GPF to increase investment in stock market
The Government Pension Fund (GPF) plans to increase
investment in the stock market to 15-16 percent of its portfolio since it
views the capital market still has potential for growth this year.
Secretary-General Visit Tantisunthorn disclosed the GPF was also poised to
invest more in long-term state debt instruments.
Under the plan, the GPF will extend its holding of
government bonds to 3-5 years because it expected interest rates in the
money market will increase by 1 percent. At current, GPF’s investment in
government and state enterprise bonds stands at 28 percent of its portfolio.
Visit said the GPF will also focus on increasing its
investment overseas to 7-8 percent from only 3 percent at present in order
to diversify risks and accommodate the current situations. With the
expectation of the Stock Exchange of Thailand’s index rally this year, he
said the GPF had a policy to raise its investment in the market to 15-16
percent.
Regarding progress on an amendment to the Government
Pension Fund Act, Visit said it had passed the first reading of the Upper
House. It is expected the process would be completed by this year.
One of the significant amendments is to give members an
opportunity to increase saving to 15 percent in maximum from percent of the
monthly salary on a voluntary basis. As well, members could opt to receive
saved money plus interest gradually instead of a lump sum when they retire
at 60 years old.
This could serve as an encouragement to saving and
investment among members in the post-retirement period and enable the GPF to
manage investment in various forms that are suitable to membership period.
(TNA)
Thai fishing industry damaged by tsunamis
Damage to Thailand’s fishing industry as a result of
last month’s devastating tsunamis is estimated to more than 2 billion
baht, according to Agriculture and Cooperatives Minister Wan Muhamad Noor
Matha.
Over 3,000 large fishing boats and some 1,000 smaller
fishing boats were damaged when the tsunamis struck Thailand’s six
southern provinces of Phuket, Phang-nga, Krabi, Ranong, Satun and Trang last
December 26, the minister said. More than 10,000 fish breeding containers in
the sea were also damaged, he said.
The government plans to initially offer compensation of
no more than 200,000 baht for each large fishing boat, 70,000 baht for a
smaller fishing boat, and 12,000 baht for a fish breeding container,
according to the agriculture and cooperatives minister.
The minister reported the damage to the fishing industry
in a recent cabinet meeting. He said he would seek financial support for the
affected fishermen, fishing-boat operators and fish breeders. (TNA)
No shortage of steel despite greater demand
Steel will not be in shortage although the demand has
rapidly increased as a result of last month’s tsunami and the planned
construction of mega-infrastructure construction projects, according to an
industry executive.
Vikrom Vatchakup, director of the Steel and Iron
Institute of Thailand, disclosed the institute had monitored and estimated
how much the demand for steel this year would increase in the post-tsunami
construction period. He assured that the steel would not be short because
there was an excessive production capacity, particularly of steel rods.
Steel rods have an annual production capacity of 8-9
million tons while the demand for the product this year is expected to
increase by around 7-8% from around 4 million tons at current. Steel sheets
have an annual production capacity of 6-7 million tons while the demand
stays around 5-6 million tones.
It is projected steel prices would stay unchanged for
this year. Presently, steel rods are priced at 18 baht per kilogram and
steel sheets at 22-23 baht per kilogram.
“Steel rods definitely won’t be short because of
excessive capacity. As well, the use of steel for the construction of basic
infrastructure will begin in the fourth quarter. So, it is expected the
demand for steel will increase by 8% to 13 million tons,” said Vikrom.
(TNA)
Impact of Chinese economic slowdown unavoidable
The expected slowdown in China’s economic growth this
year will have an unavoidable impact on the Thai economy, whether in terms
of trade, investment or the exchange rate, a leading research center has
warned.
According to the Kasikorn Research Center (KRC), the
predicted 7.5-8.5 percent growth of the Chinese economy, down from a current
high of around 9.5 percent, will affect both Thai-Chinese investment and
Thailand’s long-term economic expansion.
While noting that the Chinese slowdown represented a bid
by Beijing to stabilize its economic growth rate, the research center said
that a clear reduction in Chinese imports throughout 2005 was likely to
stymie Thai government attempts to boost the rate of exports to China by 30
percent.
However, the report also noted that the economic slowdown
coupled with increasingly liberal Chinese investment policies was likely to
encourage Chinese investors to look elsewhere to set up production bases,
and that Thailand looks set to become a focus of Chinese investment in the
region.
If Thailand launches an offensive to encourage Chinese
investment, it could see a huge boost in investment from China over the
coming year, the report said. The Thai baht could also benefit from new
Chinese exchange rate mechanisms, as it would no longer be at such a
disadvantage against the Chinese and Hong Kong currencies. (TNA)
New savings bond to
target individual investors
The Ministry of Finance has said it is planning a new
savings bond issue aimed at individual members of the public. Senior
ministry official Pannee Satavarodom said while details of the proposed
issue were still being worked out, the offer would take place by the middle
of this year. The bonds would only be sold to individuals, rather than
foundations or cooperatives, to give ordinary people greater saving options.
A survey is under way to assess demand.
Pannee, who is the director-general of the ministry’s
Public Debt Management Office, said around 275 billion baht was needed to
offset the current losses of the Financial Institutions Development Fund.
However, she said that did not imply the proposed bond issue would attempt
to raise that amount.
Pannee said her office needed to wait for the results of
the demand survey as well as input from an Australian financial advisor with
expertise in the area. She also said the structure of the bond issue would
be very different from that in the past.
The bonds might be offered on a monthly basis to salary
earners, or in a single lot, depending on the appropriateness. However, she
reiterated, an attempt would be made meet individual investor’s demands
wherever possible. (TNA)
Lending rate hike
reflects higher investment
Bank of Thailand’s Governor M.R. Pridiyathorn Devakula
has expressed no surprise for lending rate hikes by commercial banks, saying
it reflected investment continuing to increase. He said the upward
adjustment of lending rates by commercial banks was made as expected since
the loan portion in the system had increased.
In particular, the loans grew 11% in November and 14% in
December. It showed investment had risen, which led to a decline in
liquidity and an increase in interest rates.
“A signal that loans grow faster than deposits is
considered good because it reflects the investment has increased in both
inventory and large machinery equipment,” Pridiyathorn said.
The BOT chief projected the liquidity excess in the
system would gradually decline and become balanced within one year. “So,
interest rates will gradually increase, making it necessary for the business
sector to adapt to the situation,” he said.
Pridiyathorn said, “Regarding the mounting concern on a
trade deficit this year, Thailand’s revenue from tourism outpaced that
from exports. Such revenue is included in the current account balance.
According to the latest figure, the country has enjoyed a current account
surplus of around US$5 billion.” (TNA)
Over 5,000 survivors seek psychiatric help
Psychiatrists working in the Andaman region have been
deluged by visits from over 5,000 members of the public since massive tidal
waves hit the region on December 26, Public Health Minister Sudarat
Keyuraphan revealed.
Sudarat said that over 1,000 survivors had been given
sedatives to cope with the trauma of the disaster in which at least 5,000
lives were lost in Thailand alone.
Most of the complaints coming in are for stress,
insomnia; fear, guilt and confusion, with some survivors refusing to go
anywhere near the sea.
However, Dr. Wachira Phengchan, deputy director-general
of the Department of Mental Health, said that in the majority of cases the
problems were not severe, and that only 11 survivors were now undergoing
therapy at the Suan Saranrom Psychiatric Hospital, of whom 8 were patients
with a history of mental illness.
The department has pledged to set up a psychiatric help
center in the Phang-nga resort of Khao Lak, where thousands lost their lives
in the tragedy. The center will remain in operation for two years. Dr.
Wachira warned however that the people suffering from the worst problems are
the ones who are too depressed or afraid to even seek medical or other
assistance.
The Ministry of Public Health has also set up a
coordination center in Takua Pa district, which will focus on physical,
mental and environmental health. The deputy director generals of all
ministry departments will take turns to direct the center until the
situation in the region returns to normal. (TNA)
Labor Ministry sets up 400 million baht fund for tsunami survivors
The Ministry of Labor has set up a 400 million baht fund
to help compensate those affected by last month’s tsunamis, Labor Minister
Uraiwan Thienthong announced.
The ministry has agreed to make payments of 17,000 baht
for funeral expenses to the relatives of workers registered under the
ministry’s insurance scheme who lost their life in the disaster, and
additional payments of 60 percent of the workers’ earnings for a
seven-year period.
However, Uraiwan confirmed that the take-up rate to date
has been slow, with only around 10 percent of the 12,000 workers registered
in the six Andaman provinces coming forward with compensation claims.
The Labor Ministry has also procured 20,000 employment
places for workers who have lost their jobs as a result of the tragedy.
Again, however, the take-up rate has been slow, and many workers from other
provinces who were working in the Andaman area when the tidal waves struck
have opted to return to their home provinces to seek work there. Mobile
units staffed by ministry officials are now traveling around the affected
areas to alert workers of the payouts available.
Uraiwan said that the ministry had set aside a total of
400 million baht to help those affected by the tsunamis, but admitted that
payouts so far had only totally around 20 million baht. The ministry will
also go directly to the homes of those whose relatives died in the disaster
in order to ensure that they received the money they were entitled to, she
said. (TNA)
New regulations for
Bangkok’s street vendors
Bangkok’s Governor Apirak Kosayothin has announced new
strict regulations for the capital’s street vendors as part of a new city
cleanup. Street vendors will be banned from selling their products on
footpaths out of regulated zones, the governor announced last week. The
municipal authorities first plan to seek the street sellers’ cooperation,
he said. New areas will be found for them to set up their stalls. But if
they do not comply, the existing laws will be rigorously enforced, he
warned.
Unorganized street vendors have long been a problem in
Bangkok, especially the way they dominate the footpaths and part of the
streets with their businesses. A center for the quality control of these
stalls will launch a new survey of these businesses, especially food
vendors, to ensure they all meet the city’s quality and health standards.
“A ‘Green’ star - a symbol for high-standard food -
will be issued to street sellers after their food has been checked by
hygiene officials, Bangkok’s deputy governor, Dr. Pensri Pichaisanith
said.
A telephone hot line 1555 has been set up for consumers
to make complaints to the city authorities on any low quality food, goods
and other services sold by the street vendors.
The street sellers are expected to abide by the city’s
regulations to keep the streets clean and organized. Anyone convicted of
violating these regulations will be fined up to 10,000 baht, or face up to
six months in jail, or both. (TNA)
MOE expects local gas prices to fall further
Energy Minister Prommin Lertsuridej disclosed local
gasoline prices are likely to fall further since the current prices are
higher than they should be. He said hefty fuel prices at present have begun
to ease and are more stable because global crude prices continued to decline
in the past two weeks. Therefore, he called on oil traders to consider
cutting local gasoline prices further at their discretion to reflect actual
costs.
The energy ministers said he believes the prices can drop
further under the current circumstances. However, whether they decline or
not depends on the decisions of oil trading firms. He explained that all the
ministry can do is keep an eye on the situation to ensure oil prices move in
a proper manner. He said the ministry is also discussing with oil trading
companies the planned floatation of local diesel prices by the end of the
winter or early March.
At present the State Oil Fund subsidizes diesel prices at
151.27 million baht per day. So far, it has spent 61.03 billion baht on
capping the prices. “We are confident last month’s tsunami attack on the
six southern Andaman coastal provinces won’t affect the electricity
generating costs and the strategy to make Thailand become a regional energy
hub in the future,” said Prommin. (TNA)
Local banks coordinate help
for tsunami-affected customers
Top executives of local commercial banks have reaffirmed
readiness to help tsunami-affected customers in the form of cuts in interest
and loan burdens, rescheduling of debts, and debt restructuring.
Speaking after a meeting between top executives of state
and private financial institutions and Finance Minister Somkid Jatusripitak
on measures to help tsunami victims, Sompol Kiatpaibul, chairman of Siam
City Bank Plc, said the bank was ready to give full assistance to its
customers affected by the tidal wave attack.
As for existing customers, the bank is willing to reduce
interest burdens and reschedule debts. For new clients, it was ready to
provide soft loans with special terms and conditions. He said the bank
believe the incident will have impacts on tourism in the short run since all
parties concerned in private and public sectors had come to victims’ help.
Arun Jirachawala, president of Siam City Bank, said the
bank had already lent around 2-3 billion baht in the afflicted areas. Most
of its customers affected had collateral with the bank and insured
properties with insurance companies.
Supak Sivalak, president of Thai Military Bank Plc, said
loan facilities provided to customers seriously hit by the natural disaster
total around 850 million baht while those to clients slighted affected total
3 billion baht. However, he believed damages would be minimal because most
customers had already repaid more than 50% of principals.
Prasarn Trairattanavorakul, president of Kasikornbank
Plc, said loan facilities provided to the afflicted areas total around 6
billion baht. Of this, 500-1,000 million baht had been affected. The bank
was ready to reschedule debts and provide soft loans to help its clients
rehabilitate their business. He believes most businesses can be resuscitated
if the clients want to rehabilitate.
Chatisiri Sophopanich, president of Bangkok Bank Plc,
said the bank had lent around 20 billion baht in the six southern Andaman
coastal provinces. He said the bank was ready to reduce interest burdens,
reschedule debts and restructure debts.
Chada Wattanasiritham, president of Siam Commercial Bank
Plc, said the bank had provided 8 billion baht in loans to the afflicted
areas. Of this, 800 million baht had been affected. (TNA)
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