A group of Thai investors and issuers heard from some of the region’s leading experts on Thai and Southeast Asian credit trends at a conference held in Bangkok today.
The conference, ‘Credit Spotlight on Thailand: The Link to Continental Southeast Asia’, co-hosted by TRIS Rating and S&P Global Ratings, also featured a keynote speech from Dr. Veerathai Santiprabhob, Governor of the Bank of Thailand.
Mr. Sakda Pongcharoenyong, President of TRIS Rating, told attendees the ongoing growth of Thailand’s bond market is set to continue and potentially overtake the corporate loan market in coming years.
“The bond market has expanded at a compound annual growth rate of around 15% over the last decade, while the corporate loan sector has remained largely stagnant for the last five years,” Mr. Sakda said.
“This sustained growth, combined with continued interest from potential new issuers, means that the bond market may eventually surpass corporate lending in size.”
The total size of Thailand’s corporate bond market was 3 trillion Baht at the end of 2017, compared with Thailand’s corporate loan market, estimated to be 3.5 trillion Baht at the same time (excluding SME and retail loans).
Mr. Sakda said that acquisition activity in certain sectors had been a driving force in growth the value and volume of Thai corporate bond issuances in recent years.
Commenting on Thai bond market prospects for 2018, Mr. Sakda said: “We expect the food and beverage sector to stand out in 2018, alongside the property sector. A large volume of maturities in 2018 will also drive some activity in the refinancing space.”
S&P Global Ratings analyst Ivan Tan presented a recently published report regarding Thailand’s bank sector. Sharing the report, Mr. Tan commented: “While in our view earnings growth will be constrained by high credit costs, Thai banks will remain profitable enough for retained earnings to keep pace with our estimated 7% loan growth rate in 2018. On balance, positive developments have gained momentum and could signal a reversal of the credit down cycle for Thai banks. 2018 could be a turning point if the economic recovery stays on course.”
The conference was the first event jointly held by the two companies following S&P Global Rating’s strategic investment in TRIS Rating and featured analysts and economists from both companies.
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