FOREIGN INVESTORS EXPECTED TO STAY IN ASEAN MARKETS

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http://www.nationmultimedia.com/detail/Economy/30367792

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FOREIGN INVESTORS EXPECTED  TO STAY IN ASEAN MARKETS

Economy April 17, 2019 01:00

By The Nation

Foreign investors continued to buy Asean stocks in the first two weeks of April with the exception of Malaysian equities.

Year-to-date, foreign investors have bought US$1.1 billion (Bt35 billion) net of Indonesian stocks, followed by $728 million of Philippine stocks and $161 million in Vietnam equities. On the other hand, they sold $244 million of Thai shares and $434 million of Malaysian stocks.

Meanwhile, in the Asean bond markets, foreign investors bought a hefty $4.6 billion of Indonesian bonds and $1.1 billion of Malaysian bonds year-to-date. In contrast, they sold $729 million of Thai bonds during the same period.

We believe Indonesia, Philippines, and Vietnam will continue to be the sweet spots for foreign investors due to their superior economic growth. Malaysian stocks could face further outflows in the near-term as its economy is growing at a decelerating pace with negative inflation during the last two months.

Thai stocks are expected to remain sluggish over the next 1-2 months as investors wait for a clearer picture in politics.

Thanawat Patchimkul Head of Research DBS Vickers Securities (Thailand)

HIGHER TURNOVER MAY TAKE INDEX TO 1,800 PTS

The SET Index moved sideways with more active turnover. We expect a range of 1,600-1,800 points this week. Strategically, we prefer to buy on weakness and sell on strength in line with support and resistance.

Support factors

Monetary easing of central banks worldwide. Starting with the Fed reducing the QT this May, which could lead to global liquidity improvement. Inclusion of NVDRs in MSCI EM, which could prompt at least Bt60 billion in foreign capital into Thai stocks towards the end of May. High crude prices to support the energy group and the SET.

Key pressures

Consistent rise in Thai bourse’s PE in light of cuts in this year’s estimated EPS as a result of more provision for employee protection. Unclear local political developments, which could lead to a new government with insufficient stability. Higher risks to the Thai economy from Thai export contraction on the back of the US-China trade war and local political uncertainties. We recommend big caps with high dividend, low valuations and laggard prices.

1) Refiners: TOP

2) Property: QH

3) Bank: BBL

Research Department

Trinity Securities

Thailand to unveil Asean tourism push

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http://www.nationmultimedia.com/detail/Economy/30367681

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Thailand to unveil Asean tourism push

Economy April 15, 2019 01:00

By PHUWIT LIMVIPHUWAT
The Naion

Thailand is set to release comprehensive gastronomy guidelines for the Asean region by the end of this year to facilitate the recovery of tourism figures, after the industry has been hurt by a string of challenges, including dangerous air pollution in the North, the global economic slowdown and the strengthening of the baht.

As this year’s Asean chair, Thailand has listed up to 13 “economic deliverables”, most aiming to increase trade in commodities and boost the development of industry 4.0. However, the list includes a masterplan to boost the region’s export of services through tourism.

“Completing the gastronomical guidelines for the Asean region by the end of this year is part of our goal as Asean chair,” said Auramon Supthaweethum, director-general at the Commerce Ministry’s Department of Trade Negotiations (DTN).

The drafting and approval processes for the guidelines will be done by the Tourism Authority of Thailand (TAT), with the final draft to be completed by the year-end.

The aim of the guidelines is to increase the connectivity and networking of the different tourism communities in the Asean region, with an emphasis on food quality, safety and hygiene, Auramon explained.

For example, one of the routes in the guidelines is the “Asean Peranakan and Nature Trail”, which will cover multiple tourist areas from Penang and Langkawi in Malaysia to Satun, Krabi and Phuket in Thailand.

“Food consumption makes up half of the total income in the tourism industry. The guidelines are geared at increasing tourists’ awareness of the key dining areas along the Asean tourist routes, thus increasing the income of local communities there,” said the director-general.

Koh Lipe (Lipe Island), located in the southern Thai province of Satun, is included as part of the Asean Peranakan and Nature Trail. Local businesses could see long-term benefits from the guidelines, but the tourism industry also currently faces deeper problems.

“The immediate issue we are facing is the slump in the level of tourists since mid-2018, which has continued until the present,” said Rachot Suntudkan, managing director of Idyllic Resort, Koh Lipe. “Up to 60 per cent of Satun’s total income is from tourism on Koh Lipe. However, since the middle of 2018, there has been a reduction of 20 to 30 per cent in the number of tourists visiting the island.”

Last year, the total income from tourism on Koh Lipe was Bt500 million. During the December to February peak season of tourism on the island, the hotel reservation rate stood at 80 per cent. However, Rachot expects the reservation rate to slump back to 60 per cent after the high season is over. Hotel managers at Koh Lipe have called for more immediate action to address various issues, including infrastructure development to increase the ease of travelling for tourists from the mainland to the island. They expect reservation rates to recover, albeit temporarily, during the Songkran festival.

At present, Chiang Mai has only a 60 per cent reservation level after being affected by a high levels of air pollution. Bangkok and Pattaya have similar bookings at 60 per cent. The southern region has bookings of 70 to 80 per cent, according to the Thai Hotel Association (THA).

“The hotel occupancy rate for Songkran this year is expected to decrease by 5 per cent year on year due to the impact of the smog crisis. This has led to lower reservations by foreign tourists compared to the same period last year,” said Supawan Tanomkieatipume, president of the THA, in a separate interview.

“Hotel operators hope to see more last-minute bookings in the days leading up to the Songkran festival,” she said.

New land and building taxes will not increase tax rates, says Treasury Department

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http://www.nationmultimedia.com/detail/Real_Estate/30367717

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New land and building taxes will not increase tax rates, says Treasury Department

Real Estate April 16, 2019 01:00

By The Nation

The Treasury Department has reassured that a new method for appraising land and buildings will not result in higher land and building tax rates as several parties have suggested, while the Fiscal Policy Office (FPO) estimates about Bt40 billion per year in additional government revenues for the first two years from 2020 when the taxes bill takes effect.

Amnuay Preemonwong, the Treasury Department’s director-general, said that appraised building prices will be lower than the actual construction cost, resulting in the actual tax being lower than some had predicted. The appraised value of buildings will be based on its width and length regardless of the construction materials used.

The land and building tax bill will come into force from January 1, 2020 onwards.

So far, Treasury Department has appraised 20 million plots of land, with a further 13.4 million plots expected to be appraised this year.

Local officers will walk the streets to survey every house and building in the relevant areas. The categories of buildings have been cut to 31 from 69 for easier appraisal.

Amnuay said that area officers must survey and appraise every building in their areas, including those where the combined cost of residence and land is at or below Bt50 and so is tax exempt.

Meanwhile, according to the land and building law, a second house will be taxed from the value of the first baht of land and building, making it necessary to appraise every building in the country.

Amnuay also said that the new land appraisal bill, which has passed its third reading in the National Legislative Assembly (NLA), will shorten the approval period for appraised land prices and for appeals on those values, which will end at the provincial level. In the previous approach, a central committee gave approval.

In the first two years after the land and building tax bill comes into force on January 1, 2020, the government is expected to earn Bt40 billion per year from the land and building tax collection, according to the FPO.

Currently, the government revenue from the building and land tax, and the local development tax, amounts to a combined Bt30 billion.

Although the government revenue from the land and building tax is expected to be higher than in the previous system, the estimated collection is lower than the FPO’s earlier estimate of Bt60-Bt70 billion after the NLA changed the draft tax bill in response to developer pressure.

Meanwhile, the Treasury Department is moving ahead to develop a senior’s complex on a 72-rai (11.5-hectare) plot of state-owned land, while hurrying to soon finalise the first phase with Ramathibodi Hospital in Samut Prakan province after a delay of nearly three years.

The senior’s project will be implemented through a public-private partnership (PPP) scheme. The selling price per unit will include medical service fees. However, the hospital has not yet decided on the medical options in details and the costs to their ageing residents.

Other project details such as the conditions for leaving the project – voluntarily leaving or passing away, fee return, etc – also remain under consideration.

The land in this project will be rented by the department at Bt1 monthly per square wa, with the rental arrangement fee at twice that of the annual rent. It consists of three zones – the 32-rai hospital zone, 20-rai senior’s housing zone and 10-rai nursing zone.

The senior’s housing zone will consist of 1,000 units of 30-55 square metres each. It is expected to be open to rental by middle- to high-income people aged 55 years and above for a 30-year period or until they pass away.

IDC aims to stay on leading edge

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http://www.nationmultimedia.com/detail/Corporate/30367718

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IDC aims to stay on leading edge

Corporate April 15, 2019 15:53

By JIRAPAN BOONNOON
THE NATION

NTT Communications (Thailand) will set up an innovation lab to provide artificial intelligence (AI), internet of things (IoT) and blockchain solutions to support the manufacturing and security insurance industries.

The firm is also investing Bt500 million to expand its data centre at Amata City Industrial Estate.

Manabu Kahara, president of NTT Communications (Thailand), said that the firm has moved to set up Innovation Lab in order to showcase various innovative solutions to support manufacturing and the security insurance industries in order to help them improve the efficiency and productivity of their businesses. He added that the firm within this year will invest around Bt500 million in order to set up the third-phase expansion of the Bangkok 2 Data Centre at Amata City Industrial Estate. When it opens in July, the centre will boast a high-density 1,200 square-metre space with 2,000-kilowatt power facilitates to support Thailand’s investment policy in Eastern Economic Corridor (EEC).

The large investment will enable equipping the centre with a high level of stability and data security, as well as being able to provide customers with comprehensive services. The centre’s latest phase will retain the benefits of Nexcentre with its focus on quality, flexibility and cost-efficiency in responding to the business expansion and industrial investment in the EEC area.

IDC reported that by 2022, 15 per cent of public cloud computing in Thailand will be based on non-x86 processors (including quantum). By then, organisations will be spending more on vertical software as a service (SaaS) apps than on horizontal apps.

By 2024, AI-enabled user interfaces and process automation will replace one-third of today’s screen-based apps in Thailand. Also, by 2022, 20 per cent of enterprises will use conversational speech tech for customer engagement. And by 2023, some 25 per cent of servers in Thailand will encrypt data at rest and in motion; over 20 per cent of security alerts will be handled by AI-powered automation, and 3.5 million people will have blockchain-based digital identities.

“Thailand offers the highest potential growth for our business in this region,” said Kahara. “The Thai government is still driving and supporting the Thailand 4.0 scheme and the EEC project. The top three business services that generate revenue to the company are networking, the data centre and cloud services. We will also focus on providing a hybrid cloud to the market.”

By the end of fiscal 2019, the firm expects to generate revenue growth of 10 per cent over last year, he noted, adding that it has around 1,000 enterprise and business customers. Around 50 per cent are Japanese companies, with local companies making up the rest, including international branches of US and European companies. Local companies are expected to reach 60 per cent of customers over the next three years.

Neuron Mobility gets go-ahead for Darwin e-scooter service

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http://www.nationmultimedia.com/detail/Corporate/30367710

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Neuron Mobility gets go-ahead for Darwin e-scooter service

Corporate April 15, 2019 10:53

By The Nation

Southeast Asia’s leading e-scooter service, Neuron Mobility, has been given the green light by the City of Darwin for a 12-month trial of its sharing services across 37 locations of Australia’s Northern Territory’s capital.

“City of Darwin has jumped at the chance to support this 12 month trial,” said Josh Sattler, General Manager Innovation Growth and Development, City of Darwin, adding, “motorised scooters are a great option

for commuters, providing a quick, effortless and inexpensive mode of transport to move around the city.”

This trial will operate within terms and conditions established by representatives from the New Territories (NT) Police, Department of Information, Planning & Logistics (DIPL), Cullen Bay Authority,

Waterfront Corporation and Motor Accident Compensation (MAC) NT, said Zachary Wang, CEO of Neuron Mobility.

Darwin will be the first market globally to launch Neuron Mobility’s new commercial-grade N3 escooter, built from the ground up specifically for the sharing economy. The toughened scooters are

custom-built to ensure smoother urban commutes and safer rides, complementing existing transport options and improving economic activity for Darwin.

M.K. Real Estate Development rating confirmed at ‘BBB’

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http://www.nationmultimedia.com/detail/Corporate/30367709

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M.K. Real Estate Development rating confirmed at ‘BBB’

Corporate April 15, 2019 10:49

By The Nation

TRIS Rating has given M.K. Real Estate Development Plc (MK) a company rating of “BBB” and revised the outlook downwards from “stable” to “negative”.

The “negative” outlook reflects concerns over a weaker financial profile given its expansion into new businesses. The rating continues to reflect MK’s acceptable brand recognition in the housing segment and improving residential property sales. However, the rating is constrained by MK’s relatively volatile profitability and a looming rise in financial leverage.

The rating also incorporates the concern over the high level of household debt nationwide, which limits the purchasing power of homebuyers. Recent regulatory changes, introduced by the Bank of Thailand (BOT), may also affect the availability of mortgage loans.

Titan Pest eyes better performance, expands in Myanmar

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http://www.nationmultimedia.com/detail/Corporate/30367676

Titan Pest eyes better performance, expands in Myanmar

Corporate April 15, 2019 10:34

By Khine Kyaw
The Nation
Yangon

Following the three-year success of its commercial operations in Yangon, Titan Pest Management Co, an international subsidiary of Singapore’s Killem Pest Pte Ltd, is planning to expand into other major cities in Myanmar, according to Krystian Zycinski-Singh, the firm’s co-founder and managing director.

“Our main target is to be firmly established into Nay Pyi Taw and Mandalay with a robust client base this year,” he said in an interview.

“Additionally, we want to be in a position whereby we are working together with the relevant ministries to establish a robust public-sector pest control programme to benefit all people in Myanmar.”

According to Zycinski-Singh, the firm will commence servicing Nay Pyi Taw and Mandalay after the water festival, and then will expand its services along the western coastline including Ngwe Saung, Chaungtha and Ngapali beaches in the third or fourth quarters of this year. The firm aims to provide nationwide services by 2020.

“Realistically, once our presence is more established in the two cities, we would embark on phase 2 which will cover the western coastline areas,” he said.

“Our financial strategy is for funds from current growth to be invested back into the expansion into other cities.”

As the nation’s capital, Nay Pyi Taw is a strategic expansion for Titan Pest, and Mandalay is considered another key engine for the company to expand its footprint in Myanmar. Earlier this year, the regional government pegged the city’s growth at 8.1 per cent.

“Mandalay is very attractive because the pace of urbanisation there is fast and there is a conscious effort on the part of the local community to promote a sustainable city. Pest management would be integral to a green Mandalay,” said Zycinski-Singh.

The executive reminisced about 2016, its very first year of commercial operations in Myanmar. At that time, the firm started with three technicians, two office staff and one vehicle. It has grown to more than 30 technicians, seven office staff and five vehicles. By 2020, the firm expects to have more than 50 technicians, 10 office staff and eight vehicles to expand its services across Myanmar.

“Our customer base has been growing phenomenally since 2016, while the number of services we have completed grew by more than 600 per cent from 2017 to 2018. From a small team of five, we are now more than 40 people and growing further,” he said.

The firm now has more than 150 corporate clients, and expects the number of clients to double to 300 by the end of next year. Hospitality and manufacturing sectors mainly drive its growth in Myanmar, while the firm also sees growth potential in other sectors, said Zycinski-Singh.

“Our commercial client base accounts for more than 80 per cent of our business. In terms of international agencies, we work with the European Union, the United Nations and Japan International Cooperation Agency,” he said.

The firm provides pest management solutions that prevent the breeding of rodents, cockroaches, flies and mosquitoes, which spread infectious diseases including dengue, malaria, typhoid fever and leptospirosis. It uses environmentally less harmful chemicals along with safer and more effective pest control technologies that meet international standards.

“Last year, we carried out more than 6,500 services and 99 per cent of our customers said they were very satisfied,” he said.

To date, the firm has completed nearly 11,000 services in Yangon, catering to residential, commercial and industrial customers. Businesses that rely on Titan Pest’s premium service include shopping centres, hotels, hospitals, factories and warehouses, building and construction, food and beverage outlets, as well as pharmaceutical and manufacturing plants.

Big names including City Mart, Capital Diamond Star Group, Sule Shangri-la, Damco, Maersk and Pepsi are among its customers, and the firm also helps protect hospitals, schools, embassies and international organisations.

Earlier this month, the firm launched its cleaning and hygiene service in Myanmar. The new product will provide commercial facility cleaning maintenance, cleaning audits, commercial deep cleaning, upholstery and carpet cleaning services, drain and pipe clean up, and decluttering services.

“Ultimately, what we aim to achieve is total protection against any pest infestation. Hygiene is an important part of this. This step is part of our commitment to consistently add value through an end-to-end and convenient service,” he said.

“Together with an effective pest control programme, meticulous cleaning and consistently good housekeeping are a must. Poor housekeeping results in stagnant water, mountains of garbage and clogged drains where pests such as rodents and mosquitoes thrive. Mosquitoes are a big problem in Myanmar, and they only need as little as 5 millimetres of water to lay their eggs.”

According to Zycinski-Singh, the challenges in Myanmar include the lack of public awareness, the lack of an institutional baseline for sanitation and hygiene standards, no community immunity, the lack of consultation on pest management at township level and the absence of a policing agency for pest-related projects.

“Macro problems need macro solutions. So, we will focus on public consultations to raise awareness about pest control,” he said.

When less is MORE

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http://www.nationmultimedia.com/detail/Corporate/30367704

Alberto Ibeas, managing director of Diageo Moet Hennessy (Thailand)
Alberto Ibeas, managing director of Diageo Moet Hennessy (Thailand)

When less is MORE

Corporate April 14, 2019 23:39

By Kwanchai Rungfapaisarn
The Nation Weekend

ALBERTO Ibeas, managing director of Diageo Moet Hennessy (Thailand), is facing strong headwinds in leading the global alcoholic drinks company in Thailand.

Ibeas says the alcohol market is expected to continue to slow down as a result of economic pressures and a global shift in consumption in which people are drinking “better, but not more”. As Thailand is no exception, he says, this creates an opportunity to promote premium drinks and experiment with innovation. Ibeas notes that Thai consumers are very keen to try new products and have embraced the cocktail culture.

“Our ambition for Diageo Moet Hennessy Thailand is to become the best performing, most trusted and respected consumer goods company in Thailand. To achieve this goal, DMHT promotes a culture of ‘Celebrating Life Every Day Everywhere by Drinking Better Not More’. This can be interpreted as seeking to be the best you can be at work, in society and in the communities where we operate,” Ibeas says.

He took over as managing director of DMHT at the start of last year. The Spaniard brought with him 19 years of broad functional and regional experience to his role at Diageo, where he is focusing on driving sustainable business growth for the company in Thailand and “delivering benefits to all stakeholders through clear strategies and DMHT innovations”, he says.

A graduate of Universidad Comercial de Deusto in Bilbao, Spain, and Stockholm University in the Swedish capital, Ibeas started his career in finance decision support and later took on finance leadership roles across Latin America and the Caribbean, the Andean region and in the UK.

He has also held global positions with Diageo’s treasury and group strategy teams and in 2014 moved to commercial roles in his native Spain. In recent years, he led the business on the Iberian peninsula, with responsibilities for Spain, Portugal and the Canaries.

Under his leadership, the business has returned to growth after many challenging years and is once again a key player in the whisky and gin categories. He was responsible for shaping the next phase of Diageo’s route-to-consumer in Iberia, more than doubling the company’s coverage and transforming the ways of working with its wholesale partners.

Ibeas has been described as a natural leader and is known for building and motivating highly engaged teams, transmitting to them his passion in working for DMHT. He is also an avid supporter of the local communities where the company works and was actively involved in sustainability and responsibility programmes such as Diageo Learning for Life, which was applied across the Iberian region.

In his spare time, Alberto enjoys travelling, music, sports and reading. He is married and is a proud father of three.

He says that, in trying to do the best he can at work, he wants to inspire his colleagues to develop innovations and new experiences in response to Thai consumers’ changing lifestyle. These changes are typified by Thais’ preferences for premium drinks enjoyed on more relaxed occasions.

“Diageo is the world’s biggest premium spirits company. Together with our joint venture partner in Thailand, LVMH, we have an unbeatable range of global iconic brands,” he says.

“We believe that despite the market difficulties and economic challenges, there are significant opportunities for us to offer exciting celebratory experiences to our consumers.”

“Some tangible examples are the launch of our limited edition Johnnie Walker White Walker and the Fire & Ice Malt Whiskies, all in partnership with globally acclaimed HBO series Game of Thrones. Also our beautiful and Japanese inspired Smirnoff ICE Umeshu, the launch of The Singleton Malt series (perfect to pair with spicy food), and many more brands that we will be introducing in the market in the months to come.

“Being the best in society and the communities inspires us to create a positive impact where we operate. As an example, we believe that alcohol can be part of balanced lifestyle, if and when people drink moderately.” He says the company has funded a number of programmes to educate people on the need to drink responsibly.

“Some examples of these programmes are DRINKiQ for alcohol education,” he says. “We have developed an e-learning platform, and are also using innovative VR technology for a consumer roadshow.

“For the Road Safety/Don’t Drink Drive campaign we worked with the police, and have programmes in partnership with UNITAR and UNESCAP.

“For the Smashed Theatre programme, this has been undertaken with the aim of preventing under-age consumption.

“Under my leadership, I want a company that despite our success behaves humbly, that despite our global brands acts locally, a company where everybody feels valued, feels heard, a company where everyone is clear on their objectives and understands how what she or he does contributes to delivering our ambition.”

“A company that contributes to creating a better society, promoting a “drink better not more” culture, training Thai consumers to enjoy alcohol responsibly and also educating them when not to drink is the only option – for example, when driving of if you are under age – that’s what I want.

“I am also proud to be part of a company that promotes gender equality and diversity and inclusion at work; 51 per cent of our employees are women. This is also a company, that despite its size, is constantly hunting for opportunities to perform better. It is a company that is never satisfied and is always hungry for more.”

Ibeas says these characteristics of the company can be encapsulated in three points.

“We must maintain market leadership. Losing market share means that you are giving your size of the pie to someone else,” he says.

“We must create a better company, where our employees are super engaged. We must create a positive impact in our society, educating people about how alcohol can be part of a balanced lifestyle and how it can be consumed responsibly.”

Ibeas says the industry has had to contend with significant lifestyle changes on the part of consumers.

“But as a company we are very successful in delivering new products and experiences to accommodate these changes,” he says. “For example, we have seen a change from high tempo occasions, typified by loud music, to more relaxing settings and which are combined with food.

“We have developed experiences that continue to offer consumers the right drinks when they are enjoying these times.”

On the technology front, the changes sweeping through the industry and society are changing the way the company works, he says.

“The way employees work and interact with one another is being completely disrupted,” he says. “We now use technologies like Zoom so that any of our employees can videoconference with each other from anywhere in the world. We have Quip so that employees can work on a document from different locations in real time. We have moved from in-class learning to e-learning for employees with our Diageo Academy technology,” Ibeas says.

“As for outside the organisation, DMHT’s interactions are moving from traditional sources to digital platforms. This is not only about our brands. We have also developed digital initiatives to educate adults on how to drink responsibly, such as DRINKiQ e-learning and VR technology, to raise awareness on road safety,” he says.

He says the company has an exciting year ahead of it.

“On our unbeatable Super deluxe portfolio, we are introducing a JW Blue Label Year of the Pig edition, a Bangkok limited edition that will be sold in Thailand for a limited period, and a Ghost and Rare edition, which is a special Blue label edition made with whiskies from distilleries that are already closed,” he says.

“That means that the whisky cannot be made again, nor replicated. It’s an absolute jewel. We will also soon launch our Fire and Ice Malts in partnership with Game of Thrones. This is a collection of seven malts inspired by the Houses of the globally acclaimed Game of Thrones series. We will be bringing a very limited number of bottles into Thailand, we so suggest you rush to get yours.

“This year, and for the first time in Thailand, we will take our global World Class competition to several cities in Thailand. This is the best bartender competition in the world, where thousands of bartenders globally compete to be the best.

“We will have finalists from all corners of Thailand, who will then compete to be the Thai representative in the global final that will be celebrated in Glasgow in September. We will, also for the first time in Thailand, celebrate a cocktail festival in Bangkok at the same time as the Thai World Class final.”

He says that, from an innovation point of view, the company has launched Smirnoff ICE Umeshu, Johnnie Walker White Walker limited edition, and the Singleton Malts series.

“These launches were all very successfully executed,” he says. “The company will be launching two new products in the next couple of months, but we will keep that confidential for now.”

Developer posts Bt4.8 bn in first-quarter pre-sales

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http://www.nationmultimedia.com/detail/Real_Estate/30367549

Developer posts Bt4.8 bn in first-quarter pre-sales

Real Estate April 12, 2019 01:00

By The Nation

Listed property firm Ananda Development Plc has announced Bt4.8 billion in pre-sales for the first quarter of this year, up 19 per cent from its estimate, said the company’s chief financial officer Chaiyuth Chunnahacha said yesterday.

It plans to launch four residential projects worth Bt13 billion in the second quarter to boost its pre-sale total to Bt36 billion at the end of the year.

A total of 10 projects are planned for this year , comprising eight condominiums and two housing estates.

Due to capital constraints , 7 of the condominum projects will be joint venture developments.

Meanwhile, presale total for 2019 is expected to grow by 14 per cent year on year to Bt36 billion while transfers are expected to grow 9 per cent to Bt36 billion, he said.

Luxury market ‘will keep momentum’

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http://www.nationmultimedia.com/detail/Real_Estate/30367405

Luxury market ‘will keep momentum’

Real Estate April 10, 2019 01:00

By   THE NATION

3,265 Viewed

THE Property management arm of Sansiri Plc Plus Property Co Ltd has expressed confidence that the luxury market will maintain its growth, with a yield of investment of between 7-10 per cent a year.

According to a company survey, the luxury property market with prices over Bt10 million per unit grew an average 7 per cent per year during 2012-2018, despite the unremarkable growth of the Thai economy and the continued presence of risks to the global economy during the same period.

The response rate for luxury condominiums during 2014-2018 has been attractive, averaging at 70 per cent, according to the survey. Demand has also continually risen, due to the fact that the products are developed in a rather limited quantity compared to mainstream condominiums in the market. As a result, luxury projects have enjoyed a good response from customers with high purchasing power throughout the extended period.

The absorption rate for luxury projects stands at 15 units per project per month, whereas the absorption rate for mainstream projects stands at 22 units per project per month. These numbers point to a lower absorption rate for luxury projects, which is in line with proportionally lower supply.

However, when consideration is given to the percentage of projects that are able to sell out in less than one year, the survey found that 31 per cent of luxury projects were able to sell out. This compared favourably to the 20 per cent of 417 mainstream projects able to sell out within a year.

Another factor that contributed to luxury properties’ attractiveness is their status as investments that offer somewhat higher returns. Owing to ever-increasingly prices, luxury properties have produced yields of 7-10 per cent. In areas stretching from inner Sukhumvit to Thong Lo, the yield stood at roughly 9.5 per cent.

The company’s managing director, Anukul Ratpitaksanti, said the market is maintaining its growth despite the 2019 challenges that include domestic and international politics as well as economic factors.

He said developing projects to penetrate the luxury group of buyers yields better cost-effectiveness to justify the challenges involved in procuring increasingly rare city-centre land plots, and assembling them into a sufficiently large plot for project development.

He expects 2019 to again present a vibrant scene, with new luxury properties finding their audience. These properties meet the demand of those seeking quality residences, as well as of investors and foreigners.

Although the Bank of Thailand is expected to begin enforcing its new LTV mortgage regulation starting this month, the purchasing power at the luxury level is not expected to be afflicted, particularly among foreign buyers.

The measure requires an increase in the down payment to 20 per cent, with the mortgage not exceeding 80 per cent of the price. This is a level similar to many countries, including the UK and New Zealand. Still, there are also numerous countries where the regulation on down payment calls for an even higher percentage than Thailand’s new mortgage rules. For example, the down payment is 75 per cent in Singapore, 70 per cent in Malaysia and South Korea and 65 per cent in Hong Kong. Thailand’s new mortgage rules will therefore have no effect on investors from these countries, said Anukul.