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Thai stock exchange pulls 30 minute circuit breaker

13/03/2020

The Stock Exchange of Thailand (SET) had pulled a 30 minute “circuit breaker” to suspend trade between 9:59 and 10:29am leading to a fall at 11am, when the SET fell by 78.95 points, or 7.08%, to 1,035.96. Foreign investors made net sales of 1.929 billion baht in the stock market and 13.646 billion in the bond market. Most global stock prices also dropped resulting from uncertainty among investors following the Covid-19 outbreak, which has heated up recently in Europe and the US.

A stock analyst at Krungsri Securities said, “the SET had pulled the circuit breaker due to foreign investors selling off their stocks after the US President Donald Trump had suspended travel from European nations for 30 days”.

“We advise investors who cannot take risks to hold cash and monitor the situation, while those who can take risks should buy stocks for short-term profit-taking, especially stocks whose price has fallen sharply and pay high dividends regularly.”

The analyst recommended three groups of stocks for investors…

● Defensive stocks which pay high dividends, such as ADVANC, INTUCH, and TTW.
● Retail stocks, which gained buying power after the government returned the electricity metre insurance for a total amount of Bt30 billion, such as CPALL, HMPRO, and BJC.
● Financial stocks, which gain benefit from the interest rate cut, such as MTC, SAWAD, and KTC.

Courtesy: Published at The Thaiger on March 13, 2020

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Thailand CP Group’s take over bid for Tesco Asia

10/03/2020

The 332.6 billion baht deal between the UK’s Tesco-branded Asian interests and Thai conglomerate CP Group, is coming under scrutiny as there are fears it could lead to a mega-retail monopoly. In the deal, the Chareon Pokphand Group will acquire all of Tesco Asia. CPAll and CPF informed the Stock Exchange of Thailand of their surprise investment in Tesco Asia yesterday.

Before the deal can be approved by the Trade Competition Commission, the chairperson of the anti-trust commission, Sakon Varanyuwatana, says that the impact of such a buy-out must be assessed.

“We are waiting for the parties involved to submit details of the deal , under which Chareon Pokphand Group will acquire all of Tesco Asia.”

“The commission had closely monitored reports on its progress but refrained from making comment as it could affect ongoing negotiations and the stock prices of both parties.”

The commission says they expect both Tesco and CP to provide full disclosure about the financial arrangements before they can expect to seek approval from the commission. CP All already operates 8,127 7-eleven stores across Thailand.

“It might amount to a market monopoly and power over other retail store chains if it also acquires the Tesco Lotus brand.”

Tesco announced yesterday the sale of its business in Thailand and Malaysia to CP Group in a deal valued around US$10.6 billion (332.6 billion baht).

A few details about the proposed deal indicate the Charoen Pokphand Group and Charoen Pokphand Holdings would acquire 40% of Tesco Asia’s business in the Thailand and Malaysia, its subsidiary CP All Public Company 40%, with Charoen Pokphan Foods Public Company holding the balance of 20% via its wholly-owned subsidiary CP Merchandising Company, according to The Nation. 

Courtesy: Published at The Thaiger on March 10, 2020

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Thai retail giant Central launches record-breaking IPO

20/02/2020

BANGKOK: Thai conglomerate Central Retail launched Thailand’s biggest ever IPO today (Feb 20), giving it a market cap of around $8.1 billion (B253.935bn) in a punt on a sputtering economy now hampered by the new coronavirus.

Most Thais visit a shop each day owned by Central, a family-run empire which has hundreds of malls, electronics, grocery and 24-hour convenience stores across the country.

Shares in Central Retail Corporation (CRC) were offered at B42 this morning, but made only a modest quarter baht gain in early trading, with the company eyeing fundraising of just over B71bn ($2.26bn).

“CRC is very proud” to become “the country’s largest IPO ever”, chief executive Yol Phokasub said.

The money raised will pay for “business expansion and stores’ renovation”, he added.

Super rich and well connected, the firm, founded by the Sino-Thai Chirathivat family after the Second World War, has been on an ambitious overseas spending spree – acquiring or partnering with luxury shopping brands in Italy, Germany and Switzerland.

The Stock Exchange of Thailand said the initial public offering puts CRC among Thailand’s 12 largest listed companies.

Central already dominates Thailand’s streets but is desperate to make serious inroads into the booming online sales market.

The group received a royal endorsement in 2005, a recognition reserved for only the biggest conglomerates.

Thailand’s big firms are run by Sino-Thai families, with deep connections, deeper pockets and a nose for navigating the choppy political waters of a country defined by coups and short-lived civilian governments.

Drought, high household debt, the strong baht and now the impact of the deadly new coronavirus have also clouded the economic outlook.

The Bank of Thailand has said it is likely next month to revise its GDP growth outlook to under 2% (see report here), with tourism hammered by a slump in Chinese visitors.

Courtesy: Published at The Phuket News on February 20, 2020

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Number of foreign companies investing in Thailand up over 100%

06/12/2019

Foreign investment in Thailand has grown by 106% according to the National News Bureau of Thailand, with officials rolling out a number of measures to make foreign investment less complicated. The latest increase is despite a fall in the number of foreign companies approved to carry out business in the Kingdom – down 23% from last year.

Poonpong Naiyanapakorn, deputy director general of the Department of Business Development, cites various ongoing projects for the increase, including services to assist in the exploration of natural resources, mining for petroleum, and various metro projects.

During the first nine months of 2019, the Board of Investment (BOI) processed 1,165 foreign investment projects worth over 314 billion baht, reflecting an 11% increase compared to the previous 12 months.

The Department of Business Development is reported to be improving the application process, simplifying regulations and assisting investors who’ve requested investment promotion from the BOI. While foreign investors who’ve received business promotion still need to apply for foreign business certification within 30 days, they are exempt from having to process a business operations permit.

An information sharing scheme is now in the works that will enable foreign organisations to pay fees online, meaning they should be able to get their foreign business certification in just one day.

SOURCE: National News Bureau of Thailand

Courtesy: Published at The Thaiger on December 6, 2019 by May Taylor

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Strong interest of foreign investors in Phuket’s resorts – JLL report

03/12/2019

“In the Asia Pacific, Phuket is one of the three hotel investment markets in the region that have been highlighted.”

Buoyed by the rise of experience-driven travel and an affinity toward locally-inspired hotel offerings, resort assets remain a top target among investors. According to JLL Hotels & Hospitality’s Global Resort Report, resort sales accounted for 20% of all hotel sales in the Americas, while Europe, the Middle East and Africa, and Asia-Pacific’s resort sales totalled 7% of all hotel sales. Across all regions, private equity funds emerged as resorts dominant buyer, accounting for 20-50% of annual resort transaction volume in each market.

In the Asia Pacific, Phuket is one of the three hotel investment markets in the region that have been highlighted.

Phuket saw a total of 4.85 billion baht of resorts sold between 2014 and the first half of 2019. Half of these resorts achieved a transacted price at above 950 million baht. According to JLL’s report, investment activity over the period was dominated by foreign investors whose acquisitions accounted for 79% of the total investment volume, with the largest inbound capital coming from Singapore (58%). Findings from JLL also show that developers were the most acquisitive group, accounting for over 65% of total transaction volume on the island, followed by hotel operators at 20%.

Strong growth in tourism has contributed greatly to Phuket’s appeal as a hospitality investment destination. Total overnight visitors to the island have grown steadily over the past decade (2008 to 2018), with international and domestic visitation registering a CAGR of 10.9% and 9.9%, respectively. International overnight visitors accounted for 72.7% of total arrivals.

Pitinut Pupatwibul, Senior Vice President – Strategic Advisory, JLL’s Hotels and Hospitality Group, says the number of international visitors to Phuket is likely to taper off slightly due primarily to surging Thai Baht and unfavourable global economic conditions.

“However, investors have continued to show keen interest in acquiring quality resort assets in Phuket as they remain confident in the long term outlook for the tourism market of one of the world’s most popular holiday destinations.”

“In addition, increased air connectivity, lower barriers of entry through visa fee waivers and limited future supply are expected to bode well for Phuket’s resort segment in the medium to long term.”

According to JLL’s Hotels and Hospitality Group, the total stock of resorts in Phuket stood at 14,300 rooms at the end of June 2019. An estimated 540 resort rooms are planned for completion between the second half of 2019 and the end of 2021, accounting for less than 4% of the existing stock.

Courtesy: Published at The Thaiger on December 3, 2019

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Foreign investment applications rise 69% in first nine months

06/11/2019

Thailand continues attracting foreign direct investment, with applications rising 69% in the first nine months of 2019, according the Board of Investment (BOI).

Applications in the electronics and electrical sector, and the digital and automotive sectors, represented 131.78 billion baht, or 65% of the total. The value of applications, up to September this year, was 203.37 billion baht, according to latest data from the BOI.

Out of 689 project bids, Japan, Thailand’s biggest source of foreign investment, comes in first with applications for 167 projects worth 59.19 billion baht. China follows with 139 projects worth 45.44 billion, and Switzerland, with 15 projects worth 11.71 billion, BOI data shows.

The BOI Secretary General says the healthy rise in applications came, despite the fluctuations in the global economy.

“We expect the growth momentum of FDI and overall investment to continue to expand into 2020.”

Overall applications including domestic investments totaled 1,165, up 11% year on year. About half of those are for projects in the digital sector, with 143 projects. Agriculture and food processing saw 132 projects, and the electronics and electrical sector, saw 103 applications.

Courtesy: Published at The Thaiger on November 6, 2019 by thailand-business-news.com

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American firms want to relocate to Thailand to counter US-China trade war

06/11/2019

US business leaders visiting Thailand are looking for opportunities, especially relocating their production bases, as they try to sort out heir businesses in the wake of the US-China trade war.

The US Secretary of Commerce Wilbur Ross and executives of 16 American companies met the Thai Finance Minister at the ASEAN Summit to discuss trade and investment. They told the Minister that US firms are especially interested in in the Eastern Economic Corridor (EEC), Thailand’s flagship economic project. One of the world’s leading medical supplies makers has already invested in the area.

The companies are also looking at the energy, infrastructure and financial services areas, according to the Ministry.

Ross and the delegation are visiting Thailand, Indonesia and Vietnam to promote the “Free and Open Indo-Pacific” strategy, seen as a countermove against China’s Belt and Road Initiative. But their rhetoric belies a highly protectionist new paradigm for US trade policy.

Ross also supports Thailand 4.0 and praised the Kingdom for moving up to 21st place in the Doing Business ranking and for successfully hosting the 35th ASEAN Summit last week in Bangkok.

Courtesy: Published at The Thaiger on November 6, 2019 by The Nation

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18 foreign companies receive licences to operate in Thailand – September

01/10/2019

“Since January this year, 155 foreign companies have been granted licences to conduct business in Thailand.”

The Thai Department of Business Development has granted licences, during September, to 18 foreign companies to conduct business in Thailand.

The director-general Vuttikrai Leewiraphan says most of these companies are from Japan, Singapore and Hong Kong, employing 428 Thais and have an investment capital of more than 470 million baht, as well as technological know-how from their countries.

“Thailand is in need of technology transfer in the fields of off-shore rig engineering and decommissioning, petroleum drilling and safety, electrical and electronic systems for platform screen doors, agile software development, aerospace engineering, and more.”

“Among the 18 foreign companies which were granted licences, six are in business services – IT, accounting, financial, organisation development, while five are in consumer services: e-payment, e-recruitment software, equipment renting.”

“As for the rest, five are in private construction contracting and two in the retail business.”

The Nation reports, according to statistics from the department, since January this year, 155 foreign companies have been granted licences to conduct business in Thailand, generating more than 21 billion baht worth of investment.

Thailand has yet to liberalise its services sector to foreign companies, causing these investors to apply for licences to conduct businesses in specific fields first.

The sectors that a majority of foreign companies are interested in include engineering and construction of power plants and elevated train routes, petrol vehicles and equipment management and decommissioning, and resource survey satellite testing and technical support.

Courtesy: Published at The Thaiger on October 1, 2019 by The Nation

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Investor focus moves to resort property: CBRE

25/09/2019

PHUKET: Resort properties have sprung back to popularity, according to leading international property consultant CBRE. Sales performance of resort properties has risen, deriving from the pent-up demand for projects in the luxury and super-luxury segments, the agency suggests.

“Over the past two to three years, developers have been focusing on launching new housing and condominium supply in downtown Bangkok. CBRE Research reveals that there are around 30,000 units in downtown Bangkok from condominium projects launched between 2016 and 2018,” said a ealease issued on Tuesday explaining CBRE’s position.

One major challenge faced by the housing and condominium markets is that the cost of investment has been increasing along with the hike in land prices, leading to escalating asking prices, it added.

“CBRE found that 70% of buyers in the luxury residential market are Thais who have recently made purchases for own-living and long-term investment purposes rather than for short-term investment. Meanwhile, 40% of purchasers of residential properties priced below B10 million are foreigners,” the release noted.

“As many residential developers concentrate on building projects within Bangkok, the new supply of resort properties in Pattaya, Hua Hin, Chiang Mai, Khao Yai and Phuket, especially in the high-end segment, has decreased. Therefore, there has been pent-up demand as there are fewer new projects being launched,” it said.

CBRE also found that there is growing demand this year for resort properties in top resort destinations, and buyers in this segment are ready to make purchases for own-use and long-term investment purposes.

“Although prices are higher, if projects are on the beachfront or with ocean views; with five-star hotel management; or with attractive rental guarantees, buyer response and sales performance have been positive for luxury and super-luxury projects launched in 2019,” said Prakaipeth Meechoosarn, Director – Head of Resort Property Sales, CBRE Thailand.

“Some good examples include the Residences at Club Med Krabi and the Residences at Sheraton Phuket Grand Bay, which have an average price per square meter of B185,000 and B230,000, respectively. Both projects saw impressive sales performance at around B300 million during a three-day event in Bangkok. Their updated sales rates are now 85% and 65%, respectively,” she added.

Veyla Natai Residences, which was launched this year and comprises B67mn to B98mn pool villas on Natai Beach, Phang Nga, reached a sales performance of 50% in less than a month, even without show units.

MGallery Residences MontAzure Lakeside and Twinpalms Residences MontAzure, with an average of B150,000 to B180,000 per square meter, have also shown impressive sales revenue reaching B300mn in the first four days of its launch in Bangkok in August 2019, especially for Twinpalms Residences MontAzure which has now reached a sales rate of 80%, noted the release.

“These impressive sales performances prove that demand is still strong for resort properties in prime locations that can generate good returns and have the potential for value appreciation in the future. This is backed by being in sough-after locations and professional property management by leading hotel brands,” CBRE remarked in its release.

Courtesy: Published at The Phuket News on September 25, 2019

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Thailand industrial property a winner as US-China trade war drags on

03/09/2019

Amongst all the bad economic news, Thailand’s industrial property sector is profiting from the protracted US-China trade war, as mainland Chinese manufacturers shift production to ASEAN countries in an attempt to avoid escalating tariffs.

Chinese foreign direct investment into the south east Asia sector rose last year by 31.7% to USD 233 million, after declining by 15.7% in 2016-17, according to Bank of Thailand data. In the same period, total FDI into Thailand skyrocketed by 130.5% year on year. Chinese investment accounted for 4.3% of total FDI last year and 7.6% in 2016-17, according to CBRE.

FDI into Thailand’s manufacturing sector was increasing before the trade war too, and is now seeing increased participation from China.

Thailand industrial property a winner as US-China trade war drags on | News by The Thaiger

Last year, sales of serviced industrial land plots – privately owned industrial estates – by major developers in Thailand increased by 50% year on year. One park, specifically developed for Chinese manufacturers by Thai industrial estates provider Amata, accounted for 15% of the total sales in 2018.

CBRE also says China could be in line to take over from Japan, which has been the largest source of investment into Thailand since the late 1980s. Total FDI into Thailand last year amounted to USD 235 billion, with Japan contributing USD 86.6 billion and China US D4.9 billion, so there’s still a long way to go before Chinese investment outstrips Japan.

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