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Lending and deposit rates likely to rise in coming 6-9 months
Both lending and deposit rates are expected to rise in the next 6-9 months
since Thailand’s overall economy has begun to recover, according to a
leading banker.
Siam Commercial Bank executive vice president, Adisorn Sermchaiwong, said
that inflation rates and commodity prices tended to rise due to the
improving economy.
Coupled with the government’s plan to mobilize more funds locally, he said
that this could fuel an interest rate rise.
Adisorn, who heads the SCB Deposit and Investment Products Division, said he
thought interest rates would be gradually adjusted because the world economy
had not yet fully recovered quickly.
This year, he said, bank deposits had been shifted to investments in mutual
funds in large amounts since the interest rates stayed low.
Deposits in commercial banks as a whole are in deficit by Bt100 billion, he
said, but liquidity in the banking system remains high. The loan-to-deposit
ratio remains at 80-90 percent.
Mutual fund businesses run by commercial banks had expanded considerably
this year, so it is expected assets they manage would increase to Bt400-420
billion from Bt390 billion at present.
In particular, the demand for a purchase of unit trusts of the Long-Term
Fund is expected to increase by Bt8 billion late this year and that for
debentures is likely to rise by 8-10 billion, he said. (TNA)
Cabinet approves Thai capital market development plan
Finance Minister Korn Chatikavanij on Wednesday revealed the
cabinet gave a green light to implement the Thai capital market development
plan.
He said the Thai capital market development plan comprising eight measures is
initiated to increase market capitalization of the Stock Exchange of Thailand to
130 percent or 1.3 times the gross domestic product (GDP) in 2013 from 51
percent at present.
Currently, the capitalization of the Hong Kong stock market is represents 845
percent of GDP and that of the Singapore market is 202 percent of GDP.
Under the development plan, the number of investors is targeted to double in
2013 from 2.5 percent of the country’s population.
In addition, investors will be allowed to shift their money from the Government
Pension Fund and the Provident Fund to the Retirement Mutual Fund.
The eight measures for capital market development include lifting the monopoly
of the SET, upgrading SET competitiveness, liberalizing a license to operate the
securities businesses and receive commissions, reforming laws governing capital
market development, developing new financial products, promoting a long-term
saving culture, and development a secondary market.
SET president, Pattareeya Benjapolchai, said the exchange is set to become a
public company in the second quarter of 2011.
With the status change, SET will be in a position to compete with international
markets as the funding cost is set to decline.
Simultaneously, she said, the internal restructuring of SET will lead to clearer
supervision and control within the organization. SET Plc is set to list on the
stock market in the third quarter of 2011. (TNA)
FTI chief concerned with
possible border trade closure
Federation of Thai Industries (FTI) chairman Santi Vilassakdanont on
Friday voiced concerns over the ongoing tension between Thailand and
Cambodia, saying business people did not want to see the situation
deteriorate and lead to border trade closure.
Unless both countries are able to find a common solution on their own,
they might be well-advised to accept a country with a neutral stance
such as China or ASEAN to mediate a reconciliation of their differences.
He said that Thai nationals running businesses in Cambodia such as in
the hotel and hospitality industry, tourism, restaurants and textiles
told him that they still do business in the country as usual.
However, they are afraid the tension between the neighboring countries
would heighten. In particular, it might lead to a border trade closure,
which would benefit neither country.
At present, border trade represents 80 percent of the Thai-Cambodian
trade value. Last year, the value of the border trade between the two
countries reached Bt70 billion.
But in the first eight months of this year, border trade had declined by
some 20 percent to Bt36.70 billion due to global economic sluggishness.
It is expected the trade value would be around Bt50 billion for this
year.
Should border trade be closed, he said, a large amount of goods would be
smuggled into the country.
Consequently, he hoped the governments of both countries would
accelerate talks to find a proper solution to the problem and believed
they could settle it without a need to close bilateral trade. (TNA)
BOT chief backs 2nd financial sector development plan
Thailand’s 2nd financial sector development plan for
2010-2013, if successfully implemented, will help strengthen financial
institutions, reduce the cost of business operations, reduce the number of
non-performing loans (NPLs), and give small- and medium-size businesses greater
access to loan services, according to the Bank of Thailand (BoT).
BOT Governor Tarisa Wattanagase said the 2nd master plan, approved by the
cabinet on Wednesday, will be implemented in three phases.
The first phase of the plan starting in 2010-2011 focuses on helping strengthen
the financial sector, encouraging mergers between medium-size banks and smaller
banks, and giving commercial banks an opportunity to expand branches liberally
if they have a good rating and efficient management as prescribed by the central
bank.
The second phase starting in 2012-2013 emphasizes allowing an overseas bank
branch to increase its number by no more than two branches and upgrades
commercial banks for retail business into full-fledged banks having 1st-tier
capital funds of no less than Bt10 billion.
The third phase starting in 2014, which will be the year of competition, focuses
on issuing licenses to establish a new commercial bank to provide services to
people at the grass-roots level, technically-known as micro-finance. Additional
licenses to establish trust banks and the Islamic bank will also be issued after
2014.
“We will consider issuing licenses to set up new commercial banks again in the
post-2014 period since there will be a free ASEAN agreement. We need to study
how the agreement will impact Thailand’s financial sector,” said Mrs Tarisa.
(TNA)
Thailand’s revenue collections higher than expected in October
Deputy Finance Minister Pradit Phataraprasit on Thursday said
that the duties and taxes collected by the Customs and Revenue Departments in
October, the first month of fiscal 2010, was higher than projected, signaling a
clear economic recovery.
He said the amount collected by the Revenue Department in October totaled
Bt72.22 billion, which is Bt6.98 billion or 10.7 percent higher than forecast.
The department collected Bt14.72 billion in personal income tax, Bt16 billion in
corporate income tax, and Bt39.4 billion represented value-added tax, since the
public has begun to spend more.
It demonstrated that the public dared to spend more as they felt confident about
economic recovery.
Revenues collected by the Customs Department in October totaled Bt7.81 billion,
Bt1.36 billion higher than targeted.
Also, the department collected Bt21.55 billion in taxes levied on imports and
exports in place of the Revenue and Excise Departments.
Five top import categories were machinery and equipment, machinery, fuel, steel
and other metals.
Pradit said the higher-than-expected revenue collection by the two departments
showed that the Thai economy had already bottomed out and had turned to clear
recovery.
However, the global economic recovery must be watched closely because
unemployment remains uncertain, he said. (TNA)
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