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https://www.nationthailand.com/business/40013004

Thailand’s economy will suffer from indirect impacts of the military conflict between Russia and Ukraine, with reduced consumer confidence and higher cost of living, Thai Chamber of Commerce chairman Sanan Angubolkul said on Thursday.

In addition to the short-term effects, he advised that the Thai government and businesses prepare for possible long-term impacts of worsening hostilities between the two countries.

“Short-term impacts will be limited for Thailand, but we will see them indirectly. Oil prices in the global market have exceeded $115 per barrel and could easily surpass $120. This has caused petrol prices in Thailand to rise 5-7.5 baht per litre,” Sanan said.

“This will certainly affect consumer confidence. People will be more careful about spending, as the prices of goods become expensive,” he added.

The chamber chairman noted that Thailand’s combined trade with Russia and Ukraine accounted for only 0.5 per cent of the country’s total exports and 0.9 per cent of total imports.

Regarding a Western-led ban on Russian banks from the SWIFT system of international money transfers, Sanan suggested that Thai businesses consider payments through Russian banks that have not been banned and through China’s Chartered Institute of Procurement and Supply and a third country.

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication.

Sanan said chamber representatives had met with Ministry of Commerce officials on Wednesday to discuss this matter.

The group expected many Thai industrial sectors to suffer from the impact of the Russia-Ukraine war. Among them are animal feed, steel, automobiles, processed foods, cosmetics, jewellery, and tourism.

Sanan noted that Russia is a major buyer of Thai cosmetics and jewellery, and the market is growing. Also, Russians are the largest group of foreign tourists coming to Thailand following the relaxed Covid-19 immigration rules.

Due to the armed conflict, the number of Russian tourists expected to visit Thailand this year is likely to decrease by half — from an estimated 500,000 to only 250,000.

The chamber chairman also pointed to logistics issues, such as a potential shortage of shipping containers and higher freight charges caused by increased risks of shipping to the war zone.

He suggested that Thai exporters turn to land and rail transportation to Russia and Ukraine through their neighbouring countries.


Published : March 03, 2022

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https://www.nationthailand.com/business/40012994

Commercial banks approved 289.3 billion baht in loans to over 120,000 people and nearly 300 businesses affected by the Covid-19 outbreak since it was first found in Thailand in early 2020, the Thai Bankers’ Association reported on Thursday.

“For nearly two years, the association has been working with the Bank of Thailand and member banks in providing financial aid to business owners and the general public to help them stay afloat during the Covid-19 crisis,” said the association president, Payong Srivanich. “Data as of February 14 showed that 124,250 people and 285 businesses have been approved for Covid-19 related loans amounting to 289.3 billion baht.

“Besides loans, commercial banks have also granted debt moratorium to customers hit by the Covid-19 fallout, who owed 39.5 billion baht,” he added.

“Currently business loans are expanding at 7.9 per cent compared to last year, which means the business sector still needs money for business rehabilitation and expansion,” said Payong.

“Member banks under the association will continue to provide loans to business owners to make sure that the economic recovery is progressing smoothly now that the outbreak is gradually subsiding.”

Payong added that during the outbreak, member banks of the association also invested in establishing smart infrastructure, such as the PromptPay platform and Digital Supply Chain Finance to facilitate financial transactions even during Covid-19 lockdowns to comply with the government’s Covid Free Setting standard.


“We are planning to use digital platforms to record online purchasing history and payment of utility bills and submit the data to the National Credit Bureau [NCB],” said Payong. “The NCB will then use AI [artificial intelligence] and data analytics technology to turn it into Big Data that will help improve efficiency in alternative credit scoring.”

Published : March 03, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012992

A House of Representatives body looking into the controversial proposed merger between telecom giants True Corporation and Total Access Communication (DTAC) met officials from the two companies on Wednesday to seek clarifications.

True and DTAC were asked about various aspects of their deal, such as reasons for merger, guidelines, laws and impacts on consumers, the commission chairman, Anudith Nakornthap, said.

He added that True and DTAC were also to clarify some issues later so that the commission could study the impact of the deal in the future.

“The commission is still curious about the real intention of this merger deal, as it is still unclear, especially the change in technology, new services which will not affect consumers and the impact of cost reduction on service quality and competitiveness,” he said.

“Meanwhile, we want to know about the steps the National Broadcasting and Telecommunications Commission [NBTC] will take to assure consumers that the merger will not have any impact on them and they will receive good quality service at a reasonable price.”

He said the commission will summon the NBTC to discuss the issue next week before concluding all information to propose to related agencies for consideration.

Anudith said the NBTC must ensure that the merger will be in line with laws, while it can launch measures to ensure improvement in service at a reasonable price.

“We believe that the merger can be done in line with laws, but we should focus on the process before and after the merger, on how it impacts the people and the telecommunication market,” he said, adding that the commission will report to the House of Representatives later.

Anudith said the business could not survive if the merger deal cannot be done, especially with the arrival of Over-The-Top (OTT) services from abroad, citing remarks by True and DTAC.

“Both mobile operators claimed that the merger deal is a solution to reduce fixed costs, as OTT service will increase network traffic and data usage, while metaverse would impose high operation costs on them,” he said.

“Meanwhile, AIS said the coming of OTT services is a challenge that global telecommunication must face, adding that it is necessary to see the merger result.”

He said the commission is paying attention to laws, improvement in services and reasonable price, so the NBTC and related agencies must supervise the issue to ensure there is no market domination or technology concentration.

He added that the NBTC and Trade Competition Commission must supervise this issue.

Published : March 03, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012983

The Bank of Thailand (BOT) on Wednesday asked PayPal (Thailand) to extend its international money transfer service period for small online sellers until its identity verification system is completed.

BOT’s request came after a meeting of the House of Representatives’ finance, financial institutions and financial market commission. The meeting was also attended by the Anti-Money Laundering Office (AMLO) and small online entrepreneurs.

The meeting was called after the online sellers submitted a letter to commission spokeswoman Watanya Wongopasi, claiming they were affected by PayPal’s new policy that individuals must register as juristic persons to use its international money transfer service. The policy is scheduled to take effect on March 7.

Teeraphat Charoensuk, representing the online sellers, made it clear that he would suffer from PayPal’s new policy. He also claimed that he faced difficulties registering as a juristic person, citing increasing business operation expenses and age restrictions.

BOT said PayPal’s move to verify identities must be done under the bank’s supervision in order to protect Thai customers, adding that the policy is also in line with AMLO laws.

The bank said an announcement by PayPal (Thailand) asking users to register as juristic persons in order to verify their identities under the new policy is a misunderstanding as the central bank and AMLO want both individuals and juristic persons to verify themselves.

Meanwhile, Watanya said the commission had concluded that individuals can verify their identity by using their ID cards or passports. She added that business registration with the Commerce Ministry is enough to meet AMLO conditions if PayPal wants to verify business operations.

“Hence, individuals do not have to register as juristic persons, which would result in high operation costs,” she pointed out.

Watanya said PayPal’s identity verification system is expected to be completed in six months. The company must verify customers’ identities within three months after the system is ready.

She added that BOT had discussed with PayPal the issue of compensating online sellers for causing a misunderstanding.

Published : March 03, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012977

The Stock Exchange of Thailand (SET) Index is expected to rise to between 1,700 and 1,705 points on Thursday after an increase in the prices of crude oil and coal on the heels of sanctions against Russia, Krungsri Securities said.

Meanwhile, the US Federal Reserve signalling that it would raise the interest rate by 0.25 per cent each time would help boost the index, Krungsri Securities said.

“However, the index would be under pressure due to the war between Russia and Ukraine,” it added.

Krungsri Securities advised investors to closely follow the Fed’s monetary policy and US economic results to be announced on Thursday.

It recommends the purchase of the following as an investment strategy:

• PTTEP, PTT, Top, SPRC, BCP, Banpu and Age, which would benefit from the rising energy prices.

• PSL and TTA, which would gain from a rising freight rate.

• BDMS, Intuch, Advanc and Dtac, which are “defence” stocks.

The SET Index closed at 1,689.81 on Wednesday, down 4.47 points or 0.26 per cent. Transactions totalled 107.13 billion baht with an index high of 1,699.58 and a low of 1,684.53.

Published : March 03, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012975

The baht opened at 32.48 to the US dollar on Thursday, strengthening from Wednesday’s close of 32.70.

Krungthai Bank market strategist Poon Panichpibool predicted the Thai currency would move between 32.35 and 32.60 during the day.

Poon said the baht found support from China’s new “Zero Covid” prevention measures, which could lead to a travel bubble with Thailand.

He said the market was open to more risks as foreign investors continued to buy Thai stocks, which have helped the baht to strengthen.

However, the Russia-Ukraine war might keep the market in a risk-off state, which means markets will remain volatile.

Poon said the market will swing in a wider range than normal. The baht’s key resistance level will remain at 32.80 to the dollar, while the key support level would be from 32.20 to 32.40.

Published : March 03, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012960

Thailand’s exports recorded 8 per cent growth in January, Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said on Wednesday.

Jurin and Boonyarit Kalayanamit, the permanent secretary for Commerce, held a press conference at the Commerce Ministry to announce the export figures for January.

Jurin said the export figures for January 2022 came out late because the Customs Department was revising its HS [harmonised system] code, which has to be revised every five years.

Jurin said exports grew by 8 per cent in January with a total value of Bt708.31 billion.

The top 10 markets with most growth are: India (31.9 per cent), Russia (31.9 per cent), United Kingdom (29.7 per cent), South Korea (26.8 per cent), the United States (24.1 per cent), Canada (13.6 per cent), Asean (13.2 per cent), China (6.8 per cent), Latin America (5 per cent) and European Union (1.4 per cent).

Jurin said the country enjoyed growth mainly because the Commerce Ministry has been working closely with the private sector to boost exports.

Moreover, the manufacturing sector was expanding globally, which was reflected in the Global Manufacturing Index that was above 50 points for 19 consecutive months.

Another factor was the fact that the shortage of containers at the Laem Chabang deep sea port and Bangkok Port has eased, Jurin said. He said the private sector and US authorities have been working night and day and on holidays to speed up clearance of goods so the containers could be recycled for use for exports.

Jurin added that the figure was much higher than the 0.3 per cent growth in January 2021.

The Commerce Ministry maintained its export target for this year of 3 to 4 per cent growth despite the Russia-Ukraine war, Jurin said.

Jurin said the permanent secretary has been assigned to discuss the situation related to the war with the Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai National Shippers’ Council on measures to mitigate the impact of the war.

Jurin said the discussion concluded that the current situation would not much affect Thailand’s exports because exports to Russia constituted only 0.38 per cent of all export figures and only 0.04 per cent to Ukraine.

He said the conflict could affect in the long run due to rising cost because of increasing oil prices.

The meeting discussed that if some ports in Russia and Ukraine remain closed because of the war, new ports would have to be found and the shipping costs would rise.

The meeting also realised that the war could affect the prices of imported materials, such as steel for making cans and for construction and grains for making animal feed, as Russia and Ukraine are major exporters of wheat.

The meeting also discussed a measure for Thailand to seek new markets in the Middle East, Africa and Latin America to substitute markets in Russia and Ukraine.

Jurin said the meeting also discussed finding alternate markets where Thailand could replace Russia and Ukraine. For example, Thailand could try to export tapioca to China to replace corn from Ukraine or export rubber products to the US to replace products from Ukraine.

Jurin said he had told the permanent secretary to work closely with the three organisations to find measures to mitigate the impact from the war.

Published : March 02, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012933

Thai Airways has informed the cabinet that its business recovery is progressing and provided details at a meeting.

The airline had earlier established a committee to spearhead the reduction of its debt to an appropriate level in an attempt to fly the group out of the red.

Government deputy spokeswoman Ratchada Thanadirek said on Tuesday that the Cabinet had received the report, which revealed 10 important adjustments:

1. A reduction in the number of planes – which were old, inefficient or not cost-effective –from 116 to 58.
2. Adjusting its business structure: reducing the company’s payroll by 23.1 billion baht from 2019, reforming the work process, reducing the number of rented/hired aircraft, decreasing the types of planes from eight to four, and adjusting working regulations.
3. Reforming the organisation structure and reducing its size; Scaling down the number of personnel from 29,500 in 2019 to 15,200.
4. Reforming the business as a whole: the airline aims to reduce expenses by 53 billion baht per year starting with 2022.
5. Finding revenue from other sources: shipping and selling food and drinks.
6. Planning network routes to important cities in each region: Thai Airways has jumped aboard with other partner airlines to connect flights to cities to generate extra revenue.
7. Selling secondary assets: the airline has sold or is selling the stocks of subsidiaries, land and training centre in Lak Si district, land and buildings in Chiang Mai and Phuket, and its Larn Laung office. Thai Airways is also selling unused real estate and aircraft in Thailand and foreign countries.
8. Finding a new source of revenue.
9. Adjusting its debt structure.
10. Making a net profit of 11.12 billion baht from January to June 2021, but witnessing operational losses of 14.33 billion baht. Thai Airways has earned revenue of 25.89 billion baht from adjustments in its debt restructuring and adjusting its aircraft renting/hire purchase contracts.

Ratchada said Thai Airways is finding a new source of income in the form of credit amounting to 25 billion baht from financial institutions to support the company’s business recovery in 2022. A contract for the purpose is expected to be signed this month.

Published : March 02, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012931

The Stock Exchange of Thailand (SET) Index is expected to fluctuate between 1,685 and 1,705 points on Wednesday amid the war between Russia and Ukraine, Krungsri Securities said.

The invasion has also forced investors to turn away from risk assets and go in for safe-haven assets due to the rising volatility index, it pointed out.

“However, the rising crude oil price of above US$100 [THB3,263] per barrel and investor speculation of stocks which gained specific positive sentiment would help boost the index,” Krungsri Securities said.

It advised investors to monitor the US Federal Reserve’s monetary policy and announcement on the country’s economic situation between March 2 and 3.

It recommends the purchase of the following as an investment strategy:

• PTTEP, PTT, Top, SPRC, BCP, Banpu and Age, which would benefit from rising energy prices.

• HMPro, Makro, CPAll, CRC and CPN, which would gain from a domestic economic recovery.

• BDMS, Intuch, Advanc and DTAC, which are “defensive” stocks.

The SET Index closed at 1,694.18 on Tuesday, up 9.10 points or 0.54 per cent. Transactions totalled 91.80 billion baht with an index high of 1,701.69 and a low of 1,690.82.

Published : March 02, 2022

By : THE NATION

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https://www.nationthailand.com/business/40012929

The baht opened at 32.68 to the US dollar on Wednesday, weakening from Tuesday’s close of 32.61, the weakest in two weeks.

Krungthai Bank predicted the Thai currency would move between 32.65 and 32.80 during the day.

Poon said the baht was likely to fluctuate in a wide range due to pressure from the Russia-Ukraine conflict.

However, it would not weaken much because the gold price is increasing as investors sell the precious metal, he pointed out. Moreover, the baht is finding support from foreign purchases of Thai stocks.

In the short term, the baht’s key resistance level will remain at 32.80-32.90 to the dollar, while the key support level would be at 32.40.

Poon noted that the currency market is back to selling risk assets again due to the Russia-Ukraine conflict after peace negotiations failed.

Meanwhile, some investors are worried about stagflation as energy prices increase while central banks are raising interest rates.

Sanctions on Russia are also pressuring the overall world economy, Poon added.

Published : March 02, 2022

By : THE NATION