Thailand Microeconomic Weekly Update #57

THAILAND MACROECONOMICS WEEKLY UPDATE

The Tourism Confidence Index, derived from a survey of tourism operators, lingered below pre-pandemic levels in Q4 of 2023 at 77 but exhibited progress from Q3, climbing to 69, a change attributed to delayed fiscal budget disbursement.

The decision by the Bank of Thailand’s Monetary Policy Committee to maintain the policy interest rate at 2.5%, with a 5-2 vote, was in line with market expectations. This decision was influenced by the current policy rate’s role in bolstering macro-financial stability, a critical factor for fostering sustainable long-term economic growth.

Regarding energy consumption trends, the Department of Energy Business revealed that overall fuel usage in 2023 averaged 152.30 million liters per day. This marked a slight uptick of 0.4% compared to the corresponding period in the previous year. Notably, there were significant shifts in specific fuel types: gasoline consumption saw a notable increase of 3.4%, while commercial jet fuel (Jet A1) experienced a substantial surge of 50.9%. Additionally, the use of LPG showed a modest rise of 0.6%. Conversely, there were declines in the consumption of fuel oil Diesel (15.8%), NGV (5.7%), and diesel (2.5%).

In terms of financial indicators, the Bank of Thailand (BoT) reported international reserves amounting to $220.8 billion on February 2, marking a slight decrease from the figure of $221.2 billion recorded on January 26.

INDUSTRY 

Trading volumes are expected to be thin from the Chinese New Year Holiday season along with anticipation of Thai GDP figures.

Stock Exchange of Thailand

The Securities and Exchange Commission (SEC) of Thailand is set to implement new listing rules for the Stock Exchange of Thailand (SET) aimed at enhancing the quality and oversight of listed companies. Starting from next year, the SEC will enforce stricter financial and operational requirements for companies seeking to list on the SET and the Market for Alternative Investment (MAI). These changes include increased profit thresholds and shareholders’ equity post-IPO, alongside improved rules for backdoor listings and investor notifications, to bolster market confidence and integrity. Starting next year, the Securities and Exchange Commission (SEC) of Thailand will introduce revised listing regulations on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI) to improve the governance and quality of listed entities. These adjustments will mandate more stringent financial and operational standards for initial public offerings, including higher profit margins and equity requirements. Enhanced regulations for indirect listings and investor alerts aim to increase market trust and transparency. Furthermore, the SEC plans to work with the SET to develop mechanisms for automated trading halts on stocks exhibiting unusual activity, set to be implemented by 2024.

Logistics

SF International Holding (Thailand), affiliated with a Chinese logistics giant, has acquired a significant 73.18% stake in Kerry Express (KEX) for 7,000 million baht ($195.24 million), elevating its total ownership to 100%. This move not only underscores the fierce competition within Thailand’s logistics industry but also reflects China’s growing presence in the Thai market. Following the announcement, KEX’s share price surged by 7.5% to THB 7.57. This acquisition highlights the strategic value of logistics in supporting the expanding e-commerce and retail landscapes across Southeast Asia.

Agricultural

Thailand’s sugar production is expected to decline significantly this season due to adverse weather conditions, exacerbating a global sugar supply crunch. The Thai Sugar Millers Corp has revised its production forecast downwards by 500,000 tonnes to 7.5 million tonnes for the 2023-24 season, a reduction of one-third from the previous season. This decline is attributed to insufficient rainfall during critical growth periods, compounded by the effects of climate change. Consequently, raw sugar futures have seen their largest monthly gain since April, and the reduced output from Thailand, the world’s third-largest sugar producer, is likely to further tighten global sugar markets.

BOI

In 2023, Thailand witnessed a remarkable surge in investment applications, increasing by 43% to reach a five-year peak of 848 billion baht (USD 23.68 billion) . This growth was significantly fueled by foreign investments, which leaped by 72% year-on-year to 663 billion baht (USD 18.51 billion). China emerged as the top foreign investor, contributing 159.4 billion baht (USD 4.45 billion), nearly a quarter of the total foreign investment, primarily in the electronics, automotive, and electric vehicle sectors. The Board of Investment (BoI) exceeded its target to attract 600 billion baht (USD 16.75 billion) worth of promoted investment last year. The BOT aims to attract 3 trillion baht (USD 83.74 billion) in investments over the next five years starting from 2023, signaling a strong year for investment ahead.

SECTORAL UPDATE 

 Last week the SET closed at 1,388.37  points down to 0.23 points ( 0.02%), trading value last Friday was  29,071.10  million baht ($US 809.78 million.)

 

 
The SET Index is fluctuating between 1360 and 1426 points following the Bank of Thailand’s decision to maintain the policy rate at 2.50%, with investors anticipating additional government interventions, while the Relative Strength Index (RSI) stands at 49.94.Additionally, the USD/THB exchange rate is trading within the range of 35.55 to 36.10.

 

 

 

 Foreign Investors inflows had a strong start to the week which declined with local investors buying in the end of the week.

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