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Stocks offer highest
investment return in long run
Investment in stocks has offered the highest return over
the past three decades with that in bonds coming second, according to a
research conducted by the Stock Exchange of Thailand.
Senior Executive Vice President Settaputti Suthivathanarueput said SET made
the study on returns from investment in assets of various kinds in Thailand
over the past 30 years, which are divided into three periods: before the
crisis (1975-1996), in crisis (1997-2000), and after the crisis.
It found that stocks have offered the best return of up to 2,900 per cent or
12 per cent per annum over the past three decades. At the same time, the
stock market has also offered the lowest return in certain periods, as
investment returns tended to vary by the country’s economic conditions.
Bonds show up well in the survey too, and have offered the second-highest
return of up to 1,825 per cent. They are also considered attractive as they
are generally regarded as low risks and the least volatile. However, bonds
would only offer low returns if interest rates were in an upward trend,
according to the research. (TNA)
Local gold prices likely to surpass 13,000 baht this year
Domestic gold prices are expected to stay above 13,000
baht per one-baht weight (15.16 gram) for this year as global gold prices
still have a chance to reach US$700 per ounce, according to an industry
executive.
Jitti Tangsitpakdi, President of the Gold Trading Association, said that
gold imports had sharply reduced by up to 50 per cent from that of the same
period last year as the market had been sluggish since gold prices edged up
early this year. However, the gold export market remained favourable.
Tangsitpakdi indicated that gold prices are likely to increase further in
the long run since hedge funds continue to speculate on the prices in the
world markets. He added that global gold prices might possibly touch $700
per ounce for this year, which would push up the domestic gold prices past
13,000 baht per one-baht weight.
However, he cautioned local gold speculators not to buy the product now as
the prices have already increased so sharply. With the gold prices currently
running through a period of high volatility, he said that if traders decided
to invest at this time, they run a high risk of loss. (TNA)
EPPO chief says local oil prices have little chance to drop concretely
The Energy Policy and Planning Office’s Director-General,
Metha Bunterngsuk has conceded that the current oil price hike is beyond
control and that the situation is unlikely to improve unless international
political tensions eased.
Although crude prices in the United States and the United Kingdom have
lately fallen by around US$2 per barrel, refined oil prices in Singapore
have edged higher.
Unless the international political woes such as nuclear tension in Iran,
unrest in Nigeria, and the Bolivian government’s move to take over natural
gas resources, eased, the global oil prices were unlikely to decline
concretely.
To solve the oil price crisis on the home front, Bunterngsuk said, the
government had attempted to find alternative fuel sources to replace oil and
to encourage the consumption of natural gas.
He said more industrial factories had turned to use natural gas to reduce
their fuel costs and that operators in the transport sectors have also been
persuaded to count more on natural gas for their vehicles (NGV).
The government has also encouraged the growing of oil plants such as cassava
and oil palm so that they could be use to produce ethanol and bio-diesel.
On the liquefied petroleum gas price subsidy, Bunterngsuk said the
government still had a policy to gradually reduce the subsidy, which is
around 3 baht per kilogram at current rates and that this change was likely
to start from June this year. If the policy was approved and LPG prices in
the world market stayed high, he said, it is likely the local LPG prices
would edge up by 1 bath per kilogram by mid-year. (TNA)
Malaysia’s second top banking group acquires brokerage in Thailand
Malaysia’s second largest banking group,
Bumiputra-Commerce Holdings, has bought a brokerage in Thailand from
France’s BNP Paribas for US$15.4 million (€13 million) as part of its
regional expansion.
In a statement last week, Bumiputra-Commerce’s investment banking arm, CIMB
Group, said it had completed the acquisition of 100 percent equity in BNP
Paribas Peregrine Securities (Thailand) Ltd.
The shares were acquired by its Singapore unit, CIMB-GK Pte. Ltd., from BNP
Paribas, BNP Equities Asia Ltd. and five other individual shareholders, it
said. The deal was financed by CIMB-GK via external borrowings raised
entirely from outside Malaysia.
CIMB said the Thai company has been renamed CIMB-GK Securities (Thailand)
Ltd.
It said CIMB-GK already has a research office in Thailand and the
acquisition would allow it to grow its presence in the country by
undertaking securities brokerage, dealing and underwriting as well as
investment advisory activities.
“The acquisition will also enable the CIMB Group to strengthen its regional
brokerage and investment banking platform,” it added. CIMB already has
operations in Singapore, Hong Kong, United Kingdom and Indonesia, in
addition to its Malaysian presence.
Bumiputra-Commerce, through its unit CIMB, has embarked on an aggressive
expansion to strengthen its domestic position and push its ambition of
becoming a regional player after recently buying companies in Indonesia and
Singapore.
Thailand to host ASEAN+3 finance ministers’ meeting next year
Thailand will host an annual meeting of finance ministers
of the Association of Southeast Asian Nations (ASEAN) and its three main
dialogue partners from East Asia - China, Japan and South Korea in mid-2007.
Caretaker Finance Minister Thanong Bidaya said that the 10th ASEAN+3 finance
ministers’ meeting has been scheduled for May 4-5 next year and that the
two-day regional conference will be co-chaired by the finance ministers of
China and Thailand.
“Like this year, the ASEAN+3 finance ministers will exchange views on
economic conditions in the region, as well as review progress on the Asian
Bond Markets Initiative and the Chiang Mai Initiative at their annual
gathering next year,” Bidaya told journalists on his return from the 9th
ASEAN+3 meeting, held in Hyderrabad, India last week.
At this year’s meeting, he said, the Asian Development Bank (ADB) also
projected that the ASEAN+3 economies will grow around 4.7 per cent on
average in 2006, which he indicated was a satisfactory level. However, the
economies will still face such risk factors as rising interest rates, oil
price hikes, bird flu outbreaks and global economic imbalances.
The ASEAN+3 finance ministers also reached an agreement on the amended
bilateral currency exchange framework from one-way swap to two-way swap. The
framework is part of the Chiang Mai Initiative, a financial cooperative
arrangement in the region aimed to boost the liquidity of member countries
in the short term. (TNA)
Interest rate surge
won’t fuel NPLs, says BOT
A possible interest rate surge to 7-8 per cent will
neither fuel non-performing loans nor affect the country’s overall economy,
according to the Bank of Thailand.
BOT’s Governor Tarisa Wattanagase said the central bank had closely
monitored and supervised household debts in the midst of rising interest
rates.
Special attention would be paid to debtors, who opted to seek loans with
fixed interest rates initially but were forced to adopt floating rates
later. She said the BOT would monitor to see whether the debtors were able
to pay higher instalment amounts or if they wanted to reschedule the debt
repayment period.
Although lending rates have gone up uninterruptedly, she said, that fixed
interest rates have stayed at around 7-8 per cent and have not surged to 20
per cent like in the past. Should the interest rates move in that range, she
said, the BOT was confident the country’s economy would not be affected by
the expected increase in NPLs. Wattanagase also indicated that commercial
banks and business owners have already adjusted themselves by extending
loans with more caution. Most banks have turned to offer housing loans with
floating instead of fixed interest rates.
The BOT’s deputy governor also added that the question of whether the
commercial banks would speed up raising interest rates like in the past
would ultimately depend on the strategies of each bank as they all had
different levels of liquidity. (TNA)
Commerce ministry confident export target can be reached
The strengthening of the baht and surging global fuel
prices will not affect the export targets for this year as the fluctuation
in currency exchange rates and oil prices will have a similar impact on
Thailand’s trade rivals, according to the Commerce Ministry.
Government Spokesman Surapong Suebwonglee said the ministry assessed the
export direction for 2006 upon regular discussion with exporters of key
products. They viewed in the latest discussion that the export target for
this year would be reached although crude prices in the world market would
stay higher and the baht would appreciate.
This year, they estimated, the baht would stay at an average of 38-39 to the
US dollar compared with 40.2 to the dollar last year.
Still, other trading rivals of Thailand have also experienced stronger
currencies so the nation’s exports have not been adversely affected.
Thai exporters revealed that they shared a common view that the value-added
creation and logistics system developments would play an important role in
boosting export competitiveness in the long run.
They did concede that higher crude prices in the global market would affect
the production costs and prices of export products of the countries, like
Thailand, that count on the oil import, but that the nation has adjusted and
prepared itself for this situation and is encouraging the consumption of
alternative energy on a continual basis. Because of this, the surging oil
prices have not adversely affected the country’s exports and trade balance.
The trade deficit in the first quarter has dropped considerably. This,
coupled with the usual export surge in the second half of this year and
measures to curb imports, should help to reduce the trade deficit further or
even turn the deficit into surplus for this year. (TNA)
Bank of Thailand will not intervene to stabilise baht
The Bank of Thailand had no intention of intervening with
the currency which is stabilizing and which is not considered to be too
strong at the moment, Governor Pridiyathorn Devakula said last week.
The governor said the Bank of Thailand did not interfere in the value of the
baht on May 2 because it was already stabilizing and would adjust itself.
Foreign investment capital continues to flow into Thailand, but the influx
has slowed [mainly due to the country’s uncertain political situation].
As for inflation, the Bank at present has only one month of statistics to
inform currency base changes and it would like to see statistics for at
least two months before deciding on any changed monetary policy options.
(TNA)
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