The Thai economy is presenting numerous uncharted business opportunities that will further propel growth despite persistent global challenges, said panelists at Thailand Focus 2023, the annual investment conference hosted by the Stock Exchange of Thailand (SET) during August 23-25, 2023.
The conference attracted over 200 global institutional investors from 96 leading institutions as well as representatives from the government sector, money and capital market, and senior executives in the business sector, both domestic and international.
In his welcome address, SET President Pakorn Peetathawatchai invited all participants to explore the “uncharted territories” at the 17th Thailand Focus held under the theme of “The New Horizon” and witnessed the continuous robustness of the Thai economy and capital market which rebounded and even surpassed the pre-COVID era thanks to macroeconomic foundations, advancement in technology and evolution in the financial landscape.
In his opening address, SET Chairman Dr. Prasarn Trairatvorakul said the Thai economy presented numerous advantages including the robust and diversified sectors and new sectors for growth as well as the strong culture and hospitality-driven tourism sector. Reflecting this was the huge value of initial public offerings (IPOs) worth USD 3.5 billion and secondary offerings of USD 3.8 billion in 2022 and more IPOs in the pipeline for 2023 and 2024.
SET supports future growth with continuous infrastructure improvement, with Thai Digital Assets Exchange (TDX) and depositary receipts (DRs) for investment in global trading stocks. As a proof of Thai companies’ sustainability, 26 companies are listed on DJSI and 42 on FTSE4Good indices while SET is launching ESG instruments, the carbon market and ESG rating as profitability is no longer the sole measurement of success.
“The ongoing global shift in supply chains presents certain opportunities. Thailand’s geographical location, infrastructure and expertise in high value sectors place it in a strategic position,” he said.
Session: “Laying the foundations for sustainable recovery”
Bank of Thailand Governor Dr. Sethaput Suthiwartnarueput highlighted the medium-term plans to get Thailand’s economic growth back to its long-term potential (3-4 percent from 2.6 percent in 2022), keep inflation within the target range of 1-3 percent and limit financial imbalances from excessing financial leverage and risk-taking activities that may be caused by the policy rate.
He expressed his concerns about household debt, which is “too high” at 90.6 percent of GDP and should be brought down to 80 percent or lower.
“We are now at a more advanced stage of normalization. As a result, our policy objective has changed – from trying to ensure a smooth take off, now the focus is on getting the landing right,” he said.
Session: “Thai capital market towards the new horizon”
Federation of Thai Capital Market Organizations Chairman Dr. Kobsak Pootrakool expressed his confidence that Thailand’s massive investments in infrastructure, subways, ports, etc. would fuel the economic growth coupled with its position in ASEAN.
He urged the government come up with four sets of policies concerning: technology that supports Thailand’s soft power; building new industries on top of present strengths like medical tourism, logistics and digital animation; supports to Thai companies’ regionalization; and refocusing infrastructure investments to particular areas like the eastern and western coasts.
JP Morgan Asset Management Portfolio Manager Chate Benchavitvilai compared Thailand to an ageing athlete that still can remain competitive if knowing how and where to compete and how to enhance the value of its strengths, which are mostly concerning the service sector like medical tourism.
Likewise, concerning Thai listed companies, investors still see selective, not broad-based, opportunity sets. In radar are companies that focus on right investment choices, maximize returns and have the right mindset on resource allocation, he said, adding that corporate governance is as important as profitability and business duration when the companies communicate with stakeholders. CG – fairness, transparency and accountability – is more important than ever as more Thai companies investing abroad and it could result in better resource allocation.
“This is not just about calling for better rules and regulations… but I believe it’s the responsibility of collective stakeholders to create the culture where we ask the right questions, to be more demanding than other stakeholders to propel the opportunities,” he said.
Governance-wise, Kiatnakin Phatra Securities pcl President Supachoke Supabundit said that both preventive measures and deterrence should be applied to wrongdoing handling.
“On the preventive side, we can’t overreact because all preventive measures have costs,” he said, adding that Thailand then needs to deter the wrongdoings with effective, quick and severe punishment. The legal process should be quickened and punishment should be more severe. He cited KKP Research when saying that convicted of insider trading, a man receives up to 20 years in imprisonment term in the US against up to two years in Thailand.
Session: “The next s-curve of Thai tourism
Airports of Thailand pcl (AOT) Executive Vice President Latchida Apaphant called for the government supports in expanding main gateways and provincial airports as well as rail/road connectivity so as to promote travel in main and second-tier cities. Government supports are also needed in expanding bilateral flight quotas with countries like India and Saudi Arabia as well as data analytics to assist planning. AOT’s six airports accommodated more than 143 million visitors in 2019 and expected the numbers to surpass the pre-COVID era in 2024.
BDMS Wellness Clinic Chief Executive Officer Dr.Tanupol Virunhagarun was confident that Thailand would benefit from the booming in global wellness economy following the rapid rise in non-communicable diseases, with various selling points like nature, food, hospitality and medical infrastructure. When the global wellness economy hit USD 4.9 trillion in 2019 (expecting to hit USD 6.9 trillion in 2025), Thailand received 7.3 million inbound wellness trips and average expenditure of USD15,054 in 2019. With wellness clinics at 50 hospitals, BDMS Wellness Clinic is on its path to be a jigsaw in stimulating Thailand’s medical tourism.
Designed Areas for Sustainable Tourism Administration (DASTA) Director-General Dr. Chuwit Mitrchob said Thailand puts globally recognized sustainability standards like the UN’s Sustainable Development Goals and the Global Sustainable Tourism Council (GSTC) Criteria the top priority, as the country targets 30 million inbound visitors and 200 million domestic trips in 2023, in line with global travellers’ willingness to pay more for sustainable options. Thailand’s Sustainable Tourism Management Standard, Sustainable Tourism Goals and zero carbon application are in place to ensure the sustainability of enlisted properties.
Electric vehicle (EV) industries were highlighted as another promising industry for Thailand, the largest auto exporter in ASEAN and the 15th in the world.
Session: “Benefits from supply chain relocation and renewed investments: EV industries”
Thailand Board of Investment (BOI) Secretary General Narit Therdsteerasukdi revealed that the first half of this year, 891 applications for investment promotion worth USD 10.72 billion* were submitted to the BOI, an 18 percent increase from the same period last year thanks to relocation in light of geopolitical risks. While big names like Pringles and Agoda are among the newcomers, of total, 80 projects worth USD 577.32 million* belonged to the auto industry.
In the EV area, winning approvals in the past three years included the projects of automakers like MG, Great Wall Motor and BYD and 13 battery-manufacturing projects.
He foresees a very bright outlook for EV given the initiatives to introduce the complete ecosystem for all types of EVs from parts, components, batteries and charging stations to swapping stations as well as subsidies for domestic sales which has boosted the number of registered EVs to more than 70,000 as of June.
“Thailand is the right place for EV in the next decade,” he said.
Pratarnporn Phornprapha, Vice Chief Executive Officer, Rever Automotive Co., Ltd. – the sole distributor of BYD in Thailand, said her company sold 22,000 EVs in 2022 and expected to close 2023 with a 400 percent-plus increase as global EV market will grow 30 percent to 14 million units. She attributed the brisk sales to government subsidies, consumers’ commitment to help fight climate change in light of natural disasters globally as well as persistently high oil prices.
Session: “The potential of Thailand’s thriving soft power”
Narun Wiwattanakrai, Chief Marketing Officer, Siam Wellness Group pcl that has operated a spa business for 25 years, stressed the importance of unique concepts, deeper customer experience and varieties of services to stay appealing to both local and foreign customers. At present, foreign customers contribute 60 percent of the company’s revenue and the group eyes expansion through joint ventures and partnerships. At the end, Narun wished Thai massage, listed as one of the Intangible Cultural Heritage of Humanity by UNESCO, live up to its standards and become more famous globally.
S&P Syndicate pcl Chief Executive Officer Vitoon Sila-On attributed S&P’s 5-decade-long successful story to authentic ingredients and readiness to adjust operations to suit customer preferences. Wherever it goes, menus are designed accordingly to customer research and adjustments are considered after opening based on customer feedback. Looking forward, Thailand’s food industry could benefit from improvements in ecosystem that encompass standards and a chef academy.
Global Sport Ventures Chief Executive Officer and Co-founder Thainchai Pisitwuttinan charted an aggressive plan to make Rajadamnern Stadium the global Muay Thai hub. The stadium business consisting of ticketing, food & beverages and merchandising now earns 80 percent of revenue from foreigners, to whom Muay Thai’s core identity and the stadium’s architecture appeal. Growth is expected once the museum and training academy is added on along with minor changes – including easier-to-understand rules and open scoring system – that will make Rajadamnern a world-class stadium where people come and learn about the globally-renowned sport.
Session: “World class practices in sustainability”
Thai Union Group pcl (TU), SCG Group and PTT Global Chemical pcl (PTTGC) showcased their sustainability initiatives that will not only help the environment but also ensure sustainable growth for the companies.
TU Chief Sustainability Officer Adam Brennan revealed SeaChange 2030 Strategy that binds the USD 200 million investment over an eight-year period to “bring unified solutions for people and the planet”. The strategy is shaped around the group’s commitments towards net zero emissions by 2050, reduction in ocean plastics, ecosystem restoration and responsible wild caught seafood. That demands engagement through NGOs with all vessels in the supply chain, outsiders and global universities.
At SCG Group, ESG4Plus is the mantra, to achieve net zero emissions, green products/production process, reduced inequality and collaboration, and eventually trust through transparency in all operations. According to SCG Group Chief Sustainability Officer Chana Poomee, the transition can be faster with the introduction of low-carbon technology and improvement in ESG standards.
SCG Group has joined a public-private sandbox project in Saraburi province where initiatives are tested to improve cross-ministerial cooperation and prepare Thailand for the developed nations’ green funding pool.
PTTGC Executive Vice President – Sustainability Dr. Chaya Chandavasu said ESG, integrated into the company’s operations for 10 years, and climate change have been the company’s emphasis. Though being in the manufacturing industry, PTTGC sets to achieve net zero emissions by 2050 and short-term, medium-term and long-term processes have been set. Investors can lend supports through financial products for ESG investment that help companies smoothen the transition and engagement with ecosystem improvement.
“Hydrocarbons will stay for a long time but we have to find ways to reduce emissions.” Due to carbon offsetting, PTTGC eyes the adoption of carbon capture, storage and utilization, he said.
Note *average USD/THB at 33.95 for the first half of 2023 compiled by the Bank of Thailand
Writer: The Stock Exchange of Thailand
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