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BOT backs merger of asset management companies
The Bank of Thailand (BOT) has come out in favor of the
merger of assets management companies, saying that the proposed mergers will
serve to slash costs.
Mrs. Tarisa Watanagase, deputy BOT governor for financial
institutions stability, yesterday voiced backing for the merger of the
Sukhumvit and Petchaburi asset management companies, noting that it would
lead to a reduction in costs.
Nonetheless, she stressed that the merger would have to
be agreed on by shareholders of the two companies, and that once a plan of
action has been approved, the central bank would have to be informed.
“The negotiation procedures are a matter for the
shareholders. The merger will be good in that it will reduce administration
costs,” she said.
She also confirmed that the Bank of Thailand (BOT) has
made considerable preparations to pave the way for the liberalization of the
finance sector, in particular by drawing up plans to be followed by
financial institutions in order to allow them to enter into even competition
with financial institutions from abroad.
The most pressing concern is now to determine which of
the two draft financial institutions bills would be chosen by the Ministry
of Finance, she added. (TNA)
Tropical storms decimate fruit orchards
Fruit farmers in this northern province of Chiang Mai
were forced to face the sight of ruined orchids after torrential tropical
storms swept across the province last week.
Emerging from their houses to survey the damage, villages
in Baan Mai Pattana in San Kamphaeng district could only hope for rapid
assistance.
With over 100 houses now without roofs, and many crushed
by fallen trees, the villagers are forced to turn to temporary
accommodation.
In the local longan and lime orchards, the news was even
worse, with several hundred trees falling in the storms, which villagers
said were the most severe in a decade.
The Northern Meteorological Center has warned of more
thunderstorms and heavy winds to come over the coming days. (TNA)
Q1 investment continues to soar
Investment in the first quarter of this year continues to
show an impressive rise, with nearly Bt100 billion poured into Thailand’s
industrial and farming sectors, according to new figures released last week
by the Board of Investment (BOI).
The figures have served to reinforce the optimism of BOI
Secretary-General Somphong Wanapha, who has said that investment for the
year 2004 is certain to hit BOI’s target of Bt290 billion.
The first quarter figures show that the electronics
industry is continuing to receive the highest proportion of investment.
Somphong also stressed that the current unrest in the
southern border region was not having an adverse effect on investment
figures.
“In the first quarter, investment in the southern
region grew by 20 percent, compared with the same period of last year, with
20 investment projects. Most of these concern investment in the rubber and
seafood sectors. This shows clearly that the problems in the south have not
had an adverse impact on investment. The investors that put their money in
this region do so directly, and on a long-term basis,” he said.
Nonetheless, he admitted that a continuance of unrest in
the region could eventually serve to dent investment.
Requests for investment concessions in the first quarter
of 2004 stood at Bt93.8 billion, up 25 percent from the same period in 2003.
The total number of projects for which investment
concessions were requested stood at 353, an increase of 36 percent.
The electronic and electrical goods industries took the
bulk of investment, with Bt32.4 billion, most of which went into companies
producing hard disc drives and electrical circuit boards.
Agro-industry and agricultural products enjoyed the
second highest amount of investment, with Bt17.7 billion.
Interestingly, given Thailand’s avian flu crisis at the
start of the year, a considerable proportion of this money went towards
farms and factories involved in chicken production and processing.
Trailing in third were small and medium-sized enterprises
(SMEs), with investment of Bt4 billion.
The largest proportion of foreign investors over the
first quarter continued to come from Japan, with the Japanese putting their
money in automobile parts and electronics industries.
Second were the Taiwanese, who were mainly involved in
the petrochemical, paper, and plastic industries. (TNA)
New generation urged to invest in stock market
People of the new generation should set aside some of
their savings to invest in the stock market since returns remain more
attractive than deposits, given the country’s strong economic growth,
according to top executives at leading organizations.
Speaking at a seminar on “Financial Management for
People of the New Generation,” former commerce minister Suvarn
Valaisathien said how best to invest savings for greater returns depends on
the age of each person.
“Currently, deposit rates are very low. People aged
between 20-40 years could earmark 50% of their savings to invest in the
capital market because they are still young, and could have time to earn
incomes in case they lose their investment in the market,” he said.
He conceded that uncertainties are high in investment in
the stock market.
But he believes investing in the market still gives
higher returns than deposits, since average returns offered by listed
companies are now five or six times greater than from deposits.
He said the country’s economic position remains very
strong although there is a spate of anti-privatization protests by the
Electricity Generating Authority of Thailand (EGAT)’s staff and violence
in the South.
He suggested people aged 40 years or above should set
aside 30% of their savings to invest in the stock market and the remaining
70% to buy bonds.
“Now, foreign investors still view long-term investment
in Thailand as being attractive, given the stability in exports, baht value,
and politics, as well as higher returns offered by listed companies.”
Nives Hemvachiravorakorn, senior vice president of Siam
City Bank Plc, said investors should not rush to cut losses, although the
Stock Exchange of Thailand (SET) index has dropped quite significantly in
the first quarter.
Instead, they should hold their investment position in
return of dividends.
He said the SET index rallied greatly late last week
because the country’s economic position remained sound and foreign
investors were still confident of the market.
He projected that the SET index was likely to reach 800
points within this year. (TNA)
Cash circulation during Songkran period reaches over Bt4.0 billion
People in all parts of the Thai kingdom enjoyed the
Songkran Festival, with cash circulation for the traditional Thai New Year
celebrations reaching over Bt4.0 billion.
Like other auspicious events in Thailand, the Songkran
celebrations nationwide are closely linked with religious activities, as the
Kasikorn Research Center (KRC) has forecast that cash circulation from merit
makings of people in Bangkok and its peripheral areas alone during this
traditional Thai New Year period will reach over Bt1.0 billion.
A recent KRC survey found that 40% of Bangkokians would
perform merit makings as part of their Songkran celebrations.
KRC estimated that each household in Bangkok and its
adjacent areas would spend about Bt1,140 for merit makings during the Songkran
Festival, resulting in total cash circulation for the purpose to reach up to
over Bt1.0 billion.
However, the leading think tank said that most people
living or working in Bangkok and its environs would do their merit making in
provincial areas where they visit their families, relatives, or in tourist
destinations.
The KRC survey found that about 60% of people in Bangkok
and its adjacent areas would celebrate the traditional Thai New Year
up-country.
The Bangkok-based research house also forecast that
gasoline stores (G-stores) located along key highways would each earn 1.5
times more a day during this Songkran Festival, with sale volumes to each
reach over Bt20,000 a day.
KRC estimated that the convenience stores at the petrol
stations would earn up to over Bt10 million during this Songkran holiday
period.
The leading think tank projected as well that cash
circulation in the country’s resort beaches and coastal provinces nationwide
would reach up to Bt3.0 billion during this Songkran Festival, with nearly
Bt1.0 billion to go to hotels and bungalows.
Meanwhile, Deputy Prime Minister Purachai Piumsombun last
week led thousands of people, as well as representatives of government and
state agencies in Bangkok to offer alms to 222 Buddhist monks, the number of
which equals to the 222nd anniversary of Bangkok, to mark the beginning of the
Songkran Festival officially.
US Ambassador to Thailand Darryl N. Johnson and his wife
also joined in the event, held at Sanam Luang ceremonial ground.
Other places in the capital city, including Khao San Road,
a most famous tourist destination here, are also joyously celebrated the water
throwing festival in the mid summer. (TNA)
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