Thailand Microeconomic Weekly Update #25

THAILAND MACROECONOMICS WEEKLY UPDATE

`Thailand experienced a significant slowdown in headline inflation in May, reaching its lowest level in 21 months at 0.53%, compared to the previous month’s 2.67%. This decrease was mainly attributed to reduced fuel costs and a subsequent easing of non-food product prices. On a positive note, the Consumer Confidence Index for May 2023, as reported by the Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce, increased for the 12th consecutive month to 55.07, the highest level in 39 months since March 2020. The Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) estimated that Thailand’s GDP growth for 2023 would range from 3.0% to 3.5%, with exports expected to remain stable or experience a slight decline of -1.0% to 0.0%. Inflation was projected to be within the range of 2.7% to 3.2%, aligning with previous forecasts. Notably, exports of air-conditioner components to the United States saw a remarkable surge of 126% in the first quarter of the year compared to the same period in the previous year, according to the chief of the Foreign Trade Department. In response to the Bank of Thailand’s policy rate hike, state banks have been raising their interest rates. Finally, the May index, reflecting anticipated market conditions over the next three months, dropped significantly to 77.70, a decline of 26.8% from the previous month, as highlighted by Fetco chairman Kobsak Pootrakool.

INDUSTRY

The Stock Exchange of Thailand (SET) has implemented a revised listing criteria aimed at promoting technology and innovation in line with the BCG model. These criteria encompass medium-sized companies as well as large overseas companies that contribute to the growth of the Thai economy, without being limited to BOI (Board of Investment) privileges. The companies seeking listing must operate within ten specified industry groups, which include advanced agriculture and food, biofuels and biochemistry, medical and healthcare, creative tourism, modern vehicles, aviation and logistics, digital and e-commerce, intelligent electronics, robotics, and technological development and innovation.

BANKING

Mr. Surapol Opasatien, the General Manager of the Credit Bureau, disclosed that the outstanding car debt has reached THB 2.6 trillion, with an estimated THB 1.9 billion expected to become bad debt. During the first quarter of 2023, around 350,000 new contracts were approved, and the majority of these contracts, 53%, were contributed by Generation Y individuals between the ages of 26 and 43.

Bank of Ayudhya Public Company Limited (BAY)

The Bank of Ayudhya Public Company Limited has recently completed the successful acquisition of HC Consumer Finance Philippines, Inc., a consumer finance company in the Philippines. The acquisition involved a 75% stake by Bank of Ayudhya, while Mitsubishi UFJ Financial Group acquired the remaining 25% of HC Consumer Finance Philippines, Inc. Mr. Kenichi Yamato, the President and Chief Executive Officer of Bank of Ayudhya, expressed the bank’s commitment to establishing a robust presence in the Philippines. The country, with its medium-term economic growth potential of 6.0-6.5% annually, offers significant opportunities. This acquisition will further solidify Krungsri’s position as a leading financial institution within the ASEAN region.

Export-Import Bank of Thailand 

The EXIM Bank of Thailand has introduced the SME Green Bond, targeting institutional and large investors. This bond is in the form of unsubordinated and unsecured bonds, with a maturity period of 3 years and a fixed interest rate of 2.71% per annum. The total value of this offering amounts to THB 3,500 million. In the past, EXIM Bank has been actively supporting businesses involved in the development of the bioeconomy, circular economy, and green economy, collectively known as the Bio-Circular-Green Economy (BCG Economy). These sectors currently constitute 30% of the bank’s loan portfolio, approximately THB 50 billion. Looking ahead, the bank has set a goal to expand its BCG loan portfolio to THB 100 billion by 2027, aiming to further promote sustainable economic growth.

ENERGY AND UTILITIES

Susco Public Company Limited (SUSCO)

Susco Public Company Limited, a retail petrol station provider serving the aviation, construction, transportation, and service sectors, has recently entered into joint venture agreements with AMR, a comprehensive engineering service provider specializing in clean energy businesses. The collaboration aims to establish a cutting-edge electric motorcycle rental service, complete with a dedicated maintenance center and battery replacement facilities. Initially, the company intends to launch this venture in Koh Samui, located in Surat Thani province, strategically targeting both domestic and international tourists.

HEALTHCARE

In a recent announcement, Dr. Taweesilp Visanuyothin, the Deputy Permanent Secretary of the Ministry of Public Health, highlighted the pressing issue of a physician shortage. Currently, there are approximately 24,000 physicians employed under the Ministry of Public Health. However, their responsibility extends to providing healthcare services to a staggering 45 million individuals covered by the health insurance system. This puts a strain on the healthcare workforce, with a challenging workload of one physician for every 2,000 patients, well below the standard of three physicians per 1,000 patients.

INFORMATION AND COMMUNICATION TECHNOLOGY 

Turnkey Communication Services Public Company Limited (TKC)

Turnkey Communication Services Public Company Limited, a provider of comprehensive communication services specializing in telecommunication, data communications, and public safety, has joined forces with IMAS (Thailand) Company Limited and Sovis Public Company Limited to collaborate on an innovative smart airport project. This project aims to introduce advanced technology solutions for managing passenger flow within airports. The key components of the project include a sophisticated software solution and a real-time passenger density counting system. With the help of this software, the system can accurately calculate waiting times and processing times at various service points throughout the airport, ensuring efficient and seamless passenger experiences. The project has been completed in 3 airports which are Suvarnabhumi Airport, Don Muang Airport, and Phuket International Airport.



SECTORAL UPDATE

The SET closed this week at 1,555.11 points, down 4.39 points (-0.28%), trading value of 43,293.70 million baht.

 

For the upcoming week, the Index Support and Resistance is projected to be in the range of 1536-1580, indicating a sideways upward movement. Market participants are anticipating the upcoming Fed Meeting. 

 
 
In terms of the USD/THB currency pair, the expected range is 34.50-34.80.
 
 

During the Month of June so far Local Institutions have been the only net buyers 

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