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Land prices fall during banks
sell out spree
Fire sales by creditor banks, in an effort to write off
bad loans and write back non-performing loans in the system, have caused land prices in
key areas of Bangkok to drop dramatically. The land department has turned down requests by
industry organizations for land prices to be re-evaluated, saying that it would affect the
entire economy.
According to vice-president of Siam City Bank, Mr. Krisda Hutaseranee,
SCIB recently offered to sell a 230-square wa plot, located beside Le Concord Tower on
Ratchadapisek, to a Taiwanese investor at Baht 120,000 a square wa. The price was 50-60%
lower than the official evaluated price of Baht 300,000 a square wa for land in the area.
The plot on Ratchadapisek Road formerly belonged to a SCIB client,
Tosapol Land Co.
Prices of land in the prime Silom area, the heart of Bangkok, have
fallen from Baht 500,000 a square wa during boon years to an unprecedented low of just
above Baht 100,000 a square wa. "Creditor banks are trying to sell non-performing
assets in order to make some cash," Mr. Krisda said.
Loans in the property business constitute about 20% of NPLs in the
system. SCIB alone has provided nearly Baht 7 billion in loans to major land developers,
which include Land & House Plc, Bangkok Land Plc, Supalai Plc and Natural Park Group.
TOT to launch free call
campaigns
The Telephone Organization of Thailand has planned its
own free call campaign for the first time, aiming to win back customers who
recently turned to promotional packages by TelecomAsia and Thai Telephone &
Telecommunications, TOTs two rivals in basic phone services. TOT was expected to
announce the free call packages soon.
The package, which included giving out PIN phone cards and TOT cards
(chip-embedded card) in certain values, would be offered to every new phone installment.
The package would help clear out TOTs PIN cards, a service which has failed to woo
customers since its launch several years ago.
TA, the operator of a fix-line network in Bangkok and vicinity under a
concession agreement, was last February giving away more than Baht 2,000 in bonds to every
new installment. The campaign claims to have won more than 20,000 new users. TT&T
offered discounts on long-distance call rates to new installations in provinces in the
same month.
A long-term sales promotion package is also planned. TOT said
regulations have limited competitiveness in the service by the phone monopoly. The
free call promotion was believed to help spur sales in areas where public
phone booths are not available.
Brand name PC makers report increase
in first quarter sales
IBM (Thailand) said its low-price strategy has been
proven a success in the first quarter this year after the company switched to focus more
on the home user market. The companys micro tower series, which was designed for
organization users, with the price starting from Baht 34,000 a set, have surprisingly
attracted family users.
IBM has launched a three-key-point marketing strategy: low-price,
on-site service and leasing availability - since late last year. An IBM machine is nearly
one half cheaper than a Compaq Presario model, which is the leader in the home user
market. Also, IBMs leasing service fits well with needs of most buyers who shy away
from spending a huge amount all at once, said industry sources.
Compaq Computer (Thailand), meanwhile, said it has implemented a policy
to satisfy customers and its Presario series for family users has been doing well in the
market. Unlike its arch rival IBM (Thailand), Compaq was selling all new models in the
first quarter this year, instead of old models from last year, said the companys
chairman ML Chaiyawat Chayangkul.
Compaq maintains that the surge in IBM sales has not affected its
leadership in home user market.
Hewlett Packard (Thailand), meanwhile, said sales of Brio series for
organizational users have hit the target of 300-400 sets a month.
Makers of local brand PCs say prices of local brand PCs are still 20%
lower than those brand-names.
First Thai-made Nissan pickups
head for Australia
Siam Motor Co. and Nissan Sales Co. will start exporting
Nissan Big M pickups to Australia next month. The plan is to sell more than 6,000
Thai-made Nissan pickups and Nissan cars overseas before 2001. The first 260 units of
cabless Big M pickups will leave Laem Chabang deep sea port for Australia on May 7.
According to Boonpir Panvorn, PR manager of Siam Motor and Nissan
Sales, Prime Minister Chuan Leekpai will chair the ceremony at Laem Chabang. The company
hopes to send 540 units of Nissan cars and Nissan pickups abroad each month. "The
export target for this year is 2,210 units," said Mr. Boonpir.
The exports are under a plan by Japanese parent company Nissan Motor
Co. to make Thailand the export center of Nissan cars in the Asia-Pacific, said Mr.
Boonpir. The company plans to send the first Thai-made Nissan cars to New Zealand in
November before expanding to other countries, he said.
Siam Motor Co. has separated production lines for exports from those
for the domestic market to meet with different needs. SMC remains the only Thai-owned car
maker in Thailand, as others have been taken over by Japanese parent companies. Exports of
Nissan Sunny sedans planned later this year.
Competition, sparked by Esso,
heats up again in oil retail
Major oil companies have planned a head-to-head
competition in oil retail after Esso (Thailand) Plc offered a can of Nescafe for every
refill of 250 baht at its stations last month. PTT is to launch a new sales promotion
campaign while Shell (Thailand) has its plans reviewed and made more attractive to
compete.
According to industry sources, price competition started to heat up
again this month after retail prices had been up due to increasing oil prices in world
markets. The Petroleum Authority of Thailand would soon launch a campaign, offering a Coke
can to every Baht 250-refill at PTT stations.
Shell (Thailand), meanwhile, has shelved its plan to give away 1 bottle
of drinking water with every Baht 300-refill, scheduled to started next month, and
prepared to launch a more attractive offer to help promote sales of oil, said the sources.
Industry doubts how Esso handles the campaign, as profit margins in oil
retail have been very narrow. Esso dealers had shouldered Baht 2.50 in every Nescafe
bottle given away, while the profit margin is just 10 satang a liter. Other oil companies
are adopting a wait and see attitude.
Honda passenger car sales soar
pass Toyotas in first quarter
Sales of Honda passenger cars have taken the lead in the
first quarter this year, passing Toyota and Mitsubishi. Honda Cars (Thailand) believes
that the local auto market, boosted by the governments tax measures and eased
control, will continue to pick up in the second quarter.
Honda sold 2,568 units of its passenger cars between January and March
this year, which is 27.4% of the segment which saw a total of 9,386 units of passenger
cars sold. Hondas arch rival, Toyota Motor (Thailand), sold 2,327 units of passenger
cars in the quarter, or 24.8%, while MMC Sitthipol sold 1,424 units of Mitsubishi cars, or
15.2%.
HCT recently launched the all-new Civic sedan powered by 1.8-liter
low-emission engine to the market. The high-tech sedan is now available at Honda showrooms
nationwide, said HCTs general manager Mr. Apichart Wangsathornthanakul.
HCT sold 1,223 units of Honda cars in March alone, with the budget car
Honda City in the forefront. The figure increased Hondas slice to 30.6% in March.
HCT plans to double exports of its cars this year, from about 3,000 units last year.
An overall quarterly performance statement, which includes sales of
pickup trucks and commercial vehicles, is yet to be disclosed by the industry.
Theme park tycoon says he was
betrayed by finance firm
The owner of Safari World and Phuket FantaSea, Mr. Pin
Kiewpaisal, said he was betrayed by Kiatnakin Finance Plc in the FRA auction. The finance
firm has now forced him to service the auctioned debt of about Baht 2 billion. KK had
threatened to force foreclosure on Mr. Pins land in the Phuket FantaSea project.
KK said the its had considered court actions against Mr. Pin and his
family members for failing to service the debt. Mr. Pin, however, said KK agreed to be the
representative for Safari World in bidding for the loan assets the group owed to closed
finance companies. "You can write that I was betrayed by Kiatnakin," said Mr.
Pin.
According to Mr. Pins account, Safari World was in negotiations
with KK, asking the firm to be the groups representative to buy back Safaris
debts, put under custody and up for auctions by the Financial Sector Restructuring
Authority last December.
KK was said to have agreed to a buyback plan by Safari World at 60% of
the value. KK won the bid for just Baht 637 million, or about 31% of the value, then
recalled the defaulted loans at full value. Mr. Pin branded KK as vulgar in
the ailing economy.
State Housing Bank running in the
red
The Government Housing Bank has been in a financial
nightmare after customers switched to mortgage packages offered with much lower interest
rates by major commercial banks. The government-owned GHB has been under a negative trend
since 18 months ago in the economic crisis before going into the red earlier this year.
GHB has had a Baht 300 million loss every month since January, a trend
which could lead the bank into a crisis by the end of the year when accumulated losses
could reach Baht 3 billion, said sources in the Finance Ministry. GHB still charges an
average of 11% interest rate while other banks offer much lower rates ranging between 8.0%
and 8.75%.
Inefficiency in the banks management and lack of proper measures
to counter turbulence in the countrys financial system are among causes for
failures, said the sources. GHBs board of directors have seldom met to sort out the
banks problems, they said. The chairman of the bank, who plans to retire later this
year, has seldom participated in board meetings.
GHB did announce an 8% rate, but only for borrowers of not more than
Baht 100,000, which is not practical for buying a home.
Huge bureaucracy in the banks service is also blamed for
failures.
Foreign investment steadily
increased in first quarter
Foreign investment, led by the US consumer giant Procter
and Gamble, has continued to increase in the first quarter this year, a sign that
investors have been gaining confidence in the Thai economy in spite of the crisis. New
investment projects include a number of those in light industries.
According to BOIs secretary-general, Dr. Staporn Kavitanon,
Thailand has become an investment heaven for investors trying to escape rising costs under
the rules of the World Trade Organization. Like PPG, most of the investors applied for
promotion privileges to use the Kingdom as their production bases for exports, said DR
Staporn.
BOI officials said there had been 211 investment projects applying for
privileges from the office between January and March, a 7.65% increase compared to 196
applications in the same period in 1998. Costs of the projects that applied for BOI
promotion has topped Baht 46.7 billion, compared to only Baht 39.9 billion in the same
quarter last year, they said.
Projects in electronic and electrical production take the lead in a new
wave of investment, with a combined cost of Baht 12.5 billion. 32 projects, with Baht 3
billion in registered capital, are in light industry. Japanese companies lead with Baht
5.4 billion in registered capital, as more foreign partners have gained majority-ownership
of Thai operations.
Copyright 1998 Pattaya Mail Publishing Co.Ltd.
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Tel.66-38 411 240-1, 413 240-1, Fax:66-38 427 596; e-mail: [email protected]
Created by Andy Gombaz, assisted by Chinnaporn Sangwanlek. |
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