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Banks face risk of rising household debt

Rising household debt is a threat to banks' asset quality, particularly if economic conditions worsen, according to Fitch Ratings.

Higher household leverage, as well as expectations of an economic downturn, underpin Fitch's negative outlook for the banking industry. Fitch forecasts economic growth of only 2.5 per cent this year.

However, banks remain reasonably positioned to weather the challenges of a more difficult operating environment, as long as the downturn is not prolonged or more severe than expected.

Household debt-to-GDP rose to 82.3 per cent at end-2013 from 77.3 per cent at end-2012, according to data published by the central bank on March 31.

The pace has slowed, with household debt rising by only 11.4 per cent last year.

The pace would slow further this year because of the expiry of the car buyers' tax break, slower economic growth and a more cautious lending environment. The car-tax incentive programme expired at end-2012, but deliveries and related lending continued well into 2013.



Standard & Poor affirms stable outlook for Thai Oil

Standard & Poor's Ratings Services has affirmed its "BBB" long-term corporate credit rating on Thai Oil. The outlook is stable.

It also affirmed its "BBB" long-term issue rating on the company's senior unsecured notes and its "axA" long-term Asean regional scale rating on Thai Oil.

"We affirmed the ratings because we believe Thai Oil benefits from its 'highly strategic' position within the PTT group and from the likelihood of extraordinary government support for the entire group in times of potential distress," credit analyst Yuehao Wu said.

"We believe the government is likely to extend indirect support via PTT to the group members. The PTT group has a strong domestic position in the oil and gas business and a high degree of integration."



Magnolia signs JV deal with Chinese real-estate giant

Magnolia Quality Development Corporation has signed a ground-breaking joint-venture agreement with Greenland Group, a corporation ranked among China's five largest real-estate developers, and Charoen Pokphand Group, a leading Thai conglomerate.

CEO Tipaporn Chearavanont said yesterday that the JV aims to have its first project in Thailand during the first half of this year, which will result in new investment.

Greenland Group was established in 1992 as one of the largest state-owned enterprises in Shanghai and the leading turnkey property developer in China.



JSP Property plans IPO to raise funds for 3 projects

JSP Property, a commercial low-rise and residential property developer, plans to raise capital by issuing 1.2 billion shares at Bt0.50 per share.

Nomura Pattanasin Securities and AEC Securities are the financial advisers for the initial public offering, Nimitr Wongsejirakul, executive director of Nomura Pattansasin, said yesterday.

The company is working on three projects valued at more than Bt15 billion - the Bt7.5-billion Sampeng 2 project on Sathorn-Kanlapaphruek Road, the Bt5.5-billion The Miami residential project in Samut Prakan's Ban Poo area near the sea and the Bt1.8-billion Tulip Square, a European-style project comprising a condominium, low-rise commercial buildings and community mall in the Om-Noi area.


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