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NPLs drops considerably in December
As of the end of December last year, non-performing loans
(NPLs) were almost a hundred billion baht lower than that of the third
quarter, most of which are held by local commercial banks, according to the
Bank of Thailand (BOT).
A source at the BOT’s Financial Institution Policy Group reported that at
the end of December 2005, NPLs totaled 477.21 billion baht, or 8.17 percent
of outstanding loans, down 99.69 billion or 1.76 percent. Of this, 461.44
billion baht is held by local commercial banks, 9.42 billion baht by foreign
banks, 5.93 billion baht by finance houses, and 423 million baht by credit
companies.
At of the end of the third quarter of last year, NPLs totaled 576.89 billion
baht or 9.93 percent of the outstanding loans. Of this, 546.82 billion baht
is held by local commercial banks, 9.38 billion baht by foreign banks, 20.27
billion baht by finance houses, and 426 million baht by credit firms.
Previously, BOT’s Governor M.R. Pridiyathorn Devakula said NPLs in the
banking system were expected to reduce to 2% of outstanding loans as
targeted in the middle of next year, following the merger of Asset
Management Corporation and BBC Asset Management Co. (TNA)
Thailand reduces reliance
on oil imports through new oil deal
Thailand’s petroleum giant, PTT Public Company Limited
(PTT), has signed an agreement to purchase crude oil from the Jasmine
oilfield of Pearl Oil Co. (Thailand) in a bid to reduce reliance on oil
imports amidst high volatility of fuel prices.
The agreement was inked by PTT’s President Prasert Bunsumpun and Keeth
Cameron, president and CEO of Pearl Energy Co., the parent of Pearl Oil,
with Energy Minister Viset Choopiban witnessing the signing ceremony.
Under the contract, PTT will buy all the crude oil produced at the Jasmine
oilfield operated by Pearl Oil, which currently has a daily production
capacity of 10,000 barrels. The purchase totals more than 9 billion baht a
year.
The deal serves as a major stride for PTT’s efforts to reduce oil imports,
particularly in the midst of high fluctuation of oil prices.
The Jasmine oilfield is located in exploration block No. B5/27 in the Gulf
of Thailand. Pearl Oil won a concession and began crude oil production in
June 2005.
Prasert said PTT had already purchased more than 2 million barrels from the
oilfield since it began production. Crude oil, when refined, increases the
supply of diesel and bunker oil to meet local demand.
Prasert noted that the signing of the agreement would help save the
country’s currency from the import of crude oil, which is in line with
government policy. More importantly, it will help add value of the product
and maximize utilization of local resources.
Not only has PTT purchased crude oil from the Jasmine oilfield, it has also
planned to buy fuel from other oilfields in the country, particularly the
Chevron oilfield which has a daily production capacity of 40,000-50,000
barrels.
The purchase of crude oil from local oilfields would enable local traders to
reduce the oil import value by 10 percent this year, from 600 billion baht
last year, as targeted by the government, said Prasert. (TNA)
Thailand targets 7.5 million tons of rice exports this year
The Thai Ministry of Commerce has set an export target of
7.5 million tons of rice this year, up 200,000 tons from last year, Foreign
Trade Department Director-General Rachane Potjanasuntorn said.
A total of 7.3 million tons of rice was exported in 2005, generating at
least US$2.3 billion, indicating that Thai rice still has a promising year
ahead. Thailand’s export volume is expected to hit a record high of US$2.5
billion this year, he said.
The export value of Thai white rice is expected to be at approximately
US$290-300 per ton, while Thai Hom Mali or Jasmine rice will be US$450 per
ton.
The Foreign Trade Department and the private sector are jointly promoting
rice exports and restructuring of the Public Warehouse Organization (PWO)
with an emphasis on boosting rice marketing, Rachane said. (TNA)
Thai PM’s family abandons corporate flagship; sells Shin interest for US$1.88 billion
The family of Thailand’s Prime Minister Thaksin
Shinawatra sold its 49.6 percent stake in Shin Corp for a record Bt73.8
billion (US$1.88 billion) to a Singapore-led investor group.
Singapore government-related Temasak Holdings, Thailand’s Siam Commercial
Bank, and a group of Thai investors reached an agreement with the extended
Shinawatra family in which all family-owned shares in Thailand’s telecom
giant have been sold.
Upon completion of the complex transaction, according to a Temasek Holdings
news release, Shin Corp will remain a majority Thai-owned company.
Prime Minister Thaksin said the sale was his children’s decision done out of
concern for their father’s well-being as they wanted him to be able to
concentrate on his political career without being criticized for any
conflict of interest.
The transaction is understood to be the largest corporate acquisition in
Thai business history, with some 1,487.7 million shares changing hands.
Thaksin said that the sale to Temasak reflects the changed realities of
investment in today’s world. Singapore’s investment in Thailand would not
affect development in the kingdom, he said, just as the international
investment participation of Thai companies such as PTT (the state-owned oil
firm) is now investing in oil explorations in countries such as Myanmar,
Iran and Oman.
The money realized from selling the Shin Corp shares will not be reinvested
in other businesses, the prime minister said, because his children are still
young.
Instead, Thaksin said, his children might use the proceeds of Thailand’s
largest corporate transaction in history for charitable purposes, such as
setting up foundations to help society.
The transaction of the massive lot of Shin Corp shares was so significant
that the Stock Exchange of Thailand (SET) suspended further trade of the
company’s shares until the situation could be clarified to investors.
Shin Corp is the major shareholder of Advanced Information Service (AIS),
ITV, Shin Satellite and CS Loxinfo. (TNA)
Govt. urged to protect consumers as foreign control of business grows
A leading academic urged the Thai government to
efficiently enforce laws regarding fair trade for fear that local consumer
interests may be threatened by foreign companies taking control of the
country’s two giant telecommunication businesses.
National Institute for Development Administration (NIDA) lecturer Voraphol
Sokatiyanurak said that if the two big foreign telecommunications business
players - Norway’s leading telecom firm, Telenor, and Singapore’s investment
arm, Temasek Holdings, allow market forces to run its course, consumers will
reap full benefits.
However, he said, if there is no room for market forces in the competitive
market, the government is bound to protect consumer interests through law
enforcement. Thailand has some 31 million mobile phone subscribers,
accounting for 48 percent of the country’s population.
Late last year, Norwegian telecommunications operator Telenor became the top
shareholder of Thailand’s second-biggest mobile phone operator DTAC.
Prime Minister Thaksin Shinawatra’s family last week sold its 49.6 percent
stake in Shin Corp, which includes Thailand’s top mobile phone operator,
Advanced Info Service (AIS), for nearly US$1.9 billion to Singapore’s
state-owned investment company Temasek.
To secure Thailand’s place in the world market, the NIDA academic also
suggested that the government should mainly focus on development of the
country’s technological capability through three key elements: research and
development, human resources development, as well as in investment
management.
He cited China and Singapore as good examples of governments that have given
priority to development investment.
China’s largest telecoms equipment maker, Huawei, and Singapore’s Temasek
have spearheaded global investment with their huge financial resources,
Voraphol said. (TNA)
Thailand’s export growth meets government target of 15%
Thailand’s exports grew 15 percent in 2005, meeting the
government’s target while export growth this year is anticipated to reach
17.5 percent, according to the Ministry of Commerce. The country’s total
export last year reached US$110.883 billion, Director-General of the
Department of Export Promotion Chantra Purnariksha told journalists.
Last year’s export growth was particularly boosted by expanded shipments of
Thai manufactured goods, she noted. These included canned food, processed
fruits, vegetables and chicken, as well as frozen shrimps, automobiles and
parts, computers and parts, plastic products, construction materials, gems
and jewelry, printing products and cosmetics.
Chantra said, however, that the country’s total import in 2005 stood at
US$118.223 billion, a 25.7 percent year-on-year increase, spurred mainly by
imports of oil (59.1 percent), capital goods (27.2 percent), as well as raw
materials and semi final products (16.9 percent). Therefore, the country
still faced a trade deficit of approximately US$7.340 billion, she reported.
The Ministry of Commerce targets that Thailand’s total export in 2006 will
reach US$130.288 billion, a 17.5 percent growth from last year, according to
the department’s director-general. To meet the target, the ministry will
help Thai exporters penetrate new markets.
The ministry’s export promotion mission, led by Deputy Prime Minister and
Commerce Minister Somkid Jatusripitak, began late January in Japan, to be
followed by countries in the Middle East, including Jordan and the United
Arab Emirates (UAE), on February 18-21 and European countries, including
Italy and Germany, in March.
Chantra said that the baht would remain strong only in the short term and
would not affect the country’s overall exports.
“The Department of Export Promotion has discussed the current volatility in
the currency market with Bank of Thailand (BOT)’s Governor M.R. Pridiyathorn
Devakula and was ensured that the baht would not remain strong for long. The
BOT and the Ministry of Commerce also agreed that the Thai baht should
average Bt40 to the US dollar this year – a level which the projection of
this year’s export growth was based on,” Chantra told journalists.
Meanwhile, Director-General of the Department of Foreign Trade Rachane
Potjanasuntorn cautioned that the country would still face a trade deficit
of around US$5.712 billion this year, a drop of 13-14 percent from last
year’s figure.
The continued trade deficit would again be caused mainly by high oil import
bills, he noted. (TNA)
Competition in housing, consumer, credit cards lending still tough
Most bankers have conceded that competition in housing,
consumer, and credit card loans remains stiff although local interest rates
have begun to increase, according to a survey by the Bank of Thailand (BOT).
Local commercial banks have competed fiercely in lending, particularly in
housing, consumer and credit card businesses.
The lending to small and medium-sized businesses is expected to grow
satisfactorily as a risk management system has been applied for loan
approval.
The housing loan extended by specialized state financial institutions has
expanded considerably since clients want loans with a fixed rate for the
first three years of lending.
Deposits in the banking systems are projected to grow at a slower pace since
actual interest rates remain negative, resulting in more households and
business sectors turning to invest in government bonds.
Higher interest rates will not significantly affect a financial position of
the business sector, but will have a psychological impact since its
financial cost is lower.
Although most companies have managed to reduce debts considerably, operators
remain uncertain about economic conditions and investment returns. (TNA)
Social critic calls to cleanse
country of corruption
Thirayuth Boonmee, social critic and
lecturer at Thammasat University, criticized the government of Prime
Minister Thaksin Shinawatra and demanded that it solve the urgent problems
confronting the country.
In his comprehensive annual review of government performance and other
socio-political issues, Thirayuth said the crises now facing the country and
needing urgent solution is amendment of the constitution - “which still has
many loopholes and is preventing independent agencies from monitoring
corrupt politicians and officials.”
Thirayuth said that the constitution needs to be amended by four parties:
academics, politicians, media and the business community, and
representatives of the public.
Thirayuth believes that as long as the general public joins the movement,
there is no need to fear that the ruling Thai Rak Thai party, which commands
the majority of votes in Parliament, will reject any proposal for amendment
of the constitution. Thirayuth is one of the student leaders who led a move
to oust the military regime of the late Field Marshal Thanom Kittikachorn
during the student-led uprising in October 1973.
Widespread corruption, according to Thirayuth, is next in line for urgent
remedy, and there is a need for prominent citizens like Gen. Prem
Tinsulanonda, president of the Privy Council and senior statesman, to
actively serve as a model in eradicating corruption.
A working committee should be established to closely monitor undesired
activities and it should be headed by Supachai Panichpakdi, director of
UNCTAD, and Pridiyathorn Devakula, governor of the Bank of Thailand,
Thirayuth recommended.
The lecturer then called on Thaksin to quit politics after completing his
term and charged that the prime minister was acting beyond his authority in
a way which has led to massive corruption. (TNA)
Lampang to become
Thailand’s northern logistics centre
Thailand’s northern Lampang
Province is developing itself into a national logistics centre in the upper
north.
Deputy Lampang Governor Wanchai Suthiwarachai said that the governor had
called a meeting of all district chiefs in the province to discuss the plan.
“The plan, when completed, will bring prosperity not only to the province
and neighboring areas in the north, but also the nation as a whole,” he told
journalists. “This is because Lampang will become a key gate to expanding
trade and business contacts between Thailand and neighboring countries
located North of Thailand,” he noted.
The deputy governor said experts would be invited to study potential
districts in the province to be selected and developed as the focal location
for the planned northern logistics centre. (TNA)
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