Thailand Business News – Opportunities to live the James Bond lifestyle are running-out at one of Thailand’s premier luxury marina communities, Royal Phuket Marina. Thailand Business News

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Royal Phuket Marina to begin third phase of development
Thailand’s property sector is showing signs of an early recovery, as selective investors return to purchasing real estate stocks and actual property.

Some of the credit goes to a one-year government stimulus package that reduces the Special Business Tax from 3.3% to 0.11%, extends the reduction on transfer taxes from 2% to 0.01% and mortgage registration fees and provides a tax deduction on mortgage principal and interest.
Thailand’s property indicators show:

1.The Stock Exchange of Thailand (SET) index began rebounding in April 2009, and property stocks – while the first to fall in H2/08 – were amongst the first to recover
2. The Bank of Thailand (BoT) has lowered its policy interest rate four times since December 2008, prompting banks to reduce the minimum lending rate (MLR) from 7.25% to 6.25%
3. A continued drop in sales of durable goods due to uncertainty surrounding the economy is highlighted consumer confidence index (CCI) to a historic low of 72.8 in Q1/09 and New housing registrations in Bangkok and surrounding areas fell 43.8% in Q1/09

While focusing on different products, detached houses and townhomes in greater Bangkok, the company spent much of last year improving its key financial ratios.

Several factors have contributed to the strong and rapid rebound.

The severity of the global financial crisis also saw the government introduce additional sweeteners for buyers — a 300,000-baht income tax deduction for any buyers of a new home that was transferred within 2009. At the same time, mortgage interest that could be deducted from taxable earnings was increased to 100,000 baht from 50,000 and has now become a permanent tax benefit.

Tran Quang Vu, chief executive officer of Vinashin Group, is suspended as his company is being investigated for wrongdoings.

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Vietnam suspends Vinashin board members amid probe

Vietnam’s $96 billion economy is far less centrally controlled than last decade, and the country, which boasts one of the youngest workforces in the world, managed to gain membership in the World Trade Organization in 2007. The country last year exported $12.3 billion of goods to the U.S., its biggest overseas market. Foreign direct investment is on the rise and could double, to $15 billion this year according to a May 31, report analysts at Standard Chartered Bank.

However, between 2003 and 2005 Vietnam fell dramatically in the World Economic Forum’s Global Competitiveness Report rankings, largely due to negative perceptions of the effectiveness of government institutions. Official corruption is endemic, and Vietnam lags in property rights, the efficient regulation of markets, and labor and financial market reforms.

The 18th International Business Report (IBR) survey by the auditing and consultancy firm Grant Thornton surveyed over 7,400 privately held businesses across 36 nations, finding ten countries where businesses were more optimistic about their economic outlooks, including Vietnam. The survey found that expectations of increased revenues in 2010 for Vietnam is the most optimistic, with 95 percent of respondents forecasting an increase in revenue and 91 percent, an increase in profitability, in 2010. However, according to the survey, due to the global recession, average selling prices in Vietnam are expected to decrease by 13 percent. This means total sales may increase but profitability per unit may fall.

With a country with over 86 million people and with more than 60% under the age of 35 (Source: General Department of Statistics of Vietnam, 2009), Vietnam’s education needs for this young population are huge. Despite attention by the government only about 1.6 million (about 2%) actually are now at higher education institutions. Each year approximately 1.2 million students graduate from secondary education but the enrollment to higher education is only around 300 thousand (Source: Department of Higher Education, MOET).

The Pattaya-based developer Nova Group plans to introduce nine projects worth a combined 6.5 billion baht in Pattaya and Bangkok over the next two years, says president Rony Fineman. Four of them will be condominiums worth more than five billion baht. The rest will be three- and four-star hotels in the two cities. The 38-storey Legend will comprise 350 units located on Cosy beach. Two 27-storey buildings (equalling two projects) to be located on Jomtien beach will be under the Royal Beach brand and consist of 320 units each. The Palm, at 3.5 billion baht the biggest of the four projects in terms of value, will have 42 storeys accommodating 500 units on Wong Amat beach. Unit sizes will range from 36 square metres to more than 100 sq m priced from 40,000 to 50,000 baht per sq m for low-rise projects and 55,000 to 95,000 baht for high-rise buildings. The projects are expected to be launched next year although some may be introduced in 2012, depending on market conditions, said Mr Fineman. For the hotel projects, three are now under construction and will be opened in November 2011 – the Centra Sukhumvit with 78 rooms, the Centra Pattaya with 200 rooms and the Centra Nova Hotel and Spa with 79 rooms. The other two – Centra Suites and the Holiday Inn Express – located in Pattaya with 129 rooms each, will open in 2012. Construction on both will start next January. Nova will use its cashflow to develop three hotels, while the other two will utilise loans from Siam Commercial Bank and UOB Bank. Mr Fineman said the hotel industry was saturated in both Pattaya and Bangkok, so the five developments will be the company’s final hotel expansion in Pattaya. The Bangkok project stems from the group’s desire to have a presence in the capital. “We plan in 2012 and 2013 to build hotels in Phuket and Samui. We’re considering Hua Hin,” he said. The company expects environmental-impact assessment approval for the remaining projects by next June. Meanwhile, Mr Fineman remains bullish on Pattaya’s condominium market despite a slowdown in purchasing power since the 2008 global recession. “Foreign buyers in Pattaya now have double problems. The first is that the baht is very strong and the second is they have their own recession in Europe and America which is obviously affecting them,” he said. “Our projects are still selling but not like before. But we expect in the high season to sell a lot for ownership.” As well, Pattaya has suffered the most from Bangkok’s political problems due to its proximity to the capital, unlike Phuket or Koh Samui where people can avoid the troubled area via direct flights. However, demand in Pattaya from Thai buyers has started picking up with new developments such as the Central Festival shopping centre helping to lure them back. In the past few years, Thai buyers had been turning to other locations such as Hua Hin instead. The company has also seen low-season occupancy in its hotels drop to about 50-60% from 60-70% in the same period last year. Mr Fineman said Pattaya was seeing many more Indian and Chinese tourists, and he expects an increase in the number from the Far East this year, which should help offset the decline in Western tourists. Some recession-proof projects offer value for money as well as innovation, he said. For example, the company tries to offer 50% green areas in its projects. The Nova Gold Hotel also provides a computer in each guest room. Mr Fineman said Pattaya now was seeing more real demand from Thai buyers, with speculation down a bit although rental returns remain attractive at 6-8% per year. Starting with the 1986 opening of the Nova Lodge Hotel, Mr Fineman has been in Pattaya real estate for 24 years. The Nova Group currently owns three hotels managed by Amari and a serviced apartment building in Pattaya. Existing condos include the Nova Mirage, Nova Atrium and Nova Avenue Residence. The more recent Nova Ocean View and The Cliff are both 50% sold. The company’s entertainment businesses include pubs and restaurants in Bangkok and Pattaya. Land prices in Pattaya have doubled in the past two years. Plots in prime locations such as main or beach roads cost about 200,000 baht per square wah. The company expects Pattaya will grow more quickly in the future, especially once investors in established markets such as India and China start to look outside their countries. “We see Pattaya as the next Miami of the East. Proximity to Bangkok, the variety of accommodation and shopping and entertainment – it’s next to none,” he said. Foreign demand is projected to return once the euro strengthens again and the world economy improves, expected to be around the end of next year. Mr Fineman added that the Nova Group also planned to list on the SET within the next five years. Source : bangkokpost.com .

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Nova plans new condo, hotel projects in Pattaya, Bangkok worth B6.5bn

Only large developers on the stock market remain on the Thai market, as they can access a source of funding. Prices of single detached houses and townhouses only rose moderately over the past year, with condominium prices increasing the most to more than 100,000 baht a square metre in Bangkok from 80,000 to 90,000 baht.

But there is now greater emphasis on building houses and condominiums that meet the budget of the ordinary working family. New starts in the mid-range band of B2-3 million (US$50-75,000) per unit are increasing and developers are taking up the government’s challenge to build affordable homes that cost under B2 million for the army of workers previously shut out of the market. Thais are becoming much more demanding in terms of both the quality of building materials used and the type of property they want, with townhouses and detached homes on managed housing estates in the suburbs becoming increasingly popular.

Condominium homes near a Skytrain, or subway stop, score high on the location factor for both expats and investors. Whether you plan to live or invest in Bangkok, traffic congestion needs to be taken into consideration. There’s no city center as such, but several busy and popular ones. They include the CBD (Central Business District), Sathorn, Central Lumpini, Sukhumvit Road, Pathumwan, and Riverside. They’re all areas which attract expat interest.

Thailand Business News – Townhouses and condominium sales boomed while single houses priced from 3-5 million baht were the best sellers in Greater Bangkok during the first half of this year, according to a survey by the property management company Plus Property Co. Thailand Business News

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Townhouses and condominium sales boomed in Thailand

The SET index bottomed at 432 in December 2008 after tumbling from a high of 833 earlier that year. The index then levelled off in Q1/09, before working its way back to 560 in May. Triggered by positive pre-sale signs from developers, a reduction in construction costs and the government’s stimulus package, property stocks were among the first to bounce back. The SET’s revival reached a mark just 32% below its peak, in line with other world stock markets including the Dow Jones (-33%), Singapore Straits Times (-27%), the Hang Seng (-25%) and the FTSE (-27%).

The Bank of Thailand Monetary Policy Committee stopped cutting its key rate in May 2009 after seeing signals of a recovering economy. Many expect banks to adjust their rates down once rising confidence supports housing purchases, and promotion campaign launches to grasp home buyers.

As a result of declining consumer confidence during four consecutive quarters there has been a dramatic drop in sales of big ticket items such as vehicles (-33%). Bangkok housing registrations for single houses and townhouse units have also been hit hard, while investments and new mass transit lines have boosted market share for condominiums in the residential property sector, although the market demand as a whole has been lower. Transactions will most likely remain slow until confidence returns to both buyers and bankers, who finance property developers and their customers.

Recognising that sales would slow, forward-thinking companies took the opportunity to focus on their fundamentals and improve their balance sheets. This was the strategy of Hubert Viriot, CEO of the luxury developer Raimon Land, who was appointed in the midst of the crisis.

Developers with solid projects have access to financing while buyers have access to credit.

Property market in Thailand remained in a strong position thanks to good sales in the first quarter which were not only driven by the incentives. The stock market is risky to invest in, while buying gold for investment has limitations.
The recovering economy is re-building consumer confidence while homebuyers’ purchasing power is also strong, he said. Development of the mass transit network in Bangkok was another boost for the market. Politics has had little impact on condominium sales but it has dampened investment and the industrial, commercial and tourism sectors.

Medical devices constitute a thriving industry in Thailand, with the country acclaimed as a major health care hub in Asia. The Thai medical devices market in 2010 is valued at US$795 million. Thailand Business News

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Medical devices industry Overview in Thailand

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.
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.

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.

Thailand became a signatory to the pact in 2003. Thailand must show its sincerity in fighting graft by rushing ratification of the United Nations Convention Against Corruption, both private and public sectors urged over the weekend. All UNCAC signatories – 135 countries at present – are obliged to coordinate with each another on mutual legal assistance and asset recovery for crimes, even to the extent of extradition. Thailand Business News

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Thailand urged to ratify UN Convention Against Corruption,

For 2009 as a whole, nonetheless, real GDP fell 2.3 percent despite a pick-up in consumption in the fourth quarter, external demand will be the main contributor to growth in the near term.
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.

The relative strength and power of sovereign wealth funds is massively increasing, and the money has to go somewhere.
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.

Thailand Business News – Property in South East Asia has dropped off the radar for cash-strapped British buyers, according to data from the United Kingdom’s leading property website. Thailand Business News

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South East Asia property too expensive for British buyers
Thailand’s property sector is showing signs of an early recovery, as selective investors return to purchasing real estate stocks and actual property.

Some of the credit goes to a one-year government stimulus package that reduces the Special Business Tax from 3.3% to 0.11%, extends the reduction on transfer taxes from 2% to 0.01% and mortgage registration fees and provides a tax deduction on mortgage principal and interest.
Thailand’s property indicators show:

1.The Stock Exchange of Thailand (SET) index began rebounding in April 2009, and property stocks – while the first to fall in H2/08 – were amongst the first to recover
2. The Bank of Thailand (BoT) has lowered its policy interest rate four times since December 2008, prompting banks to reduce the minimum lending rate (MLR) from 7.25% to 6.25%
3. A continued drop in sales of durable goods due to uncertainty surrounding the economy is highlighted consumer confidence index (CCI) to a historic low of 72.8 in Q1/09 and New housing registrations in Bangkok and surrounding areas fell 43.8% in Q1/09

Instead of wasting resources when consumers were clearly holding back, we decided to restructure the company, clean up the balance sheet and refinance our debt with local banks.

Several factors have contributed to the strong and rapid rebound.

Property market in Thailand remained in a strong position thanks to good sales in the first quarter which were not only driven by the incentives. The stock market is risky to invest in, while buying gold for investment has limitations.
The recovering economy is re-building consumer confidence while homebuyers’ purchasing power is also strong, he said. Development of the mass transit network in Bangkok was another boost for the market. Politics has had little impact on condominium sales but it has dampened investment and the industrial, commercial and tourism sectors.

Tibet’s Insurance Regulatory Commission was inaugurated in Lhasa Saturday amid rapid development of the insurance industry in the southwestern Chinese plateau region.

The commission, as the Tibetan arm of China Insurance Regulatory Commission (CIRC), would play an important role in maintaining financial stability and promoting economic growth in Tibet, said Wei Yingning, vice chairman of CIRC.

Wei was in Lhasa for the inauguration.

The new body will map out plans for the insurance industry’s development, oversee the business activities of local insurance companies and intermediary services and maintain a sound market order, said Wei.

Last year, Tibet reported 400 million yuan (58.8 million U.S. dollars) in insurance premiums, an average 21.4 percent annual increase from 2000.

Insurance companies paid a total of 760 million yuan in compensation to their clients from 2006 to 2010, according to figures provided by Tibet’s regional government.

The insurance sector employs more than 1,000 people in Tibet. &$

&$Source: Xinhua&$&$

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Insurance regulatory body set up in Tibet