21 Oct 2019
International Economy
The Chinese economy grew 6.0 percent YoY in 3Q19, representing the slowest growth in almost 30 years and declining from the 6.2 percent pace recorded during 2Q19. The disappointing economic performance, which stands at the lower end of China’s growth target, will likely force the government to introduce new economic stimuli in order to ensure that its 2019 economic growth remains within the set target band of 6.0-6.5 percent YoY. Meanwhile, weak internal and external demand has steadily inhibited the Chinese economic growth while a series of economic stimuli implemented by the government may not be sufficient to shore up the economy. In addition, risk in the financial sector as a result of lofty debt has forced Beijing to be cautious over its economic stimuli, in particular monetary policy....Read more
9 Oct 2019
Vietnam’s automotive industry is set to grow substantially over the next 5-7 years and this will likely attract additional investments in its car production. Although Vietnam is far behind other ASEAN member states in many aspects, in particular its car production, KResearch views that its car production capacity will likely increase ahead amid a transition towards electric vehicles if Vietnam accelerates improvements in various aspects. These include economic development, implementation of appropriate policies to support the automotive and auto-parts industry, strengthening lending system of financial institutions, offering all segments of the society greater access to finance and building confidence of prospective buyers towards Vietnamese-made cars. ...Read more
Thai Economy
The Cabinet, September 10, 2019, approved the 1,000-Baht cash handout as part of the government’s “Chim Shop Chai (Taste Shop Use)” program to stimulate domestic tourism, effective September 27 - November 30, 2019. Currently, a large number of people has begun to spend the cash giveaway in provinces where they signed up to the program. KResearch has conducted a survey on spending behavior of Thai households that have registered with phase 1 of the “Chim Shop Chai” program and the findings are as follows:...Read more
Trading
Thai exports in September fell from the previous month, lower than the consensus of the analysts. The lackluster performance is in line with exports of other countries in the region which were affected by the worse-than-expected global economy and the prolonged trade war between the US and China. Outbound shipments from Thailand in September 2019 declined by 1.4 percent YoY. Although the figure is better than a 4-percent drop in the previous month, it is worse than the market consensus. In September, the value of main Thai farm exports such as rice, rubber and tapioca products contracted at a double-digit rate, dragging on the overall Thai outbound shipments. At the same time, the Thai industrial exports in September bounced back to positive territory, increasing 0.2 percent, driven by the shipments of vehicles, auto parts and components, electrical appliances and gold which continued to expand. Excluding gold consignments, the Thai exports would have contracted 2.8 percent YoY....Read more
18 Oct 2019
Industry
KResearch predicts that Thailand’s food and beverage exports in 2019 will increase 3.5 percent YoY, or equivalent to USD26.6 billion, driven by key export items, namely, fresh and frozen and chilled fruit, poultry products (chicken), wheat products, other ready meals and non-alcoholic beverages which have continued to expand and are still in demand in Thailand’s major trading partners, namely the Chinese and ASEAN markets....Read more
10 Oct 2019
Tourism
Europe is Thailand’s important foreign tourist market because a large number of European tourists tends to visit Thailand during the final quarter of every year. In addition, they typically take long vocations here and help generate substantial income for travel-related businesses....Read more
17 Oct 2019
Financial Institutions
Although 3Q19 earnings of Thai commercial banks show that the Thai commercial banking system overall has been able to maintain profitability from extraordinary items, cut expenses from setting aside reserves and undertake efficient cost management, KResearch has assessed that the sluggish Thai economy will continue to pressure growth of their core business income, in particular net interest income. We expect that net interest income will increase slightly by approximately 0.7 percent YoY in 3Q19, pressured by decelerated loan growth, declines in MRR and MOR, plus interest expenses after many commercial banks raised interest rates for fixed deposits and some savings deposits during 1H19. ...Read more
16 Oct 2019
The continuously strengthening Thai Baht has caused worries among the export-related business sector and the domestic tourism industry. Since the beginning of 2019, the Thai Baht has risen 7.4 percent against the greenback and other key major and regional currencies. The Thai currency has surged in spite of net sales by international investors in bond and stock markets. Moreover, Thailand registered a high trade surplus, partly attributed to the surplus from gold trade which continues to push the Thai Baht upward. Thailand is likely to see a high surplus from the gold trade for a while as long as global gold prices continue to increase. ...Read more
11 Oct 2019
Financial Markets
The Baht weakened late last week after hitting an over 6-year high of THB30.25/USD. The Baht rose early in the week as a safe-haven currency amid concerns about conflicts between the US and China over their trade renegotiations, as well as between the EU and UK on the BREXIT issue. However, the Baht pared those gains somewhat later in the week after the BOT signaled to announce measures in order to rein in the Baht’s appreciation in the next 1-2 months. In addition, gains on risky assets on the back of hopes for the US-China trade talks weighed down the Baht sentiment. ...Read more