Bond issue sold out in minutes
The Thai government will decide tomorrow whether to increase savings bond issue after the first 30 billion baht were snapped up in a buying frenzy across the country within hours. In some banks, the entire allocation was taken by a single customer within minutes leaving angry crowds who were left out.
The 50 billion Baht issue is being sold to raise funds for stimulus measures drawn up by the government to lift the economy out of recession. The overwhelming demand left about 30,000 senior citizens unable to buy bonds from the seven banks assigned to sell them.
The government decided to offer 30 billion baht — instead of the 15 billion baht originally planned for the first tranche for Thai citizens or residents aged at least 60 — since advance demand was so strong. The government plans to offer a 15 billion tranche on July 15-16 to the same group of senior Thai citizens and residents as well as general investors.
The overwhelming demand was attributed to the average interest on the five-year bonds of 4%, compared with 0.75% interest on fixed deposits. The government required a minimum purchase of 10,000 baht and imposed a ceiling of a million baht.