Thailand Microeconomic Weekly Update #31

THAILAND MACROECONOMICS WEEKLY UPDATE

The Ministry of Finance has revised down Thailand’s economic growth projection for the year to 3.5%, a decrease of 0.1 percentage point from the previous estimate. In June 2023, Thailand’s exports contracted by 6.4%, amounting to 848.92 billion Baht, as reported by Kirati Ratchano, the permanent secretary at the Commerce Ministry. The Central Administrative Court ruled in favor of the Mass Rapid Transit Authority of Thailand (MRTA) in a case against Bangkok Mass Transit System Plc (BTSC). State welfare card holders in Thailand will soon be able to use the government-provided 750 baht/month travelling subsidy to access boat and “song thaew” transport services provided by private operators. Due to a drop in domestic car sales and an increase in imported electric vehicles from China, the Federation of Thai Industries (FTI) has reduced its 2023 car production target to 1.9 million units from 1.95 million. Additionally, Thailand’s manufacturing production index (MPI) in June recorded a 5.24% contraction compared to the previous year, largely attributed to decreased exports amid weak global demand, according to the Industry Ministry.

INDUSTRY

INDUSTRIAL

The Federation of Thai Industries (FTI) has revised its car production target for 2023, lowering it from 1.95 million to 1.9 million units. This adjustment comes as a result of a decline in car sales, which can be attributed to financial institutions adopting stricter criteria for granting car loans. In addition, Chinese electric vehicles (EVs) have been gaining more market share, a trend that follows the government’s efforts to promote the EV industry in the country.

Mr. Surapong Paisitpatanapong, the vice-chairman of the FTI and spokesperson for the FTI’s Automotive Industry Club, anticipates a decrease in domestic car manufacturing by 50,000 units, equivalent to a 5.5% decline, bringing the projected production for the domestic market to 850,000 units. This adjusted figure is notably lower than the previous projection of 900,000 units. These shifts in the automotive industry landscape have prompted the FTI to reevaluate its targets and strategies for the year 2023.

REAL ESTATE AND DEVELOPMENT

Sansiri Public Company Limited (SIRI)

Sansiri Public Company Limited is gearing up to unveil an impressive lineup of 18 new projects, amounting to a total value of THB 38,400 million. Among the highlights is a significant expansion of their product portfolio in the single detached house segment, featuring luxurious homes branded as “Setthasiri” and ranging in price from 12 to 30 million baht. This move aims to cater to a younger clientele characterized by their swift achievements, embodying the concept of a “Portrait of Success” and embracing a life filled with pride. The upcoming launch of the New Design Series Setthasiri will introduce four captivating designs: “Georgian,” “Art Deco,” “Berlin,” and “Modern Classicism.” 

TECHNOLOGY

DITTO Public Company Limited (DITTO)

Siam TC Technology, a subsidiary of DITTO Public Company Limited, has obtained an additional right to engage in mangrove plantation for carbon credit purposes. Having already achieved their target of 100,000 rai for mangrove planting, the company currently possesses 110,948.47 rai of land. Furthermore, they have secured an additional 62,781.72 rai from 39 communities across 7 provinces, namely Nakhon Si Thammarat, Satun, Trang, Krabi, Phang Nga, Ranong, Surat Thani, and Chumphon.

STARTUP ECOSYSTEM

According to Nikkei Asia, there has been a remarkable surge in investments in Thai startups, showing significant growth in the first quarter, totaling over $530 million. This remarkable progress has occurred just one year after the implementation of a capital gains tax exemption measure, which has been instrumental in supporting Thailand’s aspiration to become a prominent ASEAN tech hub, competing with the likes of Singapore.

 Recent reports have revealed the presence of more than 1,000 tech startups in Thailand. The introduced measure, unveiled in June 2022, aimed to incentivize venture capital firms and investors to support Thai startups operating in targeted industries such as Automotive Technology, Smart Technology, Biotechnology, and others. As a result, the investment in Thai startups during the first quarter of 2023 exceeded the levels seen in the same period of 2019, before the COVID-19 outbreak, by a remarkable 137%.

Notable examples of this flourishing trend include Thai insurance-tech startup Roojai, which successfully raised $42 million in a funding round led by German insurance group HDI International in March. Additionally, in September, Bank of Ayudhya is set to launch a $28.7 million startup fund, led by a subsidiary of Japan’s Mitsubishi UFJ Financial Group, with participation expected from around 50 investors. This move is aimed at further developing and nurturing the thriving Startup Ecosystem in Thailand.

SECTORAL UPDATE

The SET closed the week today at 1,543.27 points, an increase of 18.68 points (+1.23%), trading value of 62,628.67 million baht.

 

The Thai stock market ended the week on a strong note due to clearer direction from the FED meeting on rates in addition to the dollar depreciation with capital inflows into Thailand.SET is expected to continue to swing sideways in the range of 1,520-1550 points due to the long weekend of the Thai stock market.Next Monday the market is expected to keep rising as political developments gain traction.

 
                             

USD/THB expected to be in the range of 34.00 to 34.40 from weakening of dollar.The RSI is rising close to 70.

 
 
 
For the Month of July foreign investors have still continued to be netsellers with some buying at the end of the month due to the political situation.
 

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