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Islamic Bank in Thailand to be inaugurated in June
The Islamic Bank of Thailand will be officially opened on
June 1, according to Interior Minister Wan Muhamad Noor Matha.
"The Islamic Bank of Thailand will serve Thai
Muslims based on the Islamic principle that is there will no interests for
deposits, but cash will be treated as investment", said the Interior
Minister, who, himself, is a Thai Muslim.
Wan Noor said that the Islamic Bank of Thailand would be
initially operated with a capital of 500 million baht from the Ministry of
Finance, the Government Savings Bank (GSB), and the government’s pension
fund, half of its planned initial capital of 1.0 billion baht.
The private sector, as well as the Islamic Bank of Brunei
and an investment fund from Bahrain have also expressed their interest in
jointly investing in the Islamic Bank of Thailand. The government, through
state-run Krung Thai Bank, has operated the Islamic banking services on a
trial basis over the past months.
"The Islamic Bank of Brunei wants to invest 200
million baht in the Islamic Bank of Thailand, with negotiations to be
finalized soon. The investment fund from Bahrain, on the other hand, wants
to invest in the bank as high as US$4.0 billion, and negotiations are under
progress", Wan Noor stated.
Free Trade Area agreements set to boost Thai exports
Auto producers will benefit from slashed tariffs
Commerce Minister Adisai Bodharamik recently chaired the
first meeting of the ministry’s Free Trade Area (FTA) in a bid to
kick-start negotiations with trade partners having signed FTA agreements
with Thailand.
Aphiradee Tantraporn, director general of the Department
of International Trade Negotiations, said that the first meeting assessed
the progress made on negotiations to establish agreements with a number of
countries, in particular the agreement signed with Bahrain which came into
effect last December, and plans to open up free trade in fruits and
vegetables with China.
"The opening up of free trade will increase Thailand’s
export channels. Once the agreements are signed, Thai companies will be able
to engage in trade with the countries concerned immediately," Aphiradee
said.
Thailand has already signed FTA agreements with Bahrain,
China, Japan, Australia, the United States, Peru and South Africa, and in
July India will be added to this list.
Ninnat Chaitheeraphinyoo, president of the Federation of
Thai Industries’ committee to study the impact of the Thai-Australian FTA,
said, "With Thailand producing pick-ups and small cars and Australia
producing larger cars, the two countries will be able to exchange their
products. Import tariffs will be slashed to one percent compared to the 5
percent presently levied by Australia and the 42-80 percent levied by
Thailand."
While the Thai-Australian FTA would push up Thailand’s
car exports to Australia by 100 percent, Thailand is urging Australia to
ease restrictions on the import of Thai agricultural products. (TNA)
An Intelligent Use of Cash
Advertorial
To the private investor, cash or currency holdings
traditionally imply interest-based growth within term deposits and
money-market funds. But with global interest rates as low as they are, and
exchange rates forever on the move, small gains may in fact be larger real
losses. The US Dollar Index has declined about 23% since Independence Day
2001.
A growth area in alternative investments is Managed
Currency Accounts, whereby an investor opens their own foreign exchange
account with a licensed, regulated US brokerage, and grants limited
authority to a professional Adviser to trade that account against the
interbank global forex market.
Commodity Trading Advisers as they are known in the USA,
have master agreements with a brokerage, that in turn administrates the
account and makes a secondary market under the watchful eyes of the National
Futures Association and Commodities Futures Trading Commission. Nowadays,
spot (cash market) trading is electronic and "straight through" to
the underlying interbank market, so there is a level playing field for all.
A successful adviser will deliver about 5% a month, which
is 60% a year if you take the gains as monthly income, or 264% if
compounded. Needless to say, professionals keep to a very low leverage of
4:1 or 5:1 in this market to manage the intraday volatility. They should
also hedge a spot market position with over-the-counter option contracts, or
vice versa.
For the private investor, using a small percentage of
your portfolio in this way can boost overall performance and protect its
real value in other currencies to which you will be exposed. What’s more,
your Managed Currency Account has better regulation, more transparency,
fewer charges, and offers much faster access to your capital than does an
offshore hedge fund.
Prawn farmers
fear for future
The president of Thailand’s leading black tiger prawn
farming association has warned that non-tariff trade barriers are putting
the country’s prawn exports in jeopardy, pushing down Thailand’s prawn
exports last year by 17 percent.
Somsak Paneetathayasai, president of the Association of
Black Tiger Prawn Farmers, Producers and Exporters, said that in 2002
Thailand exported 212,091 metric tons of prawns worth 75.947 billion baht,
down 17 percent in volume and 25 percent from the previous year.
The United States remained Thailand’s largest market,
followed by Japan, while exports to the European Union continued on a
downward slide.
Somsak said that despite continuing demand for prawns on
the global market, and Thailand’s strength as a producer of quality black
tiger prawns, the main obstacle facing prawn exporters in 2003 was
non-tariff trade barriers such as those concerning chemical residues and
market dumping. At the same time, he said, rival producers have lower
production costs. (TNA)
Electricity use breaks records as temperatures soar
Demand for electricity broke previous records on May 6 as
the fierce heat sent people rushing to turn on their air conditioners,
according to the Electricity Generating Authority of Thailand (EGAT).
Demand for electricity on the day stood at 17,852.7
megawatts, breaking the previous record of 17,826.4 megawatts last month on
April 8, and exceeding the peak demand forecast by EGAT, which previously
predicted that peak demand this year would grow by 7 percent.
EGAT director Sitthiporn Ratanophas said that continuing
economic growth coupled with high temperatures had pushed peak demand above
expectations, with the temperature measured at EGAT headquarters yesterday
hitting 39.8 degrees Celsius.
While urging the public to save as much energy as
possible, in particular by setting air conditioner temperatures no lower
than 25 degrees, he gave assurances that EGAT would be able to generate
enough electricity to meet demand.
However in a strange twist of irony, the office of the
Permanent Secretary for Industry experienced three power cuts on the record
breaking day, as the building’s electricity system could not cope with the
heavier than normal use of the air conditioners. (TNA)
Bank chief warns government to follow changes in US fiscal policy
Kosit Panpiemras, executive chairman of Bangkok Bank Plc
recently called on the government to adjust its economic thinking to be in
line with changes in the US fiscal policy, saying that production for export
should be conducted in line with market supply and demand.
While remaining confident that the export sector would
remain an important driver of the Thai economy, Kosit warned that the
increase in the US budget deficit could contribute to global economic
slowdown, and urged the Thai government to prepare measures to respond to
such a situation. In particular, he said, the government would have to
ensure that production for export did not exceed demand.
Kosit also downplayed government assurances that the
economy would grow by 6 percent this year, envisaging growth of no less than
3-5 percent. He cautioned that a slowdown in export could push down economic
expansion.
But his cautions were dismissed by Commerce Minister
Adisai Bodharamik, who said that the Ministry of Commerce was continually
adjusting its approaches to export, and voiced confidence that average
export earnings would remain at no less than US$6 billion a month, as they
had done for the previous two months. (TNA)
ITB-Invigorating Thai Business project obviously achieving success in the east
Suchada Tupchai
A new and stimulating Thai business project is reaping
rewards. On May 6th at Jomtien Palm Beach Hotel, Pramote Withayasuk, deputy
director of Department of Industrial Promotion presented awards to
outstanding industrial businesses that have gone through the Invigorating
Thai Business (ITB) program.
The participating businesses have been successfully
recovering from the crisis that hit Thailand in 1997. Dr. Khanit Saengsuphan,
director of Economic Policy Research Institute, Ministry of Finance, guided
participants in various ways to develop Small and Medium Enterprises (SMEs)
businesses to become strong and self supportive. Dr. Wilaiporn Liukasemsarn,
advisor of the project’s policies and strategies explained ways to expand
the SME’s ability to compete in the world market.
The Invigorating Thai Business venture is one of the
leading projects that the Ministry of Industry believes will resurrect
smaller firms in certain sectors that have been failing and will eventually
add growth to the Thai economy. Most of these companies were hit hard during
the 1997 economic crisis.
The Department of Industrial Promotion has played a key
role in coordinating with many experts from different institutes and
associations including the Automobile Institute, Thai-German Institute,
Electric and Electronic Institute, Technology Promotion Thai-Japan
Association, National Product Promotion and Development Institute.
The Department of Industrial Promotion and the Economic
Policy Research Institute co-organized the seminar to share strategies of
businesses in the east that have been outstanding performers. The seminar
drew great numbers of business operators who were eager to learn and
exchange information.
Report by World Bank projects Thailand’s GDP growth to slow to 4.5% in 2003
In an updated report put out by the World Bank, the
organization said it expects Thailand’s gross domestic product growth to
slow to 4.5% this year compared with 5.2% last year, due to the impact the
SARS epidemic is having on the country’s and East Asia’s trade and
tourism.
The report stated that here is increasing confirmation
that tourism, which contributes to 6% of Thailand’s GDP, has been dealt a
serious blow by SARS and the impact could have lasting effects well into the
third quarter.
Figures also show that Thailand’s booming exports were
slowing down. During the first quarter of this year exports showed a 20
percent year-on-year growth but the World Bank said that it was witnessing a
slowdown in Thai exports during April. Thai exports grew by 5.4% last year.
"The high growth in exports and in export orders of
the first two months of 2003 is now replaced by much slower growth in March
which looks unlikely to recover until after the first half of 2003,"
the report said.
On a more positive note, the report said private
consumption is expected to increase thanks to the government’s various
stimulus measures and would play a significant role in increasing GDP
growth. The manufacturing sector grew by more than 8 percent which was an
impressive turnaround relative to figures reported in 2001.
According to the report, total exports grew by 5.4
percent (in USD terms), with export volume growing by 14 percent, but
exports from the Philippines, Taiwan, Vietnam, Malaysia, India and China
grew faster. China, ASEAN and other Asia were the fastest growing export
markets for Thailand, as they were for most other Asian countries.
Exports to China grew 24 percent, highlighted by an
increase in manufactured goods, particularly those in the
technology-intensive category.
Jasmine rice becomes more popular with Thais overseas
Thai jasmine rice, manufactured by a royal rice mill, is
gaining popularity among Thais living abroad. Banjerd Somwang, an advisor to
the president of the cooperative village project, initiated by His Majesty
the King said that the royal rice mill has achieved a fruitful outcome, as
its jasmine, or Hom Mali rice had been increasingly popular, particularly in
overseas markets.
Thai expatriates living in the US have formed an
administrative committee to run their rice business without middlemen. Their
customers are restaurants and Thai families.
Genuine 100% Thai jasmine fragrant rice of superb quality
is the outstanding feature of the royal project’s rice.
In cooperation with the private sector in terms of
marketing, the royal mill intends to produce value-added goods by making
canned Thai fragrant brown rice for export. The canned rice has been cooked
and dried in the manufacturing process. Consumers need only 10 minutes to
warm the rice before meal.
Its convenience has created expanding demand in foreign
markets. But the canned rice is becoming a lucrative business in the
domestic market as well.
The royal mill, in collaboration with the Electricity
Generating Authority of Thailand (EGAT) plans to make brown rice for sale in
supermarkets nationwide.
Thai jasmine rice produced under the royal project is
available at such well-known places as Tesco Lotus and Tops Supermarkets,
the Oriental Hotel, the Regent Hotel, and Fuji restaurant chains. (TNA)
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