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BOI promotes call centers
and contract centers
The Board of Investment (BOI), chaired by Deputy Prime
Minister Prommin Lertsuridej, recently approved the creation of a new
activity eligible for promotion. In order to improve economic conditions
through generation of new tax revenues, increased employment for Thai
workers, and to increase usage of the Thai telecommunications industry, the
board last week announced the promotion of call centers and contact centers.
Approved projects in this category will be eligible for a
wide range of non-tax incentives, including permission to bring in foreign
staff appropriate for the activity and permission to own land. Projects in
this category, however, will not receive any tax privileges.
Projects in this activity may be 100 % foreign owned,
except in cases where the call center or contact center conducts business in
Thai, in which case, the business must be at least 51 %Thai owned, in order
to minimize the effect on existing business operators.
The BOI sees great potential for the development of
international call centers that service customers around the world from a
base in Thailand.
Finance Ministry and BOT set ceiling on credit card rates
The Finance Ministry and Bank of Thailand (BOT) have
finally agreed to set a ceiling on credit-card interest rates at 1.5 per
cent a month or 18 %a year. The resolution took effect on November 1st and
will also apply to penalty payments on monthly credit card bills.
The decision of both government bodies came after a
series of complaints by cardholders that banks and card-issuers were
imposing excessive charges, including penalty rates. This will be
Thailand’s first official ceiling on credit card interest rates charged by
issuers. The government previously had a liberal policy which allowed banks
and to set their own criteria.
The new ceiling will address complaints that some card
providers, mostly foreign banks and finance companies, are charging as much
as 25 % annual interest.
The authorities will also move to strengthen the
financial system by setting a minimum financial requirement for first-time
credit-card applicants.
The move follows a sharp rise in the availability and use
of credit cards as lenders compete to increase their market share and build
their consumer base. Lenders formerly required an applicant to earn at least
15,000 baht per month, but in June of this year, the central bank dumped the
minimum-income requirement, leaving card-issuers to decide for themselves as
to the risk of some applicants.
But growing concern about the nation’s economic
situation for next year has prompted worries in the financial community that
the credit card boom could lead to fiscal instability.
Finance Minister Somkid Jatusripitak said, “So far,
increased credit-card spending in Thailand has been largely due to personal
consumption and hasn’t indicated any risk. However, there must be new
regulations to supervise the business to prevent problems in the future.”
BOT Governor Pridiyathorn Devakul said he thinks that
maintaining a minimum salary limitation was more important than placing a
ceiling on rate charges. He said that low income people could be at risk
when using credit cards beyond their ability to repay debts. “Credit cards
should be issued only to those who have secure jobs and adequate income. If
their salary is low, they will most certainly have trouble servicing
credit-card debt,” the governor said. (TNA)
MOF boasts of successful implementation of fiscal policy
The Finance Ministry says its implementation of its
fiscal policy has been a success. Somchai Sajjapong, deputy spokesman of the
ministry, revealed the policy has been implemented so efficiently that the
nation’s economy has picked up and continues to expand despite world
economic uncertainty.
The Thai economy has satisfactorily grown at the rate of
2.1%, 3.9% and 5.1% in the first, second and third quarters of this year.
The economy in the last quarter is expected to enjoy similar growth rate to
that of the third quarter.
Somchai said the better-than-expected economic growth
resulted in a smaller fiscal deficit and is lower than the target originally
set. He said the government is also relying less on loans to offset the
budget deficit and its role in stimulating the economy by government
spending is decreasing. Public consumption is growing and current investment
is sustainable. Private companies have been encouraged to stimulate the
economy which has allowed government to reduce its role in that area.
Somchai projected the government would still play a
supporting role in jump-starting the economy next year, but prefers to
gradually ease that role for fiscal sustainability.
The public fiscal deficit is expected to be around 122
billion baht or 2.1% of gross domestic products (GDP) next year. Of this,
110 billion baht or 1.9% of GDP belongs to the government and 15.7 billion
or 0.3% of GDP to state enterprises. (TNA)
Thailand and Mexico to set up free trade area
Mexico and Thailand have agreed on principle to a
proposed establishment of a free trade area between the two countries and
will jointly study the feasibility of the plan, according to Thai Foreign
Minister Surakiart Sathirathai.
Surakiart said the two governments also agreed to set up
a joint commission, headed by Foreign Ministers of both countries to study
the feasibility of concrete practices and actions between the two nations in
economic development projects, particularly in the development of small and
medium-sized enterprises (SMEs).
“The Mexican President sees the significance of
bilateral trade and investment between Mexico and Thailand. He sees the
value of forging closer ties and more cooperation between Thailand and
Mexico even though they are located on different continents”, Surakiart
said. (TNA)
US eyes more investment in ASEAN
The United States is keen to increase investment in ASEAN,
indicating that Washington now pays more attention to the 10-nation
grouping, according to Prime Minister Thaksin Shinawatra.
Thaksin said that U.S President George W. Bush, who met
leaders of member countries of the Association of Southeast Asian Nations (ASEAN)
on the sideline of the 10th summit of the Asia-Pacific Economic Cooperation
in Mexico proposed that Washington and other APEC members increase
investment in ASEAN.
“This reflects the view that Washington now pays more
notice to ASEAN, many of which are also members of APEC, including Thailand,
and whose leaders met U.S. President Bush at the 10th APEC Summit”, said
Thaksin.
Asked by the U.S. President to express opinions on the
initiative, ASEAN leaders agreed that it was a positive sign reflecting that
Washington’s policy was now more focused on Southeast Asia. “A clear
stance by ASEAN on anti-terrorism and the grouping’s increased political
role in the international community are expected to make Washington pay more
attention to the region”, said Thaksin.
Despite hailing the U.S. move, the Thai leader said,
however, that he wants Washington to increase investment with ASEAN members
on a bilateral basis as well.
U.S. President Bush considered that there should be an
agreed invest-
ment framework between Washington and ASEAN as a whole prior to the
establishment of free-trade areas between the U.S. and ASEAN members
bilaterally. (TNA)
Canada backs Thailand as regional center in number of areas
Canada has appeared to support an idea to promote
Thailand as a regional center in various areas. Foreign Minister Surakiart
Sathirathai announced that while meeting with his Canadian counterpart in
Mexico prior to the 10th summit of leaders of the Asia-Pacific Economic
Cooperation (APEC) Ottawa expressed interest in promoting Thailand as a
production and export hub of the Association of Southeast Asian Nations (ASEAN)
and other countries with which the kingdom will establish free trade areas
on the bilateral basis, namely India, China, Australia, and Bahrain.
Surakiart said, “The Canadian Foreign Minister
expressed interest in the idea to promote Thailand as a production and
export center in Southeast Asia, and was also keen to support Thailand as a
center for education, as well as legal, agricultural and social development
in the Asian-Pacific region.” (TNA)
Seamico’s chairman accepts “Best Local Broker’ Award”
Jonathan Hirst, associate publisher and managing director
of FinanceAsia Magazine, recently presented the magazine’s 2002 “Best
Local Broker Award” to Seamico Securities Plc.’s chairman, Paron
Israsena.
Paron
Israsena accepts the award from Jonathan Hirst
Hirst commented, “There has never been a better time to
be a broker in Thailand and firm’s which have shown a long term commitment
to the Thai market, such as Seamico, are now basking in the sun of increased
volumes, fixed commissions and vastly improved profitability.”
“Seamico benefits from its blend of local and
expatriate staff and has a market share of 8%. It is locally owned and has
twice the market share of the next biggest locally-owned broker. It is also
the most profitable listed broker in Thailand, and has seen its own share
price increase from 30 baht on October 1st to 41.75 baht on May 31st,” the
publisher said.
Hirst added, “Times are good for Seamico. It saw 84 %
growth in new clients in 2001 and has seen 32 % growth of the same in the
first half of 2002. It has also seen a 340 % growth in its daily average
trading values. Our awards are issued regionally and have become a true
indicator of performance in each of the countries covered. We congratulate
Seamico on winning the award both for this year and last.”
Paron Israsena, Seamico’s Chairman, said “We are
delighted to have won this very prestigious award and will continue to
strive for excellence in the services we provide to our customers.”
“Seamico has consistently ranked as the third most active broker in
Thailand in terms of market daily volumes. It has eight offices and over 330
staff. Its services include online broking, retail broking, international
and local institutional broking, research, settlement and investment
banking. The company also has significant interests in the Brooker Group Plc.
and Raimon Land Plc.,” said Paron.
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