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Sharp fall in credit card spending during 1st quarter
Credit card spending fell by over Bt1 billion during the
first quarter of this year as the public spent more cautiously and as a
result of tight controls on plastic card use by the central bank.
According to latest statistics at the end of the first quarter released by
the Bank of Thailand, there were over 10 million credit cards active at the
end of March this year, compared to 9.9 million at the end of December last
year. Credit card spending inside Thailand during the first quarter of this
year was worth Bt45.2 billion (US$1.1 billion), down Bt1.1 billion (US$29
million) from the previous quarter at the end of 2005.
Meanwhile, credit card debt in the entire system totalled Bt143 billion
(US$3.8 billion) at the end of March, up Bt111 million (US$3 million)
compared to the previous quarter. Breakdown of the data shows that debt
among cards issued by local and foreign banks has increased while those due
for non-banks are also rising.
The overall picture is that the number of credit cards in use continues to
rise. Scrutiny of credit card debt reveals a potential slowdown among
locally-issued credit and commercial bank cards because of the Bank of
Thailand’s strict oversight measures, including the requirement that credit
card holders must have a minimum monthly income of Bt15,000 (US$397.82).
Another factor halting the credit card spending spree is that people are
more cautious amid many volatile factors such as the unsettled economic
outlook due to the political crisis, the energy price rise and the rise in
interest rates.
However, the Bank of Thailand will keep a close watch on the worrying trend
of rising debt level among cards issued by non-banks which make it easier
for people to access credit because they require only Bt7,000 minimum
(US$185.65)monthly income to qualify for a card.
The Bank of Thailand is concerned that although the volume of spending among
non-bank issued cards is lower than those issued by commercial banks, the
debt level of the two categories of card is the same. (TNA)
Shinsat to launch
Thaicom 5 satellite late May
Shin Satellite Public Company Limited announced that it
will launch its Thaicom 5 satellite into orbit by the end of May.
Shinsat executive Tanathit Charoenchan said Thaicom 5 will be able to
provide service 15 days after the launch and the first major undertaking
involves moving clients who are television broadcasters from Thaicom 3 to
the new platform. The launch of Thaicom 5 and transfer of clients from
Thaicom 3 will enable the company to recoup its investment rapidly, he said.
The next major challenge involves attempting to find more customers for
Thaicom 4 for which two new gateways are being planned for coverage of
China, India, Australia and New Zealand. The company is also speeding up to
close deals with clients in Malaysia, Indonesia and Japan.
During the first quarter of 2006, Shinsat earned Bt1.9 billion in total
revenue, with a net loss of Bt 58 million due to the depreciation of
satellite assets and interest payments, something Mr Tanathit characterised
as typical of the satellite business. Following depreciation costs, more
revenues should be booked for the ensuing quarters. The company has sold
11,134 sets of terminal kits and sales for the entire year are projected at
up to 100,000 sets.
The company’s revenue from phone service operations in Laos and Cambodia
also increased by 26.5 per cent with nearly 900,000 clients in the two
countries. Meanwhile, revenue from internet service by Lao Telecom and
Kampuchea Shinawatra increased by 42 per cent. (TNA)
Thailand’s economic
growth rate, ASEAN rank, falls
Soaring oil prices and political uncertainty are expected
to slow Thailand’s economic growth to around 4-4.5 per cent in 2006,
reducing it to rank sixth among members of the Association of Southeast
Asian Nations (ASEAN) in terms of growth, according to a report issued by
Kasikorn Research Centre.
This year, Vietnam, which has abundant crude oil and is little affected by
the increase in global crude oil prices, will see its economy grow to some
7.6-8 per cent, making it the country enjoying the highest growth in ASEAN
and second in Asia after China which is projected to see its economy expand
to 9.5 per cent, the report said.
ASEAN members in 2006 are projected to enjoy an average economic growth of
between 4-5.5 per cent while Thailand’s growth is expected to perform more
sluggishly, at around 4-4.5 per cent, slightly below the average, putting it
in last place among the leading countries of ASEAN.
While Vietnam and Thailand share an almost identical economic profile - in
which trade, tourism and investment are the major driving forces, exports by
Vietnam during the past decade grew more than four-fold to US$32.23 billion
last year from only US$7.26 billion in 1996. Thailand’s exports during the
same period almost doubled to US$110.88 billion last year from US$55.94
billion in 1996.
The Centre noted that Vietnamese exports would surpass Thailand’s in 14
years if Hanoi maintains its export growth at 20 per cent annually and
Thailand’s exports grow on average at 10 per cent per year over the same
period.
Foreign investors in the two countries are mainly from Taiwan, Japan, South
Korea, Singapore, Hong Kong, Malaysia, Canada, the US and China, according
to the report, adding that there are signs that more foreign investment
would move from Thailand to neighbouring countries if political problems
continue in this country. (TNA)
SET index likely to surpass 800 in 2nd half-year, says fund manager
The Stock Exchange of Thailand’s index is likely to stay
above 800 points in the second half of this year due to a continued inflow
of foreign funds into the bourse, according to a leading fund manager.
Maris Tarab, President of ING (Thailand) Asset Management Co, projected the
index would rally and stay above such a level if foreign funds continued to
flow into the stock market on an expectation that the country’s gross
domestic product would grow at a rate of 4.5-4.7 per cent.
At the same time, investment in state-initiated mega-infrastructure projects
would contribute to the country’s continued economic growth.
“We believe foreign funds will continue to flow into the Thai stock market
if the economy still enjoys growth due to an expansion of tourism and
exports although the new government has yet to be established”, he said. “As
well, dividend yields offered by listed companies on the Thai bourse are
still high while the price/earning ratio of the market is low.” (TNA)
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