A seasonal downturn in Thailand’s baht driven by dividend outflows and a lack of tourists could be worse than usual this year amid rising global bond yields and less liquidity, according to Kasikornbank Pcl. A dropoff in tourists after the Songkran festival in mid-April and payouts to foreign stock investors usually spell declines for the currency in May. Last year was the first time the baht managed to rally in that month since 2009. Rising developed-market bond yields and the gradual winding down of stimulus by the European Central Bank could prompt overseas investors to rebalance their portfolios away from emerging markets like Thailand, said Kobsidthi Silpachai, head of capital market research at Kasikornbank in Bangkok. “The baht may see bigger downward pressure this year than usual,” he said. “Many clients are asking about this dividend season, while exporters are hoping for some light at the end of the tunnel.” A decline in the baht may provide some … [Read more...] about Cruelest month for Thai baht could be worse than usual this year
Phuket International Airport Director, Petch Chancharoen, gave an award to Duangtawan Chuayseng, one of the housekeeping outsource staff from Phuket Inter Chemical Company today (March 2) for returning 500,000 Baht in cash to a Chinese passenger, Li Xiaofei. The cleaner was working at the mens toilet on the 3rd floor of the international terminal and found a wallet with a lot of bank notes, both Thai Baht and Yuan, with a combined value of 500,000 Baht. She reported it to the security officer to make an announcement and find the owner of the wallet. Li Xiaofei showed up with his passport, which matched with his ID card in the wallet, and correctly specified the details of what was in the missing wallet. After a week of bad news coming out of the Phuket International Airport, a big thanks and wais to Duangtawan Chuayseng for her honesty and good citizenship. - Kritsada Mueanhawong … [Read more...] about Airport housekeeper returns 500,000 Baht to passenger
TNSC chairman Ghanyapad Tantipipatpong said that export income could drop by as much as US$5 billion this year in the absence of official relief measures and continued gains in the baht. Under this scenario, the growth in exports is expected to fall well short of the announced projection of 5.5 per cent, at 3.5-4 per cent. Since the start of this year, the baht’s appreciation has resulted in a 2.85 per cent hit on Thai exports and the wage rises have also been a drag on overall export, Ghanyapad said. “Currently, the impacts have not yet been clear. Producers of local raw materials like agricultural products and food, and labour-intensive industries like textiles and garments are expected to be hit,” she said. As yet, there have no relief measures from the government or any adjustment assistance to cope with this situation, she said. Chaichan Charoensuk, TNSC secretary-general, said that this initial impact is based on the country’s export potential, … [Read more...] about Strong baht may rewrite export goal
Though it is likely that Thai exporters will enjoy a 4.8 per cent growth this year due to the momentum in global synchronised economic growth and robust global trade, those businesses that are not prepared for such changes will become sitting ducks and see their “net” profit margin gradually vanish. On average, a 3.4 per cent increase in the minimum wage could lift the Cost Of Goods Sold (COGS) and will eventually slash the net profit margin by about 0.4 per cent, given all other factors remain constant. As for the impact from the indomitably strong baht, if the Thai curency gains about 5 per cent from last year, it would eat up the net profit margin of exporters by around 0.6 per cent on average. However, different business and financial structures could lead to different levels of severity of net impacts from higher minimum wage and strong currency. The businesses that will face most ramifications from the wage hike and strong Thai baht, with a 1-3 per … [Read more...] about Are exporters a sitting duck amid wage hike and rising baht?
More money from the Government Pension Fund (GPF) and Social Security Fund (SSF) should be invested overseas to cool down the strong baht, according to the Finance Ministry. Permanent secretary for finance Somchai Sajjapongse said the appreciating baht results from an inflow of foreign capital. Several approaches can be used to send money out of the country to ease the baht, including supporting Thai business operators to invest overseas as well as funneling more money from the GPF and the SSF to invest abroad.He said some members of the both funds may feel uncomfortable that more of their money is going overseas, so at this stage overseas investments from the funds may be pushed to the ceiling first.The ceiling for overseas investment by the SSF is set at 30%, but only about 26% of the fund's investment coffers had been invested in foreign bonds as of the end of last year, according to the Labour Ministry.As of the end of last year, the SSF had 1.76 trillion baht, of which 1.24 … [Read more...] about Funds urged to invest in OS to curb rising baht