#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Manufacturing falls 23% in May, sparking plea for post-virus recovery plan

Econ

Jun 30. 2020

By The Nation

News today that the Manufacturing Production Index (MPI) in May fell to its lowest in over 8 years, with production capacity at only 52 per cent, has triggered concern over the government’s continuing lack of a Covid-19 recovery plan.

The MPI for May stood at 80.31, down 23.19 per cent from the same period last year and the lowest since January 2012, as Covid-19 lockdowns around the world sent the global economy into a tailspin. Thai businesses responded by reducing working days, which reduced production capacity to 52.84 per cent, said Itthichai Yotsri, deputy director-general of the Office of Industrial Economics (OIE). Especially hard hit was the automotive industry, where production capacity fell to 26.86 per cent.

Itthichai noted that Thailand has seen no post-pandemic economic recovery plan from the government, a factor that many parties are closely monitoring. Causing more frustration is the rumour of a pending Cabinet reshuffle, which is disrupting government work, including moves to solve difficulties faced by small and medium-sized enterprises (SMEs) in securing soft loans from financial institutions.

Itthichai pleaded for immediate remedial measures.

“Policies launched from now on are considered crucial, because the impact of the pandemic is worse than any that Thailand has experienced before. Meanwhile we cannot predict what the Covid-19 situation will be like in foreign countries, and how it will affect global industrial production and the Thai economy in the second half of this year,” said the director.

However, the OIE predicted that the Thai economy will improve in June, after May’s MPI rose 2.86 per cent from April’s figure of 78.08. The manufacturing situation improved after the government launched the third phase of lockdown easing on June 1 and Phase 4 on June 15, allowing some economic activities and businesses to resume.

“Although the May MPI index is very negative, a month-by-month comparison indicates that industrial production should continue to improve. But this depends on the relaxation of restrictions, people’s spending, and whether the severe drought situations and shortage of wet-season rain damages crops,” said Itthichai.

The OIE still projects MPI for the whole year to shrink 6-7 per cent, from its initial forecast of 2-3 per cent growth, to its lowest since MPI records began in January 2000. Meanwhile it forecasts Gross Domestic Product (GDP) will contract by 5.5-6.5 per cent, from the previous prediction of 1.5-2.5 per cent growth.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Bt50 billion fund to be earmarked for loans to SMEs

Econ

Jun 30. 2020

By THE NATION

The Office of Small and Medium Enterprise Promotion will earmark Bt50 billion to offer loans to small, medium and micro businesses to help boost their liquidity so they can retain workers amid the Covid-19 crisis.

The agency’s director general, Asst Professor Dr Veerapong Malai said the fund will be part of the government’s economic stimulus package and the plan will be tabled before the Cabinet on July 7.

The Bt50-billion package will provide two types of loans:

• A maximum of Bt100,000 per borrower at an interest rate of 1 per cent with a 10-year repayment period. This loan is applicable to individuals, juristic entities and community enterprises;

• A maximum of Bt1 million per borrower at an interest rate of 1 per cent with a 10-year repayment period. This loan is only applicable to juristic entity.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

‘Business bubbles’ to let in only high-value, low-risk travellers

Econ

Jun 30. 2020

By THE NATION

The National Security Council has outlined the criteria for allowing foreign businesspeople into Thailand under the “business bubble” arrangement expected to start in July.

Related story: Another 6 groups of foreigners to be allowed entry in July

Council secretary-general Gen Somsak Rungsita said those without a Thai work permit will have to ask permission from state agencies such as the Foreign Ministry or Board of Investment.

A joint committee will also be set up to consider permissions, added Somsak, speaking in his role as chairman of the panel on easing Covid-19 restrictions.

The committee will comprise representatives of the Foreign Ministry, BOI, the Public Health Ministry and the National Economic and Social Development Council.

Criteria for allowing entry to businesspeople will include the severity of the Covid-19 outbreak in their countries and the economic value to Thailand of their visit.

Priority consideration will be given to investors in mega-projects in the Eastern Economic Corridor and elsewhere.

The committee will also focus on Thailand’s ability to track business arrivals, he added.

Foreign business travellers will be tested for Covid-19 three times – in their country of origin, on arrival in Thailand and before departure.

So far, Singapore, South Korea, Japan, Hong Kong and China have asked to form “business bubbles” with Thailand, said Somsak. Meanwhile entry for Chinese businesspeople would be considered on a province by province basis.

Those with Thai work permits will need to show a health certificate showing they are not infected with Covid-19, along with health insurance covering medical treatment in Thailand.

Both the Centre for Covid-19 Situation Administration and the government were now studying the criteria, he added.

Meanwhile, tourists are unlikely to be allowed in to Thailand any time soon, since more time was needed to prepare for “travel bubbles”, he said.

“Travel bubbles” will match countries at low risk of Covid-19 contagion and allow free flow of visitors between them without the need to quarantine.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Asset-management firms waiting to swoop on bad debts, though minister dismisses fears

Econ

Jun 30. 2020

By The Nation

Finance Minister Uttama Savanayana said he is not worried about the Covid-19 crisis pushing up the number of bad debts, while stock analysts are predicting that asset management companies will benefit from banks’ anticipated rise in bad debts.

The minister said he was not concerned about the potential of rising bad debts from Covid-19 crisis leading to financial instability because the central bank and commercial banks had experience in containing this problem. 

“Though we are facing a crisis, our financial institutions are strong and once there is an economic turnaround, things will return to normal again,” Uttama said after meeting with central bank governor and bankers on Monday (June 29). 

“We are not complacent, and the government has been providing financial support to businesses. We are also discussing extra measures to help businesses expand in the post-Covid era.” 

Predee Daochai, Kasikornbank president, said the Covid-19 crisis has generated uncertainty in the banking business, because banks still cannot predict the volume of bad debts because the Covid-19 pandemic has not ended yet. 

Kasikornbank has been boosting its reserves against risk asset and making capital plans for the next one to three years it is required to do so by the central bank. Kasikornbank is also conducting a stress test as it has done in the past, and so far, it has not seen any problems, he said. 

Average BIS capital adequacy ratio of Thai banks is 18.7 per cent compared to the minimum requirement of 8.5 per cent.

Paying Srivanich, Krungthai Bank’s president, said his bank has also conducted a stress test in preparation to cope with the impact of the crisis. He said his bank has been closely monitoring the situation to see what happens when the government financial aid comes to a halt at the end of the year. “Small and mid-sized businesses may be relatively strong now, but they may weaken once the financial aid comes to an end,” he noted, adding that the government may need to provide more funds to support SMEs. 

Separately, analysts said that asset management companies are ready to swoop in once banks’ bad debts begin surging. 

The share prices of three major asset-management companies have risen as investors expect them to benefit from banks’ bad debts, which are expected to soar as a result of Covid-19 fallout. 

The shares of Bangkok Commercial Asset Management (BAM) rose 33.70 per cent on June 26 from  last year, while JMT Network Services’ share price rose 13 per cent, while that of Chayo Group rose 11.11 per cent.

BAM’s shares rose 60 per cent from the lowest point in March, while JMT and Chayo’s rose 100 per cent from March’s lowest level. 

Based on the first-quarter performance, JMT made profits worth Bt206.81 million, up 43 per cent, Chayo earned a profit of Bt36.99 million up 34.6 per cent, while BAM’s profit was Bt698.82 per cent, down 78.5 per cent largely because it had received a large chunk of debt payment from a client the year before. 

Looking ahead for asset management companies, Korakot Sawetkruttamat, deputy managing director at Kasikorn Securities, believes banks’ non-performing loans (NPLs) will rise considerably in the fourth quarter of this year. Hence, he said, that would be the best time for asset management firms to buy up bad debts. 

BAM reckons it will spend Bt10 billion to Bt12 billion on bad debts, while JMT is eyeing purchases of Bt4.4 billion and Bt4.5 billion and Chayo Bt1 billion. 

The three companies are expected to beat their targets or buy bad debts with a combined worth of Bt17.5 billion, taking into account the fact that businesses with combined debts worth Bt6.8 trillion have been seeking government financial aid. 

Investing in these companies will be relatively safe if investors want to commit long-term and hope to gain from their profits later. 

Rising bad debts combined with contraction in the economy will benefit asset companies, unless the situation worsens. However, their short-term performance in the next few quarters is not bright as the government has implemented measures that allow debtors to temporarily suspend debt repayment. 

Of the three firms, BAM is the most attractive as it has a portfolio of bad debts with collaterals. Chayo has also acquired a large number of bad debts backed by collaterals, but it has low liquidity. Meanwhile, JMT takes on bad debts without collaterals, though the company has a chance to grow fast and pay high dividends. 

Analysts at Capital Nomura Securities are also predicting that asset companies will benefit from bad debts becoming cheaper during the Covid-19 crisis and get good returns once the economy recovers. 

BAM has an advantage as it is in the basket of FTSE SET Mid Cap Index as well as the MSCI Index, and can grab the interest of foreign investors, Nomura analysts said. 

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Investment in EEC drops more than 18%

Econ

Jun 29. 2020

By THE NATION

The number of firms registering in the Eastern Economic Corridor (EEC) from January-May this year dropped 13.35 per cent year on year to 2,731, Department of Business Development director general Vuttikrai Leewiraphan announced today.

Their total registered capital was Bt6.790 billion, down 18.32 per cent year on year.

The EEC covers Chachoengsao, Rayong and Chonburi.

The real estate sector tops the rankings of new EEC registrations with 443 firms and total registered capital of Bt1.413 billion, followed by the construction sector with 202 firms and total capital of Bt321 million, and real estate agents at 124 with registered capital of Bt369 million.

The current number of registered businesses in the EEC is 74,073 with total capital of Bt1.959 billion. Of these, 54,357 are in Chonburi, 13,909 in Rayong and 5,807 in Chachoengsao.

Foreign investment in EEC firms has reached Bt788.156 billion, representing 40.22 per cent of total investment in the corridor. Foreigners can take a maximum 49.9 per cent stake in Thai companies.

Japan tops the EEC foreign investment rankings at Bt379.135 billion, followed by China at Bt83.767 billion and Singapore at Bt43.235 billion.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Covid-19 has increased responsibility of central banks to maintain stability: Veerathai

Econ

Jun 29. 2020Bank of Thailand (BOT) Governor Veerathai Santiprabhob

By The Nation

The central bank has three missions in the aftermath of the Covid-19 pandemic, says Bank of Thailand (BOT) Governor Veerathai Santiprabhob.

Central banks around the world have to quickly respond to the larger economic landscape changing after the virus outbreak.

First, global digitalisation has been accelerating and hence financial institutions have to remodel their businesses to meet the new challenges, said Veerathai in BOT Magazine which recently published an interview with the governor.

BOT has been promoting digital payments via digital platforms such as PromptPay and QR code. During the virus pandemic, digital transactions broke records every month, and financial transactions are currently 16 million per day and there are 6 million QR code points of payment nationwide, Veerathai said.

Transactions at bank branches have decreased swiftly. The digital transactions answer new lifestyles as physical interactions for financial transactions are on a declining trend.

“We, at BOT, have many things to do on top of our existing digital infrastructure in order to expand the scope and depth of digital financial platforms, especially for businesses,” he said.

The digital financial system will support economic activities to handle highly volatile situations better, reduce cost and increase the productivity of the whole economy.

Secondly, low interest rates will stay for a longer period into the future. The global financial crisis in 2008 did lead to low interest rates. Later, central banks started to raise the interest rates under a normalisation policy, as low interest rates would discourage people from saving  and maintain high debt level.

But after Covid-19 struck, central banks had to cut rates again to shore up the the economy, lessen the impact on the people and make the debt burden less severe for consumers, he said.

The BOT also joined the fray by reducing its policy rate to 0.5 per cent, the lowest in recorded Thai history.

Fortunately, Thailand could control the pandemic and at the same time the local financial system is not fragile compared with many countries that have suffered from a weak financial system, he said. Taking advantage of resilient financial institutions, the BOT could also execute more financial measures via financial institutions, he reassured.

Thirdly, new financial stability does not depend only on traditional banks. The new system is highly connected, covering also the capital market, debt market, savings cooperatives and mutual funds, said Veerathai.

The virus crisis has forced many central banks to implement extra measures designed to safeguard  financial markets beyond the banking system. In the Covid-19 era, the role of the central bank to maintain financial stability has increased.

“The role of the central bank may not be new, but Covid-19 has forced the bank to push its monetary policies aggressively and quickly,” he added.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Key economic data for June may hold key to SET direction

Econ

Jun 27. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index next week is expected to fluctuate between 1,300 and 1,365, a stock analyst at Krungsri Securities said.

He said that the index’s support line is between 1,320 and 1,300, while the index’s resistance line is between 1,350 and 1,365.

“We advise investors to monitor the Centre for Covid-19 Situation Administration’s consideration of the fifth phase of lockdown easing, and the Covid-19 situation,” he said.

“Among international factors, we advise following tensions between the US and their trading partners, the US, China, Japan, and the euro-zone’s Purchasing Managers’ Index in manufacturing and services in June, the US nonfarm payrolls and unemployment rate in June, Japan’s retail sales and industrial production in May, and the euro-zone’s Consumer Price Index in June.”

On Friday (June 26), the SET Index closed at 1,330.34, down 2.95 per cent compared to the previous week’s close. The index’s average daily transaction was Bt56.755 billion, down 20.51 per cent compared to the previous week’s close.

Meanwhile, the Market for Alternative Investment (mai) Index closed at 295.96, down 2.08 per cent compared to the previous week’s close.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Dow tumbles 730 points as covid-19 flare-ups force states to push back reopening

Econ

Jun 27. 2020

By The Washington Post · Thomas Heath, Hannah Denham · BUSINESS, US-GLOBAL-MARKETS 
Rising coronavirus infections roiled investors on Friday, sending stocks into a sharp decline as big-economy states like Texas and Florida put a pause on reopening to stop the disease’s spread.

The Dow Jones industrial average slid 730 points, about 2.8 percent, to close at 25,015.55. The Standard & Poor’s 500 fell 2.4 percent, to 3,009.005, while the Nasdaq composite dropped 2.6 percent, to 9.757.22

All three indexes ended the week at a loss, with the Dow erasing 3.3 percent and the S&P 500 down 2.9 percent. The Nasdaq shed 2 percent over the five-day run but remains positive for June and 2020.

All 11 sectors of the S&P were in the red, weighed down by financials, energy and communication services. Facebook shares plunged 8.3 percent on news that Unilever – the maker of Dove, Lipton and other well-known brands – would suspend advertising on the social media site through year’s end due to the “polarized atmosphere” on the platform. Unilever joins Patagonia, The North Face and others in boycotting Facebook over its handling of hate speech online.

The Nasdaq technology powerhouses – Apple, Alphabet, Microsoft, Netflix and Amazon – were all down sharply. (Amazon founder Jeff Bezos owns The Washington Post.) Airline stocks took a hit as the spreading virus is expected to crimp travel. Oil prices were down but are still floating near $40 per barrel. 

Goldman Sachs was the biggest drag on the Dow, its shares sliding 8.6 percent, after the Federal Reserve said it will cap dividends and restrict stock buybacks of the big banks as part of a “stress test” and analysis of the impact of covid-19.

“While I expect banks will continue to manage their capital actions and liquidity risk prudently, and in support of the real economy, there is material uncertainty about the trajectory for the economic recovery,” Fed Vice Chair Randall Quarles said in a statement.

Dow component Nike saw shares tumble 7 percent after the sportswear and shoe giant reported a surprisingly big earnings loss. Some analysts believe Nike’s poor showing could be a preview of next month’s corporate earnings season as companies officially announce the financial effects of the coronavirus lockdown.

“June’s stock markets have been dominated by the coronavirus,” said Howard Silverblatt of S&P Dow Jones Indices. “July will be the earnings story. And August will be the election season. Call a chiropractor, and hold on. It will be whiplash time.” 

The sell-off came after Texas and Florida ordered bars to close and imposed new restrictions to mitigate a surge in cases. Arizona, South Carolina, Idaho and other states also are reporting spikes.

Nationwide, more than 122,000 Americans have died of covid-19. And the 2.4 million confirmed cases represents a severe undercount; the head of the U.S. Centers for Disease Control and Prevention estimated Thursday that more than 24 million Americans have been infected.

The decline in stocks comes amid a mixed economic package and political upheaval following last month’s death of George Floyd, a black man who was killed in police custody in Minneapolis. Unemployment is stubbornly high, but consumer spending and orders for durable goods – both key indicators – show signs of a rebound. The Commerce Department on Friday also said personal incomes declined less than feared.

There is sentiment among some financial and political analysts that polls showing a fall in President Donald Trump’s support in key battleground states has narrowed his prospects for reelection. Trump is viewed by many on Wall Street as more friendly to business and the stock market than former vice president Joe Biden, his presumed Democratic rival.

“Two things are driving this sell-off,” said Ivan Feinseth of Tigress Financial Partners. “There’s a dramatic resurgence of covid-19 infections, and secondly, Joe Biden is leading in the polls. People may be willing to accept the idea that four years of a soft economy and mediocre stock market are worth the price of political stability.” 

Stocks are still in the midst of one of their best quarters in decades, helped by slowly reviving economy and a Federal Reserve that has said it is willing to spend trillions of dollars to boost the rebound.

“If the circumstances warrant, we will not hesitate to take additional policy actions to support the U.S. economy and banking system,” Quarles said.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Jurin eyes boosting trade ties with UK

Econ

Jun 27. 2020British Ambassador to Thailand Brian John Davidson, left, pays a courtesy call to Deputy PM Jurin Laksanavisit at Government House on Friday (June 26). Photo courtesy Royal Thai Government website.

By THE NATION

Deputy Prime Minister Jurin Laksanawisit said he had spoken to British Ambassador Brian John Davidson on Friday (June 26) on possible measures of boosting trade between the two countries.

He added that Thailand is also planning to enter negotiations with Britain on a free-trade agreement.

Jurin, who is also commerce minister, added that once the Covid-19 pandemic eases, he will lead a delegation of Thai private sector representatives to the UK for talks on trade and investment.

Meanwhile, deputy government spokesperson Ratchada Thanadirek said bilateral trade between Thailand and Britain is worth Bt220 billion.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Cabinet set to consider Bt80-bn worth of economic recovery projects

Econ

Jun 27. 2020

By THE NATION

The first lot of state projects to be proposed to the Cabinet is expected to use about Bt80 billion of the economic recovery budget, the National Economic and Social Development Council (NESDC) secretary-general Tossaporn Sirisamphan said.

The government has earmarked Bt400 billion of the Bt1.1 trillion economic stimulus package for state agencies to develop projects to revive the virus-hit economy.

Tossaporn said that as of Wednesday (June 24), state agencies had proposed 46,429 projects worth Bt1.45 trillion. However, the working panel tasked with screening okayed 213 projects worth Bt101 billion in the first round, before handing the list to the screening committee, which is expected to cut the projects down to Bt80 billion before tabling them during the Cabinet meeting on July 8.

These projects are expected to create 410,000 jobs.

Of the Bt1.1 trillion stimulus package, Bt550 billion has been earmarked to help those affected by the Covid-19 pandemic, Bt400 billion for reviving the economy and Bt4.5 billion for public health. So far, the disbursement of Bt360 billion was approved.