Mugen in vios03

Asia Stocks Rebound From 2 Year Low as Europe Seeks Solution to Crisis

Asian stocks rebounded from their lowest level since May 2010 as banks rallied amid speculation that European leaders may find a way to tame the region’s credit crisis.Sumitomo Mitsui Financial Group Inc. (8316), Japan’s No. 2 bank by market value, advanced 2 percent in Tokyo after the European Central Bank was said to be considering restarting covered-bond purchases and further measures to ease monetary conditions. Canon Inc. (7751), the camera maker which depends on Europe for about a third of its sales, rose 2.1 percent. BHP Billiton Ltd. (BHP), the world’s biggest mining company and Australia’s largest oil producer, jumped 2.3 percent in Sydney after crude and copper prices advanced.“Speculation that Europe may take additional monetary easing measures will likely boost shares” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.The MSCI Asia Pacific Index climbed 1.5 percent to 110.65 as of 9:30 a.m. in Tokyo, its first advance in four days. The measure slumped 7.1 percent last week, the most in almost three years, as concern grew that the global economy is heading for a recession. The declines drove the index into a so-called bear market after falling more than 20 percent from a May 2 high.Japan’s Nikkei 225 (NKY) Stock Average rose 1.7 percent in Tokyo. South Korea’s Kospi Index jumped 3.4 percent. Australia’s S&P/ASX 200 Index gained 2.2 percent in Sydney. New Zealand’s NZX 50 Index added 1.1 percent in Wellington.

Thai Stock Decline Stokes Exporter Opposition to Yingluck Wage Policy

The biggest drop in Thailand’s main stock index since 2008 prompted brokerages, fund managers and the bourse to call on Prime Minister Yingluck Shinawatra’s two- month-old government to alter plans to raise the minimum wage.The Federation of Thai Capital Market Organizations, a six- member grouping that includes the Stock Exchange of Thailand and Association of Investment Management Companies, urged policy makers to review any measures that would hurt exporters. The SET Index fell the most among Asian benchmark gauges yesterday, declining 5.7 percent, the biggest drop since Oct. 27, 2008.The sell-off “might bring some more common sense into the equation,” said Terry Weir, chief financial officer of Hana Microelectronics Pcl (HANA), Thailand’s biggest publicly traded semiconductor packager, which fell 6.1 percent. “If the minimum wage goes up far quicker than the productivity increase, then of course that will have a negative impact on our profits and on our competitiveness.”Concern that Europe’s debt crisis and a weakening U.S. recovery will slow exports, which account for about 60 percent of the economy, have contributed to a sell-off in Thailand’s equities and currency this month. Government plans to boost the minimum wage and purchase rice at guaranteed prices have added to investor uncertainty, said Kongkiat Opaswongkarn, chief executive officer of Asia Plus Securities Pcl. Reserve Ammunition“The government should reserve some ammunition for some hard times going forward,” said Kongkiat, who heads Thailand’s third-biggest brokerage. “They have been spending and spending and I’m afraid they probably never realized how long the global slowdown is going to last.”In 2009, the year after Lehman Brothers Holdings Inc. collapsed, Thailand’s economy contracted 2.3 percent as overseas sales shrunk 14 percent. Last year growth reached 7.8 percent, the fastest pace since 1995, as exports climbed 19 percent. The central bank expects gross domestic product to increase 4.1 percent in 2011 and 4.2 percent next year.“With the global economic slowdown, Thai exports will be affected,” the Federation of Thai Market Organizations said in a statement yesterday. “We would like to urge the government to review any policies that will affect production costs. That includes attempts to raise minimum wages. The hike in wages during this economic slowdown may accelerate layoffs by manufacturers.” Growth OutlookGovernor Prasarn Trairatvorakul said in a Sept. 24 interview that the Bank of Thailand may cut its economic growth projections as the global recovery falters, signaling there may be less scope for interest rates to rise further. The central bank raised its key rate for a seventh straight meeting last month, citing inflation risks posed by the government’s plan to raise wages and support rice prices.The minimum wage policy “is not exactly a fiscal boost” and “looks more like a transfer from one sector to another,” Santitarn Sathirathai, a Singapore-based analyst at Credit Suisse Group AG, said by phone. The government “might see this policy backfire because it actually hinders growth and may cause social problems as well because people are getting laid off.”Deputy Prime Minister Kittiratt Na-Ranong, who oversees economic policy, said the government would proceed with policies to strengthen domestic demand because the country has already “wasted much time” attempting to reduce its reliance on exports. Higher wages will “create more spending” and “increase productivity,” he said. Shift in Demand“Export-related businesses may face a difficult time because they rely on global markets,” Kittiratt, who is also commerce minister, told reporters in Bangkok yesterday. “When our policies are effective, many businesses that rely on local demand will have a good chance to benefit from stronger purchasing power because the balance is changing.”The government expects to spend as much as 400 billion baht ($13 billion) on the rice-price guarantee program, which will run from Oct. 7 until Feb. 29, deputy government spokeswoman Anuttama Amornvivat said Sept 13. Funding for the rice program isn’t included in the government’s budget deficit estimate of 350 billion baht for the fiscal year starting Oct. 1, Kittiratt said in a Sept. 12 interview.In July elections, Yingluck’s Pheu Thai party won 153 of 195 seats in the north and northeast, where incomes are about a third of those in Bangkok. That helped her to win a parliamentary majority for the first time since her brother Thaksin Shinawatra was ousted in a 2006 military coup.“Fears have overwhelmed the Thai stock market,” Petcharat Powattanasatien, the head of Kasikorn Asset Management Co., the nation’s largest money manager, with $22 billion of assets, said yesterday. “Fundamental analysis is unlikely to be justified as long as the problem in Europe and the U.S. remains unresolved.”

Euro-zone fears: Markets in tailspin

The Stock Exchange of Thailand yesterday lost as much as 9.42 per cent, which triggered a technical trading halt. In its 36-year history, the exchange’s circuit breaker has been thrown only twice before – in 2001 after the terrorist attack in the United States and in 2006 after the launch of capital controls.At yesterday’s close, the SET Index had rebounded to 904.06 points for a narrower loss of 54.10 points, or 5.65 per cent.Yesterday was the third day of dramatic tumbles on the Bangkok bourse sparked by concerns over the US and European economies, which are major markets for Thai exports. On Thursday, the Stock Exchange of Thailand Composite Index lost 3.79 per cent to 990.59 points and on Friday it lost a further 3.27 per cent to 958.16 points.The three days of losses, representing a plunge of 11.1 per cent, has wiped Bt1.02 trillion off the market’s capitalisation, bringing it down to Bt7.4 trillion.After yesterday’s panic selling of Thai stocks, the Federation of Thai Capital Market Organisations (Fetco) proposed the establishment of a Vayupak 3 Fund worth about Bt100 billion and a review of the government’s populist measures (details, page 2A).“Establishing a Vayupak Fund 3 will help to develop the capital market in the long term,” said Fetco president Paiboon Nalinthrangkurn. “The government will earn money through its reduction of holdings in state enterprises while investors will be able to buy stocks at bargain prices.Stock focuses include Thai Airways International, MCOT and PTT. The fund size could be Bt100 billion, similar to that of Vayupak 1 and 2.”Fetco is of the view that global market volatility will remain for some time, without collective action to end the cri sis and with clear signs that both the United States and Europe lack weapons to boost the economy.According to Securities Analysts’ Association secretary-general Sombat Narawutthichai, 170 Thai stocks are now trading below their fundamentals. The association is now in the process of revising its end-of-year SET Index forecast, given that euro-zone factors have become worse over the past two months. Earlier, some securities houses expected the index to end the year at 1,200 points.Fetco’s proposal for the establishment of a support fund was flatly rejected by Deputy Prime Minister Kittiratt Na-Ranong – a former president of the stock exchange. He said on the sidelines of a seminar yesterday that the government had no policy to bail out the market.He said yesterday’s Thai-market plunge looked frightening because of narrower losses on the first two days, compared with the losses of other Asian bourses. However, he said the plunge offered a good opportunity for buyers.SET president Charamporn Jotikasthira said after discussions with brokerage houses that yesterday’s market fall made the Thai bourse’s loss equal to those in Indonesia and the Philippines. In the past five days, Indonesia and the Philippines have lost 11.6 per cent and 13.6 per cent of market value respectively.He insisted that short-selling had not contributed to the tumble.Foreigners remained net sellers yesterday, with a net-sell position of Bt3.03 billion, as they left emerging markets and returned to dollar assets. So far this month, the net sells have exceeded Bt18 billion.The baht also plunged below 31 to the US dollar yesterday, to 31.17, the weakest level since January 31. Gold shed more than $100 per ounce to $1,532.72.Oil prices also fell to a seven-month low, on bets Europe’s sovereign-debt crisis would cut fuel demand. Crude for November delivery on the New York Mercantile Exchange fell as much as $2.74 to $77.11 a barrel, the lowest price since August 9, and was at $79.31 at 10.24am London time. Oil is down 13 per cent this year in New York.A senior broker at Jefferies Bache in London, Christopher Bellew – who correctly predicted Brent wouldn’t exceed $120 this summer – said that short-term panic could briefly push Brent below $100, but growth in Chinese demand was likely to prevent prices falling through the floor.World stock markets remained volatile yesterday as investors grew increasingly convinced that Greece would default on its debts – an event that economists say has the potential to worsen the global downturn.Global panic was sparked by default fears that originated from a string of bad news following the International Monetary Fund’s meeting last weekend. The Group of 20 expressed worries over the absence of a solution to ease the European debt crisis and big-time investor George Soros mentioned that the world was slipping into recession and the euro-zone debt crisis was now more severe than the US economic malaise.The most frightening news came from IMF managing director Christine Lagarde, who said the fund’s $384-billion lending chest might not be enough to meet all loan requests if the global economy worsened.According to polls released in Sunday editions of Greek newspapers To Paron and Proto Thema, most Greeks expect the country won’t be able to avoid defaulting on its public debt.Lagarde yesterday met with Greek Finance Minister Evangelos Venizelos in Washington. They discussed the terms under which the IMF mission would return to Athens to undertake a fifth review of Greece’s economic programme – most likely this coming week.To soothe markets, German Chancellor Angela Merkel said euro-region leaders must erect a firewall around Greece.Greece has yet to secure a second international bail-out amid questions about its ability to satisfy the terms for aid. Venizelos this month announced a raft of new measures including pension and wage cuts as well as a sweeping property tax to ensure the nation meets 2011 targets to qualify for a sixth loan payment in October under its first May 2010 financing package.Transport came to a standstill in the Greek capital yesterday as unions staged the latest series of 24-hour strikes against the government’s austerity drive, leading to long queues on the streets of Athens as commuters drove to work, according to Deutsche Presse-Agentur.

Decision on Dtac 3G network

 CAT Telecom chief executive officer Jirayuth Rungsrithong said a decision is near on whether Total Access Communications (DTAC)'s concession allows it to upgrade its existing network to 3G technology.
But it remains unclear whether this is so. DTAC, which operates under a concession from CAT, has been waiting since 2008 for the agency's consent to upgrade its network to 3G-High Speed Packet Access (HSPA) technology to provide commercial 3G-850 MHz service. So far, CAT has granted DTAC permission to do so only on a non-commercial basis.
Jirayuth said CAT would consult again the Office of the Attorney-General on whether DTAC is allowed to upgrade its network, this time with the added request that the Office reply promptly.
CAT first consulted the Office on this matter on April 22. The Office replied on September 12 that it had declined to make a decision on the matter.
The Office reply cited a May resolution by the National Telecommunications Commission (NTC) that DTAC is entitled under its concession, subject to the telecom law, to apply for an NTC permit to upgrade to HSPA technology. The NTC board therefore permitted DTAC to use radio communications equipment at its 1,200 base stations to facilitate the upgrade, and ruled that it was DTAC's duty to inform CAT of this. It was in accordance with this NTC resolution, the Office said in its reply, that it refrained from issuing an opinion on CAT's request on behalf of DTAC.
After receiving the Office reply last week, Jirayuth told ICT Minister Group Captain Anudith Nakornthap that while the reply "indicates" that DTAC can upgrade the network, CAT would re-submit its request to the Office of the Attorney-General. Jirayuth declined to specify when the request would be re-submitted, however.
CAT has also asked DTAC to clarify whether its current 3G-850 MHz service is offered on a commercial basis. DTAC has yet to reply.
DTAC launched the 3G-HSPA service on 850MHz in Bangkok on August 16, despite being told by CAT to wait for the Office to reply on the matter. The second-largest cellular operator said it had to press ahead with the launch or risk losing premium data customers to Advanced Info Service and Real Move.
Real Move, a subsidiary of True Corp, has launched a 3G-850 MHz service in partnership with CAT.
In January, CAT signed deals with True subsidiaries Real Move and Real Future, paving the way for collaborations to provide 3G-HSPA services. As part of these deals, Real Future will procure HSPA equipment for CAT to provide 3G capacity on a wholesale basis to interested firms. CAT will also wholesale 3G capacity to Real Move, which will provide retail services for 14.5 years.
The Office replied to the ICT Ministry in July that these CAT-True deals are not subject to the 1992 Public-Private Joint Venture Act.
The ministry consulted the Office on the matter after questions were raised about their legitimacy, including whether the deals must be in compliance with the public-private joint venture law.

Bank of Thailand Governor Prasarn warns against complacency on Asean integration

"There are dangers in allowing such an important issue to remain vague," Prasarn Trairatvorakul, governor of the Bank of Thailand, said recently.
Many point to the lack of awareness among businesses of the likely consequences for them when the AEC approaches in 2015 and that Asean integration could spawn risks and opportunity losses.
Some may argue that big companies and banks in Thailand have already seized opportunities by establishing footholds in the 10 Asean countries. Some examples are Charoen Pokphand Group, Banpu, Indorama Ventures and Bangkok Bank.
However, SMEs, which account for 99.6 per cent of all businesses in the country, may not thoroughly realise what will be coming down the pike with the wave of AEC liberalisation and when it will be materialised, as they are usually busy struggling with hectic day-to-day operations.
"One of the greatest risks that may arise is not from the AEC itself, but from ensuring that businesses and stakeholders understand what exactly is at stake," Prasarn said during the Sasin Update Talk-Reunion 2011 on the "Asean Economic Community 2015: Opportunities or Threats?
"The greatest threat is remaining complacent and not preparing for these changes," he said.
Authorities ought to paint a picture about what could be expected from the AEC so preparations can be made in time for plausible gains and challenges, he said.
The AEC is designed around five main pillars -- free trade in goods, free trade in services, free flow of skilled labour, free flow of investment, and freer flow of capital.
Many opportunities will be presented by the AEC. With about 600 million people in this regional community, demand for goods and services will explode. Then, mass production for economies of scale will likely follow and bring production costs down, said Arin Jira, deputy secretary-general of the Federation of Thai Industries (FTI).
Through integration, the region's bargaining power with trading partners will increase, he said.
After the AEC takes shape, huge flows of trade, services, investment and workers are anticipated to flow across Asean countries' boundaries - much bigger than the already large flows at present.
According to the FTI, the gross domestic product of the 10 Asean countries combined reaches US$2 trillion, about 5.4 times that of Thailand. Asean's foreign direct investment totals $50 billion, of which about 60 per cent comes from China. International trade touches $2 trillion while international tourists to these countries number 6.5 million, second only to France in the world.
"It's really important to think regionally in several dimensions. [One is] in terms of your market. What country you are in. What's your demographics," said Sethaput Suthiwartnarueput, a well-known economist and visiting professor at Chulalongkorn University's Sasin Graduate Institute of Business Administration.
Sourcing of inputs and branding are also among the critical issues for businesses to think about, he said.
Discrepancies in materials, regional laws, rules and regulations have to be sorted out to lessen the difficulties in mobilising trade, services, people, investment and capital among countries. More than that, joint ventures and many more foreign business partners will most likely penetrate all member countries, including Thailand, and gear up competition as high as they can everywhere from manufacturing and tourism to the capital markets.
Foreign investors would likely welcome the AEC and grab its future to pave the way to gain access to other larger markets like China and India, said Mathew Verghis, lead economist at the World Bank.
Member-country workers in most professions will be able to move freely among the member countries. However, the language used for communicating among nations may delay skill development or even act as a major obstacle for some.
Arin said Thailand should change its education system to one with a greater concentration on foreign languages especially English. Government assistance is also required to help boost the private sector's competitiveness.
This is seen as the only way of communicating among people in the 10 Asean nations. With extensive job training and English-language skills, Thai workers could be equipped with higher professional and language capabilities, and then earn higher income and enhance their purchasing power when fiercer competition through the AEC really comes.

Google opens Thailand office

Giant search-engine service provider and creator of the Android smart-phone platform, Google, has opened a local office in Thailand.
The move reflects a commitment by Google to focus on the Thai market.
The American multinational, which is based at Mountain View in California, hosts a variety of Internet-based services and products and generates revenue mainly from advertising.
Along with the opening of its first office here, Google has announced the appointment of Ariya Banomyong, 38, as its first country head for Thailand. Having taken his new post on July 1 this year, Ariya will oversee Google's sales and business-development operations in this country.
Google's aims in Thailand are to encourage local businesses to go online successfully and to raise online-advertising spending in the Thai market from the current level of only 0.3 per cent of total advertising spending to a level closer to that in countries like the United States and the United Kingdom, which have a well- developed Internet infrastructure and where online-advertising spending is 30 to 50 per cent of total ad spending.
Ariya comes from 10 years' experience in the telecom business with True Corporation, where his last position was chief commercial officer of True Corporation's Convergence. His experience will serve Google's mission of dealing with Thailand's Internet market, which is seeing a convergence of fixed-line and mobile Internet usage.
"It is the same passion for me in working with Google," he said. "I desire to be the pioneer to help the company settle down in the Thai market - the same as I did with Orange when it brought its business to Thailand with True Corporation more than 10 years ago."
He said the beauty of his new position with Google Thailand was that it allowed him to join one of the largest technology companies in the world, while still being a pioneering leader in his home country as a new market for Google.
Thailand has around 25 million Internet users, which means more than 30 per cent of the total population are online. About 40 per cent of these users access the Internet via mobile devices. Importantly, these people are using search services every day. Of all the counties in Southeast Asia, Thailand has the highest number of searches - 55 million per day.
Ariya said the number of mobile-Internet users in Thailand was expanding rapidly, having grown three-fold in 2009 and 2010 to represent about 40 per cent of all Internet users. Every day, three out of every five Thai smart-phone users employs a search service. This figure is higher than that in many developed countries, including the US, the UK, Germany and Australia. And the most important key word of these mobile searches is "restaurant".
"Through their search behaviour, these people are obviously telling us what products and services they are looking for. Our mission is to help businesses to utilise and benefit from this searching," he said.
This gives the Thai market big potential for Google, with huge opportunities for the search-engine leader to capture. Currently, the country's total annual spending on advertising amounts to around Bt100 billion. Less than 1 per cent of this goes to online advertising, leaving more than 99 per cent of the total as Ariya's potential market - and he is, after all, representing the biggest player in the global online-advertising field.
"We don't see other players in online advertising as direct competitors because the market is very big. We all have opportunities to capture the business of those not-yet-online, and I will do my best for Google," he said.
Ariya said his priority was setting up a local team of 10 to 20 people by next year to oversee marketing, sales and operations. Then, the company will offer more products and services to local businesses. Google sees its main role as that of an assistant, helping Thai businesses - both large and small- and medium-sized enterprises - to go online and benefit from Google's products and services.
"A priority job is to educate the Thai market, including agencies, business partners and corporate customers, on how to go online successfully and what they will then find by way of products and services from Google that can bring them continued success online. For large corporations we will use a one-on-one approach, while for 300,000 SMEs in Thailand, we will assist them through marketing activities like the recently launched 'Go Online' campaign."
Ariya said he had spent about three months, involving several interviews, in the course of his appointment as Google's country manger for Thailand. After starting the job on July 1, he spent time in training at Google's operations Australia and Singapore, learning more about Google's products and services and its corporate culture. In the course of his introduction to his new company, he met Google's executive chairman and former chief executive Eric Schmidt.