by Pooky, this blog economics journalist
Intelligence: Fortune 500 Caused Stir at NESDB and Central Bank
Analysis: Fortune 500 ranking that puts Thailand risk at 5th worse place globally, while censored by Thai press, cause a major concern at the NESDB and the Thai central bank-to the extent that special meetings were called for to asses the impact and lay down counter strategies. The NESDB is of the opinion that Thailand has little choice but to re-think its BOI push into the second and third tier global companies, while the central bank says an overall strategic industrial development push is needed to re-position Thailand for the Fortune 500. Thai Intel thinks both strategies are wise and proper.
Intelligence: Thai Security and Exchange Commission running in the red for the first time in 2009
Analysis: The Thai SEC reported running in the red as a result of lack of interest in IPO reducing the fee it gets. All in all, while the Thai stock market was up about 60% in 2009, few companies were in strong enough of a financial position to project good enough profitability for good after listings share prices. With 2010, looking better, the listings may improve, however, with the 60% stock market gain last year, and profitability still under pressure, many brokers say new listings will still be too hard to sell to the public.
Intelligence: 14 Million Tourist vs 10 Million Tourist
Analysis: The government and the Thai tourism authority says tourist will hit 14 million in 2009, but private industry says it will be about 10 million. Whatever the final figure is, both agrees that the actual income from tourist last year will drop some 30-40% as global tourist goes on a belt-tightening drive. In 2010, the situation looks similar, according to many tourist expert based on weak consumer spending in key Thai tourism market, while emerging market like China and the Middle east are highly sensitive towards political instability and the risks involved.
Intelligence: Housing Hot But Margin Squeezed
Analysis: One of the few hot spot in the Thai economy since the middle of last year is the housing industry. But bonus figures from companies in the industry, indicates that only those companies with a reputation of offering bargain price are doing well. Industry leader says this indicates that the real demand have not returned and much of the current purchase is for speculation of future price increase.
Intelligence: ASEAN Free Trade Benefits Multinational in Thailand
Analysis: Most Thai press are saying that Thai automobile and electronics industry will be the main beneficiary of the ASEAN free trade area that started a few days ago, as other such as agriculture and SME are expected to be hit hard, if not becomes more competitive and expand to ASEAN. Some Nationalistic Thais are saying that the automobile and electronics are mostly foreign companies in Thailand.
Intelligence: Thai prime minister, Abhisit makes the most from slow stimulus spending
Analysis: The corruption buffeted stimulus spending has slowed the massive spending to the point that Abhisit has said he accepts the slowdown as more scrutiny is placed on the spending. “The economy is recovering and we may not need that much of a stimulation that fast,” said Abhisit. Some economist are actually happy of this Abhisit turn because many worry about the massive debt the government has been taking on to stimulate the economy when political instability will likely wipe all the benefits away.
Intelligence: Saudi Arabia Cold towards Thailand?
Analysis: Un-confirmed reports says Saudi Arabia is again angry that the cases involving Saudi Arabian national in Thailand, is being met again by political meddling. Abhisit is placing a great deal of energy on the Middle East for a variety of reasons, and while Saudi Arabia and Thailand have little joint business interest, an angered Saudi Arabia at Thailand, will likely get headline press treatment in the Middle East. Many Thai businesses have in fact been quietly retrenching out of the Middle East, such as Bumrongraj Hospital that sold its interest in a hospital there, while Thai construction companies have never been able to win contracts for much of anything.
Intelligence: One Thai Creative Industry in Crisis
Analysis: Those involved with building Thailand into a movie studio for the global film industry are in shock, as the numbers have fallen drastically for the first time in recent memory. Both income from foreign movie making in Thailand and the actual numbers of projects, that also include animation, special effects and commercials have tanked to the point that the industry is asking the Thai government for special tax brakes. The industry expert says that Thailand is so unstable, not too many creative people will bet being able to keep their working schedule in Thailand. Other simply says Thailand is no longer a selling point, because of a negative image.
Intelligence: Thai Rail Modernization US$5 billion Plan Called Wasteful
Analysis: On paper it looks great as Thailand logistic cost as total cost of goods is among the highest in ASEAN. So the railway modernization has been proposed by the Abhisit government as the cornerstone of more competitive logistics costs. The problem, as some in the logistics industry says, is that Thai trucking fleet is also in the process of switching to NGV and is getting pretty competitive. Add to that modern trucking fleet management techniques, and the logistics cost in Thailand is dropping. So why US$5 billion for rail modernization, many are asking.
Intelligence: Thai Construction Industry asks for Protection
Analysis: The Thai construction industry that is just extremely infected with massive corruption and have been living off that corruption, is asking the government of Abhisit for special protection. The protection comes in all sort of forms to skirt WTO and ASEAN free trade. But some observer fighting for transparency in Thailand, says that the urgent request for protection is in preparation for the massive government stimulus spending that will see lots going to the construction sector, apparently, so they can continue to live off corruption that some estimates is at about 30% of every baht spent.
Intelligence: Thai Rice Farmers Not very Happy
Analysis: Most of the rice that Thai farmers have grown has been sold to the middlemen and the government, as global rice price are expected to go up this year as a result of several factors that will see supply drop by about 1% globally, reversing an increase every years. Meanwhile, unlike the Thai government and the middlemen who are keeping their stock handy for better global price, other countries are fast to un-load their rice supply, cutting deeply into Thai traditional market. Some rice industry observers say, while the Thai government and the middlemen, may end up with a 5-10% better pricing, the lost markets will mean the future of those traditional Thai markets have never been more exploited by Thailand’s competitors as it is today.