Baht may continue to strengthen with market in risk-on state: strategist
WEDNESDAY, NOVEMBER 16, 2022
The baht opened at 35.57 to the US dollar on Wednesday, weakening from Tuesday’s close of 35.55
The currency will likely move between 35.45 and 35.70 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.
He said the baht might keep strengthening as the market is presently in a risk-on state, but geopolitical risk factors are becoming more severe and might pressure the currency market while supporting the dollar to strengthen due to the demand for safe-haven assets in the short term.
Poon suggested a close watch on foreign transactions as investors were selling Thai bonds and stocks for profit. If the transactions are net sales, it might pressure the baht to weaken.
He also mentioned that mass gold sales would naturally follow as the price of the precious metal increases. This would support a strengthening of the baht, he said, believing the Thai currency will not weaken much if the dollar advances when the market is in a risk-off state.
If gold transactions support the baht, he expected the currency’s resistance level to be 35.85-36 to the dollar.
Meanwhile, he feels its support level would be 35.50, a level most importers are waiting for to purchase the dollar and other foreign currencies.
Poon advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
Baht defies expectations by rising further on Tuesday
TUESDAY, NOVEMBER 15, 2022
The baht opened at 35.71 to the US dollar on Tuesday, strengthening from Monday’s close of 35.94
The currency will likely move between 35.60 and 35.85 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.
Poon said the baht has strengthened more than expected but the market is still cautious and foreign investors might gradually sell Thai stocks and bonds.
He advised to beware of volatility in the currency market if Chinese economic data is worse than expected, which would pressure the yuan to weaken soon after being buoyed by the easing of zero-Covid measures.
A weakening yuan would place downward pressure on the baht.
Poon said however that any baht weakening would be limited as the Thai currency is still being supported by gold transactions. He forecast the baht’s resistance level at 36 to 36.20 to the dollar and its support level at 37.50 to 37.60.
He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
Senate approves executive decree for Finance Ministry to guarantee oil fund loans
MONDAY, NOVEMBER 14, 2022
The Senate on Monday passed an executive decree that allows the Finance Ministry to provide loan guarantees of up to 150 billion baht to the Oil Fuel Fund.
The decree was approved by 187 senators while one voted against it and five others abstained.
The decree had secure a 239:166 approval in the House of Representatives on Wednesday.
Before the vote, Energy Minister Supattanapong Punmeechaow explained to the Senate that the Oil Fuel Fund needed the loans to gradually subsidise oil prices to prevent severe economic crisis.
He said Thailand was facing a double crises — increase in global oil prices and depreciation in the value of the baht — as a result the country was hit hard by very high oil prices.
Supattanapong said the government of Prime Minister Prayut Chan-o-cha had averted the impact on the people by gradually subsidising oil prices.
He added that the government realises concerns about the subsidy distorting market prices and that is why it was doing it gradually.
He said the government also took into account the ability to repay the loans and the government also strictly observed fiscal discipline.
Explaining to the Senate, Pornchai Jirakulpaisan, director of the Office of Policy and Strategy of the Oil Fuel Fund Office, said the government had already approved the loan plan.
He said the first loan for the oil fund would be 30 billion baht and would be advanced this year while the remaining 120 billion baht would be borrowed next year.
Both loans would be repaid in instalments over seven years.
480 foreign firms bring over THB100bn to Thailand this year
MONDAY, NOVEMBER 14, 2022
Some 480 foreign companies have set up operations in Thailand in the first 10 months of 2022, bringing over 100 billion baht to the country and marking a 72% increase year on year.
In the same period last year, 446 foreign firms had invested 61.96 billion baht to set up in Thailand.
From January to October, 480 foreign firms were approved under the Foreign Business Act. They invested 106.43 billion baht and created 4,635 jobs, Deputy Commerce Minister Sinit Lertkrai said on Monday.
Among the new foreign companies, the biggest investors are Japanese, bringing in 37.73 billion baht and setting up 125 companies, followed by Chinese (20.84 billion baht from 22 companies) and Singaporean (11.69 billion baht from 75 companies).
Sinit said opening the door to foreign companies has helped promote knowledge and technology transfer, especially in fields related to government mega projects and infrastructure, such as the energy storage system for U-Tapao International Airport and petroleum exploration in the Gulf of Thailand.
He added that 94 of the new foreign companies have set up operations in the Eastern Economic Corridor (EEC). They account for 44.94 billion or 42% of the total foreign investment this year.
Most of these companies are from Japan, the US and Singapore, and are in the fields of biorefinery, software development, manufacturing system management and technical and engineering services.
The Commerce Ministry expects more foreign companies to enter Thailand before year-end now that most Covid-19 restrictions have been lifted and international travel has almost returned to pre-pandemic levels.
Baht rally may have hit ceiling: market strategist
MONDAY, NOVEMBER 14, 2022
The baht opened at 36.04 to the US dollar on Monday, weakening from Friday’s close of 35.94.
The currency will likely move between 35.90 and 36.10 against the greenback during the day and between 35.60 and 36.30 during the week, Krungthai market strategist Poon Panichpibool said.
He added that the baht’s upward trend may slow and even reverse if the price of gold drops quickly.
The baht surged back from 38.31 per dollar on October 19 to a five-month high on Friday.
However, Poon said foreign funds were now flowing out of the Stock Exchange of Thailand as it neared its resistance level while Thai bond yields, especially long-term yields, fell last week.
Meanwhile, the dollar is reaching its support level zone and could rebound in the short term if the market grows concerned over a possible US interest rate hike, or risk factors force it into a risk-off state, he said.
He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
Apec Summit 2022: Bracing for recession, striving for recovery
SUNDAY, NOVEMBER 13, 2022
Nongluck Ajanapanya
World leaders at the Asia Pacific Economic Cooperation (Apec) summit will seek inclusive solutions to the current global turmoil over the next six days.
Experts expect two major outcomes from the summit: a plan to prepare for recession and the outlines of a path to recovery.
Today’s uncertainties and geopolitical tensions are no longer the responsibility of a single country or region. Hence, experts say that countries must engage face to face to find solutions together to the deepening problems afflicting the world.
Ndiame Diop, World Bank country director for Brunei, Malaysia, the Philippines, and Thailand, said the global economy is currently dealing with overlapping crises.
Just as countries began to recover from the pandemic and reduce policy support, the world was confronted first with Russia’s invasion of Ukraine, then inflation, and now financial tightening as interest rates ratchet up.
Though these crises originated in different parts of the world, their impact has been global. World economic growth is projected to decline to 3.2% in 2022 and to 2.7% in 2023, from 6% in 2021, with poor and vulnerable countries bearing the brunt of the impacts.
Developing countries of East Asia and the Pacific, including Thailand, will not be immune to the global slowdown and fiscal tightening.
“Our latest economic update released in late September projects regional growth will decline from 7.2% in 2021 to 3.2% in 2022 and recover somewhat to 4.6% in 2023,” Diop said.
The risk of a global recession in 2023 is rising, according to the World Bank, International Monetary Fund (IMF), Asian Development Bank (ADB), and many other leading institutions, as central banks implement simultaneous interest-rate increases to combat inflation.
However, the expected trajectory of interest-rate increases and other policy actions may not be sufficient to return global inflation to pre-Covid levels. Global inflation, which is currently at a 14-year high, is expected to remain above target ranges in the vast majority of advanced and developing economies until 2023.
Diop pointed out that the way governments respond to today’s challenges will also shape development in the long term. Governments need to act on two fronts, he added.
They must mitigate the major risks while at the same time seizing the few opportunities.
He proposes four different courses of action to deal with this perfect storm.
First, improve fiscal policy efficiency for relief, recovery, and growth. More targeted assistance to households and businesses, rather than blanket transfers and price controls, would alleviate pain and make room for investment in infrastructure, health, and education.
Second, strengthen macroprudential policies to reduce risks associated with global financial tightening. Greater and earlier transparency about financial sector problems hidden behind the cloak of regulatory forbearance would aid in the prevention of financial instability and misallocation.
Third, reform trade-related policies in goods and, especially, in still-protected services sectors to take advantage of shifts in global trade.
Fourth, change policy to encourage technology diffusion. Increased competition and improved digital infrastructure may boost incentives for technology adoption. Ending fossil fuel subsidies and other forms of assistance are also required to encourage the adoption of green technologies and to combat climate change.
Unsurprisingly, the World Bank’s proposal aligns with the key agenda that Apec leaders will discuss during their summit at Queen Sirikit National Convention Centre in Bangkok on November 18-19.
Cherdchai Chaivaivid, the Thai Foreign Ministry’s director-general of International Economic Affairs, said that Apec leaders will discuss how to advance the Asia-Pacific region through ongoing global economic challenges toward sustainable and inclusive economic recovery from Covid-19.
The summit will renew talks on the Asia-Pacific Free Trade Area (FTAAP) by establishing a long-term framework for dialogue, he added.
Apec members will also discuss digitalisation, sustainable development, and inclusive engagement.
Host Thailand’s guiding framework for the summit is titled “Bangkok Goals on BCG (Bio-Circular-Green) Economy”. The framework will push towards a sustainable, inclusive, and resilient Apec.
“If you want to grow quickly, go alone; if you want to grow sustainably, go together,” said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), at a press conference for the Apec CEO summit.
He said that many of the issues currently facing the world arose because we failed to listen and talk to one another. The first in-person Apec summit in four years would be an excellent place to begin fixing this communication breakdown, he added.
Montri Mahaplerkpong, FTI vice president, said the summit is a great opportunity for participants to share what they have and what they lack so that they can figure out how to address urgent issues like food security, supply chains, carbon emissions, and competitiveness of small and medium-sized businesses.
Meanwhile, Kobsak Pootrakool, executive vice president of Bangkok Bank, said Apec members must cooperate to strengthen themselves, hasten recovery and combat recession.
He expects the summit to produce opportunities and paths for recovery in Thailand and other member economies.
Diop from the World Bank noted that global cooperation remains critical to overcoming our common challenges across all issues.
As such, the week-long Apec meet is an important opportunity to strengthen multilateral cooperation on these and other challenges, with a focus on solidarity and solutions, he said.
Apec comprises 21 economies accounting for 38% of the world’s population, approximately 61% of global GDP and 47% of its trade in goods and services.
Elite residency visa luring younger Chinese expats to Thailand
SUNDAY, NOVEMBER 13, 2022
The average age of wealthy Chinese expats in Thailand is falling fast, according to the firm that handles Elite residency visas in China.
Rui Guo, president of Thai Jiaranai Group, said the average age of Elite visa buyers is now lower than 40, compared to over 50 in the past.
Chinese nationals are by far the biggest buyers, accounting for 7,350 of some 20,000 Elite visas approved so far.
Thai Jiaranai Group is the official seller of Thailand Elite residence programme in China. The firm also operates Chinese online media in Thailand while offering consultancy advice to Thai firms seeking business opportunities in China.
Rui Guo was speaking during a reception party held for Elite visa holders at S31 Sukhumvit Hotel on Thursday night. He said the number of Chinese expats holding the visas has soared several-fold in the past five years. And the fact that they were getting younger showed the new generation of high-income Chinese are attracted to Thailand, he added.
The Thailand Elite Residence Programme offers four different visas for multi-entry stays of between five and 20 years.
Aimed at luring foreign investment to boost Thailand’s economy, the programme is managed by the Tourism Ministry’s Thailand Privilege Card Company (TPC).
Chinese Elite visa applicants are drawn to Thailand by the food and pleasant environment, said Rui Guo. They liked the programme because they did not have to renew visas often, he added.
Thailand’s excellent geopolitical position made it attractive for both travel and business, said Senator Weerasak Kowsurat, in his welcome speech at the event.
Weerasak, a former tourism minister, said Thailand was also luring wealthy Chinese with its international food and beautiful tourist destinations.
Fears the Elite visa is a gateway for wealthy criminals were played down by Foreign Ministry representatives, who said all applicants are checked to ensure they have honest income to benefit the Thai economy during their stay.
Thousands of holders were helping the country recover from the Covid-19 crisis by spending on tourism, sports, spars and other activities across Thailand, said Pornthep Pantanapat, deputy managing director of TPC.
None of those granted Elite visas in the past 20 years had been arrested for serious crime, he added.
BOT puts baht’s rise down to confidence, surging regional currencies
SATURDAY, NOVEMBER 12, 2022
The baht is strengthening in line with the upward trend in Asian currencies, the Bank of Thailand (BOT) said in relation to the 5% rise in the Thai currency.
Asian currencies are picking up in response to rising investors’ confidence following speculation that the US Federal Reserve may ease its monetary policy amid a slowdown in inflation, BOT spokesperson Chayawadee Chaianant said on Friday. She is also the central bank’s assistant governor for corporate relations.
She also put the rise down to signs that China may relax its zero-Covid policy.
According to Reuters, the dollar fell across the board for a second straight day on Friday as investors favoured riskier currencies following cooler-than-expected US inflation data, which fuelled the Federal Reserve’s decision to ease its hefty interest rate hikes.
The weakening of the dollar on Friday was an extension of the movement set off after Thursday’s data showed that inflation in the US rose 7.7% year on year in October, the slowest since January and below the 8% forecast.
The BOT, however, predicts that the financial market will still experience high volatility in the coming months, and has warned the private sector to monitor risks from currency exchange rates closely.
The central bank also said that between November 1 and 10, foreigners have purchased 107 billion baht worth of Thai assets. Of that, 89 billion baht was spent on the bond market and 18 billion baht on the securities market.
Thailand’s “Health for Wealth” plan for economic recovery is taking off under the twin engines of its herbal products and medical tourism markets – worth 50 billion baht and 1 trillion baht respectively.
Legalised cannabis sold over the counter around the country is the latest fuel powering those impressive figures.
The figures were revealed by the Public Health Ministry on Friday as the country builds the medical hub seen as key to its recovery from the pandemic-related crisis.
The spokes of the hub are traditional Thai medicine, alternative medicine, herbs, Thai local wisdom, and medical tourism, ministry permanent secretary Opas Karnkawinpong said.
In 2022, Thailand has so far consumed 52.104 billion baht worth of herbal products, up from 48.108 billion baht in 2021, he added.
Opas said the Health for Wealth plan had three major benefits: creating more jobs, generating more income for people and the country, and conserving traditional Thai medicine and wisdom.
The baht opened at 36.17 to the US dollar on Friday, strengthening from Thursday’s close of 36.94 to a two-month high.
The currency will likely move between 36.00 and 36.30 against the greenback during the day, forecast Krungthai market strategist Poon Panichpibool.
The market is in a risk-on state, boosting the baht to near its support level at 36 to the weakening dollar, with foreign investors pouring back into Thai stocks, he said.
However, he warned of exchange rate volatility if worse-than-expected GDP data from the UK confirms recession in the world’s sixth-largest economy, which would see the pound weaken.
He advised that rapid strengthening of the baht may slow and go into reverse if new factors emerge, such as the dollar strengthening or other currencies weakening.
Poon advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
Thousands of holders were helping the country recover from the Covid-19 crisis by spending on tourism, sports, spars and other activities across Thailand, said Pornthep Pantanapat, deputy managing director of TPC.
SootinClaimon.Com 