“Where to invest?”. Where is the next ‘good thing’ as the world starts to look to opportunities and new business models? Looking around the world, and perusing stock markets, there continues to be some traditional businesses failing but others thriving during the Covid-19 era.
Investors look to countries with economical and political stability when choosing to invest money and unveil new businesses. Whilst global depression, drops in GDP, bankruptcy, and a realignment of trade and supply chains swirls around us, there will be emerging opportunities too. According to London Post, CEO World Magazine and the World Trade Group, some countries are very fortified to withstand an economic crash.
“They have a lot of internal growth drivers with minimal affiliation with global markets. They will be the least affected. The best countries to invest in 2020 are these fortified countries.”
Their report lists four unique factors motivate an individual or a business entity to invest in a country. These are the country’s natural resources, markets, efficiency, and strategic assets.
The London Post has used this information and parameters to compile The 2020 Best Countries to Invest In ranking based on a broad list of ten equally weighted attributes: corruption index, tax environment, economical stability, entrepreneurial freedom, innovativeness, skilled labor force and technological expertise, infrastructure, investor protection, red tape, and quality of life.
Somehow, and perhaps surprisingly to people who run businesses in Thailand, the Land of Smiles has scraped into the Number 2 position. 4 of the recommended Top 10 countries are in south east Asia.
The country’s growth is amazing because in 2019, it was ranked 25 positions lower in this list. The European country’s stable economy, coupled with an entrepreneurial and innovative population, has made foreign investors very optimistic about the “progressive business environment”. In the first quarter of 2019, Croatia had a whooping foreign direct investment of more than $389 million.
Thailand occupies the second position on the 2020 Best Countries to Invest In ranking. The country has been able to capitalise on trade tension between the US and China. In the first nine months of 2019, the country received a 69% increase in the total value of Foreign Direct Investment applications, as compared to 2018. 65% of these applications were led by the automotive, electronics and electrical, and digital sectors. The growth of the Thai market and momentum indicators remain strong. Forbes listed the country as the 8th best-emerging market of 2020.
The UK is economically stable and has a skilled labour force and technological expertise. It is the sixth country attracting inflow of foreign direct investment. In the first 7 months of 2019, the US and Asian tech firms invested $3.7 billion in tech companies in the country, thus surpassing the $2.9 billion invested in the previous year.
“Despite Brexit, the UK remains the fifth largest economy in the world and has an industrialised and competitive market.”
With about 650 listed equities and a market cap exceeding $500 billion, Indonesia boasts of one of the largest Asian stock markets. The report claims the Indonesian consumer market is largely undiscovered, hence its huge potentials.
“The robust economy and heavy investment in transportation and infrastructure make this country worthy of your investment. The only downside is that non-citizens are limited to only leasehold properties.”
According to the UN, India was one of the top 10 countries with the highest inflow of foreign direct investment. India has been in the top 5 of the best countries to invest in since 2019.
“The Asian giant has invested so much in research and development and, and she is among the top countries having a comparatively skilled workforce.”
Italy is one of the top countries attracting investors in 2020. This level of economical stability, its robust manufacturing sector, and the country’s stable political environment make it a good choice for investment.
Australia boasts of more than 25 years of continued economic growth. It is the 9th country with the most direct foreign investment in 2020. Australia has been in the top 10 for ten years now.
Like Thailand, Vietnam has capitalised on the trade tension between China and the US.In recent years China’s southern neighbour has gradually risen to become a formidable manufacturing hub. This growth became even more evident when multinational corporations like Samsung began relocating are from China into Vietnam.
Latvia boasts of macroeconomic and political stability as well as good accessibility to large markets and a very business-friendly environment, according to the report. The government encourages investors by offering them a wide variety of advantages. Investors are offered significant cost advantages, including real estate expenses, competitive tax rates, and competitive labor.
Aside from being the 10th best country to invest in 2020, Singapore is also the 10th country attracting the most foreign investments. Singapore’s strong economic outlook has made many investors very optimistic. The country’s world-class business-friendly environment is one major attribute attracting investors.
Courtesy: Published at The Thaiger on May 30, 2020 by London PostRead More
Global geopolitical considerations have necessitated a significant detour for Thailand’s economy, from positive to stable. What factors are driving the financial markets?
The Thai Economy will Roar Again, in Time
Leading global ratings agency, Moody’s (Moody’s Investors Service) has issued new guidance on the Thai economy. Given the geopolitical considerations currently taking place, the leading ratings agency has downgraded the Thai credit outlook from positive to stable. In the midst of a growing economic slowdown, Moody’s has revised its forecasts for the Government of Thailand.
Now, a rating of Baa1 has been issued, and the Thai forex commercial paper is now rated at P-2. This currency rating for the Thai baht is a global short-term ratings assessment. The P-2 rating for issuers indicates that the currency is rated Prime-2 (a rung below P-1 which is the premier currency rating). P-2 designations reflect that the country has a ‘strong ability to repay short-term debt obligations’.
The Bank of Thailand is working hard to ease forex rules and regulations as tremendous pressure is brought to bear on the Thai baht. In the absence of the recent Moody’s ratings assessment, global economic pressures have a strong impact on the economies of emerging market countries. The Bank of Thailand (BoT) upped the limit from $200,000-$1 million, for the amount of proceeds that do not need to be repatriated.
This can be used to help exporters with forex expenses, without any need to send the funds back to Thailand. This reduces transfer costs for operators, saving money and increasing profitability for Thai businesses in the process. The currency has appreciated sharply over the past year, but has slowed dramatically in Q1 and Q2, 2020. An estimated 5% + depreciation against the USD has already taken place, as traders and investors shore up their portfolios with a focus on USD, GBP, EUR, and CHF.
In July 2019, Moody’s rated the Thai economy as positive with bullish prospects. In light of current considerations where global trade in goods and services has come to a standstill, the downgrade to stable has been made. Among the many challenges in the Thai economy are political instability and the implementation of government-mandated policies.
The massive economic shocks endured by the Thai economy are particularly devastating to the travel and tourism industry – the major driver of economic activity on the islands. A failing economic outlook for the world economy (short to medium term) is perpetuating instability and furthering the impact of the credit shock.
The ramifications of the current ‘new normal’ are a threat to the social aspects of society, particularly public health and safety considerations. The unprecedented decline in travel, tourism, and entertainment-related revenue streams has hamstrung the Thai economy. These economic shocks are compounding problems across the board.
Yet, despite the instability over the short-term, the Moody’s rating of Baa1 is a strong indication that Thailand will be able to counter the economic shocks that are currently being felt. Such is the strength of the Thailand economy that ratings agencies believe the sound fiscal structure will allow the country to sustain a short-to-medium term economic shock and still rebound. The diversity of the economy is its saving grace:
Thailand’s GDP in 2019 was $520 billion, up from $504.99 billion in 2018. The current year’s estimate is between $520 billion and $540 billion. The economy generates a GDP per capita of $6,361.60 (2019) with a GDP growth rate of 0.20%. All projections for GDP growth moving forward are positive despite the geopolitical uncertainty over the short term.
Several challenges remain for the Thai economy, notably the ageing population, and shortages of skilled labor. Provided these issues are addressed, the country can remain competitive. As far as foreign currency bond holdings are concerned, the forex deposit ceiling – long-term – will be pegged at Baa1, and the forex currency deposit ceiling – short-term – is a lock at P-2.
Notable among the many struggling industries in Thailand are restaurants, bars, hotels, and resorts. The Thai economy gets a $5.5 billion GDP boost from bars and nightclubs around the country every year. Current regulations have locked down the industry, preventing any further contributions from tourists. With restaurants limited to take-out and delivery services only, the entire country is ailing. The nightlife in Bangkok – a staple of the economy – has all but ground to a halt. This internationally lauded party city has been relegated to hibernation status for the time being.
The effects of the lockdown have halted currency inflows, which has negatively impacted the exchange rate value of Thai baht. The broader tourism industry in Thailand ranks #4 in the world in terms of revenue streams at $6.52 billion. Much of that has been drained from the economy due to ongoing travel restrictions. Social distancing limits gatherings to small numbers of patrons, spaced at least 6 feet apart – an unsustainable business model given restaurant capacity requirements. The expectation is that the lifting of limits will bring tourists back in their droves, but current economic realities tend to suggest a long-term recovery is on the cards.
Courtesy: Published at The Phuket News on April 28, 2020 by In ConjunctionRead More
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, 2020Read More
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, 2020Read More
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, 2020Read More
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 TaylorRead More
“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, 2019Read More
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.Read More
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 NationRead More