This is especially so for those services that have yet to be regulated by the state authorities.

Some of these financial services include the granting of loans that require vehicle registration documents as collateral.

Under the draft law, an independent committee will be set up to assume this specific task. The law also defines the terms for the providers of loans, and for those providers of financial services that are similar to loans.

A regulator to oversee these financial service providers will be established and chaired by the Finance Ministry’s permanent secretary. The Cabinet will also be authorised to consider scrapping the licences of these companies if they fail to comply with the related laws.

According to a Bank of Thailand recommendation on this draft development, the term financial service provider in the draft does not cover the providers of “home for cash” services. There are many such service providers and they have become popular. Therefore, the draft should include this kind of home for cash service into it, the BOT said.

Separately, the Cabinet yesterday approved plan by the Ministry of Social Development and Human Security to start an apartment project under phases 2 to 4 of a plan to replace the old Din Daeng flats, totalling 6,212 units worth Bt10.115 billion.

The Finance Ministry will borrow domestic funds for the project and the National Housing Authority will borrow such funds from the ministry at an interest rate of 2.15 per year. The project is expected to yield a return of investment of 7.53 per cent per year and the break-even period will be reached in 14 years.

The second phase will see the construction of 1,247 apartments at a cost of Bt1.954 billion, with work expected to be completed in 2021. In the third phase, 3,333 apartments will be built at a cost of Bt5.275 billion; construction is expected to be finished in 2022.

The final phase will see the roll-out 1,632 units at a cost of more than Bt2.885 billion, with construction due to finish in 2024.

The first phase of the construction involved the construction of 334 units.

The infrastructure fund will make its IPO of 4-4.47 billion units , offering about 1.845 – 2.056 billion units to retail investors at a minimum of 1,000 units each at Bt10 apiece. The subscription period is scheduled during October 12-19.

For individual investors subscribing to the fund units over the minimum of Bt10,000 or 1,000 units, the leftover portions of Bt1,000 or 100 units will be marked out in the following rounds until the units are completely sold out.

Investors can buy the fund units at the head offices and branches of Bangkok Bank, Krungthai Bank, Phatra Securities, Krungthai Asset management, MFC Asset Management and Finansa Securities.

According to the Cabinet resolution, about 45 per cent of future revenue from two expressways – Chalong Rat and Burapha Withi expressways will be used to back the infrastructure fund’s units for 30 years from the date of the revenue transfer agreement, said Anuwat Ruamsuke, head of capital markets at Phatra Securities – the fund’s financial adviser.

Both expressways are owned by Expressway Authority of Thailand (Exat) which is expected to use the proceeds to finance construction of its expressway projects connecting Rama III Road with Dao Khanong and the Western Outer Ring Road, and the third stage of the northern expressway connecting to the Eastern Outer Ring Road.

Chavinda Hanratanakool, chief executive officer of Krungthai Asset Management which will manage the TFFIF, said the infrastructure fund’s policy is to pay dividend to its unit-holders at least twice a year if the fund has generated sufficient profit.

The fund’s first-year return is estimated in a range of 4.75-5.30 per cent

The Ministry of Finance will hold no less than 10 per cent of the TFFIF units for five years from the date the units start trading on theSET. Retail investors will be waived from tax levied on the fund’s dividend for eight years.

CARRIER GROUNDED OVER OVERDUE DEBT

The Civil Aviation Authority of Thailand has officially suspended the Air Operator certificate (AOC) of Orient Thai Airlines Co Ltd for an indefinite period, after finding the airline had failed to pay overdue debt to several aviation state agencies, Chula Sukmanop, director-general of CAAT, said.

He added that the airline was also found to lack liquidity. It can ask for the return of its permit once it has cleared its debts.

COST OF DISASTERS LINKED TO WARMING SOARS: UN

The economic cost of climate related disasters hit $2.25 trillion over the last two decades, an increase of more than 250 percent compared to the previous 20 years, the UN said yesterday.

The United Nations Office for Disaster Risk Reduction (UNISDR) noted that “climate change is increasing the frequency and severity of extreme weather events” such as floods and storms. Between 19781997, total losses for climaterelated disasters was $895 billion (780 billion euros), UNISDR said in a report by the Centre for Research on the Epidemiology of Disasters (CRED) at the Universite Catholique de Louvain in Belgium.- Agence France-Presse

Under the current aviation law, in use since 1954, only general companies are allowed to hold airline shares. The amendment will be made as an announcement of Ministry of Transport, which will be forwarded to the Cabinet for approval.

“Funds which will be allowed to hold shares in airlines must be Thai funds and fund managers must be Thais only,” Chula said.

NBTC TO APPEAL RULING IF

DTAC FAILS TO SUBMIT BID

The National Broadcasting and Telecommunications Commission (NBTC) will lodge an appeal in the Supreme Administrative Court on October 16 against the recent Central Administrative Court ruling granting an interim protection measure to Total Access Communication (DTAC)’s 850MHz customers, if DTAC fails to submit its bid for the 900MHz licence before the submission deadline of October 16. NBTC secretary-general Takorn Tantasith said yesterday that DTAC insisted it would submit the bid within the NBTC deadline of October 16. He added that if it failed to do so before October 16 midday, the watchdog would file its appeal with the Supreme Court the same day.

He added that the NBTC had already finished drafting the appeal paper and would ask for the NBTC board’s resolution today to lodge the appeal if DTAC did not submit a a bid.

The NBTC had declined to grant an interim period of extension to DTAC to continue providing service on the 850MHz spectrum to its customers after its concession ended on September 15 this year. DTAC took the case to the Central Administrative Court, which ruled last month that DTAC should be allowed to continue using the 850MHz spectrum until December 15. The NBTC has until October 16 to file an appeal.

DTAC on Monday said it was confident of completing a feasibility study and making a final decision whether to bid for the 900 MHz within NBTC’s submission deadline. The company welcomed the flexibility from the NBTC to extend the bid submission deadline to October 16, in the event of no bid submission yesterday.

FINANCIAL SERVICES DRAFT LAW GOES TO CABINET

The Finance Ministry will table before the Cabinet today a draft law to regulate financial services, such as loan offers that require a vehicle registration book as collateral, according to a Government House source.

The law will propose the establishment of a regulator.

DHL DEPLOYS LATEST

TECH INNOVATIONS

Courier company DHL has launched its latest innovation Ring Scanner, a lightweight Bluetooth-enabled wearable scanner that allows quick barcode scanning while letting staff keep both hands free for related tasks. It is also putting into operation Vision Picking, which brings augmented reality into warehouse operations using smart glasses that enable a portable, high-quality viewing experience, and Collaborative Robots, which work safely alongside people to support complex and repetitive tasks.

Regional Container Lines Public Co Ltd (RCL) recently co-signed a loan agreement worth US$6.5 million (Bt214 million) with the Export-Import Bank of Thailand to finance the installation. The move will also enhance the efficiency of the RCL’s containership fleet.

SUSTAINABILITY 

KBank first to launch bonds to finance green, social projects

KASIKORNBANK is the first bank in Thailand and the Asean bloc to launch sustainability bonds to finance green and social projects

The bonds issued under the programme are aimed at supporting the development of Thai and regional capital markets. They should also promote investments that generate returns in parallel with driving sustainable growth in Thailand and global communities.

KBank issued sustainability bonds totalling US$100 million (Bt3.3 billion) for foreign investors, making it the first bank in Thailand and Southeast Asia to offer such bonds.

The proceeds will be used to finance projects to bring about environmental and social benefits in accordance with international standards set up by the International Capital Market Association (ICMA) and the Asean Capital Markets Forum (ACMF).

The sustainability bonds of KBank are senior, unsecured bonds with a floating interest rate based on LIBOR plus 0.95 per cent.

Under a five-year term, the maturity will be in 2023. The entire amount was offered to foreign institutional investors via KBank’s Hong Kong Branch.

Related parties include BNP Paribas, which acts as the sustainability bond framework structuring advisor and sole lead manager. Also, Sustianalytics – an independent global provider of ESG and corporate governance research – will provide a second party opinion on the sustainability bond framework.

EASY ONLINE BANKING

Krungsri plans new service to help |customers open savings accounts online

Krungsri (Bank of Ayudhya) has a plan to launch a service for opening online savings accounts. The service would make it more convenient and easy for customers to apply as only a national ID card or a passport and Krungsri Mobile Application (KMA) are required.

In addition, Krungsri is currently in the process of developing a new product based on electronic Know Your Customer technology (e-KYC), which will be rolled out by this year-end.

MANAGEABLE OUTCOME 

IFRS 9 to have credit neutral impact on APAC |banks’ credit profiles, says Moody’s

Moody’s Investors Service says that the implementation in Asia Pacific banking systems of the International Financial Reporting Standard 9 (IFRS 9) will have a credit neutral impact on banks’ credit profiles, because small reductions in capital ratios are offset by improved problem-loan coverage.

“The transition to IFRS 9 so far has resulted in average declines of 10 basis points in the banks’ common equity tier 1 (CET1) ratios, a very manageable outcome that is more modest than the impact on European banks,” said Eugene Tarzimanov, a Moody’s vice president and senior credit officer.

“In addition, credit provisions have increased at many APAC banks while impaired loans have remained unchanged, resulting in higher impaired loan coverage ratios and offsetting reductions in their capital buffers,” added Tarzimanov.

Moody’s conclusions are contained in its just-released report, “Banks – Asia Pacific: Capital Takes a Modest Hit Under IFRS 9 but Provisioning Improves”.

Developed systems are leading the way, with IFRS 9 having come into effect on January 1, 2018 in Hong Kong, Singapore, Korea and Taiwan, while implementation in Australia and New Zealand will be completed by the end of the year. Most emerging markets are set to follow in the coming years, with the exception of banks in Malaysia and the Philippines, which have already implemented the new standard.

Moody’s report covers the banking systems of Australia, Bangladesh, China, Hong Kong, India, Indonesia, Korea, Malaysia, Mongolia, New Zealand, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.

FLYING MORE

AirAsia adds two new routes between Bangkok and India 

AirAsia is further connecting Thailand and India by flying direct Bangkok-Visakhapatnam four times a week (departing Don Mueang Airport every Monday, Wednesday, Friday and Sunday) starting December 7, and Bangkok-Bhubaneswar three times weekly (departing Don Mueang Airport every Tuesday, Thursday and Saturday) starting December 6.

Santisuk Klongchaiya, CEO of Thai AirAsia, said that for the latter half of 2018 the airline plans to continually expand in the Indian market in light of its strong growth potential, and as Indian travellers are already the sixth-largest group to visit Thailand annually.

Visakhapatnam is a key port city that is undergoing notable growth and is the home of many world-class companies in the medicine, minerals and heavy industries. Bhubaneswar meanwhile is the capital of the state of Odisha and is well endowed with historical sites significant to the Buddhist faith, making it a prime destination for devout Buddhists. Known as the City of Temples, Bhubaneswar has also become a beacon for telecommunications and technological investment.

Thai AirAsia currently flies direct from India to Bangkok on five routes – from Chennai, Bangalore, Kolkata, Jaipur and Kochi. Between 80 and 90 per cent of passengers on the routes are Indian and they maintain a load factor average of 87 per cent.

KEEPING HOUSE 

Chic plans IPO on MAI in this quarter 

Chic Republic (CHIC), the distributor of furniture, home decor, and house wares, and a standalone store under the brand “Chic Republic (CHIC) and “Rina Hey”, will launch an initial public offering (IPO) of 360 million shares in the Market for Alternative (MAI) in the current quarter.

The proceeds will be used as working capital, investment in branch expansion and to repay debt to financial institutions.

At present, CHIC’s paid-up capital stands at Bt500 million. After the IPO, its registered capital will be increased to Bt680 million with a par price of Bt0.50.

It plans to launch five new branches in Thailand and abroad within the next five years, starting from this year.

Of the five new branches, the Cambodia branch in Aeon Mall 2, Phnom Penh, is expected to be opened before the end of the year, the Ram Intra branch in 2019 and the Udon thani branch in 2020.

Currently it has four stand-alone outlets in Praditmanutham, Bang Na, Ratchapreuk branch, and Pattaya.