Uttama Savanayana, leader of Phalang Pracharath Party, has pledged to continue the EEC policy and redistribute wealth, which is mainly centralised in Bangkok, to the regions.

The EEC, with some areas run by the current government, is to be extended and prepared for investments by the targeted industries.

It will also be extended to other regions in the concept of E-san 4.0 (Northeast), Lanna 4.0 (North) and Dam Kwan 4.0 (South).

The EEC is part of the Prayut Chan-o-cha-led government’s policies to boost Thailand’s competitiveness and help the country exits the middle-income gap in 2026 with an estimated per capital income of US$12,540 (Bt400,000) per year.

Korn Chatikavanj, deputy leader of the Democrat Party, said his party reserves the right to review the EEC plan, particularly its mega infrastructure investment.

In principle, the investment is necessary, he said, but if the Democrat Party is in power, it will review mega investments such as the high-speed railway project linking the country’s three main airports.

It will also negotiate with the bid winner on several issues, including the proposed profit guarantee of 6 per cent per year, he said.

“This project should not have a profit guarantee and we hope that the government will not rush for contract signing with the private enterprise,” he said.

As well, the Democrats will not confine the EEC to only three provinces. Special economic zones in border areas will also be developed.

Based on the continued expansion of border trade, an upgrade in several industries including processing and community products, will help increase income and redistribute wealth to other areas, going beyond Bangkok and its vicinities and the three eastern provinces, Korn said.

Chadchart Sittipunt, a leading member of Pheu Thai, said the party will continue the EEC development but needs to look at details of each project and the demand for the 12 targeted industries, and might extend the project to nearly all potential provinces for economic redistribution.

“Pheu Thai Party will certainly continue this project (EEC), like the Eastern Seaboard.

“We have to continue but will consider which project needs improvement or adjustment in details. For example, the high-speed rail project still lacks connectivity with other areas.

“We have to look at the U-Tapao Airport project in terms of the number of passengers,” he said.

EEC  law

Prachya Samalapa of the Thai Chamber of Commerce in the East, said the mega projects might remain unchanged in the initial period of the new government. If change is needed, it is expected to be in line with the EEC law, he said.

“Foreign investors see Thailand as an attractive investment destination. Therefore, although some projects may be delayed, they are still on the roadmap and the EEC infrastructure will benefit the country’s economy.

“Investors also gain confidence as the project moves ahead. And certainly, businessmen will come to invest but are waiting for the election result and the new government’s policy,” he said.

Somnuck Jongmeewasin, a member of EEC Watch, is urging that the political party that forms the new government reviews the EEC policy, as it has not passed a strategic environmental assessment (SEA).

The downward revision follows the expected power vacuum after Thailand’s election this month, impacts from the US-China trade dispute and lack of clarity on Britain’s exit from the European Union.

Thanavath Phonvichai, director of the centre, said that though the economy would be stimulated by short-term spending for the election, Thailand might have to wait until the third quarter of the year before a new government takes shape. There could be a vacuum period for new fund infusion to stimulate the economy with the only acceleration coming from the remaining budget disbursement.

Though the US-China trade war has been easing, there will be impacts on the global economy from the US move to impose 10 per cent tariff on US$200 billion worth of Chinese goods, while Brexit remains unclear, he said.

“Our earlier growth projection was 4-4.5 per cent for the Thai economy. But it may be lowered to 3.7-4.2 per cent with 3.8 per cent being the average figure. The centre is revising down the economic figures for 2019,” he said.

Thanavath urged the new government to come up with policies to attract foreign investment, boost Thailand’s competitiveness and push up the Thai growth to 5 per cent, a figure he expects will encourage foreigners to invest in Thailand.

But to have 5 per cent economic growth, the new government might have to continue with the 20-year national strategic plan and mega-infrastructure projects extending from high-speed rail, airports, ports to the Eastern Economic Corridor. The country needs to restructure its product manufacturing to add more value with innovations and create human resources for technologies and the digital economy.

Based on the centre’s survey of 2,239 people nationwide in February this year about confidence in the Thai economy, the Consumer Confidence Index (CCI) increased for a second straight month to 82.0 from 80.7 in January. The current CCI inched up to 55.7 from 54.5 and the future index rose to 93.6 from 92.3.

Thanavath cited certainty about the election schedule and an active election environment nationwide for the rise in the indices. Political parties are expected to spend about Bt30 billion to Bt50 billion for their election campaigns and activities.

Chinese tourists have also returned to near-normal levels, as reflected in information from chambers of commerce nationwide about their high occupancy rates, while prices of agricultural products including field corn, tapioca, pork, chicken meat, duck meat and eggs have gone up. The US-China trade war has also eased after two earlier rounds of negotiations, he said.

“Consumer confidence has improved while Chinese tourists are back, the trade war has not worsened, and the Thai election is a certainty. Therefore, the Thai economy is expected to gain from these factors particularly from the spending in election campaigns,” he said.

“Digital technology is changing the customer experience,” says Thanit Osathalert, head of consumer and retail, KPMG in Thailand. “Customers are currently more likely to use digital technology to explore and interact with potential purchases.

This offers retailers the opportunity to transform how they interact with the consumer.”

In its latest publication, KPMG has identified key retail trends that will shape the industry in 2019.

From ‘we’ to ‘me’

The best retailers are forensically using customer-centric data to deliver hyper-personalisation. Retailers can now get a very in-depth understanding of their consumers’ behavioural habits through a new frontier in personalisation such as through analysing emotional data, eye movements and DNA, in addition to searches, purchases and views to pinpoint exactly what customers need in real time.

“Adding analytics to the mix, retailers can use predictive analytics to forecast their customers’ next moves. This is also forcing retailers to reinvent the in-store experience,” adds Osathalert.

Consumers get price savvy

The introduction of smartphones has enabled consumers to become more price savvy and informed than ever before. Modern shoppers don’t want to pay full price and they aren’t afraid to share their opinions through reviews. Paying less for more and talking about it has become a trend in itself with more avenues for consumers to leave reviews and suggestions. In fact, 81 per cent of shoppers do online research before committing to the purchase and 89 per cent of these customers begin their buying process with a search engine.

The rise and rise of voice

In 2019, we will see artificial intelligence’s impact on retail grow substantially in two key areas: smart speakers and chatbots. Most smart speakers depend on assistants from current e-commerce giants – which opens up new doors into consumer homes for retailers. Chatbots offer businesses the opportunity to provide personalised online customer experience.

Experiential retail is coming to life

Retailers are actively experimenting with experience as their most powerful tool to win and retain customers. New figures show consumers continue to spend less on buying things, and more on doing things. By creating a more immersive experience, retailers can drive people to their stores and ensure they leave not just with products but also memories.

‘Planet friendly’ is due to arrive

The planet friendly movement has momentum. Consumers are shopping with emotion and values as much as their wallets. In 2019 we will see companies make more meaningful sustainability commitments that create significant impact that align with the values of the company, its brands and its target audiences.

Social currency will be more transactional

Social media has become embedded in many customers’ purchasing journeys. More and more, consumers are relying on community and word-of-mouth instead of advertisements for product recommendations. Retailers need to actively engage with these tools as consumers increasingly use them as a primary interaction point with brands and companies.

From transaction to service provider

In today’s retail economy, understanding the power of platforms is vital. The supply chain is no longer the central aggregator of business value. What a company owns matters less than what it can connect. Platforms that are dominating the retail industry know that the power lies in selling a service where they can create the means of connection.

Due to the high risks of adapting core business models, traditional players will collaborate and form partnerships to drive efficiency. We will see companies invest in a business but not get involved directly, consequently seeing the rise of joint ventures in 2019.

“In conclusion, pairing digital technology with predictive analytics is a powerful combination for any retailer who is able to connect these dots. Retailers that are performing well have connected their physical and digital presence to deliver an enhanced customer experience.“A seamless hand-off between and among technologies and in-store, during single and multiple journeys, is becoming a must as customers come to expect a ‘phygital’ experience,” says Osathalert.

Contributed by BizKPMG

First, the MSCI increased its weight in Chinese equities from 5 per cent to 20 per cent on a gradual basis, leading to other Asian stock markets being underweighted.

The other being the lower-than-expted net earnings of listed companies in the fourth quarter of 2018 at Bt155 billion, compared to the earlier estimate of Bt250 billion.

This week, the SET Index will likely be volatile, moving between 1,620-1,660 points with the major issue being possible cuts in other listed companies’ earnings estimates.

We also expect the baht to strengthen against the dollar from Bt33 to Bt32.

Adjustment will likely be made to provision for employee benefits after amendment to the labor law – an expense of about Bt27 billion to Bt28 billion in profit/loss statements, among other changes.

Initially, listed companies’earnings per share ( EPS) has been cut from Bt112.2 to Bt104-Bt106.

By maintaining the market price to earnings ratio at 16 times, the SET Index is targeted at below 1,700 points, meaning relatively low upside.

Clearer signals from the US-China trade war have been partly priced in. If the negotiations are delayed or end with an unexpected outcome, it could create pressure.

Meanwhile, domestic politics is not expected to have a major impact on the stock exchange , provided the election schedule for March 24 remains unchanged.

Amid market volatility and limited upside, we prefer high dividend stocks with low Beta.

Our picks: LH, EASTW, TTW.

Therdsak Thaveeteeratham,|Executive Vice President/Research,|Asia Plus Securities

INDEX PAST POLITICALLY

SENSITIVE PERIOD

Last week was bad for export figures, starting with the US trade deficit rising to US$59.8 million in December and about $620 billion for 2018, a 20.7 per cent decline year on year in China’s exports in February due to trade uncertainty and the New Year |holidays, and a 4.7 per cent drop |year on year in Thailand’s January exports.

The US trade deficit is expected to push President Donald Trump into finalising the trade negotiations with China on March 27.

After last-week’s pressure from ex-divident signs on big caps such as PTT, BCP and BH, the ECB’sut of the estimated euro-one economic growth and dissolution of the Thai Raksa Chart party have led to a positive view on the SET this week.

In the next period, investors will likely be focusing on political stability after the election and outcome of the US-China trade talks, widely expected to be positive.

We recommend these groups:

1 Stocks with growth prospects and upside but trading at lower forward price to earnings (PE) than the past averages: SAWAD (Fwd PE@15.63x), ERW (Fwd PE@27.15x), GLOBAL (Fwd PE@27.67x), COM7 (Fwd PE@20.63x), MEGA (Fwd PE@19.62x).

2 Stocks with dividend yields higher than 4 per cent: TISCO, HANA, KKP.

Retail plays in the provinces:BJC, GLOBAL, ROBINS, SCCC.

Passakorn Linmaneechote,|Deputy Managing Director/Research, Kasikorn Securities