Thailand Microeconomic Weekly Update #29

THAILAND MACROECONOMICS WEEKLY UPDATE

In June 2023, the Thai Consumer Confidence Index improved for the 13th consecutive month, reaching 56.7, the highest in 40 months due to the recovery of tourism and the economy. Meanwhile, the caretaker Cabinet backed the Finance Ministry’s decision not to extend the 5-baht cut on diesel oil excise, expiring on July 20. The Revenue Department plans to establish a digital tax data repository and develop a chatbot for standardized tax-related information. Last year, the Social Security Fund experienced a 17.6 billion baht decline, the first drop in five years, attributed to decreased market capitalization and reduced contributions during the pandemic. Additionally, the Digital Economy and Society Ministry is preparing to launch the Central Fraud Registry as an automated solution to combat scams, illegal transactions, fraud, and mule accounts. Furthermore, Move Forward Party leader Pita Limjaroenrat failed to secure a parliamentary vote for PM, garnering 324 votes with 182 objections, 199 abstentions, and 44 absentees, necessitating another vote on July 19.

INDUSTRY

LOGISTICS

LEO Global Logistics Public Company Limited (LEO)

LEO Global Logistics Public Company Limited, a comprehensive provider of global logistics services and integrated logistics solutions, has entered into a contractual agreement with Global Multimodal Logistics Company Limited (GML), a subsidiary of PTT Public Company Limited. This contract focuses on the provision of reefer container rental services, including clip-on gensets, to facilitate the transportation of fresh fruits to China. Spanning a continuous period of three years, the collaboration between LEO and GML aims to support the Ministry of Commerce’s initiative to enhance fruit exports, particularly durian. The objective for 2023 is to achieve a significant export value of 100,000 million baht, in line with the ministry’s goal of exporting a total of 4.44 million tons of fresh and processed fruits, representing a 10% increase from the previous year.

ENERGY AND LOGISTICS

PTT Oil and Retail Business Public Company Limited (OR)

The EV Station PluZ, a subsidiary of PTT Oil and Retail Business Public Company  Limited, has expanded the EV charging station to cover 77 provinces around Thailand with over 400 stations within 2030 and targeting 7,000 DC’s head to facilitate electricity car users.EV Station PluZ OR’s electric charging station provides alternative energy services as part of reducing carbon emissions, achieving Net Zero Carbon by 2050, in line with OR’s goals, as well as supporting changing consumer demands. And the trend of electric cars will increase in the near future.

Banpu Public Company Limited (BANPU)

Banpu Public Company Limited has finalized the acquisition of CXA Temple 2, LLC, which holds 100% ownership of the Temple II Gas-fired power plant located near the Temple I Gas-fired power plant in Texas, USA. The total investment for this acquisition amounts to USD 460 million (THB 16,060 million), and the transaction was successfully completed on July 10, 2023.

TECHNOLOGY

Ditto Public Company Limited (DITTO)

Ditto Public Company Limited, a company specializing in the sale and provision of comprehensive solutions for digital document management systems, photocopiers, and printers (known as Document and Data Management Solution), as well as offering engineering turnkey services for government projects, has successfully secured a major contract from the Bank for Agriculture and Agricultural Cooperatives (BAAC). This contract entails the implementation of a system development project aimed at enhancing debt quality management within the bank. The project holds a significant value of THB 198.5 million and involves the utilization of a software system that will empower the BAAC to effectively classify risks by leveraging customer default behavior data.

I&I Group Public Company Limited (IIG)

I&I Group Public Company Limited, a digital and technology consulting firm, is set to finalize its investment deal and establish a joint venture with VMO Holding, a prominent tech company in Vietnam, by the end of 2023. The strategic decision to invest in VMO is driven by its extensive experience in serving a wide range of customers, including startups and large corporations worldwide, including Thailand. Furthermore, I&I Group is actively engaging in discussions to invest in additional companies in Vietnam.

Bitkub Capital Group Holdings Company Limited 

Bitkub Capital Group Holdings Company Limited has recently announced a reduction in its workforce, primarily as a result of the slow growth in the digital asset business and the overall economic downturn. The company has made a decrease of 1.81% in employment within Bitkub Online and a 5.47% reduction across all subsidiaries of the Bitkub group. 

INDUSTRIAL ESTATE

During the first half of 2023, the Thailand Board of Investment (BOI) reported a remarkable 70% increase in investment promotion applications compared to the same period last year, totaling THB 364.4 billion ($10.3 billion). Foreign direct investments (FDI) drove this surge, experiencing a staggering 141% growth, with global companies showing a preference for Thailand as a manufacturing base in industries like electronics, food processing, and automotive, particularly in the electric vehicle (EV) supply chain. FDI applications reached 507 projects, with a combined investment value of THB 304 billion. China led the way with THB 61.5 billion investment across 132 projects, followed by Singapore with THB 59.11 billion from 73 projects, and Japan with THB 35.33 billion from 98 projects. The value of Japanese applications more than doubled from the previous year, mainly due to significant projects in electronic components and automotive parts.

COMMERCE

Central Retail Corporation Public Company Limited (CRC)

Central Pattana Plc, Central Retail Corporation Plc, and Centara Hotels and Resorts have formed a partnership with J. Front Retailing, a renowned retailer in Japan. Under a signed agreement, these companies aim to collaborate on research and development to enhance their retail operations and create fresh opportunities for the retail industries in Thailand and Japan. The initial phase of this joint venture involves the exchange of exclusive privileges for “The1 Exclusive customers” in Thailand and “Gaisyo VIP” customers in Japan. Furthermore, Central Retail, Centara Hotels and Resorts, and The1 have plans to foster tourism and cultural exchange between Thailand and Japan in the future, emphasizing the influence of food, products, services, arts, and culture through Central Pattana’s mall and department stores, which fall under the J.Front Retailing

SECTORAL UPDATE

The SET closed the week at 1,517.92 points, an increase of 23.90 points today (+0.19%), trading value of 43,640.01 million baht.
 
                                                             
                              

The Set index is expected to move sideways with support and resistance levels between 1460 to 1520, rising in line with regional stock markets.

 
While the USD/THB has a range between 34.50 and 35.00 based on US CPI numbers for July, and local investors have been net buyers while foreign investors have been net sellers this month.
 
 

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