The Bank of Thailand believes a downgrade by Japan’s leading rating agency will not have much impact on the money market, given investors’ expectations, while economists expressed concern that other credit rating agencies might follow, which could raise borrowing costs.
Japan Credit Rating Agency recently changed its outlook on Thailand to “negative” from “stable”.
BOT spokeswoman Roong Mallikamas said JCR’s outlook downgrade did not surprise money market, as reflected by the continuing stability of the baht.
Economists said agreed that the downgrade did not surprise the markets as Thailand has been facing prolonged political unrest with weakening economic fundamentals. They also kept a watch on whether others would follow the downgrade on Thailand in the next month or two.
Benjarong Suwankiri, head of TMB Analytics at TMB Bank, said that if there were a credit downgrade on Thailand, the impact on the private sector would be limited to only large enterprises that borrowed overseas.
Teerada Charnyingyong of Phillip Securities said JCR’s downgrade might not have as big an impact as such moves by other credit-rating agencies, while foreign direct investment, particularly from Japan, might slow down or shift elsewhere. However, existing investment is expected to stay in Thailand, given the readiness of its infrastructure.
Govt to sell rice next week
The Commerce Ministry will next week release about 800,000 tonnes of rice to the market via general bidding and the futures market.
On Wednesday, the ministry will sell 200,000 tonnes via the Agricultural Futures Exchange of Thailand, and 169,000 tonnes through regional bidding in Suphan Buri on the same day.
On Thursday, the Foreign Trade Department will release 424,000 tonnes of rice through general bidding.
State spending exceeds target
State expenditures during the first six months of fiscal year 2014 exceeded target by 3.24 per cent. This was due to accelerated spending of more than Bt100 billion by the Department of Local Administration and measures to expedite the flow of funds into the system, according to the Comptroller-General Department director-general Manus Jamveha.
He added that the disbursements of state funds for the first six months of fiscal 2014 amounted to Bt1.24 trillion, or 49.24 per cent of the total Bt2.52 trillion. Regular disbursements accounted for 52.1 per cent, investment-related spending was Bt150 billion, or 35.24 per cent of the total Bt400-billion investment budget for the year, which is 0.24 per cent higher than the projected 35-per-cent quarterly revenue target.
Total state expenditures in the first six months of this fiscal year, which began in October 2013, exceeded the target by 3.24 per cent.
According to Manus, disbursements of the fiscal 2015 budget should be delayed by about six months. Disbursements of the fiscal 2014 budget can proceed, however, 70 per cent of which is for routine spending.
SEC forum urges preparedness
The Securities and Exchange Commission wants the private sector to tie sustainability to its businesses and prepare for mounting technology risks.
SEC secretary-general Vorapol Socatiyanurak said the commission hosted “Modern Business, Attentive and Ready for Any Situation” – the first SEC for CEOs Forum – to strengthen cooperation and exchange experience and insights between top executives of listed companies and the SEC.
The forum focused on corporate responsibility to society and the environment along with corporate governance and anti-corruption measures.
A member of the Thailand Information Security Association Committee shared with the participants the need to raise awareness to be properly prepared for technology risks.