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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)
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