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World’s supply chain managers enjoy their moment in the sun

Econ

Jul 11. 2020Alexander Lacik, chief executive officer of Pandora, at the company’s headquarter offices in Copenhagen, Denmark, on Aug. 19, 2019. MUST CREDIT: Bloomberg photo by Carsten Snejbjerg. Location: Copenhagen, Denmark

By Syndication The Washinton Post, Bloomberg · Andrew Noel

Accustomed to crunch time and performing in a crisis, the world’s supply chain managers are having something of an extended moment in pandemic recovery mode.

Procurement experts were center stage in the rush to secure alternative sources of household essentials, medical gear, raw materials and components to keep factories running when covid-19 first struck. Now chief executive officers are looking to those same managers for more strategic vision and ways to shock-proof supply chains for corporate survival.

From auto makers to food processors, manufacturers that have relied on a strategy of low-cost supplies and minimum inventories are rethinking such an approach given the combination of the pandemic, trade conflicts and harsher natural disasters.

The buzzwords now are flexibility and resilience.

“This whole part of the equation has a higher prominence,” Alexander Lacik, CEO of Danish jeweler Pandora Group with about 7,400 outlets, said in an interview. The chief supply chain officer “is not someone I speak to just once a month,” he said.

When the coronavirus hit, it took some companies three to four weeks to understand the ripple effect on areas like procurement and logistics.

Those firms are now in the rebuilding phase, with one eye on what digital tools and other technology they need to stay on top when the the next crisis comes, according to Kristian Park, a risk advisory partner at Deloitte in London.

“There’s been a 50% increase in people coming forward who have realized they didn’t have the information they needed,” Park said. “As always with these things, it takes one seismic shift to change people’s perception of the risks.”

That’s the sweet spot of a chief supply chain officer, who is typically more comfortable with a broad focus spanning procurement, logistics, strategic alliances and managing costs, Park said.

Recent studies support a move to introduce more flexibility. Companies with a resilient supply network grow faster because they better adapt to shifts in demand, potentially boosting their order rate by as much as 40% and customer satisfaction by up to 30%, according to a study by Bain & Co.

Making its own jewelry in Thailand and owning shops across 100 countries means Pandora’s Chief Supply Officer Jeerasage Puranasamriddhi has greater control. Yet the company still relies on air freight and some 200 suppliers. As the pandemic snowballed, the company’s initial response was to push more inventory to its shop premises in case one of the large centralized warehouse facilities went down, Lacik said.

Lacik is now reviewing his company’s set-up, from procurement of materials to surging online sales. Where possible, having a single source for an input will be avoided and back-up plans put in place. Online sales are up as much as 300% currently, leading the Danish company to rethink its e-commerce strategy, and whether it could manage online sales internally rather than rely on a third party. It may also look at factories outside of Thailand, Lacik said.

Two decades ago less than 10% of companies had a supply chain director, according to Jan Godsell, a professor of operations and supply chain strategy at the University of Warwick. The number now is closer to 50%, with the role of a chief supply chain officer becoming more common in the past five years.

They’re ascending the corporate ladder even more in the post-pandemic world, she said.

“Covid-19 may have been a wake-up call to main boards of the importance of supply chains and hopefully it will accelerate the rise of the chief supply chain officer,” Godsell said.

The median salary for a supply-chain manager was about $78,507 a year for those with a bachelor’s degree and $95,750 with a graduate degree or higher, according to the Association for Supply Chain Management’s 2020 annual survey. The poll generated about 2,500 responses through Jan. 31.

At large global companies, the top positions can pay $300,000 to $400,000.

But even before the health crisis, there were chronic shortages of workers to fill the positions – about one applicant for every six openings, says Abe Eshkenazi, CEO of the Chicago-based association.

As the jobs become a bigger part of a company’s strategic management team, he says more lucrative salaries will follow. “The demand for talent is going to be significant on the backside of this,” Eshkenazi says. “We’re seeing skills and expectations for supply chains increase exponentially.”

All the sudden interest hasn’t gone unnoticed among students facing a brutal job market. Haslam College of Business, part of the University of Tennessee in Knoxville, is among colleges offering supply chain studies that are seeing a flurry of inquiries from students and workers looking for a new career, according to George Drinnon, executive director of undergraduate programs. “This awareness is translating into more attention to the field,” he said.

Another anecdotal sign of the profession’s popularity: 6,000 registered attendees from 109 countries for a July 16-18 virtual conference titled “Preparing for the Recovery After Covid-19” and hosted by Alcott Global, an executive search firm specializing in e-commerce, logistics and supply chain executives.

Speakers include the supply chain bosses from companies including Swedish appliance maker Electrolux, U.S. tool maker Stanley Black & Decker and Beiersdorf, the German maker of Nivea skin-care products. The Singapore-based recruiter sold out of sponsorships for the event in 10 days.

“We are seeing huge interest,” said Radu Palamariu, Alcott’s managing director for Asia-Pacific.

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Business travel bubble to be finalised next week

Econ

Jul 11. 2020Transport Minister Saksayam Chidchob

By THE NATION

Details of how restrictions will be relaxed to allow Japanese businesspeople to enter Thailand should be concluded next week, said Transport Minister Saksayam Chidchob.

The move comes after Japanese businesspeople advised the Board of Investment that they want to enter Thailand to run their existing businesses here.

They are currently prevented from doing so because Thailand requires them to first undergo a Covid-19 test in their own country. However, Japan is only testing suspected patients.

Saksayam said that he still wants any future foreign arrivals to strictly follow Thai public health rules.

If the measures planned for Japanese businesspeople are successful, they will become standard protocol for others entering Thailand, he added.

Chula Sukmanop, director-general of the Civil Aviation Authority of Thailand (CAAT), said the restrictions on inbound and outbound flights remain in place. 

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Thai electronics shares surge on weakening baht, European demand

Econ

Jul 11. 2020

By The Nation

The value of Thai electronics stocks has risen almost 20 per cent over the last month as European countries promote electric vehicles and the baht weakens, say analysts.

Among the beneficiaries is Delta Electronics (Thailand) (DELTA), whose share price has risen 14.68 per cent to Bt69.50.

Anekpong Putthapiban, assistant director at Asia Plus Securities, said electronic stocks gained positive sentiment from the baht falling to Bt31.2 against the dollar, European countries’ measures to promote use of electric vehicles, and moves around the world to ease disease controls.

“After many countries eased lockdown measures, investors may be thinking that the price of electronic stocks has bottomed out,” he said. “However, we advise people to avoid investing in these stocks because their price has reached maximum value, while these companies’ second-quarter performance is likely to drop.”

Meanwhile, a stock analyst at Capital Nomura Securities noted the price of Delta shares had risen by over 150 per cent from their low point in March this year, adding that the company’s performance is likely to recover faster than its competitors.

“We expect the company’s second-quarter net profit to be about Bt681 million, up 8 per cent quarter on quarter, but down 30 per cent year on year,” the analyst said.

“The company’s sales will increase by 4 per cent thanks to growth in telecommunications infrastructure and the European auto industry’s move to buy materials for electric vehicle manufacturing. Meanwhile, the company’s net profit in the second half of this year would increase in line with seasonal factors.”

The analyst added that Capital Nomura Securities has adjusted Delta’s net profit forecast from 16 per cent to 15 per cent in 2020 and from 12 per cent to 21 per cent in 2021.

“Aside from the recovery in automotive and telecommunication industries, the company also benefited from the weakening baht, so we expect Delta’s gross profit to increase from 20.5 per cent in 2019 to 21.2 per cent in 2020 and 22.4 per cent in 2021,” the analyst added.

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TCG to guarantee Bt30bn in loans for small businesses 

Econ

Jul 11. 2020Finance Minister Uttama Savanayana

By The Nation

The Finance Ministry has asked the Thai Credit Guarantee Corporation (TCG) to guarantee Bt30 billion in SME loans, but will set up a separate Bt50-billion fund to support small and medium-sized businesses hardest hit by Covid-19 and the economic contraction.

Finance Minister Uttama Savanayana said he has assigned the state-owned entity to extend guarantees for SME bank loans worth Bt30 billion.

“The pressing issue for SMEs now is lack of liquidity, and their next problem is how to use funding to upgrade themselves. We agreed to address their immediate problem first,” said Uttama after meeting with bankers and senior officials.

Once the existing fund is used up, then this further financial support may be extended, he added.

TCG president Rak Vorrakitpokatorn said guarantees for loans of Bt15 million-Bt20 million would be extended to eligible SMEs, down from previous programme’s Bt100-million limit. The Bt30-billion guarantee scheme will enable banks to lend up to Bt45 billion, benefitting 40,000 to 50,0000 SMEs, he added.

Meanwhile, Predee Daochai, Thai Bankers’ Association president, said that banks will look at businesses’ ability to repay debts before extending loans. He admitted that bad debt in the banking system was on the rise, but did not know by how much. The important thing was that the banking system was still functioning properly, he added.

Meanwhile, Uttama said the planned Bt50-billion SME support fund would be proposed to Cabinet in the next few weeks.

Thai SMEs have been hit hard by the Covid-19 fallout. The Bank of Thailand has rolled out a Bt500 billion programme of soft loans via commercial banks but only Bt100 billion in loan applications has so far been approved. Bankers wary of bad debts had asked the Finance Ministry to instruct the TCG to guarantee the loans.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

U.S. stocks trade mixed with tech faring worst

Econ

Jul 10. 2020

By Syndication Washington Post, Bloomberg · Yakob Peterseil · BUSINESS, US-GLOBAL-MARKETS 
U.S. stocks traded mixed as investors considered whether a rising number of coronavirus cases will curb the global economic recovery. Treasuries jumped, with the five-year yield touching a record low.

Tech shares led declines, a dynamic that’s become increasingly rare as investors favored megacap companies seen as insulated from pandemic lockdowns. Most shares rose on the S&P 500 as the gauge fluctuated between small gains and losses after data showed record deaths in Florida, Texas and California from the virus. Gilead Sciences Inc. advanced after the company said its Remdesivir treatment cut covid-19 mortality risk by 62%. European shares edged higher.

With record deaths across America, as well as fears of a second wave in Asia, the spotlight is back on the spread of the coronavirus as investors head into the weekend. Fiscal and monetary stimulus buoyed markets thus far, but investors are looking for signals on what additional support may be in the works. Federal Reserve Bank of Dallas President Robert Kaplan, speaking on Fox Business, said he sees the need for more fiscal outlays.

“We’re going to see intermittent periods of shutdowns over the next year or so while we’re still grappling with this virus,” Erin Browne, a multi-asset portfolio manager at Pacific Investment Management Co., said on Bloomberg TV. “But I wouldn’t expect we’re likely to see a wholesale shutdown of the U.S. economy like we saw earlier this year.”

Elsewhere, China shares dropped as selling by state-backed funds signaled authorities wanted to slow the pace of gains following the Shanghai Composite’s eight-day winning run.

Oil traded below $40 a barrel in New York. In the U.K., yields on two- and five-year notes hovered near all-time lows amid speculation that the Bank of England may further ease monetary policy.

These are the main moves in markets:

Stocks:

– The S&P 500 Index was little changed as of 10:19 a.m. New York time.

– The Stoxx Europe 600 Index climbed 0.5%.

– The MSCI Asia Pacific Index dipped 1.1%.

– The MSCI Emerging Market Index sank 1.3%.

Currencies:

– The Bloomberg Dollar Spot Index fell 0.2%.

– The euro decreased 0.2% to $1.1309.

– The British pound rose 0.3% to $1.2642.

– The Japanese yen strengthened 0.4% to 106.76 per dollar.

Bonds:

– The yield on 10-year Treasuries fell two basis points to 0.60%.

– Germany’s 10-year yield declined two basis points to -0.48%.

– Britain’s 10-year yield declined two basis points to 0.14%.

Commodities

– West Texas Intermediate crude declined 0.1% to $39.58 a barrel.

– Gold strengthened 0.3% to $1,808.10 an ounce.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Prayut shifts to ‘new normal’ economic management 

Econ

Jul 10. 2020Prime Minister Prayut Chan-o-cha on Friday meets with his economic advisers, business leaders and some ministers to discuss extra measures to support small businesses and people adversely affected by the Covid-19 pandemic.

By The Nation

Prime Minister Prayut Chan-o-cha has changed the way he manages the economy by increasing collaboration with his economic advisers and business leaders.

Prayut postponed today’s meeting of the Council of Economic Ministers and instead held a meeting with his advisers, economic ministers and business leaders to discuss remedial and recovery plans after the Covid-19 outbreak.

Deputy Prime Minister Somkid Jatusripitak, who leads the Cabinet economics team, also attended today’s meeting.

Somkid downplayed the postponement of the economic ministers meeting, saying that economic management would run smoothly as he knows both the PM’s advisers and business leaders very well.

“It is better for the PM to have all the information, including from outsiders, before making a decision on economic measures,” said Somkid.

“PM Prayut is interested in how to support small and medium-sized enterprises and we have already talked with the Finance Ministry about measures to support SMEs, which will be submitted for Cabinet approval once the PM agrees,” said Somkid. He added that the Finance Ministry cannot solve many problems on its own and needed cooperation from other ministries run by different parties in the coalition, such as the Agriculture, Commerce and Labour ministries. The PM, as leader of the economic team, was in a good position to secure that cooperation “because coalition government needs to move together”, added Somkid.

Kobsak Pootrakool, secretary of the Council of Economic Ministers and the PM’s deputy secretary-general on political affairs, said the prime minister has changed the way he works under the “new normal” by listening more to his economic advisers. Previously, Prayut was merely updated by senior officials and talked with ministers.

Kobsak said the PM’s economic advisers and business leaders have proposed establishing a centre for economy recovery from the Covid-19 pandemic, similar to the government’s Centre for Covid-19 Situation Administration (CCSA) which has won success in containing the outbreak.

Meanwhile Paiboon Narintarangkul, chairman of the Federation of Thai Capital market Organisations, urged the government to make Thailand the hub for regional finance and capital markets. Others have proposed legal reform in order to make doing business in Thailand much easier.

Other business leaders attending today’s meeting were Kalin Sarasin, secretary-general of the Thai Chamber of Commerce. Suphachai Chearavanont, chairman of the Council of Digital Economy and Society, Ghanyapad Tantipipatpong, chairmen of the Thai National Shippers’ Council, Supant Mongkolsuthree, chairman of the Federation of Thai Industries and Predee Daochai, president of the Thai Bankers’ Association. Prayut’s economic advisers in attendance included Pailin Chuchottaworn, former deputy transport minister, Setthaput Suthiwart-Narueput, a member of the central bank’s Monetary Policy Committee, and Pirapan Salirathavibhaga.

The meeting came a day after the four ministers credited with running Thailand’s economy resigned from the ruling Palang Pracharat Party, though kept their seats in Cabinet. Prayut announced on Thursday he would reshuffle the Cabinet after talks with coalition parties. Prayut’s economic management has failed to impress observers since Thailand’s economy is currently the worst performer among Asean countries.

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SET slides as new Covid-19 cases continue rising in US

Econ

Jul 10. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index dropped 15.31 points or 1.12 per cent closing at 1,350.50 today (July 10). Transactions, meanwhile, totalled at Bt64.196 billion with an index high of 1,363.28 and a low of 1,346.72.

During the morning session, a Krungsri Securities’ stock analyst said he expected the index to fall between 1,355 and 1,360 before rebounding due to uncertainty over the impact Covid-19 is having on economic recovery as the number of new cases is continuing to rise.

“In the US alone, there are more than 61,000 new Covid-19 cases daily, which has forced some states to impose lockdown measures again,” the analyst said.

“Plus, the SET Index is under pressure from the drop in the price of crude oil and the resignation of four Palang Pracharat Party executives.”

However, the analyst reckoned that the index would rebound from speculation in stocks of companies whose second-quarter performance will benefit from the weakening baht.

The top 10 stocks with the highest trade value today were STGT, AOT, CPALL, PTT, KCE, PTL, STA, PTTEP, EA and PRM.

As of 4.45pm, the price of crude oil dropped by US$0.94 or 2.37 per cent to $38.68 per barrel, while the price of gold rose by $9.10 or 0.50 per cent, to $1,812.90 per ounce.

Other indices in Asia were also on the slide:

Japan’s Nikkei Index closed at 22,290.81, down 238.48 points, or 1.06 per cent.

China’s Shanghai SE Composite Index closed at 3,383.32, down 67.27 points, or 1.95 per cent, while Shenzhen SE Component Index closed at 13,671.24, down 83.50 points, or 0.61 per cent.

Hong Kong’s Hang Seng Index closed at 25,727.41, down 482.75 points, or 1.84 per cent.

South Korea’s KOSPI Index closed at 2,150.25, down 17.65 points, or 0.81 per cent.

Taiwan’s TAIEX Index closed at 12,073.68, down 119.01 points, or 0.98 per cent.

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Gold price comes under pressure from sales for profit-taking

Econ

Jul 10. 2020

By The Nation

The price of gold was unchanged in morning trade on Friday (July 10), the Gold Traders Association reported.

As of 9.28am, the buying price of a gold bar was Bt26,600 per baht weight and selling price Bt26,700, while gold ornaments cost Bt26,120.68 and Bt27,200, respectively.

Spot gold price moved to US$1,802 (Bt56,403) on Friday morning after the price dropped by $16.8 to $1,803.8 (Bt56,459) per ounce at close on Thursday.

Investors were selling gold to take profit after the price rose to the highest in almost nine years, while the strengthening dollar also pressured the gold price.

Hong Kong gold price dropped by HK$100, opening at $16,660 (Bt67,280) per tael Friday morning.

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Surge in Covid-19 cases globally casts shadow over Thai stocks

Econ

Jul 10. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index dropped by 7.12 points, or 0.52 per cent, to 1,358.69 in morning session on Friday (July 10).

A stock analyst at Krungsri Securities expected the index to fall between 1,355 and 1,360 before rebounding due to uncertainty following the Covid-19 impact on economic recovery as the number of new cases continued to increase.

“In the US alone, the number of new Covid-19 cases has increased by 61,000 people per day, causing some states to impose lockdown measures again,” the analyst said.

“Meanwhile the SET Index would be under pressure from the decline in crude oil price and the resignation of four Phalang Pracharat Party leaders.”

The analyst added that the index would rebound from speculation in stocks whose second-quarter performance would benefit from the weakening baht.

He recommended that investors buy:

▪︎ Food and electronics stocks that benefit from the weakening baht, such as TU, CPF, GFPT, TFG, KCE, DELTA and HANA.

▪︎ Stocks whose second-quarter performance will improve, such as TOP, PTTGC, SPRC, BGRIM, CKP, TASCO, STA and SPALI.

▪︎ Defensive stocks that are able to escape the impact from market volatility, such as INTUCH, TTW and DIF.

The Stock Exchange of Thailand (SET) Index rose by 3.35 points, or 0.25 per cent, closing at 1,366 on Thursday. Total transactions amounted to Bt72.6 billion as investors still hold off investments due to lack of new positive factors and rising coronavirus cases.

Net buys by foreign investors amounted to Bt1.241 billion in stocks and Bt2.848 billion in bonds. There were 6,009 net long Thailand Futures Exchange contracts.

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Dow drops 350 points as new covid infections rise

Econ

Jul 10. 2020

By The Washington Post · Hamza Shaban · BUSINESS, US-GLOBAL-MARKETS 

The Dow Jones industrial average fell sharply Thursday, as investors grappled with fresh unemployment data, flagging corporate earnings and a spike in new infections in some states that may prolong an economic recovery.

The Dow fell more than 350 points, or 1.4 percent, eroding the week’s gains. The Standard & Poor’s 500 dropped 18 points, or 0.56 percent, while the Nasdaq composite, lifted by tech stocks, rose by 55 points, or 0.53 percent.

Shareholders absorbed new Labor Department data showing another 1.3 million people filed first-time unemployment claims last week. That marked an uptick from the week before and a continuation of elevated joblessness that has taken hold since the pandemic. New unemployment claims have averaged about 1.4 million for the past four weeks.

Alongside troubling economic data, Wall Street is also reacting to public opinion on President Donald Trump, experts say, and his reelection prospects for November. On Thursday, the Supreme Court handed Trump a defeat, rejecting his assertion that he enjoys absolute immunity from investigation while in office.

Equity prices were pummeled by the “combination punch” of accelerating coronavirus cases and the high court decision allowing New York prosecutors to pursue a subpoena of the president’s private and business financial records, said Sam Stovall, the chief investment strategist of U.S. equity strategy at CFRA. “Both factors may hinder President Trump’s reelection chances, increasing the uncertainty surrounding a possible Democratic sweep in November.”

Walgreens was one of the biggest drags on the Dow, with shares falling nearly 8 percent on disappointing quarterly results. The drugstore chain disclosed sharp losses in overseas sales due to the pandemic.

Kristina Hooper, the chief global market strategist at Invesco, said investors have been gravitating to growth areas like tech, which has rebounded from the market’s March lows. But weak earnings are weighing on the stocks. “Storm clouds have formed over stocks today,” she said. The biggest cloud is growing fear about a stalled reopening as infections continue to rise and the country appears unable to control the first wave of the virus,” she said.

Investors also digested the latest warning from public health experts. On Wednesday, Anthony Fauci, the nation’s top infectious-disease official, said some states might want to seriously consider “shutting down” again if they are facing a spike in new cases. In the past week, Texas and Florida, the second and third most populous states in the nation, each broke their records for new daily infections, at 10,028 and 11,458, respectively.

“Markets are digesting the latest jobs data, which, despite being lower relative to previous weeks, confirms the fact that layoffs continue and millions are still out of a job,” said Nicole Tanenbaum, partner and chief investment strategist at Chequers Financial Management. “Investors have largely remained focused on the prospects for a swift economic recovery, and this data underscores the vulnerability of such a recovery, particularly against a backdrop of renewed resurgence in virus cases across the country.”

In the coming weeks, Congress is expected to weigh the possibility of another round of emergency relief for individual Americans. In March, lawmakers approved $1,200 payments that were sent to as many as 159 million U.S. households. Meanwhile, the Federal Reserve has pledged to keep interest rates near zero for several years, as part of its aggressive approach to keep the economy from sliding further.