Farm sector bond debt: Massive growth

Govt farming bank has now issued record 122 billion baht in bond debt compared to 199 billion for all state-owned enterprises.

Photo above of a trading workstation for electronic trading of securities on the electronics trading platform of a financial market.

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FINANCE

Farm sector drives BAAC bond growth

25/10/2012
Nuntawun Polkuamdee

Bonds issued by the Bank for Agriculture and Agricultural Cooperatives (BAAC) have reached a record 122 billion baht this year, more than half the combined 190 billion baht issued by all state enterprises.

Bond supply from state enterprises has significantly increased from last year, driven partly by crop pledging schemes...

...The BAAC this year became the most active organisation by issuing bonds worth more than 122 billion baht after issuing none in recent years

...The bank is the funding source of the farm sector, with the rice pledging scheme needing huge funds... 

The bond market has been active this year. Since January, companies have issued debentures worth about 360 billion baht, well above the ... projection of 280-300 billion baht...

Commercial banks are also active, issuing about 30% of corporate bonds.

Most need money to prepare for the enforcement of Basel III rules next year, while others need funds for expansion.

Corporate bond value will set a new record this year. The private sector needs funds for post-flood expansion and as a cushion against the global financial crisis. Low interest rates also support the issues, while demand is huge...

...The interest rate cut by 0.25 percentage points to 2.75% this month has spurred activity in the bond market, especially in long-term bonds...

... government agencies and state enterprises will continue raising funds from the bond market to support many projects including infrastructure, water management and others...

The bond market has expanded significantly over the past decade to reach its current value of 8.2 trillion baht. The Stock Exchange of Thailand has market capitalisation of about 10 trillion baht...

(Source: Bangkok Post, FINANCE, Farm sector drives BAAC bond growth, 25/10/2012, Nuntawun Polkuamdee, link) 


Bond Finance Vocabulary
 
bond - a formal contract to repay borrowed money with interest at fixed intervals, a paper certificate is issued much like a stock certificate (See Wikipedia and essential vocabulary)  พันธบัตร
issue - make available to public ออกใหม่
issue bonds - when a company or organization sells bonds to raise money (finance business)

Bank for Agriculture and Agricultural Cooperatives (BAAC) - the bank that makes loans to farmers owned and operated by the government (See Wikipedia)

Basel III - "a global regulatory standard on bank capital adequacy, stress testing and market liquidity risk agreed upon by the members of the Basel Committee on Banking Supervision in 2010-11. ... developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage" (See Wikipedia)
 
commercial bank - a privately-owned bank (not state owned) with branches in many different places providing services such as bank accounts, loans and savings plans for people and businesses (See Wikipedia)

corporation (noun) - a business organization created using legal procedures (incorporated) and owned by shareholders (See Wikipedia) public company, public limited company  บริษัทเอกชนจำกัด, บริษัทมหาชน, บริษัทมหาชนจำกัด

corporate (adjective)
corporate bonds - bonds issued by privately owned companies (not government)
commercial banks are also active, issuing about 30% of corporate bonds

trading workstation - a computer connected to a network and electronics trading platform used to trade securities (See images)
security - a financial asset such as a share or bond; the certificate that shows you own this (See Wikipedia also see financial instrument)
electronic trading - trading securities by computer over network (See Wikipedia)
electronics trading platform - a computer system that allows trading anywhere (See Wikipedia)
financial market - (See Wikipedia)

sector - a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
farm sector
private sector

drive - cause something to happen
drive growth - cause growth
driven partly by - one of the things that causes ...

record - the best or most ever achieved สถิติ
a record 122 billion baht

state - government รัฐ
enterprises - companies
state enterprises

significantly - in an important way อย่างสำคัญ
significantly increased

schemes - systems for achieving some goal
crop pledging schemes...

active - working, operating, doing your job
became the most active organisation

funding - the money you get to support a project การให้เงินสนับสนุน
source - the place or person something comes from or starts at, or the cause of something ต้นกำเนิด, แหล่งกำเนิด

funding source - a place where you can get money (finances business operations)
the funding source of the farm sector

scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
rice pledging scheme

funds - money needed or available to spend on something เงินทุน
needing huge funds

the rice pledging scheme needing huge funds... 

debentures - a long-term loan to a company with a fixed interest rate การกู้เงินระยะยาว  ใบหุ้นกู้ของบริษัท
issue debentures

companies have issued debentures worth about 360 billion baht

projection - a calculation or guess about the future based on information that you have การคาดคะเน

well above the projection - a large amount above, far above
well above the ... projection of 280-300 billion baht

enforcement - making sure laws and rules are obeyed and punishing people if they are not obeyed บังคับใช้กฎหมาย
expansion - when something increases in size, number or importance การขยายออก

Most need money to prepare for the enforcement of Basel III rules next year, while others need funds for expansion.

cushion - soften (something that makes the damage less; limits damage)
global - throughout the world ทั่วโลก ทั้งโลก all over the world, including the whole world
crisis - an urgent, difficult or dangerous situation วิกฤตการณ์  วิกฤต

global financial crisis
cushion against the global financial crisis

support - help, by giving money, for example สนับสนุน
demand - the need and desire to buy goods and services by households and businesses

Corporate bond value will set a new record this year. The private sector needs funds for post-flood expansion and as a cushion against the global financial crisis. Low interest rates also support the issues, while demand is huge...

interest - payments made for the use of another's money for a period of time
rate - อัตรา
interest rate - the cost of borrowing money, usually given as a percentage of amount borrowed (the principal) อัตราดอกเบี้ย

spurred - caused ก่อให้เกิด
spurred activity - caused activity to happen
spurred activity in the bond market

...The interest rate cut by 0.25 percentage points to 2.75% this month has spurred activity in the bond market, especially in long-term bonds...

infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค

decade - a period of ten years ทศวรรษ, ระยะเวลา 10 ปี
over the past decade
expanded significantly over the past decade

current - of the present time ปัจจุบัน
current value
current value of 8.2 trillion baht

market capitalisation - total value of a company's or stock market's stock shares that are traded on the stock market (calculated by multiplying the number of shares by their selling price on the stock exchange); total value of a security traded on a financial exchange (See Wikipedia)

The bond market has expanded significantly over the past decade to reach its current value of 8.2 trillion baht. The Stock Exchange of Thailand has market capitalisation of about 10 trillion baht...