BUSINESS 
HEADLINES [click on headline to view story]: 

MINT to join the S.E.T.’s Food & Beverage Sector index

Noble laureate still upbeat about Thai economy

WB and ADB ready to finance mega projects

3 “big players” suspected of leading share manipulation

BOT chief satisfied with current baht movement

IMF unconcerned over Thai growth rates

MINT to join the S.E.T.’s Food & Beverage Sector index

The Stock Exchange of Thailand (S.E.T.) has informed Minor International (MINT) of its plan to include MINT as part of its Food and Beverage Sector index to better reflect the company’s business profile and large food and beverage business. From July 1, 2005, MINT will be included in the SET’s Agro and Food Industry Group’s Food and Beverage Sector index rather than the Service Industry Group’s Hotel and Travel Sector index.

MINT is pleased with the SET’s decision and believes that it reflects the relative size and strength of its food and beverage business which accounts for a majority of its total revenue. In 2004, MINT’s branded food service operations with nearly 500 restaurants accounted for 4,479 million baht, or 55% of total revenue. MINT’s food and beverage business was listed on the SET as the Minor Food Group (MFG) and was de-listed in January 2005 after MINT acquired a 100% stake in MFG following a successful tender offer.

Despite joining the SET’s food and beverage sector index, MINT remains committed to expanding all of its businesses including its hotel, retail property, and spa businesses which accounted for 3,450 million baht or 42% of total sales in 2004.

Minor International is Thailand’s largest food service operator with over 500 outlets system wide under The Pizza Company, Swensen’s, Sizzler, Dairy Queen and Burger King. It is one of Thailand’s leading hotel operators with a portfolio of ten hotels and nearly 2,100 rooms under the Marriott, Four Seasons, Anantara and Royal Garden brands in Thailand and Vietnam. Through a joint venture with Marriott International, it has developed the 144 room Marriott Vacation Club Time Share in Phuket. It is also one of the largest spa operators in the Asia Pacific region with 15 spas in Thailand and China under the Mandara, Anantara and other spa brands.


Noble laureate still upbeat about Thai economy

The Thai economy has not deteriorated to a worrying level although it has been affected by rising oil prices, according to a Nobel laureate.

Prof. Edward C. Prescott, who was awarded the 2004 Noble Prize in Economics, said hefty fuel prices in the world market had not yet reached a critical point.

At present, economies in the United States and West Europe still have potential for growth and those in Southeast Asia, except that of Japan, continue to expand.

He said the Thai economy would not be adversely affected by the oil price surge if market mechanisms were adopted properly. The government’s decision to float local fuel prices was justifiable.

He added the trade deficit incurred by the US remained not of concern although debts were huge.

Naturally, the well-off could incur huge debts because they have strong financial status.

At present, the debt/earning ratio of the US remains at 28% of gross domestic product. The huge debts incurred by the US are considered a red in the account only.

He projected the global economy in the second half of this year would still be affected by the fuel price rise. (TNA)


WB and ADB ready to finance mega projects

The World Bank and the Asian Development Bank (ADB) have shown interest in giving loan supports for Thailand’s mega-projects since they view the schemes are worth investment, according to a leading fund manager.

Pichit Akarathit, president of MFC Asset Management Plc, who is also an advisor to investment projects, including Bangkok’s seven-route skytrain extension project, said that many financial institutions and fund managers had been keen on financing the government’s large-scale infrastructure projects.

Included are the World Bank, the ADB, International Finance Company, and foreign funds keen on investment in the basic infrastructure.

As a result, the amount needed for investment in the projects should not be a concern, and he expects them to get off the ground in the fourth quarter of this year.

He said details of the mega-projects would be presented to foreign fund managers who are due to participate in the next Thailand Focus Forum, to be held here at the end of this month.

He believes the presentation would give investors proper understanding of the projects, which could attract a large amount foreign investment.

It would also help boost investment sentiment in the Thai stock market, he noted.

In the past, most investors remained uncertain since information they obtained was ambiguous and they had the opinion that the projects would experience delays. (TNA)


3 “big players” suspected of leading share manipulation

Three “key players” have been found leading groups of individual and juristic persons suspected of having being involved in share manipulation on the Stock Exchange of Thailand, according to the Anti-Money Laundering Office.

Pol Maj Gen Peeraphan Premputhi, the AMLO’s secretary-general, said the Securities and Exchange Commission had asked AMLO to examine the financial transactions and sources of one major share trader on the stock market.

He said AMLO had examined the case and found there are three core players leading groups of 10-15 individual persons and 10-20 juristic persons whose financial sources are linked.

The trio would play a key role in providing margin accounts to the groups so that they could bring in money to purchase stocks of one listed firm and then push up its prices to the level that attracts small investors.

He stated the groups would accumulate the stocks in a bid to manipulate the prices. But the accumulation would not exceed 5% of the total shares available in the market in order to avoid reporting the share transaction to SEC.

Once the stock prices increased to a certain level, they would dump the shares to gain profits from the difference. The dumping would make small investors unable to sell off the shares in time. Eventually, they need to hold the shares at very high prices.

He said such manipulation resulted in the fortune gains of hundreds of millions of baht.

“We will give our information on the examination of financial sources through the computer system to SEC so that it can use it for the final decision on whether such behavior is considered share manipulation.

“Should share manipulation be found and persons involved be executives of companies, they will be subject to a 5-10 year sentence in prison and a fine of 500,000 baht or both under the Securities Act B.E. 2535. As well, SEC is authorized to freeze their assets for 180 days,” he said. (TNA)


BOT chief satisfied with current baht movement

Bank of Thailand (BOT)’s Governor M.R. Pridiyathorn Devakula has expressed satisfaction with the currency movement following the bank’s move to curb speculation on the money market.

He said on Wednesday that the market condition and the baht were rather stable with no speculation found after the bank instructed securities companies to limit lending in baht through non-resident accounts early this week.

“The speculation on the Thai currency has eased significantly after we sought cooperation with securities companies. Now we haven’t found any attempt to speculate on the baht. But we will closely monitor it and make a move immediately if we witness any signs of speculation,” he said.

The BOT chief conceded that only one securities company was found to have been involved in baht speculation.

Even so, the central bank needs to issue measures to curb this quickly in order to prevent other securities firms from following suit, which could lead to baht volatility.

He disclosed that the involved company is a securities arm of a foreign firm registered in Thailand.

It made a baht-denominated loan contract with a foreign bank, which is under the umbrella of the foreign firm.

Such behavior is seen as tantamount to seeking money for baht speculation, he said.

On the currency movement last week, the baht weakened by 0.27 percent to 40.89 baht to the US dollar, but strengthened by 0.06 percent against the euro. (TNA)


IMF unconcerned over Thai growth rates

The International Monetary Fund (IMF) has fallen behind the Bank of Thailand (BOT)’s assessment that the nation’s projected failure to meet its 5 percent growth target for the year is not a matter of concern, BOT Governor Pridiyathorn Devakula revealed this past week.

The governor of the central bank, where IMF officials recently collected Thailand’s latest economic figures, told reporters that the IMF opinion was broadly similar to the BOT’s; that is, Thailand is unlikely to meet its 5 percent economic growth target for 2005, but this is not worrying when the whole world is also experiencing economic slowdown.

And while the IMF expressed unease over Thailand’s incipient current account deficit, it predicted that over the second half of this year the current account deficit would ease, and that the nation’s economic stability would remain solid.

Compared to many other nations, Thailand’s current account deficit is relatively low, while its foreign reserves are high, putting its economy in a much stronger position.

The main warning from the IMF concerns large-scale government infrastructure development projects.

While conceding that the projects are necessary for economic growth and would help stimulate economic expansion by around 0.5 percent in 2006, the IMF cautioned that the investments would need to produce clear economic returns, and that they should not lead to a rise in the current account deficit, currently valued at around USD3 billion. (TNA)