Business

US Election’s Impact on Global Markets and Thai Economy: ASPS Insights

Published

2 months ago

November 4, 2024

The upcoming US election is more than just a political event; it’s shaping up to be a significant driver of global market volatility. Asia Plus Securities (ASPS) anticipates substantial shifts, warning investors to consider stocks with low volatility and strong third-quarter earnings. Here’s a deep dive into ASPS’s market outlook and what it means for both global and Thai investors.

US Election Impact on Global Markets and Thai Stocks: Key ASPS Insights

The US election is likely to create ripples in global markets, and ASPS is on high alert. Investors may need to adopt cautious strategies amid political shifts, potential interest rate changes, and the geopolitical factors influencing global stocks.

ASPS Highlights the Volatile Outlook for Global Markets

Political tensions are ramping up in the US as election day approaches, and ASPS suggests the event may impact markets worldwide. The brokerage firm advises investors to tread carefully, especially in stocks likely to experience heightened sensitivity to market fluctuations.

US Federal Reserve’s Rate Policy: A Key Factor

The Federal Reserve’s stance on interest rates is another crucial element ASPS recommends monitoring. While the Fed hints at delaying rate cuts, this move could trigger global bond yields to rise. As global economies grapple with inflation and political tensions, these decisions are likely to drive investor strategies.

Geopolitical Concerns Influence Investment Choices

ASPS warns of possible geopolitical risks that could further unsettle global markets. Given these potential risks, the brokerage firm recommends sticking to stable stocks with strong third-quarter performances, as these are likely to fare better amid uncertainties.

The Ripple Effect: How Thai Markets and Economy Could React

In Thailand, local market movements may be influenced by both US election outcomes and domestic economic developments. ASPS points out that while the Thai economy is not growing at a rapid pace, upcoming government budgets and economic plans could provide a much-needed boost.

Thai Fiscal Policies Aiming for Economic Revival

The Thai government’s budget for 2024 and 2025 is designed to stimulate growth, focusing on public spending and private sector investment. ASPS is optimistic that these measures could foster an increase in household consumption and fuel economic recovery despite lingering concerns over high debt levels and credit rating risks.

Political Uncertainty Adds Pressure on SET Index

Thailand’s political landscape may further impact the Stock Exchange of Thailand (SET) index. Political controversies, such as potential changes within the Pheu Thai Party, could delay investor confidence, especially from foreign investors, who might be hesitant to dive into the Thai stock market amid political instability.

ASPS’s Profit Forecast for Thai Companies: A Cautionary Note

ASPS has sounded the alarm on expected profit declines among Thai-listed companies for the third quarter of 2024. Recent Bloomberg Consensus data indicates a collective earnings decline for about 75% of the Thai market cap. This dip could influence investor strategies in the coming months.

Declining Corporate Profits Signal a Slowdown

For Q3, the profits of 132 listed companies are expected to fall between 220-230 billion baht. This marks an 11% decline from the previous quarter and a year-on-year decrease of 14.5%. ASPS suggests this may be a temporary setback, but it’s a trend investors should keep in mind when assessing the Thai stock market’s growth potential.

SET Index Projections for 2024 and 2025

Despite the temporary profit decline, ASPS has set optimistic SET index targets of 1,510 points for 2024 and 1,633 points for 2025, forecasting an improvement in earnings per share (EPS) for Thai companies. This projection could signal a positive outlook if government policies and fiscal plans align to support economic growth.

Key Takeaways from ASPS’s Market Outlook

The US election and local political scenarios in Thailand are significant factors for investors in the months ahead. ASPS’s forecast emphasizes caution, particularly when it comes to navigating the risks posed by interest rate policies, geopolitical tensions, and fluctuating corporate earnings.

Investment Strategies for 2024 and Beyond

Focus on Low-Volatility Stocks: To mitigate risk, investors may want to consider stable stocks that are less likely to be impacted by political and economic fluctuations.
Monitor Interest Rate Policies: Changes in the Federal Reserve’s policy could have lasting impacts, especially for sectors sensitive to interest rate shifts.
Assess Domestic Fiscal Measures: Keep an eye on the Thai government’s economic stimulus efforts, which could create opportunities for growth within local markets.

Conclusion – Navigating Market Volatility in 2024 with ASPS Insights

As the world awaits the outcome of the US election, ASPS highlights the need for prudence and careful stock selection. By keeping a close eye on interest rates, geopolitical factors, and domestic economic policies, investors can better prepare for potential market shifts. In an environment fraught with volatility, ASPS’s insights offer a roadmap for staying resilient and making informed investment decisions.

Ref-Thaiger

Business

Thailand Commits to Becoming an AI Learning Hub

Published

3 weeks ago

December 5, 2024

Wadi

Ministers Announce Plans for AI Governance Collaboration

Thailand is dedicated to advancing global trust in artificial intelligence (AI) governance and establishing itself as a learning hub for AI through collaboration with UNESCO, according to Prasert Jantararuangthong, the Minister of Digital Economy and Society (DES). This initiative aims to enhance the ethical application of AI technologies while fostering skilled professionals in the field.

Goals for AI Workforce Development

The Ministry of Higher Education, Science, Research and Innovation (MHESI) has set ambitious goals to increase the number of AI-skilled workers by adding 30,000 engineers over the next three years. This plan includes generating 100 AI innovations valued at 40 billion baht and promoting AI adoption across 600 agencies nationwide.

Significant Increase in AI Adoption Rates

According to the AI Readiness Measurement 2024 report by the Electronic Transactions Development Agency and the National Science and Technology Development Agency, AI adoption plans among Thai organizations have reached 73.3%, reflecting an increase of nearly 20 percentage points year-on-year. This surge indicates a growing recognition of the importance of AI in various sectors.

Hosting the UNESCO Global Forum on AI Ethics

On Wednesday, the DES Ministry, MHESI, the Education Ministry, and UNESCO announced their partnership to host the 3rd UNESCO Global Forum on the Ethics of AI 2025, themed “Ethical Governance of AI in Motion.” This event is scheduled to take place from June 24 to 27, 2025, in Bangkok and will serve as a platform for knowledge exchange and collaboration on AI governance.

Commitment to Ethical AI Implementation

Prasert emphasized that Thailand’s commitment aligns with UNESCO’s AI Readiness Assessment framework, which is recognized globally. The country has recently introduced key frameworks such as the AI Governance Guideline for Executives and the Generative AI Governance Guideline for Organizations. These resources aim to ensure responsible and transparent implementation of AI at all organizational levels.

Multilateral Collaboration for Developing Countries

The upcoming forum is expected to foster multilateral collaboration and build AI governance capacity in developing countries. It highlights Thailand’s dedication to global trust in AI governance while positioning itself as a leader in ethical AI practices.

Integration of AI Technologies Across Industries

Suphachai Jaismut, vice-minister for MHESI, stated that Thailand is prepared to integrate AI technologies across various industries, driven by a commitment to advancing research and development (R&D). This integration is crucial as Southeast Asia’s digital economy continues to grow rapidly.

Addressing Challenges in the Digital Economy

While advancements in AI infrastructure are promising, challenges such as the digital divide and job displacement due to automation remain significant concerns. Xing Qu, deputy director-general for UNESCO, emphasized that building peace through education, science, and culture is vital in an era where AI increasingly influences societies and economies.

Business

Thailand to Finalise Free Trade Agreement with EFTA by January 2024

Published

4 weeks ago

December 1, 2024

Ashley Wings

Thailand is preparing to finalise a landmark Free Trade Agreement (FTA) with the European Free Trade Association (EFTA) by January 2024. The agreement marks Thailand’s first FTA with a European trade bloc and is expected to bolster exports, attract investments, and enhance Thailand’s position in the global economy.

EFTA Partnership: A Milestone in Thailand’s Trade Strategy

Who Are EFTA Members?

The EFTA comprises Switzerland, Norway, Iceland, and Liechtenstein, offering Thailand access to lucrative European markets.

Commerce Minister Pichai Naripthaphan highlighted the FTA’s importance, describing it as a pivotal step for economic growth and trade expansion.

“This is Thailand’s inaugural FTA with a European bloc, setting a precedent for modern trade standards and sustainable development goals,” said Pichai.

Comprehensive Scope of the Agreement

What Does the FTA Cover?

The FTA includes 15 broad areas designed to modernise trade relations and foster sustainable development. Key areas include:

Trade in Goods
Rules of Origin
Investment Opportunities
Trade Facilitation
Intellectual Property Rights
Sustainability and SMEs Development

Future Expansion Opportunities

The FTA is seen as a stepping stone toward future trade agreements with other significant partners, including the European Union, advancing Thailand’s global trade ambitions.

Economic Impact of the Thailand-EFTA Trade Partnership

Surging Trade Figures

Between January and October 2023, trade between Thailand and the EFTA exceeded US$10 billion, accounting for 2.03% of Thailand’s global trade and reflecting a 23.22% year-on-year growth.

Key Thai Exports and Imports

Exports to EFTA: Jewellery, watches, canned seafood, machinery, cosmetics, and rice.
Imports from EFTA: Gems, gold, pharmaceuticals, scientific equipment, and fresh seafood.

The agreement is expected to further diversify and increase Thailand’s trade portfolio.

Next Steps: Approval and Implementation

High-Level Signing at WEF Davos

The FTA will be presented to the Thai Cabinet for approval before its official signing at the World Economic Forum (WEF) in Davos, Switzerland, in January 2024. Prime Minister Paetongtarn Shinawatra and Commerce Minister Pichai will attend the signing ceremony.

Ratification and Rollout

Following Parliamentary approval, the agreement will be ratified, paving the way for implementation and significant contributions to Thailand’s GDP growth.

A Strategic Vision for Thailand’s Future

The Thailand-EFTA Free Trade Agreement aligns with Prime Minister Paetongtarn Shinawatra’s vision of positioning Thailand as a global trade hub. By establishing this partnership, Thailand is set to achieve:

Increased export opportunities
Enhanced foreign investment
Strengthened trade ties with Europe

As the January deadline approaches, Thailand’s first European trade agreement symbolizes a bold step toward economic transformation, underscoring its commitment to modernisation, sustainability, and global collaboration.

Business

Thai Airways Secures 44 Billion Baht to Propel Post-Rehabilitation Future

Published

4 weeks ago

December 1, 2024

Ashley Wings

Thai Airways International (THAI) has secured approximately 44 billion baht through a share rights offering, marking a significant milestone in its recovery journey. The move is set to bring the national carrier closer to exiting its court-supervised debt restructuring process and resuming stock trading by mid-2025.

Thai Airways is offering 9.82 billion new shares to existing shareholders at 4.48 baht per share. This capital infusion represents the final phase of its restructuring, aimed at ensuring financial stability and market re-entry.

“This marks a critical step before the airline resumes operations as a publicly traded entity,” said a Cabinet source.

Government’s Role: Strategic Investment Without State Enterprise Status

Maintaining a National Flag Carrier

The Thai government has announced plans to increase its investment in Thai Airways while ensuring it does not revert to a state enterprise.

Current Stake: The Finance Ministry holds 47.9% of THAI shares.
Post-Restructuring: The ministry, the Vayupak Fund, and the Government Savings Bank will collectively own around 40% of the airline.

“This structure ensures Thai Airways remains a national flag carrier while avoiding direct state control,” confirmed Finance Minister Pichai Chunhavajira.

Debt Conversion and Shareholder Dynamics

Debt-to-Equity Swap Secures Creditor Support

Thai Airways’ creditors have agreed to convert approximately 53 billion baht of debt into equity as part of the rehabilitation plan. This move aligns with THAI’s efforts to stabilize its financial position.

The Council of State approved the recapitalization as a legitimate component of the restructuring process.
Despite debates over the Finance Ministry’s voting rights during the creditor meetings, officials clarified that the debt-to-equity swap remains incomplete, allowing the ministry to retain creditor status.

Path to Recovery

THAI is expected to exit rehabilitation by February 2025.
The airline plans to resume stock trading by May 2025, paving the way for a return to the public market.

Broader Implications for Thai Airways

Strengthened Financial Position

The successful share rights offering bolsters Thai Airways’ financial resilience, ensuring the airline’s ability to navigate post-rehabilitation challenges.

National Pride and Strategic Vision

The government’s balanced approach highlights its commitment to preserving Thai Airways’ status as a national carrier while encouraging operational independence.

Soaring Toward a Brighter Future

Thai Airways’ 44 billion baht share rights offering symbolizes its steady progress toward financial recovery and operational excellence. With strong government support and strategic restructuring, the airline is poised to regain its position as a leading player in the global aviation market by 2025. This pivotal moment underscores THAI’s resilience and its importance to Thailand’s economic and cultural identity.