The Centre for Economic Situation Administration (CESA) has approved a budget of Bt43.5 billion for two economic stimulus schemes to boost consumers’ purchasing power and domestic consumption.
The budget will come from the country’s existing Bt1 trillion of funds borrowed to revive the economy after Covid-19.
Of the total, Bt22.5 billion will be spent on phase 2 of the “Kon La Khreung” (Let’s Go Halves) subsidised shopping scheme.
Phase 1 of the scheme, from October 23 to December 31, offers about 10 million citizens discounts of up to Bt150 per day on purchases at participating stores, capped at Bt3,000 throughout the period.
The remaining Bt21 billion will be spent to increase the subsidy state welfare card holders receive on purchases of consumer goods by an additional Bt500 per person per month for three months. This will be effective from January-March next year.
Finance minister sees 4-4.5% growth for Thai economy next year
EconDec 03. 2020Finance Minister Arkhom Termpittayapaisith
By The Nation
The Thai economy is expected to expand 4-4.5 per cent next year, said Finance Minister Arkhom Termpittayapaisith.
The economy will take two years to recover, while the tourism sector will take four years before recovering to pre-Covid-19 levels, he told a seminar on next year’s economic conditions, hosted by Prachachart Turakit newspaper on Wednesday.
He expected Thailand to see at least 8 million tourist arrivals next year, doubling to 16 million in 2022, 32 million in 2023 and 40 million in 2024.
He added that despite the brighter outlook, the ministry was not being complacent and has continued to launch or extend stimulus packages to revive an economy struggling under the impact of Covid-19.
Next year the ministry will focus on restructuring the tax system to boost revenue for state coffers, he said.
The second phases of two economic stimulus projects – “‘Let Go Halves” and the state welfare card shopping subsidy – were approved by the Centre for Economic Situation Administration (CESA) on Wednesday and will be put to the Cabinet next week.
Under phase 2 of Let’s Go Halves (Kon La Khreung), the number of participants eligible for the daily Bt150 shopping subsidy will be increased from 10 million to 15 million. The total subsidy limit per person will also rise from Bt3,000 to Bt3,500. The second phase will run from January 1 to March 31.
Those who participated in Shop Dee Mee Kuen (Shop and Payback) and holders of state welfare cards are not eligible for Kon La Khreung.
The Finance Ministry will reveal the registration day soon.
Under the second scheme, holders of the state welfare card will receive an additional Bt500 per person per month for purchases made at participating shops. The second phase will run for three months from January to March 2021.
The Bank of Thailand’s Monetary Policy Committee (MPC) has identified three issues of concern for the country – the rapidly rising baht, a bleak outlook for the financial system, and rising household debt.
The concerns were pinpointed in minutes of the MPC meeting on November 18, which were made public on Wednesday (December 2).
The minutes raised concern that the rising baht would hit the fragile economic recovery by eroding export profits, in turn affecting investment and employment. The baht is being lifted by capital inflows to Thailand and other emerging markets, driven by monetary easing and higher risk appetite in global financial markets. The baht was also being pressured upwards by long-term structural challenges of low investment causing a high current account surplus, together with the home bias behaviour of Thai investor, it said.
The MPC recommended considering additional short- and long-term measures to rein in the baht.
The panel was also concerned the slow and uneven economic recovery could undermine the future stability of the financial system.
Business were more financially fragile, particularly in the tourism sector where economic activity remains much lower than pre-pandemic levels. Meanwhile, SMEs had limited access to credit due to higher credit risks.
Households remained vulnerable given high household debt and the slow recovery in income, which affected their ability to service debts. Nevertheless, credit assistance measures had partially relieved liquidity constraints on businesses and households affected by the pandemic, said the minutes.
The rising household debt-to-GDP ratio and slow recovery in incomes would delay the deleveraging process, which would have adverse impacts on consumption and economic growth in the medium term, according to the minutes. Household debt to GDP rose to 83.8 per cent in the second quarter this year.
Debt restructuring and economic restructuring should thus be accelerated to boost recovery in incomes in the post-Covid environment. Meanwhile an uneven recovery in income among sectors would result in worsening inequality problems and limit sustainable economic growth in the long term. Policy coordination among public agencies would play an important role in distributing liquidity where it is needed, such as by coordinating credit and financial measures implemented by the government and the Bank of Thailand. The MPC viewed that commercial banks, specialised financial institutions, and the Thai Credit Guarantee Corporation, were all playing crucial roles in curbing credit risks. This would help facilitate a broader distribution of ample liquidity in the system and support business adjustment to the post-Covid environment.
The committee voted unanimously to maintain the policy rate at 0.5 per cent to support economic recovery while placing emphasis on the use of more targeted measures.
It identified three core risks to the Thai economy going forward:
1. Domestic political uncertainties which could affect consumer and investor confidence.
2. Progress in admitting foreign tourists to Thailand, which would likely be gradual depending on the Covid-19 situation in foreign countries and also vaccine development. 3. Heightened financial vulnerability of households and businesses following the phase-out of the support measures.
Central Retail ploughing Bt10bn into 2021 expansion plan
EconDec 03. 2020Chief executive officer Yol Phokasub
By The Nation
Central Retail Corporation Plc, the flagship of Central Group, has set aside an investment budget of Bt10 billion next year for expansion in Thailand and overseas, said chief executive officer Yol Phokasub.
He added that the company was ready to expand branches and acquire businesses in Thailand and overseas thanks to its strong liquidity.
The company’s online sales have grown 200 per cent monthly in line with the change of consumer behaviour following the Covid-19 outbreak, he added.
PTT Exploration and Production (PTTEP) has unveiled investment plans for 2021 and for the next five years (2021-2025). The plans aim to maintain production volumes, accelerate key projects, and capture new business opportunities for long-term growth, targeting a 6 per cent growth in oil sales volume over the next five years.
PTTEP CEO Phongsthorn Thavisin said the company has set aside total expenditure for 2021 of US$4.196 billion (Bt132.174 billion) – of which Bt81.522 billion is capital expenditure and Bt50.652 billion is operating expenditure.
The company lists three key business objectives.
The first is to maintain production levels of the existing S1 Project, Bongkot Project, Arthit Project, Malaysia Project, and Zawtika Project, as well as prepare for planned operations of the G1/61 (Erawan field) and G2/61 Projects (Bongkot field). This plan will involve capital expenditure totalling Bt61.204 billion.
The second is to increasing future production volume by developing major projects including the Mozambique Area 1 Project and the Algeria Hassi Bir Rekaiz Project to start production as planned. The company will also accelerate development of Sarawak SK410B in Malaysia, where gas has been discovered, in order to reach the final investment decision (FID). Capital expenditure of Bt15.530 billion will support these activities.
The third is to accelerate exploration activities to enhance contingent resources for supporting long-term growth. Total capital expenditure for activities is Bt4.788 billion, mainly devoted to the drilling of exploration and appraisal wells in Malaysia and Mexico.
PTTEP’s five-year investment plan (2021-2025) has a budget of Bt734.845 billion. The five-year plan targets a CAGR for petroleum sales volumes of around 6 per cent.
Said Phongsthorn: “2021 is going to be another challenging year for the exploration and production industry due to uncertainty over the Covid-19 pandemic and global economic recovery, which continue to have a direct impact on energy demand and oil price. PTTEP has adjusted its organisational structure and business plan, especially reducing the unit cost, to strengthen operations and make the company resilient for the volatile market.”
He added that PTTEP had reviewed its five-year investment plan under an “Execute and Expand” strategy designed to serve domestic demand and ensure sustainable growth. “With a robust capital structure and operating cash flow, the company will be able to support the above investment plan and other business opportunities despite the effect of a low oil price environment,” he said.
PTTEP said it is also evaluating new business opportunities in the gas-to-power value chain in Myanmar where the company says it can add value to its existing natural gas fields, as well as scale-up its AI & Robotics Venture (ARV), and seek investment opportunities in renewable energy.
The Joint Standing Committee on Commerce, Industry and Banking predicts that the Thai economy will grow 2 to 4 per cent next year, while exports will grow 3 to 5 per cent.
This growth will be in line with the expected global economic recovery.
Kalin Sarasin, the committee’s chairman, added that the panel has revised the forecast for economic growth this year upward to between minus 7 per cent and minus 6 per cent.
It had previously forecast the growth rate for this year at between minus 9 per cent and minus 7 per cent.
However, he said, the committee had found that signs of economic recovery in the fourth quarter was weakening, adding that the government must take the lead in driving the economy next year.
The Stock Exchange of Thailand (SET) Index closed at 1,417.95 on Wednesday, down 2.92 points or 0.21 per cent. Total transactions amounted to Bt78 billion with an index high of 1,430.49 and a low of 1,415.10.
In the morning session, an analyst at Krungsri Securities predicted the day’s index would fluctuate between 1,410 and 1,430 points despite positive US news of a $908-billion (Bt27.4 trillion) economic stimulus package and a Covid-19 vaccine.
“However, the falling oil price due to postponement of the Opec+ meeting amid a dispute over the bloc’s oil production policy, together with today’s Constitutional Court ruling in a case against PM Prayut Chan-o-cha, would pressure the index,” he said.
The court ruled Prayut had not violated the charter by staying on in his Army residence, so could stay in office.
The 10 stocks with the highest trade value today were KBANK, ADVANC, PTT, CPF, PTTEP, SCB, AOT, MINT, CPALL and SCGP.
As of 4.30pm, the price of oil rose by US$0.15 or 0.34 per cent to $44.70 per barrel, while gold rose by $7.20 or 0.40 per cent, to $1,826.10 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 26,800.98, up 13.44 points or 0.050 per cent.
China’s Shang Hai SE Composite Index closed at 3,449.38, down 2.56 points or 0.074 per cent, while Shenzhen SE Component Index closed at 13,961.58, up 31.20 points or 0.22 per cent.
Hong Kong’s Hang Seng Index closed at 26,532.58, down 35.10 points or 0.13 per cent.
South Korea’s KOSPI Index closed at 2,675.90, up 41.65 points or 1.58 per cent.
Taiwan’s TAIEX Index closed at 13,989.14, up 103.47 points or 0.75 per cent.
Kerry Express IPO wins warm welcome from investors
Dec 02. 2020Alex Ng
By The Nation
The Securities and Exchange Commission (SEC) has approved delivery company Kerry Express (KEX)’s application for an IPO and it should start trading in the last week of December.
The price range for the IPO has been set at between Bt25 and Bt28, with subscription being opened to retail investors on December 8, 9 and 14 and to institutional investors on December 16-18.
The final price is expected to be announced on December 15.
KEX is offering 300 million shares in the IPO, which will raise approximately Bt7.5 billion to Bt8.4 billion.
Proceeds from the listing will be used for expanding the Kerry Express network, enhancing its efficiency, repaying loans and boosting its working capital.
Kerry Express has already received strong support from institutional investors with the tranche being 10 times oversubscribed by cornerstone investors.
“Thai investors can now participate in Kerry Express as a shareholder and drive its sustainable growth in various aspects. We are grateful for such participation in the future of Kerry Express,” said Alex Ng, the company’s chief executive officer.
“The rise of the new economy, especially social commerce and e-commerce, is fuelling enormous growth in the logistics sector as it is the final platform connecting sellers with end consumers. This is also reflected in our performance where the volume of parcels grew substantially over 134.9 per cent compound annual growth rate over 2014 to 2019. Given that Thailand’s e-commerce to retail penetration rate is still immature, Kerry Express is well-positioned to accommodate and propel further growth of the sector.”
With an existing network of more than 15,000 service points, 1,200 distribution centres and more than 18,000 employees, the company continues with its “Kerry Express Everywhere” expansion.
Veena Lertnimitr, Siam Commercial Banks’ executive vice president for investment banking functions and director of SCB Securities, said SEC has approved the IPO application and filing is now effective. She confirmed that KEX stocks will start trading in the fourth week of December. SCB is one of the financial advisers and leading underwriters for this issue.
Prasert Tantayawit, managing director of the investment banking department, Maybank Kim Eng Securities (Thailand), another joint financial adviser and joint lead underwriter, said: “KEX is an attractive investment, backed by the company’s leading market position, its solid business model and the structural growth prospects.”
He added that Kerry Express has received strong support from institutional investors. Cornerstone investors have overbooked by approximately 10 times the number of shares available in the cornerstone placing portion.
The Government Savings Bank (GSB) has organised a “GSB for Samui” fair on December 8 and 9 at Central Festival shopping complex to promote tourism on Koh Samui.
“The festival will feature GSB booths providing financial aid, career training courses and scholarships to local entrepreneurs and students,” the bank said.
“There will also be more than 100 street food vendors participating and other fun-filled activities that all members of the family can enjoy,” it said.
“Don’t miss your chance to participate in games and lucky draws featuring prizes such as GSB’s limited edition piggy banks, movie tickets and various discount coupons,” it added. “See you at Central Festival next week, where we will make Koh Samui joyful again.”
Finance Minister Arkhom Termpittayapaisith 
Chief executive officer Yol Phokasub 
Kalin Sarasin 
Alex Ng 
