin@pdmo.go.th

Acting Director of Financial Product Development Division