The Energy Ministry is preparing to adjust its power development plans as several of its plants will have to undergo health impact assessment under the new harmful industries list. Energy Minister Wannarat Channukul announced today that the declaration of the 11 harmful industries list will affect several of its 3,000 megawatt-plus power plants because they do not use natural resources in generating electricity, making the plants now subject to environmental impact and health impact assessments.

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Power Plans to Be Adjusted

At the end of 2009, real GDP was back at pre-crisis levels, as measured in seasonally adjusted terms.
All in all, a more favorable external environment should help boost real GDP growth to 6.2 percent in 2010. After this year, slower growth in developed countries, emerging capacity constraints as capacity idled during the crisis is quickly put to use, and the weight of the ongoing political turmoil on new investment, should likely keep growth below Thailand’s historical average of 5.1 percent. On the whole, Thailand’s fiscal and financial picture remains solid

Thailand’s equity market bounced back strongly from the global crisis in 2009, with a total shareholder return (TSR) of 91% for the year 2009 against a 36% decline the year before. Ultra-lax monetary policies and massive public spending across the globe helped spur a quick turnaround from the worst global downturn since the Great Depression.
The 2009 market rally reflects the perception that valuations are about long-term potential, and that political crises in Thailand rarely have a dramatic impact on the fundamentals of the economy. If we look at the EV/EBITDA multiples of the oil and gas sector, for example, valuations are still low compared to regional peers : this is partly a reflection of regulatory risks and political instability in Thailand.
Introduction The modern Thai Capital Market traces its origins back to the early 1960s. In 1961 Thailand implemented its first five-year National Economic and Social Development Plan to support the promotion of economic growth and stability as well as to develop the Kingdom’s standard of living. Following upon this, the Second National Economic and Social Development Plan (1967-1971) then proposed for the first time that an orderly securities market be established in order to mobilize additional capital for national economic development.

The creation of Thailand’s first officially sanctioned and regulated securities market was initially proposed as part of the Second National Economic and Social Development Plan (1967-1971). In outlining its proposal for the creation of a supervised securities market, the Second National Development Plan stressed that the market’s most important role would be to mobilize funds to support Thailand’s industrialization and economic development.

The prime minister reiterates that the government will not increase the value-added tax in order to finance the state welfare policies. He also emphasizes that this administration is competent in dealing with the country’s economy. Prime Minister Abhisit Vejjajiva affirmed that it is not necessary for the government to raise the value-added tax, or VAT, to ten percent from the current seven percent in order to fund the state welfare policies.

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PM Rules ouf VAT Increase

Sectors linked to external demand (namely, manufacturing, hotels and transport) have been the main contributors to growth since the 1997-98 Asian financial crisis, and have also determined the dynamics of the economy in 2008-09. These sectors have accounted for almost all of the annual changes in real GDP.
Overall, domestic demand should provide a positive but limited contribution to growth: vulnerable households lost ground in 2009 and risks are substantial in 2010, as falling agricultural output due to the current drought may offset opportunities from the improved overall economic environment. Household consumption levels, which are highly correlated with the poverty rate, contracted in 2009 despite the rebound in the last quarter of the year, suggesting a likely increase in the poverty rate compared to 2008, especially when compounded by the loss in purchasing power from the food and fuel crisis of 2008. The outlook for 2010 is uncertain : average wages are likely to increase, thanks to the reallocation of labor from agriculture to manufacturing. Although labor markets appear very tight, with unemployment below 1 %, the data do not account for the large number of workers who moved to lower-productivity jobs in agriculture and informal services due to the crisis. Many of these workers are now returning to manufacturing, which offers higher wages than agriculture.

Chinese investment funds, Middle Eastern petrodollars — there is a huge amount of new money being channeled into the Asian capital markets.
But another factor is likely the presence of larger, institutional investors in large-cap stocks who are more concerned about long-term performance than short-term market movements.

In 1972 the Government took a further step in this direction by amending the “Announcement of the Executive Council No. 58 on the Control of Commercial Undertakings Affecting Public Safety and Welfare”. The changes extended Government control and regulation over the operations of finance and securities companies, which until then had operated fairly freely. Following these amendments, in May 1974, long-awaited legislation establishing “The Securities Exchange of Thailand” (SET) was enacted. This was followed by revisions to the Revenue Code at the end of the year, allowing the investment of savings in the capital market. By 1975 the basic legislative framework was in place and on April 30, 1975, “The Securities Exchange of Thailand” officially started trading. On January 1, 1991 its name was formally changed to “The Stock Exchange of Thailand” (SET).

The Bank of Agriculture and Agricultural Cooperatives has declared that it will keep loan interest rates the same for another six months to help farmers while the prime minister will, on August 16, preside over the launch of the Debt Alleviation Card program designed to help debtors out of their financial binds. Prime Minister Abhisit Vejjajiva will this Monday open the Debt Alleviation Card: Disciplined Spending project created under the administrations commitment to remedy the plight of debtors.

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Public Debt Rescue Project to be Launched Aug 16

The output of other sectors was also affected during the recent crisis, although less markedly because they had been growing slower than the sectors linked to external demand.
While the Thai government is aware of the need for these reforms, political uncertainties have made it more challenging to pursue them

In Vietnam, households use to held their savings in cash or real estate. With the opening of the stock market, you have seen a tremendous shift of funds into the capital market.
But for the smaller companies, you see much greater volatility in returns,’’ he said, adding that smaller firms on the SET with market cap below $200 million offer 40% to 60% lower long-term TSRs compared with their larger brethren.
Introduction The modern Thai Capital Market traces its origins back to the early 1960s. In 1961 Thailand implemented its first five-year National Economic and Social Development Plan to support the promotion of economic growth and stability as well as to develop the Kingdom’s standard of living. Following upon this, the Second National Economic and Social Development Plan (1967-1971) then proposed for the first time that an orderly securities market be established in order to mobilize additional capital for national economic development.

The creation of Thailand’s first officially sanctioned and regulated securities market was initially proposed as part of the Second National Economic and Social Development Plan (1967-1971). In outlining its proposal for the creation of a supervised securities market, the Second National Development Plan stressed that the market’s most important role would be to mobilize funds to support Thailand’s industrialization and economic development.

Thailand’s inflation in June grew 3.4 per cent on year, due mainly to the spikes in food and fuel prices, according to the Commerce Ministry. Thailand Business News

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Thailand’s inflation up 3.4% in July

With a well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export industries, Thailand enjoyed solid growth from 2000 to 2008 – averaging more than 4% per year – as it recovered from the Asian financial crisis of 1997-98. Thai exports – mostly machinery and electronic components, agricultural commodities, and jewelry – continue to drive the economy, accounting for as much as three-quarters of GDP. The global financial crisis of 2008-09 severely cut Thailand’s exports, with most sectors experiencing double-digit drops. In 2009, the economy contracted about 2.8%. The Thai government is focusing on financing domestic infrastructure projects and stimulus programs to revive the economy, as external trade is still recovering and persistent internal political tension and investment disputes threaten to damage the investment climate.
Base effects are expected to lead to an increase in inflation readings in the fourth quarter of 2009 and into 2010, but monetary policy is likely to remain accommodative. In the same way that the deflation in 2009 has not warranted a more aggressive monetary policy reaction despite the Bank of Thailand having a lower bound of zero on its inflation target, positive inflation in 2010 should not lead to aggressive tightening either, and the Bank of Thailand is not expected to raise rates until the second half of 2010 despite rising inflation readings.

Social and political stability

Thailand is a foreigner friendly and welcoming Buddhist country. The country’s form of government is a constitutional monarchy, with a high reverence for the Thai Monarchy, and devotion to the teachings of Buddhism. And although the vast majority of the people in Thailand are Buddhist, all religions are welcome, and His Majesty the King is the patron of all religions.

Thailand’s Growing economy

Economically, this country of 65 million people is characterized by steady growth, strong exports and a vibrant domestic consumer market. Abundant natural resources and a skilled and cost-effective work force help attract foreign investors, and enable them to prosper and develop industry in Thailand.

Sufficient infrastructure

Thailand has good infrastructure with modernized transportation facilities, as well as upgraded communications and IT networks that ensure optimum business and living conditions. State-of-the-art industrial estates boast sophisticated facilities and superior services.

The words of the Thai Royal Anthem, performed at most official ceremonies and before the start of every movie, may strike a Western ear as somewhat archaic.

After all, the system of absolute monarchy ended in 1932, following a revolution staged by a small group of disaffected civil servants and military men. Since then, Thai kings have ruled under a constitution; their powers theoretically no greater than those of European monarchs. Yet, since he was officially crowned in 1946, His Majesty King Bhumibol Adulyadej has assumed the role of constitutional monarch and has worked tirelessly on behalf of his people, gaining a measure of personal devotion that is probably more intense than that felt for any of his all-powerful ancestors. It has been said that Their Majesties King Bhumibol and Queen Sirikit are the hardest working royal couple in the world with a work load once estimated to be equal to at least one function every day of the year. Of the several institutions that form the foundation of modern Thai life, the one His Majesty represents is not only the most visible but also the most revered.

The deputy managing director of Retaillink, a division of CP All that sells various types of equipment for retail stores, says sales during the first two quarters of this year contracted due to the political unrest, but it is confident the annual sales of retail store equipment will grow by 12 percent.

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Retaillink Predicts 12 % Annual Sale Increase

At the end of 2009, real GDP was back at pre-crisis levels, as measured in seasonally adjusted terms.
The continuation of certain government policies, especially the pension to the elderly and free education should also support higher consumption levels for the poor. The longer-term goal of reducing reliance on external demand will take time, especially given political uncertainties that hinder the government’s ability to implement not only its investment program but also needed structural reforms.

Alexander Wood, a founding partner of AWR Lloyd, believes the global crisis has acted as a catalyst for a fundamental, structural change in the global capital markets. The real new players in the markets are the sovereign wealth funds.
Thai valuations still trail the region considerably. Price-to-earnings multiples for the Thai market were 18.9 times for 2009, compared to, say, 25 to 30 times for the Australian, Japanese and Shanghai markets and valuations could be higher, if not for the political instability in Thailand over the past several years.
Introduction The modern Thai Capital Market traces its origins back to the early 1960s. In 1961 Thailand implemented its first five-year National Economic and Social Development Plan to support the promotion of economic growth and stability as well as to develop the Kingdom’s standard of living. Following upon this, the Second National Economic and Social Development Plan (1967-1971) then proposed for the first time that an orderly securities market be established in order to mobilize additional capital for national economic development.

The creation of Thailand’s first officially sanctioned and regulated securities market was initially proposed as part of the Second National Economic and Social Development Plan (1967-1971). In outlining its proposal for the creation of a supervised securities market, the Second National Development Plan stressed that the market’s most important role would be to mobilize funds to support Thailand’s industrialization and economic development.

The Transport Company and the Transport Ministry have joined hands in promoting road safety awareness with an aim to eliminate all road accidents. After launching a road safety campaign, Transport Permanent Secretary Supoj Sablom said his ministry has always promoted road safety and encouraged companies providing mass transit services, including the Transport Company and the Bangkok Mass Transit Authority, to give priority to passenger safety.

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Transport Ministry Aims for Zero Road Accident

Domestic demand has also shown signs of life, but the severe weather, the withdrawal of consumption-based fiscal stimulus and political uncertainty should be a drag on growth. With a large fraction of the population still occupied in agriculture or working in rural areas, agriculture is a critical variable for the performance of household consumption.
Government consumption will likely contract due to the phase-out of consumption measures of the first fiscal stimulus package. Investment is expected to recover, as capacity utilization rises and deferred maintenance, machine replacements and limited expansion of existing plants take place. In addition, there are indications that construction investment, long subdued, may be picking up.

Alexander Wood, a founding partner of AWR Lloyd, believes the global crisis has acted as a catalyst for a fundamental, structural change in the global capital markets. The real new players in the markets are the sovereign wealth funds.
The TSRs for the two groups are similar.

Despite the failure of the BSE, the concept of an orderly, officially supported securities market in Thailand had by then attracted considerable attention. In this regard, the Second National Economic and Social Development Plan (1967-1971) proposed, for the first time,
a plan for the establishment of such a market, with appropriate facilities and procedures for securities trading.

In 1969, as recommended by the World Bank, the government acquired the services of Professor Sidney M. Robbins from Columbia University to study the development channels of the Thai capital market. Professor Robbins had previously served as Chief Economist at the United States Securities and Exchange Commission. The same year proved an eventful one for the Thai capital market, as the Bank of Thailand also formed a Working Group on Capital Market Development, which was assigned the task of establishing the stock market. A year later, in 1970, Professor Robbins produced a comprehensive report entitled “A Capital Market in Thailand”. This report became the master plan for the future development of the Thai capital market.

The industry minister expects the final list of industrial projects that could cause severe environmental and health impacts, to be announced within the next two months. Regarding the latest development in the Map Ta Phut impasse, the National Environmental Board has assigned the Natural Resources and Environment Ministry to conduct a further study on 18 industries that are deemed harmful to the environment and the health of people living nearby.

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Harmful Industries List to Be Declared Within Next 2 Months

A severe drought and a decline in rice prices in early 2010 do not bode well for agricultural production and consumption, although increased employment in manufacturing will partly offset the impact to agriculture.
However, the upside is limited due to political and regulatory uncertainty, including from possible political violence and the Map Ta Phut court case. The government investment plan is proceeding at a slow pace, but public investment should contribute to growth.

With economic pundits forecasting that Asian economies will lead global growth over the next few years, led by emerging giants China and India, it seems logical that investors will shift their funds to Thai and Asian equity markets in search of higher yields.
The 2009 market rally reflects the perception that valuations are about long-term potential, and that political crises in Thailand rarely have a dramatic impact on the fundamentals of the economy. If we look at the EV/EBITDA multiples of the oil and gas sector, for example, valuations are still low compared to regional peers : this is partly a reflection of regulatory risks and political instability in Thailand.

The modern Thai capital market can essentially be divided into two phases, beginning with “The Bangkok Stock Exchange” which was privately owned, followed by the establishment of “The Securities Exchange of Thailand”.

The inception of the Thai stock market began as far back as July 1962, when a private group established an organized stock exchange as a limited partnership. The group later became a limited company and changed its name to the “Bangkok Stock Exchange Co., Ltd.” (BSE) in 1963.
Despite its well-intended foundation the BSE was rather inactive. Annual turnover value consisted of only 160 million baht in 1968, and 114 million baht in 1969. Trading volumes continued to fall sharply thereafter to 46 million baht in 1970, and then 28 million baht in 1971. The turnover in debentures reached 87 million baht in 1972, but stocks continued to perform poorly, with turnover hitting an all time low of only 26 million baht. The BSE finally ceased operations in the early 1970s.

It is generally accepted that the BSE failed to succeed because of a lack of official government support and a limited investor understanding of the equity market.

The Public Debt Management Office is looking to amend treasury reserve laws to allow transfer of surplus funds to commercial banks in hope of taking advantage of the rising interest rates. Director of the Public Debt Management Office, Jakkrit Parapunthakul, disclosed that the office is studying the possibility of an amendment to treasury reserve regulations to increase funds.

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Law Amendment Eyed to Increase Treasury Reserve

A severe drought and a decline in rice prices in early 2010 do not bode well for agricultural production and consumption, although increased employment in manufacturing will partly offset the impact to agriculture.
Policies that could contribute to reducing Thailand’s dependence on foreign demand include a phased liberalization of the services sector, boosting transport infrastructure, a reform of educational curricula and improved access and quality of higher education to boost skills of the labor force, better integration of universities, firms and government, and improved social safety nets

Total shareholder returns (TSR) for 2009 are calculated by assuming that investors reinvest all cash received over the course of the year to determine a total return from one’s investment. The 2009 analysis covers 505 companies from the Stock Exchange of Thailand and the Market for Alternative Investment and is based on share valuations as of Dec 31 and dividend payments made over the 2009 calendar year.
The result is that analysts have little incentive to track a stock, further lowering its visibility.

The modern Thai capital market can essentially be divided into two phases, beginning with “The Bangkok Stock Exchange” which was privately owned, followed by the establishment of “The Securities Exchange of Thailand”.

The inception of the Thai stock market began as far back as July 1962, when a private group established an organized stock exchange as a limited partnership. The group later became a limited company and changed its name to the “Bangkok Stock Exchange Co., Ltd.” (BSE) in 1963.
Despite its well-intended foundation the BSE was rather inactive. Annual turnover value consisted of only 160 million baht in 1968, and 114 million baht in 1969. Trading volumes continued to fall sharply thereafter to 46 million baht in 1970, and then 28 million baht in 1971. The turnover in debentures reached 87 million baht in 1972, but stocks continued to perform poorly, with turnover hitting an all time low of only 26 million baht. The BSE finally ceased operations in the early 1970s.

It is generally accepted that the BSE failed to succeed because of a lack of official government support and a limited investor understanding of the equity market.