Thailand seeking alternative energy sources and plans to utilize alternative energy over the next five years
Deputy Foreign Minister Preecha Laohapongchana is
visiting Germany this week to study the country’s advanced technology in
research and development (R&D) and utilization of alternative energy,
according to journalists.
“Given current world price hikes, the government is
seeking alternative energy sources to secure Thailand’s energy supply and
sustain domestic demand,” he said.
“It’s time we reduce our reliance on fossil-based
fuel and turn to other sources, including solar cells, bio-energy and even
wind-based power,” the minister was quoted as saying.
The Thai government is studying alternative energy
sources and plans to utilize them within five years, the minister said.
The government’s move was a response to continuing
global oil price hikes - to more than US$60 a barrel on major international
Local banks likely to pose lower
net profits in 2nd quarter
Local commercial banks are likely to register lower net
profits in the second-quarter of this year since interest and
non-interest-based incomes have declined, according to the Kasikorn Research
The leading think tank projected this past week that net
profits from the second-quarter operating performances of commercial banks
as a whole would drop by 5.65% to 2.61 billion baht, from 2.76 billion in
the first quarter of this year.
The expected decline in net profits stems from lower
earnings obtained by major commercial banks, partly because they had not
received any dividend from the investment in the Vayupak Fund.
Classified by the size, major banks are expected to
register net profits (after tax deduction) of 1.94 billion baht, down 8.30%
from the first quarter.
Medium-scale banks are likely to earn 3.63 billion baht
in net profits, up 6.76% from the first quarter, and small-scale banks are
forecasted to enjoy net profits of 0.86 billion baht, up 23.47% from the
KRC forecasts that in the first half of this year, local
banks will enjoy combined net profits of 5.37 billion baht, a surge of 61%
from the corresponding period last year.
It also projected that the upward adjustment of lending
rates would help the performance of commercial banks in the second half of
The transfer of non-performing loans by the banks to
asset management companies would help ease bad debts in the banking system.
However, there remain many risk factors that could affect
banks’ performance. Included are the oil price surge, higher inflation
rates, and slow export growth. (TNA)
Economy likely to pick up next year
The Thai economy is set to begin regaining momentum next
year with a growth rate of 4-5%, but the country is likely to experience
higher trade and current account deficits, according to the Kasikorn
Research Center (KRC).
The leading think tank said the economy is expected to
grow 3.6-4% this year, down from 4.5-5.1% as earlier estimated, because of
mounting pressure from the fuel price hike, higher interest rates, and
current account deficit.
It projected the second-quarter economy will expand 3.5%,
close to 3.35% in the first quarter, boosted by investment expansion.
The production sector will grow at a satisfactory level
and tsunami-affected tourism will improve from the first quarter.
KRC stated negative factors that deterred economic growth
in the second quarter include higher oil prices that eroded consumer
confidence, and a higher current account deficit than in the first quarter
due to a sharp increase in oil imports.
This year, KRC forecasts that the country will have an
account deficit of US$4.5 million, or 2.5% of gross domestic product, the
highest in eight years.
Exports are projected to grow 13% while imports are
likely to rise by 25.4%. Inflation rates are set to edge up to 3.9% from
3.7% and are forecast to stay at 4% in the fourth quarter of this year.
The baht might stay at an average of 40.70 to the US
dollar compared with 40.22 last year. The Bank of Thailand is expected to
gradually increase the 14-day re-purchase rate to 3.5% at the end of the
year from its current rate of 2.5%.
For next year, the economy is likely to regain momentum
with a growth rate of 4-5%, bolstered by state spending, especially in mega
infrastructure projects, and salary hikes for government officials. (TNA)
Mobile phone companies
to ease call rate promotions
Mobile phone operators are set to ease back on their
stiff call rate promotion competition and focus on service quality and
supplementary services, according to Kasikornthai Research Center.
The leading think tank reported competition in the mobile
phone market has markedly intensified in the first half of this year with
many operators offering call rates as low as 0.25 baht per minute.
This has resulted in inefficient service and connection
problems between networks, especially during “rush hours”, as steep
increases in phone calls would overload operator signal channels, resulting
in phone line congestion.
In the first four months of this year, the number of
mobile phone users has increased by 18.75% over the same period last year,
to 28.5 million. Of this, 83% are pre-paid phones and the remaining 17%
However, this period of call rate promotions is due to
end soon, and phone operators will ease back on their competition in the
second half of the year by turning away from a price war to focusing on
network quality and the introduction of various supplementary services.
KRC believes problems with signal quality could be
addressed in the second half if each operator manages to increase their
signal channel as planned.
KRC representatives also said the mobile phone market
would be moderately affected by the economic slowdown in the second half of
Although mobiles phone play an important role in daily
living, few use them in unnecessary ways.
During the current economic downturn, consumers are
likely to reduce phone use to save costs, which will be another risk factor
to watch out for, in addition to stiff competition among operators,
according to KRC. (TNA)
Baht weakens to lowest level in 2 years
The baht continued to depreciate this past week and broke
through the level of 42 to the US dollar, to 42.02, the weakest in 2 years,
since August 2003, according to a money dealer.
Suksan Wattanayakorn, vice president of Kasikorn Bank
Plc’s Money Management Division, attributed the further weakening of the
local currency to the continued purchase of the dollar as investors expected
the United States’ Federal Reserve would raise key interest rates while
the central banks of other countries were likely to decrease them.
He said the series of explosions in London subways, which
caused many casualties, had not adversely affected the local currency.
Pichit Akkarathit, president of MFC Asset Management Co,
said investors rushed to dump shares at the opening of trading upon concern
over the subway bombs in London, but after that, the purchase of stocks in
banking, finance, communications and construction contracting sectors had
regained the SETs momentum and pushed up the index into positive territory.
He conceded the subway bombs had affected investment
sentiment, particularly of foreign investors who wanted to wait for a clear
picture of the situation.
At present, he said, there is no signal of foreign
capital outflow from the country.
However, he believes hefty fuel price hikes would have a
greater impact on the Thai stock market than terrorist attack fears. (TNA)