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Foreign investors want BOT to tighten rules in local financial institutions
After finding that foreign investors are worried about
its slack disciplinary action against wrongdoers, the Bank of Thailand (BOT)
plans to tighten its restrictions on the governance of local financial
institutions.
BOT Deputy Governor Tarisa Watanagase said the BOT is
considering measures to improve its corporate governance rule with concerned
agencies in order to strengthen investor confidence in the Thai capital
market.
During overseas road shows held in the US and UK in
January of this year, senior officials from BOT, the Stock Exchange of
Thailand, the Securities and Exchange Commission, and the Finance Ministry
met with groups of American and European fund managers.
Thai officials briefed them on the county’s capital
market opportunities as well as the BOT requirements on local financial
institutions and listed firms. However, some foreign investors still view
Thailand’s regulations and any punishment regarding wrong doers as
unacceptably slow and in most cases ineffective. (TNA)
Former finance minister
urges private sector
companies to revamp
Speaking at a seminar on economic trends in 2003 deputy
prime minister and former finance minister Somkid Chatusripitak said that
the government wants to see Thailand turn over a new leaf, giving Thailand
prosperity and wealth, enabling it to compete with other nations and allow
it an honorable place on the global stage.
Somkid, who gave up his seat at the Finance Ministry
during the recent Cabinet reshuffle, said he had no concerns about the
ministry, as he had already put good working systems in place. As deputy
prime minister, Somkid will still have a large role in the Finance Ministry,
although he will not be involved in day-to-day operations.
Somkid expressed concern about the competitiveness of the
private sector, urging private sector companies to revamp themselves and
form groupings to think of ways to boost Thailand’s competitiveness in a
world of rapidly changing trade situations and increasing trade rules.
Somkid lauded the government for being able to change the
picture of Thailand over its past two years in office, saying that two years
ago foreigners had little faith in Thailand, but that they now saw it as an
attractive place to invest.
He defended the government’s decision to aim for 6%
growth in GDP this year, saying that the government had to make leaps
forward rather than fall back on old and failed methods. (TNA)
Thai officials expect to conclude free trade pact with India by August
Thailand expects to conclude a free trade agreement with
India in July or August, a Thai foreign ministry spokesman confirmed on
February 16. Thailand would be the first country outside South Asia to sign
such a pact with India, ministry spokesman Sihasak Phuangketkeow said.
Prime Minister Thaksin Shinawatra said that it was agreed
during recent meetings between Foreign Minister Surakiart Sathirathai and
Indian officials that India would form a free trade area with Southeast Asia
in general, and with Thailand in particular. Indian Deputy Prime Minister
Lal K. Advani paid a recent visit to Thailand.
Thaksin said he expected negotiations on the details
would be completed by July, and that Indian Prime Minister Atal Bihari
Vajpayee would visit Thailand in August or September to sign the pact.
Thaksin indicated that the initial agreement would
eliminate tariffs, and that other trade barriers would be lifted later, but
gave no details.
Banks to inject B1.3 billion into grassroots economy
Thirteen projects are to get cash injections of 100
million each as part of a program established by three state banks to inject
money into the grassroots economy.
The credit will be offered by the Bank for the
Development of Small and Medium Enterprises together with the Bank for
Agriculture and Agricultural Cooperatives (BAAC) and the Government Savings
Bank (GSB).
Samran Phu-anatanon, manager of the SME Bank, stated that
most of the projects were those that presented high potential and low risk,
but that if any of the projects had problems with collateral the Small-scale
Industries Credit Assurance Corporation could be called on to act as a
guarantor.
Praising the initiative as the first collaborative effort
among the three banks, Samran said that the BAAC and GSB would be in charge
of offering credit to projects based outside Bangkok, as the SME Bank’s
network did not yet extend to the provinces.
He said that the SME Bank has also requested a capital
increase of around 10 billion baht from the Finance Ministry so the bank has
sufficient capital for future business operations. This capital injection
would be spread over several years, with 3.2 billion baht given to the bank
for the present fiscal year.
The SME Bank manager admitted however that plans to enter
into investment partnerships with foreign institutions were running into
difficulties, as foreign investors were concerned about the fact that the
bank was state-run.
He added that the SME Bank would begin to sell its shares
within the next five years, but that the government would still retain a 49%
holding. (TNA)
Local consumption still key
to economic growth
Kosit Punpiumrat, executive chairman of Bangkok Bank Plc,
the country’s largest bank, stated local consumption will remain a key
driving force for the country’s economic growth this year, as exports
could be affected by global economic uncertainty. He said last year’s
better-than-expected growth of 5% was due to boosted local spending and
exports.
The surge in the consumption was attributed by the
government’s measures to stimulate local demand and the improved export
resulted from increased import by the US.
The US economy remains uncertain this year; therefore the
government cannot count on exports to the US to stimulate the economy.
Given these factors, Koist projects the economy will
expand at the rate of 3-5% this year, supported by the export.
Last year saw the concrete restructuring of the private
sector, which could boost competitiveness among local entrepreneurs.
Increased competitiveness, particularly among small and medium-size
enterprises will play a vital role in maintaining economic growth. (TNA)
Consumer confidence index stable in January
The consumer confidence index in January remained stable
despite higher fuel prices, according to researchers at the University of
Thai Chamber of Commerce.
Saovanee Thairungroj, dean of the Economic Faculty,
disclosed the confidence index on overall economy increased to 91.6 from
90.3 in December last year and that on job opportunities rose to 79.5 from
77.7 while the index on future incomes dropped to 105.1 from 107.7.
Factors that boosted the confidence include the continued
increase in the export, stronger baht, stock market rally, and
government’s low interest policy to stimulate the economy.
Negative factors include higher fuel prices in January
and mounting concern over global economic uncertainty.
Thanawat Polvichai, director of the university’s
Economic and Business Forecasting Center, said the confidence index was
stable despite rising oil prices. Usually, the fuel price hike would
undermine the consumer confidence.
“We have to closely monitor consumer confidence in the
next months now that the government issued a measure to cap premium gasoline
at 16.99 baht per liter and diesel at 14.79 baht,” Thanawat said. (TNA)
Jewelry exports likely to grow 12 percent this year
The export of precious stones and ornaments is expected
to grow at least 12% this year if the government aggressively promotes the
industry.
Sunee Sri-orathaikul, president of the Jewelry Traders’
Association, said it set a target of export growth for precious stones and
ornaments at around 12% year on year, which could increase the export value
of the product to reach 100 billion baht for the first time.
The association is urging the government to reduce
obstacles to the industry’s growth. If this is done on a steady basis, the
country’s product export share in the world market has a chance in the
near future to increase to 4% from its current 2%. Jewelry would become the
country’s top export.
Sunee expressed support for the government’s plan to
waive the value-added tax (VAT) on some raw materials, saying it would
reduce the cost of the materials and encourage the flow of high quality
materials into Thailand.
She said the export value of jewelry last year reached
US$2.17 billion (93.09 billion baht), up 18.1% from the previous year. Main
export destinations include the United States, Israel, Belgium, Switzerland,
Hong Kong, Japan and Germany.
Key factors that contributed to the sustained growth of
the jewelry export are the continued development of product quality, higher
skill of workers in the industry, and modern and value-added design of the
product. (TNA)
DLD pushes for native chicken preservation to boost farmers’ incomes
The Department of Livestock Development (DLD) is taking
steps to develop breeding methods of Thai native chickens to prevent the
extinction of the rare species.
Plabpla Suwanwichanee, head of Uthai Thani Animal
Husbandry Station said that his agency launched a research project to study
Thai indigenous chickens for preservation, as many species had recently
disappeared.
The Thai Native Chicken Study and Research Center was set
up to gather Thai native chickens and develop a breeding program for further
local chicken farming.
Originally in Thailand, there were 44 Thai native
chickens but at the present, only 23 breeds have been discovered. Uthai
Thani Animal Husbandry Station currently has 22 species of those found in
the wild. It expects to produce more than 20,000 chicks of Thai indigenous
breeds per year and distribute them to farmers in 2005.
“We need to take this problem seriously. Crossbred
fighting cocks without selection and commercially bred poultry farming cause
the loss of the Thai native chicken’s gene,” Plabpla said. He added that
the project was aimed at raising people’s awareness about the importance
of the Thai domestic fowl, which could earn the farmers an annual income of
between 20,000-30,000 baht. (TNA)
TFRC warns local banks of increasing foreign competition
Thailand’s commercial banks are being urged to revamp
themselves, and if they do not, foreign banks are likely to grab
increasingly larger slices of the market.
In a recent report, the Thai Farmers Research Center (TFRC)
cautioned that although foreign banks tended to focus on corporate banking,
they were increasingly making inroads into the personal banking sector,
offering services such as personal credit.
While Thai commercial banks currently have an overall
credit base 10 times higher than that of their foreign counterparts, this
was likely to change.
According to TFRC foreign banks are stronger on a number
of fronts, such as their international networks, stable sources of capital
in the country of the parent bank, their ability to transfer technology and
experience from the parent bank, and their flexibility.
The report also found that foreign banks gained capital
from deposits and borrowing between banks and the financial market, while
Thai commercial banks had most of their capital in deposits alone.
In terms of income and expenditure, foreign banks have
higher net interest income than Thai banks, due to lower interest servicing
costs, as well as a higher proportion of income from commission fees.
The fact that foreign banks have a large proportion of
corporate clients means that they have a lower proportion of bad debts to
overall credit. Their staff tends to be highly effective in making profits,
despite the fact that per capita staff costs are higher. (TNA)
Honda may double production of Thai-built vehicles due to popularity
Japanese giant Honda has stated that Thai-built vehicles
have been so well-received in Japan that it is planning to increase local
capacity.
Asian Honda Motors chief executive officer Satoshi
Toshida said that production at the company’s plant in Ayutthaya Province
may be doubled from the present 70,000 units a year.
Toshida said reception of Honda’s new small saloon car
in Japan was overwhelming and current production may not be enough. The car,
branded the City in Thailand and the Fit Aria in Japan, is the first model
that Honda has exported from Thailand to Japan.
Last month Honda received 3,000 orders for the car, 1,000
more than the target. Thanks to the Fit, Honda took over the top slot in
Japan from Toyota Motors in the January car rankings.
The final decision to increase production will be based
on demand in Japan, but the initial signs are good. “The City, re-branded
as Fit Aria is selling very well in the Japanese market. If orders continue
to rise, people from Japan will be coming to Thailand to discuss increasing
exports,” Toshida said.
Adisak Rohitasune, Asian Honda’s vice president, said
of the 50,000 units to be exported this year, 50 percent will be going to
Japan, 10 percent to the Middle East and the rest to other Asian countries
and Australia.
Toshida said this year Honda is aggressively marketing
its products to increase sales within the country and abroad.
Within Thailand Honda hopes to sell 60,000 sedans with
total sales of the auto market expected reach between 460,000 and 470,000
vehicles. Honda also hopes to sell 1.4 million motorcycles. (TNA)
SME bank to allow intellectual property as collateral
Poverty stricken philosophers and inventors have been
offered a way out of penury by the Bank for the Development of Small and
Medium Sized Enterprises whose board has agreed that intellectual property
would be allowable as collateral on loans.
SME Bank executive manager Samran Phu-anantanon said that
the board passed the motion allowing the use of patents, copyrights and
trademarks to make up thirty percent of collateral. However, the bank would
have to discuss the details with the Ministry of Commerce to determine
exactly which types of intellectual property rights would be permissible.
The board also passed a motion agreeing to expand the
types of collateral to include government and state enterprise bonds,
together with state enterprise stocks, to make up no more than 80-100
percent of the total collateral value.
At the same time, debentures offered by private sector
companies registered with the Association of Debenture traders will be given
a rating of no less than BBB, and allowed to account for no more than 50-60
percent of collateral.
The bank will also open the way for bank deposit books or
even market stalls to be used as collateral, as long as sufficient
documentation is provided to back up the claim.
Borrowers will also be able to give personal guarantors
for amounts of up to 100,000 baht or 300,000 baht in the case of accredited
franchises.
Samran said, “The SME Bank’s easing of regulations
concerning collateral will lead to the smoother extension of credit to SMEs.”
During its first month of operations as the SME Bank, the
bank issued loans worth 1 billion baht against an annual target of 30
billion. The new measures are designed in accord with the government’s
policy of turning assets into capital. (TNA)
Spuds provide ammunition
in EU trade war
Thai government officials were no doubt secretly gloating
at the recent discovery of nitrofurans in imported German potato products,
with hints that Thailand could retaliate against the EU’s strict trade
barriers on Thai chickens by refusing to import German potatoes.
While Deputy Agriculture Minister Newin Chidchob, who has
made no secret of his anger at the EU’s continuing claim that Thai
chickens may be contaminated with nitrofurans, said that further inspections
of the potato products would have to be carried out, it was clear that he
was preparing to use the issue to threaten an all-out trade war.
The contaminants were apparently discovered during
routine tests carried out by the Department of Livestock and the Fisheries
Department.
Newin said that if the second tests still showed evidence
of contamination, the potato products in question would be recalled and an
import and sales ban would be imposed.
Gleefully throwing back words spoken by EU officials, he
denied that the measures would constitute a trade barrier, saying that they
were merely designed to ensure that the quality of life of Thai people did
not fall below that of anyone else.
The discovery of the contaminants is particularly timely
for Thailand, as the EU is preparing to consider easing its regulations
governing the import of Thai chickens.
Newin reiterated yesterday that Thailand was taking
strict measures to ensure that its chicken products were not contaminated,
and would shut down any farms found to be producing contaminated products.
Describing the EU’s strict regulations as a trade
barrier, he said that the issue was a political one, and vowed to take the
matter to the World Trade Organization if the EU continued to refuse to
relax its rules. (TNA)
John Richards appointed GM of
Premier Land & Development
On February 15, 2003, Premier Land & Development, an
affiliate of the Premier Homes Real Estate Co. Ltd., welcomed Mr. John
Richards to its team as general manager.
John
Richards (right) and Supap Netpanya (left)
Mr. Richards was welcomed to Premier Land &
Development by its owner and managing director, Supap Netpanya, “The
Eastern Seaboard’s First Lady of Real Estate”.
After seven hugely successful years in the area, Premier
Homes Real Estate Co.’s parent company, Premier International, recently
launched Premier Land & Development and has quickly become an area
leader in land and commercial sales, leasing and development.
John Richards has worked with Premier Homes Real Estate
Co. Ltd. for the past two years, successfully helping to build what has
become the Eastern Seaboard’s most successful real estate company. His
vast experience in operations management and sales leadership with Premier
Homes Real Estate Company have been proven and productive assets that are
sure to lead Premier Land & Development into a new era of continued
success.
John began his career in the restaurant industry, rising
fast through the ranks to become area manager for a large restaurant chain
in Sydney, Australia. After years of managing employees, numbering in the
hundreds, John turned his attention to pest control management, first
starting in his native Australia, then in Dubai and finally to Bangkok where
he became the company’s general manager of operations for Thailand.
Looking for a career change, John relocated to Pattaya
about seven years ago where he took his past experience and expertise into
the real estate business. Seven years later, John has become a popular
fixture amongst the Pattaya expat community, even having served as president
of the local Rotary Club.
When asked about John Richard’s performance record with
Premier Homes, owner Supap Netpanya quickly responded, saying that she had
felt a very strong sense of confidence and dependability from John the day
she hired him into the company and was not surprised to see John excel as
quickly as he has.
Next John Richards was asked what he felt was in the
future for himself as general manager. His answer was quick and sure, “We
are about to witness the ‘Five Star’ phase of Pattaya’s growth, which
will bring us a good number of high quality condominiums, resorts and hotels
over the coming years. Premier Land and Development will be a community
leader in the conception and development of this ‘Five Star’ era.”
John Richards went on to say, Premier Land &
Development now has its eye on the future of the Pattaya-Jomtien area. With
zoning already started on the new racetrack and plans for a future casino,
the Eastern Seaboard region is exploding with activity. Premier Land &
Development is firmly poised to be of service and assistance to any
individual or corporation wishing to buy, lease and/or develop land and
commercial properties.
With the great success John has experienced during the past two years at
Premier Homes, things are looking very promising and we wish John Richards
continued success at Premier Land & Development for many years to come.
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