Navigating Thailand Towards the New Horizon

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Numerous unprecedented business opportunities are emerging within the Thai economy that will further propel growth, persistent global challenges notwithstanding, 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 government, financial and capital markets, and senior business executives, both domestic and international.

The welcome address by SET President Pakorn Peetathawatchai

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 witness the continuing robustness of the Thai economy and capital market, which has rebounded and surpassed the pre-COVID era, thanks to strong macroeconomic foundations, advancements in technology, and evolutions in the financial landscape. 

The opening address by SET Chairman Dr. Prasarn Trairatvorakul

In his opening address, SET Chairman Dr. Prasarn Trairatvorakul said the Thai economy presents numerous advantages including the robust and diversified existing sectors and new sectors for growth, as well as a strong culture and hospitality-driven tourism sector. This is reflected in the huge value of initial public offerings (IPOs) worth US$3.5 billion and secondary offerings worth US$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. To demonstrate Thai companies’ efforts on sustainability, 26 companies are listed on the Dow Jones Sustainability (DJSI) and 42 on FTSE4Good indices, while SET itself 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.

The keynote address "Laying the foundations for sustainable recovery" session by Bank of Thailand Governor Dr. Sethaput Suthiwartnarueput

In the session titled “Laying the foundations for sustainable recovery,”

Bank of Thailand Governor Dr. Sethaput Suthiwartnarueput highlighted 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 to lessen the chance of high debt and risk-taking activities that may be caused by the policy rate rise. 

He expressed 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.

The "Thai capital market towards the new horizon" session

In the following session, on “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, amongst others, would fuel economic growth, coupled with its standing in ASEAN. 

He urged the Government to come up with four sets of policies concerning: technology that supports Thailand’s ‘Soft Power’; building new industries on top of present strengths such as medical tourism, logistics, and digital animation; support for Thai companies’ expansion into the wider region; and refocusing infrastructure investments to particular areas such as the coastal areas, both eastern and western.

JP Morgan Asset Management Portfolio Manager Chate Benchavitvilai compared Thailand to an aging athlete that still can remain competitive if she knows how and where to compete and how to enhance the value of her strengths, which are focused on the services sector, such as medical tourism.

Likewise, concerning Thai listed companies, investors still see selective, not broad-based, opportunity sets. On the radar are companies that focus on sound investment choices, maximize returns, and prudent resource allocation, he said, adding that corporate governance (CG) is as important as profitability and business longevity when the companies interact with stakeholders. CG – fairness, transparency, and accountability – is more important than ever as more Thai companies invest abroad and seek to better allocate resources.

“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 in order to capitalise on opportunities,” he said. 

On governance, Kiatnakin Phatra Securities PCL President Supachoke Supabundit said that both preventive and deterrent measures should be applied when handling wrongdoing.“On the preventive side, we cannot overreact because all preventive measures have costs,” he said, adding that Thailand needs to deter prohibited acts with effective, quick, and severe repercussions. The legal process should be expedited and punishment should be more severe. He cited KKP Research which compared that a person convicted of insider trading in the United States could receive up to 20 years’ imprisonment, whereas in Thailand, the sentence would be a maximum of two years.

"The next s-curve of Thai tourism" session

During the session on “The next S-curve of Thai tourism,”

Airports of Thailand PCL (AOT) Executive Vice President Latchida Apaphant called for the Thai government to support expanding the main gateways and provincial airports as well as rail and road connectivity so as to promote travel in main and second-tier cities. Government support is also needed in expanding bilateral flight quotas with countries such as India and Saudi Arabia as well as data analytics to assist with planning. The 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 expressed confidence that Thailand would benefit from the boom in the 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 US$4.9 trillion in 2019 (expecting to hit US$6.9 trillion in 2025), Thailand received 7.3 million inbound wellness trips and expenditure averaged US$15,054 in 2019. With wellness clinics at 50 hospitals, BDMS Wellness Clinic is on its path to being a jigsaw piece in stimulating Thailand’s medical tourism.

Designated Areas for Sustainable Tourism Administration (DASTA) Deputy Director-General Dr. Chuwit Mitrchob said Thailand places globally recognized sustainability standards like the UN’s Sustainable Development Goals and the Global Sustainable Tourism Council (GSTC) Criteria as top priorities, 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 also in place to ensure the sustainability of listed tourist attractions. 

During the Session, Electric Vehicle (EV) industries were also highlighted as another promising industry for Thailand, the largest auto exporter in ASEAN, and the 15th in the world. 

The "Benefits from supply chain relocation and renewed investments: EV industries" session

At the session titled “Benefits from supply chain relocation and renewed investments: EV industries,”

Thailand Board of Investment (BOI) Secretary-General Narit Therdsteerasukdi revealed that in the first half of this year, 891 applications for investment promotion worth US$10.72 billion* were submitted to the BOI, an 18 percent increase from the same period last year, thanks to relocations in light of geopolitical risks. While big names including Pringles and Agoda are among the newcomers, in total, 80 projects worth US$577.32 million* belonged to the auto industry. 

In the EV arena, investors granted approvals in the past three years included the projects of automakers MG, Great Wall Motor, and BYD,and 13 battery-manufacturing projects.

He foresees a 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 2023.

“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.

"The potential of Thailand's thriving soft power" session

In the following session: “The potential of Thailand’s thriving Soft Power,”

Narun Wiwattanakrai, Chief Marketing Officer, Siam Wellness Group PCL a company which has operated the spa business for 25 years, stressed the importance of unique concepts, deeper customer experiences, and varieties of services to remain appealing to both local and foreign customers. At present, foreign customers contribute toward 60 percent of the company’s revenue, and the group eyes further expansion through joint ventures and partnerships. At the end, Narun expressed his wish that Thai massage, listed as one of the Intangible Cultural Heritage of Humanity by UNESCO, lives up to its standards and become more famous globally. 

S&P Syndicate PCL Chief Executive Officer Vitoon Sila-On attributed S&P’s five-decade-long success story to authentic ingredients and readiness to adjust operations to suit customer preferences. Wherever it goes, menus are designed according to customer research, and adjustments are considered based on customer feedback. Looking forward, Thailand’s food industry could benefit from improvements in the ecosystem that encompasses standards, and an academy for training chefs.

Global Sport Ventures Chief Executive Officer and Co-founder Thainchai Pisitwuttinan charted an active 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, drawn to the Stadium by Muay Thai’s core identity and its architectural appeal. Growth is expected once the museum and training academy are completed, along with minor changes — including easier-to-understand rules and an open scoring system — that will make Rajadamnern a world-class stadium where people can come and learn about the globally-renowned sport.

The "World class practices in sustainability" session

For the final session, on “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 their companies. 

TU Chief Sustainability Officer Adam Brennan described the SeaChange 2030 Strategy that binds the US$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 commitment 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 and production processes, reduced inequality, 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 green funding pool offered by developed-country partners. 

PTTGC Executive Vice President – Sustainability Dr. Chaya Chandavasu said ESG has been integrated into the company’s operations for 10 years, and climate change has been the company’s emphasis. PTTGC has set out to achieve net zero emissions by 2050, and short-term, medium-term, and long-term processes have been laid out. Investors can lend support through financial products for ESG investment that help companies achieve smooth transitions and engagement with ecosystem improvements.

“Hydrocarbons will stay for a long time, but we have to find ways to reduce emissions.” Due to carbon offsetting, PTTGC is eyeing 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.

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