High-growth Asian nations need private-sector support
Governments in high-growth Asian countries may face difficulties in maintaining growth and funding for all their infrastructure needs, according Standard & Poor’s Ratings Services.
Governments will need the private sector to channel funds into some projects, or face the prospect of a slowdown in investments that will constrain economic growth, S&P said in a recent report on “Why Global Investors Aren’t Making Inroads Into Infrastructure Funding In Asia”.
Many offshore investors expect higher returns from Asian infrastructure investments to reflect the greater risk. However, they are competing with liquid local banks that can charge lower costs and lend on weaker credit standards.
“As a result, there’s little incentive for governments to structure projects that international investors would consider investable,” Ian Greer, an S&P credit analyst, said yesterday.
S&P questions the ability of domestic banks to keep pace with the demand for infrastructure in Asia. However, attracting foreign investment will necessitate risk-adjusted returns.
Economic and sovereign risks can vary enormously among Asian countries and potential lenders may conclude the risk-rewards aren’t high enough. Reducing risks will require the greater development of a credit culture and supportive framework.
Best Western in deal with Germany’s rail operator
Best Western International has started 2014 on the right track, following the signing of a partnership agreement with Germany’s national rail operator, Deutsche Bahn.
Providing just the ticket for regular travellers, members of Deutsche Bahn’s “bahn.bonus” customer loyalty programme can now earn points while staying at any of Best Western’s 4,000+ hotels and resorts across the world, which include more than 200 properties in Asia.
Bahn.bonus members will be awarded 250 points for every qualifying stay at a Best Western hotel anywhere around the world. Customers do not need to be members of the Best Western Rewards programme to qualify.
Authorities linked to risk of trust-product default
The move this week to avoid default by a trust product managed by China Credit Trust comes as a relief to local investors and market participants, but it also represents a potentially missed opportunity to limit moral hazard, according to Fitch Ratings.
The size of the exposure – around US$500 million – is not the main issue. Rather, the significance of this event is in understanding the credit implications of why the authorities may have encouraged the outcome – to protect investors at this point – and the moral hazards created by it.
“This episode has in our view highlighted risks to which Fitch has been drawing the market’s attention for some time.
“The large state banks are, however, better positioned to absorb these risks thanks to their traditional funding franchise strength.
“But the China Trust case does reveal that they are not immune to the risk, as the product was reportedly sold through ICBC’s branch network.”
SET plans roadshows upcountry to bolster investments
The Stock Exchange of Thailand plans to hold roadshows in the provinces after the proportion of retail investors dropped from an average of 57 per cent of the total last year to 45 per cent.
SET deputy managing director Kessara Manchusri said that at present 10 per cent of retail investors were from the provinces, but the bourse aimed to jack that up to 25 per cent within two years. To that end, the SET will mount roadshows upcountry to promote investment in the market this year.
This is part of the exchange’s bid to increase the number of investors from 974,891 accounts in 2013 to 1.1 million this year, she said.
SEC imposes suspension
The Securities and Exchange Commission has imposed a three-month suspension of approval on Pannasorn Thanapermpoonwattana of Maybank Kim Eng Securities (Thailand), Nakhon Ratchasima branch. But taking into account that she has already been suspended by her employer for three months, the suspension imposed by the SEC is deemed to have been served.
The action follows a report from Maybank Kim Eng Securities (Thailand) that Pannasorn had been authorised by two clients to make securities-trading decisions on their behalf.
Before this matter was reported to the company, Pannasorn had told her branch manager that she had obtained such authorisation and decided to trade by the instruction of clients’ appointee or by her own deliberation.
For a long period, she continually made trading decisions on the clients’ behalf at a high trading volume and value. Later, the clients demanded that she compensate them for losses incurred from the trading.
Pannasorn admitted to trading in this manner in an explanation to the SEC.
In performing their duties, investment consultants can send trading orders only after obtaining instructions from their clients. They are not allowed to make securities-trading decisions on behalf of their clients, regardless of a client’s permission or authorisation.
The SEC suspended approval to Pannasorn as a capital-market investment consultant for three months, according to sanction guidelines.
EcoSport built in Rayong
Ford Motor Co has started production of its EcoSport “urban sport-utility vehicle” at the Ford Thailand Manufacturing plant in Rayong.
The Thai-built models will be for domestic sale and export to markets across the Asean region. The EcoSport will eventually be sold in 100 markets worldwide.
“The all-new EcoSport continues our ongoing product-led transformation by providing customers with another segment-leading vehicle to our growing Ford showroom across our Asean markets,” said Matt Bradley, president of Ford Asean.
“Produced at our highly flexible Ford Thailand Manufacturing facility, it is the next proof point in our continued growth strategy in the region,” he added.
TripAdvisor via TAT website
Visitors planning a trip to Thailand can now access the full content of TripAdvisor via the official Tourism Authority of Thailand website www.tourismthailand.org.
The partnership agreement will allow visitors to enhance the quality of their Thai travel experience by getting a comprehensive set of event listings, information on places of interest, and ratings and reviews, TAT governor Thawatchai Arunyik said.