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Thai government preparing to subsidize retail oil prices

Foreign fund managers invited to meet with local firms

BOT to revise economic growth estimate if government cuts VAT

Thai government preparing to subsidize retail oil prices

The Thai government announced on Monday February 3 that it is preparing to commit several billion baht (tens of millions of dollars) to a fund that would subsidize retail oil prices in order to alleviate the impact of higher global oil prices resulting from fears of a U.S.-led war on Iraq.

Prime Minister Thaksin Shinawatra said after an urgent meeting on the subject that the fund would be set up in coming days.

Last week his Cabinet had decided to defer a proposed 1.3 billion baht (US$30 million) package to subsidize oil prices for farmers, fishermen and transport operators in the event of a prolonged war in Iraq.

Energy Minister Pongthep Thepkanchana told reporters after Monday’s meeting that the situation had now changed as oil prices had continued to rise in the past few days.

Pongthep said there was now more information pointing at the likeliness of a crisis in the Middle East.

Pongthep added he was still working on the details of the new subsidy plan before its submission to the Cabinet, and that the source of funds to be used had yet to be detailed.


Foreign fund managers invited to meet with local firms

Kittirat Na Ranong, Stock Exchange of Thailand (SET) president said it has plans to invite foreign fund managers to meet and talk with executives of local companies following the impressive success of its road shows in the United Kingdom and the United States. As a result, the fund managers would be invited to meet with listed firms’ executives in 60 days after every quarter ended as it was a period when performance results were reported.

He said SET planned road shows in Asian countries in the first half of this year and European countries in the second half.

Most foreign investors asked about good governance of listed companies during the road shows in the UK and US. They also wanted SET to give information on the matter in a regular basis.

Foreign investors said they wanted individual investors to hold larger stakes so they could have a role in supervising the companies’ performance. They also want major shareholders to distribute more shares. (TNA)


BOT to revise economic growth estimate if government cuts VAT

Bank of Thailand’s Governor M.R. Pridiyathorn Devakula has conceded the bank might need to revise its economic growth estimate this year if the government decided to cut the value-added tax (VAT).

He said the bank forecast that this year’s economy would grow 3.5-4.5% on the assumption that VAT stood at 7% at present.

The projection was made without an expectation that the government would adjust the tax rate. So, should the rate be adjusted, the economic growth estimate must be revised.

The BOT chief said the government’s decision to cut VAT would help boost people’s spending significantly, which could contribute to the further growth of the country’s economy.

On the progress in the early debt repayment with the International Monetary Fund, M.R. Pridiyathorn said the schedule remained intact as the first of the four installments would be repaid on February 14.

He reiterated the early debt repayment had already factored in the possible impact from a war in the Middle East. (TNA)