THAILAND - World Bankpubdocs.worldbank.org/en/191231510171559932/forum-sdmf... · 158,791 MB (at...
Transcript of THAILAND - World Bankpubdocs.worldbank.org/en/191231510171559932/forum-sdmf... · 158,791 MB (at...
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THAILAND
Mr. Suwit RojanavanichGeneral Director of Public Debt Management Office
Ministry of Finance, Kingdom of Thailand
Savings Bond : Developing for the Future
To be the Safe Haven for our Retail Investors
1
-
0
500,000
1,000,000
1,500,000
2,000,000
0%
35%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 2024 2025 2026
Proportion of Household and Non-profit in Government Debt Securities
MB
4%Savings Bond Outstanding
% o
f In
vest
ors
in G
ove
rnm
ent
Deb
t Se
curi
ties
150,791 MB
-0-
Savings Bond outstanding in Thai bond market
158,791 MB(at the end of September 2016)
Government Debt Securities(Classified by Types of Investors)
Today
29%
4%25,000 MB
366,490 MB
424,311 MB381,796 MB
483,839 MB
61,214 MB19,511 MB
Contractual Funds27%
Insurance Company
28%NR
13%
Depository Corporation
14%
Financial Institution
3%
Bot6%
Mutual Funds
2%
Other1%
Before and during the CrisisSavings Bond was the main
instrument for government funding
After the Crisis- Savings Bond objective is the instrument for retail investors- Savings Bond coupon needs to top-up 80 to 120 bps over the government bond yield
- Maintain Savings Bond for the future urgent funding needs
1
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Changes of Savings Bond Issuance in the Last 10 years
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Issuance : Twelve times(Every month)
Issuance : One time Issuance : Two times Issuance : Five times
Issuance : Three times Issuance : Two times Issuance : Three times Issuance : Three times Issuance : Two times
0
2,000
4,000
6,000
8,000
10,000
Tenor : 3-year
0
2,000
4,000
6,000
8,000
10,000
Issuance : Twelve times(Every month)
Max. Size : THB 80,000 millionMax. Size : THB 500 million Max. Size : THB 500 million
Tenor : 3-year Tenor : 5-year
Coupon : Fixed Coupon : Fixed Coupon Type : Step-up
0
20,000
40,000
60,000
80,000
100,000
5-year
THB Million THB Million THB Million
0
10,000
20,000
30,000
40,000
50,000
3-year 5&10-year
THB Million
0
10,000
20,000
30,000
40,000
50,000
3-year 3-year
THB Million
0
20,000
40,000
60,000
80,000
100,000
3-year 5-year
THB Million
0
10,000
20,000
30,000
40,000
50,000
3-year 3-year 7&10-year
THB Million
0
10,000
20,000
30,000
40,000
50,000
3-year 10-year 3-year
THB Million
0
20,000
40,000
60,000
80,000
100,000
3-year 3-year 6-year
THB Million
Tenor Coupon Max. Size (THB million)
3-year Fixed 2,000
3-year Fixed 500
3-year Fixed 2,000
3-year Fixed 500
3-year Fixed 50,000
0
10,000
20,000
30,000
40,000
50,000
3-year 3-year 3-year 3-year 3-year
THB Million
Tenor Coupon Max. Size(THB million)
3-year Fixed 4,000
3-year Fixed 4,000
Tenor Coupon Max. Size(THB million)
3-year Fixed 3,000
3-year Fixed 5,000
6-year Fixed 80,000
Tenor Coupon Max. Size(THB million)
3-year Fixed 4,000
3-year Fixed 4,000
7&10-year Fixed 30,000
Tenor Coupon Max. Size(THB million)
3-year Fixed 4,000
10-year Fixed 50,000
3-year Fixed 4,000
Tenor Coupon Max. Size(THB million)
3-year Fixed 50,000
5&10-year Step-up 20,000
Tenor Coupon Max. Size(THB million)
3-year Fixed 500
6-year Step-up 100,000
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Domestic Bond Market Has Developed Rapidly and Efficiently
• Government has more options to borrow money• Benchmark Bonds and other innovation bonds
have lower borrowing cost than Savings Bond
0%
20%
40%
60%
80%
100%
120%
0
2
4
6
8
10
12
19
95
19
96
19
97
19
98
19
99
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00
20
01
20
02
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03
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04
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05
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06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Jun
-1
6
Asian Financial Crisis
75%
THB
Tri
llio
n
% o
f G
DP
Post Crisis – 2000 : Volume Oriented
Bond Market Capitalization Tripled
Government Bonds Outstanding grew by 50 times
Government Bond Market Share jumped
from 3% in 1997 to 44% in 2000
2007 - 2009: Development Oriented
Regular Benchmark Issuance
New Product Development
Regular Market Dialogue with BOT and PD
Pre-Crisis- Illiquid Bond Market- Absence of Benchmark Bond- Dominated by SoE’s Bonds
2010 - 2012:(Market Deepening Oriented) 50-yr Bond, 10-yr LB, ScriplessRetail Savings Bond Upgrade PD Privileges 8 Benchmark Bonds create
reliable reference yield curve
Next Step 2013 - 2016:(Financing Thailand & Connecting ASEAN) 25-yr Amortized Bond, 15-yr ILB Bond Switching & Bond Consolidation Regional Linkage (CGIF) Foreign Currency Bond
34
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Innovation Bond
60%
10%
10%
10%
10%
5
Development and Globalization
Savings bond• Investors’ options• Asset Allocation• Investment Knowledge• Growing of alternative
investment in the market• Derivative• Commodity• Mutual Fund (LTF, RTF)• Real Estate• Arts & Antique• Etc.
80
180Single House Town houseCondominium Land
House Price Index – Bank of Thailand
2008 2010 2012 2014 2016
1,2001,3001,4001,5001,6001,700 SET Index
2013 2014 2015 2016
Gold Price – goldprice.org
1.5
2.5
3.5
4.5Government Bond Average Yield% p.a.
2011 2012 2015 201620142013
More Competitors
Real Estate
Gold Investment
Stock Investment
• Government Funding Tools• Benchmark Bond• Savings Bond• Inflation-Linked Bond• Amortized Bond• Bank Loan• Treasury Bills• Promissory Note
Major government funding instrument is Benchmark Bonds Comprising of 7 series such as 5-10-15-20-30-50 year
Savings Bonds tenor 3 – 10 year
Bank Loan tenor 2-4 year
Other- T-bill tenor 3 day – 1 year- Promissory Note tenor 4 – 45 year
4
3
2
5
1
4
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Before the Crisis
• Illiquid bond market and unreliable yield curve• Main instrument for government fundraising
After the Crisis
• Bond Market Capitalization had raised• New funding tools have been developed
• High-Cost : needs 80 – 120 bps over the government bond yield to prefer the retail investors• Demand of the investors : main investors in government bond are institutional investors• Lower relatively Return compared to other investment : Equity, Commodity, Real Estate and etc.
Savings Bond Vs. Other Government Funding Tools
Current Savings Bond Position• Supporting the Government Policy: Savings Society• For Retail Investors especially Elderly : Risk Free Investment• Maintain the proportion for government funding in the future :
Limited time period & Large amount
Summary : Savings Bond as Government Funding Instrument
5
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Thai Government Savings Bond Distribution Channels
Over the Bank branches’ counter (The original distribution channel)
= 99.4%
*the percentages are according to the result of the latest savings bond
Automatic Teller Machine: ATM (Since FY2011)
Internet Banking (The Latest channel – FY2016)
= 0.3%
= 0.3%
- Favorite Customers- Familiar to Retired and Older people
- More than 40,000 terminals- 24 hours service
- Fast and convenient- Lifestyle of the new generation
6
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Widening
Deepening
Diagonal
Future : What are we planning to make it happen?• Extending the selling period• Increasing the number of the distribution
channels• Expanding the Retail Investor Base:
the Non-Profit Entities and Working-Age
• Expanding the bond type regarding the investors’ preferences
• The whole system development e.g. Treasury Direct
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Appendix
9
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By Bills By Instruments
957,xxx MBFY 2017
-Tentative-
GOVT Fund Raising Plan
Loan Bond5-10-15-20-30-50 yrs
550,xxx
Promissory NotesR-Bill, And Others
Remark : 1. Exclude external funding for both new borrowing and rollover debt with amount of 71,xxx2. Exclude T-Bill rollover debt
New
Bo
rro
win
g
44
0,X
XX
MB
R
oll
Ove
r5
17
,XX
X M
B
RolloverFIDF Debt
313,xxx
Rollover Govt Debt
189,xxx
Rollover SOEs Debt 15,xxx
Deficit 390,xxx
On-Lending 50,xxxInsurance Decree 5x
Savings Bond
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Historical Changes in Thai Government Bonds Issuance by Bond Types
47,000 46,000
98,850 96,00051,605
11,000
259,826215,000
221,110 223,850
202,000
266,139
274,999
134,000
148,900
136,641 152,861
151,471
140,733
269,86240,000
50,87265,000
22,730
29,338
54,000
61,000
89,379
7,000
82,2343,814
31,577
7,367
38,000
20,141 69,073
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2010 2011 2012 2013 2014 2015 2016
Saving Bonds Amortizing Bonds Inflation-Linked
Long-term (>10 yr) Medium-term (5-10 yr) Short-term (
-
The LatestRegular Savings Bond
Issuance
What different :- The Non-Profit Entities
can not purchase this latest savings bond
Why? :- To be an exclusive
investment for Retail Investors
- High funding cost- Not in the period of
government funding needs
12
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2011 2012 2013 2014 2015 2016 2017 2560 2017 2020 2021 2022 2023 2024 2025 2026
5. SB189A 31,577 MB
1. SB16DA 4,000 MB
2. SB175A
2018 2019
4,000 MB
7. SBST215A
9. SB247A
A
11,836 MB
18,164 MB
B
E
C
3. SB17DA4,000 MB
FY2017 Expiration of 2 SB 8,000 THB Mil. (5%)FY2018 Expiration of 3 SB 39,577 THB Mil. (26%)FY2019 Expiration of 1 SB 50,000 THB Mil. (32%)
FY2021 Expiration of 2 SB 21,206 THB Mil. (14%)FY2024 Expiration of 1 SB 18,164 THB Mil. (12%)FY2025 Expiration of 1 SB 12,141 THB Mil. (8%)FY2026 Expiration of 1 SB 5,840 THB Mil. (4%)
A
C
F
B
E
G
10. SBST251A 12,142 MB
G
Savings Bond OutstandingAs of September 30th, 2016
158,791 MB (11 Series)
4. SB185A4,000 MB
6. SB18OA 50,000 MB
D
D
8. SB217A
11. SBST265A
11,702 MB
7,370 MB
F
Savings Bond : Safe Haven for Retail Investors
20182017 2019 202620252024
The Last SB will be expiredin next 10 years
(FY2026)
2021
13
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Inaugural 10-yr Inflation-Linked Bond (10-yr)
Long-term Fixed Promissory Notes (25-35-45-yr)
Electronic Retail Savings Bond (3-5-yr)
Saving Bond Online
Super- Size Inaugural 25-yr Back-End Amortized Bond
Domestic Bond Market in Transition
Building Yield Curve /Enhancing Liquidity
Regional Connectivity / AEC
Market Infrastructure
Innovation /Product Development
Debt FolioEnhancement
SustainableSource of Fund
Activated Public Debt Management Fund
Appointed 14 MOF-Outright PDStrengthening PD system
(Exclusivity, League Table, Greenshoes Option)
Bond Switching (1st execution: 28 Nov 14)
Baht Bond (Foreign Issuers Bond)
ATM Lengthened
Thai Khem Khang (350,000 THB Mil.) 1,900,000 THB Mil. Long-Term Infrastructure Inv’t
Water Decree (350,000 THB Mil.)
Well-Distributed Maturity Profile / Bond Switching
Well-Balanced Fixed-Floating Ratio Cost Lowered
FIDF Decree Passed = 70,000 THB Mil. Fiscal Space
Market Deepening Oriented(2010 - 2012)
Funding Infrastructure Investment Connecting ASEAN
(2013 - 2016)
Well-Distributed Investor Base
Funding Infrastructure Investment Connecting ASEAN
8 Tenors ofBenchmark Bonds
3
57
1015
2030
50
10 15 20 30 50
150,000 MB
Liquidity-Oriented
Outstanding Amount 3 5 7
300,000 MB
Full Funding Capacity : 1,200,000 THB Mil.
Market ConsultationAnnual PDMO Market Dialogue
Quarterly PDMO one-on-one PD Dialogue
STRIPS Bond
Baht Bond (CLMV)
Foreign Currency Bond (Plan)
Credit Guarantee Investment Facility (CGIF)
2016 Highlights
Quarterly PDMO one-on-group MOF Outright PD Dialogue
Annual PDMO Market Dialogue
Monthly PDMO one-on-one MOF Outright PD Dialogue
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Savings Bond as A Tool for Savings Society Expand the investor base
34,31638,000
50,000
-
10,000
20,000
30,000
40,000
50,000
60,000
FY2012 FY2014 FY2016
Increasing of Savings Bond SalesTHB mil.
9,894
27,771
34,049
-
10,000
20,000
30,000
40,000
50,000
FY2012 FY2014 FY2016
Increasing Number of Individual Investors
182 194
293
-
100
200
300
400
500
FY2012 FY2014 FY2016
Increasing Number of the Non-Profit Entity InvestorsNo. of Customers No. of Customers
• The Direct Investment from
the retail investors increased
• Number of Individual and the Non-Profit Entity investors increased
15
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16
Savings Bond as A Tool for Savings Society Expand the investors base
77 289 274 302
1,114
31 90 87 95293
0
500
1,000
1,500
FY2012 FY2013 FY2014 FY2015 FY2016
THB mil.
Purchasing amount No. of the non-profit entities
1,321 2,777 2,973 3,070
15,250
0
10,000
20,000
FY2012 FY2013 FY2014 FY2015 FY2016
No. of Customers
2,670 6,129 6,901 6,938
34,343
0
10,000
20,000
30,000
40,000
FY2012 FY2013 FY2014 FY2015 FY2016
No. of Customers
Number of savings bond customers
Number of customers who 60 years old and above
Number and purchasing amount of the non-profit entities
FY2016 issued: THB 50,000 mil.
Direct investment increased
395% from FY2015 (27,405 accounts)
The Elderly are the main customers of Savings Bond as
More than 40% of Total Customers 49% 45%43% 44%
46%
The number and purchasing amount of
the Non-Profit Entities in savings bond has continuously
increased
*Excluded the Special Savings Bonds
-
18
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19
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20
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Domestic Bond Market Has Developed Rapidly and Efficiently
- Savings Bond objective is the instrument for retail investors- Savings Bond coupon needs to top-up 80 to 120 bps over the government bond yield
- Maintain Savings Bond for the future urgent funding needs
0%
20%
40%
60%
80%
100%
120%
0
2
4
6
8
10
12
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Jun
-1
6
Asian Financial Crisis
75%
THB
Tri
llio
n
% o
f G
DP
Post Crisis – 2000 : Volume Oriented
Bond Market Capitalization Tripled
Government Bonds Outstanding grew by 50 times
Government Bond Market Share jumped
from 3% in 1997 to 44% in 2000
2007 - 2009: Development Oriented
Regular Benchmark Issuance
New Product Development
Regular Market Dialogue with BOT and PD
Pre-Crisis- Illiquid Bond Market- Absence of Benchmark Bond- Dominated by SoE’s Bonds
2010 - 2012:(Market Deepening Oriented) 50-yr Bond, 10-yr LB, ScriplessRetail Savings Bond Upgrade PD Privileges 8 Benchmark Bonds create
reliable reference yield curve
Next Step 2013 - 2016:(Financing Thailand & Connecting ASEAN) 25-yr Amortized Bond, 15-yr ILB Bond Switching & Bond Consolidation Regional Linkage (CGIF) Foreign Currency Bond
21
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0
500,000
1,000,000
1,500,000
2,000,000
0%
35%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 2024 2025 2026
Proportion of Household and Non-profit in Government Debt Securities
Structure Shift … Savings Bond was a Main Instrumentfor Government funding under the economic crisis
MB
4%Savings Bond Outstanding
% o
f In
vest
ors
in G
ove
rnm
ent
Deb
t Se
curi
ties
150,791 MB
-0-
Savings Bond outstanding in Thai bond market
158,791 MB(at the end of September 2016)
Government Debt Securities(Classified by Types of Investors)
Today
29%
4%25,000 MB
366,490 MB
424,311 MB381,796 MB
483,839 MB
61,214 MB19,511 MB
Contractual Funds27%
Insurance Company
28%NR
13%
Depository Corporation
14%
Financial Institution
3%
Bot6%
Mutual Funds
2%
Other1%
22
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Domestic Bond Market Has Developed Rapidly and Efficiently
Savings Bond is No Longer Government’s primary fundraising instruments
0%
20%
40%
60%
80%
100%
120%
0
2
4
6
8
10
12
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Jun
-16
Asian Financial Crisis
75%
THB
Tri
llio
n
% o
f G
DP
Post Crisis – 2000 : Volume Oriented
Bond Market Capitalization Tripled
Government Bonds Outstanding grew by 50 times
Government Bond Market Share jumped
from 3% in 1997 to 44% in 2000
2007 - 2009: Development Oriented
Regular Benchmark Issuance
New Product Development
Regular Market Dialogue with BOT and PD
Pre-Crisis- Illiquid Bond Market- Absence of Benchmark Bond- Dominated by SoE’s Bonds
2010 - 2012:(Market Deepening Oriented) 50-yr Bond, 10-yr LB, ScriplessRetail Savings Bond Upgrade PD Privileges 8 Benchmark Bonds create
reliable reference yield curve
Next Step 2013 - 2016:(Financing Thailand & Connecting ASEAN) 25-yr Amortized Bond, 15-yr ILB Bond Switching & Bond Consolidation Regional Linkage (CGIF) Foreign Currency Bond
23
-
24
Development and Globalization
Savings bond
Stock Investment
Gold Investment
Real Estate
• Investment options• Asset Allocation• Investment Knowledge• Growing of alternative
investment in the market• Derivative• Commodity• Mutual Fund (LTF, RTF)• Real Estate• Arts & Antique• Etc.
80
100
120
140
160
180Single House Town house
Condominium Land
House Price Index – Bank of Thailand
2008 2010 2012 2014 2016
1,200
1,300
1,400
1,500
1,600
1,700 SET Index
2013 2014 2015 2016
Gold Price – goldprice.org
1.52.02.53.03.54.04.5
Government Bond Average Yield% p.a.
2011 2012 2015 201620142013
More Competitors
-
25