“According to our study, up to 35.4 per cent of investors from the USA who have businesses in China are considering to moving their manufacturing plants from China to others countries, as a result of the USA and China facing off in their trade war since last year,” Dr Simon Ogus, chief executive officer of DSG Asia, said at the event in Singapore yesterday.

He and other investments experts were sharing their views at a seminar titled The Future of China-Asean Relations in a Divided World, which was held as part of the InvestAsia2019 conference in the city state. The two-day event, conducted by Maybank Kim Eng and ICBC, opened yesterday.

Ogus said that 18.5 per cent of the American respondents in the survey that planned to relocate their manufacturing plants are studying the possibility of moving them to Asean countries.

The survey showed that the industries in which the interest for a move to Southeast Asia is keenest include those covering consumer products, technology and telecommunications hardware, automotive production and chemicals.

“Asean is a region with the potential for business expansion, as the markets in the region are opening up on regulations and promoting foreign direct investment,” Maybank Kim Eng’s regional economist Cha Huk Bin said.

Bin said Vietnam and Thailand, in particular, have been drawing more foreign direct investment compared with their rivals in the Asean region, reflecting the promotion efforts of both countries.

According to Mayank Kim Eng research, foreign direct investment in Vietnam has grown by an average of 9 per cent a year since 2013. In Thailand, growth in foreign direct investment has been particularly strong in the chemicals, electronics and automotive industries, Bin said.

The deputy chairman (China) of APS Asset Management, Tan Kong Yam, said Asean has a close relationship with China and that a free-trade agreement between the two sides has opened up opportunities for China’s investors to expand their investments in Asean countries.

“The trade war between China and the USA has created opportunities for Chinese investors to expand their investments outside the USA. Asean is one of the top choices for Chinese investors looking to expand their investments,” Tan said.

Abdul Farid Alias, group president and chief executive officer of Maybank, said the global economy is weakening, in no small measure due to a widespread sense of uncertainty. A great source of this uncertainty is the ongoing trade war between the US and China, he said

Alias, who was speaking during a separate session titled “Doing Right in a Period of Uncertainty” at the same seminar, said the real problem is not confined to the risks that tariffs pose to the present economic order. The conflict as a whole has cast serious doubts on the future of global economic connectivity, with world trade volumes plunging at the fastest rate since the depths of the financial crisis in May 2009.

Against the backdrop of this fragmented global environment, countries around the world have started sliding into new regional arrangements, especially in Asia. To prove this point, the share of intra-Asian trade to total trade rose to 61 per cent in 2018 from 57.3 per cent in 2016, Alias said.

Intra-regional FDI rose to 50.2 per cent in 2017 from 48 per cent in 2015. About half of all jobs created from greenfield investments in Asia originated from within the region. There are signs the transition from globalisation to regionalisation is fast under way, with many of the world’s future trends expected to converge in Asia. The region’s rapid progress has surprised even the most critical sceptics, Alias said.

“In my view, taking lessons from our own past, and lessons from the West today, Asean economies have a profoundly unique opportunity in charting an entirely new course for the future. This is one that could balance economic freedom and free-market principles with a deep sense of responsibility towards society and the environment,” he said.

Expolink Global Network, the organiser of the trade show ‘Intelligent Warehouse Logistics Technology, Warehousing and Management Systems’, together with EuroExpo, organiser of the international trade show LogiMAT, and Messe Stuttgart say they aim to bring the logistics exhibition to a global level, making Thailand the key Asean gateway.

The event, “Intelligent Warehouse – Logistics Technology, Warehousing and Management Systems”, an exhibition of innovative warehouse systems and future warehouse management with modern technology, was first held in 2015 with 50 Thai and international exhibitors. The show has since attracted growing interest from the network with the next event due from July 24 to 27 at the Impact Exhibition Centre, Hall 5, Muang Thong Thani.

The first “LogiMAT Intelligent Warehouse” event will be held on May 13-15, 2020.

“Currently we maintain our prediction that Thai exports will grow between 3 and 5 per cent in 2019, a decrease from last year’s 6.7 per cent growth,” Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said at a press conference held by the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) yesterday.

On Sunday, US President Donald Trump tweeted: “For 10 months, China has been paying tariffs to the USA of 25 per cent on US$50 billion of High Tech, and 10 per cent on $200 billion of other goods. These payments are partially responsible for our great economic results. The 10 per cent will go up to 25 per cent on Friday. $325 billion.”

The projection of 3 to 5 per cent growth in exports is based on the assumption that the trade war will not escalate drastically in 2019. Supant conceded, in an interview held while the JSCCIB event was in progress, that if the trade war does worsen, then the sub-3 per cent expansion could happen. This was because many Thai exports are part of the supply chain affected by the tariffs that the US has imposed on China, said Supant, whose FTI is part of the JSCCIB.

Pimchanok Vonkorpon, director-general of the Commerce Ministry’s Trade Policy and Strategy Office, said exports will be affected if the US further increases its tariffs on Chinese goods to the threatened 25 per cent. Products such as meat, fish and seafood, fruits, coffee, tea, and flavouring products would be among those affected, she said in a separate interview.

The JSCCIB predicts that, faced with these pressures, the economy will grow between 3.7 and 4 per cent this year, with tourism and investment as the key factors driving expansion.

“Investments, in particular, are expected to increase significantly after the second half of this year. After the new government is established, we expect that foreign investment in the country will increase and public investments in key mega-infrastructure projects will continue,” Supant said.

For Thailand to cope with the trade war, Supant urges the private sector to attract diverted investment from China into the Kingdom. The public sector should step up its efforts to further integrate the country within the Asean region, especially with Thailand’s role as the chair of the regional bloc this year.

The FTI has called for the digitisation of trade windows in the region to reduce costs for exporters. This is in line with the government’s goal of completing the Asean Single Window (ASW) for all 10 Asean members.

More than 70 per cent of consumers also would share that data for benefits including more-rapid loan approvals, discounts on gym memberships and personalised offers based on based on current location, according the report, which is based on Accenture’s global Financial Services Consumer Study.

At the same time, however, people believe that privacy is paramount, with 83 per cent of respondents saying they are very cautious about the privacy of their personal data. Data security breaches were the biggest concern for consumers in Thailand, tied with increasing costs, when asked what would make them leave their bank or insurer.

The survey was done online in May and June last year, drawing on of 47,000 consumers in 28 markets. Respondents were required to have a bank account and an insurance policy and covered multiple generations and income levels.

Nontawat Poomchusri, country managing director and financial services practice lead for Accenture in Thailand, said that Thai consumers are very similar to many others in Asia in that regard.

“People here know there’s value in their personal data, so that’s why they agree to share it with banks and insurance firms, because they’ll get faster loan approval or cheaper fees and services or similar benefits,” said Nontawat.

“They’re willing to share that data, so long as they get something in return. They’re very pragmatic in that sense. There’s a growing appetite in Thailand for personalisation of products and services based on targeted consumer financial data.

“The large number of people willing to share their data for more efficient services at better prices underscore the role of digital technologies in the distribution of financial services here.”

However, Nontawat said that with the growing concern about the safeguarding of this data, financial institutions need to make that a top priority as they look to address their customers’ evolving needs.

“If consumers don’t see the level of personalisation, offers and products they want from their banks or insurers, they will certainly look for it elsewhere,” he said.

Consumers showed strong support for personalised insurance premiums, with 87 per cent interested in receiving adjusted car insurance premiums based on safe driving and 73 per cent in exchange for life insurance premiums tied to a healthy lifestyle, the highest rates in the world for those options. The vast majority of consumers (95 per cent) would provide personal data, including income, location and lifestyle habits, to their insurer if they believe it would help reduce the possibility of injury or loss.

In banking, 94 per cent of consumers would be willing to share income, location and lifestyle habit data for rapid loan approval, and 93 per cent would do so to receive personalised offers based on their location, such as discounts from a retailer. Some 77 per cent of consumers want their bank to provide updates on how much money they have until their next pay day, and 78 per cent want savings tips based on their spending habits.

Security concerns

“Concerns over security in banking and finance are a big issue that’s front and centre on everyone’s minds because of the recurring data breaches we see around the world,” said Nontawat. “Companies have spent billions of dollars to upgrade their cyber defences and improve their technology to prevent potential security issues, but we need to see this as an investment in peace of mind. It’s going to be an ongoing investment for everyone, not a one off, particularly as more and more of transactions move to digital finance.

Piyush Singh, a managing director at Accenture who leads its financial services practice in Asia-Pacific and Africa, said: “Thai consumers are willing to share significant personal data to improve their lives and get very targeted services and offers, more than many other people around the world, underscoring the huge opportunities for banks and insurers in the country.”

“The opportunities emerging in Thailand are huge, but banks and insurers also need to pay close attention to growing concerns about data privacy and security and make that a top priority as they invest in new technologies and digital services.”

The appetite for data sharing differs around the world.

Appetite for sharing significant personal data with financial firms was high in China and India, with 67 per cent and 69 per cent of consumers, respectively, willing to share more data for personalised services.

That rate was even higher in Southeast Asia, with 81 per cent of respondents in Indonesia and 74 per cent in Thailand saying the same.

Half of consumers in the US and only 42 per cent in Australia said they were willing to share more data for personalised services. In Europe, where the General Data Protection Regulation took effect in May, consumers were more sceptical. Only 40 per cent of consumers in both the UK and Germany said they would be willing to share more data with banks and insurers in return for personalised services.

Paiboon Nalinthrangkurn, Fetco chairman, said that the three-month FETCO Investor Confidence Index dropped 2.83 per cent to 104.49 from 107.53 in the previous month, regarding it as “neutral” for a second straight month, given the unclear local political developments after the March-24 election.

The Election Committee (EC) is believed to be preparing to certify the election results after which the new government can be formed, which could boost the Index and encourage foreign capital to move into the Thai stock market after net sales for four months.

In the first four months of this year, foreign investors net sold Thai stocks worth about Bt10.02 billion or US$313 million. The Thai stock market is the only one in the region in which foreign investors net sold stocks.

“This year is a good year for stock markets worldwide. The SET (Stock Exchange of Thailand) Index increased 7 per cent, regarded as slight, as it would have risen more if the Thai political developments had been clearer,” Paiboon said.

In contrast to being net sellers in the Thai stock market for the first four months of this year, foreign investors net bought Indonesian stocks worth about $4.57 billion, Filipino stocks of $817 million, Vietnamese stocks worth $215 million, Korean stocks of $6.79 billion, Taiwanese stocks worth $6.04 billion and Indian stocks of $9.88 billion. Among all, only foreign investors have experienced a drop in confidence by 20 per cent to 100 from 125 in the prior survey, for the unclear Thai political situation, international conflicts, the prolonged US-China trade war, and estimated lower Thai economic growth.

Individual investors’ confidence rose 6.62 per cent to 100, while proprietary portfolios’ confidence soared 27.28 per cent to 127.28 and local institutional investors’ confidence edged up 3.12 per cent to 110.

The current most attractive groups are energy and utility, given higher crude prices and most unattractive is mining.

Ariya Tiranaprakij, senior executive vice president of Thai Bond Market Association (ThaiBMA), said that the interest rate expectations Index for the Bank of Thailand’s Monetary Policy Committee meeting on May 8 stayed at 60, up from the previous survey due to the unchanged move of the global interest rates.

In the first four months of this year, foreign investors net sold Thai bonds worth totalling Bt64.07 billion. Of total bonds traded, short-term bonds worth Bt73.03 billion were sold for a narrower actual spread between Thai and US bonds and more investment in riskier assets with higher yields, while long-term bonds worth Bt8.96 billion were bought.

If a successful conclusion to the trade negotiations between the United States and China cannot be reached, it is believed that foreign capital will move back to Thai bonds as their safe haven, Ariya said.

Sukit Udomsirikul, managing director for research at SCB Securities, said that the SET Index in the second-third quarter of this year is expected to improve above the first quarter, the same direction for global indices on expectations for no US rate rise, the end of US quantitative tightening and satisfactory conclusion of the US-China trade negotiations.

The SET Index in this May is expected to rise to 1,700 points, if the new government is successfully formed, Sukit said.

If the new government is not formed, the SET Index may fall to 1,630 points, he said. He expected foreign capital to net buy Thai stocks worth about Bt30-Bt50 billion due to MSCI’s rebalance for higher weight of Thai stocks and certain political situations.

Meanwhile, the estimated amount of foreign capital inflow is not large, given the small number of tech stocks in the Thai bourse. Foreign investors are interested in tech stocks, he said.

The Commerce Ministry will meet to discuss the impact with the country’s commercial ambassadors on May 31 before revising the export value from an earlier estimated growth of 8 per cent, she said.

Thai National Shippers’ Council’s vice chairman, Visit Limlurcha, yesterday said, “If the US announces an increased import tax from China of 25 per cent on May 10, 2019, that will impact directly for Thailand’s export value, and may require revising down from the latest estimate of 5 per cent growth to 3 per cent in this year,”