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Investors go ahead with three big projects in Thailand
The Board of Investment of Thailand (BOI) has granted
investment promotional privileges to three major investment projects in the
country worth 52 billion baht, saying the current political turmoil has not
affected the investment.
BOI’s Secretary General Sathit Sirirungkamanond said BOI agreed at its last
meeting to grant promotional privileges to investment projects made by
Japan-based Honda Company for the production of auto parts of Jazz, Civic
and City for export. Also receiving promotional privileges are Thai Oleo
Chemical Company in the chemical product business, and the Siam Cement Group
for the production of raw materials for the medium and downstream
petrochemical industry.
He said most foreign investors still believe that Thailand’s post-election
government would not considerably change the investment promotion policy.
They were confident that the new government would still promote investment
in the same direction as that of the previous government.
He said major foreign-registered companies, which use Thailand as a
production base for their exports, had continued to expand their investment
in the kingdom because they still view Thailand as a suitable production
base to serve the world market.
However, he conceded that local producers are likely to suffer from declined
sales of products due to the economic slowdown should the political
disturbance drag on.
“Since BOI has increased promotional privileges for investment in the
electronics industry, the number of projects applied for investment
promotions have reached 48, worth 18 billion baht, in the first two months
of this year, or up 12 percent from 34 in the same period of last year,” he
said. (TNA)
Thailand-Australia boost bilateral cooperation
Thailand and Australia have agreed to strengthen
bilateral ties and cooperation in various areas, particularly in customs
services.
The gesture was agreed at a meeting between caretaker Foreign Minister
Kantathi Suphamongkhon and newly-appointed Australian Ambassador to
Thailand, William Paterson.
The Australian top envoy paid a courtesy call on the Thai foreign minister
after taking office here.
Australia will send officials to Thailand to cooperate with their Thai
counterparts in customs procedures, according to the Thai foreign minister.
Kantathi said he also discussed regional issues with the new Australian top
envoy, including the situation in Myanmar and the Korean Peninsula.
“Canberra and Bangkok share a common view that sanctions will not be a good
solution to concerns over Myanmar’s human rights problem, and that more
attempts should be made to integrate Myanmar into the international
community,” he told journalists.
Australia’s preparations to host the Asia-Pacific Economic Cooperation
(APEC) forums next year were also discussed at the meeting, said Kantathi.
(TNA)
EGAT interested in acquiring Glow Energy
EGAT Public Company Limited says it is interested in
acquiring shares of Glow Energy Public Company Limited because the latter
operates the same power business.
EGAT’s President Krais Karnasuta conceded last Monday that the company has
already been discussing the possibility of a share acquisition with Glow
Energy for some time now.
Private power operators normally offer shares for sale to other investors
when they change investment policies, he said. He added that EGAT would
consider the share acquisition with caution. Should it decide to invest in
Glow Energy, it would have its affiliates negotiate the deal, he noted.
Krasi said EGAT was interested in acquiring Glow’s shares because the latter
generates power, which is a core business already run by the former.
He said its affiliates, which would be assigned to negotiate the deal, might
be Ratchaburi Electricity Generating Holding Public Company Limited or
Electricity Generating Public Company Limited.
A company in which EGAT holds most stakes will be encouraged to take the job
first.
Currently, EGAT holds a stake of 25.41 percent in Egco and 45 percent in
Ratchaburi. (TNA)
Persistent political woes to affect auto sales, says industry executive
Thailand’s current political turmoil, if persistent, will
affect consumer confidence, local sales of vehicles and a plan to promote
the country as the Detroit of Asia, according to an industry executive.
Adisak Rohitsoon, president of the Auto Industry Association, said that
should the April 2 snap election fail to materialize or follow with a series
of by-elections, people would feel uncertain about spending.
Under the current circumstances, a targeted increase of 8% on the sale of
vehicles to 750,000 units would be affected, he cautioned. However, total
exports of vehicles this year is expected to remain at 520,000-550,000 units
as originally targeted.
Aside from political uncertainties, hefty fuel prices is another factor that
could dampen total auto sales.
The upward interest trend has not yet affected auto sales because the
current hire-purchase rate remains at 3 percent, compared with 5 percent in
the past.
“Total sales of vehicles in the January-February period remained normal
despite the political uncertainties.
It is expected that some people are waiting to buy vehicles at the Bangkok
International Motor Show, which is organized for March 24-April 2. The event
will be instrumental in evaluating people’s purchasing power,” he said.
Adisak expressed concern that should the political confusion drag on, it
would affect the strategy that promotes Thailand as the Detroit of Asia.
Under the strategy, total sales of vehicles are set to double from 1 million
in 2005 to 2 million units in 2010.
Whether the strategy is be successful or not depends on the post-election
government’s policies to support tax incentives, human resources development
and international trade connection, he said. (TNA)
EGAT will buy back staff shares before March 31
About two-thirds of some 15,000 EGAT Public Company
Limited (EGAT) employees will sell back their shares in the privatized
former state enterprise Electricity Generating Authority of Thailand,
according to acting Chairman of the EGAT board, Norkhun Sithipong.
Following a decision by the board last Friday, EGAT will discuss its plan to
buy-back shares from its staff with the Revenue Department.
The status of re-paid withholding tax is one of the financial issues to be
addressed before the company could complete the share purchase, he said.
The company would like to buy back the shares by March 31, according to the
acting EGAT chairman, who is also Deputy Permanent Secretary for Energy.
He said the process should be concluded before March 31 after the company’s
management and the Revenue Department agree regarding how staff would be
reimbursed for the withholding tax they paid in advance on capital gains.
EGAT queried its staff. Some 15,000 employees responded, with 9,600 saying
that they would sell back the shares, according to Norkhun. Staff members
still retain the right to buy EGAT shares at its Bt10 par value later should
they want to, he said.
EGAT staff still holding shares would receive dividends following a
shareholders’ meeting on April 26, which would consider paying a dividend of
Bt0.75 with the payment to be made in May, he said.
The staff decision to sell back the shares comes amid concern that the
Supreme Administrative Court will block state-run EGAT from listing on the
Stock Exchange of Thailand (SET). The court is expected to rule on the case
soon.
The EGAT board also agreed to build a 500-kilovolt transmission line from
Sawannakhet in Laos to Thailand’s northeastrn Mukdahan Province in
preparation for the Nam Theun 2 Hydroelectric Dam in Laos to go online.
Construction of the transmission line will be completed in late 2009 with a
total investment of more than Bt1.3 billion (US$32.5 million).
The board also approved building a 223-kilovolt transmission line between
Bang Sapan and Surat Thani Province at a total investment of between
Bt200-300 million in a bid to boost power sufficiency in the country’s
southern region. (TNA)
GDP to grow less than 4% if political woes persist, say leading organizations
Thailand’s gross domestic product is projected to expand
less than 4 percent if the current political tension drags on, according to
a joint committee of three private-sector organizations comprising of the
Thai Chamber of Commerce, the Federation of Thai Industries (FTI) and the
Thai Bankers’ Association.
The committee has estimated possible impacts from the ongoing political
turmoil on the country’s economic conditions for several weeks.
It found the political situation, if persistent, would make the country’s
GDP expand less than 4 percent this year due to an anticipated decline in
investment and exports.
The body views, however, that key economic sectors have not yet been
adversely affected in the short run in terms of lending, production capacity
utilization, imports and exports.
Many other economy-related agencies have also estimated the situation and
concluded that the country’s economic growth this year will marginally
reduce from the earlier projection of 4.5 percent due to a fall in
consumption and investment.
Meanwhile, the University of Thai Chamber of Commerce’s International Trade
Study Center projected that the Thai economy is likely to grow only 3.2
percent this year if the current political turbulence drags on.
Utha Pisalvanich, the center’s director, said a study found that the
political turmoil would have an impact on the country’s economic growth and
international trade.
The current political uncertainty, if it ended soon, would reduce the
projected economic growth of 5.02 percent for this year to 3.98 percent.
However, should the situation persist, the Thai economy would only grow 3.20
percent, he cautioned.
Spending on investment would be hardest hit with a sharp drop from 11.46
percent as estimated earlier to 5.54-8.73 percent, he noted.
Private consumption would only grow 3.16-3.59 percent against 4.15 percent
projected earlier, he said.
However, he noted, international trade would not be adversely affected, with
exports growing 13.14-13.46 percent to 5.02-5.03 trillion baht and imports
expanding 13.80-14.03 percent to 5.43-5.45 trillion baht this year.
He added that the center suggested all parties find a way to end the
political conflict to restore foreign investor confidence.
No matter which political party will form the post-election government, it
should follow up on the state-supported mega-infrastructure projects and try
to maintain the stability of foreign exchange rates at 40-41 baht to the US
dollar to ensure the country’s competitiveness, he suggested. (TNA)
Export Promotion Dept to expand Thai franchises into US and Japan
The Export Promotion Department is set to expand the Thai
franchise business into the United States and Japanese markets following a
successful positioning of many franchises in neighboring countries and Asian
markets.
Deputy Director-General Kunyaphan Rangkam said that the department’s policy
is to encourage Thai franchisers to penetrate into overseas markets since
many have managed to position their franchises in Singapore, Malaysia and
Myanmar.
The United States and Japan are targeted as next destinations for the
penetration of the franchises.
He said what the Thai franchisers need to give priority to are the same
levels of quality and standard as those of foreign rivals to ensure that
their franchises satisfy clients.
He said the department had promoted the positioning of Thai franchises on
overseas markets for 5 years. Of this, 60 percent is food business.
The department plans to boost awareness of franchises in spas and service
businesses overseas.
Thai franchises that managed to penetrate into overseas markets include
Black Canyon, Coca and Mango Tree, Ticketonline, and Oriental Spa. (TNA)
State enterprises, private sector encouraged to invest overseas
Caretaker Deputy Prime Minister and Commerce Minister
Somkid Jatusripitak has urged Thai state enterprises and private firms to
invest more and explore for market opportunities overseas despite the
current political uncertainty.
Civil servants should not become idle due to the country’s current political
turmoil as the problem is believed to be resolved soon, according to Somkid.
While inspecting the Foreign Trade Department last Friday, Somkid said that
he agreed with an idea regarding Thai state enterprises to invest in China,
as well as in India and other neighboring countries in Indochina, and that
it is the main duty of the department’s officials to negotiate on Thailand’s
trade and investment with authorities in those countries and others.
He said reports that a leading Thai sugar producer, Mitr Phol Co., wants the
Foreign Trade Department to help negotiate with the Lao government on the
company’s behalf, as it plans to invest in the Lao PDR in growing sugarcane
and establishing a sugar refinery with an annual production capacity of
between 400,000 - 800,000 tons over the next 40 years based on a land lease
contract.
Somkid said that PTT Public Company Limited (PTT) also wants to invest
abroad, and that such sentiments are positive news.
Other positive signs are that LG, a major South Korean electronics firm,
plans to invest in Thailand.
“Once the company invests in the Thai kingdom,” he said, “then Samsung will
follow suit.”
The caretaker commerce minister said he was optimistic that foreign
investment would pour into the Asian region, including Thailand, over the
next four years.
He believes the planned Thai-Japanese Free Trade Area (FTA) Agreement would
be signed after the new Thai government takes office.
Additionally, the Thai authorities are negotiating with their US
counterparts on Washington’s decision to impose an anti-dumping duty on Thai
shrimp exports.
“If the negotiation fails, the Ministry of Commerce may lodge a petition
against the US move to the World Trade Organization”, Somkid noted. (TNA)
Continuing demand for Thai rice overseas
Exported Thai rice during the first two months of this
year totaled 1.3 million tons, showing positive signs that Thai rice is
still in great demand overseas, according to caretaker Deputy Prime Minister
and Commerce Minister Somkid Jatusripitak.
In 2005 Thailand exported 7.3 million tons of rice worth US$2.3 billion,
while the country shipped 1.3 million tons of rice valued at US$434 million
in January and February this year, he said.
Despite the positive signs on rising rice exports, especially Thai fragrant
rice, problems persist with foreign substances found in rice exported to
China, he said.
Concerned government officials and private exporters should negotiate with
major wholesalers in China with a goal to enable more brands of Thai
fragrant rice (khao hom mali) to enter the Chinese market so that the
problem could be reduced, Somkid said.
The government now has about 500,000 tons of rice stored in its warehouses
to be sold by bidding on a gradual basis. (TNA)
Stock investment likely to turn bullish after snap election, says SET chairman
Investment in the Stock Exchange of Thailand (SET) is
expected to turn bullish following a snap election on April 2, according to
SET board Chairman Vijt Supinit.
He said last Monday that many investors believe that the current political
turmoil would ease or calm down when the election ends.
Most investors remain confident of investment on the Thai capital market
with small and local institution investors becoming net buyers.
Foreign investors have continued to sell some shares because they do not
understand the ongoing political situation well.
He conceded the SET index has been on a downward trend as of late, with a
daily trading value of approximately 10 billion baht.
In spite of this, the fundamentals of the Thai bourse remains strong and
attractive since the price/earning (p/e) ratio of the market is very low. A
return rate from dividends averages 4-5 percent, which is higher than
deposit rates offered by commercial banks. (TNA)
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