The Thai Economy Is In Crisis

[Naam]

The Nasdaq was above 6000 in the year 2000 and lost over 70% of it's value. When a bubble exists size is no protection, indeed the bigger they are the harder they fall.

that's correct but the Nasdaq had and still has a big number of "tec" stocks which do not possess any intrinsic value. from 1995 till 2000 the clowns were bidding fancy prices for companies without any assets and balance sheets which have never shown a single penny profit. i am not claiming that the SSE does not include "hot air" stocks but the number is definitely a fraction when compared to the Nasdaq.

disclaimer: i don't like stocks and i don't like stock markets. going once a year to Vegas and placing 100 dollars (once only!) on red or black is all the casino i need

[highdiver]

What surprises me is that most posts are Thailand-inwardly looking as if Thailand could survive on it's own.

thank you for a very good post.

Is thailand in Crisis? it will depend on how you define Crisis.

I agree with you that thailand is higly exposed to the big bubble building up.

the BOT has done all it can to controll the inflow of capital used only for short term and speculative investment by hedging them. howver thailand as an exporter of goods is higly dependent on those countries that are now causing the bubble, so at the end of the day Thailand may suffer from a crisis that was generated out side.

from the bangkok post today

The soon-to-be-formed State Investment Company of China will be the single largest investor on any street, let alone Wall Street. Export revenues and a domestic boom have boosted the Chinese government's foreign-exchange reserves to a record $1.2 trillion. The Chinese will soon become an international powerhouse rivalling and eventually surpassing private equity from the whole world.

can you imagine what will happen to the Baht if Chineese decide to invest in thailand with out any controll ?

the chineese have now liberated the guide lines and allow chineese invesotrs to invest outside of china. look at what happened to the HK market before a week.

I belive that the fianance ministry and the BOT are very aware of this situation. and they attemting to take steps as to protect Thailand from those high speculative trends the are impacting world markets.

those steps taken have shown a low down in some sectors but in over all the thai economy is in a good state and protected from the speculators.

As for china and its impact on the world markets and thailand as well.

China's economic fragility is not just a problem for Beijing. As the Chinese maw has grown, it has become a growing market for its neighbors. Thailand, Singapore, Malaysia, Philippines and Australia have seen their exports to China.

China has become the worlds second largest oil importer [after the U.S.] with prices rising. [Chinas oil imports increased 38 percent last year; predictions were for a fuel imports doubling this year.] Chinas pull has inflated world prices for example, benchmark hot-rolled-sheet price jumped 80 percent to $500 a net ton, a 15-year high.

The chinnese central banks hard currency reserves are now reaching an incredible amount . That, in turn, introduces inflation with the exchange of imported dollars for renminbao.

Speculators believe, despite all chineese government statements upward movement of the yuan will come. They want a slice when they trade back into dollars.

the stockmarket is then pulled into a frenzy. not just in China but all over the world.

the ‘greater fool’ theory applies – the idea that investors rationalise buying an overvalued asset by hoping to sell it on to a ‘greater fool’ later.

When the bubble was pricked, there was no single clear catalyst – similar to the dotcom boom in March 2000. It’s just that the bubble had reached its tautest, and the marginal buyer could not be found.

the bubble is there and it getting biger every day.

I belive that when it bursts.. thailand will still have food for the thai people and the impact will be softer then those of western countries.

Edited May 24, 2007 by Maestro
Quoted text reduced. Unnecessary to quote the entire post.

[Jai Dee]

Thai stock plungs by 1.6 per cent

Thai stock market plunged 1.6 per cent at one point during Thursday morning trading session to 719.56 from Wednesday which closed at 731.22 on mounting anxiety over political uncertainty in Thailand as well as regional stock slump.

The SET index, however, slightly recovered to end the first trading session at 721.51, down by 1.33 per cent.

Brokers said the sharp decline in the Thai stocks could be ascribed to investor fears over rising political uncertain toward court ruling on whether two key political parties would be dissolved scheduled on May 30. In addition, the SET index fall was also caused by regional stock market plunge led by Chinese stock markets after former US Federal Reserve chairman Alan Greenspan commented that China's stock markets are already overheat.

Source: The Nation - 24 May 2007

[bingobongo]

i assume many of you go native and dont touch McDonalds, but the point is to show the worsening of the economy in general, not whether you like Big Macs or pad thai (especially you ThaiGoon and Highdiver).....

McDonald's sales go stale on economic woes

Hester Chew, chairman of McThai's executive committee, yesterday said this was the first time in five years the company was seeing flat growth.

However, he said the overall "quick-service restaurant" market, which is currently worth Bt14.5 billion, was facing the same predicament.

Chew expects McThai's overall sales to grow 10-15 per cent this year. (THIS GUY IS DREAMING)

http://www.nationmultimedia.com/2007/05/24...ss_30035020.php

[Khun Jean]

23 pages and not an inch closer to the answer.

I studied economy for a while until i got bored with it. Main reason is that you can study a lifetime to be sure that you will end up being an expert who will know tomorrow why the things he predicted yesterday didn't happen today.

A degree in mass psychology would be better to study this 'crisis'. But unfortunately i don't have that either.

[Mid]

oh I see the "dooms day" brigade has an early start to day.

so to get them flaming even harder here are some hard facts

so in plain terms .............................

oh what a difference a day or two make .

feel free to remove the rose coloured glasses .

Edited May 24, 2007 by Maestro
Quoted text reduced. Unnecessary to quote the entire post.

[Mid]

here's a bit more , in case there is still some doubt .......................

Central bank cuts rates again

Bangkok (Agencies)

The Bank of Thailand cut its benchmark interest rate for the fourth time in five months to try to revive spending, as consumer and business confidence hovers near a five-year low.

The central bank lowered its one-day bond repurchase rate to 3.5 per cent from 4 per cent. The decision was widely expected.

the decision yes ,

the size , not so much .........................

[highdiver]

i assume many of you go native and dont touch McDonalds, but the point is to show the worsening of the economy in general, not whether you like Big Macs or pad thai (especially you ThaiGoon and Highdiver).....

McDonald's sales go stale on economic woes

Hester Chew, chairman of McThai's executive committee, yesterday said this was the first time in five years the company was seeing flat growth.

However, he said the overall "quick-service restaurant" market, which is currently worth Bt14.5 billion, was facing the same predicament.

Chew expects McThai's overall sales to grow 10-15 per cent this year. (THIS GUY IS DREAMING)

http://www.nationmultimedia.com/2007/05/24...ss_30035020.php

Tourist arrivals rise, especially from Europe

BANGKOK: -- The number of foreign tourists visiting Thailand has risen by four per cent during the first four months this year, with most new arrivals coming from Europe, Tourism Authority of Thailand governor Phornsiri Manoharn said Thursday.

About four million foreign tourists visited Thailand between January and April, marking a 4 per cent increase from the corresponding period last year, while a total of 14.8 million international visitors are expected to come throughout this year, bringing in combined revenues of up to Bt547 million, the TAT governor said.

more tourists spending more mony and buying all that junk food. that why Mc thai will still grow by 10%.

but they will also be spending money on many other things.

[ThaiGoon]

[jdinasia]

14.8 million people? bringing in combined revenues of 547 million .... ..... is my math right and they will each spend 1 Euro?

[ThaiGoon]

More like 547 billion imo. Typical journalists' typo.

[bingobongo]

eat up boys (Thaigoon and Highdiver), it is getting worse.......let them eat cake.....uh, i mean noodles......

Noodles index rings true

If the sales of Mama instant noodles serve as an economic indicator - the so-called Mama Index - the figures in the first quarter this year indicate that people have less to spend.

If consumers have more disposable income they eat instant noodles less often, but if they are short of cash they naturally turn to the affordable instant dish.

http://www.nationmultimedia.com/2007/05/25...ss_30035109.php

Edited May 24, 2007 by bingobongo

[mumbu]

Here is a complete statement of BOT from their home page. It is quite clear that internal conditions in Thailand continue to deteriorate while external conditions are excellent. To understand what is happening in Thailand one should compare the situation and policies of that country with their neighbours: Malaysia, Phillipines and Vietnam. The economy, stock markets and currencies are booming while Thailand stock market is the worst performer in the region. The external conditions are the same for the whole region. Thailand lagging far behind its neigbours due to policies of junta and their government.

I also saw several days ago an interview with the current Thai finance minister and he confirms what is stated in BOT statement: visible deterioration in consumer confidence, investments and internal consumption.

Regarding the numbers of TOT: I am sorry, but I do not believe that the number of tourists got increased. Nor in overall estimates. There will be very hot summer in BKK (and may be beyond) and not only because of the high tempreture.

There will be no referendum on constitution and elections. Junta will declare the situation unstable and unsuitable for elections and fire the current government. Sonthi most probably will assume the duties of PM. Tourism will collapse and the things get bloody. Unlike what many predict, the courts will move swiftly on khun Thaksin and his family trials, major political parties most probably will be disbanded. The situation in deep South will continue to deteriorate which will raise the possibilities of East Timor scenario with external interference and scary possible outcomes.

Time frame: May -August till planned retirement of Sonthi in September.

Expats: prepare themselves for a ride (with growing xenofobic mood) under conditions of growing chaos and instability.

Ms. Suchada Kirakul, Assistant Governor of the Monetary Policy Group, Bank of Thailand, announces that the Monetary Policy Committee (MPC) met today to assess the latest economic developments and trends in order to determine the appropriate monetary policy stance. The main issues discussed were as follows.

Overall domestic demand continued to soften due to a slowdown in private expenditure and fragile confidence. Although the government accelerated spending, government expenditure had yet to achieve the target. Meanwhile, exports continued to expand favorably in line with global economic conditions and the ability of exporters to adapt to the current environment. However, there remained a risk to export growth should the global economy slow down going forward.

Inflation continued to moderate as expected. The MPC thus assessed that despite higher global oil prices, inflationary pressure would remain low due to a slowdown in domestic demand.

The MPC viewed that, with subdued inflationary pressures, monetary policy could be eased to facilitate economic growth, while inflationary pressures remained manageable. The MPC therefore decided to lower the 1-day repurchase rate by 0.5 per cent from 4.00 per cent per annum to 3.50 per cent per annum, effective today. The current rate was deemed suitable in ensuring the inflation target and supporting economic expansion.

Bank of Thailand

23 May 2007

For further information, please contact: Mr. Trirat Thanaprakopkorn Tel: +66 (0) 2283 6186 e-mail: [email protected]

[ThaiGoon]

The "Lock Ness Monster":

http://etna.mcot.net/query.php?nid=29557

JICA expert offers caution on Bangkok's mass transit project

BANGKOK, May 23 (TNA) – An expert from Japan's International Cooperation Agency (JICA) said Thailand's progress in designing the metropolitan Bangkok mass transit project is admiral, but cautioned that some points, such as the size of Bang Sue station, should be reviewed.

Although the project has been delayed, Thailand has made progress and bidding is expected soon for the Purple and Red Lines.

When construction actually begins depends on when the terms of a loan between Thailand and Japan are agreed, he said.

Mr. Kobayashi suggested that building the Red Line should begin first as it is the backbone of the network, and that three roles of mass transit projects should be considered in building the system: serving daily commuters, long distance commuters, and the integration of the overall logistics system.

Read it on 2bangkok.com that the section from Bang Sue-Taling Chan which just got approved by the Cabinet on Tuesday will be as follow (thanks to Khun Wisarut at 2bangkok.com):

1) Track 1-2 -> Electified Standard gauge for commuter service

2) Track 3-4 -> Electrified Standard gauge for express commuter services

3) Track 5-6 -> Non electrified e meter gauge for temporary DMU services ... and for cargo services after the introduction of electric traction.

http://www.bangkokpost.com/breaking_news/b...s.php?id=118964

Talk on JBIC loan likely to end in June

Negotiation with Japan Bank for International Cooperation (JBIC) for a loan to finance the construction of Bangkok's electric train routes is very likely to be wrapped up by June, according to Public Debt Management Office’s Director-General Pongpanu Svetarundra

All these projects should boost the economy once they go into construction phrase.

[ThaiGoon]

http://www.bangkokpost.com/Business/25May2007_biz42.php

Citi says many large funds 'are just waiting to invest'

Long-term political woes the main fear

CHIRATAS NIVATPUMIN

Investor interest in Thailand remains strong, despite ongoing uncertainties about the political situation, according to Gary Newman, the country officer for Citi in Thailand. He noted that at a Citi investor conference for the Indochina region earlier this week, institutional investors from around the world continued to maintain strong interest in the Thai market.

''The message from investors was that they want to understand the way forward [for the country]. Many are just waiting to invest,'' he said.

''Everyone sees the positives for the country. It's now just a waiting game.''

Mr Newman, who joined Citi in 1994 as chief dealer and head of balance sheet management in Germany, said that political hiccups aside, the Thai economy remained fundamentally attractive.

''We see the economy slowing to 4% [growth] for the year. But there still remain lots of strong indicators, whether they be high employment and exports, strong tourism or low inflation,'' he said.

[Thaddeus]

Many are just waiting to invest,'' he said.

Like a hungry dog looking at a tin of unopened tuna fish.

"Waiting to invest" means what exactly?

[Jai Dee]

SET sinks 10.50 points

The Stock Exchange of Thailand (SET) Index yesterday (May 24) plummeted 10.50 points, down by 1.44 percent, to close at 720.72. The market value was approximately 14,475,210,000 baht, with about 1,963,339,000 shares being traded.

The SET 100 Index also closed lower at 1,104.30, decreasing by 17.08 points while the SET 50 Index ended at 509.67, down by 7.76 points. The mai Index decreased 2.95 points to close at 210.67.

The top five most active values were as follows:

PTT remained at 244.00 baht, down by 2.00,

TOP closed at 66.00 baht, down by 3.00,

BBL remained at 114.00,

PTTEP closed at 99.00 baht, down by 2.00 and

KTB closed at 10.90 baht, down by 0.20.

Source: Thai National News Bureau Public Relations Department - 25 May 2007

[Jai Dee]

Center for Economic and Business Forecasting reveal increasing number of Thai households in debt

The Center for Economic and Business Forecasting, of the Thai Chamber of Commerce University reports that an increasing number of Thai households are incurring debt.

The Director of the the Center for Economic and Business Forecasting, Thai Chamber of Commerce University, Asst Prof Dr. Thanawat Polwichai (ธนวรรธน์ พลวิชัย), revealed that a recent 2007 survey of Thai households found that the probability of a family incurring debt has increased from 12.41 to 14.85 percent when compared with the same period in 2006. Asst Prof Dr. Thanawat said that these figures correspond with the National Statistical Office's figures for household debts during the 1997 Asian Financial Crisis.

54.36 percent of surveyed households become indebted due to the purchase of a vehicle, while 63.7 percent become indebted after securing non-formal loans. Asst Prof Dr. Thanawat added that the government should proceed with economic stimulation measures as well as promote foreign investors' confidence in the nation.

Source: Thai National News Bureau Public Relations Department - 25 May 2007

[Prakanong]

Many are just waiting to invest,'' he said.

Like a hungry dog looking at a tin of unopened tuna fish.

"Waiting to invest" means what exactly?

Yeah - they are just sitting on their piles of cash waiting to invest in Thailand to setle down. In the meantime of course they are doing nothing with their money nor looking at otehr possibilites - this is due to everyone living in a vacuum where thailand is the only possibility.

Its known as cloud cuckoo land

[Prakanong]

"It is quite clear that internal conditions in Thailand continue to deteriorate while external conditions are excellent. To understand what is happening in Thailand one should compare the situation and policies of that country with their neighbours: Malaysia, Phillipines and Vietnam. The economy, stock markets and currencies are booming while Thailand stock market is the worst performer in the region. The external conditions are the same for the whole region. Thailand lagging far behind its neigbours due to policies of junta and their government."

Getting this through to the myopic is hard though - they have no understanding outside the Thai realm.

Some of them think its normal and acceptable to bribe your kids into school if they are too thick to get in themselves - thats bad enough but they think this happens everywhere else in the world - myopia rools

[ThaiGoon]

Oh well.

[Jai Dee]

Please keep the personal attacks and flames out of this thread.

Several posts have been deleted.

[Steely Dan]

"It is quite clear that internal conditions in Thailand continue to deteriorate while external conditions are excellent. To understand what is happening in Thailand one should compare the situation and policies of that country with their neighbours: Malaysia, Phillipines and Vietnam. The economy, stock markets and currencies are booming while Thailand stock market is the worst performer in the region. The external conditions are the same for the whole region. Thailand lagging far behind its neigbours due to policies of junta and their government."

Getting this through to the myopic is hard though - they have no understanding outside the Thai realm.

Some of them think its normal and acceptable to bribe your kids into school if they are too thick to get in themselves - thats bad enough but they think this happens everywhere else in the world - myopia rools

I have to take issue with your take on external conditions, in my oppinion there is a worldwide liquidity bubble primed to burst, of course as you state Thailand has it's own local problems, I just hope they can rediscover a Buddhist indifference to material wealth as I suspect we have some very rocky times ahead.

[Prakanong]

"I just hope they can rediscover a Buddhist indifference to material wealth as I suspect we have some very rocky times ahead"

They have - its called the "Sufficiency Economy"

The problem is though the rich and powerful have their idea's about waht is sufficianr for them and what is sufficient for the less well off.

"Let them at cake" comes to mind!

An old Marxist would have a field day looking at Thailand and its feudalism, egrarian society and the wannabe bourgeois ;-))

[highdiver]

the dooms day brigade just does not wish to learn.

Thailand is not seeking a short term speculative investment. it is seeking long term dedicated investors to add growth.

thailand is offering long term investors very good conditions through the BOI.

Thailand does not want small time investors that can not make it where they come from and are coming to Thailand to compete with the local business.

As for comapring Thaialands militery govermant with other countries in the region.

Sinagpore is a well known democracy. they realy give total freedom to citizens. and they allow people to speak out against the govermant.

Vietnam is yet another free country with no coruption and a stable democratic rule

Cambodia, burma, laos are in a great state too when it concerns "investors confidence"

and less we forget China. where forign investors are IP protected and the goverment is a free democracy.

Thailand is open for investment, however many speculators and short time investors are pissed of that the Thai goverment is not allowing them to invest as they see fit in thaialand.

the world is nearing the explosion of the liquidity bubble and the Thai goverment has to protect the Thais not the speculators who wish to rip the country off.

[Mid]

please explain my speculating and ripping the country off ,

pre coup 4 Thai nationals employed full-time with social etc ,

post coup , business currently closed and one Thai staff ..............

[Prakanong]

please explain my speculating and ripping the country off ,

pre coup 4 Thai nationals employed full-time with social etc ,

post coup , business currently closed and one Thai staff ..............

The Junta should employ some of these rose tinted guys as spin Dr's and stop wasting money on that American PR company!

Dubya wants them to explain how the war is going well first though!

They make tony Blairs spin Dr's look like babes in the wood.

[Steely Dan]

the dooms day brigade just does not wish to learn.

Thailand is not seeking a short term speculative investment. it is seeking long term dedicated investors to add growth.

thailand is offering long term investors very good conditions through the BOI.

Thailand does not want small time investors that can not make it where they come from and are coming to Thailand to compete with the local business.

As for comapring Thaialands militery govermant with other countries in the region.

Sinagpore is a well known democracy. they realy give total freedom to citizens. and they allow people to speak out against the govermant.

Vietnam is yet another free country with no coruption and a stable democratic rule

Cambodia, burma, laos are in a great state too when it concerns "investors confidence"

and less we forget China. where forign investors are IP protected and the goverment is a free democracy.

Thailand is open for investment, however many speculators and short time investors are pissed of that the Thai goverment is not allowing them to invest as they see fit in thaialand.

the world is nearing the explosion of the liquidity bubble and the Thai goverment has to protect the Thais not the speculators who wish to rip the country off.

Your first argument smacks of 'In the kingdom of the blind the one eyed man is King', incidentally Singapore are still considered partly free which is not the case with Thailand.

Now there is a problem 'protecting' the Country from speculators, that is that great underlying distortions in the value of what would otherwise be freely traded occur. This has led for example to the huge trade surplus China has with the U.S. When things are allowed to float freely huge movement do occur, look at how Gold rocketed after 1977 when U.S citizens were allowed to own it for investment purposes again. I'm referring of course to the ridiculous split rate Baht which will cause massive instability once capital restrictions are ended, in the meantime the Pu Yai's of this world will be busily flying to Singapore to exchange sackfuls of Baht to dollars to then be changed back into Baht on their return to Thailand.

[Jai Dee]

Master plan to resolve grass root problems, set as priority

The Minister of Finance is set to evaluate on the monetary and financial master plan for 2007-2011 suggested by Deputy Prime Minister and Minister of Social Development and Human Security, Mr. Paiboon Wattanasiritham (ไพบูลย์ วัฒนศิริธรรม). The purpose of the master plan is to resolve poverty issues concerning the grass-root level.

The Minister of Finance Chalongphob Sussangkarn (ฉลองภพ สุสังกร์กาญจน์) said that the master plan will apply tax measures to help alleviate poverty issues; however, he remarks the ministry must consider social benefits.

Finance Minister says the national economy, including figures of import and export, is improving, representing the higher investment in the future.

Source: Thai National News Bureau Public Relations Department - 25 May 2007

[Mid]

Finance Minister says the national economy, including figures of import and export, is improving, representing the higher investment in the future.

this gentleman can join the others who believe that because you say something it's true ,

facts , figures ???