OTCC chairman Sakon Varanyuwatana said the complaints had been lodged by and against many parties, such as small operators against larger ones and vice versa.

This unnamed committee under the Commerce Ministry has also been tasked with issuing guidelines for fair business practices in the franchising area, as well as business practices regulated by the government, such as telecommunications, insurance, energy and financing.

Those found breaching these guidelines will be punishable under a yet-to-be legislated law that will be based on these guidelines as well as the committee’s case studies and recommendations.

Citing one of the complaints, Sakon said private hospitals using powerful networks are dumping service fees unfairly against businesses using smaller networks, and are also fixing the prices of medicines and medical supplies in their favour.

TCC will also look into the merger of two taxi-hailing services based outside Thailand that was done without notifying Thai regulatory agencies. This merger has resulted in higher fares and the committee will study the impact this has had on Thai commuters, he said.

He added that sellers have also complained about the owners of e-commerce websites forcing them to sell their goods at much lower prices.

A UOB analyst commented that it would have only a slight affect on the market as banking institutions and insurance companies invest in high-rated corporate bonds. The ThaiBMA has suggested that the reserve fund should depend on the rating of corporate bonds.

Ariya Tirnapragit, deputy managing director of the ThaiBMA, said that the International Financial Reporting Standard, IFRS 9, would be effective in 2021. The measure would affect insurance companies and commercial banks. Listed companies who invest in corporate bonds have to reserve fund in case of bad debt. The bad debt reserve will depend on the corporate bond’s rating and the term of the corporate bond. High-rated bonds will have low reserve fund while low-rated ones will require high reserve funds. Also, long-term corporate bonds will have a higher reserve fund than short-term bonds.

The association was in the process of preparing the guidelines following new standards in the IFRS 9. They will hold a focused group discussion with other parties in the bond market such as the federation of accounting professions, commercial banks, insurance companies, securities companies and asset management companies.

“The new financial reporting standard ‘IFRS 9’ has more stipulations. In the future, every investment has to reserve funds for possibility of bad debt from loans, credit and corporate bonds. The ThaiBMA is focusing on corporate bond investments by creating guidelines for small companies to help them reach the new standards” Ariya added.

Kitpon Praipaisarnkit, a strategist at UOB Kay Hian, said that there was not enough information to decide if the reserve fund would affect the market, as companies that invest in corporate bonds usually choose high-rated bonds. Companies do not have expectations of high returns, and returns higher than from savings accounts were acceptable.

An indirect effect from the IFRS 9 is the higher cost of corporate bond sales, as low-rated bonds have a high maintenance cost, which will affect medium companies with unstable financial status.

“Investors in corporate bonds are commercial banks, insurance companies and listed companies mostly through commercial banks. These parties have already prepared for the new standard and they will invest in high-rated bonds,” Kitpon said.

Ariya said that since July 2019, private companies had sold Bt650 billion worth of bonds, expected to reach Bt700 billion by September.

In addition, the Bank of Thailand will start Basel III measurement next year, including capital accords, as bonds will be able to convert to funding for five years, increasing the chances of bond sales. However, commercial banks have already invested in new corporate bonds to replace old bonds due to the lower bond cost.

He said that Finance Minister Uttama Savanayana had recently reported a successful discussion with BoT about the co-monitoring plans.

The major members of the committee will include the Finance minister as the chairman of the committee, the Finance secretary, the governor of The Bank of Thailand, the secretary general of the office of the Securities and Exchange Commission, and the secretary general the office of the National Economic and Social Development Council.

“It is an ideal plan for these people, who are almost of the same age and have the same vision, to work together and discuss current financial problems,” said Somkid. “Their teamwork will find a solution and prepare for the difficult situation [coming] in the near future ”

On August 6, the government discussed the unstable global economic situations that has arisen due to three trends – the US-China trade war, pro-democracy protests in Hong Kong, and a weakening of the Yuan currency.

As the Dow jones index has decreased during the China-Us trade war, Thailand is closely monitoring it as China holds many US bonds.

“I have directed every agency that is related to the situation, such as the Finance ministry, to hold discussions with financial institutions, the Bank of Thailand, and the Stock Exchange of Thailand to ensure better economic management,” Somkid said.

Of this amount, Bt120 billion will be allocated for the approval of projects and Bt80 billion for economic stimulus and future projects.

Budget director Dechapiwat Na Songkhla said that the Cabinet had approved the fiscal 2020 budget at Bt3.2 trillion, with a budget deficit of Bt469 billion. An additional Bt200 billion will be reserved for the future government plans

The additional Bt200 billion will be divided into: salaries and welfare for civil servants at Bt40 billion; Treasury at Bt60 billion; and an additional budget for new recruit civil servants of around Bt10-20 billion. The government will have Bt80 billion remaining for use in future government projects and for the economic stimulus.

The investment budget in 2020 has been set at Bt640 billion, representing 20 per cent of the whole government budget.

The study will focus on how the SEF can play a crucial role in encouraging people to save and further enhance the capital markets, Uttama said.

The proposal to establish the SEF was put forward by the Federation of Thai Capital Market Organisations (FETCO).

Uttama said that the issue of whether the tax benefits for LTF investors would be cancelled had yet to be finalised. If the granting of the tax benefits continued, it should be awarded via a new kind of fund.

It is envisaged that the new fund would encourage individuals to direct their savings into the capital markets.

Separately, Uttama said that the ministry supported the establishment of the National Pension Fund (NPF) and the e-business law. The bills to enable both laws will be forwarded to the Council of State for scrutiny.

The central bank’s assistant governor, Chantavarn Sucharitakul, on Friday issued the statement that the currency could move up or down as a caution to those worried about a further strengthening of the currency.

Chantavarn, who made the statement after a meeting with business leaders, said the reality that the baht could rise or fall meant importers and exporters should hedge against exchange rate risks.

The meeting between BOT officials and representatives from the Thai Chamber of Commerce and the Federation of Thai Industries took place amid concerns expressed by companies over the impact of the strong baht.

The baht remains persistently strong after the Bank of Thailand cut its policy rate by 0.25 percentage point to 1.5 per cent on Wednesday, prompting business groups to call for more cuts. At 1.5 per cent, Thailand’s policy rate is among the lowest in the region and below that of the US policy rate, said the central bank.

The central bank said the baht has risen 5 per cent against the US dollar since early this year, driven by the country’s large current account surplus. The baht stood at Bt30.73 per cent to the dollar at noon on Friday, according to Reuters.

The current account surplus for the first seven months of this year was US$17.4, despite a contraction in exports. A larger contraction in imports contributed to the surplus. Low levels of investment in the country are also a major factor behind the surplus, and the central bank needs the involvement of other parties to jointly solve the problem, Chantavarn said. Public and private investment should be accelerated in order to import more raw materials and machinery so as to upgrade the country’s competitiveness.

The central bank said that it had managed the baht carefully to avoid being accused of currency manipulation in order to gain trade advantages, said the statement, apparently in reference to the hostile US government policies against trade partners. The US last week denounced China as a currency manipulator after the yuan breached the 7 to the dollar level, with the declaration heightening trade war tensions. The central bank also called for importers and exporters to quote more local currencies in their term of trade. The share of Thailand’s exports to the US is about 10 per cent of the total, but Thai businesses quote their prices in dollars for up to 80 per cent of the trade value.

Officials of the chamber and the central bank met on Thursday (August 8) to discuss economic issues.

Chamber chairman Kalin Sarasin said that among the topics discussed was the central bank should seek ways to make Thailand the regional financial hub.

They also discussed the central bank’s oversight of the baht, which has tended to rise. Kalin welcomed the central bank’s decision on Wednesday to cut the policy rate to 1.50 per cent from 1.75 per cent.

The chamber also proposed soft and bold measures to the central bank for handling the baht, including further cutting the benchmark rate. The bank should also crack down on cases involving speculation of the baht.

The appreciation of the baht for the past four years has hurt the competitiveness of exports and the situation is being worsened by the devaluing yuan and the trade wars, chamber officials said.

Atip Bijanonda, honorary president and Adviser of Housing Business Association, who also met central bank officials, said that he had proposed to the BOT to relax the loan-to-value (LTV) measure.

The BOT’s reduction in LTV became effective on April 1. The new measure restricts loans to 90 per cent of value for the first home, 80 per cent for the second home, and 70 per cent for the third home.

Sontirat said the government has been looking deeply into the issues and asked that he be given time to work on a solution before he can announce a successful conclusion to the neighbours’ dispute.

“I’m trying to solve this problem. Please let me work on this for the moment. My team has already gained an understanding of the matters. We now see the problems and the challenges that we face. It’s a sensitive problem. That’s all I can say for now,” he said

The most important reason behind the need to renegotiate the overlapping maritime border is the increasing national petroleum reserves.

Deputy Prime Minister Somkid Jatusripitak has been involved in the process with his oversight of the Foreign Affairs and Energy ministries, which are coordinating their efforts on the negotiations plan.

Premrutai Vinaiphat, director-general of the Mineral Fuels Department, said a resolution to the overlapping maritime border between Thailand and Cambodia was a mission and a duty of the ministry. But the department had to wait for the minister’s approval before releasing more information.

A source from the petroleum industry said that if the government makes a deal with Cambodia on the border, the energy costs for both countries, including for liquefied natural gas (LNG) imports, will decrease. Gas can be used in many industries, the source said. These benefits would help encourage investment in the Eastern Economic Corridor and improve Thailand’s performance in industrial cost-effective competition.

“To close the deal, the solution for both countries has to focus on benefits, not politics. The solution might come from the Joint Development Area (JDA); gas would be sent to the one country which is in need of it first” the source said.

If the deals are closed, the seventh gas separate plant might happen depending on the future gas reserves exploration as the gas in the Gulf of Thailand has been decreasing. However, construction costs would have to be considered.

The Mineral Fuels Department reported that it had submitted a plan that would see reserved areas for national security separated from JDA, which had been declared in 2011.

BAY acquired the stake from Security Bank Corporation (SBC), through the bank or its subsidiaries. The transaction, subject to regulatory approvals, is expected to be completed by the fourth quarter of the year.

The joint venture aims to build on the strengths of Krungsri and SBC in the unsecured personal loan segment with plans to jointly explore opportunities in other areas including credit cards, auto loans, motorcycle loans and insurance.

Krungsri president and chief executive officer Seiichiro Akita said, “We are very pleased to partner with a leading financial institution like Security Bank. Together, the two banks will join hands in developing and delivering quality consumer finance products to people in the Philippines.”

With expertise and experiences from both sides, the collaboration between Krungsri and SBC will enhance SBF’s business competitiveness while penetrating and serving the Philippines’ high-growth consumer finance market, Akita said

“This transaction will give Krungsri an opportunity to expand its consumer finance business to the next level while emphasising the bank’s strategy in its inorganic growth plan. With MUFG’s extensive global network, Krungsri holds a robust position in extending its foothold to leverage its strength in retail banking and consumer finance to cover countries in the region beyond CLMV,” Akita added.

SBC president and CEO Sanjiv Vohra said, “SBC and Krungsri are both committed to accelerating customer-centricity in banking. By localising the strategies that propelled Krungsri to become Thailand’s market leader in consumer finance, SBF is well-positioned to scale the business faster, launch better and more innovative product variants, serve more customers and, in effect, substantially grow its market share in retail business.”

The joint venture will strengthen the relationship between Krungsri and SBC, both of which are strategic members of Mitsubishi UFJ Financial Group, Japan’s largest financial institution and one of the world’s largest and most diversified financial groups.