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January 25, 2010

Roadshows to boost Asean trade The Commerce Ministry's Foreign Trade Department is planning to conduct a series of roadshows within Asean to boost trade and investment benefits after the Asean Free Trade Agreement (Afta), with zero tariffs on many goods and services, took effect on January 1. Targeted destinations are Laos, Burma, Vietnam, Cambodia, Malaysia and Indonesia. Director-general Vichak Visetnoi said the department would lead groups of Thai businessmen to those countries to explore more opportunities through the new "seamless trade". "Exports from Thailand to the Asean market, in particular to neighbouring countries, should grow significantly, by 20-30 per cent annually. There will also be more investment between Thai and other Asean countries as businesses see the potential benefits from Afta," Vichak said. The ministry says exports from Thailand to other Asean countries were worth Bt1.1 trillion (US$36.3 trillion), down 11.18 per cent, last year. Asean nevertheless ranks as the Kingdom's largest export market, at 21 per cent of export value, followed by the European Union at 11 per cent, the US at 10.9 per cent and Japan at 10.3 per cent. Vichak said Afta would not only increase Thai export value, but also help develop economic growth for the whole region. More investment in neighbouring countries will help stimulate their growth, which will in turn increase consumption and demand for imports from Thailand. Moreover, Afta will help narrow the gaps among each country's development in Asean. For instance, the gap in average income between the most and least developed countries is now 100-fold, with Singapore's per capita GDP at US$30,000 and Cambodia's at $300. With trade flowing among member countries and more investment going to the least developed members, incomes will rise. Potential investment sectors for Thailand among neighbouring countries are agro-industrial, processed food, fashion and garments, automobiles, electronics, consumer goods, furniture and construction. Meanwhile, the Commerce Ministry is launching a campaign to encourage the consumption of Thai foods and garments during the Fifa World Cup in Africa. Srirat Rastapana, director-general of the Department of Export Promotion, said the ministry would soon conduct a roadshow to penetrate the South African market in order to increase awareness of Thai food and other goods. "Large numbers of people will attend the World Cup football finals in South Africa, hence the promotion of Thai products will certainty increase the volume and value of Thai sales to the market," said Srirat. The ministry will also seek to get greater recognition for Thai restaurants in South Africa during the games. Spas and massage parlours should also see a boost. South Africa is a major tourist destination. Thai restaurants, spas and massage parlours should have a bright future there, said Srirat. Thai exports to South Africa dropped by 14.5 per cent to $1.44 billion last year. Major products exported to the market are rice, cars, prepared and preserved fish, radio and television sets and rubber products. Source by : The Nation, January 25, 2010

January 7, 2010

Auto tax breaks on the table The Energy Ministry will soon meet with the Finance and Industry ministries to discuss tax breaks for fuel-efficient vehicles in order to resubmit their proposal to the Cabinet this month.   The Cabinet on Tuesday rejected the tax-waiver proposal for hybrids, as Prime Minister Abhisit Vejjajiva wants a comprehensive review by the three ministries of tax incentives for all types of fuel-efficient vehicles. Energy Minister Wannarat Charnnukul said yesterday the three ministries would consider tax exemptions for eco-cars, gasohol vehicles, E85 gasohol vehicles, NGV vehicles and hybrid vehicles. Tax exemptions should also be considered for auto parts and include excise duty, he said. The tax-exemption plan will be finished this month in order to propose it to the Cabinet again, he said. Eco-car manufacturers should develop the vehicles to use E85 gasohol. However, this also depends on the investment readiness of the carmakers, he said. The Energy Ministry has speeded up the conversion of the 30,000 taxicabs that still cannot run on NGV, he added. "The NGV engine installations should be transparent, while they should not be hurried because that might create some damage," he said.  Source : The Nation, January 7, 2010

January 4, 2010

Thai aviation industry expected to bounce back in 2010 Published on December 28, 2009 The Thai aviation industry is expected to bounce back in 2010 as the global economy improves. The sector was hit hard in 2009 as the overall travel industry plunged due to the global economic downturn and domestic political turbulence. However, there are signs that next year promises a recovery. Serirat Prasutanond, president of Airports of Thailand, which operates six major airports in Thailand, said the company was confident that the aviation industry would return to positive territory in 2010. "AOT's business, including both airline passengers and freight, fell by 5 per cent" in 2009, Serirat said. The industry's total passenger numbers fell from 41.9 million in 2008 to 38 million in 2009. Although the future looks brighter, Serirat said the company would hold off on projects deemed unnecessary next year, including the construction of a third runway at Suvarnabhumi Airport. Instead, the company will build a new domestic terminal at the airport at a cost of Bt9 billion, which is expected to be complete by 2013. The new terminal will accommodate about 20 million passengers per year. Moreover, it will add at least two economy lounges at the airport, which will have 100 Internet terminals, free Wi-Fi and online self-check-in machines. Serirat said AOT planned to build a new international passenger terminal at Phuket International Airport, and to turn the existing facility into a domestic terminal. Once the new terminal is completed, the airport will accommodate up to 12 million passengers a year, up from 6 million, he said. Next year is also expected to see the completion of renovations at Chiang Mai International Airport, Serirat said. Among the six airports under AOT's management, those in Chiang Rai and Hat Yai had seen operations decline the most, while the Phuket airport had seen the best performance. The International Air Transport Association has predicted the global industry will lose US$5.6 billion (Bt187 billion) in 2010. It also expects operators to face lower yields and rising costs, keeping the industry in the red. For 2009, IATA forecasts an industry-wide loss of $11 billion. Giovanni Bisignani, IATA's director-general and CEO, said the worst was likely behind the industry, however. Demand in 2010 is likely to continue to improve and airlines are expected to drive down non-fuel unit costs, he said. According to ITB World Travel Trends Report, commissioned by Messe Berlin, the organisers of the ITB Berlin 2010 expo, travel demand in 2010 is likely to pick up, but spending is likely to lag at 2005-2006 levels. Prospects for 2010 will be greatly determined by the degree to which consumer confidence returns in Japan and China, the report states. The report also said Asian travel demand declined 5 per cent in 2009, due in part to a sharp decline in traveller numbers from South Korea. Long-haul destinations such as Europe are being hit the hardest as Japanese, Chinese, Indians and Thais choose to stay home or travel within Asia, the report said. Thai AirAsia said it aims to serve 6.1 million passengers in 2010, up from 5.2 million passengers in 2009, with revenue of Bt9 billion expected. The airline will operate more international routes to link Thailand with major Indian cities including Mumbai, Chennai, Kolkata and New Delhi. Meanwhile, it will expand more routes into China as well as the Indochina region. However, PB Air decided to shut down operations on December 21, due to the economic crisis. The airline is a unit of local beverage giant Boon Rawd Brewery. It entered the commercial aviation business in 1990.

December 28, 2009

YEAR-END SPECIAL Eco-cars set to shake up domestic market Published on December 28, 2009 The Thai automotive industry is preparing for a major shake-up, with eco-cars being highlighted as the new engine to boost the industry amid concern that oil prices could shift Thailand's focus away from its first auto product champion - the 1-tonne pickup. Initially, when the eco-car project was bought to the discussion table several years ago by the government, some auto companies and analysts believed it would damage the pickup market. So the project was postponed until 2007. Auto-makers are however beginning to change the way they look at things now, and many are talking about how the eco-car will actually boost the size of the market. The total domestic market this year is estimated at close to 520,000 vehicles, while in past years sales have been as high as 700,000-plus. "Two players will enter the eco-car segment next year, Nissan and Honda. While Nissan is set to launch in March, Honda is expected to launch in the last quarter of 2010. With a few months of sales, eco-cars will boost the market by about 5 per cent. "They will take some sales away from the pickup segment and the 'B' passenger-car segment, not to mention smaller brands like Proton, Chery and Naza. A majority of the new customers, however, will be new, meaning first-time car buyers. Expect the total market to reach 600,000 units next year," said an industry insider. Aside from eco-cars, elevating the market will be the B-car (subcompact) segment, which also promises lower fuel costs. During its launch month of November, the Mazda2 sold 1,015 units. Sales have been so strong that Mazda Sales Thailand has asked AutoAlliance Thailand - operator of the Ford-Mazda joint-venture plant in Rayong - to increase output to keep pace with soaring bookings. Mazda Sales Thailand managing director John Ray expects the B-car segment to grow 9-10 per cent this year, and by a similar amount next year. It is expected to account for 115,000 vehicles this year. B-segment cars represent 22 per cent of automobile sales in the Kingdom. They also make up 40 per cent of all passenger cars sold in the country. As the focus is on small cars, this could lead to a change in the market ratio between pickups and passenger cars. The eco-car is set to draw low-end pickup buyers, who usually pay about Bt380,000 for a vehicle and can now turn to a new sedan. "The eco-car will takes sales from pickups and could effect the cheaper B-segment sedans," said Ray. "But it's unlikely to affect higher-up products like the Mazda2, Honda Jazz, Toyota Yaris and the soon-to-come Ford Fiesta. These customers wouldn't buy these vehicles if they were so worried about price. It's a different class altogether." Market analysts at Mazda and Chevrolet expect the Thai market to even reach a balance of 50:50 between pickups and passenger cars in the next two years, against the 60-per-cent pickup share of previous years. Besides the pickup market, the eco-car will also affect the second-hand car market. People who currently cannot afford a new vehicle have to turn to the used-car market. Prices for used B-segment cars are likely to drop after the launch of the first eco-car. The auto market next year is not expected witness the same turbulence as in 2009, when sales fell heavily in the first quarter - bottoming out at a year-on-year contraction of 33.4 per cent. Thanks to stimulus packages, the market picked up strongly. The overall market in the first 11 months reached 476,786 units, down 14.3 per cent, which is the lowest contraction this year. The decline in the passenger-car market is now down to only 1.7 per cent, while the pickup market is down by 20.7 per cent. Shedding light on the industry's revival is also the fact that in November, auto production marked the first annualised increase in 13 months, according to the Federation of Thai Industries' Automotive Industry Club. Although output in the first 11 months of the year was only 887,656 units - a 32.21-per-cent drop from the same period last year - all players are now more positive about the outlook. While passenger-car production from September to November reached 339,418 vehicles, output during the December to February period is forecast to rise to 345,880 units. Auto analysts are now looking at a 570,000-unit domestic sales figure for 2010, which would be equivalent to 10-per-cent growth, but some say sales could reach 600,000 units if there were nothing of a major nature stalling economic recovery. Along with the decline in the domestic market, export markets for Thai automobiles have also been heavily affected. But along with the local market's recovery, exports have also started to pick up. October exports were the highest since December last year and 20 per cent higher than in September, while export value was down by just 5 per cent compared to the same month last year. As overall auto output is expected to hit 1.2 million units next year, the eco-car will further boost Thailand's position as the "Detroit of Asia". Under Board of Investment rules, each producer has to meet the 100,000-unit annual output target within five years. Everyone is watching carefully developments on stimulus measures here and elsewhere, as these will be the key to boosting auto demand in the year to come. Tomorrow: Will the tourism industry recover next year? ECO-CARS SET TO SHAKE UP DOMESTIC MARKET � xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx � VIJO VARGHESE, KINGSLEY WIJAYASINHA THE NATION The Thai automotive industry is preparing for a major shake-up, with eco-cars being highlighted as the new engine to boost the industry amid concern that oil prices could shift Thailand's focus away from its first auto product champion - the 1-tonne pickup. Initially, when the eco-car project was bought to the discussion table several years ago by the government, some auto companies and analysts believed it would damage the pickup market. So the project was postponed until 2007. Auto-makers are however beginning to change the way they look at things now, and many are talking about how the eco-car will actually boost the size of the market. The total domestic market this year is estimated at close to 520,000 vehicles, while in past years sales have been as high as 700,000-plus. "Two players will enter the eco-car segment next year, Nissan and Honda. While Nissan is set to launch in March, Honda is expected to launch in the last quarter of 2010. With a few months of sales, eco-cars will boost the market by about 5 per cent. "They will take some sales away from the pickup segment and the 'B' passenger-car segment, not to mention smaller brands like Proton, Chery and Naza. A majority of the new customers, however, will be new, meaning first-time car buyers. Expect the total market to reach 600,000 units next year," said an industry insider. Aside from eco-cars, elevating the market will be the B-car (subcompact) segment, which also promises lower fuel costs. During its launch month of November, the Mazda2 sold 1,015 units. Sales have been so strong that Mazda Sales Thailand has asked AutoAlliance Thailand - operator of the Ford-Mazda joint-venture plant in Rayong - to increase output to keep pace with soaring bookings. Mazda Sales Thailand managing director John Ray expects the B-car segment to grow 9-10 per cent this year, and by a similar amount next year. It is expected to account for 115,000 vehicles this year. B-segment cars represent 22 per cent of automobile sales in the Kingdom. They also make up 40 per cent of all passenger cars sold in the country. As the focus is on small cars, this could lead to a change in the market ratio between pickups and passenger cars. The eco-car is set to draw low-end pickup buyers, who usually pay about Bt380,000 for a vehicle and can now turn to a new sedan. "The eco-car will takes sales from pickups and could effect the cheaper B-segment sedans," said Ray. "But it's unlikely to affect higher-up products like the Mazda2, Honda Jazz, Toyota Yaris and the soon-to-come Ford Fiesta. These customers wouldn't buy these vehicles if they were so worried about price. It's a different class altogether." Market analysts at Mazda and Chevrolet expect the Thai market to even reach a balance of 50:50 between pickups and passenger cars in the next two years, against the 60-per-cent pickup share of previous years. Besides the pickup market, the eco-car will also affect the second-hand car market. People who currently cannot afford a new vehicle have to turn to the used-car market. Prices for used B-segment cars are likely to drop after the launch of the first eco-car. The auto market next year is not expected witness the same turbulence as in 2009, when sales fell heavily in the first quarter - bottoming out at a year-on-year contraction of 33.4 per cent. Thanks to stimulus packages, the market picked up strongly. The overall market in the first 11 months reached 476,786 units, down 14.3 per cent, which is the lowest contraction this year. The decline in the passenger-car market is now down to only 1.7 per cent, while the pickup market is down by 20.7 per cent. Shedding light on the industry's revival is also the fact that in November, auto production marked the first annualised increase in 13 months, according to the Federation of Thai Industries' Automotive Industry Club. Although output in the first 11 months of the year was only 887,656 units - a 32.21-per-cent drop from the same period last year - all players are now more positive about the outlook. While passenger-car production from September to November reached 339,418 vehicles, output during the December to February period is forecast to rise to 345,880 units. Auto analysts are now looking at a 570,000-unit domestic sales figure for 2010, which would be equivalent to 10-per-cent growth, but some say sales could reach 600,000 units if there were nothing of a major nature stalling economic recovery. Along with the decline in the domestic market, export markets for Thai automobiles have also been heavily affected. But along with the local market's recovery, exports have also started to pick up. October exports were the highest since December last year and 20 per cent higher than in September, while export value was down by just 5 per cent compared to the same month last year. As overall auto output is expected to hit 1.2 million units next year, the eco-car will further boost Thailand's position as the "Detroit of Asia". Under Board of Investment rules, each producer has to meet the 100,000-unit annual output target within five years. Everyone is watching carefully developments on stimulus measures here and elsewhere, as these will be the key to boosting auto demand in the year to come. � � Auto industry on recovery path With auto production in November marking the first annualised increase in 13 months, all players are positive about the 2010 outlook - after a sharp slump this year. Export-oriented production (Jan-Nov) 2009/2008/Change in no of units/% change � Passenger cars/101,064/157,988 /-56,964/-36.03 1-tonne pickups/392,292/578,139/-185,846/-32.15 All export output/493,357/736,127/-242,770/-32.98 (Export-oriented November production rose 2.89 per cent year on year to 64,181 units.) Domestic-oriented production (Jan-Nov) 2009/2008/Change in no of units/% change Passenger cars/178,743/218,793/-40,050/-18.30 1-tonne pickups/201,968/337,795/-135,827/-40.21 All domestic output/394,299/573,300/-179,001/-31.22 Total/887,656/1,309,427/-421,771/-32.21 Source: FTI's Automotive Industry Club

December 22, 2009

TCCC's Office will be close from December 28-30, 2009 and open again January 4, 2010

November 13, 2009

Capital market must grow, says PM Expansion key to winning global funds Thailand's capital market must continue to develop to support the Thai economy's growth, says Prime Minister Abhisit Vejjajiva.   Prime Minister Abhisit Vejjajiva admires a golden dragon worth 15 million baht displayed by the Chin Hua Heng gold shop at yesterday’s opening of SET in the City. SOMCHAI POOMLARD The cabinet recently approved the capital market development plan which calls for the Stock Exchange of Thailand's market capitalisation to rise to 130% of gross domestic product within five years from 86% today, he said. The plan aims to raise the efficiency and potential of the capital market for Thailand's overall benefit, he said. The Thai market must grow to compete with other markets in the region for global capital. A larger, more liquid market in turn will help reduce financing costs for Thai companies and support economic growth. Mr Abhisit, speaking at the opening of the SET in the City 2009 investment exhibition, said the development plan also aimed to increase public participation in the market, with a goal of doubling the investor base to 5% of the population in five years from 2.4% today. Legal and tax reforms will eliminate current obstacles to the market, facilitate mergers and acquisitions and support the development of new products and services such as Islamic financing. The SET itself will undergo change in a process called demutualisation, where its monopoly on exchange services will be eliminated and non-members allowed to trade on the market. The securities sector will also be liberalised, with brokerage fees to be allowed to fall starting next year to support greater competition in the market. Mr Abhisit said the capital market needed to expand its range of financial services to better meet investors' needs. New innovations such as infrastructure funds would allow the public to take a direct stake in new public investment, while derivatives linked to interest rates or government bonds would give investors greater tools to manage risk. A new national savings fund, already approved by the cabinet, will also help increase the pool of long-term savings in the market and strengthen the social safety net for the elderly. SET chairman Sompol Kiatphaibool said the SET in the City event, now in its sixth year, aimed to encourage the public to take an interest in savings and personal investment. A total of 96 organisations are participating in the event, which is being held through Sunday at Siam Paragon. Source : by Bangkok Post, November 13, 2009

November 10, 2009

Canada-Thailand Strategic Energy Partnership (No. 337 - November 10, 2009 - 11:10 a.m. EST) The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, today met with Wannarat Channukul, Thailand’s Minister of Energy. The ministers agreed to develop an unprecedented Canada-Thailand strategic energy partnership. “Representatives from both countries will meet again before the end of the year to identify specific technologies and services for potential expanded trade and technology partnerships,” said Minister Day. “This agreement will help Canadian companies take advantage of opportunities in the Thai market, particularly in oil and gas exploration and production, natural gas vehicles, biomass energy, and wind, solar and nuclear energy.” During his trade mission, the first Canadian ministerial visit to Thailand in six years, Minister Day opened SNC-Lavalin’s new operating base in Bangkok. The centre will be the hub for the Canadian company’s work in the renewable and conventional thermal energy sector in Southeast Asia. “This is a great example of the demand for Canadian expertise here in Thailand, and of a Canadian company stepping in to meet that need,” said Minister Day. “The new centre offers immense opportunities for both our countries to create new jobs and prosperity for our citizens.” “We are very pleased to expand our presence in Thailand and the region,” said Alain Lemay, Senior Vice-President, SNC-Lavalin International Inc. “SNC-Lavalin has significant expertise and over 40 years of experience in delivering projects in Asia, most recently on the SIPCO 160MW combined cycle power plant in Rayong, Thailand, and we look forward to working with our Thai clients and partners in the region and continue to deliver world-class engineering and construction solutions to the domestic and regional market.” On this trade mission the Minister also highlighted that Canada’s Economic Action Plan is investing in clean energy projects that are creating high-quality jobs for Canadians, helping our environment and preparing the economy for the future. The Minister also met with senior Thai officials including the President of the Trade Representative Office, Kiat Sittheeamorn, and Thailand’s Minister of Commerce, Porntiva Nakasai. During the meetings, Minister Day discussed Canada’s robust and growing commercial partnership with Thailand, promoted Canada as a major player in the energy sector, and pressed for removal of Thailand’s trade restrictions affecting access of Canadian swine, pork, and related products, based on science. Minister Day also visited the British Columbia International School in Bangkok, where students pursue a mixed curriculum—Canadian and Thai—and obtain two high-school graduation certificates, one from Thailand and one from British Columbia’s Ministry of Education. “This school is an example of the kind of reach Canadian teaching institutions and methods are having in the region,” said Minister Day. “My visit to Thailand not only shows Canada’s commitment to increasing trade and investment with this market, but it also highlights our countries’ people-to-people contacts, as demonstrated by our education links.”

November 2, 2009

Kuron chooses Thailand as manufacturing base for whitening toothpaste Confidence in the quality of Thai manufacturing has encouraged Kuron Corp to make its whitening toothpaste here instead of in the United States, where the rest of its range is produced. The company's business concentrates on healthcare products in five categories - oral care, haircare, sport, garments/cars and beauty - and therefore it has to guarantee high quality and safety to consumers. Kuron's well-known product in the oral-care segment is whitening gel under the Sparkle brand, which is made in the US. The product is imported for special groups of customers, particularly dental clinics. However, the price is quite high. The company decided the economic downturn was the right time to introduce a product that broadens consumer choice at a lower price. As a result, it has launched Sparkle whitening toothpaste, which is made in Thailand and is up to four times cheaper than its whitening gel. Prices of the new product range from Bt85 to Bt165, depending on the size. Marketing director Detrit Na Takuathung said the company expected the new item to grab a 10-per-cent share of the overall Thai toothpaste market, which is valued at Bt5.5 billion per year. Although the whitening toothpaste will be produced in Thailand, the raw materials are being imported mainly from the US. Production is controlled under American standards. "We want to encourage Thai people to have brighter smiles, which will make consumers satisfied with both of our products [whitening gel and toothpaste]," said Detrit. The Sparkle brand has been marketed since 1996, when Virut Norman Ngaw, managing director of the company, founded the whitening-gel formula while in the US. Kuron plans to distribute the whitening toothpaste through modern-trade outlets - including Tesco Lotus, Makro, Carrefour and Big C - from December 1. Detrit said the company's overall Thai sales from all five product segments would grow by 12 per cent to Bt600 million this year. However, it targets growth of 20 per cent next year to Bt720 million, excluding Sparkle products. Including Sparkle products, sales are expected to expand by 120 per cent with the additional sales of Bt500 million from the brand. He accepted that the economic crisis had hit consumer purchasing power, but the company's products had not been that greatly affected, as they are targeted more at city folk rather than those in rural areas. Kuron plans to launch more innovative products for oral care by the middle of next year. Source : by The Nation, November 2, 2009

October 31, 2009

SET slumps through 700-point barrier   Thai shares yesterday fell through the 700-psychological level, tumbling almost 2 per cent following the sharp overnight fall on Wall Street and in line with regional stock markets. The sell-off was due to investors' mounting anxiety over a spluttering economic rebound.     Concerns that the eight-month rally on the Stock Exchange of Thailand will fade after the government' stimulus policy is unwound also negatively affected the market. The SET Index slumped from the opening bell before closing at 690.10 points, off the day's trough of 685.39. Turnover was moderate at Bt21.21 billion. The main sell-off was seen in big market-cap stocks. PTT lost 3.19 per cent at Bt243, PTT Exploration and Production dropped 3.63 per cent to Bt146, Kasikornbank plunged 3.36 per cent to Bt79, Bank of Ayudhya was off 3.23 per cent at Bt18, Siam Commercial Bank dipped 2.8 per cent to Bt78.25 and Siam Cement fell 2.86 per cent to Bt204. Taiwan's weighted index fell 2.37 per cent yesterday, while Japan's Nikkei-225 index lost 1.83 per cent, the Hong Kong Hang Seng Index dived 2.28 per cent and the Shanghai Composite Index was down 2.34 per cent. The Dow Jones Industrial Average overnight lost 119.48 points (1.21 per cent) to close at 9,762.69. CIMB Securities (Thailand) said in a note that the steep fall in Thai shares indicated the stock market was entering a downward trend. Initially, the SET Index might test the key support level of 670 points, it said. The broker said foreign investors' selling pressure was behind yesterday's steep decline, adding that the sell-off would continue as investors sense fourth-quarter earnings will not be as good as third-quarter profits. CIMB recommended investors to hold cash to snap up stocks when the SET Index reaches 670 points. Banking and construction stocks are recommended buys. Capital Nomura Securities said concerns that the South Korean and other central banks in Asia would be tightening their monetary policy to guard against bubbles also dampened the stock market. The brokerage said investors who hold shares for one to three months should lower property, petrochemical and financial stocks in their portfolios and shift to stocks gaining benefits from the economic recovery, laggard stocks and dividend plays. An analyst at Kiatnakin Securities recommended investors to downsize their portfolio and hold more cash if the SET Index fails to pull itself back above 700 points. An Ayudhya Securities analyst, however, said the SET's bullish medium-term outlook remained despite yesterday's fall. Investors should wait and see, the analyst said, as stock markets around the world are consolidating and there is a higher chance of making the wrong investment move. An opportunity to buys stocks in companies expected to post stunning earnings in the third quarter will be seen when the SET Index is at 665-670 points, the analyst said, citing Preuksa Real Estate, Supalai and Thai Union Frozen Products. Ruchir Sharma, 35, who overseas US$25 billion (Bt837 billion) in emerging-market stocks at Morgan Stanley, said in an interview in Mumbai that the global stock-market rally, which resembles the bull run between 2003 and 2007, would end as government spending slows after so-called easy money boosted asset prices. "Such echo rallies are never as big as the original one, and we will see it fading away. The rally will end as the effects of the stimulus begin to fade and the credit bubble caused by easy money disappears," he was quoted as saying by Bloomberg. Source : The Nation, October 30, 2009

October 30, 2009

BOT denies baht intervention The Bank of Thailand yesterday denied that its higher swap obligations so far this year were caused by its attempts to intervene in the currency market as reported by some media, but were due mainly to the country's current-account surplus.  The BOT's statement was reacting to a local media report yesterday that since the second quarter the central bank had heavily intervened in the currency market by buying US dollars to stem the baht's appreciation, and had also traded in the forward market. The report said this had increased its outstanding swap obligations to US$15.1 billion (Bt505 billion), the media said. Mathee Supapong, the central bank's director of the Domestic Economy Department, yesterday admitted that the outstanding swap obligations had increased significantly since early this year. But the increase was mainly due to the rising current-account surplus, not the result of baht intervention, he said. As of October 16, the BOT's outstanding swap obligation was accounted at $15.1 billion. Over the first eight months of this year, Mathee said, the country's current-account surplus was as high as $14.8 billion, while the balance of payments was in control. "The swap is a normal tool for the central bank to manage baht liquidity in the market. The BOT didn't throw much money to intervene [as reported by the media] as it also uses other financial tools to absorb liquidity. Currently, the excess liquidity is accounted at around Bt2.9 trillion. [To absorb liquidity], it issued bonds worth Bt1.5 trillion to Bt1.6 trillion, followed by repurchase bonds of Bt900 billion and swaps of Bt500 billion," he said. Mathee added that the BOT had used several tools to manage liquidity in the market to support business adjustment by private sector. Moreover, the swap transactions can also help reduce shortage of the US dollar in a time of crisis, while the swap amount can be changed depending on liquidity at a particular period. In early 2008, its swap obligation increased to $23.3 billion, and then fell sharply to $3.6 billion in early 2009, Mathee said. The baht has strengthened 3.8 per cent this year as overseas investors bought about $1.8 billion more shares than they sold. In addition, the dollar's weakness has increased the magnitude of the baht's strength. The baht yesterday fell for the first time in three days as investors shunned riskier assets on concerns a global economic recovery will falter as US bank losses persist. Ten-year bonds were little changed. The baht fell 0.1 per cent to $33.43 as of 4.57pm yesterday in Bangkok, according to data compiled by Bloomberg. The MSCI Asia Pacific Index of regional equities dropped 1.5 per cent, the biggest decline since October 2, after the Standard & Poor's 500 index of US shares slid 1.2 per cent. Of 26 emerging-market currencies tracked by Bloomberg, all but three retreated against the greenback and Asian stocks declined the most in three weeks. US equities dropped on speculation lawmakers will phase out a tax credit for home-buyers and Bank of America will have to sell shares to pay back its government bail-out. "A mixture of risk aversion and speculation that the Fed will hint at an earlier exit," is pushing Asian currencies lower, said Tetsuo Jerry Yoshikoshi, a senior economist with Sumitomo Mitsui Banking in Singapore. The yield on the benchmark 3.875-per-cent bond maturing in June 2019 was at 4.316 per cent, according to the reference yield from the Thai Bond Market Association. Source : The Nation, October 29, 2009

October 25, 2009

Major private hospitals slow investment plans Leading private hospital chains playing a key role in boosting Thailand as a medical-care destination remain cautious over new investment next year, despite the authorities' assurance of a better outlook. The chains have seen declining business this year due to the global economic crisis, last year's airport shutdowns and type-A (H1N1) influenza. According to Tourism and Sports Minister Chumpol Silapa-archa, the number of foreign tourists coming to Thailand for a mixture of medical care and tourism this year fell 7-8 per cent from 1.3 million in 2008. But he said the ministry expected the outlook for medical tourism next year to improve in line with the global economic recovery. The ministry is seeking approval for a visa fee waiver for medical tourists until the end of 2010 to help the industry. Hospitals have been active in investing in buildings and personnel to accommodate more foreign patients in past years. Now they are more cautious, and none are spending extravagantly given the uncertain outlook. The executives from Bangkok Dusit Medical Services (BDMS), Phya Thai Hospital or Samitivej Hospital have not committed to big investments in the coming year. However, Vibhavadi General Hospital is investing to expand capacity. Chaisit Kupwiwat, deputy managing director, said the hospital was going ahead with its plan to construct a nine-storey building adjacent to the existing hospital on Vibhavadi-Rangsit Road, with work expected to be completed in 2010. The construction cost is Bt300 million, of which Bt200 million will be spent next year. After the building is completed, Vibhavadi will be able to serve 3,000 outpatients per day, up from the current 1,100. Chaisit said Vibharam Hospital - Vibahvadi's subsidiary in which it holds a 50-per-cent stake - was in talks with two smaller hospitals in the northern part of Bangkok to acquire major shareholdings and provide operating service. This is in line with the company's policy to create a business network in the area. John Lee Kho-shun, executive vice president of BDMS, said the company would allocate 4-5 per cent of its revenue in 2010 for investment, which is the normal rate to sustain revenue growth of 5 per cent. BDMS expects its revenue in 2009 to be around Bt20 billion. It estimates the revenue in 2010 to grow at a single-digit rate. Capital expenditure in the upcoming year will be around Bt1 billion. The investment amount in 2010 is a slight increase from this year, when BDMS allocated only 2-3 per cent of its revenue. BDMS operates the Bangkok Hospital Group, BNH Hospital, the Samitivej Hospitals and the Royal International Hospital. Most of the investment budget in 2010 will go to the construction of a medium-sized hospital in Hua Hin in Prachauap Khiri Khan province. The hospital is expected to open in the first half of 2011. Besides the construction of the hospital in Hua Hin, BDMS will spend to replace old medical equipment. BDMS has another plan to invest in the healthcare business, which will be finalised within the next few months. Lee did not disclose the investment details, as he wants to wait for a clearer picture. Regarding investment in the Middle East, Lee said BDMS might construct a second hospital in Abu Dhabi, but the plan would not come off next year as originally planned due to the global economic slump. Thana Thiramanus, head of marketing and support at Phya Thai Hospital, said it had earlier planned to expand existing hospitals in 2010 so as to increase capacity to serve both inpatients and outpatients, but it had to revise the investment plan after the fourth quarter's performance was not so good. Thana said the company had planned to invest about Bt500 million in 2010, but those plans were now on hold. EXPANSION ON HOLD Phya Thai operates three hospitals in Bangkok under the Phya Thai and Phya Thai Sriracha brands. He said Phya Thai Hospital had seen a decline in patient numbers since September. Although numbers in the current quarter are still above the same period last year, they are below the hospital's expectation. While expansion is put on hold, Phya Thai still plans to purchase new medical equipment, with a budget of Bt100 million-Bt200 million. Raymond Chong, managing director and chief executive of Samitivej Hospital, said the hospital planned to allocate 5 per cent of its revenue for investment in 2010, of which 50 per cent would be spent to upgrade its IT system and renovate part of the existing building. The hospital has no plans for major investment in 2010. Thailand has been recognised as a medical hub as it has many professional physicians and other health workers, while the medical service fees are much lower than those in Singapore, Malaysia, Europe and the US. Of 12 million foreign tourists coming to Thailand last year, 1.3 million entered the Kingdom for medical tourism. Most were from the Middle East. "The global economy is recovering but BDMS is not confident whether it is sustainable. The factor we're concerned about is tourist numbers and foreigners who come to Thailand for medical tourism, which are not as good as in the past two to three years. Foreigners are still cautious about spending money for healthcare. So, we have an optimistic view for the global economy but have to spend carefully," Lee said. Monday: The eco-car and its magical wand for boosting the auto industry. Sorce : The Nation December 25, 2009

August 6, 2009

July 22-23, 2009 Phuket, Thailand Parliamentary Secretary to the Minister of Foreign Affairs, Deepak Obhrai, concluded meetings with the Association of Southeast Asian Nations (ASEAN), where he exchanged views with officials from ASEAN and ASEAN Regional Forum countries on a range of regional and global issues. Highlights of Parliamentary Secretary Deepak Obhrai’s meetings included: the unanimous adoption of the Joint Declaration on ASEAN-Canada Enhanced Partnership, which will form the cornerstone of Canada’s relationship with ASEAN and define the multi-faceted cooperation between Canada and ASEAN members in the years to come. The Declaration provides the opportunity to advance Canadian priorities in diverse fields, including human rights and fundamental freedoms, counterterrorism, transnational issues, security, trade and investment, sustainable development and people-to-people contacts. raising Canadian concerns regarding the continued detention of pro-democracy leader Aung San Suu Kyi and the human rights situation in Burma.

July 2, 2009

The Thai stock market was the seventh-Best performer in Asia in the first half of the year, surging 32.53 per cent from the end of 2008.

May 25, 2009

Projects with EIA can go ahead in Rayong By Chalida Ekvitthayavechnukul Published on May 11, 2009 Petrochemical projects in Rayong that have passed an environmental impact assessment (EIA) can move ahead with their investment, since a new pollution-reduction plan is not expected to affect them. "At a National Environment Board [NEB] meeting, we discussed whether projects with EIA approval could carry on [and decided they could]. However, projects awaiting EIA approval should be delayed until the pollution-reduction plan is completed," said Sorayud Petchtrakul, an adviser to the industry minister. The NEB designated Map Ta Phut and other parts of Rayong province as a pollution-control zone on April 30. The pollution-reduction plan is being formulated by Rayong's provincial officials and local communities in collaboration with public agencies such as the Pollution Control Department and the Industrial Estate Authority of Thailand. Petrochemical projects that are waiting for EIA approval are worth about Bt200 billion, while those that have received approval and can proceed have a combined investment of more than Bt100 billion, Sorayud said. To reduce confusion among investors, he said the former pollution-reduction plan, which was brought in when Surayud Chulanont was prime minister, would remain effective until the new one is in place. The Board of Investment has written to the NEB about the effects on investors of the declaration of the pollution-control area, seeking a clear explanation that can be given to companies. It expects a response within two weeks, Sorayud said. Meanwhile, the petrochemical investments by Siam Cement Group (SCG) and PTT in Map Ta Phut remain on track. PTT is proceeding with construction of its Bt100-billion petrochemical complex, including a sixth gas-separation plant, olefins capacity expansion, downstream products and associated utilities. It will gradually start operations from this year through to 2011.

May 19, 2009

Hospitals expected to witness continued drop in patients By Nalin Viboonchart Published on May 11, 2009 An analyst from Trinity Securities said last week that there was a signal of a decline in foreign patients caused by the global economic slowdown since the first quarter of last year and then, dramatically, by the airport closures at the end of the year. The numbers of foreign patients of both Bumrungrad Hospital and Bangkok Dusit Medical Services (BDMS) in the first three months of the year dropped by 4 per cent. BDMS comprises Bangkok Hospital, BNH Hospital and Samitivej Hospital. The number of foreign patients flying to Thailand for complex-disease treatment or surgery also declined. The global economic crisis has forced some foreign patients to switch to lower-cost hospitals in India and elsewhere, the Trinity analyst said. "This factor will have a direct impact on the hospitals' gross profit margins. If the first-half performances of Bumrungrad and hospitals under BDMS's umbrella are hit continuously by the economic downturn, we may consider revising our expectations on both companies," the analyst said. Trinity forecasts Bumrungrad's net profit in the first quarter of this year to show flat growth from a year earlier, while that of BDMS is expected to drop drastically from its historic record of Bt700 million in the first quarter of 2008 to Bt350 million. The Trinity analyst said he expected the A-H1N1 influenza would affect only the country's big hospitals, and only in the short term, because the virus was less severe than the Sars virus. The new influenza's death rate is only 6 per cent, while that of Sars was 60 per cent. The broker expects the new virus to be controlled within two months. KGI Securities (Thailand) said in its research that the number of Bumrungrad's foreign patients in the first quarter this year dropped by 5.1 per cent year on year but increased by 10.1 per cent if compared with the fourth quarter of 2008, to 105,000. Patients from the US have gradually declined. But those from the Middle East are growing. A 5.1 per-cent drop in Bumrungrad's foreign patients was better than KGI's 2009 full-year expected drop of 14 per cent. Meanwhile, the hospital's total patients in the first three months of 2009 dropped by 2-3 per cent from the first quarter of last year. The broker forecasts Bumrungrad's first-quarter revenue to grow by 1.7 per cent year on year and 5.1 per cent quarter on quarter. The average revenue per patient is expected to increase by 11 per cent for inpatient and 12 per cent for outpatient. The key drivers are the room-price adjustment after renovations and the increase in complex disease treatment and surgery. KGI expects the hospital's net profit in the first quarter this year to be Bt305 million, down by 3 per cent year on year. Although the decline in foreign patients was less severe than the broker's expectation, the country's political turmoil and concerns about the influenza outbreak are the major factors keeping foreign patients away. Meanwhile, medium-sized hospital operators such as Bangkok Chain Hospital, the operator of Kasemrad Hospital, are forecast to see higher revenues in the first quarter of this year thanks to the increase in medical benefits for members members of the Social Security Fund. Ayudhya Securities forecasted in its research that Kasemrad's first-quarter net profit would grow by 16 per cent from the fourth quarter last year and 19 per cent year on year. The hospital's operating result during 2009-2010 will continuously increase, against the economic trend. Besides the increase from the Social Security Fund, the growth of specialised-disease services have boosted Kasemrad. Analysts say its gross profit margin is expected to grow from 20-25 per cent to 30 per cent this year. The government increased its allowance for medical expenses for Social Security Fund members by 23 per cent from last year, higher than the normal increase of 3-5 per cent per annum. The government has already adjusted those medical expenses upwards by 9 per cent for 2010, better than Ayudhya's expectation of a rise of 5 per cent.

May 14, 2009

Projects with EIA can go ahead in Rayong By Chalida Ekvitthayavechnukul Published on May 11, 2009 "At a National Environment Board [NEB] meeting, we discussed whether projects with EIA approval could carry on [and decided they could]. However, projects awaiting EIA approval should be delayed until the pollution-reduction plan is completed," said Sorayud Petchtrakul, an adviser to the industry minister. The NEB designated Map Ta Phut and other parts of Rayong province as a pollution-control zone on April 30. The pollution-reduction plan is being formulated by Rayong's provincial officials and local communities in collaboration with public agencies such as the Pollution Control Department and the Industrial Estate Authority of Thailand. Petrochemical projects that are waiting for EIA approval are worth about Bt200 billion, while those that have received approval and can proceed have a combined investment of more than Bt100 billion, Sorayud said. To reduce confusion among investors, he said the former pollution-reduction plan, which was brought in when Surayud Chulanont was prime minister, would remain effective until the new one is in place. The Board of Investment has written to the NEB about the effects on investors of the declaration of the pollution-control area, seeking a clear explanation that can be given to companies. It expects a response within two weeks, Sorayud said. Meanwhile, the petrochemical investments by Siam Cement Group (SCG) and PTT in Map Ta Phut remain on track. PTT is proceeding with construction of its Bt100-billion petrochemical complex, including a sixth gas-separation plant, olefins capacity expansion, downstream products and associated utilities. It will gradually start operations from this year through to 2011. SCG has a joint venture with Dow Chemical to expand products in the field of higher alpha olefins. The JV expects to start up the plants next year.