What Effect On Thailand Of Financial Squeeze?

[ray23]

This is the first report that I believe paints a possible true picture. Mind you it does not include the effects on the Tourist industry.

There is a lot of the blame game going on in the tourist industry, the truth you don't have extra money for a vacation Thailand, it would be absurd to go on vacation. The industry has done well during boom times but boom times are not here now. During the boom times it has become expensive to come here. The baht exchange in the case of American adds over 20% to the cost alone. Those costs are now being felt by the EU and the UK as well. Much less the increase in the cost of leisure in the community.

Russsia this has become a wonderland to them, it's hurting as well, China as to the average person they are in real trouble with extra money. so beyond all the political upheavel which in reality means vrey little to a tourist. They simply don't have the money to vacation here now.

So the answer really is to change the costs of a vacation here. I don't see that happening they just kept building five star hotels to attract money people and they forgot what brought them to this level on the first place.

To actually have government policies in effect to double charge visitors, doesn't speak of welcome does it?

LIke it or not they have created an atmosphire where in visitors just assume they will be scammed.

You know I have no idea what is available other then Thailand to those in the UK and EU. But, for American's there are many places that are closer less expensive and lots of fun. Never forget for us Canada is a foriegn Country and it is gorgeous and the people are nice. Feel like being rowdy there is always Mexico. Both of which you can ge to with your car and no airfare, taxis, rental cars.

You want beautiful beaches hard beat what the carribean offers. for that matter Florida west coast of the states. All for a lot less then you can come here for now. if your in the states.

So unless something changes I think the tourist industry will continue feel the squeeze.

Since I don't live in the states but in Thailand and my hobby is tour riding. Well a 200% tax for a new bike, big enough to enjoy it on, or bring it in parts and get a dodgy book for an additional 70K. Hotel more expensive. Living with a dollar income that stosp me from going when I would have been more then happy to explore more often then I do now.

So here I sit paying for a home a pickup. all the insurances and when I have extra money I really have to think twice about spending in today's world. I'm doing things very carefully now. My income ten times more then the average Thai, what are they thinking right now? Are they going to be pumping money into the local economy or will they be doing all the can to pay off debts and take care of thier famalies.

There is a lot more to this picture then some foriegner sticking money in Thai Stocks.

We arleady see hard time in the states the EU & the Uk. It just has not hit Asia yet

TRADE FEARS

US crisis likely to hurt exports

By Chalida Ekvitthayavechnukul,

Watcharapong Thongrung

The Nation

Published on October 1, 2008

Thai shipments expected to be affected by global financial woes

The US financial crisis will directly affect Thai goods shipments to that country next year, with other major export markets also hit, exporters and manufacturers said yesterday.

They warned the Kingdom could face an outflow of capital by American investors. Banks will be more cautious with lending, which will directly affect manufacturers' operations.

Adding to the problem are expectations that Thailand's economy will grow less than 4 per cent.

Federation of Thai Industries (FTI) chairman Santi Vilassakdanont expects the US Congress eventually to approve a $700 billion bail-out plan to ease the financial crisis.

He said Thailand would definitely be hurt by the financial turmoil in the US, because 20 per cent of the Kingdom's exports were sent to that country.

As well, he believes the crisis will spread throughout Europe and to Japan, which are also important export destinations for Thailand.

"The Commerce Ministry must evaluate the impact on each industry's exports and formulate a plan to address the effects on exports next year," he said.

FTI executives are scheduled to meet with Finance Minister Suchart Thadathamrongvech on Friday. Santi expressed concern that sensitive capital transfers would make foreign exchange less stable.

He said the central bank should not increase interest rates during this economic downturn, because that would increase operating costs.

"If a huge amount of capital flows out of the country, it will result in a tightening of financial liquidity, so I'm concerned banks will become more careful about granting loans to small and medium-sized enterprises next year," he said.

Transamut Foods chairman Paiboon Ponsuwanna said the US financial crisis had not made an immediate impact on Thailand. Thai manufacturers and exporters have received a normal amount of orders for the fourth quarter.

However, the crisis has had a psychological effect, creating expectations of US importers eventually halting new orders for Thai goods.

"It is expected the impact on Thailand will be felt early next year. Exporters should draw up plans to cope with that," he said.

Paiboon, who is also vice president of the Thai National Shippers' Council, said exporters relying mainly on the US market would face declines in orders next year. Other major trading partners of the US will also be hit, such as Europe, Japan and the rest of Asean.

"To maintain competitiveness, those who rely on the US market should concentrate on cash flow, raw materials and cost management," he said.

Veteran economist Narongchai Akrasanee called the US financial crisis "a tsunami that hit Europe first before slowly heading for Asia".

He said it was actually fortunate that recent political conflict in Thailand had kept foreign investment down, because otherwise the effect would have been bigger, due to huge capital outflows.

The Kingdom currently has considerable foreign-exchange reserves of about US$120 billion (Bt4 trillion).

He agreed with a proposal by the Thai Bankers' Association that the central bank keep a close watch on the country's liquidity. Former Industry Ministry permanent secretary Chakramon Phasukavanich agreed Thailand would face an economic slump next year because of the US financial crisis.

He said politics had partly influenced the US House of Representative's rejection of the emergency bail-out plan, plus one survey showed 55 per cent of respondents disagreed with the plan.

"Evaluating the situation is quite complicated, but I believe Thailand's growth will remain at about 4 per cent next year, because our economy has been bolstered by the real sector," Chakramon said.

He added that the political situation would be another main factor in the country's economy.

Thailand's exports of shoes and accessories will be badly affected by the US financial crisis, because their main markets are the United States and Europe, which are reeling from the crisis, said the Kasikorn Research Centre.

In the first eight months of the year, export value reached $665.2 million, down 0.8 per cent year on year, due to higher operating costs. In that period, 38 per cent of Thai products went to Europe, 24 per cent to the US and 38 per cent elsewhere.

"Thai exporters are facing market risks, because demand in both markets has shrunk in the past year," the research centre said.

The value of exports to the US dropped 1.4 per cent year on year in the first eight months.

In the same period last year, Thailand also witnessed a 16.5-per-cent annualised decline. Export value to Europe also declined continually.

[bingobongo]

credit markets are frozen......and yes in LOS too

pain is coming to a builder/developer/homedebtor near you.........

Thai developer Preuksa delays bond sale to next year

Thai developer Preuksa Real Estate PS.BK said on Wednesday it had delayed a plan to sell three-year bonds worth up to 1.5 billion baht ($44 million) to next year due to unfavourable global financial conditions .

Earlier, Thailand's top energy firm, PTT PCL PTT.BK, said it might postpone a plan to sell 10 billion baht ($296 million) of bonds due to the global financial crisis.

http://www.reuters.com/article/rbssFinanci...K36639320081001

Edited October 1, 2008 by bingobongo

[ray23]

Something like this will effect a lot more then the development company. Question is will it really be that much better next year I seriously doubt it.

[VegasVic]

Something like this will effect a lot more then the development company. Question is will it really be that much better next year I seriously doubt it.

Tourisim will undoubtedly be hurt very bad this season, but the more important situation is that the go go days of the big $ being thrown at the BIRC countries and Asian markets are a thing of the past. The Chinese, Brazilian, Indian, and Russian markets may have a dead cat bounce coming, but that bounce will just allow those late to the party to finally divest themselves of their remaining assets in those markets. The U.S. and European markets are in the middle stages of this mess, but the BRIC counties and Asia are just feeling the initial effects of the flu right now Of the BRIC countries Brazil will be the most likely to have some sort of decent recovery over the next couple of years, but even Brazil will get painted with the broard brush that has painted over all the BRIC markets. Its kind of like the dot com crash in the states, all tech stocks took a huge hit for quite a while because people avoided the sector, but eventually solid companies like Apple rebounded and have come back, the BRIC markets will likely have the same fallout as the techs did after the dot com crash!

[ray23]

So both the tourist sector and the export sector, that is hard hit. The unstable government isues are still there just not being talked about as much. Don't bleed it don't read.

The new PM seems to be talking a new ball game but things are stacked so high against him , even if he is the answer does'nt stand a chance. An election is in the cards soon. But, will that really change anything. It may be a different party name but, in the end it will be the same power structure and the same fighting.

If Thailand could get to that point of actually working on the infrastructure it might carry it through. But, that does not seem likely.

I just saw thoery as import costs go beyond exports revenue that tjhe baht is strengthened, to off set the addtional costs. That makes since to me. But how far will a 100 billion dollars go if he is used in that manner. I don't see what we are going to deal with, being a few quarters. I think we are really talking years.

It's amazing that out of the blue we see problems, that for a long time now the BOT has said were not there. You know they can talk themselves to death. But, people will not take the risk now.

Stock market here below 600 wasn't that supposed to be the magic number to show real problems?

Now when the bail out is made law it may jump above that. But I have no one say that the bail out is goign to stop this. Only soften the blow and prolong the agony. So I don't think the bottom has been hit yet. I have never invested cause I'm, still trying to learn. But, when we get through this one I would give it a try. Once this is ridden out if everything stays true to form, we will have some very productive years to follow.

I think what investors were mising is there is risk thats why better returns. The average Chinese and Indian peson obviously thought there would be nothing but gains. apparently they were not alone in that thoguht. Big players seem to be thinking the same way.

There is always something in ten year cycles or there abouts, the time finance, before Dotcom. But there is always strenthening in the process as well. So I just venture forth in a year or two. In he maentime ther are prices to be paid. It appears that for all the wonderful talk Thailand will be paying a well.

Cost of living is going to adjust, so for those if us retirted here on fixed incomes this may be bad, or it may turn out to be good. But for awhile I don't think we are going to be seeing good things. One of the relaities of living on a fixed income is that your not a apt to needs loan to get by. Good example I don't have credit cards don'teed them or want them. So credit will effect e very little, major pruchases aredone they are on loans but at fixed rates.

Not having any experience in living in a foriegn country the one thing that hit me, was the rate of exchange at one time my debt to income ratio was 15%, not there any longer but still well in the comfort range and could survive even if those numbers got worse.

To be honest it was frightening when only the states seemed to be getting hit. But the reality is showing now which means that things will adjust everywhere. for some one like me that mean I have a fighting chance. So not happy to see the mess, but a bit relieved to know people like me won't be trying to play catch up.

Why is Thailand important to me simple it's my home. If I ever have to leave I will be kicking and screaming all the way.

Means my income will be sufficient to ride this out.

There will be fire sales around that even someone like me can buy in.

Possibilty of promoting more relaxed immigration rules the biggy fo me permaneant residence. Ya I know far fetched for retirees but who knows might be a widnow of a opportunity. Even governments listen better when they need something.

Seems like the mirror might breaking and the smoke clearing here in Thailand.

I wish no one harm but the reality the cost here were getting insane, paying more for farm land here then you would in the states. Paying as much for a condo in a humid hot climate as you would for a place in a moderate climate. Sorry not logical.