MACROECONOMICS WEEKLY UPDATE

The manufacturing production index (MPI) in February dropped by 2.71% compared to the previous year, which was slightly better than forecast due to the slowing global demand that hurt exports, according to the Industry Ministry. The output in March is expected to be steady or down slightly. However, domestic demand improved on the back of a rebound in tourism. Industrial goods account for 80% of total exports.

The Bank of Thailand had raised its policy rate to 1.75% up 25bps from 1.50% to tame inflation and bring it within the target range of the central bank. The Committee projects the economic growth to be 3.6% in 2023 and 3.8% in 2024. Headline Inflation would likely return to the target range by mid-2023 and is projected to decline to 2.9 and 2.4 percent in 2023 and 2024, respectively. Core inflation is projected to fall to 2.4 and 2.0 percent in 2023 and 2024 respectively. However, persistently high inflation remains a risk, as producers could pass on higher costs absorbed in the past and demand-side pressures pick up as the recovery gains traction.

The value of Thai merchandise exports in February 2023 contracted -4.7% YoY, marking a five-month consecutive contraction. US$22.4 billion (730 billion baht), while imports increased by 1.1% to $23-5 billion, resulting in a trade deficit of $1.11 billion key importing countries facing mounting pressure from the global economic slowdown, hampering demand for products.

Wisit Limluecha, Vice President of the Thai Chamber of Commerce, said he disagreed with the Excise Department’s recent decision to increase the tax on sugary beverages, which is set to take effect on April 1. The move will result in higher costs for businesses, especially since the tax rate has been increased three times. Moreover, the ongoing drought has caused many raw materials to become more expensive, further adding to the concerns of business operators.

Thailand secured a 500-million-baht durian deal with Yunnan province during trade talks in China’s southern province this week, the Commerce Ministry reports.

Thailand recorded a current account surplus of $1.3 billion in February, the central bank said on Friday

INDUSTRY

CONSUMER AND RETAIL

Berli Jucker Public Company Limited (BJC)

Berli Jucker Public Company Limited (“BJC”) announced the appointment of Thapanee Techajareonvikul as the Company’s Chief Executive Officer and President, effective from June 26,2023. This marks the appointment of BJC’s first female executive to the top in 140 years, having played a key role in driving BJC’s business towards success as a senior vice president for a long time.

Also, the board has approved a plan to list its 100% owned BRC (BigC Retail Corp) on the SET, max 29.98% of Bt87.1b registered capital and appoint Asawin Techajaroenvikul as the first CEO of BRC. In 2022, BRC had total income of 113,573-million-baht, total net profit of 6,757 million baht, and total assets of 336,833 million baht.

 Thailand Central Group

Thailand’s Central Group is a possible candidate to acquire a large stake in the shopping mall arm of Vingroup along with other companies, Vietnam’s largest conglomerate. However, discussion with potential buyers is ongoing which could mark one of the largest merger and acquisition transactions in Vietnam.

            Also, CPN collaborates with WeChat Pay to offer promotion campaigns & mobile payment for Chinese travelers, and expects spending jump via tourist destinations including Central World, Central Village outlet, Rama 9, Chiang mai, Phuket, Samui and Pattaya.

Sabina Public Company Limited (SABINA)

Miss Duangdao Mahanavanont, CEO of Sabina Public Company Limited or SABINA, the manufacturer and distributor of lingerie under the brand “SABINA”, has recently signed an agreement with Mrs. Cecilia Valdez-Saculo, an executive from Moda SBN Co., Ltd. (Moda SBN), to acquire 77.33% stake in MODA SBN an authorized retailer & distributor of Sabina products in Philippines to strengthen foothold & expand customer base overseas.

 Siam Makro Plc (MAKRO)

            Siam Makro Plc, the operator of Makro cash & carry stores and Lotus’s hypermarkets, has allocated 25.3-27.5 billion baht this year to expand its retail and wholesale businesses. In which 13.1-14.1 billion baht is for Makro’s wholesale business and 12.2-13.4 billion is for Lotus’s retail business. This includes branch expansion and the development of distribution centers, digital systems and new businesses.

Transportation

Airports of Thailand (AOT)

Airports of Thailand Plc will proceed with its plan to transform 723 rai of land adjacent Suvarnabhumi International Airport into “airport city” now that the Interior Ministry has amended the zoning code in Samut Prakan to allow the project to proceed, its president said.

AOT will start the project by opening bidding for a contractor to build a bridge and road from the airport to the 723-rai plot and to install basic infrastructure, including piped water and electricity cables.

Telecom

Advanced Info Service

Mobile operator Advanced Info Service is investing 27 billion to 30 billion baht this year to upgrade its telecom infrastructure to support emerging technologies like artificial intelligence, augmented and virtual reality, and the internet of things, its CEO told a press conference. This will be invested to upgrade 5G networks, home internet, and 5G platforms.

Also, Bangkok Bank, Thailand’s leading financial services provider, is partnering with telecom operator AIS 5G to increase domestic spending by combining debit card payment service with earning AIS points.

Tourism

The Index for Tourism Confidence in the first quarter had remained below the pre-pandemic level because of the worry over high energy costs and businesses from the Chinese using nominees with spa and massage businesses affected the most at 40%, followed by inbound operators and transport operators.

 Also, the government expects an increase in the number of international flight arrivals during the Songkran period as Bangkok has been listed as one of Airbnb’s top destinations for 2023.

Media

RS & GRAMMY

 RS Music, has formed a joint venture with Grammy Music to perform a series of concerts under the name “Across the Universe Joint Venture”. This is scheduled for July, September, and October of this year which is expected to be sold out. The profits will be split equally between the two listed companies and is expected to contribute to the media and entertainment businesses with the deal to be concluded in the second quarter.

Banking

Bangkok Bank

Bangkok Bank, Thailand’s leading financial services provider, is partnering with telecom operator AIS 5G to increase domestic spending by combining debit card payment service with earning AIS points.

In addition, Bangkok Bank (BBL) has surpassed its credit card spending target for the first two months of 2023, which saw growth of 17% YoY for January and February beating its 15% target this was due to shopping, petrol and travel a key signal of the border and tourism situation and result of pent-up demand.