|
IPO price of RRC shares finally
set at Bt18 each
An initial public offering (IPO) price of Rayong Refinery
Public Company Limited (RRC)’s shares has been set at 18 baht each, the
lowest in the Book Building price range of 18-23 baht per share.
Prasert Bunsumpun, President of PTT Public Company Limited (PTT), who is a
director of RRC, said that the company had finally set the IPO price of its
shares at 18 baht per unit following road shows overseas.
He said RRC was satisfied with the price because it reflected the company’s
actual fundamental value amidst a decline in stock markets around the world.
He said RRC would gain around 25 billion baht from the fund raising through
the Stock Exchange of Thailand (SET).
He believed the share price would move above the subscription price on the
first trading day because RRC is a stock with sound fundamentals. As well,
the company plans to undertake a joint venture with Aromatics (Thailand)
Public Company Limited, which is also under the PTT umbrella.
Mr. Prasert said he believed the market conditions and the political
situation would have improved by the time the RRC shares begin trading on
June 5. (TNA)
Local oil prices set higher than
usual, says vocal senator
Local fuel prices have been set higher than they should
have been when compared with those on the global market, according to a
vocal senator.
Speaking at a seminar on “Oil Crisis” at Chulalongkorn University, Senator
Sophon Supapong said the government had failed to exercise an existing
mechanism to fully supervise the local oil price hike to ease people’s
burdens, particularly when PTT Public Company Limited (PTT) was privatised.
Politicians and capitalists have been those to benefit most from the PTT
share distribution on the Stock Exchange of Thailand (SET), he pointed out.
“Local fuel prices are set unfairly now that oil has become a politician
product,’’ he said.
He pointed out that the country’s refinery capacity presently totals around
one million liters per day, whilst the local demand is only 700,000 liters
per day with the remainder of the oil going for export.
He said the ex-refinery prices could be set at whatever level the government
desired but that those levels were currently running higher than they should
be when compared with those on the world markets. The ex-refinery prices are
normally set by the National Energy Policy Committee, some of whose members
are also directors of privately owned refineries.
Sophon also called for the end to use refined oil prices in Singapore as a
benchmark for setting local oil prices. As he pointed out, Thailand imports
the majority of its oil from the Middle East so it should count on the
Middle East oil prices as a benchmark, instead of those in Singapore. (TNA)
DPM aspires to see closer
Thai-US trade relations
The caretaker Deputy Prime Minister and Commerce
Minister, Somkid Jatusripitak has proposed that the Thai Chamber of Commerce
(TCC) and its US counterpart should jointly map out a strategy for the
economic and trade development of both countries.
Speaking after a meeting with representatives of the US Chamber of Commerce
(USCC), he said the impression he received was that US businesses were
interested in investing in Thailand as they view the kingdom to be a nation
with good economic prospects.
Dr. Somkid conceded that up to the current point in time, US businesses had
invested a relatively small amount in Thailand, but believed that closer
trade relations, particularly among the private sectors, would improve the
level of investment.
He indicated that the Board of Investment of Thailand (BOI) is ready to give
promotional privileges to giant US companies such as Seagate and Chevron and
other businesses who have shown an interest in shifting their production
base to Thailand.
On the proposed Thai-US Free Trade Area (FTA) Agreement, the deputy premier
said he told the USCC representatives that the Thai government is not now in
a position to forge ahead with the matter because of the current political
stalemate. However, as soon as a new government is formed, the issue will be
placed back on the agenda. (TNA)
Housing mortgage executive opposes policy to keep rates unchanged
The government’s policy to have state-owned banks keep
mortgage rates unchanged for now will help borrowers in an initial period,
but may fuel their burdens in the long term if the rates are allowed to
float later, according to an industry executive.
Speaking in an “Economic Language” program on Modernine Television, Kitti
Patpongpibul, President of the Housing Mortgage Association, said the
decision by state-owned banks such as the Government Housing Bank (GHB) to
maintain the mortgage rates would benefit borrowers in the short term as
they would not have such a large burden on their interest payments.
But in the long run, their interest burden would increase significantly and
rapidly if the banks were no longer in a position to maintain the mortgage
rates and had to allow them to float to reflect actual costs later, he
cautioned.
He said the move to keep the mortgage rates unchanged would have a similar
impact on the population as did the government’s decision to cap local fuel
prices previously.
Allowing the mortgage rates to float would enable borrowers to adjust
themselves financially over a longer period of time and give them a clearer
idea as to how much they could afford to borrow, he said.
Mr. Kitti suggested that prospective homebuyers should carefully plan their
mortgage repayments before making a decision to purchase houses and should
not count on the lending rate remaining artificially static.
He said some property developers had already adjusted their strategies by
shifting to build smaller houses with lower prices in line with the current
upward interest trend. (TNA)
GHB poised to raise lending
rates next month
The Government Housing Bank (GHB) is set to raise lending
rates by 25 base points in June if the Bank of Thailand (BOT)’s Monetary
Policy Committee decides to further increase the policy interest rate.
Khan Prachuabmoh, the bank’s president, said that should the MPC raise the
14-day repurchase rate at its meeting on June 7, GHB would have no choice
but to follow suit. He said if GHB decided to increase the lending rates by
0.25 per cent, the minimum lending rate (MLR) offered by the bank would
climb up to 8 per cent.
Currently, he conceded, more bank customers who sought a credit facility of
more than one million baht preferred to borrow at a fixed rate for 5-10
years to manage costs as interest rates are currently on an upward trend.
He said GHB had paid no attention to offer a fixed lending rate for 20 years
because the period is too long and this would entail the bank taking onboard
a far greater risk of loan defaults. (TNA)
Raimon Land recieves new funding facility from Lehman Brothers for development of ‘The River’
Blake Olafson, left, the Vice
President of Lehman Brothers (Thailand) Ltd. is pictured here with Nigel
Cornick, CEO - Raimon Land Plc.
Bangkok - Raimon Land Plc. recently announced the
successful placement of a 450 million baht debenture fully subscribed by
Lehman Brothers. The placement was made through Taksin Hotel Holding Co.
Ltd. of which, a 60% stake is owned by Raimon Land Plc. The proceeds will be
used towards the development of the company’s “The River” project in
Bangkok.
Mr. Nigel Cornick, CEO of Raimon Land commented. “As we progress with the
development of ‘The River’ and additional Grade ‘A’ residential condominium
developments in Thailand, facilities such as the one established by Lehman
Brothers will help ensure that we maintain a consistent pipeline of projects
and revenue for the foreseeable future.
Foreign heavy selling of stocks only short-term, says finance minister
Caretaker Finance Minster Thanong Bidaya last week
shrugged off mounting concern over the heavy selling of stocks by foreign
investors on the Stock Exchange of Thailand (SET), saying it would proceed
only temporarily.
He said that foreign investors had dumped shares on the SET and other stock
markets in Asia in order to shift funds into the US dollar because they were
afraid that the United States’ Federal Reserve would further raise key
interest rates.
However, he believed the heavy selling of shares would proceed only in the
short run and the shifting of money back to the US would ease, as the dollar
was not expected to strengthen more than the current level.
The Thai baht had now begun to stabilize, he said, adding that the ideal
level of the baht that would not affect the country’s exports and imports
should be around 37.5 to the US dollar.
On the country’s current trade deficit of US$551 million, Dr. Thanong said
it stemmed from the ongoing oil price hike. He projected that the country’s
trade balance in the second quarter of this year would remain in deficit,
but to a lesser degree than has previously been projected. (TNA)
SME index edges down in 2nd quarter
The SME index in the second quarter of this year edged
down by 1.06 points, from the benchmark 100 points, as a result of surging
oil prices, according to the University of Thai Chamber of Commerce’s small-
and medium-sized enterprise study center.
The SME index is conducted based on a benchmark 100 point level. Should the
index stay below the level, it means the overall output has declined and
vice versa.
Utha Pisalvanich, the center director, said the survey found that SME
production had declined due to the continued increase in oil prices and the
political impasse. It had resulted in the SME index dropping and the
country’s industrial competitiveness declining.
The survey showed the SME index on food and beverages in the second quarter
was 94.2, down 6.8 from the first quarter, due to higher transport costs,
while the index on textiles was at 102.29, up 2.29, thanks to more spending
in the Songkran festival.
It also found the index on vehicles and transport equipment at 109.74, up
9.74 from the first quarter, due to state measures to boost production,
while the index on leathers was 97.06, down 2.94, as a result of pricing
competition with foreign rivals.
As well, the index on chemicals stayed at 101.99, up 1.99, and that on
rubber and plastics at 105.4, up 5.4.
“Calculated based on a percentage change in indices on respective
industries, we find the overall SME index in the second quarter was at
98.84, down 1.06,” said Mr. Utha.
He conceded 2007 would be a year of hardship for Thai SMEs since the
business sector would be affected by surging fuel prices and political
uncertainties.
|
