Thailand Microeconomic Weekly Update #37

THAILAND MACROECONOMICS WEEKLY UPDATE

During the week some of the key concerns include the U.S. and China, but overall sentiment for the upcoming week remains positive, with a focus on Consumer Confidence Figures.

August’s year-on-year inflation rose by 0.88%, driven by higher fuel prices, which also pushed up food costs. Meanwhile, a survey by FETCO reported a substantial 69.3% surge in investor confidence, shifting from ‘neutral’ to ‘bullish.’ Thai Sugar Millers Corp predicts an 18% drop in production for the 2023-24 season due to worsening heat and dry conditions. FTI anticipates motorcycle production will surpass the 2.1 million unit target this year. House Speaker Wan Muhamad Noor Matha announced the government’s policy presentation in Parliament scheduled for September 11 to 12.

                                  

 

INDUSTRY

ENERGY AND UTILITIES

Thai Oil Public Company Limited (TOP)

Approximately 45,000 liters of crude oil have leaked into the sea during a transfer operation from a tanker at a Single Buoy Mooring (SBM-2) owned by the Thai Oil subsidiary of PTT, located off Chonburi province. According to Pinsak Suraswadi, the director general of the Pollution Control Department, Oilmap projections indicate that the spilled oil is expected to reach the southern shores of Kangkao Island and Udom Bay on September 7, followed by Loy Island, near Sriracha district, on September 8. The oil is forecasted to reach Banngsan beach by September 10.

Thai Oil initially stated that the oil spill was under control, with no further leakage into the sea. The company is currently assessing the situation and surveying the surrounding areas to determine the potential impact of the spill. The incident occurred on September 3 at 9 pm, and there have been no reported casualties. Thai Oil has not disclosed the precise volume of oil spilled but has stated that it promptly implemented its emergency oil spill plan. In response to the accident, the company’s staff closed the valves at SBM-2, deployed an oil boom, and used dispersants to contain the oil and prevent its spread

PROPERTY DEVELOPMENT 

Assetwise Public Company Limited (ASW)

Assetwise Public Company Limited has successfully completed its investment in “Rhom Bho Property Public Company Limited” following a tender offer. As a result, Assetwise now holds a significant 67.71% share in the company. This strategic move is part of their expansion plans in the Phuket real estate market, with intentions to diversify into the hotel and property sectors. In preparation for future travel trends, Assetwise is gearing up to launch two new condominium projects by the end of this year, with a combined project value exceeding 5,000 million baht. These projects are expected to attract the interest of foreign buyers. Asset wise has set a target to achieve continuous revenue growth for TITLE, aiming to reach 10,000 million baht over the next 3 years. This growth will significantly contribute to strengthening Assetwise’s overall income position.

INITIAL PUBLIC OFFERING 

Line Man Wongnai

Line Man Wongnai, an on-demand service company, is aiming to achieve profitability and list on the Stock Exchange of Thailand (SET). It plans to use digital loans for growth and has ambitious goals to become a “decacorn” with a valuation exceeding $10 billion. The company recently became a unicorn after raising $265 million in a Series-B funding round, securing its financial stability until its planned IPO. Line Man Wongnai intends to expand its engineering team, diversify its services with digital lending for merchants, and continues to offer services like food delivery, grocery delivery, messaging, and taxi hailing.

CORPORATE BOND

Bangchak Corporation Public Company Limited (BCP)

The issue of “defaulted debentures” remains a subject demanding close scrutiny for the remainder of 2023. According to the Thai Bond Market Association (ThaiBMA), there are seven companies currently facing payment defaults, encompassing a total of 23 debentures, with a combined value exceeding THB 19,030 million, as detailed below:

#

Company

Number of debentures

Total Amount (THB million)

1.

Stark Corporation Pub Co.,Ltd

5

9,198.4

2.

All Inspire Development Pub Co.,Ltd

7

2,334.2

3.

Asia Capital Group Pub Co.,Ltd

7

2,575.38

4.

Apex Development Pub Co.,Ltd

1

765

5.

Inter Far East Energy Corporation Pub Co., Ltd

1

3,000

6.

Destination Hotel and Resort Co.,Ltd

1

557

7.

JKN Global Pub Co., Ltd

1

600

Mr. Roongroj Seksunwiriya, Director of Investment Product Selection and Partnership at SCB, has indicated that the Thai bond market is showing early signs of increased defaults this year, which are having a widespread impact on market sentiment. Specifically, the sale volume of high-yield or non-rated debentures with credit ratings below BBB- and non-rated debentures is expected to slow down due to uncertainty regarding rollovers. This slowdown is likely to affect companies’ liquidity, as borrowing costs rise, resulting in a heavier debt burden.

According to the Thai Bond Market Association (Thai BMA), approximately THB 23,825 million worth of debentures, out of a total of THB 217,095 million, are set to reach their due dates over the remaining four months of this year. Most of these debentures belong to listed companies. The high-yield or non-rated debentures account for 5% of the total outstanding debentures in the market.

In the second quarter of 2023, the financial statements indicate that three sectors—construction materials, agriculture, and household and office products—have limited ability to repay debt. On the other hand, technology and communication, as well as construction, are among the high-indebted sectors that will be adversely affected by the increased cost of borrowing.

SECTORAL UPDATE

                                      ( The SET closed the week today at 1,547.17 points, down 3.19 points (-0.21%), trading value 34,714.41 million baht..)

The SET index shows sideways movement with resistance at 1571 and support at 1524, while the RSI hovers around 50, signaling a slowdown in market momentum for September. Jobless claims at 216k, beating expectations, influence USDTHB with support at 35.50 and resistance at 35.70 amid THB depreciation.

     For the Beginning of the month of September Proprietary Traders and Local Individuals were net buyers with Foreign investors and Local      institutions net sellers

 

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