All posts tagged business

Krungsri Bank to leverage synergies in second half to continue growth

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

Krungsri Bank to leverage synergies in second half to continue growth

Sep 20. 2019
By The Nation

1,148 Viewed

Krungsri (Bank of Ayudhya PCL) on Thursday (September 19) said its commercial banking business strategy in the second half of 2019 includes synergising Krungsri’s local strength with Mitsubishi UFJ Financial Group (MUFG)’s global network to provide superior financial services that serve the different needs of corporate customers and small- and medium-sized enterprises (SMEs).

Krungsri also aims to become a trusted banking partner, as it builds non- interest income and fee income through solutions that help enhance business efficiency.

Pornsanong Tuchinda, Krungsri’s chief of commercial banking, said in the first half of 2019, Krungsri’s commercial banking group achieved growth target, while non-interest income rose beyond target.

Despite uncertainty in global trade and economics, Krungsri customers have been highly adaptive to changes in business environment, he said, adding that the commercial banking group emphasises on adjusting balanced portfolio to enhance quality management and strengthen overall operations. With ongoing volatility of economic conditions, Krungsri is strongly committed to supporting business customers consistently and sustainably, he said. It also continues to focus on the remarkable strength of synergies between Krungsri’s local expertise and MUFG’s global network, enabling us to provide differentiated financial services and introduce new risk management products that help mitigate currency and interest-rate risk, he added.

The bank also provides advice, knowledge sharing and networking activities through Krungsri Business Empowerment, designed to help our corporate and SME customers extend business potential and create strength in the long run. “We have also developed several digital platforms to offer more convenient and cheaper services to help our customers enter the digital economy era,” he said.

Metinee Jongsaliswang, Krungsri’s head of corporate banking group, said: “Krungsri gives priority to customer-centricity strategy and upgrades our services to become a thought partner, as well as provides comprehensive financial solutions via digital platforms to serve every aspect of customers’ needs. The strategies helped the performance of Krungsri’s corporate banking to exceed target in the first half, with total revenue increasing 6 per cent from the same period a year earlier, supported by an increase in fee income, such as derivative fees, investment banking fees, and those from domestic trade transaction.

“The growth helped boost the proportion of non-interest income to 25 per cent of total revenue from 18 per cent a year earlier. Through the collaboration with MUFG, Krungsri has enhanced capabilities to facilitate offshore business expansion, business matching and joint venture for corporate customers, which resulted in the strong growth of Krungsri’s corporate banking.”

Sayam Prasitsirigul, Krungsri head of SME banking group, said: “Krungsri’s SME banking group posted strong growth that exceeded our target. In the first half of 2019, loans for SMEs grew 8 per cent from the end of 2018, mainly due to outstanding performance of supply chain business, while deposits also posted robust growth of 8 per cent.

“Another strong area was fee income from trade finance, which rose 8 per cent from the same period a year earlier, as a result of the collaboration with MUFG. Fee income from cash management increased 26 per cent from a year earlier. On the asset quality, Krungsri SME has managed assets efficiently, with non-performing loan for the SME segment at 3.4 per cent in the first half of 2019, less than 3.8 per cent at the end of 2018 and lower than the industry average,” he added.


Nestle opens institute to solve plastic problem

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

Nestle opens institute to solve plastic problem

Sep 19. 2019

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Nestle officially inaugurated its Institute of Packaging Sciences in Lausanne, Switzerland on Thursday (September 19).

This first-of-its-kind facility will help the multinational giant to bring functional, safe and environmentally friendly packaging solutions to the market and to address the global challenge of plastic packaging waste.

Mark Schneider, Nestle’s CEO, said: “Our vision is a world in which none of our packaging ends up in a landfill or as litter. To achieve this, we will introduce reusable packaging solutions and pioneer environmentally friendly packaging materials. Furthermore, we support the development of local recycling infrastructure and deposit schemes to help shape a waste-free world. The Nestle Institute of Packaging Sciences enables us to create a strong line of sustainable packaging solutions for Nestle products.”

The Institute of Packaging Sciences focuses on a number of science and technology areas, such as refillable or reusable packaging, simplified packaging materials, recycled packaging materials, high-performance barrier papers as well as bio-based, compostable and biodegradable materials.

Stefan Palzer, Nestle CTO said: “Reducing plastic waste and mitigating climate change effects through cutting-edge technology and product design are a priority for us. Nestle experts are co-developing and testing new environmentally friendly packaging materials and systems together with our development centres, suppliers, research institutions and start-ups. Located at our Nestle Research facilities in Lausanne, the institute also leverages our existing research capabilities in food safety, analytics and food science.”

Sander Defruyt from the Ellen MacArthur Foundation said: “Nestle was one of the first companies to sign the New Plastics Economy Global Commitment, setting concrete targets to eliminate plastic waste and pollution at the source. It is great to see the world’s largest consumer goods company now increasing its research focus and capacity to deliver on these ambitions.”

Nestle is already making progress towards its 2025 packaging commitments and has launched novel packaging solutions. For example, Nestle packaging experts and suppliers developed products in recyclable paper packaging such as the Nesquik All Natural cocoa powder and the YES! snack bars in under 12 months.

JKN looks to export local content throughout Asia

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

JKN looks to export local content throughout Asia

Sep 19. 2019
By The Nation

637 Viewed

Thailand’s content management and distribution company JKN Global Media will export more local content to international markets as part of its strategy to become the leading content provider in Asean, chief executive officer Jakkaphong Jakrajutathip said.

The company has already brought Channel 3 soap opera content to some countries in Asean as well as to South Korea. It is expected to soon close a deal with a Japanese partner to promote the soap opera on digital TV channels in Japan.

Because Thai content is seeing increased popularity, Jakkaphong said this is the time for the company to boost its overseas revenue. Its entry to the Korean market will pave way for the company to jump into other regional markets.

JKN has also continued to bring more foreign content to Thailand’s digital TV channels, as well as joining with local and foreign partners to produce a variety of content including documentaries and for TV.

Next year it will focus on broadcasting its content on an online platform.

The company is expected to generate revenue of Bt1.6 billion this year, up 15 per cent year on year. The company achieved revenue of Bt870 million in the first half of this year with a net profit of Bt150 million.

JD Central marks first year’s success with shopping fest

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

JD Central marks first year’s success with shopping fest

Sep 19. 2019

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JD Central, an eCommerce technologies and online retail business, is celebrating its first anniversary of operations in the country with the launch of “B1RTHDAY JOY SHOPPING FEST” campaign, offering special deals to customers for their continuing support.

The company set out to build a strong and efficient e-commerce infrastructure through its online shopping platform for the trust of consumers.

Rvisra Chirathivat, Chief Marketing Officer said “JD Central has realised its plan and expectations after the official launch on September 28, 2018. Today, we have achieved more than four million downloads with a 35-fold increase in orders, 2,000 registered official stores, and a 100 million platform visitors within just a year. These impressive records reflected the success of  our customer-centric strategy, offering quality products with 100 per cent authenticity and fast delivery. JD Central also solves online customer pain points by delivering products within 24 hours nationwide. It is even faster in Bangkok where customers may receive online orders  in a couple of hours.  We also use data analysis technologies to create marketing strategies for direct communication to consumers.

“In addition, JD Central gives priority to the rights of online consumers. Recently, we signed an MoU with the Foundation For Consumers (FFC) and other related government parties to underscore our responsibilities to our clients. We would like to express our gratitude to customers, brands and partners for their support and collaboration throughout the first year of our operations. We believe it will continue well into the future,” Rvisra said.

In the first year,  JD Central focused on building a strong e-commerce infrastructure through collaboration with government agencies, aiming to boost Thai SMEs’ competency in cross border trade, e-logistics integration and development, backed by technologies including online consumers’ right protections.

Meanwhile, Rvisra said, the company had teamed up with various brand partners for  “O2O strategy”,  which has been implemented within the Central Group as well as other services, such as banks, restaurants, telecommunications and applications. It not only provides customers with more channels for shopping and product selection, but also expands our service to meet their demands for easy access to products and services.

One of key factors of our success is the “JD Thailand Official Flagship Store”, formed  under a partnership between JD Central and in China, which has widened the opportunities  for cross-border selling by Thai entrepreneurs, Rvisra added.

U City building major international school next to Thana City

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

U City building major international school next to Thana City

Sep 19. 2019
Cameron Fox, the Founding Head of VERSO International School

Cameron Fox, the Founding Head of VERSO International School

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U City Plc, an affiliate of BTS Group Holdings Plc, and Fortune Hand Ventures Ltd of Hong Kong have announced a Bt5-billion investment in Verso International School, whose state-of-the-art campus will occupy a vast property next to the Thana City estate in eastern Bangkok and which is set to open in August 2020.

The school will have capacity for 1,800 students from pre-nursery to Grade 12.

“It is my long-term goal to create something that will benefit future generations, not only to add value to our business,” said Keeree Kanjanapas, chairman of BTS Group Holdings and U City.

“I have always aimed to invest in human resources, and eventually found the right partner, Fortune Hand Ventures, to build an international school that truly provides an innovative and highly progressive educational experience in Bangkok.

“At the same time, we are transforming one of the company’s assets next to our Thana City estate on Bangna-Trat Road into a value-accretive property for the future. Located on 168 rai, this is set to become the largest international school in the Bangkok metropolitan area. It will be approximately 60 per cent green space to provide students with comfort, emotional safety, and intellectual and artistic inspiration.”

Keeree Kanjanapas, chairman of the board of directors of BTS Group Holdings Plc and U City Plc

Fortune Hand Ventures’ participation represents the largest single foreign investment in international schooling in Thailand.

With experience in education dating back over half a century, Fortune Hand Ventures will directly operate the school under the stewardship of founding headmaster Cameron Fox.

The starting point for the project, said Fox, was a simple question: How can we design a new international school that will truly prepare its students for a world that is changing faster than at any other time in human history?

He invited the global design and innovation firm Ideo to help imagine what such a school of the future could and should be.

“Working closely with Ideo’s San Francisco studio, a highly talented team used a human-centred design approach to create Verso’s dynamic and compelling vision for the future,” Fox said. “The opportunity to design and build a school of this magnitude from scratch represents a unique opportunity for the Verso team to positively impact the future of school designs on a global scale.

“We have re-engineered a comprehensive set of American educational standards to form the foundation for Verso’s own ‘Future-Ready’ curriculum. Learning will be interdisciplinary, project-based, and skills-focused.”

Cameron Fox

Verso comes at an opportune moment in the wake of structural shifts in the global economy towards Asia and Thailand’s ongoing efforts to digitise its economy. Leading organisations and companies are seeking a new generation of leaders and innovators who have the skills and mindset needed to respond quickly to change while positively impacting the world around them.

Thailand’s Eastern Economic Corridor, which is projected to attract up to 100,000 people to the region annually, is increasing the need for international schools in the eastern part of Bangkok. This reality has influenced U City’s decision to transform its property into an innovative international school that will cater to this anticipated economic growth.

According to the International Schools Association in Thailand, the Kingdom is Southeast Asia’s fastest-growing international school market, with double-digit growth for the past eight years.

Piyaporn Phanachet, chief executive of U City, said the school will be just four kilometres from Suvarnabhumi Airport and close to future Light Rail Transit on the Bangna-Suvarnabhumi line.

Thana City and the surrounding area are poised to become a top-class community ecosystem with an extensive range of amenities within easy reach. This will include condominiums and homes and shopping and lifestyle destinations such as Mega Bangna, Central Village, Thana City’s world-class golf course, restaurants and the newly opened Eastin Thana City Golf Resort.

Piyaporn Phanachet, Chief Executive Officer of U City Plc


Banpu beefs up Energy Technology Group backed by ‘Greener & Smarter’ technology

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

Banpu beefs up Energy Technology Group backed by ‘Greener & Smarter’ technology

Sep 19. 2019

669 Viewed

Banpu Public Company Limited has reinforced the team of top executives handling its Energy Technology Business Group.

James Rama Phataminviphas serves as chief executive officer and Kanokwan Jitchobtham as managing director of Banpu Infinergy Co Ltd, along with Chanit Suwanparin as managing director of Banpu Electric Vehicle Business.

The firm said it was gearing up the business group “towards innovation and technological development with a ‘Greener & Smarter’” and an international business model that “builds on smart city solutions”.

“To achieve sustainable growth, Banpu consistently ensures that we stay abreast of abrupt changes in technology and consumer demands in the digital era,” said CEO Somruedee Chaimongkol. “While the energy trend is today shifting towards decarbonised, decentralised and digitalised power generation, Banpu has introduced the ‘Greener & Smarter’ strategy across our three core business groups – Energy Resources, Energy Generation and Energy Technology – to bring about synergised effects of this implementation.

“We are continuingly engaged in energy technology research and development alongside constant development of our people, business operations and management. Most recently, we have strengthened our high-level management team with appointment of business executives who are well-versed in technology and have insightful understanding of consumer behaviour and needs.”

James is responsible for business planning and strategies as well as overall management of the Energy Technology Business Group. Under his guidance, the group will ensure its alignment with the Greener & Smarter strategy and become more competitive with expanded capability to offer a more comprehensive array of products, services and solutions.

James has more than 24 years of multi-industry experience that spanned banking, finance and telecommunication. He is an executive keen on technology-driven business transformation to achieve greater efficiency and competitiveness.

In the banking sector, he was most recently country head of Channels and Digitalisation at United Overseas Bank (Thai), with more than 1,500 people under his leadership. He also has extensive work experience in overseas telecommunication markets including the US and China.

Kanokwan continues as managing director of Banpu Infinergy, a one-stop provider of total solar energy and smart city services. Her key responsibilities include company management, business development and pursuit of new opportunities to strengthen the group’s business portfolio.

Kanokwan spent more than nine years working in Banpu’s legal department, where she was engaged in contract management and project M&A in many countries where Banpu invested. She was also part of the management team steering its major restructuring and she was one of the founding members of Banpu Infinergy, giving her a deep understanding of the various business units.

She stays alert for growth opportunities and partnerships that will further strengthen the business ecosystem, such as investment in Sunseap Group, Durapower Technology (Singapore) and Fomm Corp.

Chanit will lead the EV business unit with a “mobility as a service” concept, which is focused on offering end-to-end electric vehicle and mobility services by combining hardware and software technologies to address current urban needs.

He will also explore opportunities to extend the group’s capability and competitiveness in terms of technology and integrated solutions as well as delivery of all-encompassing services to customers.

Chanit has more than 30 years of management experience in key roles at many leading companies. He is recognised for his ingenuity and product development acumen, which often use innovation to add values to products and increase overall competitiveness.

Prior to joining Banpu, he was managing director at TAC Consumer, where he was part of the executive team that successfully listed it on the Market for Alternative Investment. Career highlights include key positions at Green Spot (Vitamilk), Cerebos (Thailand) and Unilever Holdings (Thailand), as well as at the Marketing Association of Thailand.

“We are confident that the strengthened team will contribute significantly to extend BANPU as a leading supplier of integrated energy solutions with service that are always abreast of consumer behaviour and global energy trends,” said Somruedee.

Orange Line completion first of dozen delayed projects scrutinised

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

Orange Line completion first of dozen delayed projects scrutinised

Sep 20. 2019


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The Transport Ministry will on Friday (September 20) present the council of economic ministers with details on completing the western section of Bangkok’s Orange Line mass transit route.

The details cover civil works and the installation of an electrical system on the Min Buri-Bang Khun Non section. The project will cost Bt120 billion.

The western segment runs between the Thailand Cultural Centre and Bang Khun Non.

The Mass Rapid Transit Authority of Thailand project would be developed on a public-private partnership (PPP) basis.

Transport Minister Saksayam Chidchob said the project, if approved, would be forwarded to the Cabinet soon.

There are 11 mass transit projects in the ministry’s 2018 Action Plan awaiting Cabinet approval:

• Civil works on the southern extension of the MRT Purple Line between Tao Poon and Rat Burana (worth Bt77 billion)

• Phase 3 of the Laem Chabang Deep Sea Port (Bt84 billion)

• Maintenance-repair-and-overhaul facilities for U-tapao International Airport (Bt10 billion)

• Double rail tracks for Jira-Ubon Rachathani (Bt37 billion)

• Double rail tracks for Khon Kaen-Nong Khai (Bt26 billion)

• Double rail tracks for Hat Yai-Padang Besar (Bt8.1 billion)

• Double rail tracks for Pak Nam Po-Denchai (Bt62 billion)

• Double rail tracks for Chumpon-Surat Thani (Bt24 billion)

• Double rail tracks for Surat Thani-Hat Yai-Songkhla (Bt57 billion)

• Double rail tracks for Denchai-Chiang Mai (Bt59 billion)

• Procurement of new aircraft for Thai Airways International (Bt150 billion).

Deputy Prime Minister Somkid Jatusripitak said the economic ministers want to speed development of the delayed mass transit projects.

He said measures to boost exports and tourism would also be presented to the council in the next two weeks.

No decision yet on LNG import plan

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

No decision yet on LNG import plan

Sep 20. 2019
File  photo credit: Petronas : Petronas LNG facilities

File photo credit: Petronas : Petronas LNG facilities
By The Nation

1,198 Viewed

Energy Minister Sontirat Sontijirawong said on Thursday that the ministry has yet to decide on the plan to import 1.5 million tonnes of liquefied natural gas (LNG) annually from Malaysia’s Petronas LNG.

He was responding to a report which suggested that the ministry had cancelled an auction organised by the Electricity Generating Authority of Thailand(Egat) for the imports of LNG for eight consecutive years, estimated to worth more than Bt 100 billion. Egat uses LNG as input for electricity production.

“Egat is still negotiating with Petronas, we have not reached a conclusion,” he said.

Should Egat and Petronas agree on the deal, it still have to be forwarded for consideration by the Energy Policy Administrative Committee(EPAC), Sontirat said.

The Energy Ministry wanted Egat to buy LNG on the spot market, starting with small amounts and not exceeding 90,000-180,000 tonnes per purchase.

Large amounts of import will lead to higher costs for storage and electricity production and could have an impact on consumers.

Another issue involves the advance payment condition, which may increase the financial burden on Egat. Sontirat said the ministry will appoint Kulit Sombatsiri, within September 24, the new chairman of Egat in replacement of the previous chairman who had resigned. Kulit, currently Energy Ministry’s permanent secretary, is expected to solve many issues as the next chairman of Egat.

Beyond Beauty Asean returns to Impact for 6th edition

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

Beyond Beauty Asean returns to Impact for 6th edition

Sep 19. 2019

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Her Royal Highness Princess Chulabhorn Krom Phra Srisavangavadhana graciously appointed Surapit Kirtiputra, Vice President for International Affairs of the Chulabhorn Research Institute, as her representative in presiding over the opening ceremony of “Beyond Beauty Asean-Bangkok 2019”, being held at the Impact Exhibition and Convention Centre from September 19 (today) to September 21.

The opening ceremony saw the attendance of  Suphan Mongkolsuthree,  chairman of the event;  Kriengkrai Thiennukul, vice chairman; Ketmanee Lertkitcha, deputy secretary-general of The Federation of Thai Industries and president of the Thai Cosmetic Manufacturers Association, and Vichaya Soonthornsaratoon,  vice president and  administrator of Thailand Convention & Exhibition Bureau (TCEB).

After five consecutive years of success, the sixth edition of Beyond Beauty Asean Bangkok (BBAB), the number one trade show in the Asean beauty market, has returned to the Impact Exhibition and Convention Centre.  Organised by Informa Markets and Impact, in cooperation with The Federation of Thai Industries, the event provides local and international players in the industry the opportunities for business connections and  market expansion.

BBAB 2019  showcases the latest beauty innovations and products from around 600 exhibitors and is expected to attract more than 16,000 visitors. It features two main zones: the BBAB Finished Products zone, presenting a variety of finished beauty and cosmetic products and the BBAB Supply Chain zone, which is designed especially for OEM / ODM businesses and their clients.  In addition , there is “Beauty Made in Thailand”, a special zone for Thai beauty and cosmetic brands.

“The healthcare and beauty sectors in Thailand have experienced  continuous growth. In 2018, the country’s beauty and personal care market topped US$6.2 billion in value. The industry grew by 7 per cent annually over the last six years, and ranked 1st among the largest export income earners in Asean,” said Suphan Mongkolsuthree, Chairman of the Federation of Thai Industries (FTI).

“By representing the industrial sector, FTI is working closely with the government  to promote the development of technologies and innovations that benefit the industry. This is a strategic approach to empower large, medium and small industrial entrepreneurs and enable them to keep pace with changes in the behaviours of health- and beauty-conscious consumers and the entry into an aging society”.

“Beyond Beauty Asean Bangkok 2019″, he said,  is expected to provide entrepreneurs with access to the latest health and beauty trends, and a venue for exchange of experience and points of view on further business development. The event’s special zone, Beauty Made in Thailand, gathers all locally manufactured products relevant to health and beauty. It helps Thai entrepreneurs to capitalise on technologies and innovations to penetrate new markets and create new opportunities for further expansion in the global business network. It’s also certain that by participating in this event, Thai entrepreneurs will be  equipped with the  ability to address new challenges arising from fiercer competition in the industry. They will be well-prepared to grow in a stable and sustainable way. This is in line with the government’s policy of transforming Thailand into a regional medical hub where all related products and services are smartly integrated.”

Vichaya Soonthornsaratoon, vice president and administrator of Thailand Convention & Exhibition Bureau (TCEB), said the agency’s sixth commitment to BBAB reflects Thailand’s goal of becoming the gateway to Southeast Asian beauty and cosmetics markets as the country is recognised as a centre of international trade fairs in the region.

TCEB  recently announced a surge of 206.65 per cent last year from 2017 in the number of  MICE travellers from CLMV market to Thailand. Aside from creating business opportunities for the beauty and health industry in Thailand, TCEB also hopes BBAB 2019 will lead to continuous  growth of the international exhibition industry in Thailand, and to support Thailand as a base for  international businesses seeking to penetrate the markets of  neighbouring countries, and Asean.

This year, TCEB has set a growth target of 30 – 40 per cent in CLMV travellers. TCEB has organised overseas roadshows and campaigns to draw foreign  exhibitors and visitors to international exhibitions in Thailand.

Claudia Bonfiglioli,  general manager/Beauty Global of Informa Markets stated: “Beauty markets in Southeast Asia have great potentials and that’s why international brands are quite active here. We hope Beyond Beauty Asean Bangkok can build a bridge between Thailand and other countries to create a marketplace that generate business opportunities”.

Loy Joon How, general manager, Impact Exhibition Management Co Ltd said “Thai entrepreneurs who are interested in the beauty business or in overseas expansion are given the opportunity to share their visions with both local and international visitors. We are confident that BBAB 2019 will be well received by the beauty and cosmetics community, and as a platform for enabling the exchange of ideas and knowledge, to further strengthen the industry in our region”.

Global volatility squeezes growth of Thai household financial assets

Published September 20, 2019 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

Global volatility squeezes growth of Thai household financial assets

Sep 19. 2019
By The Nation

589 Viewed

The gross financial assets of Thai households rose by a meagre 0.8 per cent in 2018, one of the weakest increases since the financial crisis in 2008, according to the 10th edition of Allianz’s Global Wealth Report.


In the previous two years, growth rates of around 9 per cent were achieved, which puts the asset and debt situation of households in more than 50 countries/regions under the microscope, financial assets in 2018 across industrial and emerging countries/regions declined simultaneously for the first time, the report said.

Savers worldwide have found themselves in a bind, due to the escalating trade conflict between the US and China, Brexit and increasing geopolitical tensions, the tightening of monetary conditions and the normalisation of monetary policy.

The stock markets reacted accordingly, with global equity prices falling by around 12 per cent in 2018, which had a direct impact on asset growth. Global gross financial assets of private households fell by 0.1 per cent and remained more or less flat at 172.5 trillion euros, according to the report.

“The increasing uncertainty takes its toll,” said Michael Heise, chief economist of Allianz Group. “The dismantling of the rule-based global economic order is poisonous for wealth accumulation. The numbers for asset growth also make it evident: Trade is a no-zero-sum game. Either all are on the winning side – as in the past – or all are on the losing side – as happened last year. Aggressive protectionism knows no winners.”

The dismal performance was mainly due to a sharp drop in securities, by 6.6 per cent. Insurance and pensions, too, posted rather disappointing growth: They advance by just 3.2 per cent in 2018, the weakest increase in the last two decades. Bank deposits, on the other hand, increased by a more robust 4.8 per cent, clocking the highest growth in the last five years. Growth in liabilities accelerated to 6 per cent – the strongest increase since 2014. Thus, the debt ratio of households has crept up to 78.4 per cent, well above the regional average of 52.4 per cent (Asia ex-Japan), the report said.

The gross financial assets of Asian households declined by 0.9 per cent in 2018, marking the first decline since the 2008 financial crisis. The decline was triggered by a sharp fall in securities, mainly equities and investment funds, by 14 per cent. Bank deposits, on the other hand, and insurance and pensions were growing healthily by 8.7 per cent and 8.2 per cent, respectively.

When analysing portfolio structures, one trend becomes obvious: As Asian financial markets have become more sophisticated, the share of assets held in simple bank deposits has dropped significantly. It stood at 46.4 per cent at the end of 2018, 16 percentage points below the level at the beginning of the century, the report said. Correspondingly, the share of securities rose from around 20 per cent to 36.2 per cent, as more and more households invest their savings in capital markets. The share of insurance and pensions, however, was a mere 16 per cent, ie, half the global level.

“It is a paradox savings behaviour,” said Michaela Grimm, Allianz Group senior economist and co-author of the report. “Asian countries/regions age rapidly and many people save more because public pension schemes in many of these countries/regions are still in their infancy or provide only a basic pension in old age. But they seem not to embrace those products that offer the most effective old-age protection, namely life insurance and annuities. Both governments and the industry should step up their efforts further to offer attractive solutions in this field. This also holds true for initiatives to improve financial literacy and accessibility.”

Worldwide household liabilities rose by 5.7 per cent in 2018, a tad below the previous year’s level of 6 per cent, but also well above the long-term average annual growth rate of 3.6 per cent. The global debt ratio (liabilities as a percentage of GDP), however, remained stable at 65.1 per cent, thanks to still robust economic growth. Most regions saw a similar development in that respect. But Asia (excluding Japan) is a different story. True, debt growth slowed down in 2018, to 13.8 per cent (2017: 15.7 per cent). But in the last three years alone, the debt ratio jumped by almost ten percentage points to 52.4 per cent, driven mainly by China where it increased by a whopping 15 percentage points to 54.0 per cent, the report said.

“Debt dynamics in Asia and particularly in China are of concern,” said Patricia Pelayo Romero, Allianz Group economist and co-author of the report. “Chinese households are already relatively as indebted as, say, German or Italian ones. The last time we had to witness such a rapid increase in private indebtedness was in the US, Spain and Ireland shortly before the financial crisis. However, compared to most industrialised countries/regions, debt levels in China are still markedly lower. There is still time to cope with the development and avoid a debt crisis,” according to the Allianz Global Wealth Report

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