Thai Business News http://www.thai-discovery.com/forum/index.php Fri, 27 Aug 2010 03:57:37 +0000 10 http://www.thai-discovery.com/forum/topic/3384-its-not-that-diffficult-to-set-up-shop-on-the-internet/ It's not that diffficult to set up shop on the internet
By Janejit Ladpli
Published on August 27, 2010

Young people these days mostly dream of becoming their own boss. For this generation, climbing to the top of the executive level in a large corporation may be the least preferred career path because it seems to take too long to claim such success. Even if you succeed at a very young age, uncertainties lie before you.

However, starting from scratch on your own is not that easy either. Where do you start? An answer isn't that hard to find. If you have ever been carried away while doing Internet shopping, you might have realised how online business could be your next move. But there is a catch: How can you get ahead of competitors?

When you shop online, have you found it troublesome to have to find an ATM, transfer your payment, fax the transfer slip to the merchant, and wait for the confirmation? Imagine what an "easy payment method" could

do for your new business.

Yes, convenience is the key. Convenience, to customers, is when they get what they want in no time. Convenience, to a business entrepreneur, is when a customer can pay for goods with just one click and the money is transferred to your bank account the next day.

Imagine how fast this could make your business grow. You might be able to receive payments even before the goods are delivered to your customers.

But none of these can happen without an easy but secure payment tool.

Although cash isn't bad, it might limit your business to only a certain group of prospective customers, while burdening them with all the trouble of payment processes. Besides, cash requires more manual operations and, thus, is more expensive and time-consuming. Registering your online shop with a bank's "payment gateway" will enable you to accept credit-card payments over the Internet, which in turn will expand your customer reach. From the consumer's perspective, a convenient payment method will also encourage bigger purchases and offer various benefits like installment payments and bonus point redemption.

But a new entrepreneur's fear is probably paperwork and related fees and charges. Is it worth it to set up shop on the Internet? Signing up for e-commerce merchant status or applying for a payment gateway is not much more complicated than registering a physical store. It is easier than one might imagine, and does not involve any major investment - no application fee and no set-up fee. The difference is only the transaction fee. The official term for this is a "merchant discount rate" or MDR, which can be defined as a cash management fee.

When customers use their credit cards at your shop, or, in this case, over the Internet, the money will be transferred to you the next day. It saves time for both parties. Transaction reports will be provided to help you keep track of your monthly revenue. And customers can prolong their actual payments.

Since paying with a credit card online is a virtual payment - called a "card not present" transaction in the industry - there is no physical store, no physical card-reader machine, and, most importantly, no payer's signature. A higher MDR is, therefore, justifiable as a risk management cost that banks need in order to minimise fraud. It is a moderate rate that does not significantly add up to a much higher selling price.

Surprisingly, the MDR may turn out to be lower than other general administration costs when compared to a physical store. Therefore, it is best to calculate the MDR in your price.

Are you ready to make your dream come true?

Source: ]]> Fri, 27 Aug 2010 03:57:37 +0000 http://www.thai-discovery.com/forum/topic/3384-its-not-that-diffficult-to-set-up-shop-on-the-internet/ http://www.thai-discovery.com/forum/topic/3373-another-interest-rate-hike-expected-today/ Another interest rate hike expected today
By The Nation
Published on August 25, 2010

The Bank of Thailand's Monetary Policy Committee (MPC) is expected to raise its policy interest rate again today by 25 basis points, the second such rise since April 2009, in the light of better-than-expected economic performance driven by exports, investment and domestic consumption.


After the 25-basis-points increase on July 14, a similar increase today would see the policy interest rate reach 1.75 per cent. Research houses expect yet another hike of 25 basis points to 2 per cent in October or some time before the end of this year.

Siam Commercial Bank, DBS Vickers Securities (Thailand), Tisco Securities and HSBC Global Research all expect the MPC to hike the rate by a quarter of a percentage point today. DBS, in particular, said the country's spectacular economic performance had strengthened its expectation that the policy rate would be raised by another 50 basis points to 2.25 per cent in the fourth quarter of this year. It is also revising upwards its GDP-growth forecast for 2010.

"After an increase [today], another increase is expected in October," Tisco Securities said. "We anticipate the policy rate to stay at 3 per cent in 2011. Strong household spending has confirmed the upward trend in demand-pull inflation. Core inflation could be 2 per cent by the end of this year."

Growth in Thailand's gross domestic product in the second quarter was 9.1 per cent, year on year - much stronger than expected.

According to Tisco Research, actual second-quarter GDP growth outpaced market expectations. During the quarter, the market consensus had expected growth in a range of 7.4-9 per cent.

However, higher interest rates are expected to strengthen the baht further against the US dollar. On Monday, the exchange rate touched Bt31.46 per dollar, the strongest level since April 2008. Yesterday, on anticipation of an increase in the policy rate today, the baht traded near its highest level in more than two years in the morning, at 31.49 per dollar.

Gains in the strength of the baht may be limited by speculation that some banks will sell the local currency because its advance has been too rapid, a currency trader at Bangkok Bank, Disawat Tiaowvanich, told Bloomberg. He said today's MPC meeting might move the baht to the stronger side.

"Exporters also want to sell the dollar on its rally because they have a perception that the dollar will be weaker across the board. Some interbank players are taking some profits from the recent rallies."

The baht may strengthen to 31.40 per dollar this week, Disawat said.

According to Bloomberg, the baht dropped 0.3 per cent to 31.56 per dollar yesterday afternoon, the biggest decline since May 25, after a technical gauge traders use to predict price reversals signalled declines in the local currency.

Appreciation in the currency to the highest level since April 2008 sent the dollar's 14-day relative strength index to 11.12 yesterday, the lowest level since March 2008. The index has stayed below 30 since August 6, a threshold that signals the US currency is poised to rally.

Source: ]]> Wed, 25 Aug 2010 03:41:06 +0000 http://www.thai-discovery.com/forum/topic/3373-another-interest-rate-hike-expected-today/ http://www.thai-discovery.com/forum/topic/3372-india-hopes-to-enter-thai-traditional-medicine-market/ India hopes to enter Thai traditional medicine market
By PETCHANET PRATRUANGKRAI
THE NATION
Published on August 25, 2010

India wants to form a collaboration with the Thai government and the local traditional-medicine industry to penetrate markets both locally and in the international arena.


The Indian Embassy and the Federation of Indian Chambers of Commerce and Industry (FICCI) held a conference in Bangkok yesterday in a move to introduce the potential of Indian homeopathic cures to the Thai market.

At present, traditional Indian medication cannot be sold in Thailand, even though these cures are accepted in many other countries. Ambassador Pinak Ranjan Chakravarty said Indian enterprises were looking to tighten trade and investment with Thailand and Asean countries in many sectors, including alternative medicine.

He said that since the science of traditional medicines in both Thailand and India was similar, the two countries should join up to promote this industry. Chakravarty said this collaboration would become even more beneficial once the Thailand-India and Asean-India free-trade agreements were put in place.

Bilateral trade between Thailand and India should result in earnings worth US$7 billion (Bt220.81 billion) this year, now that $3.2 billion has already been achieved in the first half.

Manju K Prakash, assistant secretary-general of the FICCI, said the global market for traditional medicine was worth about $62 billion. She added that India has made considerable progress in upgrading its healthcare system, doubling life expectancy in the country and nearly halving infant-mortality cases, and had been a destination for alternative cures for more than a decade.

Satish Sehgal, president of the India-Thai Business Association, said putting Indian traditional medicines on the shelves would not destroy the market for local cures, but would reduce prices.

Sanjay Srivastava, director of Maharishi Ayurveda Products, one of the leading homeopathic-medicine producers in India, said more than 12,000 herbs were used in Indian traditional medicines compared with just 23 in Thailand.

He added that close collaboration between the two countries would also help increase the acceptance of traditional Thai medicines in the international arena.

Source: ]]> Wed, 25 Aug 2010 03:40:07 +0000 http://www.thai-discovery.com/forum/topic/3372-india-hopes-to-enter-thai-traditional-medicine-market/ http://www.thai-discovery.com/forum/topic/3354-thailand-braces-for-slower-growth/ Thailand braces for slower growth
By Wichit Chaitrong
The Nation

Thailand's gross domestic product expanded 10.6 per cent in the first half, but growth momentum tended to be slower in the second half, according to the National Economic and Social Development Board (NESDB).


NESDB Secretary-General Ampon Kittiampon said at a press conference today that in the second quarter alone, the GDP expanded 9.1 per cent, compared to 12 per cent in the first quarter.

He attributed the extraordinary growth to the exports, which expanded 40 per cent, while private investment and domestic consumption grew 18.5 per cent and 6.5 per cent, respectively.

He added that the economic growth in the second half could expand only 4-5 per cent, which would turn the full-year 2010 growth rate to 7.5 per cent.

Growth rate in the third quarter will be 6-7 per cent and in the fourth quarter 1-2 per cent due to slowing momentum of stimulus packages in other countries as well as the relatively higher base last year.

Next year, the GDP would expand in the range of 4-5 per cent, he said, when export, investment and consumption will grow in the normal rates. Thailand will also benefit by public investment.

Source: ]]> Mon, 23 Aug 2010 04:38:40 +0000 http://www.thai-discovery.com/forum/topic/3354-thailand-braces-for-slower-growth/ http://www.thai-discovery.com/forum/topic/3343-exporters-warned-as-baht-heads-towards-30-per-dollar/ Exporters warned as baht heads towards 30 per dollar
By Wichit Chaitrong
The Nation
Published on August 21, 2010

The baht is bracing for further appreciation, possibly approaching 30 per US dollar in the second quarter next year, according to the Bangkok branch of Bank of TokyoMitsubishi UFJ, which predicted heavy repercussions on exporters with lowmargin products.



Roong Sanguanruang, chief market analyst of the bank, said at a Thailand Market Association seminar on interest rates and the foreignexchange outlook yesterday that the baht was expected to move in the range of 30.7532.25 to the dollar in middle of next year. Earlier, Kasikornbank's treasurer expected the baht to end this year at 31 per dollar.

Coupled with the appreciation is greater volatility, Roong said. Movement of the US dollar was harder to predict because of the interaction of two main market forces. One predicts the exchange rate by guessing what the US Federal Reserve will do. The other force engages in risktaking. The market participants often interpret the same news differently, causing fluctuating movements of the exchange rate, she said.

The Chinese yuan is expected to continue to appreciate gradually, as the Chinese government tries to prevent export shocks caused by any sharp rise of its currency.

Other regional currencies will also appreciate in tandem. For example, the Indonesia rupiah and the Malaysia ringgit rose almost 10 per cent in one year against the dollar as of August 6, Roong said, while the baht rose about 5 per cent. But in the past few weeks the baht has risen sharply, a bit late compared with other currencies, she said. The potential for high growth has contributed to the strength of currencies in emerging Asia.

Roong also said the Bank of Thailand might increase its policy rate from 1.5 per cent to 2 per cent by the end of this year to curb inflation. The central bank would, however, be cautious about raising the rate because of the risk of an economic slowdown and political uncertainty.

The yen will also rise in the next 12 months but it will weaken in the long run because of persisting deflationary tendencies in Japan, she said.

Sompop Manarungsan, president of the Panyapiwat Institute of Technology, said exporters of labourintensive products would be hit hard by low margins. "A 10percent baht rise could make many exporters lose money," he said.

New central bank governor Prasarn Trairatvorakul will face a challenge over how to manage the baht as investors flee the US market and move their money into Asia, which recently has caused a sharp rise in the Thai stock market, he said.

The global economy also faces the risk of a bondbubble crisis that could devastate the global economy as the subprime crisis did in 2008, he warned. Bond prices have increased and driven down yields as investors seek safe havens.

While the United States is still implementing an expansionary monetary policy, Europe has started to implement exit strategies because of the threat of a publicdebt crisis. "Our government should follow Europe by reducing spending on populist programmes, otherwise the country could face a sovereign debt crisis in the near future," he warned.

Source: ]]> Sun, 22 Aug 2010 04:22:11 +0000 http://www.thai-discovery.com/forum/topic/3343-exporters-warned-as-baht-heads-towards-30-per-dollar/ http://www.thai-discovery.com/forum/topic/3335-thai-energy-giant-considers-carrefour-acquisition/ Thai Energy Giant Considers Carrefour Acquisition



Thailand’s largest energy company, PTT plc, announced its plans to bid for French retailer Carrefour’s Thai assets recently. Aimed at further diversifying their operation into the international market, PTT are thought to be considering a US$600 million offer for the superstore chain.

Bangkok, the 20th of August 2010: Carrefour, Europe’s top retailer, is planning to sell its assets in Malaysia, Singapore and Thailand at a potential price of over US$1 billion, in order to focus on other “core” markets, according to various sources.

In recent years, Carrefour has withdrawn interests in Japan and South Korea, to focus on growing markets in China and India.

PTT will join a long list of potential suitors to the Thai operations of Carrefour with France’s Casino considering a possible approach for all Carrefour assets in the region, according to Reuters.

PTT Chief Executive Prasert Bunsumpun told analysts on Thursday that PTT was studying whether an acquisition of Carrefour’s Thai assets would be viable or beneficial to its existing business base.

Speaking to Reuters, PTT Chief Financial Officer Tevin Vongvanich stated, “We are actually interested to see whether there’s an opportunity to link to our businesses,” “We are studying the plan, but there are no further details or information on the timing at this point”.

Various industry insiders have questioned the deals benefit to PTT, who already are in partnership with over 5,000 7-Eleven convenient store branches in Thailand along with its investment in Jiffy convenient stores at its retail gas stations. “We do not think it is a good idea. PTT does not have expertise in the wholesale business,” Kasikorn Securities said in a note to clients.

Meanwhile, other interested party’s include leading Thai conglomerate Berli Jucker Plc, owned by liquor tycoon Charoen Sirivadhanabhadi, Singapore-listed Dairy Farm International Holdings Ltd and Britains Tesco’s supermarket chain.

Carrefour with 40 stores, are currently 4th in the retail standings in Thailand which includes the likes of 7-Eleven, Tesco-Lotus and Big C and are valued at up to Bt19 billion (US$603 million).

Source: http://www.pattayadailynews.com/en]]> Sat, 21 Aug 2010 04:22:18 +0000 http://www.thai-discovery.com/forum/topic/3335-thai-energy-giant-considers-carrefour-acquisition/ http://www.thai-discovery.com/forum/topic/3334-banking-on-the-future-of-thailand/ Banking on the future of Thailand
By Nophakhun Limsamarnphun
nophakhun@nationgroup.com
Published on August 21, 2010

A wealth of private sector banking experience can pay dividends to the central bank, according to outgoing Kasikorn president, Dr Prasarn Trairatvorakul
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Dr Prasarn Trairatvorakul, the outgoing president of Kasikorn Bank, is set to bring his wealth of private-sector experience to the task of central banking. Prasarn, 58, was recently chosen among three short-listed candidates to head the Bank of Thailand for the next five years, starting October 1.

As governor, he would play the leading role at the Monetary Policy Committee, which sets interest rates and manages money supply to optimise the country's economic growth and stability.

In former days, the governor was solely in charge of monetary policy, but the 1997 "Tom Yam Kung" crisis led to reform that shifted such a crucial decision - which could make or break the economy - to collective responsibility.

Besides economic growth and stability, Prasarn shares the opinion that a fairer income distribution and a social movement to protect the environment now also figure prominently among the central bank's broader goals. However, he concedes that there are no direct tools that can be used by the central bank to address these national issues.

In fact, fiscal measures such as government spending and tax incentives, as available to the Finance Ministry, are more suitable, and these instruments can be switched on and off whenever appropriate. He cites as an example a government initiative seeking the private sector's support for a big raise in the country's minimum wage, in exchange for an income tax cut

"There would be a multiplier resulting from a possible rise in consumption among the country's low-income earners [if the minimum wage is increased substantially as a way to address the income gap issue, as envisaged by the government]. In other words, there would be an income transfer from such a policy," says Prasarn.

However, such a policy initiative means the government will have to part with an amount of corporate income tax revenue to boost workers' purchasing power. This may boost economic growth in the short and medium terms, depending on the effectiveness of the multipliers, but Prasarn is not sure if it will also help narrow the income gap in the long run.

Having spent many years in the private sector after leaving previous posts at the Securities and Exchange Commission (SEC), Prasarn believes that private-sector experience is highly valuable as far as central banking is concerned.

Alan Greenspan, the previous chairman of the US Federal Reserve, also had a lot of private-sector experience before joining the US central bank, he notes. In addition, the late Joseph Kennedy, a business tycoon, was tapped to be the first chairman of the US's SEC during the 1930s because of his private-sector experience.

Regarding the Bank of Thailand, there is also a need to further promote cross-public-private-sector experiences to better prepare a new generation of competent central bankers, who will need to be abreast of fast-moving markets in Thailand and abroad.

At present, Thailand's central banking system relies on inflation targetting, but some other countries use different principles to manage the monetary policy.

Regarding the US system, it appears that the Fed has relied more on human judgement than other criteria, especially in the past couple of years. Lately, the Fed has also taken two unprecedented actions that are contrary to the principles of sound central banking. First, it has openly purchased government bonds, thus lending money to the government. Second, it has openly bought commercial papers, thus lending money to the private sector.

Both actions are the equivalent of printing money in the hope of averting the worst US economic recession since the 1930s.

But have they worked? So far, the first round of action hasn't, and it looks like the second round is forthcoming.

Source: ]]> Sat, 21 Aug 2010 04:20:55 +0000 http://www.thai-discovery.com/forum/topic/3334-banking-on-the-future-of-thailand/ http://www.thai-discovery.com/forum/topic/3328-record-trade-defecit-amid-rising-gold-auto-part-imports/ Record trade defecit amid rising gold, auto part imports
By Petchanet Pratruangkrai
The Nation
Published on August 20, 2010

Thailand reported a trade deficit of US$939 million (Bt29.6 billion) last month, the biggest deficit in two years, due mainly to increasing import demand for gold and auto parts to support export expansion.


The Commerce Ministry reported yesterday that the value of Thailand's exports in July grew 20.6 per cent to $15.5 billion, while imports surged 36.1 per cent to $16.5 billion, a record for imports in two years.

Exports in the first seven months jumped 34.1 per cent to $108.63 billion while imports rose 49 per cent to $103.19 billion. Trade surplus totalled $5.43 billion in the first seven months of this year, despite a huge trade deficit last month.

The ministry reported that imports saw a big jump last month due to the lower gold price compared with June this year.

Gold imports reached 44.57 tonnes, worth $1.7 billion last month, up 203 per cent from $126.6 million in June. This was due to the lower gold price in the world market, which dropped by 3.01 per cent month on month to $1,231 per ounce in July.

Imports of vehicles and parts, including automobiles and parts, and motorcycles and parts, rose steeply last month by 77.1 per cent to $697.8 million.

"Continued export growth in July has ensured that Thai exports will achieve the expansion target of 20 per cent to Bt183 billion this year, said Commerce Minister Porntiva Nakasai.

However, the appreciation of the baht has emerged as the biggest concern, with the possibility of it slowing down export growth in the remaining period, she said.

Porntiva said the baht could even strengthen to Bt30 to the US dollar. To ensure export growth, the ministry will cooperate with the Bank of Thailand to stabilise the baht, she said.

Meanwhile, following a significant growth in exports, domestic consumption and recovery in the tourism sector, the University of the Thai Chamber of Commerce (UTCC) has revised up its economic forecast for 2010 from 56 per cent to 6.57.5 per cent.

It is expected that the Thai economy has a high possibility of achieving 6.9 per cent expansion, valued at Bt9.67 trillion this year.

Thanavath Phonvichai, director of UTCC's Economic and Business Forecasting Centre, said that robust economic growth would result in higher employment and more loan demand in the final quarter of this year, and next year.

Factors that may cause slowing down of economic growth are sluggish demand in the United States and the European Union, and the stronger baht, which is expected to touch Bt31.3Bt31.4 in the fourth quarter of this year, said Thanavath.

The new forecast took into account that incomes from tourism will grow by 6.02 per cent this year from minus 9.85 per cent, with the number of tourists reaching 14.6 million this year; exports are expected to grow by 23.9 per cent; domestic consumption will reach 3.8 per cent from a 1.1percent slide last year; and foreign direct investment will improve by 5.7 per cent from a 9percent decline last year.

GDP for the farm sector is projected to grow from minus 0.5 per cent last year to 2.1 per cent expansion this year, while GDP for the industrial sector will climb from minus 5.1 per cent to 11.5 per cent this year.

The assumption of 6.57.5 per cent growth is based on an estimated average exchange rate of Bt32 against the greenback, policy interest rate at 1.752 per cent, inflation at 3.5 per cent, and unemployment rate at 1.3 per cent.

Additionally, the UTCC also expected that the Thai economy will continue to grow by 45 per cent next year. Due to the strong economic fundamentals, the baht could move up to Bt30 to the US dollar next year.

Source: ]]> Fri, 20 Aug 2010 04:33:40 +0000 http://www.thai-discovery.com/forum/topic/3328-record-trade-defecit-amid-rising-gold-auto-part-imports/ http://www.thai-discovery.com/forum/topic/3327-pm-exports-to-lift-gdp-growth-to-7/ PM: Exports to lift GDP growth to 7%


Prime Minister Abhisit Vejjajiva was confident the export sector would help lift gross domestic product growth to at least seven per cent this year, reports said.

The prime minister on Friday morning chaired the ceremony marking the 90th anniversary of Commerce Ministry fair, and presented a speech on “Commerce Joins Business Sector to Overturn Thai Economy”.

Mr Abhisit said the economic growth rate was as high as 10 per cent in the first half of the year because of the substantial expansion in the country’s exports.

“The export sector could play a vital role in boosting the economy in the third and fourth quarters of the year. As a result, the GDP growth for 2010 will not be less than seven per cent,” said Mr Abhisit.

Source: ]]> Fri, 20 Aug 2010 04:32:16 +0000 http://www.thai-discovery.com/forum/topic/3327-pm-exports-to-lift-gdp-growth-to-7/ http://www.thai-discovery.com/forum/topic/3316-for-the-baht-the-only-way-is-up/ For the baht, the only way is up
By Nattawut Sachabudhawong
Published on August 19, 2010

With the recent movement of the baht, especially in August, the timing seems right to recap the fundamentals behind the currency's recent shifts in value.

In 2009, it opened at 34.8 against the US dollar, before ending the year 4 per cent stronger at 33.3. However, this year has already seen a 4.2 per cent increase in value against the dollar. At the beginning of 2010, many pundits were expecting to see the baht level out at around Bt32/dollar by year-end. At the time, we argued that the baht might strengthen beyond these expectations to around Bt31/dollar. We remain firm in that view.

Both internal and external factors have led to that conclusion.

The internal factor is Thailand's balance of payments figure, which is reflecting a huge surplus in both our current account and capital account. Significant growth in the exports sector during the first half of the year has helped produce a figure of $6 billion-plus in the current account, while, the capital account added another surplus of $7.5 billion, mainly from capital inflow into both the stock markets and capital markets. These two combine as the balance of payments figure, which so far is growing faster than last year.

Externally, there are two factors. First, the yuan has become a key factor over the past couple of months after China decided to allow its currency flexibility by releasing the unofficial peg to the dollar. As a result the yuan will tend to appreciate, and will drag along regional currencies including the baht.

Second are the changes to growth expected in major economies of the US, Europe and Japan in the second half of this year. The fiscal policies these economies have used to kick-start growth will begin to have less impact, and we expect to see slower growth here. Meanwhile, the emerging economies of China and the East should continue to grow apace, allowing their central banks to normalise their interest rates sooner. This will attract more capital flow into our region, which should push up the value of Asian currencies in the second half of this year.

With this combination of external trends and internal factors, there is only one way for the baht to go in the second half of this year - up.

Nattawut Sachabudhawong is a member of the assets and liabilities management team of Siam Commercial Bank's Treasury Division.


Source: ]]> Thu, 19 Aug 2010 02:49:05 +0000 http://www.thai-discovery.com/forum/topic/3316-for-the-baht-the-only-way-is-up/