Business

The Economy Can’t Shrug off Thailand’s Political Problems

Thai economy, Thai junta. Thai Army chief General Prayuth Chan-ocha, center, arrives to give a news conference at the Army Club in Bangkok

BANGKOK – It didn’t take long for Thailand’s ruling junta to discover the first lesson of building popular goodwill: when in doubt, spend. The National Council for Peace and Order (NCPO), the ruling junta led by General Prayuth Chan-ocha, has occupied itself in its first month in office airing out government coffers with a high-powered leaf-blower. It paid nearly 92.4 billion baht ($2.8 billion) to rice farmers under a subsidy scheme implemented by the deposed government of Yingluck Shinawatra. It is pondering ambitious transport schemes estimated to cost more than $72 billion.

It has also promised to clear a $21-billion backlog of projects awaiting approval from the Board of Investment (BOI)—of which Mr Prayuth has appointed himself chair. At the BOI’s first post-coup meeting, on June 18th, it approved 18 projects worth $4 billion. And after deposing a government founded on economic populism, the NCPO seems to have decided that sometimes mimicry is the better part of governance: it brokered a deal that brought World Cup matches to free TV channels.

Thais seem to have responded well: a survey taken after the coup showed that a consumer-confidence index had reversed a 13-month decline, rising from 67.8 in April to 70.7 in May. While the stockmarket dropped on May 23rd, the day after the military seized power, it has since marched steadily upward; by July 1st, the SET index was at 1,486, up nearly 17% since the start of the year. Thailand’s currency, the baht, similarly reversed its short post-coup slide.

But all is far from well. In the first quarter of 2014, Thai GDP fell 0.6% from the previous quarter and 2.1% year-on-year. Tourism, which makes up roughly 7% of the economy, has declined markedly: according to STR Global, a data provider, hotel-occupancy rates from January through May were 15% lower than in the same period of 2013. In June the Thai central bank nearly halved its 2014 growth forecast to 1.5%.

Foreign direct investors also seem skittish: in the first five months of 2014, they made applications to the BOI for 334 projects worth 230 billion baht, compared with 526 projects worth 256 billion baht in the first five months of 2013. Japanese investors, usually the biggest category, have proved particularly reluctant, with their applications more than halving in value.

Some of this decline is no doubt cyclical. Thailand’s economy boomed in 2012 and 2013 as the country recovered from the devastating floods of 2011. Easy credit and government schemes to encourage first-time home- and car-buyers led consumers to spend freely. But all that spending has left a nasty hangover in the form of worryingly high levels of household debt. And the decline in FDI represents more than a return to the norm: if the pattern established in the first five months of this year holds it will be well below pre-flood levels.

Thailand’s central bank says the country is probably not heading for recession; activity started to pick up in the second quarter. Sutapa Amornvivat, chief economist for Siam Commercial Bank, said she has started to see signs of modest rises in consumption: small shops ordering more, people eating more meals out and buying more household goods. Tourists will eventually return, as they did after Thailand’s previous coup in 2006 (after the latest putsch, the first places to see the curfew lifted were Koh Samui, Pattaya and Phuket—all tourist destinations).

By tackling FDI applications, the NCPO has signalled that Thailand remains open for business. The country’s manufacturing sector—it is the world’s largest rubber producer and its second-largest producer of hard drives and light pick-up trucks—has weathered years of political upheaval. Thailand still has comparatively good infrastructure and low corporate taxes.

But it also has a workforce that is aging quickly, and growing more expensive: from 2011 to 2013 wages rose by more than 30%. Its unemployment rate is less than 1%—the result of a large agricultural sector and a generous official definition of employment. Even so, in the second half of 2013, more than half of Japanese firms surveyed by JETRO, the Japanese trade-promotion agency, reported labour shortages. The NCPO’s promise to sort out the country’s labour market has so far accomplished little except to send hundreds of thousands of Cambodian workers fleeing for the border.

Small wonder that JETRO has been promoting a “Thailand Plus One” strategy, in which Japanese firms begin transferring more labour-intensive parts of their businesses to countries with cheaper labour and more potential growth. Rajiv Biswas, chief economist for Asia Pacific with IHS, a consultancy, says “that sense of Teflon Thailand is eroding” as other South-East Asian countries grow more attractive to investors and Thailand’s political outlook remains as hazy as the Bangkok skies.

Business

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

(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

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(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

Business

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

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.

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