Vol. I No. 5 Saturday 23 November - 29 November 2002
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BUSINESS NEWS
HEADLINES [click on headline to view story]:

World Economic Forum report shows Thailand’s rating moves up slightly

Krung Thai Credit Card forced to reject applicants

SET chief upbeat about investment return in bourse

Fly Chiang Mai - Chittagong direct after December 12

Figures show more tourists arrivals in Thailand

Discount carrier Virgin Blue to make Bali flights priority in expansion plans

Thailand wins vote to hold 2006 Skål world congress

TNT launches new express direct China/Europe airfreight service

World Economic Forum report shows Thailand’s rating moves up slightly

According to a report released by the World Economic Forum on November 12 that ranks countries as to their competitiveness, Thailand is inching its way up the scale. The kingdom has moved up slightly in this year’s rankings, which also named China, India and Malaysia as countries making great strides forward.

The report uses two methods to analyze competitiveness. The Growth Competitive Index (GCI) is based on three categories of variables that drive economic growth; public intuitions, technology and the macro-economic environment. The Microeconomic Competitiveness Index evaluates underlining conditions which define the sustainable level of productivity in each country surveyed.

Eighty nations were included in the 2002 ranking. Thailand stands in 31st place for growth and competitiveness and was ranked 35th on the micro-economic competitiveness scale, which is up from 33rd and 38th respectively in 2001.

According to the report, the US leads the Growth Competitiveness Index, overtaking Finland which was ranked 1st in 2001 and is now in 2nd position, and Taiwan, Singapore and Sweden follow.

Among emerging economies, China and India registered significant improvements in their relative positions, to 33 and 48 respectively from 39 and 57 last year. These substantial improvements were due to their stable macroeconomic environment. The report did say, however, in the case of China, potential risks have been recently introduced due to problems in China’s banking sector.

Thailand edged up two positions in the overall growth-competitiveness ranking to 31. The kingdom’s advantage has been in the macroeconomic environment (ranked 11), but the country continues to perform poorly on technology (ranked 41) and public-institutions (ranked 39).

Although Thailand was elevated three positions to 35th place this year it still placed lower than nations such as Slovenia, Estonia, Chile and Tunisia.

On the Company Operations and Strategy and Quality of the National Business Environment sub-indexes of this category, Thailand is in 33rd and 35th place respectively.

Developing nations whose microeconomic competitiveness improved significantly include Slovenia, the Dominican Republic and Sri Lanka.

The report said that Malaysia was the country which showed great leaps forward in a number of areas, including cluster vitality, the rules governing competition, value-chain presence, branding, and the nature of competitive advantage.

On the other hand, several developing nations have suffered a decline in microeconomic competitiveness including Thailand’s neighbors the Philippines and Indonesia. (TNA)


Krung Thai Credit Card forced to reject applicants

As a result of the Bank of Thailand’s recent decision to curb interest rates and reintroduce minimum salary requirements, Krung Thai Credit Card (KTC) said it has been forced to reject many applicants.

KTC director Niwat Jittalarn said that the company will have to focus more on the expansion of personal loans which currently has no control regulations.

On November 7th of this year, The Finance Ministry and the Bank of Thailand (BOT) confirmed plans to impose a minimum salary requirement for acquiring credit cards as well as a ceiling on the interest that card issuers can charge.

BOT Governor Pridiyathorn Devakula said that the new required a minimum monthly salary of 15,000 baht and an 18% cap on annual interest charges will help prevent credit card defaults and avoid a debt crisis among low wage income earners.

The central bank’s move has prompted both foreign banks and non-bank credit card issuers to move in the same direction with KTC, trying to turn to earn more income from personal loan provision schemes.

A senior management executive at Standard Chartered Nakornthon Bank admitted that the new BOT regulations have affected the bank’s credit card business. “Credit card services have high operating costs since we do not have as many branches as local commercial banks. We have to hire marketing teams at higher rates. Huge amounts were spent in various marketing campaigns and promotions in order to offer more privileges to our clients,” he said. “In the meantime, we may have to trim marketing and promotion campaigns budgets and emphasize personal loan programs which have higher rate of return,” he added. (TNA)


SET chief upbeat about investment return in bourse

The SET chief recently stated that the Stock Exchange of Thailand is one of the stock markets in the region which has provided impressive return rates.

SET president Kittirat na Ranong said the local bourse has given investors a return rate of around 20% over the past year. Prices of many listed firms on the SET are relatively low since they hover close to the same level as before the terrorist attacks on the World Trade Center in the United States on September 11 last year.

Kittirat pointed out that fundamentals of listed companies have now improved significantly as could be witnessed by the combined net profits of around 100 billion baht in the first half of this year.

“It is expected the combined profits will reach 200 billion baht for the whole year. That means the price/earning ratio of the local bourse will be below 10 times. So, I believe that Thai stocks have an opportunity to rally considerably,” Kittirat said.

He said many companies continued to list on the market. Since early this year, 15 firms have gone public with their stocks being traded on the SET and the Market for Alternative Investment. As well, 29 more are planning to list on the market either before this year is over or early next year.

Kittirat said the country’s economy has recovered and is showing positive growth. The economy is expected to continue growing in the future given the increase in international reserves to a present US$37 billion compared with $27 billion in 1998.

He added that foreign debt burdens have decreased to $64.4 billion from $109 billion in 1997. This reflects the country’s competence in generating high revenue. He said the excessive liquidity in the financial sector will keep interest rates low. (TNA)


Fly Chiang Mai - Chittagong direct after December 12

Bangladesh hoping to attract Thai investment

Phitsanu Thepthong

THAI Airways International will launch a regular flight service on the Chiang Mai - Chittagong route (a tourist spot in Bangladesh) with 3 flights a week, starting from December 12, according to HE Hemayet Uddin, the Bangladesh Ambassador to Thailand. The inaugural flight will be presided over by Prime Minister Thaksin Shinawatra.

Hemayet Uddin, Ambassador of Bangladesh to Thailand

On the Bangladeshi side, the launching ceremony of the first flight on this direct route is expected to be presided over by Bangladesh Prime Minister Begum Khaledazia.

The ambassador said this air corridor is expected to be a bright prospect for this region and especially for Thailand and Bangladesh relations for joint business, tourism, and investment opportunities.

According to their ambassador, Bangladesh has charming waterfalls and rivers, sight seeing, tea gardens and nurseries, shrines and tombs, the shrine of Hazrat Shah Jalal, Surma Bridge, picnic spots, bungalows, hotels, motels, archaeological sites, temples, forts, handicraft products, tours and tourist facilities. Tourist information centers are available and would help draw visitors and tourists, he said. Bangladesh is also well known for its leather fashions. It is also known for fish, perch, catfish, river shad, carp and pomfret.

On the investment side, its Board of Investment, through the Prime Minister’s Office, has issued a guide to opportunities. Bangladesh has incentive packages for investors by way of repatriation of profit and tax relief. The government has also been pursuing rapid liberalization policy in all economic sectors and redesigned its role from controlling and regulating to promoting and facilitating the investors.


Figures show more tourists arrivals in Thailand

Tourism Minister Sonthaya Khunpluem recently announced that tourist arrivals for this time of year were up by 16 percent. He said that this increase indicated that some holidaymakers may have changed their plans and chose Thailand out of safety concerns after the recent bomb attack in Bali.

Although the Thai Hotels Association reported mass hotel cancellations shortly after travel warnings to South East Asia were issued by various countries, the majority of hotels in the country say they have felt little impact.

Sonthaya said the Tourism and Sports Ministry has set up a tourist cooperation center which will serve as the major source of information on tourism to deal with concerns stemming from warnings by governments to their citizens regarding travel in Thailand.

To deal with the negative reports about touring in this region, the TAT has allocated 50 million baht to public relations activities overseas in an effort to reinforce the country’s positive image.

The Tourism Authority of Thailand (TAT) hopes that major events such as the New Year festival will attract visitors to the kingdom.

TAT has forecast that tourist arrivals will increase 6 percent to 10.5 million this year. Despite the slowdown in the airline industry after the Sept. 11 attacks in the USA last year, tourist arrivals to Thailand grew by nearly 6 percent to 10.03 million. (TNA)


Discount carrier Virgin Blue to make Bali flights priority in expansion plans

Budget carrier Virgin Blue will make the troubled holiday island of Bali a priority destination when it begins a major expansion from Australian domestic routes into international services soon, Virgin boss Richard Branson said recently.

Branson said he wanted the carrier, which has carved out a strong niche in Australia’s budget air travel market since it started two years ago, to help restore the Indonesian island’s shattered tourist industry following last month’s bomb attack.

“I think it is very sad to see that it is now empty of tourists and yet it is just as likely that a bomber could strike anywhere in the world,” Branson told Sky News.

Just a four-hour flight from some Australian cities, Bali has been a popular holiday destination with Australians for almost three decades.

But the tropical island’s tourism industry has withered since a car bomb tore through a nightclub packed with foreign tourists on Oct. 12. Almost 90 Australians died in the attack, which killed more than 180 people.

Branson also said that after only two years of operation, Virgin Blue’s revenues could top 100 million Australian dollars (US$56 million) this year. He said the discount carrier would soon place an order for up to 40 new jets over the long term.

“There is still an awful long way to grow, not just internally within Australia, but we have pinpointed about 18 overseas destinations where airfares are very high where we can go as well,” he said.

Branson’s comments come after the carrier last week won a month long struggle to increase its access to landing slots at Sydney Airport, positioning it for further expansion.

Branson said the airline would “most likely” announce an order for 30 to 40 new jets in the next four to five weeks and increase its push to gain a larger share of travelers from Australian flag carrier Qantas, which commands about 80 percent of the domestic market.

Branson said he would also lodge a challenge with Australia’s antitrust watchdog, the Australian Competition and Consumer Commission, against a joint-services agreement between Qantas and British Airways.

Under the agreement, the two airlines work out schedules, agree on fares, and share passengers and profits on the lucrative Australia-London route, which includes services to Asia and Europe.

“We are certainly putting in a submission to the commission authority to say that in the interests of the consumer and of competition they should be competing, not colluding,” Branson said.


Thailand wins vote to hold 2006 Skål world congress

124 for Thailand against 71 for London

At the Skål world congress held in Cairns, Australia, a vote was taken as to where the 2006 congress should be held - Thailand or London. The Chiangmai Mail is very pleased to report that the bid put forward to host the 2006 world congress by the Thailand Skål team was successful. As the results of the vote were read out, spontaneous applause rang through the crowded Cairns Convention Centre and the Thailand members were congratulated on their fine performance in promoting Thailand as the venue.

Thailand’s Skål team in Cairns lets out a cheer when the results are announced.

Since the Skål delegates from around the world represent the ‘movers and shakers’ in the tourism industry, this is indeed a great coup for Thailand to be able to showcase its attractions for this group in 2006. While many may say, “It’s four years away,” we will need all of that time to prepare and present the Skål delegates of the world with the finest promotional programme that we can offer.

The opportunities for increased tourist numbers to every tourist city will benefit everyone. The Chiangmai Mail salutes “our” Skål team led by national councillor Malai Sakolviphak; president of Bangkok Skål Brian Sinclair-Thompson; president of Skål Pattaya and the East, Murray Hertz; vice-president of Skål Pattaya and the East and GM of the Chiangmai Mail Peter Malhotra, secretary and GM of the Royal Cliff Beach Resort Andrew Wood, and Skål members Bob Lee and Eric Hallin, Phuket. Congratulations on a job well done - and the next item on the agenda is the job coming up for 2006!


TNT launches new express direct China/Europe airfreight service

TNT Express, the world’s leading business-to-business express carrier will provide direct and quicker turnaround deliveries for cargo between Europe and China, and synergizes the two economies via a dedicated, purpose-built freight airport in Liege, Belgium.

The new partnership based upon a code-share agreement between TNT Airways and China Southern Airlines, China’s largest airline, will bring together industry leading, expertise from these major airfreight players and leverage TNT’s comprehensive air and road network in Europe.

Under the strategic alliance, a B747 aircraft under wet-lease from Atlas Air will fly twice weekly form the TNT Express European hub in Liege, Belgium, to Shenzhen and Shanghai. This arrangement ensures quicker turn-around times; faster custom clearances and transfer of goods form the 100-metric ton freighter to TNT’s dedicated European air and road network. Plans are underway to increase the loop service to four rotations a week by 1st quarter 2003.

Christian Drenthen, TNT airways chief Executive Officer, said, “TNT Airways is pleased to announce this new extension to our already unsurpassed air and read network in Europe. We will continue to progressively enhance our service offerings for all our customers, in the areas of speed, flexibility and outreach across the world.” A wet-lease arrangement includes hire of aircraft and crewmembers.

“TNT is especially proud that this new partnership will facilitate our clients’ business growth in the world markets of Europe and China, and particularly now in China, which is indisputably the world’s newest and fastest growing economy. The new enhanced connectivity will further facilitate two-way services and support for our joint European and Chinese customers. And ensure greater control over their shipments within definite and quicker delivery times,” Drenthen added.

Of the new partnership, Wong Chang Shun, President, China Southern Airlines, said, “China Southern is dedicated to achieving close cooperation with our business partners around the world. We are proud to be part of this win-win relationship with the world’s leading carriers. In partnering TNT Airways, we are confident that together, we will provide more superior services to our customers and facilitate grater access to the European markets.”

The partnership will also provide TNT customers with extensive access to China as China Southern operates more than 385 routes and has 5 subsidiary airlines in Hainan, Henan, Hubei, and Shenzhen.

TNT’s extensive air network capabilities, excluding its new link to China, already operates in 55 airports across the UK, Scandinavia, Germany, Eastern Europe, Switzerland, Italy, France, Spain/Portugal, Denmark, Belgium and more. TNT’s extensive European road network connects over 31 countries including Demark Germany, Turkey, Luxembourg and Ireland.



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