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SMEs to get targeted aid when blanket support expires next week: BOT

EconOct 17. 2020Roong Mallikamas, assistant governor, briefs reporters on a new financial aid strategy for SMEs at the Bank of Thailand on Thursday. 

By The Nation

The Bank of Thailand (BOT) will shift from a blanket strategy to targeted aid measures for small and medium-sized enterprises (SMEs) affected by Covid-19 when their loan-repayment holiday expires next Thursday (October 22).

The debt suspension covered 1.05 million loans worth a total Bt1.35 trillion, out of total debts of Bt6.89 trillion covered by all government measures, BOT assistant governor Roong Mallikamas said on Friday. The measures, implemented via commercial and state-owned banks, include a debt moratorium, debt restructuring, rate cuts, and others, she said.

The end of the debt suspension would not lead to a spike in defaults, as state-owned banks have extended the measure for another three to six months, covering Bt400 billion worth of loans, she assured.

Meanwhile commercial banks taking care of Bt950 billion in debts have found that the majority of debtors will be able to service their loans, she said. Banks will continue to provide a lifeline for those unable to resume debt payments or only able to make partial payments, in order to prevent their debts becoming non-performing loans (NPLs).

Banks have already contacted all but 6 per cent of this group, Roong said.

Some businesses have recovered to almost pre-Covid-19 levels, including beverage firms, electrical appliance firms and traders, she added. But tourism-related sectors have recovered at a slower pace, with hotels only up to 26 per cent of their pre-coronavirus business.

“Therefore, the central bank has asked banks to shift from blanket aid to targeted support that meets specific demands of individual debtors,” she said.

Extending blanket support could be damaging in the long run, increasing the debt burden of SMEs or leading to exploitation by debtors, she said.

It could also undermine financial stability in the long term, reducing liquidity by about Bt200 billion annually, she added.

The central bank has permitted banks to freeze their loan classifications until the end of this year in order to prevent debts turning bad.

Debtors who could not contact their lenders or could not restructure their debts  could reach the central bank debt-solutions channel via https://www.1213.or.th/App/DebtCase, she added.

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SET drops by nearly 1% due to ongoing political unrest

EconOct 16. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,233.68 on Friday, down 9.28 points or 0.75 per cent. The volume of total transactions was Bt44 billion with an index high of 1,247.89 and a low of 1,226.95.

In the morning session, an analyst at Krungsri Securities said he expected the index to fall to between 1,230 and 1,235 owing to political unrest, which he reckoned would be prolonged.

“Also, many European countries’ move to reimpose lockdown measures to prevent a second Covid-19 wave and the rise in US unemployment figures would pressure the market,” he said.

The top 10 stocks with the highest trade value today were CPALL, PTT, KBANK, STA, STGT, TISCO, SCC, MINT, NER and HANA.

As of 4.30pm, the price of oil dropped by US$0.24 or 0.59 per cent to $40.72 per barrel, while gold rose by $5.50 or 0.29 per cent, to $1,914.40 per ounce.

Other Asian indices were mixed:

Japan’s Nikkei Index closed at 23,410.63, down 96.60 points or 0.41 per cent.

China’s Shanghai SE Composite Index closed at 3,336.36, up 4.18 points or 0.13 per cent, while Shenzhen SE Component Index closed at 13,532.73, down 92.16 points or 0.68 per cent.

Hong Kong’s Hang Seng Index closed at 24,386.79, up 228.25 points or 0.94 per cent.

South Korea’s KOSPI Index closed at 2,341.53, down 19.68 points or 0.83 per cent.

Taiwan’s TAIEX Index closed at 12,750.37, down 77.45 points or 0.60 per cent.

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SET expected to be highly volatile after declaration of emergency

EconOct 16. 2020

By The Nation

The government’s decision to declare a state of emergency to deal with political rallies is causing high volatility in the Stock Exchange of Thailand (SET), an analyst at Asia Plus Securities pointed out.

After protesters surrounding Government House dispersed and announced they would continue rallying, the government put Bangkok under emergency in a bid to control the situation.

An Asia Plus Securities analyst said SET’s condition when the state of emergency was declared the last four times – Black May in 1992, People’s Alliance for Democracy’s protest in 2006, United Front of Democracy Against Dictatorship’s protest in 2010, and People’s Democratic Reform Committee’s protest in 2014 – has been studied and compared.

“We learned that the SET Index experiences high volatility in the short term once the state of emergency is declared, before rising gradually in the next phase,” he said.

He said the SET Index is expected to fluctuate from minus 7.35 per cent to plus 11.17 per cent in the first two weeks after the announcement. It should then rise by 40.7 per cent after a month of the imposition of emergency, then by another 5.69 per cent in two months and 8.21 per cent in three months.

He advised investors to hold 25 per cent of their funds in cash to cope with market volatility and invest 75 per cent in small- and mid-cap stocks that pay high dividends, as well as stocks that are will not be affected by the political unrest.

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RCEP agreement to be signed in November and take effect next year

EconOct 16. 2020

By The Nation

The Regional Cooperation and Economic Partnership (RCEP) agreement is ready to be signed in November, and is expected to take effect in the second half of next year, Auramon Supthaweethum, director-general of the Trade Negotiations Department, said.

The Covid-19 crisis was not an obstacle to RCEP negotiations as the panel was meeting via video conference to summerise all remaining issues and revise the legal document, she said.

At the 8th RCEP Ministers’ Meeting on August 27, through video conferencing, the meeting confirmed that the agreement would be signed at the 4th RCEP Summit during the 37th Asean Summit in Vietnam in mid-November.

The signing method will be discussed with Vietnam as the chair of Asean in 2020.

“The RCEP Agreement will enter into force only if at least half or six Asean members and half of the non-Asean members (three out of six) enact it. As for Thailand, we must seek approval from the Cabinet. After that, there will be a process to seek approval from Parliament. The deal is expected to come into effect as early as around the second half of 2021.” said Auramon.

RCEP will be the largest free-trade agreement (FTA) in the world, comprising 16 member countries with a combined population of almost 3.6 billion (48.1 per cent of world population), combined gross domestic product (GDP) of more than $28.5 trillion (32.7 per cent of world GDP) and total trade value of over $11.2 trillion (29.5 per cent of world trade)

Fifteen countries, with the exception of India, will sign the agreement. The members have not yet been able to respond to India’s concerns about trade deficit with many members.

Even without India, RCEP will cover a population of more than 2.2 billion (30 per cent of world population), total GDP of more than $25.6 trillion (29.3 per cent of world GDP) and trade value of more than $10.4 trillion (27.4 per cent of world trade)

“RCEP members will welcome India to return to the group because India has been a key member of the RCEP talks since negotiations began in 2012 and believes that India’s participation would help RCEP grow the region,” said Auramon.

She said the RCEP agreement would benefit Thailand more than FTAs ​​in the Asean framework, such as Asean-China, Asean-Japan, or Asean-Korea.

She said that Thailand would at least gain from non-Asean members in many ways, such as China, South Korea and Japan to open up new markets and reduce tariffs on Thai products, such as agricultural products namely tapioca flour, fisheries, fruit juices, pineapple, coconut juice, paper, and automotive parts.

In the past, in the framework of the Japan-Thailand Economic Partnership Agreement and Asean-Japan Comprehensive Economic. Partnership reduced tariffs on goods to Thailand to zero, accounting for approximately 88 per cent of the total inventory. South Korea eliminated tariffs on Thailand by about 91 per cent and China by 94 per cent on all products. In the RCEP framework, Thai products will be get even more tax benefit, although not 100 per cent.

“Another thing that we will have is the origin of Made in RCEP products because it is a big package. There will be more options to accumulate origin of goods from member countries to receive mutual tax benefits, including promoting a multilateral trading system of rules and helping the regional economy recover and grow stably. In addition, in regard to the regulations from RCA to FTAs ​​that were recently made in the latter, there would be new chapters such as electronic commerce,” said Auramon.

RCEP comprises 16 countries: Thailand, Malaysia, Indonesia, Singapore, Philippines, Vietnam, Myanmar, Laos, Cambodia, Brunei, China, Japan, South Korea, India, Australia and New Zealand.

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SET remains under pressure from domestic political unrest

EconOct 16. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index fell by 0.29 points, or 0.02 per cent, to 1,242.67 in the morning session on Friday.

An analyst at Krungsri Securities expected the index to fall to between 1,230 and 1,235 due to domestic political unrest, which would be prolonged.

“Also, many European countries’ move to reimpose lockdown measures to prevent a second Covid-19 wave and the rise in US unemployment figures would pressure the market,” he said.

As an investment strategy, he recommended that investors buy:

▪︎ PTTGC, IVL and TOP that will benefit from the rising oil price.

▪︎ TU, STGT, CBG, SCC, IVL, COM7, ASIAN, DELTA and HANA whose third-quarter performance is expected to improve.

The SET Index closed at 1,243 on Thursday, down 21.03 points or 1.66 per cent. Total transactions amounted to Bt54 billion amid escalating political turmoil in Thailand and a standoff in the US over economic stimulus measures.

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Gold price rises from worries over second Covid-19 outbreak

EconOct 16. 2020

By The Nation

The price of gold rose by Bt150 per baht weight in morning trade on Friday, the Gold Traders Association reported.

As of 9.26am, the buying price of a gold bar was Bt28,050 per baht weight and selling price Bt28,150, while gold ornaments were priced at Bt27,545.72 and Bt28,650, respectively.

At close on Thursday, the buying price of a gold bar was Bt27,900 per baht weight and selling price Bt28,000 while gold ornaments cost Bt27,394.12 and Bt28,500, respectively.

Spot gold price moved to US$1,907 (Bt59,514) per ounce in the morning after the price rose by $1.6 to $1,908.9 per ounce at close on Thursday due to mass buy-ups of the precious metal after many countries in Europe reimposed lockdown measures to contain the spread of Covid-19.

Hong Kong gold price rose by HK$90 to $17,620 (Bt70,960) per tael on Friday morning, the Chinese Gold and Silver Exchange Society reported.

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Labour Ministry offers IoT courses to boost skills of country’s workforce

EconOct 16. 2020

By The Nation

The Labour Ministry is planning to have up to 5,000 workers armed with high-tech skills for the internet of things (IoT) industry by next year.

Tawat Benchatikul, director general of the ministry’s Department of Skill Development, said Deputy Labour Surachai Trakulthong visited Eastern Economic Corridor (EEC) labour management centre and the human resource development institute in Chonburi to formulate a concrete action plan for the country’s workforce, including labour procurement, skill development, labour welfare, occupational safety and social security.

Surachai instructed the department to work on upgrading workers’ skills, especially by adopting the latest technology and innovation to boost productivity and create more opportunities for EEC’s 10 target industries to build the confidence investors. 

Tawat said this year, his department has been working under a workforce development plan designed to boost the skills of 6,400 workers this year and 5,440 in 2021. 

Five courses lasting 30 hours each are up for grabs in October and November, namely two related to three-dimensional measuring tools, one on SolidWorks software, one on the GxWork3 software designed by Mitsubishi and one on handling and controlling robotics. 

Meanwhile, the Office of Skill Development in Chachoengsao is offering courses on IoT, automation, robotics and mechatronics, which are open to the general public, new graduates, formal workers and unemployed people with basic skills. Trainees will be given theory and practical lessons to prepare them for employment. 

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Foreign investors ‘confused by emergency rule’

EconOct 16. 2020Thai Chamber of Commerce chairman Kalin Sarasin 

By The Nation

Foreign investors need more details of what they can or cannot do in Thailand under the state of emergency imposed on Thursday, said Thai Chamber of Commerce chairman Kalin Sarasin.

He added that foreign investors had inquired whether they can go ahead with holding seminars and meetings in Thailand, after the emergency ban on gatherings was imposed on Thursday.

Chambers of commerce in the provinces had also asked him if they will be able to continue with planned activities, he said.

He added that it would take a few days to judge whether emergency rule will hit foreign-investor confidence. He believes the economy could escape damage from political turmoil if the anti-government protests end soon.

Meanwhile, Japanese faith in Thailand remains high, according to Japan External Trade Organisation (Jetro) president Atsushi Taketani.

Japanese investors were still confident in Thailand and remain committed to driving its economy regardless of current political situation, he said.

The country’s core economic policies – including development of the Eastern Economic Corridor – would not be affected by escalating political protests, the Industrial Estate Authority of Thailand said on Thursday.

Attapon Jirawatjanya, deputy governor of the authority, predicted that ongoing anti-establishment protests would be a short-term problem.

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Industrial estates mushrooming in EEC despite virus crisis

EconOct 16. 2020

By The Nation

Industrial estate operators are ploughing ahead with development plans in the Eastern Economic Corridor (EEC), unfazed by the impact of Covid-19, said Industrial Estate Authority of Thailand deputy governor Attapon Jirawatjanya.

The authority recently approved the launch of three new industrial estates, including the Rojana Industrial Park in Nong Yai, Chonburi and the Egco Rayong Industrial Estate. Attapon expects them to inject about Bt80 billion in investment and generate around 50,000 jobs for the local economy.

He said that at least three more operators are consulting on plans to set up industrial estates in the EEC.

5G infrastructure to support automation and robotics will be installed within the next five years at the authorities’ five industrial estates – at Map Ta Phut, Laem Chabang, Bang Pu, Lat Krabang and the Northern Region Industrial Estate, he added.