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Seminar sees opportunity for Thai services to invest in China
Thai investment in China’s booming economy could
increase, particularly in the service sector, prominent businessmen say.
Uttama Saonayon, vice minister for commerce, said during a seminar last
Friday that China, a member of World Trade Organization (WTO) since 2000, is
being watched closely by several countries as a major country good for
investment.
More Thai fruits and vegetables have been exported to China following the
signing of the Thai-Sino Free Trade Area (FTA) Agreement on fruits and
vegetables in late 2003.
In addition to China, Thailand is able to export more to European Union (EU)
member countries, including France, the United Kingdom and Italy.
Thanakorn Seriburi, vice chairman of the Charoen Phokphand Group (CP), said
he believes that interesting areas of investment in China include spas,
traditional Thai massage, hotel, restaurant and car repair businesses, as
China has opened its market for investment.
China’s economy will continue to grow, said Prida Tiasuwan, president of
Pranda Jewelry Co.
Thai businesses can still invest in hospitals and account auditing sectors
as approximately 10 percent of China’s 1.3 billion population could be
considered rich and they have sufficient purchasing power. (TNA)
Thai-US FTA talks postponed pending new government
The upcoming seventh round of talks between Thailand and
the United States on free trade area agreements (FTA) will be postponed
until the new government takes office, Commerce Permanent Secretary and
chief negotiator Karun Kittisataporn said.
The talks must be temporarily postponed to wait for a new government to take
office, Karun said. After that, the talks will continue.
The Thai and US negotiators have not yet fixed a date or venue for the
seventh round of talks but have tentatively scheduled it for early this
year, as both sides are to sign the pact within the middle of the year, he
said.
Karun said US officials asked him about the current Thai political
situation, but they did not show overt concern as they considered it a
normal situation and understood why Thailand needed to push back the
negotiation date.
Regarding the FTA talks with Japan, Karun said Thai and Japanese negotiators
have already reached a conclusion and are simply waiting for the leaders of
both countries to sign the pact.
However, the signing of the Thai-Japanese FTA agreement also must be
postponed from the previously scheduled April 3 date until the new
government takes office. While the new government can make some changes to
the pact, in theory it should not do so since it has been agreed upon by the
both sides. (TNA)
Foreign capital continues
to flow in despite political tension
Foreign capital continues to flow into the country even
though political tensions remain, according to a leading fund manager.
Vorapak Thanyawong, president of J.P. Morgan (Thailand) Co, said that
despite the political uncertainty that led to the House dissolution last
Friday, foreign capital remains to continually flow into Thailand.
In the past two months, net foreign investment amount has surged to nearly
90 billion baht, while the net amount for the whole year of 2005 totaled 110
billion baht. This shows that foreign investors still have confidence in the
Thai economy, and that Thailand is still a sound investment.
Although there are concerns over the political uncertainty, foreigners
believe that it will only be short-term problem.
Vorapak projected that the Thai economy this year would expand approximately
five percent, boosted by exports and the implementation of mega-investment
projects.
However, he conceded, foreign investors are concerned over delays in project
implementations due to the House dissolution.
He said the investors are waiting for the snap election results in April to
see whether or not there would be a party that wins a majority of voters.
Should a coalition government be set up in the event that no party wins the
majority, it would definitely affect the policy on the mega-projects, he
said. (TNA)
Baht tipped to rise on election call
The baht is expected to edge up slightly after the
dissolution of the Lower House by Prime Minister Thaksin Shinawatra, the
strengthening of Japanese yen against the greenback, and a signal that
Japanese interest rates are to rise further, according to a report issued by
Kasikorn Research Centre.
Although commercial banks were stocking up on cash this week to cater for
withdrawals by company employees, the report said the overnight inter-bank
rate was predicted to adjust to around 4.14-4.17 percent, and the baht was
projected to move this week within the 39.0-39.4 range to the dollar.
The baht was expected to gain on the dissolution of the House of
Representatives, surge of the yen against the dollar, and a positive sign
that Japanese interest rates could rise after Bank of Japan Governor
Toshihiko Fukui signaled on Friday that interest rates were set to increase,
it said.
Currency traders would also be monitoring monthly economic data to be
released by the Bank of Thailand this week as well as important economic
figures from the United States, the report said. (TNA)
Economy likely to be hit by snap election call, says leading forecaster
Prime Minister Thaksin Shinawatra’s decision to dissolve
parliament and call early election will cut economic growth by at least 0.5
percent, according to a leading forecaster.
Thanavat Polvichai, director of the University of Thai Chamber of Commerce’s
Economic and Business Forecasting Centre, said that the April 2 snap poll
would delay the implementation of a series of major government-backed
projects. In turn, he said, this would block up to 300 billion baht in
economic investment and cause growth to drop by 0.5 percent.
Thanavat said there were three likely outcomes to the political crisis.
Firstly, the current situation could degenerate into violence, causing the
election’s cancellation. In this worst-case scenario, the major projects’
scheme would be delayed indefinitely and cut economic growth to 3.5-4
percent.
Secondly, if the election goes ahead within 60 days and the new government
is able to get the projects off the ground by early next year, the Thai
economy will grow 4.3-4.5 percent as investments will resume after the
political situation eases. This is the most likely scenario, according to
the centre.
Finally, a provisional government could be set up, led by a premier
appointed by His Majesty the King. The constitution would have to be amended
to allow for this ahead of delayed elections.
In this scenario, the major projects would be postponed until the middle of
next year when a newly elected government is able to formulate its policies.
In this case, the economy could grow around four percent.
“We are confident that the country’s economic fundamentals remain strong.
The Thai economy will definitely grow more than four percent if the
mega-projects get off the ground. However, if there is any violence, the
economy will only grow by approximately 3.5 percent, driven mainly by
exports,” he forecast. (TNA)
February inflation up 5.6% year-on-year
Inflation in February increased by 5.6% compared to the
same month last year, the Commerce Ministry announced.
Permanent Secretary for Commerce Karun Kittisaporn was quick to assure,
however, that the number represented only a 0.3% increase from January 2006,
and that into the latter half of 2006, inflation should slow down to a
possible annual average of between 3.5 to 4.5%.
The Commerce Ministry forecasts that inflation from March till mid-2006
should stay at a range of 5.6-5.7%, given the volatile oil price.
The Ministry arrived at the 3.5%-4.5% average for the entire 2006 year on
the basis that the Thai economy would grow by 4.7-5.7%, the exchange rate
average would be at 41 baht to the US dollar, minimum wage is at 190 baht
per day, and crude oil at 50-60 dollars per barrel.
The Ministry, said Karun, is closely monitoring prices of essential goods at
this juncture when political crisis is looming. (TNA)
MCOT enjoys net profit growth of 33% in 2005
MCOT Public Company Limited (MCOT) posted a net profit of
more than 1.1 billion baht last year, up 830 million baht or 33 percent from
the previous year, with a dividend set to be paid at 0.55 baht per share in
the middle of May, the company’s President Mingkwan Sangsuwan revealed last
Monday.
He said MCOT earned 3.48 billion baht in totaled revenue, up 17 percent from
2.97 billion baht in the previous year.
Of this, 2.2 billion baht stemmed from television advertisement revenue,
representing an 18 percent rise from 1.86 billion baht the year before. It
is the first time the TV-based revenue exceeded two billion baht.
The radio-based revenue totaled 555 million baht, up 23 percent from 452
million, compared with the overall growth of 3 percent in the radio
industry.
He said the radio-based revenue grew rather considerably since MCOT had
managed and operated some of its radio frequencies itself.
The company plans to make a phase-two change in its Modern Radio in April.
It is scheduled to pay a new dividend of 0.55 baht per share for 2005 on May
15.
Mingkwan said the government’s decision to dissolve the House of
Representatives and call a snap election would help boost local
advertisement businesses, particularly through the TV media, because there
would be advertisement spending by political parties and the Election
Commission of Thailand (EC) on the Senate election and the general elections
in April.
He said MCOT is not worried about the House dissolution because its revenue
comes from various channels.
Modernnine TV has also focused on the knowledge-based society concept. So,
it is able to differentiate its products.
Additionally, MCOT’s advertisement rates are more competitive than other TV
channels since they range from 220,000-240,000 baht per minute and will
remain unchanged in the first half of this year.
It is expected that Modernnine TV will enjoy revenue growth of 12-20 percent
and the Modern Radio revenue growth of 25 percent for the whole year.
Mingkwan said MCOT plans new road shows in London and New York some time
during this month to present information to fund managers at the invitation
of Merrill Lynch Securities Co and ABM Amro Securities Co. (TNA)
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