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The Star
27-05-2025
- Business
- The Star
Thai DPM Pichai courts global funds to reignite stock market, eyes investment reforms
BANGKOK: Deputy Prime Minister and Finance Minister Pichai Chunhavajira (pic) revealed that the Thai government is in talks with major international investment funds to attract more capital into the Thai stock market, particularly as the SET Index lingers at the 1,100–1,200 level, which he said is increasingly appealing to investors. Speaking during a keynote address at the Daily News Talk 2025 seminar, themed 'The Charm of Thai Stocks: Driving the Economy,' Pichai noted that large institutional investors, many of whom have historically allocated significant portfolios to Thailand, have shifted more capital overseas in recent years. However, these funds still maintain investments worth hundreds of billions of baht in Thailand—mainly in government bonds. Although returns from foreign investments have been solid, recent volatility in global markets has prompted investors to reassess. Pichai said investors are starting to see that Thai stocks have declined significantly, and are re-evaluating asset allocations and regulatory conditions that could support a return to Thai equities. Pichai assured that the government is prepared to revise regulations to make the Thai capital market more attractive. This includes restoring investor confidence and reforming capital market laws, such as the soon-to-be-enforced Securities Oversight Act, which will impose civil and criminal penalties for naked short selling. These legal changes, he said, are part of broader efforts to strengthen the Thai economy and position it for long-term growth, while large corporations have suggested aligning structural reforms with global trends, such as green economy and ESG practices. 'I have spoken with several funds about new investment policies. With the Thai stock index at this level, many see an opportunity. Thai equities still have appeal, especially for those who understand the fundamentals,' Pichai said. 'Thailand is viewed as a safe haven—but most investors are in a 'wait-and-see' mode. They have not left; they are watching what we do next.' When asked about the relatively slow shift from long-term equity funds (LTFs) to the new Thai ESGX funds, Pichai acknowledged that investors are still highly liquid and likely weighing the right timing for reallocation. On the strong baht, Phichai attributed the currency's rise to recent capital inflows, though he cautioned that much of it may be short-term investment in bonds, rather than equities, which are more sensitive to economic sentiment and structural reforms. 'Bond investments offer immediate returns and safety, unlike equities which require more confidence in Thailand's short- and long-term economic strategy,' he explained, adding that fund allocations could shift to equities once economic conditions improve. Regarding broader investment incentives, Pichai noted that foreign investors are showing increasing interest in relocating production to Thailand. The government is working to support domestic manufacturing and employment, while upgrading workforce training—with a particular focus on linking labor to research sectors. On land use reform, the government is currently amending laws to allow long-term leases of state land for up to 99 years—returning ownership to the state at term's end—rather than requiring investors to buy land through the BOI (Board of Investment). These efforts will be paired with enhanced access to utilities such as water and electricity. On the use of cryptocurrency for retail payments, Pichai clarified that the discussion focuses on enabling crypto transactions via credit cards accepted by merchants—not tied to domestic currency. This model is under consideration by the Bank of Thailand, referencing global practices in crypto-based payment systems. - The Nation/ANN
Business Times
23-05-2025
- Business
- Business Times
Political uncertainty and global headwinds could weigh on Thai market: CGSI
[SINGAPORE] Thailand's stock market is likely to face continued pressure from political uncertainty and global economic headwinds, CGS International (CSGI) said. Kasem Prunratanamala, the chartered financial analyst of CGSI Thailand research team, noted on Wednesday (May 21) that the aggregate net profit of Thai corporations under their coverage remained flat year on year in Q1 2025. Quarter on quarter, however, there was a strong 40 per cent rise. The sectors with the most significant quarter-on-quarter net profit growth included electronics, construction, food and telecommunications. The sectors that delivered the weakest quarter-on-quarter growth included hotels, consumer and property. Several Thai companies, particularly those in banking, construction, and oil and gas, exceeded expectations with their Q1 earnings. Conversely, the service and transportation sectors reported results that fell short of forecasts. Prunratanamala cautioned, however, that political instability could hinder the government's effectiveness, especially amid a challenging economic environment. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Thailand faces a 36 per cent US tariff if a reduction cannot be negotiated with Washington before a moratorium expires in July. The US has set a 10 per cent tariff for most nations while the moratorium is in place. Tensions between Thailand's ruling Pheu Thai Party and its coalition partner Bhum Jai Thai (BJT) have intensified on the back of disputes over key policies such as cannabis legalisation and minimum wages. The continued tit-for-tat between the parties can undermine the unity and may affect the coalition's long-term stability, the analyst noted. He added: 'A worst-case scenario for Thai politics now is a house dissolution, with a six-month limbo period before a new government takes office. 'Even so, we believe an interim government will not be able to do its job as the conflict between the two parties is likely to prolong,' said Prunratanamala. He added that a second-worst case scenario would be BJT's expulsion from the coalition, which would result in a major Cabinet reshuffle. As BJT is widely believed to have influence over most of the senators, CSGI believes that it will be difficult for any major government Bills to pass through parliament under the current political environment. After a roughly 10 per cent rebound from recent lows – driven by hopes of easing global trade tensions – CSGI believes the Stock Exchange of Thailand (SET) is now fairly valued at around 12 times its 12-month forward price-to-earnings (PE) ratio. However, ongoing political tensions between the Pheu Thai and BJT parties are likely to keep market sentiment weak, said Prunratanamala. As a result, CGSI has reaffirmed its SET Index target of 1,200 points, based on a projected FY2026 P/E ratio of 13.4 – one standard deviation below the 10-year average. In terms of investment strategy, CSGI is turning more defensive. 'We prefer domestic-focused, high-yield stocks,' Prunratanamala said. CSGI has removed Berli Jucker Public Company, Minor International Public Company, and Carabao Group from its top picks, and added The Erawan Group and Gulf Development. On the upside, Prunratanamala added that potential Bank of Thailand rate cuts and government stimulus could help support the market if implemented.
Malaysian Reserve
19-05-2025
- Business
- Malaysian Reserve
Thailand slashes growth forecast on impact of trade war
THAILAND significantly lowered its forecast for economic growth this year as the global trade war undercuts private investment and exports, adding to already-weak consumption at home. Gross domestic product will likely grow 1.3% to 2.3% in 2025, the National Economic and Social Development Council said on Monday. The latest forecast is a full percentage point lower than the previous estimate of 2.3% to 3.3% and more or less aligns it with that of the Bank of Thailand, the World Bank and the International Monetary Fund. Following the dire outlook, the government decided to put on hold a planned cash handout program and instead use about 157 billion baht ($4.8 billion) budgeted for it to support projects which will generate more jobs and boost competitiveness of the local industries. If the full-year GDP outturn comes in at the midpoint, it would be Thailand's weakest print since the pandemic, according to Bloomberg-compiled data. It could take around two years for the economy to recover from the impact of a threatened 36% US tariff and a global trade slowdown, NESDC chief Danucha Pichayanan said at a briefing in Bangkok. 'Economic growth remains constrained by high household and corporate debt burdens and it is expected the growth to be softened in the second half of the year, following the global economic and trade slowdown and the impact of trade protection measures,' it said in a statement. The benchmark SET Index fell 0.7% to its lowest close since April 29. The baht, which pared gains after the release of the data, was 0.9% higher at 33.07 to a dollar by 4:30 p.m. local time. Southeast Asia's second-largest economy is bracing for the possibility of a 36% tariff in the US, its largest export market. Thailand is waiting to start negotiations with Washington to bring down the levies. 'The negotiation results will dictate the Thai economic outlook going forward,' Danucha said. 'If the situation remains relaxed like this, our economy should continue to grow without problem. If not, the situation will change.' Exports will likely grow just 1.8% this year, down from the previous estimate of 3.5% and the 5.8% in notched 2024. Machinery and electronics are Thai exports at risk of losing market share in the US market from the higher tariffs, Danucha said. Private investment is projected to decline 0.7% in 2025, in line with the exports slowdown. Private consumption, which accounts for the bulk of Thai GDP, is seen growing just 2.4%, down from the previous estimate of 3.3% and the 4.4% in 2024. Government stimulus should boost public consumption and investment, NESDC said. While Thailand's economy grew at a faster-than-expected pace last quarter, it was largely driven by a surge in exports as businesses front-loaded orders in a bid to avoid the Trump tariffs. 'The trade situation and foreign exchange may be more volatile and the economy may slow down going forward,' with the impact more clear in the third quarter, Danucha said. He warned businesses and consumers to brace for the risks and be cautious with their spending. GDP in the January-March period rose 3.1% from a year earlier, beating the 2.9% median estimate in a Bloomberg News survey and comparing to the revised 3.3% pace notched in previous three months. The economy expanded 0.7% quarter-on-quarter, compared with a median estimate for 0.5% growth. A global trade war would exacerbate Thailand's already sluggish recovery post-pandemic, with local consumption remaining tepid despite cash handouts, and China's slowdown hitting the tourism sector. NESDC cut its forecast for tourist arrivals this year to 37 million from 38 million. Prime Minister Paetongtarn Shinawatra has pledged new stimulus measures, but they may come at the cost of bloating still-elevated government debt levels. Moody's Ratings lowered Thailand's credit rating outlook to negative from stable last month as the trade war weighs on its economic and fiscal strength. The prime minister said some programs are being reviewed in view of an expected shortfall in revenue as the trade war is affecting all countries. New government-initiated projects may help boost growth between 0.7 to 1 percentage point, Finance Minister Pichai Chunhavajira told reporters. The Bank of Thailand also has 'very limited ammunition' after 75-basis points in cuts brought its benchmark key interest rate to 1.75%, Governor Sethaput Suthiwartnarueput said earlier this month. The central bank has warned that GDP growth this year could fall to as low as 1.3% — the slowest pace since the pandemic — in case of a severe trade war and higher US levies. –BLOOMBERG
Straits Times
19-05-2025
- Business
- Straits Times
Thailand slashes growth forecast amid impact of trade war
The latest forecast is a full percentage point lower than the previous estimate of 2.3 per cent to 3.3 per cent. PHOTO: AFP Thailand significantly lowered its forecast for economic growth this year as the global trade war undercuts private investment and exports, adding to already-weak consumption at home. Gross domestic product (GDP) will likely grow 1.3 per cent to 2.3 per cent in 2025, taking into account additional stimulus measures the government is planning, the National Economic and Social Development Council (NESDC) said on May 19. The latest forecast is a full percentage point lower than the previous estimate of 2.3 per cent to 3.3 per cent. The cut more or less aligns the agency's forecast with that of the Bank of Thailand, the World Bank and the International Monetary Fund. If GDP growth comes in at the midpoint, it would be Thailand's weakest since the pandemic, according to Bloomberg-compiled data. It could take around two years for the economy to recover from the impact of a threatened 36 per cent US tariff and a global trade slowdown, NESDC chief Danucha Pichayanan said at a briefing in Bangkok. 'Economic growth remains constrained by high household and corporate debt burdens and it is expected the growth to be softened in the second half of the year, following the global economic and trade slowdown and the impact of trade protection measures,' it said in a statement. The benchmark SET Index fell as much as 0.8 per cent to its lowest level since April 30. The baht pared its gains to 0.2 per cent against the dollar. South-east Asia's second-largest economy is bracing for a possibility of a 36 per cent tariff in the US, its largest export market. Thailand is waiting to start negotiations with Washington. 'The negotiation results will dictate the Thai economic outlook going forward,' Mr Danucha added. 'If the situation remains relaxed like this, our economy should continue to grow without problem. If not, the situation will change.' Exports will likely grow just 1.8 per cent in 2025, down from the previous estimate of 3.5 per cent and the 5.8 per cent notched in 2024. Machinery and electronics are at risk of losing market share in the US from the higher tariffs, Mr Danucha said. Private investment is projected to decline 0.7 per cent in 2025, in line with the export slowdown. Private consumption, which accounts for the bulk of Thai GDP, is seen expanding just 2.4 per cent, down from the previous estimate of 3.3 per cent and 4.4 per cent in 2024. Government stimulus should boost public consumption and investment, NESDC said. While Thailand's economy grew at a faster-than-expected pace last quarter, it was largely driven by a surge in exports as businesses front-loaded orders in a bid to avoid the Trump tariffs. 'The trade situation and foreign exchange may be more volatile and the economy may slow down going forward', with the impact more clear in the third quarter, Mr Danucha added. He warned businesses and consumers to brace for the risks and be cautious with their spending. GDP in the January-March period rose 3.1 per cent from a year earlier, beating the 2.9 per cent median estimate in a Bloomberg News survey and comparing with a revised 3.3 per cent pace logged in the previous three months. The economy expanded 0.7 per cent quarter-on-quarter, compared with a median estimate for 0.5 per cent growth. A global trade war would exacerbate Thailand's already sluggish recovery post-pandemic, with local consumption remaining tepid despite cash handouts, and China's slowdown hitting the tourism sector. NESDC cut its forecast for tourist arrivals in 2025 to 37 million from 38 million. The government will hold a meeting on May 19 to discuss ways to support the economy. However, limited monetary and fiscal space could constrain the nation's ability to respond. Prime Minister Paetongtarn Shinawatra has pledged new stimulus measures, but they may come at the cost of bloating still-elevated government debt levels. Moody's Ratings lowered Thailand's credit rating outlook to negative from stable in Apri l as the trade war weighs on its economic and fiscal strength. The Bank of Thailand has 'very limited ammunition' after 75-basis points in cuts brought its benchmark key interest rate to 1.75 per cent, governor Sethaput Suthiwartnarueput said earlier in Ma y. The central bank has warned that GDP growth in 2025 could fall to as low as 1.3 per cent – the slowest pace since the pandemic – in case of a severe trade war and higher US tariffs. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
30-03-2025
- Automotive
- Yahoo
Trump's auto tariffs are likely to hit an emerging Asian auto hub, showing there are risks for investors everywhere
Trump's 25% tariffs on auto imports stand to impact global carmakers and supply chains. Thailand's auto exports are expected to be hit, adding to investor gloom and risk. China's offshore manufacturing facilities could also be impacted. US President Donald Trump's auto import tariffs are impacting more than carmakers' stocks — global supply chains connected to the vast vehicle industry are also getting hit, adding to investment risk. "South Korea is most exposed, followed by Japan. Within ASEAN, Thailand — a regional manufacturing hub — is most vulnerable," Nomura economists wrote in a note on March 27 about the auto tariff risks in Asia. In Thailand, Finance Minister Pichai Chunhavajira told reporters on Thursday that the country's auto part exports will be affected by the tariffs. Pichai did not quantify the impact of Trump's impending levies on Thailand. The country is Southeast Asia's largest car production hub, with an extensive network of factories that supply parts and raw materials for global players from carmakers to tiremakers. Thailand's benchmark SET Index dropped 1% on Friday to a one-week low. The index is about 16% lower year to date as Trump's trade war injects more uncertainties into a market already battered by corporate scandals, weak economic growth, poor corporate earnings, and political instability. Thailand's auto shipments account for just 4.3% of its exports to the US, but weak global demand could depress shipments of auto parts elsewhere. "These effects may take some time to materialize but, in our view, pose a clear medium-term threat to one of Thailand's leading industries," wrote Nomura analysts. The vulnerabilities in Thailand underscore the existence of investor landmines worldwide as investors move some investments away from the US's volatile markets. The 25% tariff on all imported finished vehicles is slated to take effect on April 3. A 25% tariff on auto parts is slated to take effect no later than May 3. Trump's executive order did not name China, but it said the pandemic and its impact on global supply chains has undermined the US's ability to maintain a resilient domestic industrial base. In contrast, foreign auto industries "propelled by unfair subsidies and aggressive industrial policies, have grown substantially," the order stated. The tariff announcement sent domestic and foreign auto stocks tumbling. In Asia, Japan's and South Korea's car makers are expected to be in the direct line of fire, with shares of auto giants Toyota and Hyundai posting sharp losses since the executive order was signed. In Europe, shares of automakers also fell, with Germany's Volkswagen and BMW down 4% since Trump signed the executive order. Read the original article on Business Insider Sign in to access your portfolio
