Thailand Microeconomic Weekly Update #54

THAILAND MACROECONOMICS WEEKLY UPDATE

Deputy Transport Minister Manaporn Charoensri stated that the government may reconsider the land bridge project, with a 1 trillion baht investment, pending the results of an ongoing feasibility study, which is currently examining the inclusion of industries in the project area. Details of the study will be disclosed when available. Meanwhile, the Thai Bond Market Association issued an Investor Caution warning for five out of six series of debentures by MK Real Estate Development, following the company’s announcement of a meeting on February 14 to seek approval for revising the financial terms of its debentures.

In monetary policy, the Bank of Thailand has reiterated its decision to maintain the policy rate at 2.50%, emphasizing its alignment with the principle that the rate should not impede economic growth, financial stability, or the inflationary framework in the Thai context. This statement comes in response to Prime Minister Srettha Thavisin’s criticism that the policy rate is excessively elevated and not in harmony with the decreasing inflation rate.

Deputy Finance Minister Julapun Amornvivat suggested a potential delay in the handout scheme (Digital Wallet) beyond May, citing the government’s careful consideration of information, particularly the Council of State’s legal opinion on the proposed bill to authorize a Bt 500 billion (USD 14.3 billion) borrowing for the scheme.

Furthermore, the Security and Exchange Commission (SEC) has lifted the previous cap of 300,000 Thai Baht per offering on retail investments in real estate and infrastructure-linked initial coin offerings, effective from January 16. This change aims to promote the enhanced utilization of technology in fundraising efforts.

INDUSTRY 

Market trends are likely to swing in the range of 1,360 to 1,390 . This comes as upcoming analysts meeting (Monday to Wednesday) to discuss the performance of the banking sector and share insights on Thailand’s economic outlook for 2024

CRYPTOCURRENCY 

Binance Thailand has officially launched its cryptocurrency trading platform. This is a joint venture between Gulf Innova Co., Ltd, an affiliate of Gulf Energy Development Public Company Limited, and Binance Capital Management Co., Ltd., an affiliate of Binance group. Binance Thailand has obtained the licenses to operate the digital asset exchange and brokerage services from the Ministry of Finance of Thailand in May 2023 and under the supervision of the Office of Securities and Exchange Commission. The platform is now officially open for trading on January 16, 2024.

TOURISM 

The government plans to attract tourists by introducing a special Muay Thai visa. This visa aims to promote Thailand’s unique cultural aspect of Muay Thai and allows foreigners who enroll in Muay Thai classes in Thailand to stay for up to 90 days. With a tourist visa, a foreigner can stay in Thailand for up to 60 days. The Tourism Authority of Thailand (TAT) believes this will motivate more visitors to explore Thailand’s diverse offerings. The initiative highlights Thailand’s soft power in areas like film, food, festivals, fashion, and fighting, with tourists spending significantly on these aspects. The TAT is also planning other visa incentives to boost tourism spending and lengthen visitors’ stays. A new website, Nowmuaythai.com, has been launched to provide comprehensive information about Muay Thai-related activities, tours, and gyms in Thailand.

FOOD AND BEVERAGE

Thai Union Group has announced their intention to exit minority investment in Red Lobster. Thai Union has been a minority investor in Red Lobster since 2016 and had previously reviewed Red Lobster for operational and financial improvements. Due to various challenges, including the COVID-19 pandemic, industry headwinds, and rising costs, Red Lobster has had a negative impact on Thai Union’s financials. Consequently, Thai Union plans to record a significant non-cash impairment charge for this exit. Despite this, Thai Union maintains a strong balance sheet and low debt/equity ratio. In addition, the Board has approved a share repurchase for financial management purposes not exceeding THB 3.6 billion (USD 101.23 million) or 200 million shares; this is to prove the company’s strong financial position. The company is in the process of finalizing its Corporate Strategy 2023, which will focus on core business areas such as Ambient Seafood, Frozen, and PetCare.

ENERGY

Thai Oil Public Company Limited (TOP)

Thai Oil Public Company Limited announced that its Crude Distillation Unit-3 (CDU-3) is undergoing temporary maintenance for about 13 days starting from January 16, 2024, due to technical issues. The company has taken measures to minimize supply disruptions to its customers. This maintenance does not affect the timeline for the construction and startup of the Clean Fuel Project (CFP).

ELECTRIC VIHICLE 

Thailand has made a significant step in the electric vehicle (EV) sector by discovering two large lithium deposits located in Phang Nga (Southern), amounting to 14.8 million tones. This positions the country as the world’s third-largest holder of lithium reserves. The Thai government’s acknowledgment of these reserves marks a pivotal moment for the nation’s EV industry, potentially boosting domestic EV battery production. This aligns with the global movement towards sustainable transportation and could elevate Thailand’s role in the EV market. 

SECTORAL UPDATE 

 Last week the SET closed at 1,382.51 points, an increase of  4.58 points ( +0.33%), trading value was 49,226.20  million baht ($US 1.387 million.)

 

 

The SET index is currently finding support at 1,360 points and has been unable to surpass the resistance level of 1,390 points, while the Relative Strength Index (RSI) is concluding the week at 38.11.

 

 

 

 

 

 

The USD/THB current range 34.93 – 35.51

 

The past  week  investors have been net seller for the week, in contrast with local investor with net local investor with heavily net buyer .

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