#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Mergers and acquisitions post-Covid: redefining M&A strategies to create value

Biz insightsFeb 11. 2021

By Benchamaporn Piyakulvorawat
Special to Nation Thailand

Many sectors will need to reinvent themselves in order to thrive, and M&A activities will have a strong influence in shaping the “next normal” environment and creating new business narratives for many companies.

Deloitte Southeast Asia was recently honoured to welcome Professor Aswath Damodaran, a professor of finance at the Stern School of Business, NYU, and the author of several textbooks on valuation, corporate finance and investment management, to be our distinguished guest speaker on the topic “Crisis as a crucible: a Jedi guide to investment serenity”. Professor Damodaran shared his views on ways to approach business valuations in this time of innovation and uncertainty. The webinar was valuable and could inspire business leaders and companies planning mergers and acquisitions (M&A) to rethink and design their strategies in the new world post-Covid-19.

Those who have been following Professor Damodaran’s valuation practices would be familiar with his statement about “the narrative as valuation”, which cites that “narrative without numbers is storytelling and numbers without stories to back them up are just financial modelling”. In the webinar, Professor Damodaran described a 5-step valuation, starting from developing the narrative for the business to be valued, testing the narrative to see if it is possible, plausible and probable, converting the narrative to value drivers, connecting the value drivers to valuation, and keeping the feedback loop to improve and modify the narrative.

There are implications for both business leaders and investors. For businesses to attract capital, they need to develop a rational narrative about their business, convey the narrative to investors effectively, and act consistently. Businesses also need to identify their value drivers and measure how the narrative is unfolding and changing in response to unforeseen events. Investors need to find companies that have convincing narratives, convert these narratives into value to justify the investment value. They must also be open to changes in narratives and numbers, especially during times of uncertainties and new phenomena.

The concept of narrative and numbers becomes clearer during current conditions as crises can affect a company’s “story”, favourably or unfavourably, and consequently expectations of its business value. During the time of a typical crisis, resilient business leaders have to:

• Respond – deal with the present situation and manage continuity;

• Recover – learn and emerge stronger, and

• Thrive – prepare for and shape the “next normal”.

The post-Covid world will unleash structural and systematic changes and it is expected that recovery will be highly asymmetric across regions and sectors. Many sectors will need to reinvent themselves in order to thrive and M&A activities will have a strong influence in shaping the “next normal” environment and creating new business stories for many companies.

In a Deloitte publication on M&A amid Covid-19, it is anticipated that a combination of defensive and offensive M&A strategies will emerge as companies strive to safeguard core markets, accelerate transformation and position themselves to capture market leadership. Redefining M&A post-Covid in terms of rebound scenarios and strategic choices will bring clarity of purpose while confronting uncertainties. Inorganic growth strategies such as partnerships with peers, co-investments with private equity, investment in disruptive technologies, or cross-sector alliances could be alternative strategies beyond traditional M&A in a post-Covid world.

Companies in disadvantaged sectors such as aviation, hospitality and real estate may turn to M&A to safeguard their future. The defensive M&A strategies include:

• M&A to salvage value: companies that have been severely impacted and are in a financially vulnerable position will need to take decisive measures to secure their survival. Some will pursue M&A activities such as portfolio optimisation and divestment of non-core assets to increase capital efficiency, or wind down underperforming businesses or loss-making divisions to preserve the viable core business. Rapid turnaround strategies and speed of execution are crucial to maximise value.

• M&A to safeguard markets and maintain competitive parity: companies where the impact has been less severe, but remain in a financially vulnerable position, could use M&A to safeguard their markets and core businesses, and maintain parity with their competitors. Companies that have capital constraints should consider alliances and pursue co-investment opportunities to reduce risk and capital outlay.

Companies in sectors that are more resilient such as digital health, remote working technologies, enterprise security and media streaming may pursue acquisitions to capture their market leadership. The offensive M&A strategies include:

• M&A to transform the business and safeguard the future: companies that have strong balance sheets but expect a significant degree of structural disruption to their sector could use M&A to safeguard their customer bases and supply chains and accelerate transformation of their business models. They may pursue opportunistic acquisitions to prepare for “next normal” conditions or disruptive acquisitions to accelerate the adoption of digital technology in their businesses, and explore acquisition opportunities by actively scanning the market for underperforming peers and high-growth start-ups that are struggling under funding constraints.

• M&A to change the game: companies that are resilient could use M&A to capture market leadership. The next normal is likely to accelerate sector convergence from new customer behaviours and spending patterns. Companies should ally with both large specialist partners as well as start-ups from the innovation ecosystem to collaborate and shape new market offerings.

These M&A strategies will affect companies’ future business directions, their stories and expected business values. Business leaders need to be ready to redefine their strategies and develop new stories under the next-normal world with supporting fundamentals and commitments to achieve and create value for their investors.

As emphasised by Professor Damodaran, when a crisis hits, a company’s story matters more than ever before since numbers can no longer be used as a crutch.

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Gold price drops, following silver

Biz insightsFeb 03. 2021

By The Nation

The price of gold dropped by Bt100 per baht weight in morning trade on Wednesday, the Gold Traders Association reported.

As of 9.25am, the buying price of a gold bar was Bt26,100 per baht weight and selling price Bt26,200, while gold ornaments cost Bt25,635.56 and Bt26,700, respectively.

At close on Tuesday, the buying price of a gold bar was Bt26,200 per baht weight and selling price Bt26,300, while gold ornaments cost Bt25,726.52 and Bt26,800, respectively.

The spot gold price moved to US$1,844 (Bt55,339) per ounce in the morning, while the Comex (Commodity Exchange) gold price slumped by $30.50 to $1,833.40 per ounce on Tuesday due to the over 10 per cent fall in the price of silver after the Chicago Mercantile Exchange, the world’s leading and most diverse derivatives marketplace, increased its maintenance margin to deal with individual investor speculation.

The Hong Kong gold price meanwhile dropped by HK$70 to $17,000 (Bt65,817) per tael, the Chinese Gold and Silver Exchange Society reported.

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Digital Finance Controllership: Moving from robots to intelligent automation

Biz insightsJan 28. 2021Joeyvoen Teo

By Montri Khongkruephan, Joeyvoen Teo

Special to The Nation

Across finance today, organisations are challenged to manage large volumes of structured and unstructured data coming from disparate systems. As the global economy evolves rapidly to recover from the prolonged impact of Covid-19, the finance function continues to feel the pressure to generate significant value-added insights for the organisation.

The ability of CFOs to leverage digital and intelligent technologies to position their finance function as the catalyst to drive data-driven insights and identify strategic opportunities, will determine the future of their organisations.

Shift to building smarter bots

The first wave of a financial digital core was led by the adoption of Robotic Process Automation (RPA). The RPA ability to automate repetitive rules-based processes, to open email attachments, complete e-forms, and initiate workflows, record, re-key data, make calculations, generate reports and work around the clock was revolutionary. The benefits of automation are obvious in cost reduction, lower error rates, improved service, turnaround time reduction and increased scalability of operations, with improved controls and compliance.

However, RPA has its limitations. Bots are able to follow logical rules-based processes – but unable to see patterns, understand the logic behind the data or extract meaning from images, text or speech.

Since late 2019, organisations have been seeking to scale these solutions by integrating intelligent and cognitive AI capabilities such as speech recognition, natural language processing (NLP) and machine learning (ML) to automate perceptual- and judgement-based tasks and predictions that were once reserved for humans.

This has shifted the paradigm, extending automation to a whole new potential. Organisations are now able to become more efficient and agile as they transform into fully dynamic digital businesses.

Montri Khongkruephan

Benefits of intelligent cognitive automation

Machine learning, autonomics, machine vision, NLP and deep learning offer the ability to extract meaning from images, text or speech, detect patterns and anomalies, predictions analysis, recommendations and decisions.

A modernised financial digital core driven by RPA and intelligent cognitive capabilities has the ability to eliminate closed tasks and provide real-time analytics to support business objectives. Leading organisations are leveraging the digital core to reimagine financial processes, enhance strategic business partnership through real-time analytics to rapidly respond to business changes and M&A activities.

A recent Deloitte survey found executives of organisations currently scaling intelligent automation have already achieved an average 27 per cent reduction in costs, as compared to the expected 22 per cent, from their implementations to date.

Digital finance controllership

In digital finance controllership, a specialised combination of accounting knowledge and flexible in-memory financial applications is being used to modernise business data and logic.

Finance controllers can now transform business and finance processes, achieving higher efficiency, speed and accuracy, including by automating predictions and decisions on the basis of structured and unstructured inputs.

By combining internal financial information and operational data with external information to make sense of an increasingly complex world, financial controllers are able to generate new insights and identify hidden patterns.

Many ERP systems are faced with the challenge of automating the full end-to-end Close, Consolidate and Report process but often do not fully support the linkages within the business. This can lead to a fragmented, manual and inefficient close, as well as to inefficiencies throughout the accounting period.

In contrast, integrated systems promote a clean transactional data flow from source directly to financial systems (sub-ledgers and general ledgers), reducing the number of transaction-level variances that require manual reconciliation.

The previously fragmented and manual financial close management is being replaced with a hub-and-spoke model where applications can now work in synchronization within a single data source.

RPA software helps to pull, aggregates fragmented financial data, while the processing of the data are under the direction of more advanced intelligent and cognitive technologies. When the AI algorithm has completed processing its functions on the raw data, RPA then pushes the final output answers to the target systems.

How to start?

Embracing intelligent cognitive technology requires strategic transformational change and design thinking, but can play a key role in ensuring long-term implementation success.

As financial controllerships embark on their modernisation journey it is critical to establish a clear, long-term vision and road map that has buy-in and input from key stakeholders across the risk and finance organisations. There is a need to examine the opportunities of AI to address today’s business challenges, prioritise the opportunities, articulate how the intelligent cognitive automation will add value to the business, and align the next steps.

In summary, financial controllers have the opportunity to harness sophisticated intelligent cognitive technologies, analytical tools, and methods. The importance lies in the ability to identify quick-wins and decisions to address key pain points such as manual journal entries, data aggregation processes, manual reconciliation processes, and product control and reporting preparation processes.

This targeted automation of manual processes will help to enhance overall data quality, reduce costs, increase processing speeds, and better manage the risk of reporting errors in the near term, providing a quick turnaround in ROI. This, in turn, will pave the way to longer-term investments and strategy to incorporate more sophisticated intelligent cognitive capabilities such as machine learning, predictive analytics and AI to achieve a true transformation in digital finance controllership.

Montri Khongkruephan is a partner, and Joeyvoen Teo a senior manager, of audit & assurance at Deloitte Thailand.

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Finance Ministry sells 5% stake in Bangchak Corp to fund PTTOR share purchase

Biz insightsJan 25. 2021

By The Nation

The Finance Ministry sold 71.89 million shares in SET-listed Bangchak Corporation (BCP) to the state-owned Vayupak Fund 1 on January 19, according to the Securities and Exchange Commission (SEC) on Monday.

The sale was made to fund the ministry’s purchase of 153.34 million shares in PTT Oil and Retail Business (PTTOR)’s upcoming initial public offering.

The sale accounted for 5.30 per cent of BCP’s total issued and paid-up shares.

Following the sale, the Finance Ministry’s stake in BCP amounts to 65.54 million shares, accounting for 4.82 per cent of the company’s total shares.

As of January 22, the Finance Ministry’s shareholdings totalled Bt1.22 trillion, with stakes in Airports of Thailand (AOT), PTT, TMB Bank (TMB), Thailand Future Fund (TFFIF), Thai Airways International (THAI), BCP, MCOT, MFC Asset Management (MFC), Padaeng Industry (PDI), Ratchaphruek Hospital (RPH) and NEP Realty and Industry (NEP).

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Data and tech transformation ‘offer path to Covid recovery’

Biz insightsJan 20. 2021Taveesak Saengthong

By The Nation

Data and technology transformation underpin the path to global recovery from the Covid-19 catastrophe.

So says tech company Oracle (Thailand), which said it is committed to helping overcome the public health crisis both here and abroad.

Taveesak Saengthong, managing director for Oracle (Thailand), remarked that collaboration between the public and private sector, and across industries, will be crucial to this effort.

In Thailand, where the technology company is marking 30 years in the market, Taveesak said that Oracle is constantly innovating to offer a solution for every piece of the puzzle.

He shared that Oracle can contribute towards Thailand’s recovery in two ways – addressing the healthcare sector requirements and economic recovery through support for businesses.

Oracle said its National Electronic Health Records (EHR) Database and Oracle Public Health Management System, two solutions which were built by Oracle teams around the world when Covid-19 became a global pandemic, have been instrumental in helping government efforts in collecting, processing and analysing health updates from patients and healthcare providers.

In Africa, Oracle is also working with Tony Blair Institute to support a yellow fever vaccination program in Ghana, Rwanda and Sierra Leone, with a modern, cloud-based, electronic health records system to help manage their large-scale vaccination programmes.

To get the vaccine to people on the ground, it said governments need to put the processes and infrastructure in place to adequately and effectively manage the vaccine development ecosystem.

“Compounding the issue, cold chain logistics are particularly difficult in warmer climates, and with most parts of Southeast Asia being in the tropics, this could pose a significant obstacle. To address this challenge, Oracle offers its Supply Chain Management [SCM] Cloud to help customers maintain a resilient supply chain to keep the economy going,” said Taveesak.

Meanwhile with Covid-19 impacting the economy, governments and businesses would also need to look at boosting morale of people by enabling upskilling for digital talents and also how businesses manage their workforce, Oracle said.

Said Taveesak: “With the demands for remote working, there is increased demand for more digital, including the need for digital talents. Oracle is also contributing to the upskilling of talents through our Oracle Academy programme.” In Thailand, Oracle Academy partners with 89 institutions and support 178 educators, to train students on core as well as up-and-coming technical skills, enabling them employment in the technology sector.

Oracle said it is also working with Thai customers to ensure their business continuity during the pandemic.

Ngern Tid Lor, a microfinance leader in Thailand, decided to migrate to Oracle Fusion Cloud Enterprise Resource Planning (Oracle Cloud ERP). This move offers them an array of improved features with richer data intelligence in a single management platform that brings about an overall reduction in cost. Minor Hotels has moved its use of Oracle E-business Suite, Hyperion and BI for its food business to Oracle Cloud Infrastructure (OCI).

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Top ‘new normal’ trends waiting to shape the world in 2021

Biz insightsJan 06. 2021Thawipong Anotaisinthawee, country manager for Nutanix (Thailand)

By Thawipong Anotaisinthawee

Special to The Nation

2020 was a year of shocks and rapid change, reshaping the way we work and the ways in which technology was used to support the new normal.

Organisations that adjusted quickly were able to weather the storm and come out on top, though others struggled to keep pace with the digital acceleration required to survive.

This digital acceleration will continue to shape the tech and business landscape into 2021. Here are my top predictions for trends that will shape the next 12 months.

Agile strategy implementation

As countries begin to look beyond the Covid-19 pandemic, we will start to see a slow, staggered return to physical workspaces. But it will be an uneven recovery. Across the Asia-Pacific region and further afield, our countries and economies are very interconnected. So, even if one country’s recovery is going well, global uncertainty will continue until all major international players return to an even keel.

Naturally, this will create a scattered return to growth. To deal with this, organisations will need the agility to shift their strategies and spending on a quarter-by-quarter basis to ensure they can react to the macro situation. The appetite for traditional, large capitalised IT spending will be replaced with just-in-time agility.

A traditional approach to technology doesn’t allow this agility. Instead, enterprises and governments will look to subscription models over longer-term contracts or lock-ins, to ensure they have the ability to shift and innovate in the face of uncertainty.

A pay-as-you-grow model which encourages “fail fast” strategies will balance the imperatives to innovate with the need to reduce exposure.

Validation for digitisation a top priority

Regardless of how far they lag behind pre-COVID-19, countries and businesses alike will be pushed to a new level of digitisation in the coming 12 months.

Every organisation will have to rethink its model – even if we snapped back to how things were (which we won’t), our environment and peoples’ expectations have changed. To cope, even the most brittle organisations will need to embrace agility. This is being seen already – Japan, for example, has gone so far as to mandate increased digitisation across key government departments.

Previously, digitisation was the priority of the chief information officer or CIO, and not given attention by the CEO or the rest of the management. This changed rapidly with the pandemic when finally, the enabling power of digital transformation was recognised across the business world. It will remain a top priority throughout 2021, when having the right level of digital ability will continue to be vital for business agility and survival.

As a result, the CIO will become more prominent in business decisions and leadership, with their tech investments having been validated in a big way. The shift of IT from a cost centre to a key business driver will accelerate. Every business is now a technology business, even if they don’t realize it yet.

Climate change to be back on agenda

If it hadn’t been for COVID-19, climate change would have been the biggest global story of 2020. After being pushed off the global agenda this year, climate change will return to be the dominant subject in 2021.

Politics aside, it’s clear the effects of climate change are real and we need to find a way forward. This is particularly true of industries like resources, transport and agriculture. As companies continue to embed and accelerate their digital transformation, they need to do this with a view on climate change and its effects.

Distributed businesses, for example, will need to increase their resilience. Major weather events will impact supply chains and factories in vulnerable areas.

In the face of these concerns, technology can enable better practices. Innovative solutions like edge computing will play a key role in this space – for example, implementing and tracking efficient and sustainable practices on the ground, tweaking and optimising on the go to increase yield, decrease emissions, better manage productions lines, and so on.

Recent political shifts should also bring the US back to the table as a partner and driving force for dealing with climate change, with reverberations globally.

Hybrid and multi-cloud strategy

Many Asia-Pacific companies that wanted to run head first into the cloud are catching up with their US counterparts, who realised several years ago that many mission-critical or legacy applications vital to the running of a business aren’t right for the cloud.

Companies want cloud-like capabilities but need to keep optionality and flexibility. No one wants to be locked into anything. As such, CIOs will begin insisting on hybrid and multi-cloud strategies, or at the very least insist on portability assurances as they become increasingly cloud smart.

Globally, we have seen many organisations begin to modernise their applications and shift to a “cloud first” strategy, only to hit a wall when they find that key applications cannot be efficiently migrated nor refactored to a cloud-friendly model. Instead, a hybrid and multi-cloud strategy will be necessary to balance desire for cloud agility and economics with the reality of sustaining operations.

This will also enable the quarter-on-quarter agility businesses will need for the foreseeable future. Organisations will learn to take the long-term view and avoid being locked into something that next quarter might not work, if the world suddenly looks completely different.

If there’s one thing organisations should take from 2020 and apply to their 2021 strategies, it’s this: Disruptive change is inevitable. Flexibility and adaptability need to be core to business thinking.

Thawipong Anotaisinthawee is country manager for Nutanix (Thailand).

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

New normal heralds renaissance of the PC

Biz insightsJan 06. 2021Sam Burd is president for Dell Technologies’ Client Solutions Group.

By Sam Burd

Special to The Nation

The term “tablet PC” was coined in around 2000, and 10 years later we saw the first headline – “The PC Officially Died Today” – giving rise to a decade-long debate, with most tech pundits convinced that the PC would go extinct by 2020.

Fast forward to today and the narrative has changed. Worldwide PC shipments rose 17.1 per cent year on year in the third quarter of 2020, while smartphone shipments are projected to drop 1.3 per cent year on year in the same quarter, according to International Data Corporation (IDC).

While the PC has always helped us connect, collaborate and communicate, 2020 has proven the value it brings to our lives more than any other time. I believe we’re witnessing the renaissance of the PC. Not a resurgence, as that would imply a period of little activity, but a renaissance – an entirely new way of thinking about something.

We’ve been designing innovative PCs that can help you “work from anywhere” for years, but now we’ve been given a rare opportunity to step back, rethink and use this time as a catalyst for positive, innovative change.

IT doesn’t touch the PC

Dell has always put the needs of people at its core, with support available at every stage of a company’s journey to provide a productive and connected digital workforce.

But how does this evolve in our renaissance phase? Think of PCs that self-heal to keep you working instead of looking for help. Think how the combination of AI, analytics, the cloud and improved connectivity will make remote management of PCs a breeze. And how the promise of predictive maintenance means problems fix themselves before they manifest.

A future where an IT professional never physically touches a PC again? That’s a revival that could benefit us all.

With AI, PC stands for personal companion

With ever-increasing demands, we need PCs that do more than just work. We need PCs that are more intelligent, self-aware and user aware. We recently introduced Dell Optimizer, our AI-based software that learns and adapts to how you work and provides faster app launches, extended battery life, easier log-on and secure lock-outs.

Future AI capabilities will benefit us in ways we haven’t imagined yet. AI will make PC usage more seamless, customised and hassle-free, getting rid of challenges like connecting to the local network or setting up a printer.

Imagine ubiquitous connectivity and continuous experience that translates across all your preferred devices so you can always pick up where you left off. Think about having a personal AI assistant on your PC to help manage work and home life. Setting appointments or making recommendations based on contextual data will be simple tasks completed in the background for you.

Collaboration, connectivity take spotlight

The industry has long focused on offering the smallest and lightest devices possible. And Dell has worked towards balancing the demand for compact form against the convenience of a variety of ports, long battery life and the connectivity options remote workers need. The themes of “work from anywhere” won’t change, but the way they manifest will.

As your PC gets more intelligent, it understands when you want to be seen and when you don’t. If you’re participating in a video conference but get distracted – it could be a phone call, or your officemate/partner/child/dog needs you – you can trust your PC to turn off the camera until you choose to re-engage.

Remote workers need baseline internet connectivity and 5G availability is expanding. However, we still need more PCs that can leverage 5G for anywhere, secure connectivity or that can default to 5G when wi-fi is slow. Collaboration and connectivity that make you feel like you’re with your colleagues when you aren’t – that’s the next frontier.

PC luxury within reach

When I think about a renaissance of the PC, I imagine us being able to bring these “premium” experiences to more employees.

Beyond the look and feel of devices, premium is about offering features you care about, like low blue-light technology and privacy shutters for when you log many hours a day on your device.

Better PC designs engineered for disassembly and material recovery will become more important. And look for more options like PCaaS that provide flexibility in IT spending, simpler ways to refresh to the latest PCs and peace of mind with secure data removal and recycling of the device at its end of life.

Security conquers all

This new way of working comes with more opportunities for security vulnerabilities, making it crucial to secure PCs. According to a recent study, more than three-quarters of organisations prioritise supply chain security during vendor selection to address counterfeit components, malware and firmware tampering.

We also need to rethink security in a creative way. Not through patches and updates, but by offering PCs that use machine learning and AI to eradicate malware before it even settles. PCs should offer best-in-class security products and practices to lower the risk of having end-users accessing internal networks from home.

For me, a renaissance in this area means I never question if my PC –or the information on it –is secure.

Time for a renaissance is now

We have learned the PC is far from dead. It’s the gateway for us all to work, play and learn. Because of this intimacy, people expect more from their PC now than ever before – and we’re listening.

We’re working on augmenting PCs with technologies like cloud, 5G and AI to offer smart, personalised and wonderful experiences. While we’ve long been on this journey, this “renaissance” moment gives us the opportunity to pause and rethink how we bring about this future.

Sam Burd is president for Dell Technologies’ Client Solutions Group.

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Five reasons to worry about faster U.S. inflation (nationthailand.com)

Five reasons to worry about faster U.S. inflation

Biz insightsDec 03. 2020U.S. one-hundred dollar, ten-dollar, five-dollar and one-dollar bills. MUST CREDIT: Bloomberg photo by Paul Yeung. Photo by: Paul Yeung — Bloomberg 

By Syndication Washington Post, Bloomberg Opinion · Bill Dudley · OPINION, OP-ED 

A lot of people believe that inflation in the U.S. is dead or, if not dead, in a state of suspended animation for the foreseeable future. They could be setting themselves up for an unpleasant surprise.

In official projections and market prices, it’s hard to see any concern about the possibility of excessive inflation. According to the Federal Reserve’s September Summary of Economic Projections, inflation won’t get back to the Fed’s 2% objective until 2023. The yields on different types of Treasury securities suggest that investors expect annual inflation to average 1.9% over the next decade – or an even lower 1.6% by the Fed’s preferred measure.

No doubt, inflation has been very low for a long time, despite extreme monetary stimulus. But is it right to believe so strongly that the trend will persist? I see a number of reasons inflation might come back much more quickly than the consensus suggests.

First, the onset of the pandemic in March and April drove prices down sharply – by half a percent, according to the Fed’s preferred measure (the price index for personal consumption expenditures, excluding food and energy). This has depressed year-over-year readings of inflation. But after April 2021, the lower readings will become the new basis for comparison, and year-over-year measures of inflation will jump.

Second, the development of effective vaccines will allow people to return to their normal spending patterns by the second half of 2021. The leisure and hospitality industry – including restaurants, hotels and airlines – will probably regain pricing power as demand recovers. Sharp price increases might even be needed to balance demand with the available supply, which the pandemic has undoubtedly diminished. These are unlikely to be offset by price decreases in areas that probably will see less demand, such as online streaming (Netflix) and videoconferencing (Zoom).

Third, the lingering effects of the pandemic will make it difficult for companies to meet increased demand by simply producing more with the same people and capital. When the crisis period ends, capital will not be allocated to its most productive uses: Many expansion projects and investments have been suspended and new demand patterns will likely emerge post-pandemic. Also, many workers will have left the hardest-hit sectors, making it difficult for businesses to find the labor needed to expand. Some businesses, such as restaurants, will simply have disappeared, reducing the capacity available to meet resurgent demand. 

Fourth, the Fed has revised its long-term monetary policy in a way that allows for more inflation. Previously, the central bank aimed to hit its 2% target regardless of how far or how long inflation had strayed from that objective in the past. Now the Fed wants inflation to average 2%, which means it will have to exceed 2% for a significant time to offset the chronic downside misses that have accumulated over the past decade.

Specifically, Fed officials have said that they won’t raise short-term interest rates until employment is at its maximum sustainable level, and inflation has reached 2% and is expected to go moderately higher for some time. This means they’re unlikely to respond to any inflation uptick until they expect it to be both persistent and sizable.

Fifth, the government is much more likely than it used to be to support the economy with added spending. Fiscal orthodoxy has shifted: Instead of worrying about rising federal debt burdens, economists now see much greater scope for aggressive action to offset significant shortfalls in demand. As a result, the government probably won’t want to remove fiscal stimulus as quickly as it did after the 2008 financial crisis (a move that led to a disappointingly slow recovery). That said, the Joe Biden administration might not be able to do what it wants if Republicans retain control of the U.S. Senate.

All told, inflation might be a greater danger precisely because it’s no longer perceived as such. Policy makers want to push it higher. Most households and businesses are not concerned about the risks. Once the pandemic abates, those risks will no longer be entirely on the downside. And given how completely financial markets have come to expect low inflation and interest rates, and how much support those expectations are providing to bond and stock prices, an upside surprise could prove nasty.

– – – 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Dudley is a senior research scholar at Princeton University’s Center for Economic Policy Studies. He served as president of the Federal Reserve Bank of New York from 2009 to 2018, and as vice chairman of the Federal Open Market Committee.

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

As remote work goes viral, companies and countries are scrambling to keep up

Biz insightsNov 16. 2020Mark Kuratana 

By Mark Kuratana

Special to The Nation

The need for remote work arrived quickly when Covid-19 triggered work-from-home orders virtually overnight.

The world has never experienced such a large-scale resourcing challenge.

The Covid-19 crisis forced many companies to review their business continuity plans and scramble to find ways to deploy and manage resources differently in light of government travel restrictions.

With the crisis ongoing, companies continue to seek ways of making their resource deployment more flexible to support operations with the least disruption possible.

Some companies were able to continue with minimal disruption thanks to the nature of their business and the technology they adopted.

But for many others, challenges in resource planning are unlikely to go away quickly. “New normal” resourcing planning will be part of their strategy for the foreseeable future.

Outside Thailand, many countries were experiencing demand for remote working options before the pandemic. Technology that enabled virtual connections and meetings meant geographical location was often less of an issue when it came to acquiring talent.

This trend in workforce planning and talent acquisition will most likely grow as technology rapidly improves and enables companies to become more connected and agile. New-generation workers are also more technologically savvy and require more balance and flexibility in their work locations.

The landscape is changing quickly under pressure from government regulations and restrictions in reaction to the pandemic. We are seeing remote work evolving into various scenarios, from virtual assignments and international remote work to domestic remote work, work from home and other similar arrangements. And these are still evolving as the world and companies continue to understand the impact of Covid-19 and what this means for their present and future planning.

Each company has different features, considerations, challenges and possible remote-working solutions to choose from.

A variety of stakeholders within the company will need to align and agree on shared goals to ensure that successful remote working can be achieved. For example, implementation of remote work can have an impact on various functions of the company – including global mobility, human resources, talent, immigration, corporate tax, finance, and operations, to name a few.

At the same time, remote work can trigger unintended legal/regulatory issues concerning corporate tax, permanent establishment, withholding tax, individual double tax, social security and employment.

Thailand, for example, has various laws and regulations surrounding immigration and work requirements as well as corporate and individual income tax obligations if working in Thailand or performing work for Thailand.

To legally work in Thailand, a foreigner needs to have the right visa and work permit. The concept of “work” is broadly defined under Thai regulations and often includes working on the computer at home or at a remote location without having to be a workplace or client site.

Under the Foreigner’s Working Management Emergency Decree BE2560 (2017) and Amendment BE2561 (2018) (“Foreign Working Law”) “work” is defined as engaging in an occupation regardless of whether or not there is an employer or wages or other form of compensation.

Therefore, to legally work remotely in Thailand, a foreigner is normally required to have a work permit. This may create challenges and issues for the individual and employer since generally a work permit application must be sponsored by a Thai entity.

The risk of working remotely without the right documents typically increases over time and can also trigger other employer issues such as corporate tax, permanent establishment issues and possibly violation of the Foreign Business Act (“FBA”) if the proper foreign business licence or certificate is not obtained.

The complex laws and regulations around mobile employees are not unique to Thailand. In Southeast Asia and beyond, each country has laws governing how foreign work is defined and regulated as well as having its own laws governing individual and foreign company regulations and tax obligations.

Meanwhile in many countries there is increasing connectedness between agencies such as tax and immigration. Information sharing between countries is also increasing quickly.

The risks of not complying with country regulations can vary from financial penalties, detention, deportation or other sanctions for both the individual and companies, not to mention reputational risk.

In Southeast Asia, some countries have very active monitoring processes as well as stiff financial and operational penalties for non-compliance. With the advent of Covid-19, many national regulatory agencies have issued new rules to keep up with these changes, and this is expected to continue as the situation unfolds.

It is more important than ever for employers to be on top of these changes and plan carefully with each of their relevant stakeholders to see how this will impact their current and future workforce and to minimise any risk and disruption to their operations.

Mark Kuratana is Global Employer Services leader for Thailand, Myanmar and Laos at

Deloitte Thailand.

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

You may regret staying parked in U.S. stocks

Biz insightsNov 13. 2020A person wearing a protective mask passes in front of the New York Stock Exchange in New York on Nov. 9, 2020. MUST CREDIT: Bloomberg photo by Michael Nagle. 

By Syndication Washington Post, Bloomberg Opinion · Nir Kaissar · BUSINESS, PERSONAL-FINANCE, US-GLOBAL-MARKETS 
Money managers cherish the role of contrarian, trendsetter and freethinker — even if it’s in words more than deeds. Ask 10 managers an investment question and you’re likely to get 10 different answers.

So during the rare moments when they agree, it’s worth paying attention. And right now there’s widespread agreement on this question: Which investment will perform better over the next several years, U.S. or foreign stocks? The answer isn’t in dispute, and it’s not the U.S.

Big asset managers such as BlackRock Inc., Vanguard Group and JPMorgan Asset Management, and even some smaller ones, spend a lot of time trying to estimate future returns from stocks, bonds and other investments. Those estimates – capital market assumptions in industry jargon – are crucial inputs in the financial plans and investment portfolios they deliver to clients. They’re also handy for managing investors’ expectations.

Coming up with those estimates isn’t easy. As investors are constantly warned, when it comes to markets it’s not safe merely to assume that the past is a roadmap to the future. Instead, capital market assumptions require thoughtful, detailed judgments about the variables that drive investment returns. For stocks, that means at a minimum, estimates around future dividend yields, corporate earnings growth and changes in stock valuations.

Given the guesswork involved, there’s often lots of disagreement about which investments are likely to be the best performers, which is why the current consensus that foreign stocks will outpace those in the U.S. is so unusual. BlackRock, for example, estimates that U.S. stocks will produce a return of 5.8% a year over the next 10 years, compared with 7.1% for European stocks and 7.3% for emerging markets. Vanguard estimates that U.S. stocks will deliver a return in the range of 3.9% to 5.9% a year over the next 10 years, while foreign stocks will generate a return closer to 7.4% to 9.4%. JPMorgan and UBS, to name two others, agree that more value lies overseas. In fact, it’s hard to find publicly available capital market assumptions that favor the U.S.

That consensus makes sense when you unpack the three main drivers of stock returns. First, dividend yields are generally higher outside the U.S. Second, covid-19 has dampened business prospects around the world, so the jaw-dropping earnings growth generated by U.S. companies in recent years – and which propelled U.S. stocks past foreign markets during the last decade – is unlikely to return anytime soon. Third, and probably most important, valuations are considerably lower outside the U.S. By any measure, the U.S. stock market is as richly valued as it has ever been, or close to it, so valuations are unlikely to rise meaningfully from current levels. Meanwhile, many foreign stock markets are trading near or below their historical average valuations so there is considerable room for them to rise and boost future returns. 

And that may even be understating the potential impact of valuations. When they move from low to high and vice versa, they often overshoot. There are lots of historical examples. In the early 2000s, for instance, emerging-market stocks traded at depressed valuations; just a few years later in 2007, they were the priciest on record. More recently, the U.S. stock market traded well above its historical average valuation just before the 2008 financial crisis; by early 2009, U.S. equities had tumbled well below that average.

That tendency for wild swings in valuation is one reason some managers anticipate even starker outcomes for U.S. and foreign stocks. Boston-based money manager GMO, whose forecasts are widely followed, expects U.S. stocks to lag those in other developed countries by roughly 5 percentage points a year over the next seven years after taking inflation into account. And it estimates the margin could be as high as 15 percentage points a year relative to emerging-market stocks.

All of which raises another question: Given the widespread agreement that foreign stocks are the place to be, why isn’t more money invested outside the U.S.? Of the assets in stock funds favored by ordinary investors, which includes exchange-traded funds and mutual fund share classes sold directly to individuals, roughly 74% are in U.S. stocks, according to Morningstar data. That’s a big bias given that the U.S. accounts for about 58% of global stocks by market value and just 15% of global gross domestic product. It’s even bigger considering the opportunity foreign markets present in this moment. Perhaps individual investors overestimate the importance of U.S. companies in the global context. Most have almost certainly never heard of capital market assumptions.

What’s more surprising, though, is that professional investors favor the U.S. just as much. Of the assets in stock mutual funds favored by institutional investors and money managers, roughly 76% are in U.S. stocks. Some of the pros undoubtedly suffer from the same biases that afflict ordinary investors, but there’s a more powerful force driving them: career risk. As any seasoned money manager will tell you, the quickest way to get fired is to fall behind a runaway U.S. stock market. And the best way to avoid that ruinous outcome is to cozy up to U.S. stocks.

Indeed, managers who have cut back on U.S. stocks in recent years have paid a price. GMO is one of them. In a recent note, it acknowledged that, “our underweight to U.S. equities, and our overweight to EM equities have not worked as we had hoped, as expensive assets have gotten more expensive and cheap assets have gotten cheaper.” The result: “clients are losing patience.” GMO likens the experience to 1999, when it was “fired, ridiculed, and pilloried in the financial press” for its faithful adherence to value investing during the height of the dot-com mania. 

That doesn’t mean foreign stocks are a surefire bet. And even if the consensus proves to be right, there’s no way to know when fortune will begin to favor foreign stocks. So it’s not smart to abandon the U.S. and move everything overseas. But for those still clinging to the comforts of home or chasing a hot U.S. stock market, there’s no better time to sprinkle some money abroad.