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Basic infrastructure key to drawing Japanese investment

Stock analysts upbeat about bullishness in 4th quarter

Unemployment drops to 2.6% in 2nd quarter

Thai-Myanmar joint special economic zone planned

Household debts still not worrying

Public land in 3 southern provinces to be re-zoned for commercial use

Car exports up by 38 percent

Private sector proposes Thailand as shipping transit hub

BOI joins with Bangkok Bank to promote investment in Vietnam

Oil price volatility a key concern for next year’s economy

Basic infrastructure key to drawing Japanese investment

Thailand needs to accelerate the development of basic infrastructure to attract investment from Japanese investors who are now paying greater attention to China, according to the Kasikorn Research Center (KRC). The leading think tank said in an analysis report on “Competition with China and ASEAN Members” that in the past fiscal year of 2003-2004 China had managed for the first time to attract more direct investment from Japan than the Association of Southeast Asian Nations (ASEAN).

Japanese investment in China has increased to 8.7% of its total stakes around the world, while that in ASEAN had contracted for the second consecutive year. KRC warned that a decline in Japanese investment in ASEAN signaled member countries of the group need to adjust strategies to attract investment from Japan.

The report said that to draw Japanese investment back, the government must not only offer investment promotions, but it must accelerate the development of basic infrastructure that facilitates business operations and helps offset high labor costs in Thailand.

Basic facilities that need rapid development include local and international transport, information technology and telecommunications, and the business tax system. The government also needs to improve transparency and efficiency of services by state agencies and encourage the liberalization of competition in the market. Local industries also need to develop readiness in terms of personnel and technology to accommodate increased investment and economic activities in the long run. (TNA)


Stock analysts upbeat about bullishness in 4th quarter

Veteran stock analysts are projecting that the investment sentiment in the Stock Exchange of Thailand (SET) will be bullish in the fourth quarter on speculation of the better-than-expected performance results of listed companies.

Speaking at a seminar on the “Direction of Thai Stock Market in Last Quarter,” Suwapa Charoenying, president of National Securities, said that the third-quarter operating performance of many listed firms on the SET was likely to outpace that of the same quarter last year. She said the market had already absorbed many negative factors that had dampened the investment sentiment since early this year.

Suwapa pointed out that state enterprises and giant companies, like Thai Oil Plc. plan to list on the SET in the fourth quarter. Because of this, she believes the SET index is likely to rally and hover around 700-750 points by the end of this year although it could be engulfed by rising oil prices and political change early next year. She suggested that investors hold no more than 10 stocks in their investment portfolios so that they have time to study data of each stock.

Jariya Posayachinda, manager of BOA Asset Management Co, said that institutional investors, particularly foreign funds, recently made overweighed investment in the Thai stock market and took some profits last month. She believes local and foreign funds will continue to accumulate promising stocks and unload some securities with expected poor performance for the whole year on the eve of the release of the third-quarter performance results.

Sukwat Prasertying, Senior Manager of Asset Plus Management Co, said 2004 was considered a very “cruel” year for the stock market because unfavorable incidents had periodically occurred since early this year. “However, foreign investors have continuously purchased stocks and performance results of many listed firms were better than analysts expected,” he said. (TNA)


Unemployment drops to 2.6% in 2nd quarter

The country’s unemployment figure dropped to 2.6% of the workforce in the second quarter of this year from 2.9% in the same period the year before, according to the National Economic and Social Development Board.

Boonyong Vechamaneesri, deputy secretary-general of NESDB, disclosed the number of the poor had decreased to 6.2 million or 9.8% of the population from 15.3 million or 27.2% during 1990-2002 although the economic crisis broke out in that period.

The employment in the industrial handicraft and construction sectors had risen to 19.8% and 74% in the second quarter from 18.9% and 66% in the same quarter last year.

The number of unemployed totaled 290,000 or 2.6% of the country’s workforce, down from 2.96% from the same quarter of the previous year.

The unemployment in the northern region was 3.23%, the highest in the country, since it experienced the drought while that in the southern region increased to 2.32% from 1.04% due to a spate of violence in the South.

Unemployment among people finishing elementary vocational study edged up to 4.12% from 3.15% and those who finished their high vocational study to 5.6% from 4.05%.

The increase in the unemployment among people in such educational levels was attributed by the fact that the skills of many people finishing their studies did not meet the needs of employers. (TNA)


Thai-Myanmar joint special economic zone planned

The local Federation of Thai Industries in Thailand’s west-northern province of Tak plans to push ahead with a scheme to establish a special economic zone across the Thai and Myanmar border after the two cities of Mae Sot and Myawaddy are twinned.

The Thai government is scheduled to discuss making the two border towns the basis of a special economic area when the cabinet has its mobile meeting in Tak on October 19, according to Amnart Nanthahan, who heads the Tak branch of the FTI.

Thai exports to Myanmar through the Mae Sot-Myawaddy border checkpoint are expected to reach ten billion baht at the end of this year, Amnart said. This is much higher than at any of the other checkpoints along the Myanmar border.

If the cabinet approves the project, there will be further infrastructural development, including an industrial estate and a new airport. The planned economic zone is expected to help boost bilateral trade and investment. It will also help create employment for Myanmar laborers so that they don’t have to cross into Thailand looking for work. (TNA)


Household debts still not worrying

Thailand’s high household debts are still not at a level to provoke worry when compared with those of many other countries, according to the Fiscal Policy Office (FPO)

The FPO’s deputy director-general, Somchai Sujjapongse disclosed that the country’s household debts now stood at 33 percent of the gross domestic product (GDP). The amount was not considered high when compared with that of Hong Kong, which stood at 60 percent of GDP, Australia at 83 percent the United States at 84 percent and Singapore at 85 percent. However, he conceded should people of the next generation prefer to default on debts; it would be harmful to the stability of the country’s economy.

According to the Bank of Thailand’s research data, the current amount of household debts is not so high that it could affect the country’s economic stability. The central bank viewed higher household debts showed that more people were accessible to capital sources, and spent them on investing in business or purchasing assets.

Somchai said the efficient way to strengthen households, and to prevent them from incurring more debts was to give people knowledge on saving and how to spend money to ensure they have a good attitude toward long-term debt repayment prospects.

Regarding some academics’ view that the government’s policy to stimulate the economy at the grass-root level had fueled household debts, Somchai said the policy was aimed at giving people an opportunity to get access to capital sources. It should not be seen as a way to increase household debts, or burdens to the country’s economy. (TNA)


Public land in 3 southern provinces to be re-zoned for commercial use

The government plans to speed up its study of public land in Thailand’s southern border region, as it wants to re-zone for commercial use. Under the government’s proposed scheme, public land will be offered for long-term commercial and industrial use with the aim of attracting investors and industrialists to the country’s three southern-most provinces of Yala, Narathiwat and Pattani.

According to Interior Minister Bhokin Bhalakula the study is designed to suggest what land should be re-zoned, how it will be allocated and who should get it so that the local communities get maximum benefit from the program.

Bhokin said the Department of Land originally suggested that unused public land throughout the entire country should be re-allocated. But he said he believes the measures should first start in the three southern provinces which have seen a recent spate of violence this year in order to improve the local economies. He said it will be vital to provide proper management of the allocation in order to prevent trespassing and illegal ownership of allocated land. (TNA)


Car exports up by 38 percent

Thailand’s vehicle exports rose by over 38 percent over the first eight months of the year, pulling in revenue of 92.39 billion baht according to new figures released by the Federation of Thai Industries (FTI).

From January to August Thailand exported 208,306 vehicles, a figure expected to rise to 300,000 by the end of the year. Suraphong Pahisitpattanaphong, the FTI’s spokesman for the automobile industry group, said that during the same period Thailand produced a total of 584,394 vehicles, up 23.5 percent from the same period in 2003.

Domestic sales of saloon cars rose 18.2 percent, while saloon car exports were up by 26.42 percent. Domestic sales of pick-up trucks, meanwhile, rose by 15.9 percent, with exports up 27.82 percent.

Suraphong forecast a steady increase in production, with automobile giants Toyota, Isuzu and General Motors all having shifted their production bases for pick-up trucks to Thailand.

Although concerns have been voiced over the impact of rising oil prices on the automobile industry, Suraphong said that the effect had in fact been negligible, as most people had already turned to vehicles using diesel rather than benzene.

In the country’s provincial areas, pick-up trucks account for 57 percent of all vehicle sales. This year, it is predicted that Thailand will manufacture around 900,000 vehicles, of which 600,000 would be for the domestic market. (TNA)


Private sector proposes Thailand as shipping transit hub

One of Thailand’s leading shipping companies is urging the government to review its ambitious plans to transform Thailand into a regional shipping hub, saying that rather than trying to catch up with Singapore, Thailand should revamp itself as a shipping transit point for goods for landlocked countries.

Speaking at the Thailand Focus 2004 meeting, M.R. Chanraemsirichok Chatrathat, president of Thoresen Thai Plc, said that over the past six years Thailand’s shipping sector had grown slowly in comparison with that of Singapore. Nonetheless, investment opportunities remained, with the sector showing signs of picking up this year, while Thailand remained one of a few countries in the world to make regular exports of goods by ships.

But M.R. Chanraemsirichok cautioned that the lack of financial support was serving to hold back Thailand’s shipping sector. “This means that shipping companies that were not registered on the Stock Exchange of Thailand (SET) have no opportunities for modernizing their fleets,” he said.

Turning to the government’s target of transforming Thailand into a regional shipping hub, the shipping chief hinted that it would be almost impossible to catch up with Singapore, which had made huge strides in the shipping sector to stand well ahead of Thailand. Rather than receiving large containers of goods, Thailand should reposition itself as a shipping transit hub, he said, noting that Thailand’s Laem Chabang Port in the eastern province of Chonburi and the Bangkok Port were not on par with deep sea ports in neighboring countries. However, Thailand would do well to act as a shipping point for landlocked countries such as Laos, northern Myanmar and southern China, he said. (TNA)


BOI joins with Bangkok Bank to promote investment in Vietnam

The Board of Investment of Thailand (BOI) and Bangkok Bank Public Company Limited are to organize a joint seminar at the end of this month to promote Thai investment in Vietnam.

Announcing the seminar, Suchart Phisitwanich, investment advisor for the BOI, said that seminar on October 27 would give Thai businesspeople information on investment concessions available from the Vietnamese authorities, as well as information on bilateral trade and investment legislation.

A total of 110 Thai companies have invested in Vietnam, making Thailand become Vietnam’s ninth largest foreign investor, and the second largest from the Association of Southeast Asian Nations (ASEAN) after Singapore.

The majority of Thai investment in Vietnam is in the processed agricultural goods sector, hotels, property, automobile components and consumer goods. Thai companies with investment interests in Vietnam include top firms such as Charoen Phokpand, Amata, Red Bull and Thai Nakorn Pattana. (TNA)


Oil price volatility a key concern for next year’s economy

Bank of Thailand (BOT) Governor M.R. Pridiyathorn Devakula recently disclosed that the current fuel price fluctuation on the world market will be a key factor that has an influence on the Thai economy next year.

Briefing the Commerce Ministry’s officials of the country’s economic outlook in the second half of this year and the whole of next year, M.R. Pridiyathorn said the Thai economy would probably continue to grow at least 6 percent in the second half, with inflation rates remaining at a low level of 2-3 percent.

For next year, he said, the economy could be affected by the continued volatility of fuel since the International Monetary Fund (IMF) reported that global fuel prices were likely to stay above US$40 per barrel over the next eight years.

The IMF believes although the Organization of Petroleum Exporting Countries will increase its output, it could take at least eight years before global oil prices decline to the proper level. Therefore it is necessary for all parties to further cooperate in the government-initiated energy conservation measures. He projected that the government would allow diesel oil prices to increase following the general election early next year.

“To contain the rates, the central bank may need to increase local interest rates in tandem with higher global interest rates. However, it will attempt to reduce effects from the interest hike on debtors as much as possible to prevent the reentry of non-performing loans,” the BOT chief said. (TNA)