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EMERGING MARKETS-Thai baht at 10-month high on foreign buying of bonds, stocks

Anushka Trivedi
·3-min read

* Thai baht adds about 2.5% since U.S. election * Vaccine distribution timeline a risk to baht - analyst * Malaysia, Singapore stocks drop By Anushka Trivedi Nov 11 (Reuters) - Thailand's baht hit a 10-month peak on Wednesday as foreign investors flocked to the country's high-yielding debt and equity markets after progress in a COVID-19 vaccine trial lifted prospects for the trade- and tourism-dominated economy. The baht firmed as much as 0.8% to 30.210 against the dollar, bringing its gains to about 2.5% since the U.S. election last week resulted in Joe Biden winning the presidency. Local stocks were up 0.5%. Drugmakers Pfizer Inc and BioNTech SE flagged a 90% efficacy rate for their vaccine over the weekend, compounding gains in Asia that had been buoyed by Biden's win as he is expected to be less hawkish on trade compared to Donald Trump. Democrat Biden's new administration and the high chances that Republicans will keep control of the Senate will result in a slimmer round of new stimulus and may cap U.S. long-term yields, adding to the appeal of Asian bonds offering high real yields. "The gains in baht are driven by foreign inflows...they have been net buyers of equity and fixed income last week," Poon Panichpibool, a market strategist at Krung Thai Bank said. Progress on a vaccine bodes well for the ailing economy as it counts exports and tourism as its main sources of revenue generation, but the pandemic still remains a key factor in determining the baht's movement in the near-term. "If the COVID-19 outbreak is still not under control and there's no further positive development in distribution of the vaccine, the market sentiment could shift from risk-on to risk-off, adding to the U.S. dollar's strength," Poon said. Other currencies were rangebound against a tepid greenback, with the Taiwanese dollar again firming more than 1% to outperform its peers. Meanwhile, stock markets in Singapore and Malaysia declined 0.5% and 1%, respectively, after a euphoric rally in the previous session was sparked by the vaccine news. HIGHLIGHTS ** Thailand's 10-year government bond yield down about 3.8% this week ** Top losers on FTSE Bursa Malaysia Kl Index include IHH Healthcare Bhd down 3.36% and Hap Seng Consolidated Bhd down 2.93% ** Top drags on the Singapore STI include: Ascendas Real Estate Investment Trust down 6.3% and Mapletree Industrial Trust down 4.3% Asia stock indexes and currencies at 0434 GMT COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS STOCKS YTD % DAILY % Japan +0.15 +3.32 1.75 7.12 China +0.29 +5.55 0.09 10.26 India -0.11 -3.88 1.01 4.85 Indonesia -0.14 -1.28 0.85 -12.55 Malaysia -0.05 -0.75 -1.05 -1.90 Philippines +0.06 +4.95 0.05 -9.93 S.Korea +0.30 +4.01 1.14 12.89 Singapore +0.11 -0.16 -0.54 -16.52 Taiwan +1.20 +5.58 0.98 10.11 Thailand +0.66 -1.12 0.48 -14.69 (Reporting by Anushka Trivedi in Bengaluru; Editing by Kim Coghill)