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Average baht value appreciates in 1st quarter
The average value of Thai baht in the first quarter this
year appreciated over its value in the fourth quarter last year,
particularly in January, according to the Bank of Thailand (BOT).
In a report on the baht movement in the first quarter,
the central bank said the value of the local currency stayed at an average
of 38.61 to the US dollar, higher than in the fourth quarter of 2004.
The baht strengthened sharply in January since confidence
in the US dollar had eroded markedly as a result of the continued deficit in
the country’s current account balance and the budget balance.
There was also a rumor about a possible adjustment of the
Chinese yuan, which caused foreign investors to increase the baht position
by shifting their investment to the Stock Market of Thailand (SET).
The baht appreciation went on in February because the
investors had more confidence in Thailand following the country’s general
election in early February.
The local currency had then moved in a narrowed range
before weakening rapidly at the end of the first quarter since confidence in
the greenback had increased, particularly when the US Federal Reserve (FED)
decided to raise its policy interest rates rapidly and significantly to
contain inflation rates.
At the same time, the confidence in the Thai baht had
declined upon uncertainties of how extensive rising oil prices would have an
impact.
However, the BOT said the nominal effective exchange
rates (NEER) continued to strengthen in the same direction of other regional
currencies in the first two months of this year.
Still, NEER dropped moderately in March.
Even so, the average rates in the first quarter of this
year continued to increase by 3.2% from those in the fourth quarter of last
year. (TNA)
LCIT handles 8,063 TUE capacity container ship
The largest capacity container ship to call at Laem
Chabang, M.V. OOCL Lang Beach, with its 8,063 TEU capacity, called at Laem
Chabang International Terminals C3 facility on May 10. With an overall
length of 322.97 meters and a breadth of 42.8 meters, this vessel, owned and
operated by OOCL, was built in 2003 and has a deadweight tonnage of 133,855
metric tones.
There was a small ceremony on board to welcome delegations from Laem
Chabang Port and Customs.
LCIT’s
CEO Chris Langford presents flowers, plates and model of a Royal Barge to
the master of the M.V. OOCL Long Beach, Capt. Lin Tieh Han.
M.V.
OOCL Long Beach
BOT chief downplays concern on baht volatility
Bank of Thailand’s Governor M.R. Pridiyathorn Devakula
disclosed the weakening of the baht at present stems from a high volatility
of currency exchange rates in the global market.
He said the central bank has closely monitored the baht
movement since foreign exchange rates on the world market had fluctuated
heavily on the back of the Chinese yuan and US dollar volatility.
 Bank
of Thailand’s Governor M.R. Pridiyathorn Devakula
Nobody could guess which direction the two main
currencies would move.
However, he said, the BOT was confident it could manage
to ease the baht fluctuation.
“Now, foreign exchange rates are so volatile. The baht
appears to weaken since the US dollar has strengthened. But actually, the
baht remains neutral, as it has weakened against the dollar while
strengthening against euro and Japanese yen,” he noted.
The current level of the baht value would contribute to
the country’s export growth, he said, adding that most exporters were
satisfied with the local currency value at present.
He pledged that the BOT would attempt to supervise the
baht movement to ensure it stays at an appropriate level.
He said the baht’s appreciation and depreciation could
not be measured only by taking the US dollar into account. It must be also
compared with other currencies available in the international reserve.
The BOT chief affirmed that the baht has not weakened at
present. Instead, the Thai currency is staying rather neutral for now.
M.R. Pridiyathorn also brushed aside concern over
possible capital outflow upon the continued selling of shares on the stock
market by foreign investors and the weakening of the baht against the
dollar.
He said the central bank had not yet seen any sign of the foreign capital
outflow. The central bank just found a certain amount of money had moved
from the stock market to non-resident accounts or the bond market, he said.
(TNA)
PM calls for domestic confidence in Thai economy
International ratings agencies have given Thailand a
glowing report, but domestic economic confidence still appears to be at an
ebb.
So concerned is the government at this disparity that
Prime Minister Thaksin Shinawatra reiterated calls for Thais to follow the
international lead in perceiving the nation’s economic strength, while
pledging to ensure economic growth of no less than five percent this year.
The prime minister revealed that last week he had
convened a meeting of private sector operations to stress Thailand’s
continuing economic strength.
The meeting follows a recent decision by a UK-based
international ratings agency, Fitch Ibca, to upgrade Thailand’s sovereign
ratings, a 98 percent growth in foreign investment over the first quarter of
the year.
But the first trimester also witnessed a drop in domestic
investment, while key indicators point to continuing domestic uncertainties
over the Thai economic situation.
Thaksin said that the government is pouring nearly
Bt100,000 into a variety of grassroots economic stimulus measures.
At the same time, it is seeking to tackle corruption in
government investment projects by stipulating that the bidding for all such
projects be conducted through electronic auctions.
The prime minister reiterated that he would ensure gross
domestic product (GDP) growth of over five percent this year, and would
ensure that if the current account balance or trade fell into the red, the
deficit would be only a minor one. (TNA)
Ministers to discuss Bt150 billion gas pipeline project
With a cost of over Bt150 billion, the third phase of the
PTT Public Company Limited (PTT)’s latest gas pipeline project was never
going to be cheap, but the government hopes that it could feed the
country’s energy needs for years to come.
Originally estimated at Bt93 billion, the cost of the
project has soared, as the government increasingly turns to natural gas as
one of the answers to Thailand’s rising rate of oil imports.
Funded by the PTT, the project will feed gas into
electricity stations powered by the Electricity Generating Authority of
Thailand (EGAT), which, together with the private sector, hopes to build a
large number of new gas-fired power stations over the next five years.
But the higher costs do not only reflect higher demand.
The construction costs for the project have also rocketed due to the rising
price of steel and other raw materials.
At a recent cabinet meeting, ministers deliberated the
government’s overall energy strategies, which will emphasize energy
conservation campaigns and the use of alternative sources of fuel, whether
gasohol, biodiesel or natural gas for vehicles (NGV). (TNA)
SET to cut corporate taxes
on listed firms
The Stock Exchange of Thailand (SET) and the Listed
Companies’ Association plan to seek the Finance Ministry’s approval for
a reduction of corporate taxes levied on listed companies on the SET and the
Market for Alternative Investment (MAI) to 25% and 20% respectively, from
30% at present.
Sopavadee Lersmanaschai, senior executive vice president
of the SET, disclosed that the corporate tax reduction was proposed because
listed companies had higher costs than non-listed firms.
Currently, she said, the Thai stock market has granted
tax incentives only to listed companies in order to encourage more
non-listed firms to mobilize funds on the market.
Under the proposed tax incentive rule, listed companies
with registered capital of more than 200 million baht shall enjoy the
corporate tax reduction to 25%, from 30% for five years.
Listed firms with registered capital of less than 200
million baht shall have the tax reduced to 20% for five years.
Ms. Sopavadee said the proposal would be made after the
Listed Companies’ Association manages to restructure the board by
increasing the number of members to 30 from 21.
Vichet Tantivanich, president of MAI, said the SET in
June would discuss with agencies concerned a possible extension of current
corporate tax incentives granted to listed companies, which are due to
expire by the end of September.
One proposed option is to allow all listed companies on
the SET and MAI to enjoy the tax reduction to 20%, from 30%, for 5 years no
matter when they were listed. (TNA)
New airport project corruption-prone, says PM
Mega-projects, like Bangkok’s new international
airport, which involve many contracts, are susceptible to corruption, Prime
Minister Thaksin Shinawatra conceded.
The premier promised, however, that the probe on the
alleged bribery in the procurement deal of the Suvarnabhumi Airport’s
bomb-detective devices would be totally transparent.
Thaksin said the newly-appointed panel investigating the
alleged scandal would examine all the facts and publish their findings,
including information on the procurement procedures.
Over the weekend the top executive of Patriot Business
Consultant, which brokered the purchase of the high-tech CTX bomb-scanning
devices from US-based GE-Invision Technology Company for Bangkok’s new
international airport, admitted that “certain figures” had asked for
kickbacks to close the deal.
The Patriot Business Consultant executive said the
company had “entertained” board members of NBIA, the authority in charge
of developing the Suvarnabhumi International Airport.
In response to the opposition Democrat Party’s
statement that the corruption could be traced back to the prime minister,
Thaksin said his only involvement was to chair a meeting which laid down the
guidelines for the new airport, and giving instructions that it must be
equipped with the state-of-the art security systems in view of international
terrorist threats.
Thaksin appealed for patience and time so that
investigators can verify and establish the facts.
“Loopholes in procurement procedures are virtually
everywhere. It’s a question of whether the government can scrutinize it or
not. If we can’t do it, then perhaps independent agencies, like the
National Counter-Corruption Commission (NCCC), will have to. But the NCCC is
understaffed. So it is a major challenge for this administration,” said
the prime minister. (TNA)
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