CIMB Thai Bank (CIMBT) plans to launch more bonds, derivatives and loans based on the Thai Overnight Repurchase Rate (THOR) in order to boost its standing in the financial market to 30 per cent from 20 to 25 per cent.
Pao Chatakanonta, CIMBT’s head for treasury and markets, said after the Bank of Thailand (BOT) announced a new reference rate based on THOR, CIMBT and Kasikornbank completed their first Overnight Index Swap (OIS) derivative transaction based on THOR worth Bt800 million since August.
“So far, four banks have conducted derivative transactions with CIMBT, in which Bt8.3 billion worth of derivatives were based on THOR. Hence, we expect banks to launch more derivatives, loans and bonds based on THOR in the future,” he said.
He added that CIMBT used reference interest rates based on THOR in several different types of contracts, such as derivatives, interbank agreements and loans, and expects to gain 30 per cent of the financial market share by the end of this year based on Thai Baht Interest Rate Fixing (THBFIX) worth around Bt4 trillion per year.
“However, we expect CIMBT customers to make transactions based on fallback THBFIX by yearend and transactions based on THOR in the future,” he said.
“Meanwhile, we expect the business sector to launch more bonds, especially large businesses, utilities agencies and consumer groups.”
He added that CIMBT’s treasury management business is performing well and expects to exceed its revenue target this year by 15 to 20 per cent.
“Though the decline in import and export volumes has had an impact on CIMBT’s foreign exchange business, the bank has been able to generate revenue from other businesses,” he said.
Banpu Power is conducting due diligence for power plants in Thailand and overseas, chief executive officer Kirana Limpaphayom said.
The move is to achieve its goal of expanding its power generation capacity to 5,300 megawatts from 2,400MW in the next five years.
Most of the targeted projects are outside Thailand, such as in China, Vietnam and the US.
Banpu is developing the 1,300MW-capacity Shanxi Lu Guang plant in China, which should start feeding power to the grid in the fourth quarter of this year.
Recently, the company also acquired a wind-power plant with 38MW capacity in Vietnam, and has shown interest in taking over four or five natural gas power plants in the US, each with a 600MW capacity.
The CEO said these new investment plans will become clearer next year.
He went on to say that the company does not expect this year’s revenue to be lower than last year’s earnings of Bt10.075 billion.
Investors holding Wind Energy Holding (WEH) shares came under pressure again when former WEH director Nop Narongdej said the company needed votes from 75 per cent of the shareholders to raise funds in the Stock Exchange of Thailand (SET).
Recently, WEH board of directors decided to dismiss Nop from the board and have shareholder Pradej Kitti-itsaranon take his post because the former director had failed to have WEH listed.
Nop said he would let the new director complete the job of getting the company listed, adding that it was up to the rest of the major shareholders to deal with Pradej’s default in stock payment.
Meanwhile, Kraisak Kadkum, lawyer for Golden Music (GML) which holds 37.867 per cent of WEH shares, said he will seek arbitration for Pradej to return the 14.39 million GML shares after he defaulted on share payment. GML has also terminated its contract with Pradej.
“Pradej’s move to use WEH shares for his benefit during the shareholders meeting on September 10 was unfair to GML,” the lawyer said.
To maintain its benefit, GML filed a complaint with the civil court before seeking arbitration to stop Pradej from using is voting rights on such shares until the arbitration proceedings are complete. This includes a ban on transfer, sale or acquisition of shares.
The court has yet to set a hearing date for the case.
The board of Directors of Charoen Pokphand Foods Pcl (CPF) last Friday agreed to seek shareholders’ approval for its subsidiary in China to acquire 43 companies in the swine business through the issue of new shares as payment to the seller.
The move aims to integrate the business as one of the leading swine producers in China, which is the world’s largest pig market worth US$200 billion with an average annual growth of 8.3 per cent during the 10 years from 2010 to 2019 (according to China’s National Statistical Office).
Chia Tai Investment Co Ltd (CTI), whose main business is feed manufacturing and distribution in China, is an indirect subsidiary of CPF via CP Pokphand Co Ltd (CPP), a company listed on the Hong Kong Stock Exchange.
The proposal will facilitate the integration of its feed production in China with the swine business, which is now managed by Chia Tai Animal Husbandry Investment (Beijing) Co Ltd, a subsidiary of Charoen Pokphand Group.
The proposed deal aims to acquire 43 companies of Chia Tai Animal Husbandry Investment (Beijing) worth 28.14 billion renminbi (Bt131.287 billion). CTI will issue new shares as payment to the seller without incurring any financial burden.
Entering into this business will create business opportunities for CTI by penetrating more swine business markets with high growth potential like China, the company said. It is also a vertical integration of CTI to achieve an integrated swine business operation covering feed, farm and slaughter, throughout processing.
The company said this strategy would encourage efficiency to deal with market changes as well as combine expertise in its value chain.
The share-swap deal is expected to allow CTI to gain higher profits from swine business expansion thanks to the lucrative pork price. The company said the deal would also help higher efficiency cost and business management to benefit its investment in the long run.
Since this merger is a connected transaction, the acquisition requires approval from small shareholders. CPF will hold the first extraordinary shareholders’ meeting on October 27.
By The Washington Post · Hamza Shaban · BUSINESS, US-GLOBAL-MARKETS, RETAIL Amazon said Monday it will hire another 100,000 workers to meet surging demand in the covid-era, bolstering an already dramatic expansion of its workforce this year and underscoring the massive shifts in online spending the pandemic has helped fuel.
The latest hiring drive, which includes full- and part-time jobs, is the fourth large campaign the Seattle-based retail giant has initiated this year. All told, they add up to 308,000 positions. By comparison, Amazon said it employed 798,000 Americans at the end of 2019.
(Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
Competition among major online retailers has intensified as many Americans adapt to a prolonged period of working from home, and consumers look to online shopping to replace visits to the store. But in the early months of the pandemic, Amazon was caught flat footed. As consumers rushed to stock up on cleaning supplies, home office equipment, and recreational goods, Amazon was rocked by shipping delays and a depleted inventory. Walmart and Target were able to fill some of that void, using their bricks-and-mortar locations as pickup depots and e-commerce shipping hubs, exploiting the legacy of an established physical presence. As a result, Amazon’s share of the U.S. online retail market fell from 42.1% in January to 38.5% in June, according to data from Rakuten Intelligence. Walmart increased its position from 2.2% to 3.5%, and Target boosted its share from 3.5% to 5.0%.
“Despite their profits, I thought the company’s in-stock performance and delivery standards were terrible in many cities, and I didn’t think they were particularly great to their front line workers,” said Paula Rosenblum, an analyst for Retail Systems Research in Miami. She added that the company is bracing for some portion of employees to be out sick from covid-19 and other illnesses, and is preparing for a potential blowout holiday season.
“Let’s see if they can recoup the business they gave away to Walmart, Target and Kroger.”
Sucharita Kodali, a retail analyst at Forrester Research, said Amazon hires 100,000 to 200,000 more workers every holiday season. While it’s unclear how many of the people brought on during the covid crisis will remain permanent employees, she said the latest expansion seems in line with its traditional end-of-year boost.
Amazon’s growth stands in contrast to what is playing out in the larger retail sector, which has seen more than a dozen large brands file for bankruptcy since the pandemic started six months ago and ushered in a recession. Several well-known brands, including Lord & Taylor, Modell’s, Stage Stores and New York & Co., are shuttering all their stores. Those that do survive will be leaner: The Gap announced it would shutter 200 locations, while Ascena Retail Group – the parent company of Ann Taylor, Lane Bryant and Justice – is closing nearly 1,600 stores while in bankruptcy. Overall, a record 25,000 stores are expected to disappear this year, according to Coresight Research.
Amazon said in its most recent earnings report that net sales jumped 40%, to $88.9 billion from $63.4 billion in the year-ago period. It also doubled its profits, leaping from $2.6 billion to $5.2 billion during the months of April, May and June, as the coronavirus continued to spread across the country.
Amazon has faced criticism from workers rights groups and staff in recent months, including some who have complained of intense and unsafe working conditions during the pandemic, and allegations that the company fired workers for speaking out.
Amazon contends that the employees were dismissed for violating internal policies. Earlier this year, hundreds of Amazon workers staged a virtual rally, protesting what they said were unethical working conditions.
Like the other mega-tech companies with trillion-dollar market values, investors expect Amazon to emerge from the pandemic even stronger. But Amazon’s dominance has also attracted more scrutiny from Washington. In a recent congressional hearing featuring Big Tech’s chief executives, lawmakers spent much of their time pressing the head of Amazon. Members of Congress paid particular attention to the power dynamic between the company and its third-party sellers, which both rely on Amazon’s marketplace and in many instances must compete with Amazon’s own goods. The hearing marked the first time Bezos testified on Capitol Hill.
By Syndication Washington Post, Bloomberg · Cathy Chan · BUSINESS
Before CLSA was acquired in 2013, the Hong Kong brokerage’s research division issued a warning to investors in Chinese financial companies: beware of “high-frequency interference” from the Communist Party.
Nearly a decade on, there’s no better example of how the Chinese government can transform a financial firm than CLSA itself.
The latest case in point: CLSA executives have for the first time been ordered by their bosses at state-owned Citic Securities to participate in China’s five-year planning process, a ritual that Communist Party leaders have used to guide the nation’s economy since the 1950s, people familiar with the matter said. Major state-owned enterprises are required to submit five-year plans to the government, and CLSA’s outlook will now feed into Citic’s report to Beijing, which is unveiling a new road map in October, one of the people said.
The diktat adds to a series of steps by Citic to overhaul CLSA, a Hong Kong icon that’s long been known for its independent-minded research and raucous investor conferences. Some observers have portrayed the moves as a financial-industry microcosm of the Chinese government’s broader clampdown on the former British colony.
Citic’s leaders have argued that the changes at CLSA are needed to improve discipline and coordination on everything from hiring to deal making and risk management. Yet the upheaval has also contributed to a steady exodus of senior talent and made it more difficult for the firm to retain even recently hired investment bankers from international competitors.
After CLSA Chief Executive Officer Rick Gould left in August, just a handful of division heads who pre-date the Citic takeover remain, including Shaun Cochran, now head of research, and Edward Park, who runs institutional equities. Much of the original leadership team, including long-time CEO Jonathan Slone, departed in early 2019 after clashing with Citic Chairman Zhang Youjun.
“Converting a freewheeling investment banking business into an SOE structure amounts to real value destruction,” said Chen Zhiwu, director of the Asia Global Institute at the University of Hong Kong. “CLSA can’t compete internationally any more and will have to rely on what its parent company feeds to it.”
A spokeswoman at CLSA declined to comment. Citic Securities didn’t immediately reply to an email seeking a comment.
The five-year plan ordered up from Beijing includes growth and hiring targets, an assessment of risks and opportunities in major markets and an analysis of the competitive landscape, the person familiar said, asking not to be identified discussing internal matters.
Chinese President Xi Jinping and other senior Communist Party leaders are expected to lay out their 2021-2025 strategy for the entire country in October.
CLSA’s planning directive follows other recent changes that include direct reporting lines from Hong Kong to Beijing and a more restrictive approval process for capital investments and hard underwriting decisions, the person said. Client non-disclosure agreements also need approval from a quality control team, whereas previously they only needed a sign off from a director or a licensed representative. To encourage collaboration between staffers in Hong Kong and Beijing, their bonus pools have been combined.
What the changes will mean for CLSA’s bottom line is hard to say, given that the unit doesn’t disclose detailed financial statements. One thing that seems clear, however, is that the firm is becoming increasingly China-centric.
While Zhang has pushed CLSA to build a stronger presence in India, Southeast Asia and Japan, his overseas ambitions aren’t as grand as those of his predecessor, Wang Dongming, who orchestrated the 2013 acquisition. The firm’s primary goal now is to serve Chinese clients and help foreign investors navigate China, the person familiar said.
That strategy still requires executives and deal makers with overseas experience, a cohort that CLSA has struggled to retain. Gould lasted just 16 months as CEO even though he was appointed by Zhang, who at the time deemed it important to have a non-Chinese CEO to maintain the firm’s international image. In April, Zhang installed former Vanguard executive Charles Lin, a Chinese native, as CLSA vice chairman. Lin, based in Hong Kong, has now assumed many of Gould’s responsibilities.
Citic also earlier appointed Li Chunbo, its head of research and equities and trading, as chairman of institutional equities and research at CLSA.
The firm has seen some gains this year. Citic Securities ranks fifth in arranging stock sales in Hong Kong this year, rising from 11th in 2019, data compiled by Bloomberg show.
Andrew Hartley, who worked for almost 15 years at CLSA and most recently oversaw Singapore, left earlier this year. Richard Taylor, the former head of corporate finance and capital markets, quit around the same time.
The exodus bodes ill for CLSA’s ability to attract overseas clients and deals, according to Asia Global Institute’s Chen. “Investment banking is totally a people business,” he said. “Once the key people are gone, so is its main business.”
In an effort to boost confidence among travellers, Emirates Airline has partnered with hospitals in Bangkok to extend special rates on Covid-19 tests for its passengers.
Emirates passengers will only need to present their air-ticket to be given a discount on Covid-19 tests at Bangkok Hospital, Bangpakok 9 International Hospital, Piyavate Hospital and Princ Hospital Suvarnabhumi. Covid-19 tests have to be taken no more than 96 hours before a flight.
Emirates resumed daily flights between Bangkok and Dubai earlier this month. Emirates flies to 85 cities across the world via its hub in Dubai.
CorporateSep 14. 2020THAI acting president Chansin Treenuchagron visits the bankruptcy court this morning to hear the court’s order on the airline’s rehabilitation. The court has been mulling this issue since May 26.
By THE NATION
The bankruptcy court on Monday (September 14) gave the go-ahead to Thai Airways International (THAI)’s rehabilitation plan and choice of planner to implement it.
As announced in the Royal Gazette earlier, THAI’s creditors have about a month to file for the repayment of debts either online or at the airline’s headquarters in Bangkok.
The creditors will then be presented with the rehabilitation plan for approval before it goes to court for a final okay. This procedure will take another two to three months.
THAI had previously informed its shareholders that the restructuring process will focus on five aspects, namely debt repayment, a review of its routes and fleet, improvement of management structure, review of financial strategy and methods to generate revenue, and making its organisational structure compact.
As of 11.30am on Monday, THAI stocks had risen 6.51 per cent to Bt3.60 per share.
Syn Mun Kong Insurance Pcl (SMK) has set aside a budget of Bt160 million for 2020-22 as part of its continued digital transformation to become a full “insurtech” organisation, chairman Reungvit Dusdeesurapot said.
He added that the transformation would strengthen the company’s competitiveness and ensure continued growth.
Of the total budget, Bt45 million will be spent in the first year. The company has kept developing new digital insurance platforms to make it easier for customers to access its products and services, he said.
He expects the company’s net profit to continue to grow this year. It made a net profit of Bt409 million in the first half of 2020, up 35 per cent year on year.
THAI acting president Chansin Treenuchagron visits the bankruptcy court this morning to hear the court’s order on the airline’s rehabilitation. The court has been mulling this issue since May 26. 
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