Thailand Microeconomic Weekly Update #27

THAILAND MACROECONOMICS WEEKLY UPDATE

The Election Commission (EC) has certified the election results for all 500 members of the lower house, while the Bank of Thailand intends to introduce new lending guidelines to prevent household borrowers from becoming overly indebted. Additionally, the central bank of Thailand is conducting an online public hearing on revised draft regulations for the establishment of virtual banks. On the economic front, Thailand’s competitiveness ranking for 2023 has improved by three positions, placing it 30th out of 64 economies worldwide and 3rd in ASEAN, as reported by the International Institute for Management Development (IMD). The first meeting of the House of Representatives is expected to take place between July 4th and 6th, following the EC’s confirmation of 400 constituency MPs and 100 party-list MPs. In terms of foreign investments, the number of companies setting up operations in Thailand has increased by 16% year-on-year, although investment itself has dropped by 18%, according to the Commerce Ministry. Lastly, in response to recent accounting scandals, debt defaults, and share price fluctuations, the Stock Exchange of Thailand is planning a comprehensive overhaul of its listing rules.

INDUSTRY

BANKING

SCB X Public Company Limited (SCB)

SCB X Public Company Limited has entered into a collaborative agreement with KakaoBank, the leading digital bank in South Korea, to establish a consortium. SCB X will hold the majority of shares in the consortium, while KakaoBank will maintain a minimum stake of 20%. This partnership aims to boost SCB X’s competitive edge by leveraging the expertise of KakaoBank, which has achieved significant success as a mobile-first bank in the South Korean retail banking market. Yun Ho Young, the chief executive of KakaoBank, expressed the hope of replicating this success in Thailand.

Kasikorn Bank Public Company Limited (KBANK)

Kasikorn Bank, through its subsidiary KVision, has entered into an investment project known as QFLP (Qualified Foreign Limited Partner) with Mr. Yuan Guohua, Deputy Secretary of the Communist Party Lingang Special Area Executive Committee in Shanghai, China. The primary objective of this project is to attract foreign investors and bolster investment in private equity, particularly in technology companies, while strengthening Kasikorn Group’s investment capabilities. Notably, Kasikorn Vision Co., Ltd. (KVision) has obtained a private equity fund management license and a QFLP investment quota of 1.5 billion yuan. This achievement makes Kasikorn Bank the first and only Thai bank to receive such a license and quota, marking a significant milestone in its investment ventures.

PROPERTY DEVELOPMENT 

Asset World Corp Public Company Limited (AWC)

Asset World Corp Public Company Limited, a holding company specializing in the operation and management of hospitality and commercial properties, has made significant investments in the Plaza Athénée New York hotel business. Additionally, they have expanded their exclusive strategic partnership with Nobu Hospitality, a renowned luxury lifestyle brand experiencing rapid growth worldwide. Leveraging AWC’s expertise in project development, the collaboration aims to create two iconic hotels under the Plaza Athenee brand. One of these is the Plaza Athenee Nobu Hotel and Spa New York, which will be developed within the towers of the esteemed Plaza Athenee New York hotel. Situated in a prime location in Manhattan, this hotel has been renowned as one of New York City’s finest establishments for nearly a century.

TOURISM AND LEISURE

Mr. Yuthasak Supasorn, the governor of the Tourism Authority of Thailand (TAT), announced the launch of a religious tourism project called “Mutiverse.” This initiative aims to curate a diverse range of travel experiences for various faiths, beliefs, and wisdom traditions that showcase Thailand’s unique identity. The project encompasses religious sites, temples, cultural artifacts of reverence, faith-related customs and practices, as well as community-based tourism. The event is scheduled to take place from June 30, 2023, to July 2, 2023, at the Central Department Store. It is expected to generate a revolving income of 15 billion baht in 2023.

TRANSPORTATION AND LOGISTICS

The Trade Policy and Strategy Office (TPSO) of Thailand is actively promoting the country’s participation in the domestic and global electric vehicle (EV) markets. Thailand experienced significant growth in electric car production and domestic sales in 2022, with exports also showing steady growth from 2017 to 2022. Thailand ranks 24th globally as an exporter of electric cars and 4th in Asia, with Japan being the primary export destination. The TPSO emphasizes the importance of focusing on both domestic market promotion and encouraging the export of electric vehicles and related parts. Compliance with laws and regulations, monitoring trade measures, and engaging in networking activities with importers are advised for producers.

Mr. Surapong Paisitpatanapong, the Vice President and Spokesperson of the Automotive Industry Club at the Federation of Thai Industries (FTI), disclosed that the export of finished cars in May 2023 reached 86,358 units, representing a notable increase of 12.25% compared to May 2022. The export value amounted to 54,969.77 million baht, reflecting a significant growth of 18.91% compared to May 2022. This growth can be attributed to robust sales in various trading partner countries, including Japan with a 25% increase, Indonesia with a 65% increase, Malaysia with a 21% increase, the UK with a 23% increase, France with a 24% increase, and the US with a 22% increase. As a result, the total finished car exports during the first five months of the year (January-May) amounted to 439,990 units, marking a substantial growth of 17.09% compared to the same period last year. The export value also recorded a notable increase of 22.06% from the same period last year, reaching 273,255.84 million baht.

SECTORAL UPDATE

The SET index closed on the 22/06/2023 at 1,509.31 points, down 12.81 points (-0.84%), trading value 46,825.48 million baht.
 

The Set index remains under downward pressure but is anticipated to experience a technical rebound, with support and resistance levels at 1500 to 1530. The Thai stock market is expected to be volatile due to the Bank of England’s announcement of a 0.5% interest rate increase to 5.00%.Furthermore, the USD/THB exchange rate has broken out of its previous range, establishing new support and resistance levels at 35.00 and 35.50.

 
Foreign investors continue to be net sellers of -9,7222.03 million THB as of the 22/06/2023 as political uncertainty remains.

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