Foreigners owning land closer to
It is almost a reality. It appears that, before long,
foreign investors with Baht 25 million of investment will be able to own a 1-rai plot of
land in the Kingdom. The chances are good that the draft bill to amend land laws will be
approved by the House of Senators this week. Once passed, the bill would be promulgated
into law this month with an immediate effect.
According to Atthaporn Thongprapai, deputy chief of the Department of
Land, the bill sailed through the House of Representatives last week and will be back in
the Senate this week, while other related bills - to let aliens own 100 percent in
condominiums and a have 100 year terms on land leases - were pending in the lower house.
Meanwhile, ministries are considering necessary measures to prevent
foreigners from establishing kingdoms in Thailand; ownership rights over a
piece of land will be conferred on individual investors only, said sources in the Ministry
of Interior. The new laws will directly benefit the slumping property industry, they said.
A 40 percent ownership in living estates by foreigners proposed to
government; developers in upscale market will highly benefit from European and Western
investors while those in lower segments expected to tap from Taiwanese, Chinese and
investors from Hong Kong; new buyers believed to bring in between Baht 1-10 billion this
Seized properties to be sold on the
The Legal Execution Department will this year put seized
properties on the Internet for sales. The move is among new activities in the action plan
to speed up sales of properties in custody under the foreclosure law. The department had a
most difficult time selling those properties last year when sales fell sharply.
According to the departments inspector-general, Sansern
Palvatvichai, a number of legal hurdles - difficulty in forcing foreclosure on assets,
setting median prices and protests by asset owners - have been obstacles when auctioning
seized assets. The economic crisis made the situation worse, he said.
Selling of undeveloped land has been worst hit. The department could sell
only 5 percent of seized land in Bangkok, and another 11 percent in the provinces, a sharp
drop compared with the booming years of 1992 and 1993, said Mr. Sansern.
There have been nearly 40,000 cases concerning undeveloped land; a piece
of land in Chiang Mai was still left unsold after 57 announcements and invitations for
bids; more direct selling activities with department stores planned this year; the Net
could be fruitful in public relations.
Boon Rawd to launch super
Thailands beer giant Boon Rawd Brewery is to launch a
new beer in April to penetrate the premium beer market now reigned over by locally brewed
Heineken beer, in the belief that the over all industry will attain 5-6 percent growth
this year, the same level as last year.
According to industry sources, the new move by Boon Rawd Brewery, brewer
of Thailands Singha beer and Leo beer, was directed at Heineken by Thai whisky
tycoon Mr. Charoen Siriwattanapakdi, who also brews Singhas main rival Chang
Boon Rawds Leo beer has successfully contained the aggressive growth
of Chang beer in the lower market, according to sources. It was late last year when sales
of Chang beer exceeded those of Singha beer for the first time, a trend which forced Boon
Rawd to launch Leo beer, followed by fire sales campaigns.
Name of new premium beer yet to be disclosed; long-necked, light brown
bottle design to attract yuppie drinkers; new premium beer a strategic move to cover all
market segments; Boon Rawd says there was a gap in the market between former leader
Kloster beer and newcomer Heineken.
GHB to further cut interest rates
The Government Housing Bank is set to reduce mortgage
interest rates by another 0.5 percentage point this March, bringing the rates down to the
lowest level in 4-years. GHB also plans to provide loans to home owners to refinance their
debts with other financial institutions.
The cut would lower interest for a Baht 300,000 loan, currently at 9.25
percent, to 8.75 percent, said the banks managing director Siriwat Promburi. The new
low interest rate scheme is aimed at reducing the banks overwhelming liquidity.
About Baht 8 billion in loans are available, he said.
Home owners who have mortgages with other financial institutions could
join GHBs refinancing program starting February 1. Under the program, GHB would help
ease customers interest burdens by 1-percent for 1 year before those customers pay
GHBs general rates. A refinance package is limited to Baht 5 million loans, said Mr.
GHBs 1998 share of the home buying market was 46 percent, yet could
exceed 50 percent, or Baht 50-60 billion this year; the 3-month level for NPLs is 21
percent, or Baht 16 billion; the March rate cut to be the final one.
Thousands to be laid off from
banks this year
The prolonged economic crisis will lead to about 5,000
redundancies in the banking sector this year, with the government-owned Krung Thai Bank
leading in the new round of layoffs. KTB currently shoulders as many as 18,000 employees
after merging with Bangkok First City Bank and absorbing many former employees of the
Bangkok Commercial Bank.
According to banking sources, KTB now has about 6,000 too many
employees and is planning an early retirement program in a redundancy plan scheduled later
this year. KTB management has found in surveys that 1,000 employees will voluntarily join
such a retirement if the compensation package is attractive enough.
Meanwhile, Thai Bank will reduce the size of its workforce from 4,500 to
2,000. A management consultant is working on the cut. Thai Dhanu Bank, restructured soon
after its deal with a Singaporean partner, said to further cut its staff after a new
managing technology is introduced. There will be only 10 personnel working in each TDB
branch, said TDB sources.
Bangkok Metropolitan Bank offers a compensation worth 20 months of salary
to early retirees; BMB said employees face an uncertain future after foreign investors
step in; BMB, put on sale by the Bank of Thailand, was courted by a number of foreign
Harrods quietly takes over
Texacos exploration field
The UK Harrods, with their subsidiary Harrods Energy
(Thailand), has been in talks to take over three off-shore gas and oil exploration fields
from the US based Texaco. The move signifies strong interest from the owner of Harrods,
Mohammed al Fayed, father of Dodi al Fayed, the fiancée of the late Princess of Wales.
Last August, Harrods Energy was granted exploration rights over two
on-shore fields covering 5,800 square kilometers in Prachuab Kirikhan; the takeover of the
three Texaco fields in the Gulf of Thailand will make Harrods Energy among the largest
explorers after the US UNOCAL and the Petroleum Authority of Thailand.
According to the leader of Thai-Rak-Thai Party, Dr. Thaksin Shinawatra,
Harrods investments in Thailand came after months of efforts spent during his trips last
year to the US and Europe to persuade investors to come in. Dr. Thaksin said he had only
acted as a coordinator and has no shares in the company.
US group, led by former Kansas Senator Bob Dole, in negotiations with
Srivikorn family for deals in the Royal Meridien President and with Preecha group for the
Emerald Hotel; Carlyle group of former secretary of state James Burger allocated Baht 5000
million for investment projects in Thailand.
Honda boss: 1998 most difficult
year in decades
1998 was the most difficult year in 3 decades for the auto
industry, as combined sales plunged by 60 percent with only 140,000 units sold. Family
cars suffered the most, falling 65 percent, said Satoshi Toshida, chairman and CEO of
Honda Cars (Thailand).
According to Mr. Satoshi, the wide-spreading draught caused by water
shortages might slow down Thailands economic growth this year because of falls in
agricultural outputs. In that respect, the local car industry would face another year of
difficulty and combined sales figures could be around those of last year, he said.
Honda Cars last week introduced the new low emission Honda Accord and
Honda Civic to the Thai market for the first time. Prices for LEV Civics range from Baht
663,000 to Baht 805,000. Prices of the new Honda Accord sedans range from Baht 1.075
million to Baht 1.65 million.
The company has a policy to maintain prices by cutting costs at assembly
lines; the claimed market leader Toyota remained skeptical as Honda took the lead in the
11th month; new models with low emission engines will constitute 60 percent of
Hondas vehicle sales this year; the introduction was just 1 day before Toyota
unveiled its new Corolla compact sedans.
Industries stunned as BBL reveals
The non-performing loan (NPL) level revealed by the Bangkok
Bank PLC this week has stunned the industrial sector of Thailand, especially the banking
industry, as BBL needs to raise Baht 13.4 billion in new capital. The banks NPL
level reached 48 percent, or more than Baht 400 billion, at the end of 1998, according to
a report filed with the Stock Exchange of Thailand.
The banks major debtors have been slow in repayment, said BBLs
president Chatsiri Sophonpanich in the report. The bank was, however, confident that it
will sort out the NPL problem, as interest rates are lowered and debt restructuring talks
with major debtors have been in progress.
BBL extended Baht 850 billion in loans to industries in 1998, down from
Baht 1.1 trillion in the previous year, said Mr. Chatsiri. The bank last week announced a
capital gain of Baht 3.8 billion made from adjusting the terms of its subordinated
convertible bonds worth US$400 million in foreign markets.
BBL is to raise another Baht 40 billion in a plan to increase registered
capital; NPLs raised concerns among investors, share price fell to Baht 62.5 on Tuesday,
from Baht 68.5 a share last Friday; managers said they could not believe their eyes in
seeing such a figure provided by the blue chip bank.
Fewer companies closed in January
Fewer companies closed down in January, an indication that,
according to the Trade Mark Department, signifies a stabilizing economy. Only 731
companies, with nearly Baht 1.85 billion in registered capital closed, a 28.26 percent
decline compared with the same month last year.
According to the departments chief, Norawat Suwan, only 1,024
companies registered in January this year, a 38 percent slide from January 1998. Those new
companies registered with just over Baht 3.5 billion capital, 24.18 percent down from the
Baht 4.61 billion of those opened in the same month last year.
A total of 12,201 companies and legal entities in businesses closed in
1998, the worst year for the countrys business sector, Mr. Norawat said. He said
that it was very likely that there would be fewer companies closing this month as the
macro economy was stabilizing.
Most of those closed down were small and medium-sized businesses left in a
liquidity crunch; leading in the closure were those in food, restaurant and service,
followed by those in construction; no new companies registered with more than Baht 499
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