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Thailand’s Economy is on Fire, But is it too Hot to Handle?

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Young middle-class shoppers fill the malls in downtown Bangkok

 

BANGKOK – As well as dousing each other liberally with water during the recent Songkran festival to mark the country’s traditional New Year’s Day holiday, Thais will have spent freely on parties and celebrations, on making merit, on travel and on consumer and luxury goods

Young middle-class shoppers fill the malls in downtown Bangkok, while on the streets outside, the government is building infrastructure to beat the city’s traffic problem, made worse by a rash of new cars on the roads as people take advantage of a tax rebate. Other measures that are giving a boost to domestic consumption include income tax cuts and a rise in the minimum wage.Demand from India and China is boosting the export market, while the property sector and the commodities market is healthy. Its outperforming stock market is wooing investors from all over the world.

The World Bank forecasts the Thai economy will grow 5.3 per cent this year, up from its 5 per cent prediction in December, while next year GDP growth is expected at 5 per cent, compared to an earlier forecast of 4.5 per cent, the lender said in a report this month.

The baht has risen around 4 per cent against the dollar this year and is at levels not seen since the Asian financial crisis in 1997.

As political problems ease, Thailand is emerging as the darling of global investors right now.

“Thailand is on fire in the short term,” said Paul Krake of View from the Peak. “There is excess capacity there but you don’t have real bad loan problems. Personal debt is growing but it’s not really a problem.”

The prime Minister Yingluck Shinawatra’s cabinet last month approved a plan to borrow 2 trillion baht (Dh250 billion) for long-term infrastructure projects after the floods which devastated the country in 2011.

Luxmon Attapich, the senior country economist for Thailand at the Asian Development Bank, said that of the government’s infrastructure budget, between 30bn and 40bn baht would be disbursed by the government next year.

Water management spending is a big part of the efforts to ensure there is adequate infrastructure in place in case of future flooding.

Some 80 billion baht would be spent next year on the water-management project, following the 35bn-40bn baht invested in the project this year, Ms Luxmon said.

She listed the key challenges facing the country as off-budget borrowing by the government, high public debt, how to increase revenue collection, and governance, but she said there were no critical signs of a bubble developing in the Thai economy.

The Thai stock exchange has risen 48 per cent in the past 14 months, but it has shown signs of slowing. And while the property price index is on the rise, it is not on a sharp upwards curve, she said, while calling for vigilance.

This month, the Economic and Business Forecast Centre of the University of the Thai Chamber of Commerce (UTCC) unveiled a decidedly upbeat outlook for the Thai economy.

A UTCC poll showed that Thai consumer confidence last month hit its highest point since the army coup in 2006, and it expects the economy to grow by not less than 5 per cent this year.

“The continued rise in consumer confidence will ensure the country’s strong economic expansion this year because consumption will be a major factor driving economic growth,” Thanavath Phonvichai, the director of the UTCC’s Economic and Forecasting Centre, said in an interview.

The Consumer Confidence Index was at 84.8 points, up from 84 in the previous month, and it has risen continuously for six consecutive months.

“Domestic consumption should grow by 4-5 per cent this year, while tourism expansion will also help to spur the domestic economy throughout the year.”

As well as the borrowing bill to finance infrastructure projects, consumer confidence was boosted by a recent spike in Thailand’s SET Index, the stronger baht and decreasing domestic oil prices.

Low interest rates and easy monetary policies in the United States, the European Union and Japan have prompted a massive outflow of capital into emerging markets, and foreigners are rushing to buy into Thai funds.

The emerging-markets investor Mark Mobius has more than a quarter of his US$18bn Templeton Asian Growth fund, the biggest in the region, invested in Thailand.

The influx of capital has boosted property and stock prices, prompting fears of an asset bubble that could burst once the funds are withdrawn.

Commenting on risks to the broader South-east Asian region, Bert Hofman, the World Bank’s chief regional economist, said: “Continued demand-boosting measures may now be counterproductive as it could add to inflationary pressure … a strong rebound in capital inflows to the region induced by protracted rounds of quantitative easing in the US, EU and Japan, may amplify credit and asset price risks.”

Critics say the stimulus measures have stoked spending and contributed to rising household debt. The Bank of Thailand said it will monitor “persistently high” credit growth. About 1.25 million Thais have taken up the car-buying incentive the government introduced to boost domestic consumption after the 2011 floods, helping to drive local car sales to a record last year.

Average Thai household debt rose from 82,485 baht per household in 2002 to 134,900 baht in 2011, according to the National Statistics Office.

“Is the baht too strong? Yes. Are the banks too expensive? Yes. But these are not really a problem. As much as we macro bears like to say these are a problem, these are not. Thailand is a bit of a darling. On the whole it’s in great shape,” said Mr Krake.

The World Bank believes the main challenge next year for Thailand’s growth continues to be the high uncertainty in the global economic prospects, particularly related to the euro-zone crisis.

Asked about how potential political issues could become a problem, Mr Krake said: “Until a problem becomes a crisis, they just stay problems. Economic factors take over.”

As the water pistols spray and talc-infused water arcs through the air, the forecasts are for spending during Songkran to increase 10.42 per cent, highlighting the real economic benefits of the feel-good factor. – Clifford Coonan

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PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

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(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

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Old National Bank And Infosys Broaden Their Strategic Partnership.

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Old National Bank And Infosys Broaden Their Strategic Partnership.

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Infosys

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

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American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

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Qantas Airways Apologizes After R-Rated Film Reportedly Airs On Every Screen During Flight

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American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

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water

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

water

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP

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