THE STABILIZING ROLE OF THE HOUSEHOLD SECTOR IN THE THAI SAVINGS BOND MARKET: AN EMPIRICAL ANALYSIS
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The structural composition of the investor base is a critical determinant of sovereign bond market stability, particularly in emerging economies exposed to global capital flow volatility. Although conventional literature highlights the liquidity offered by institutional investors, the stabilizing capacity of domestic households is inadequately explored. This study empirically examines the household sector's role in the Thai savings bond market from January 2017 to the present, with the objective of quantifying its impact on market stability and growth. Utilizing monthly time-series data from the Bank of Thailand, the research employs a 12-month rolling standard deviation model to assess comparative volatility and an Ordinary Least Squares (OLS) regression to determine the statistical determinants of market size.
The empirical findings indicate that the household sector is the predominant market force, representing an average of 88.31% of total outstanding bonds. The analysis reveals a notable stability differential: the household sector demonstrates a volatility profile (SD = 4.81) that is roughly 2.3 times lower than that of the institutional and foreign sectors (SD = 11.13). This discovery substantiates the Preferred Habitat Theory in an emerging market context, depicting retail investors as safety-seekers with inelastic demand rather than speculative traders. Furthermore, regression analysis confirms that household demand is the primary determinant of market expansion (R-Squared = 0.826), with a significant elasticity coefficient of 0.80. The research concludes that the household sector operates as a Stabilizing Anchor for public debt. Therefore, it advises that policymakers establish Direct-to-Household digital issuance channels to capitalize on this robust demand as a strategic economic safeguard against external financial vulnerabilities and capital flight threats.
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