SET aims to raise number of listed firms by 50 next year

The Stock Exchange of Thailand has targeted an increase in the number of listed companies in the bourse and the Market for Alternative Investment (MAI) by 50 next year, according to SET’s president Kittirat na Ranong.

He said state enterprises being privatized would be included in the number of the new listed companies.

The number, when coupled with the existing list of firms set to increase capital, would bring up market capitalization by 300 billion baht.

Kittirat said the SET set an aim to increase market capitalization to 1.5 trillion baht this year and 2 trillion next year.

He also said the SET committee agreed to set up a Fund-Raising Center aimed at facilitating fund mobilization.

The center, chaired by SET’s assistant chief, Sopawadee Lertmanaschai, who is also MAI’s acting president, would comprise an Investor Relations & Marketing Division, Issuer Marketing Division and Corporate Communication Division. The center should begin operating by the end of this month.

Sathit Wansillapin, manager of Capital Normura Securities’ Stock Analysis Division, said the Thai stock market is likely to remain bearish next year since the country’s economy still “isn’t out of the woods”.

However, the government’s efforts to step up privatization of state enterprises and encourage state-owned firms to get listed on the SET would help stimulate the market to a certain extent.

Also, improved performance results of listed firms and the successful restructuring of some companies would encourage investors to pay more attention to the market, he said. (TNA)

Thailand-South Asia to open joint free trade area

Thailand plans to open a new free trade area with countries in South Asia over the next five years, according to deputy commerce minister Suvarn Valaisathien.

Suvarn told TNA that the cabinet approved the plan and authorized the Ministry of Commerce to negotiate with countries in South Asia, including Bangladesh, India, Myanmar, and Sri Lanka on the proposed BIMSTEC Free Trade Area.

“A 5-year target has been set to finalize an agreement to establish the new free trade area,” he said.

Under the planned BIMSTEC Free Trade Area, member countries would reduce import tariffs to 0-5%, the same level as in the ASEAN Free Trade Area (AFTA).

Member countries would also remove non-tariff barriers to one another, namely quotas, he said.

Thailand would, therefore, benefit from exporting such products as clothes, electrical appliances, and stainless products to South Asian countries, Suvarn said.

Thailand trawlers could also enter member countries’ waters to catch tuna and shrimp for export to the U.S. market and for use as raw materials in local food industries, he said.

A meeting will be held in India between December 27 and 28 to discuss the planned free trade area, according to the deputy commerce minister.

South Asia has a total population of around 1.26 billion, 200 of which are considered well-to-do.

Thailand’s exports to South Asian countries accounted for US$1.5 billion last year. (TNA)

MOC confident exports will enjoy growth of 5-10% next year

Commerce Minster Adisai Bodharamik voiced confidence that Thai exports, which are likely to contract by more than 6% this year, would begin to pick up next year with an expected growth of at least 5-10%.

In an interview by phone from the United States, the minister, who accompanied Prime Minister Thaksin Shinawatra on his trip to the USA, attributed the expected moderate export growth to the projected economic recovery in the US in the second quarter of next year.

He said the premier had met a group of prominent US businessmen to exchange views and information on trade, investment, and the overall economies of the two countries.

The premier assured them that the Thai economy would grow by no less than 3% next year since his government had managed to improve basic infrastructure in the country.

Dr Adisai said the US prominent figures and businessmen with whom he had talked believed the economy would begin to turn around in the second and third quarters of next year after the public fears of the September 11 terrorist attacks eased. More American people have resumed spending on consumer goods and are doing cheerful activities now. So, he believed the US economy would turn around next year.

He said the US economic recovery would give the overall Thai economy a boost next year because the US is Thailand’s top export destination. Thai exports to the US represent 20% of the Thailand’s total exports. Japan accounts for 15%.

Should the economies of the two countries turn around, Thai exports are likely to regain momentum with growth rates of 5-10% in 2002. (TNA)

People asked not to be too optimistic about the economy

People should not be too optimistic that the country’s economy would turn around within the next two years as projected by Prime Minister Thaksin Shinawatra, according to a key member of the opposition Democrat Party.

Deputy party leader Trairong Suwankiri said it was part of the premier’s tactics to make remarks that give hope to the public. But in reality, whether the Thai economy would recover or not relies on the global economy and the capability of the government.

The world economy remains sluggish now. In particular, the United States and Japan continue to experience economic slowdowns.

He said the global economy could pick up in 2003 if the United States economy managed to turn around in the second half of next year. But in his view, whether the US economy would recover or not remains uncertain.

Trairong said he understood Thaksin, as a prime minister, certainly wanted the public to be cheerful. “But as an economist, I want to ask the public not to be too optimistic because nobody, even economists, can tell exactly what will happen.”

Asked whether measures taken by the current administration to address the economic woes for now are sufficient, he said he has closely monitored the implementation of the government’s policies, particularly the one-million-baht revolving fund for each village nationwide. The deputy Democrat leader said he was afraid the village fund policy would be fruitless and become a waste of money.

The policy appears not to help create new jobs as the injection of money into the system is rather slow and careless.

Only 20,000-30,000 out of 80,000 villages currently participate in the populist program, he said. (TNA)

Thai economy likely to grow 1.6-2.8% next year: TFRC

The Thai economy is projected to grow between 1.6% and 2.8% next year, depending on the economic recovery in the United States and Japan, according to the Thai Farmers Research Center.

The leading think tank said the country’s exports this year are expected to contract by around 6.5% and imports by 1.9%. This factor would put heavy pressure on the economy, the source said.

Private sector consumption is likely to expand by 2.5-2.7%, compared with 4.6% last year. Spending on investment is set to edge up only 0-0.5%, a sharp decrease from 5.4% the previous year, with the inflation rate of 1.7%.

Given these factors, the country’s economy for this year is forecast to grow around 1.4-1.5%, compared with 4.5% the year before.

The economy in the last quarter of this year is expected to grow marginally by 0.6-0.8%, the lowest since the first quarter of 1999.

TFRC said the economic recovery in 2002 would be limited as the country’s exports remain unfavorable due to the economic slowdown in the US. Local spending will play a key role in stimulating the economy next year.

Should export growth be flat, imports edge up only 1%, household consumption by 2.5-2.7% and spending on investment by 0-1% with the inflation rate of 1.5%, the country’s economy is likely to grow 1.6-2%.

But should exports grow by 3%, imports by 5%, household spending by 3-3.33%, and spending on investment by 3-5% with the inflation rate of 1.7-2%, the economy is set to grow 2.5-2.8%.

As the Thai economy can not depend largely on exports next year, the think tank suggested, the government should accelerate private sector spending to help stimulate the economy. (TNA)

TAMC confident of restructuring 500bn baht of NPLs next year

The Thai Asset Management Corporation is confident it will manage to restructure 500 billion baht of non-performing loans transferred from financial institutions by next year, Deputy Prime Minister Somkid Jatusipitak said yesterday.

Currently, more than 700 billion baht of NPLs incurred by state-owned financial institutions have already been transferred to TAMC. The total amount of problem loans set to be transferred from state and privately owned financial institutions is around 1.1 trillion baht.

Dr Somkid, who is also finance minister, said he has been in discussions with Capt Yodchai Chusri, president of TAMC, and the sub-committee on the progress of debt restructuring of the transferred NPLs.

The body reported TAMC had already put the operation system in place and could start debt-restructuring tasks next month.

The corporation set a target to restructure more than 200 billion baht in the first half of next year and around 500 billion baht in the whole year.

The deputy premier said he proposed the body adjust its working approach to boost performance by balancing the restructuring of debts incurred by small and large business operators.

The new approach would enable the corporation to restructure NPLs in a faster and more efficient manner, he said. (TNA)

Local jewelry market remains sluggish this year

The local jewelry market remains sluggish this year as people still prefer saving or spending on only indispensable goods for fears of the persistent economic slowdown, according to an industry executive.

Komsun Opasthavorn, president of the Jewelry Traders’ Association, said the sale of precious stones and ornaments on the eve of the New Year festival was likely to be sluggish, similar to last year.

The continued slowdown is because most people opt to buy consumer products or indispensable goods, such as houses and condominium units as saving assets under the current economic situation.

The precious stones and ornaments market must still depend on the purchasing power of up-market consumers.

He said although jewelry is among one of the country’s top five exports, the market for jewelry products produced with local raw materials is unable to significantly expand inside the kingdom. Local customers prefer diamonds to rubies, and the latter’s production process counts on local raw materials.

“Thailand has abundant ruby minerals but is short of mineral resources for diamond making. So, people should pay attention to buying rubies instead of diamonds,” he said.

Currently, the De Beers Group is the world’s largest jewelry trader with a market share of 95%. The group’s precious stones and ornaments also dominate the Thai market.

Komsun said he wants Thai people to be loyal to Thai products and purchase locally produced jewelry made from local materials. (TNA)

MOC targets raising software exports to 100bn baht in next 4 years

The Commerce Ministry set a target of increasing the country’s export of software products to 100 billion baht within the next four years.

Deputy Commerce Minister Suwan Walaisathien said the ministry has a policy to encourage the export of software products, particularly computer software, and the development of software programs.

It has an objective to raise the soft export value to 5 billion baht next year, 10 billion in 2003 and 100 billion within the next four years.

To encourage the development of local software products, he said, the government would have to allow foreigners with software development expertise to work in the country so Thai people could learn and develop the product themselves.

The government must not be too strict on the issuance of work permits for foreigners, he said.

As well, local software developers, who want to work overseas, must accept terms and conditions of employment contracts. They need to agree to transfer the ownership of their developed software to foreign employers or reveal their development know how.

Suwan said he wants to see Thai experts in the information technology sector follow the development of software in India, even though India has been developing their IT industry for 20 years while Thailand has just begun doing the same over the past 5 years.

Currently, India’s annual export of software products totals US$26 billion. Should Thais be trained by foreign experts on a continual basis with government’s support, he believed, the development of local software products would be in much progress. (TNA)

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