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HEADLINES [click on headline to view story]: 

Seminar sees opportunity for Thai services to invest in China

Thai-US FTA talks postponed pending new government

Foreign capital continues to flow in despite political tension

Baht tipped to rise on election call

Economy likely to be hit by snap election call, says leading forecaster

February inflation up 5.6% year-on-year

MCOT enjoys net profit growth of 33% in 2005

Seminar sees opportunity for Thai services to invest in China

Thai investment in China’s booming economy could increase, particularly in the service sector, prominent businessmen say.
Uttama Saonayon, vice minister for commerce, said during a seminar last Friday that China, a member of World Trade Organization (WTO) since 2000, is being watched closely by several countries as a major country good for investment.
More Thai fruits and vegetables have been exported to China following the signing of the Thai-Sino Free Trade Area (FTA) Agreement on fruits and vegetables in late 2003.
In addition to China, Thailand is able to export more to European Union (EU) member countries, including France, the United Kingdom and Italy.
Thanakorn Seriburi, vice chairman of the Charoen Phokphand Group (CP), said he believes that interesting areas of investment in China include spas, traditional Thai massage, hotel, restaurant and car repair businesses, as China has opened its market for investment.
China’s economy will continue to grow, said Prida Tiasuwan, president of Pranda Jewelry Co.
Thai businesses can still invest in hospitals and account auditing sectors as approximately 10 percent of China’s 1.3 billion population could be considered rich and they have sufficient purchasing power. (TNA)


Thai-US FTA talks postponed pending new government

The upcoming seventh round of talks between Thailand and the United States on free trade area agreements (FTA) will be postponed until the new government takes office, Commerce Permanent Secretary and chief negotiator Karun Kittisataporn said.
The talks must be temporarily postponed to wait for a new government to take office, Karun said. After that, the talks will continue.
The Thai and US negotiators have not yet fixed a date or venue for the seventh round of talks but have tentatively scheduled it for early this year, as both sides are to sign the pact within the middle of the year, he said.
Karun said US officials asked him about the current Thai political situation, but they did not show overt concern as they considered it a normal situation and understood why Thailand needed to push back the negotiation date.
Regarding the FTA talks with Japan, Karun said Thai and Japanese negotiators have already reached a conclusion and are simply waiting for the leaders of both countries to sign the pact.
However, the signing of the Thai-Japanese FTA agreement also must be postponed from the previously scheduled April 3 date until the new government takes office. While the new government can make some changes to the pact, in theory it should not do so since it has been agreed upon by the both sides. (TNA)


Foreign capital continues to flow in despite political tension

Foreign capital continues to flow into the country even though political tensions remain, according to a leading fund manager.
Vorapak Thanyawong, president of J.P. Morgan (Thailand) Co, said that despite the political uncertainty that led to the House dissolution last Friday, foreign capital remains to continually flow into Thailand.
In the past two months, net foreign investment amount has surged to nearly 90 billion baht, while the net amount for the whole year of 2005 totaled 110 billion baht. This shows that foreign investors still have confidence in the Thai economy, and that Thailand is still a sound investment.
Although there are concerns over the political uncertainty, foreigners believe that it will only be short-term problem.
Vorapak projected that the Thai economy this year would expand approximately five percent, boosted by exports and the implementation of mega-investment projects.
However, he conceded, foreign investors are concerned over delays in project implementations due to the House dissolution.
He said the investors are waiting for the snap election results in April to see whether or not there would be a party that wins a majority of voters.
Should a coalition government be set up in the event that no party wins the majority, it would definitely affect the policy on the mega-projects, he said. (TNA)


Baht tipped to rise on election call

The baht is expected to edge up slightly after the dissolution of the Lower House by Prime Minister Thaksin Shinawatra, the strengthening of Japanese yen against the greenback, and a signal that Japanese interest rates are to rise further, according to a report issued by Kasikorn Research Centre.
Although commercial banks were stocking up on cash this week to cater for withdrawals by company employees, the report said the overnight inter-bank rate was predicted to adjust to around 4.14-4.17 percent, and the baht was projected to move this week within the 39.0-39.4 range to the dollar.
The baht was expected to gain on the dissolution of the House of Representatives, surge of the yen against the dollar, and a positive sign that Japanese interest rates could rise after Bank of Japan Governor Toshihiko Fukui signaled on Friday that interest rates were set to increase, it said.
Currency traders would also be monitoring monthly economic data to be released by the Bank of Thailand this week as well as important economic figures from the United States, the report said. (TNA)


Economy likely to be hit by snap election call, says leading forecaster

Prime Minister Thaksin Shinawatra’s decision to dissolve parliament and call early election will cut economic growth by at least 0.5 percent, according to a leading forecaster.
Thanavat Polvichai, director of the University of Thai Chamber of Commerce’s Economic and Business Forecasting Centre, said that the April 2 snap poll would delay the implementation of a series of major government-backed projects. In turn, he said, this would block up to 300 billion baht in economic investment and cause growth to drop by 0.5 percent.
Thanavat said there were three likely outcomes to the political crisis. Firstly, the current situation could degenerate into violence, causing the election’s cancellation. In this worst-case scenario, the major projects’ scheme would be delayed indefinitely and cut economic growth to 3.5-4 percent.
Secondly, if the election goes ahead within 60 days and the new government is able to get the projects off the ground by early next year, the Thai economy will grow 4.3-4.5 percent as investments will resume after the political situation eases. This is the most likely scenario, according to the centre.
Finally, a provisional government could be set up, led by a premier appointed by His Majesty the King. The constitution would have to be amended to allow for this ahead of delayed elections.
In this scenario, the major projects would be postponed until the middle of next year when a newly elected government is able to formulate its policies. In this case, the economy could grow around four percent.
“We are confident that the country’s economic fundamentals remain strong. The Thai economy will definitely grow more than four percent if the mega-projects get off the ground. However, if there is any violence, the economy will only grow by approximately 3.5 percent, driven mainly by exports,” he forecast. (TNA)


February inflation up 5.6% year-on-year

Inflation in February increased by 5.6% compared to the same month last year, the Commerce Ministry announced.
Permanent Secretary for Commerce Karun Kittisaporn was quick to assure, however, that the number represented only a 0.3% increase from January 2006, and that into the latter half of 2006, inflation should slow down to a possible annual average of between 3.5 to 4.5%.
The Commerce Ministry forecasts that inflation from March till mid-2006 should stay at a range of 5.6-5.7%, given the volatile oil price.
The Ministry arrived at the 3.5%-4.5% average for the entire 2006 year on the basis that the Thai economy would grow by 4.7-5.7%, the exchange rate average would be at 41 baht to the US dollar, minimum wage is at 190 baht per day, and crude oil at 50-60 dollars per barrel.
The Ministry, said Karun, is closely monitoring prices of essential goods at this juncture when political crisis is looming. (TNA)


MCOT enjoys net profit growth of 33% in 2005

MCOT Public Company Limited (MCOT) posted a net profit of more than 1.1 billion baht last year, up 830 million baht or 33 percent from the previous year, with a dividend set to be paid at 0.55 baht per share in the middle of May, the company’s President Mingkwan Sangsuwan revealed last Monday.
He said MCOT earned 3.48 billion baht in totaled revenue, up 17 percent from 2.97 billion baht in the previous year.
Of this, 2.2 billion baht stemmed from television advertisement revenue, representing an 18 percent rise from 1.86 billion baht the year before. It is the first time the TV-based revenue exceeded two billion baht.
The radio-based revenue totaled 555 million baht, up 23 percent from 452 million, compared with the overall growth of 3 percent in the radio industry.
He said the radio-based revenue grew rather considerably since MCOT had managed and operated some of its radio frequencies itself.
The company plans to make a phase-two change in its Modern Radio in April.
It is scheduled to pay a new dividend of 0.55 baht per share for 2005 on May 15.
Mingkwan said the government’s decision to dissolve the House of Representatives and call a snap election would help boost local advertisement businesses, particularly through the TV media, because there would be advertisement spending by political parties and the Election Commission of Thailand (EC) on the Senate election and the general elections in April.
He said MCOT is not worried about the House dissolution because its revenue comes from various channels.
Modernnine TV has also focused on the knowledge-based society concept. So, it is able to differentiate its products.
Additionally, MCOT’s advertisement rates are more competitive than other TV channels since they range from 220,000-240,000 baht per minute and will remain unchanged in the first half of this year.
It is expected that Modernnine TV will enjoy revenue growth of 12-20 percent and the Modern Radio revenue growth of 25 percent for the whole year.
Mingkwan said MCOT plans new road shows in London and New York some time during this month to present information to fund managers at the invitation of Merrill Lynch Securities Co and ABM Amro Securities Co. (TNA)