New bond issues in 2005 are expected to become increasingly structured as public offerings aimed at retail investors rather than for institutional investors, according to the Thai Bond Dealing Centre. Nattapol Chavalitcheevin, the Thai BDC president, said institutional investors would typically take a more conservative approach in a rising interest rate environment, to minimize potential unrealized losses as investments were marked-to-market.
A number of large companies, such as Siam Cement, have proved highly successful with public bond offerings in the past two to three years. Certainly demand remains strong, if the heavy interest in a Baht 20 billion issue of five- and eight-year bonds by the Government Savings Bank earlier this month is any indication. The Thai BDC expects new corporate bond issues to be worth around Baht 120 billion in 2005, or on par with this year. New corporate issues from January to November 2004 totalled Baht 119.81 billion.