What's new in business news: October 25, 2013 | Bangkok Post: learning

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What's new in business news: October 25, 2013

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State bank non-performing loans main future risk for economy, sugar prices need to move freely & system to reduce volatility from faster stock trading. 

Tighter rural credit lending and the price pullback of the government’s rice pledging scheme will contribute to lower spending power for rural communities and low-end consumers, says Mr Maguire head of research and strategy at UBS Thailand. PORNPROM SATTRABHAYA

BANKING 

State bank non-performing loans main risk in future 

Bad loans, shouldered by state-owned specialised financial institutions (SFIs) are the key risk for the Thai economy in 2014, says Raymond Maguire, the head of research and strategy at UBS Thailand. Two SFIs have already needed capital bailouts, but they are small and can be managed. Of concern is small and medium-sized enterprises and SFIs, as cooperative banks have lax lending standards and do not share their data with the National Credit Bureau.

Most of the accumulated debt is associated with low-end consumers. The banks that have been lending aggressively to low-end consumers are government banks or SFIs, and over the last three or four years they were lending to the poor at 25% a year but recently pulled back to 7%. The price pullback of the government's rice pledging scheme may also have a negative effect on rural communities. 

Bank NPLs are expected to increase. The Islamic Bank of Thailand and the Small and Medium Enterprise Development Bank of Thailand are the SFIs struggling with high rates of non-performing loans (NPLs).

[See full atory risk" >here ]

AGRICULTURE 

Sugar prices need to float more quickly

As Thai sugar is the cheapest in Asean, millers are repeating their call for the Industry Ministry to float its price.

In Thailand, white refined sugar retails at 23.6 baht, but in other Asean countries prices are much higher. Sugar in Indonesia retails for 33.95 baht , in Singapore for 40.35 baht and in the Philippines 41.2 baht. Outside Asean, prices are even higher  57.09-77.85 baht in China, 66.9 baht in Japan, 49.5 baht in Korea and 59.75 baht in Australia.

Thailand has sufficient domestic supplies now, but almost all of the sugar allocated for exports has already been sold in forward contracts and if domestic sugar is smuggled to other countries, Thailand might face a shortage.  Asean countries are not required to float sugar prices once the AEC is established, but a free flow of goods must be allowed.

A Thailand Development Research Institute (TDRI) study proposed scrapping the domestic price cap in place for three decades. There have already been two cabinet resolutions to implement the TDRI's proposal, but reforms by the Industry Ministry have been slow. The floating of sugar prices would trim state subsidies, but the Cane and Sugar Board prefers a partial float in a set range with the government providing compensation.

[Read full story here ]

STOCK MARKET 

System to reduce volatility that comes with faster stock trading 

The Stock Exchange of Thailand is preparing to use a "circuit breaker" for highly traded stocks to ease the impact of volatility on retail investors

The high-frequency trading (HFT) system is an advanced trading platform capable of processing a large number of orders at very fast speeds. Most Stock Exchange of Thailand (SET) stocks trading through HFT are large-cap stocks with high liquidity, mostly listed on the SET50. Since the SET launched HFT late last year, the number of total investors that place orders through SET-registered brokers to trade via HFT has gradually increased to about 10% of total trading value. The speed of the HFT system can contribute to high volatility in the movement of stock prices.  Neither brokers not registered with the SET nor institutional investors can place orders on HFT directly.

There is a concern over a possible 'flash crash' similar to what happened with the Dow Jones Index when it fell by more than 1,000 points in a few minutes in May 2010 due to the rapid speed of HFT. After SET studied other stock markets, it found most set a frame of price movements for each stock they want to control with a gap of 5% or 10% for price movements, with a circuit breaker halting trade for two minutes once it reaches a critical level.

[Read full story here ]

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Vocabulary:

accumulate: to get more and more of something over a period of time - เก็บสะสม, สะสม, สั่งสมมานาน

aggressive: determined to win or succeed and using forceful action to achieve victory or success - เริ่มต่อสู้ ซึ่งมีความมั่นใจสูง

allocate: to officially give out an amount of or share of something - แบ่งส่วน

associated with: connected with in some way - ที่เชื่อมโยงกัน

bailout package: a set of actions or programmes designed to help a business that is in danger of failing - การฟื้นเศรษฐกิจ แผนการช่วยเหลือธุรกิจ

broker: a person who buys and sells things for other people - นายหน้า

cabinet: the group of government ministers who make and approve government policy - คณะรัฐมนตรี

call: a request, an order or a demand for somebody to do something or to go somewhere - ข้อเรียกร้อง

cap: an upper limit on an amount of money that can be spent or borrowed - ขีดสูงสุด, ครอบ

capable: able to do something; very good at a job - มีความสามารถ

capital: a large amount of money that is invested or is used - ทุน, เงินทุน

circuit breaker: an electrical device that turns off the electricity if there is a sudden dangerous increase, also a computer system that stops trading in a stock if there is a dangerous change in price -

community: the people living in one particular area - ชุมชน

compensation: things that make a bad situation better - สิ่งที่ชดเชย

concern: a worry - ความกังวล

consumer: someone who buys and uses goods and services - ผู้บริโภค

contract: an official written agreement - สัญญา

contribute to: to help to cause an event or situation - ช่วยก่อให้เกิด

cooperative: a business or farm owned and run by the people involved, with the profits shared by them - สมาคมสหกรณ์

credit bureau: an organisation that keeps information about whether people have paid heir debts and provides this information to banks and concerned companies - ข้อมูลเครดิต. ศูนย์ข้อมูลสินเชื่อ

critical: (of a bad situation) very serious or dangerous - อย่างรุนแรง  อย่างวิกฤต

data: facts or information, especially when examined and used to find out things or to make decisions - ข้อมูล, ตัวเลข, สถิติ

debt: an amount of money that you owe - หนี้, นี้สิน

decade: a period of ten years - ทศวรรษ, ระยะเวลา 10 ปี

domestic: inside the country being talked about - ภายในประเทศ

ease: to make a problem, situation or pain less severe or serious - บรรเทา

effect: a change that somebody/something causes in somebody/something else; a result - ผลกระทบ

establish: to start something, in this case, a process - สร้าง, ก่อตั้ง, จัดตั้ง

export: something sold and transported to another country - สินค้าออก

float: when something such as an exchange rate or interest rate is allowed to move up and down freely in response to market forces and government does not try to control it -

frequency: the number of times something happens within a particular period - ความบ่อย

gap: a space or opening in the middle of something or between things - ช่องว่าง

gradually: slowly and in small stages or amounts - อย่างทีละน้อย

halt: to stop - หยุด

impact: an effect or influence - ผลกระทบ

in place: prepared and ready to use - เข้าที่, อยู่ในที่

investor: a person or organization that invests money, i.e., uses money with the aim of making a profit from it, for example by buying property or buying shares in a company - นักลงทุน

key: most important - ที่สำคัญ

launch: starting something - การเริ่มต้น

lax: not paying enough attention to rules, or not caring enough about quality or safety - ละเลย

lending: giving money to someone who agrees to pay it back in the future - การให้ยืม

level: the amount of something that exists in a particular situation at a particular time - ระดับ

liquidity: the ease with which assets can be turned into cash - สภาพคล่อง

listed firm: a public company, i.e., a company that offers its shares to the public on a stock exchange - บริษัทมหาชน

loan: an amount of money that a person, business, or country borrows, especially from a bank - เงินกู้

low-end: cheap goods or people buying cheap goods, people not spending a lot of money - low-end consumer goods, cheap consumer goods

manage: to succeed in doing something - สำเร็จ,จัดการได้สำเร็จ, ทำได้สำเร็จ

miller: a person who owns or works in a mill for making flour - เจ้าของโรงสี

national: for the whole country - แห่งชาติ, ของชาติ

negative: bad - ที่เป็นด้านลบ

non-performing loan (NPL): a loan that is not being paid back as arranged and may never be paid back; a non-performing loan (NPL), bad debt - หนี้เสีย, หนี้สูญ, หนี้ที่ลูกหนี้ไม่ยอมชำระตามกำหนด

order: to officially request a company for some product you want to buy - สั่ง

partial: in part, but not complete - บางส่วน

platform: the type of computer system or the software that is used -

prefer: to like or want more than anyone or anything else - ชอบมากกว่า

process: a series of actions that you take in order to achieve a result - แนวทางปฏิบัติ, กระบวน, วิธีการ

proposed: suggested as an idea for a group to consider - ถูกเสนอ

provide: to give someone/ something that they want or need - จัดหาให้, จัดเตรียมไว้ให้

pull back: reduce the level of activit; stop doing what you did before -

range: to have an upper and a lower limit in amount, number, etc - ผันแปรภายในขอบเขตหนึ่ง

rapid: happening quickly - อย่างรวดเร็ว

recently: not long ago - เมื่อไม่นานมานี้, เมื่อเร็วๆ นี้

refine: to improve something by making small changes to it - ทำให้ดีขึ้น

refinery: a factory where a substance such as oil is refined (= made pure) - โรงกลั่น

register: to put your name and other information on an official list in order to be allowed to do something, e.g., vote, study, stay in a hotel etc - ลงทะเบียน

repeat: something that happens again, i.e., which is very similar to a previous happen - การกระทำซ้ำ

require: to make somebody do or have something, especially because it is necessary according to a particular law or set of rules - บังคับใช้ (กฎหมาย) กำหนด

research: a careful study of a subject, especially in order to discover new facts or information about it - การวิจัย

resolution: an official decision that is made after a group or organisation have voted - มติ

retail: to sell directly to the public for their own use - ขายปลีก

retail investor: investments made by individuals themselves, rather than by companies or organizations -

rice pledging scheme: a government programme in which a fixed price, in this case well above the market price, is offered to rice farmers for their harvested rice - การจำนำข้าว

risk: the possibility that something dangerous or unpleasant might happen - ความเสี่ยง

rural: connected with the countryside outside big towns and cities  - ในชนบท, บ้านนอก

scrapping: giving up; stopping - ยอกเลิก   ยุติ

set: fixed, not changing, already decided or scheduled - จัดไว้, กำหนดล่วงหน้า

share: to have or use something at the same time as someone else - ใช้ร่วมกัน

shortage: when there is not enough of something - การขาดแคลน

shoulder: to deal with or accept something difficult - แบกรับภาระ หรือสถานการณ์

smuggle: to take things or people to or from a place secretly and often illegally - ลักลอบนำเข้า

standards: rules for behaving which should be obeyed - มาตรฐาน, บรรทัดฐาน, กฎเกณฑ์, กรอบ

strategy: a plan that is intended to achieve a particular purpose - ยุทธวิธี, กลวิธี

struggles: experiences difficulty and makes a very great effort in order to do something - ดิ้นรน

study: a project that looks at some subject in great detail and produces a report to share the information - งานวิจัย

subsidy: an amount of money that a government or organisation pays to help to reduce the cost of a product or service - เงินชดเชยที่รัฐเป็นผู้จ่ายให้

sufficient: enough - เพียงพอ

supply: an amount or quantity of something that is available to buy or use; use the amount of a good available in a market to buy - อุปทาน

trade: the buying and selling of goods and services - การค้าขาย

trim: to make something neater, smaller, better, etc, by cutting parts from it - ตัด

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