Thai economy likely to grow 2-2.5% next year: stock analysts

The Thai economy might only expand 2-2.5% next year since the non-performing loan problem remains in the banking sector and the foreign trade sector is being impacted from the economic slowdown in the United States and Japan, according to securities analysts.

Sathit Vannasilapin, manager of Capital Nomura Securities’ Analysis Division, said the country’s economy in 2002 is likely to grow 2-2.5% of gross domestic products, compared with the expected expansion of 1-2.5% this year.

The overall economy would remain under pressure from the NPLs held by commercial banks and declining foreign trade due to the economic sluggishness in the US and Japan.

He said the government’s economic stimulus package will maintain the country’s economic growth to a certain extent. But it can’t stimulate the economy into full steam due to increased public debts, which are expected to reach 75% of GDP.

Surachai Pramualkitcharoen, an analyst at Yuanta Securities (Thailand), said the country’s exports have been adversely affected by the global economic slowdown. Under these circumstances, the economy is projected to grow around 1% this year.

The economy is likely to expand at the rate of 2% next year because the global economy is expected to begin to turn around following the US Federal Reserve’s continued interest rate cuts (11 consecutive times) from 4.75% to 1.75% since early this year.

He said the government’s reserve budget of 58 billion baht, or 1% of GDP, will be disbursed to stimulate the economy in the last quarter of the year. This, coupled with the village fund scheme aimed at stimulating spending in provincial areas, would help jumpstart the overall economy. (TNA)

SEC supports PM’s idea of listing state enterprises on NYSE

The Securities and Exchange Commission’s Secretary-General Prasan Trairattanavorakul voiced support for Prime Minister Thaksin Shinawatra’s proposed idea of encouraging the country’s state enterprises to try and get listed on the New York Stock Exchange.

The SEC chief said he did not expect any problems concerning getting listed and believes state-owned or private companies could make share offers to the NYSE if they wanted to.

Still, they must give ‘information disclosure’ a priority because the stock market regulator in the United States focuses on this most when screening companies for possible listing on the bourse.

He said Thailand’s current information disclosure system meet the standards and has won trust to a certain extent. Accounting standards have also improved to international acceptance.

A key flaw that needs to be addressed in the eyes of foreign investors is the enforcement of laws and the punishment of those found guilty. They remain below the standard.

“Pushing shares of local companies to get listed on foreign stock markets, particularly the ones with sound fundamentals, will cause prices of their shares listed on the Thai market to move in the same direction.

“For instance, in case one local stock with a price/earning ratio of 15 times is listed on NYSE, but its share on the Thai bourse has a P/E ratio of only 5 times, foreign investors will rush in to buy it for profit-taking in the New York market. It will eventually boost market sentiment.”

However, Prasan warned, if the state-owned or private companies want to be listed on the NYSE or other foreign bourses, they should do the same in the local stock market as well.

Should all firms with strong fundamentals be allowed to be listed on foreign bourses, the Thai market risks losing an opportunity to increase the number of quality products, he added. (TNA)

PM: Gov’t has enough budget for administration

The government has enough in the central budget for administration and implementation of its policies, Prime Minister Thaksin Shinawatra confirmed last week.

During his weekly radio program, “Premier Thaksin Meets the Public”, broadcast live, Thaksin brushed aside recent news reports that the government was running out of funds to administrate and implement its policies and measures. He instead affirmed that the government still has adequate funds for planned policies and measures.

“News reports that the government is running out of budget are groundless. We still have adequate funds in hand to be used even in projects or measures worth up to Bt100-200 billion,” he said.

The news reports came after the government reportedly took out part of its earmarked budget for economic stimulus packages to support projects under the provincial administration.

Thaksin said that the arrangement was just a technical adjustment so that budgets could be allocated to needed projects in time despite some legal restrictions.

The Thai leader called for the media to avoid publicizing news reports which may have negative impact on the economy.

He also called for the private sector to try its best to address problems it faces to help push the whole economy to get through difficulties, saying that spirit, rather than self-discouragement, would work.

“Amid current downturn economic conditions globally, only strong spirit, rather than self-discouragement, will help private firms to get through difficulties. For the public sector, the government has contacted and sought collaboration from neighboring and allied countries in the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC), and we agreed to try our best to stimulate our economies so that the global economic conditions will eventually improve,” he concluded. (TNA)

Rajabhat owed millions in fees

The Suan Dusit Rajabhat Institute has Bt172 million in outstanding debt yet to be collected from students, and says that it is planning to forbid those who have not paid their tuition fees from attending classes.

Sawong Bunplook, director of the institute’s registry, said that as of the first semester of the 2001 academic year, the total amount of tuition and other related fees that students had yet to pay had accumulated to Bt172 million. Each non-paying student owes between Bt5,000 and Bt90,000 to the institute, said Sawong.

Those owing the highest amount were students in their fourth year that had never paid any fees since enrolling as freshmen. (TNA)

Thai fabrics become more popular among foreigners

Local fabrics, particularly Thai silk, are increasingly popular among foreigners, as orders for Thai fabrics have risen remarkably over the past few months.

Ms. Umakorn Kanking, designer and owner of Ugus, a fabric store of the small and medium-sized enterprise (SMEs) group on Silom Road, told TNA that she anticipates promising prospects for Thai fabrics, particularly Thai silk, next year.

This is because more orders have been placed for Thai fabrics over the past months, and sales volumes have started to rise after shrinking for a certain period of time following the terrorist attacks in the United States in September, she said.

She attributed the improving prospect of the Thai fabric market to growing local tourism businesses. “Just after the terrorist incidents in the U.S., sales of Thai clothes dropped by 50%, but the condition is improving with sales volume now growing to 90%, thanks to the expansion of the local tourism industry,” she said.

Many local firms and hotels have also turned to using uniforms made from Thai fabrics to get in line with the government’s policy on promoting the use of Thai products, she said.

Ongoing New Year celebrations also help boost the sale of Thai fabrics, as people buy local materials as New Year’s presents for their friends and loved ones, according to Ms. Umakorn. (TNA)

SET: Share buy-back rules now effective

The Stock Exchange of Thailand (SET) has approved listed companies for share buy-back, which started taking effect from last month (December) onwards.

Patareeya Benjapolchai, senior vice president of the stock exchange, said on Thursday that there are about 150 listed companies that are able to re-purchase their shares.

The Electricity Generating Plc and the General Environmental Conservation Plc are two listed companies that are commencing share purchase projects.

The SET has already issued guidelines for listed companies to repurchase their shares in addition to the details on share repurchases in the ministry regulations. (TNA)

New minimum daily wage

The minimum labor wage as of January 1, 2002 will be raised as follows, according to the Labor Ministry:

Baht 168 per day for Phuket (up from 165 baht a day); 165 baht per day (unchanged) for six provinces (Bangkok, Nakorn Pathom, Nonthaburi, Pathumtani, Samut Prakarn and Samut Sakon); 146 baht for Chonburi, up from 143 baht per day.

Baht 143 per day for five provinces - Chiang Mai, Nakorn Ratchasima, Phang-Nga, Ranong, Saraburi; 138 baht per day for Angthong, up from 133 baht a day; 137 baht per day for Chachoengsao, up from 133 baht a day; 135 baht per day for two provinces: Narathiwas and Singburi, up from 133 baht a day. (TNA)