Foreign investors 'unsure' of Thailand's long-term stability

[webfact]

SEMINAR
Foreign investors 'unsure' of Kingdom's long-term stability
Pichaya Changsorn
The Nation


From right: Doangkamol Chotana, president of Nation Multimedia Group (nmg); Kan Trakulhoon, president and CEO of SCG Group; Supant Mongkolsuthree, president of the Federation of Thai Industries; Dr Surakiart Sathirathai, former deputy prime minister

BANGKOK: -- Foreign investors are positive on the near-term outlook for Thailand but remain sceptical of its long-term prospects, a seminar heard yesterday.

"The biggest concern of foreign investors is how to prevent this cycle [of political instability] from repeating itself every two or three years," Prinn Panitchpakdi, managing director of CLSA Securities (Thailand), told the "Thailand Is Back" international conference organised by the Federation of Thai Industries and The Nation.

Derek Kidley, chief executive of PwC Southeast Asia Consulting, said that from his discussions with CEOs around the region, foreign investors remained positive about Thailand and had not pulled out.

However, those living far away are confused about what is going on here and the next 18-24 months will be crucial to see if there will be a sustainable solution.

"I think stability is good but the real issue is how to generate long-term stability. People are looking for concrete steps," he said.

Prinn said the big flow of capital into the Thai stock market and foreign direct investment in the last few months demonstrated that foreign investors were not worried about the short-term view of the country.

"Thailand can be back in business" if it can get a truly "selfless leader" to set an example.

"There is no quick fix for political reform. It will take a generation, not just one year," he said.

Foreign investors are happy with the "road map to democracy" that was drawn up by the National Council for Peace and Order, he claimed. "But to achieve true sustainability over the long run, both sides [of political conflicts] need to find a common ground and come to sacrifice," he said.

Stanimira Koleva, general manager of small- and mid-market solutions and partners for Microsoft Asia-Pacific, said Microsoft had seen some positive signs of technology adoption in Thai businesses that reflected commitments of local businesses here in the last two months.

Lionel Dantiacq, head of Michelin in Southeast Asia and Oceania, said "predictability" was not strong enough at present.

The French tyre company expects growth in regional markets, thanks to the development of better roads and transport infrastructure, but the tyre industry faces huge overcapacity in the region.

He said Michelin had made substantial investments in Thailand, where it runs six factories for tyres and other products, and two of the plants here are some of the best for the company globally in terms of production quality.

Source: http://www.nationmultimedia.com/business/Foreign-investors-unsure-of-Kingdoms-long-term-sta-30239775.html


-- The Nation 2014-07-30

[selftaopath]

"Thailand can be back in business" if it can get a truly "selfless leader" to set an example.

WOW..... they're not asking much are they??? PHEW. Now that will be an undertaking. HUMN????

[EricBerg]

The only "long term stability" the article refers to that Thailand has is the lack of it. Regarding that the Kingdom hasn't done too bad over the decades.

[shirtless]

Thailand has boomed for so long maybe its now heading for a correction.

[BudRight]

Oh man. Tomorrow the story will be that foreign investors love Thailand and there's nothing to worry about.

[crusader79]

Global warming will also hammer Thailand's capital and agricultural industries.

[EnglishJohn]

People know that Thaksins plan will be to ride out the coup, get another proxy back as PM and begin reversing everything back to how it was. Who knows - the next leader of the Army might be bought much more easily than Prayuth.

I have a feeling his chance has gone now - he must rue the day he told them to railroad the amnesty bill through. That single act has guaranteed he will die in exile.

[JesseFrank]

And just the other day there was someone who said that foreign investors understood it all and were keen to increase their investments in Thailand.

Not that the guy who made those claims was part of the foreign investors, but what a difference a day makes.

[klauskunkel]

Solution for long term stability:

become a Chinese colony.

(it's a joke, somewhat...)

[Tham1]

Thailand will be fine, there is no problems - only Farang worry too mutt

[noitom]

Michelin must be thrilled that yesterday's Thai news kicked off with the proclamation that Thai auto sales are 40.5% down. They mentioned the big flow of foreign capital in to the Thai stock market. Can you begin to imagine the insider trading, swindling and corruption in the Thai public securities trade? Yet we never see a bust for corruption in Thai investment management, banking, brokerage, or corporate management. There is never a white collar Thai bust, arrest, and prosecution. Never.

[anon676545345]

Thailand has boomed for so long maybe its now heading for a correction.

I think Thailand has boomed because of rather than inspite of the global financial crisis Interest rates in the developed world have been at extremely low levels over the past 6 years, that combined with massive quantative easing policies from the US, UK and Japan have injected an unpresidented amount of low interest liquidity into the global economy. Rather than being just being used to stimulate the stagnating western economies as it was intended much of this money was put to work in deleloping economies as this offered a better short term return. This influx of foreign capital is what caused the strengh in the currencies of emerging markets and as we can see now the exchange rates have started to normalise as foreign investment slows.

During this period household debt in Thailand has steadily climbed and is now 80% of their GDP, this is just household debt not soveriegn or industrial and this is affecting consumer spending as consumers are paying off these debts. I think that initiatives like the "car scheme" and "rice pledging" will be detrimental to the Thai economy over the next few years.

[Eric Loh]

Thailand will be fine, there is no problems - only Farang worry too mutt

Like your comment. Thailand have reasons not to worry too much. Strong reserves, full employment, strategically located around emerging economies, relatively young population, large domestic market etc. These reasons enough for many countries to die for. What is missing though is political stability and countless coup. Look no further than Philippines and Indonesia which have been in the past notorious for coups but now enjoyed prosperity and development when given the chance for democracy to continue and allow people to mandate. If this coup is a good coup as everyone tends to think, then I hope it will do all the necessary reforms and let this be the last coup. Then we will have the political stability that we craved for.

[BlueSkyCowboy]

Michelin must be thrilled that yesterday's Thai news kicked off with the proclamation that Thai auto sales are 40.5% down. They mentioned the big flow of foreign capital in to the Thai stock market. Can you begin to imagine the insider trading, swindling and corruption in the Thai public securities trade? Yet we never see a bust for corruption in Thai investment management, banking, brokerage, or corporate management. There is never a white collar Thai bust, arrest, and prosecution. Never.

They are learning from the USA. Never a high level/ high Dollar conviction that is appropriate for the amount of money for Wallstreet people. Remember Marc Rich, he went to Switzerland yoddeling and later bought a pardon from "the honorable" Bill Clinton

[siampolee]

Chartist post # 12

During this period household debt in Thailand has steadily climbed and is now 80% of their GDP, this is just household debt not soveriegn or industrial and this is affecting consumer spending as consumers are paying off these debts. I think that initiatives like the "car scheme" and "rice pledging" will be detrimental to the Thai economy over the next few years.

Sadly indeed this is the inheritance and the poisoned chalice that the Shinwatra clan and their ilk have bequeathed to Thailand and its peoples.

It is going to be some time before the Thai economy can be considered safe due to past events over the last decade or so.

[Thai at Heart]

Question is, where next?

They have done automobiles.

ASEAN is coming, reforms of various laws and regs for investment are needed. The labour market for cheap labour is maxed out and the education level is considered low.

What industry can they invest in or attract investment in to achieve 4 to 6% growth in the next 10 to 20 years?

[Basil B]

I can see the frustration of any potential inverter thinking of investing in Thailand, although it is a better place than it was a few months ago you can not see into the future, and I believe the Junta has no intention to remain in power indefinitely.

So one day Thailand will return to the bad old days unless the Junta can truly break the mould of corrupt politics.

Edited July 30, 2014 by Basil B

[BigC]

SEMINAR

Foreign investors 'unsure' of Kingdom's long-term stability

Pichaya Changsorn

The Nation

From right: Doangkamol Chotana, president of Nation Multimedia Group (nmg); Kan Trakulhoon, president and CEO of SCG Group; Supant Mongkolsuthree, president of the Federation of Thai Industries; Dr Surakiart Sathirathai, former deputy prime minister

BANGKOK: -- Foreign investors are positive on the near-term outlook for Thailand but remain sceptical of its long-term prospects, a seminar heard yesterday.

"The biggest concern of foreign investors is how to prevent this cycle [of political instability] from repeating itself every two or three years," Prinn Panitchpakdi, managing director of CLSA Securities (Thailand), told the "Thailand Is Back" international conference organised by the Federation of Thai Industries and The Nation.

Derek Kidley, chief executive of PwC Southeast Asia Consulting, said that from his discussions with CEOs around the region, foreign investors remained positive about Thailand and had not pulled out.

However, those living far away are confused about what is going on here and the next 18-24 months will be crucial to see if there will be a sustainable solution.

"I think stability is good but the real issue is how to generate long-term stability. People are looking for concrete steps," he said.

Prinn said the big flow of capital into the Thai stock market and foreign direct investment in the last few months demonstrated that foreign investors were not worried about the short-term view of the country.

"Thailand can be back in business" if it can get a truly "selfless leader" to set an example.

"There is no quick fix for political reform. It will take a generation, not just one year," he said.

Foreign investors are happy with the "road map to democracy" that was drawn up by the National Council for Peace and Order, he claimed. "But to achieve true sustainability over the long run, both sides [of political conflicts] need to find a common ground and come to sacrifice," he said.

Stanimira Koleva, general manager of small- and mid-market solutions and partners for Microsoft Asia-Pacific, said Microsoft had seen some positive signs of technology adoption in Thai businesses that reflected commitments of local businesses here in the last two months.

Lionel Dantiacq, head of Michelin in Southeast Asia and Oceania, said "predictability" was not strong enough at present.

The French tyre company expects growth in regional markets, thanks to the development of better roads and transport infrastructure, but the tyre industry faces huge overcapacity in the region.

He said Michelin had made substantial investments in Thailand, where it runs six factories for tyres and other products, and two of the plants here are some of the best for the company globally in terms of production quality.

Source: http://www.nationmultimedia.com/business/Foreign-investors-unsure-of-Kingdoms-long-term-sta-30239775.html

-- The Nation 2014-07-30

All I see in samui is more arrests for people working normal jobs such as taxi but arresting for parking on government roads

More harder to park with more parking restrictions

Building that have been given permits in Phuket being knocked down

I know they might have paid bribes but this is normal in the land office they won't even see toe case without an evalope

As for planning permission the tessabaan are always looking for ways to push you for a bribe

Be it to hurry up the process building not quite correct but telling you after it's built then paying another bribe

Now they are going as far as to knock businesses down

Now as a foreigner investor

If invest in a restaurant or a hotel. If all I know if what I am told and I ask for the people to produce me all the correct paper work such as hotel licence, restaurant licence extra planning permission been approved signed and complete

Then how can I be sure with out going to all these places and running a full investigation as to how each permit was obtained then checking the legality of it

Then if there is something wrong what can I do

?

My money is already invested so i can only get it back through the business so all one could do is hope and shut up

Not really safe is it?

Plus the lawyers who the company have hired are probably the same lawyers that pushed the planing permission through extra and just accept it as normal

I know that bribing is part of life on Thailand it's too late to do anything about it

Even for driving in Bangkok I used to have to keep up to 1000 baht behind my license as soon as they see my forang face at a poll booth the pulled me over

Even if I had only driven about 20 meters to re booth

Even changed rented cars and had to wear glasses

[rickirs]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I can see the frustration of any potential inverter thinking of investing in Thailand, although it is a better place than it was a few months ago you can not see into the future, and I believe the Junta has no intention to remain in power indefinitely.

So one day Thailand will return to the bad old days unless the Junta can truly break the mould of corrupt politics.

"There is no quick fix for political reform. It will take a generation, not just one year,"

Does this suggest the Junta must continue its absolute power over the three branches of government for a generation before it can let go? Much more efficient than overthrowing the government every two or three years and having to undo all the political "interference."

[Baerboxer]

Michelin must be thrilled that yesterday's Thai news kicked off with the proclamation that Thai auto sales are 40.5% down. They mentioned the big flow of foreign capital in to the Thai stock market. Can you begin to imagine the insider trading, swindling and corruption in the Thai public securities trade? Yet we never see a bust for corruption in Thai investment management, banking, brokerage, or corporate management. There is never a white collar Thai bust, arrest, and prosecution. Never.

Didn't one of Thaksin's sisters and her husband get fined for insider trading recently?

[Johpa]

Solution for long term stability:

become a Chinese colony.

(it's a joke, somewhat...)

What joke?? It has been the southern most monthorn (province) for generations.

[Stan7444]

Thailand has boomed for so long maybe its now heading for a correction.

I think Thailand has boomed because of rather than inspite of the global financial crisis Interest rates in the developed world have been at extremely low levels over the past 6 years, that combined with massive quantative easing policies from the US, UK and Japan have injected an unpresidented amount of low interest liquidity into the global economy. Rather than being just being used to stimulate the stagnating western economies as it was intended much of this money was put to work in deleloping economies as this offered a better short term return. This influx of foreign capital is what caused the strengh in the currencies of emerging markets and as we can see now the exchange rates have started to normalise as foreign investment slows.

During this period household debt in Thailand has steadily climbed and is now 80% of their GDP, this is just household debt not soveriegn or industrial and this is affecting consumer spending as consumers are paying off these debts. I think that initiatives like the "car scheme" and "rice pledging" will be detrimental to the Thai economy over the next few years.

Many good points and in addition, it is the offshoring of manufacturing due to lower (not lowest) rates and the quality labor which has been driving much of the FDI over the past many years. Also, the BOI tax "holiday" for foreign companies locating in different areas of Thailand is a great incentive, especially as opposed to the draconian corporate tax rates in the US (among highest in the world) and the EU. Offering world class products in SEA with Thailand as the base, and with ASEAN around the corner, along with Thailand being geographically centrally located within SEA, offers other advantages. Corporations are about capital creation and cheap(er) labor and lowered (or no) taxes, bring more profits to the bottom line for shareholders, which are the ONLY group that corporations owe 100% allegiance towards.

If attending this same conference, I would have been disappointed that Ford, GM, Bayer, and other large multinationals who have invested in some cases billions of USD into Thailand were not speaking there. They only had SCG, Nation, etc. etc. attending like jerking yourself off once again hearing the same old stuff. Thought PWC/s comments were VERY guarded politically as well.

If Thailand does not stabilize politically then some companies might pull out, but to where? Probably Indonesia which is now on a roll compared with other ASEAN countries other than Singapore, which is already overcrowded and not much of a manufacturing country due to their taxes and high labor rates. Possibly Vietnam as well.

Thailand has a great opportunity to continue growing FDI is they do not screw it up due to political instability every few years.