BUSINESS 
HEADLINES [click on headline to view story]: 

GPF to increase investment in stock market

Thai fishing industry damaged by tsunamis

No shortage of steel despite greater demand

Impact of Chinese economic slowdown unavoidable

New savings bond to target individual investors

Lending rate hike reflects higher investment

Over 5,000 survivors seek psychiatric help

Labor Ministry sets up 400 million baht fund for tsunami survivors

New regulations for Bangkok’s street vendors

MOE expects local gas prices to fall further

Local banks coordinate help for tsunami-affected customers

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)