Business

Thailand’s Credit Rating Takes Beating over Countries Political Deadlock

Both groups were responsible for violent street protests in recent years. And as Yingluck well knows, a future round of violence could trigger yet another military coup.

BANGKOK – Ask Thai government officials and they will fume that it is just unfair. How can Thailand be denied an “A” sovereign credit rating when other countries with poorer macroeconomic numbers already have that coveted assessment?

Securing a high credit rating helps a country access cheap funding on international bond markets. And for the Thais, the obvious comparison is with Malaysia.

All three major rating agencies — Standard & Poor’s, Moody’s and Fitch — give Malaysia an “A” grade. Those same agencies put Thailand at the upper end of the “B” category, meaning that while Thai bonds are still rated investment grade, they are not regarded as being of the same quality as Malaysia’s.

Thailand remains bitterly divided between yellow- and red-shirt protesters, together with their respective allies.

The macroeconomic numbers, however, suggest otherwise. Thailand’s public debt stands at around 44 percent of gross domestic product, significantly lower than Malaysia’s 53.7 percent. And while both countries have fiscal deficits, Malaysia’s is proportionately higher (4.5 percent of GDP last year) compared to that of Thailand (3 percent). Both countries also hold international reserves equal to more than nine months of retained imports.

The reality, however, is that such numbers are not the only factors rating agencies look at when making their assessments. Also considered is the impact of more subjective political variables. While Malaysia certainly has its problems, the political impasse in Thailand seems far riskier.

Thailand’s recent political history, involving military coups, constitutional change and deadly street clashes, cannot be ignored. Malaysia’s political difficulties will be dealt with at the ballot box in a couple of months; Thailand’s could easily be settled at the point of a gun.

Despite the comfortable parliamentary majority that Thai Prime Minister Yingluck Shinawatra’s Pheu Thai Party secured in the 2011 elections, government economic planners are far more easily sidetracked by urgent, short-term political considerations than in most other countries. Frequent changes of government have not helped either.

Education reform, which could help promote the country’s long-term economic prospects, is already being neglected.

Thailand remains bitterly divided between yellow- and red-shirt protesters, together with their respective allies. A loose grouping of middle-class professionals and royalists, yellow-shirt protesters supported the 2006 military coup that ousted Yingluck’s brother, Thaksin Shinawatra.

The red shirts, on the other hand, hotly oppose what they see as attempts by the urban and military elite to monopolize political power. Sympathetic to Thaksin, they include students, left-wing activists, farmers and businessmen.

Both groups were responsible for violent street protests in recent years. And as Yingluck well knows, a future round of violence could trigger yet another military coup.

Murder charges brought against former Prime Minister Abhisit Vejjajiva

In order to maintain strong support among rural voters, her government implemented several populist policies, some of which are contributing to the growing fiscal deficit. According to the World Bank, a controversial rice-buyback scheme alone was responsible for a 115-billion-baht (US$3.86 billion) loss from the 2011-12 bumper harvest.

The government says it is aiming for a balanced budget by 2017. The maximum level of public debt is officially estimated at 49.9 percent of GDP. But critics give much higher debt projections.

“No one in this government is concerned with fiscal discipline,” former finance minister Pridiyathorn Devakula told an economic forum in Bangkok last month.

There is certainly plenty on the political calendar to worry about this year. The International Court of Justice is due to rule later on Bangkok’s acrimonious dispute with Cambodia over the ownership of the Preah Vihear temple. Should Thailand’s claim be rejected, as seems entirely possible, Yingluck could face serious protests from citizens accusing her of not doing enough to defend Thailand’s cultural heritage.

The rising cost of living and lower prices of agricultural produce are also causing concern. Street protests by farmers could, if left unaddressed, seriously undermine the government’s support in rural areas. And this, in turn, could give the government’s opponents outside Parliament the opportunity they are looking for.

But it is the government’s push to amend the present constitution, drafted by a military junta following the 2006 coup, that is potentially far more serious.

The Yingluck government sees it as anti-democratic. Proposed changes include a return to a fully elected Senate, increased provisions for amnesty, and limits on the power of judicial and independent bodies to scrutinize elected politicians.

The yellow shirts are opposed to all of these changes, saying any attempt to amend the Constitution would potentially weaken the monarchy. The government also seems to have little inclination for reconciliation. This can be seen in the crackdown on yellow-shirt protesters in November and the murder charges brought against former Prime Minister Abhisit Vejjajiva in December.

It looks like that rating upgrade will just have to wait.

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