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3 Sep 2009

Financial Markets

BOT Savings Bonds: Impact on Banking Liquidity (Business Brief No.2622)

คะแนนเฉลี่ย
KASIKORN RESEARCH CENTER (KResearch) expects that BOT savings bonds, scheduled for subscription on September 3, 4 and 7 will receive overwhelming response from investors. Even so, KResearch views that there are now many savings options available for investors. In addition to the BOT savings bonds, the government will likely issue additional savings bonds to finance their second economic stimulus program (SPII) or the so-called ;Strong Thailand” program. Other savings alternatives include debentures, domestic and foreign fixed-income funds, bills of exchange (B/E) and special long-term deposit products, all of which are on offer from the private sector to meet diverse savers' needs under the current economic circumstances.

With regard to banking liquidity, KResearch holds the view that the issuance of these BOT savings bonds may have only limited impact on liquidity in the banking system. The proceeds earned from sale of these bonds are expected to be used for redemption of bonds issued by the Ministry of Finance in 2002 (to repay part of the FIDF's liabilities) that reached maturity on September 2, 2009. Meanwhile, financial institutions are expected to pay close attention to the signs of economic revival that will lead to higher credit demand. Their liquidity should also be sufficient to cope with improved economic conditions, wherein the launch of savings products with attractive returns will help maintain their customers and balance their liquidity as the economy takes a firmer footing.

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Financial Markets