BUSINESS NEWS
HEADLINES [click on headline to view story]: 

Planned listing of AAT on SET postponed

Profits of securities firms likely to plunge in 3rd quarter

Government should decide more quickly on property stimulus measures

Support to Japanese investors

Police request gold shop operators to close at 9 p.m. to prevent crimes against them

Cabinet approves way to boost ASEAN-China cooperation

Investment in construction sector continues to grow

Bali bombing boosts Asia’s security industry that’s been cashing in since Sept. 11 attacks

Planned listing of AAT on SET postponed

The planned listing of AAT Plc on the Stock Exchange of Thailand has been postponed due to negative sentiment in the capital market.

Finance Minister Somkid Jatusripitak announced last week that he has discussed the issue with Transport Minister Suriya Juengrungreungkit regarding progress made in the improvement of the state organization through the privatization and agreed that although delayed, the process will go ahead.

AAT says it has just completed its reorganization needs time to strengthen the new structure of the organization. The decision on the listing of privatized state agencies on the SET depends on the discretion of a committee in each agency.

Dr Somkid conceded the sentiment in the capital market remains bearish, dampened by the stock market plunge around the world therefore the committee wants to wait a little longer until the situation improves. (TNA)


Profits of securities firms likely to plunge in 3rd quarter

Analysts blame fears of a US-Iraq war and say profits from the third-quarter performance of securities brokerage firms are likely to plunge since trading volume has significantly dropped.

Capital Nomura Securities Research Division projected securities companies listed on the Stock Exchange of Thailand, excluding CNS and Siam Industrial Credit, would have combined profits of 84 million baht, down 79% from those of the second quarter of this year. The sharp decrease was attributed to the fall in an average daily trading volume by 43% to 5.74 billion baht in the third quarter from 10.07 billion baht in the previous quarter.

It said most securities houses remained unable to fully expand income sources and seek new business because they are short of personnel with specific skills. Under the circumstances some firms could find themselves in the red again when liberalization of brokerage fees resume in 2005.

Kim-eng Securities’ research division shared the same view, forecasting the performance of the securities companies would deteriorate in the third quarter. Many investors feared a possible US-Iraq war would put the US economy into recession, which could have negative effect on stock markets around the world. This could be witnessed by a net selling of foreign investors and a sharp decrease in the daily trading volume on the SET in the third quarter.

Seamico Securities Research Division predicted listed securities firms, excluding CNS and Seamico, would have profits of only 198 million baht, down 41% from those of the second quarter. It attributed the sharp fall in the profits to the persistent bearish sentiment on the bourse in the third quarter. (TNA)


Government should decide more quickly on property stimulus measures

A leading banking executive says the government should accelerate its decision on whether it will extend its measures to stimulate the property business so people and property developers can prepare their financial and business plans in advance.

Ladawan Thanatanit, executive vice president of Bangkok Bank Plc, said the government should stop vacillating on their decision of extension of tax incentives and fee reduction in the property sector. It should continue these measures for at least two more years so potential buyers and property developers can monitor the direction of the sector.

Ladawan suggested the government set up a central information center on property business. Currently information on the business provided by private companies and state agencies is either incomplete or unreliable. (TNA)


Support to Japanese investors

Prime Minister Thaksin Shinawatra has pledged his government will lend support and protection to Japanese businessmen who have made investments in Thailand.

Delivering a speech at the “Prime Minister Meets Japanese Businessmen” function held by the Thai-Japanese Association, he said he personally has a good feeling with Japanese and considered them as a true friend of Thailand.

Japan was the first country which offered the US$4-billion loan to Thailand through the International Monetary Fund when the latter’s economy plunged into crisis in 1997.

The Thai leader added that Japanese investors have never distanced themselves from Thailand. They continued to increase their investment in the country even though China has become a major rival for foreign investment.

Thaksin said, “I’m ready to lend support to Japanese businessmen and encourage their partnership to boost the Thai economic growth. To attract foreign investment today, we need to wise-up to the situation. So, it is time for us to protect investors regardless of nationality.”

Beside export promotion the government acknowledges the importance of seeking new markets for investors by establishing free trade areas and forging relations and partnerships with many countries through the Asia Cooperation Dialogue. (TNA)


Police request gold shop operators to close at 9 p.m. to prevent crimes against them

(L to R) Pol. Lt. Col. Nana Inpitak, Pol. Lt. Col. Sakrapee Prewphanit, Pattaya police chief, Pol. Col. Padungsak Ubekkanon, Sunt Suppasahatrangsri and Somchai Manotaworn, president of Gold Shop Operators Association, met to discuss closing gold shops by 9 p.m. as a safety measure.

In an effort to reduce crime and promote crime prevention, Pattaya police chief, Pol. Col. Padungsak Ubekkanon and his team recently met with Somchai Manotaworn, president of Gold Shop Operators Association in Pattaya and Naklua and committee members at the Green Park Hotel. Authorities suggested that gold shop owners close their shops at 9.00 p.m. in order to better protect themselves from robberies.

Padungsak said Pattaya police have come up with three new ideas to better insure safety of gold shops in the Pattaya and Naklua area. They suggested shops install CCTV (Closed Circuit Television) and install automatic doors at the entrance. Finally, coordinating operating hours with a 9:00 p.m. closing time throughout the area would help police in their efforts to provide protection.

At the meeting most of the association members agreed that the proposals have merit. However, some owners pointed out that not all gold shops are members of the association. They want police to inform these gold shops of the proposal and request their cooperation.

If these ideas are to succeed gold shops must unite and operate under a unified procedure. Otherwise those who reduce their business hours will lose revenue to shops that remain open later than 9:00 p.m.


Cabinet approves way to boost ASEAN-China cooperation

The cabinet has finally approved the Commerce Ministry’s approach to comply with the framework for the establishment of the ASEAN-China Free Trade Area.

The framework of ASEAN-China Economic Cooperation was proposed by leaders of ASEAN members and China at the summit in November last year, under which the ASEAN-China Free Trade Area is set to be implemented in 10 years.

It features the liberalization of trade, service and investment in line with the World Trade Organization’s criteria. ASEAN and China will expand their economic cooperation in fields of agriculture, information technology and communications, human resources development, investment and Mekong basin development.

The framework of the cooperation will be signed by ASEAN and China leaders in this year’s summit to be held in Cambodia during November 4th through November 8th

Under the framework, the free trade area will be established in order to attract foreign investment into ASEAN and China. An impact on the foreign investment shift from ASEAN into China as a result of the latter’s entry in the WTO will be eased and mutual investment between ASEAN and China will increase. (TNA)


Investment in construction sector continues to grow

Investment in the construction sector is expected to grow 7% this year, which could result in the gross domestic products in the sector expanding by 8%, according to recent figures released from Thai Farmers Research Center.

A clear recovery of the construction sector is contributed to the improvement in the country’s overall economy as it represents around 10% of the gross domestic products.

An increase in the construction works has improved the production sector, trade of construction materials and decorations, and design and interior decoration services.

Increased income earned by construction workers has fueled local consumer spending. So, the construction sector played a partial role in boosting the economic growth this year.

However, there are clouds on the horizon. TFRC projected the sector will continue to expand in the second half of this year, but at a slower pace. It warned sector growth in 2003 could be dampened by external economic volatility.

The country’s economy is likely to grow at a slower pace next year if the fragile global economy deteriorates because of the possibility of war between the United States and Iraq, and rising oil prices. The situation would certainly affect consumer confidence and could a domino-effect on the continued recovery of production and investment.

An economic slowdown would also dampen corporate performance and financial position, which in turn could lead to an increase in non-performing loans. A slowdown in growth would force budget constraints on the government which is presently trying to boost growth in the property and construction sector. If that happens, continued recovery might need to rely more on private investment. (TNA)


Bali bombing boosts Asia’s security industry that’s been cashing in since Sept. 11 attacks

By Dirk Beveridge
Associated Press Writer

The Bali nightclub bombing may have blown a hole in Indonesia’s economy and could affect those of its neighbors, but business is booming for companies that provide security from armed guards to full-scale corporate evacuations.

Demand for security services has risen steeply in parts of Asia, executives say.

After the deadly attacks on the Indonesian resort island, requests for new or enhanced security systems jumped by 30 percent to 40 percent at Apro Technology in Singapore.

“Those who responded immediately were from high-profile companies or they were companies from high-profile countries like Australia and the United States,” said Ignatius Kahn, Apro’s marketing manager at Apro.

Asian security companies have been doing well since the Sept. 11, 2001, attacks in New York and Washington. And, while the Bali tragedy hasn’t triggered the same massive demand, many businesses now wonder where the next terror target might be.

“Those who have not done anything since Sept. 11 because they had this perception that nothing would happen here - well, I think they are reconsidering,” Kahn said.

Business is also up at other security consultancies and companies in Asia.

“Our Indonesian office has already been busy,” said Aaron Leung, a security consultant with Pinkerton (Hong Kong) Ltd. “It is a volatile country. After the bombing - something like this will keep them extra busy.”

Pinkerton, which handles security for 80 percent of the Fortune 1,000 corporations, has evacuation plans for employees and families when trouble breaks out in countries where they are working and living, Leung said.

The plan unfolds in stages, with dependents and nonessential workers leaving before things get too dangerous. In a full-blown crisis, such as the turmoil in Indonesia during the fall of Suharto, remaining essential employees are sometimes flown out in chartered Lear jets.

At Political & Economic Risk Consultancy Ltd. in Hong Kong, analyst Bob Broadfoot had just been working on an island-by-island assessment of the risks that companies face in the Indonesian archipelago. “Bali we would have rated as a low risk,” Broadfoot said.

However, Broadfoot warned the quick assessments of who was responsible, with many blaming the al-Qaida terror network or Jemaah Islamiyah, which wants to establish a pan-Islamic state in Southeast Asia, could be detrimental.

Such conclusions can feed on themselves, when in reality the risks following the Bali bombing are quite different depending on whether the perpetrators were foreigners who might strike elsewhere, or homegrown groups seeking to make a political point specifically in Indonesia, he said.

“It’s really discouraging to see people jump to conclusions,” Broadfoot said. “Some people were immediately saying it’s al-Qaida. If that’s the case, then it’s significant for other countries like Thailand, Malaysia, and Hong Kong. If they can pick a Bali, they can pick an anyplace.”

Leung said tougher security measures taken across Asia over the past year have varied from country to country, based on perceived threats in different locations.

In Hong Kong, which is not seen as a high-risk area, companies have been more likely to make it harder for outsiders to enter their places of business, by installing keypad door locks or giving employees cards that must be swiped to gain access.

One five-star hotel in Hong Kong has installed an X-ray machine and a device that detects minute particles of explosives, and workers now check all mail and parcels going in, Leung said. He declined to identify the hotel.

Kahn said while much can be done to protect private businesses or homes it can be difficult to protect restaurants and bars like the ones targeted in Bali.

Because they are by nature open to the public, bars and restaurants should try installing cameras in plain view as a deterrent and make sure that parking lots are not too close - so terrorists would find it harder to carry out car bombings, Kahn said.