What's new in business news: July 26, 2013

What's new in business news: July 26, 2013

Amnesty bill sends stocks & baht downwards, low-income earner household debt rising & CP Group invests in Russia.

BANKING

Low earners' debt rising

The debt service ratio of 52% of disposable income for low-income earners in 2011 far exceeded the appropriate level of 28-30%.

The debt service ratio at the bottom end of the income scale - those earning less than 10,000 baht a month - rose from 46% in 2009.

The debt service ratio is the proportion of debt payment to disposable income, with a higher ratio indicating more vulnerability to the upward interest rate cycle.

The Bank of Thailand last week said rising household debt limits the scope of a policy interest rate cut, and left the policy rate unchanged at 2.5%, amid weakening economic growth triggered by tepid domestic consumption.

Ms Sutapa said the debt service ratio of those earning more than 10,000 baht a month was 25% in 2011.

The higher debt burden of low-paid workers has also hurt motorcycle sales.

Thailand's household debt is now 80% of gross domestic product (GDP) after continuously rising from 63%, 70% and 77% in 2010, 2011 and 2012, respectively.

The 80% figure does not take into account informal lending such as by loan sharks.

"Some 22% of the 80% household debt comes from consumer finance in the commercial banking system, but this is not a concern due to the low level and high potential of debt payment," said Ms Sutapa.

ECONOMICS

Baht falls on amnesty bill concerns

26/07/2013

The baht, government bonds and stocks dropped this week over concerns that plans to push forward an amnesty bill for those accused of crimes during the 2010 crackdown on political protesters will trigger renewed tensions.

The value of stock shares fell by the most in six weeks Thursday and slumped 1.8% from July 19 after confirmation that an amnesty bill will be tabled for consideration by parliament in August.

The Pheu Thai Party agreed on Wednesday that the first amnesty bill to be debated by the House when it resumes would be the draft legislation presented by Pheu Thai MP for Samut Prakan Worachai Hema.

Parliament now has five amnesty bills to consider, including the one engineered by Mr Worachai. Relatives of victims of the 2010 political violence are also proposing a people's amnesty bill, which would raise the number to six.

OVERSEAS INVESTMENT

CPF buys Russian pork firm

B3.15bn deal clinches Kaliningrad producer

Charoen Pokphand Foods Plc (CPF) will pay 3.15 billion baht for a 83% stake in Russia Baltic Pork Invest ASA (RBPI), a large-scale grain and pork producer in Russia's Kaliningrad region.

RBPI, which also has operations in Nizhny Novgorod and Penza in the west, is planning to expand its operations to mainland Russia.

The deal is part of CPF's expansion plans in food and into Russia, where it already operates feed mill and integrated swine businesses.

In 2009, CPF invested 3.5 billion baht to build advanced feed mills and swine farms in Lukhovitsy County.

The investment aims to serve huge demand for meat in the country, at 2.75 million tonnes a year, while local production capacity remains low, leading to imports of some 750,000 tonnes of pork every year.

RBPI's net profit in baht terms was 343 million baht on sales of 1.39 billion baht last year.

CPF projects sales this year to increase by 10-15%. Operations in 12 countries including Russia are expected to contribute 55% to revenue in 2013 thanks to aggressive investment expansion in recent years.

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Vocabulary

  • accused: to be said to have done something wrong or committed a crime - ถูกกล่าวหา
  • aggressive: determined to win or succeed - ก้าวร้าว
  • amnesty (noun): a situation in which a government agrees not to punish, or to no longer punish, people who have committed a particular crime - การนิรโทษกรรม
  • appropriate: suitable or right for a particular situation or purpose - ที่เหมาะสม
  • bill: a proposal for a law - ร่างกฎหมาย
  • bond (noun): a way that companies and the government borrow money from many people each of which owns one or more "bonds" which are usually traded on securities exchanges - พันธบัตร
  • burden: to give somebody a duty, responsibility, etc. that causes worry, difficulty or hard work - เป็นภาระ
  • commercial bank (noun): a bank with branches in many different places, that provides a range of services, especially related to bank accounts, loans and saving money, for people and businesses; the kind of bank that most people use - ธนาคารพาณิชย์, สถาบันการเงินที่มุ่งเน้นการรับฝากเงิน
  • concern: a worry - ความกังวล
  • confirmation: a statement, letter, etc. that shows that something is true, correct or definite - การยืนยัน
  • consideration: giving careful thought to something before making a decision - การคิดพิจารณา
  • consumer finance (noun): making loans to people buying things in stores that they pay back with monthly payments -
  • consumption: the act of using energy, food or materials; the amount used - การบริโภคพลังงาน, การใช้หมดไป
  • continuous: happening or existing for a period of time without interruption - ซึ่งติดต่อกัน, ซึ่งต่อเนื่องกัน
  • contribute to: to help to cause an event or situation - ช่วยก่อให้เกิด
  • crackdown: strong action that someone in authority takes to stop a particular activity - การใช้กำลังเข้าปราบปรามของเจ้าหน้าที่
  • cycle: the fact of a series of events being repeated many times, always in the same order - วงจร, วัฏจักร, ระยะเวลายาวนาน
  • deal (noun): a formal agreement, especially in business or politics - ข้อตกลง, การตกลงซื้อขาย, การซื้อขาย
  • debate: a discussion in which people or groups state different opinions about a subject - การอภิปราย, การโต้วาที, การถกเถียง
  • debt (noun): an amount of money that you owe - หนี้, นี้สิน
  • demand (noun): the need and desire of people to buy goods - อุปสงค์
  • disposable income (noun): income left after taxes, etc. have been taken away from it and that you are free to spend or save - รายได้ที่จับจ่ายได้
  • domestic: inside the country being talked about - ภายในประเทศ
  • draft: written for consideration, but not yet in its final form - ฉบับร่าง
  • draft bill: a proposal for a law - ร่างกฎหมาย
  • due to: because of - เนื่องจาก
  • earner: a person who earns money for a job that they do - ผู้มีรายได้
  • engineer: to arrange for something to happen, especially in a useful and skilful way - วางแผน
  • exceed: to be more than something; to go beyond a limit - เกินกว่าที่กำหนด
  • expand: to make or become larger - ขยาย เพิ่ม
  • expansion: when something increases in size, number or importance - การขยายออก
  • feed (noun): animal feed; animal food -
  • feed mill (noun): a factory that produces animal food (feed) -
  • figure: a number representing a particular amount, especially one given in official information - ตัวเลข, จำนวนเลข
  • foreign direct investment (noun): FDI, money that people or companies of one country invest in another country by buying property, building factories, buying businesses, etc -
  • grain: the small hard seeds of food plants such as wheat, rice, etc; a single seed of such a plant - เมล็ดข้าว, เมล็ดพืช
  • gross domestic product: the total value of all goods and services produced in a country in a year, except for income received from money invested in other countries. It is often simply called GDP - ผลิตภัณฑ์มวลรวมภายในประเทศ
  • household: a group of people, often a family, who live together - ครัวเรือน
  • indicate: to show that something is true, exists or will happen - แสดง, ทำให้รู้
  • informal debts: debts owed to people outside the banking or financial system - หนี้นอกระบบ
  • integrated: combining things of different types in one effective system - ที่รวมเข้าด้วยกัน
  • interest rate: the percentage that a bank or other financial company charges you when you borrow money, or the percentage it pays you when you keep money in an account - อัตราดอกเบี้ย
  • invest: to spend money on something in order to make it better or more successful - ลงทุน
  • investment (noun): the act of investing money in something - การลงทุน
  • large-scale (adjective): very big -
  • legislation: a law or set of laws suggested by a government and made official by a parliament - กฎหมาย, การออกกฎหมาย
  • lending: giving money to someone who agrees to pay it back in the future - การให้ยืม
  • limit: to stop something from increasing beyond a particular amount or level - จำกัด
  • loan shark: a person who charges very high interest rates for money borrowed - ผู้ปล่อยเงินกู้โดยคิดดอกเบี้ยสูงมาก
  • low-income: earning little money - รายได้ต่ำ
  • mainland: a large mass of land that forms the main part of a country but does not include any islands belonging to the country - แผ่นดินใหญ่
  • parliament: the group of people who are elected to make and change the laws of a country; the building where members of parliament meet. - รัฐสภา
  • party: an organized group of people who have similar ideas about the way in which a country should be governed, and who work together to try to persuade people to vote for them in elections - พรรค การเมือง
  • policy (noun): a set of plans or action agreed on by a government, political party, business, or other group - นโยบาย
  • potential: possible in the future - ที่อาจเป็นไปได้
  • producer: a person, a company or a country that grows or makes food, goods or materials - ผู้ผลิต
  • project: to make a calculation or guess about the future based on information that you have - คาดคะเน
  • protester: someone who shows that they disagree with something by standing somewhere, shouting, carrying signs, etc - ผู้ต่อต้าน, ผู้ประท้วง
  • recent: happening or starting a short time ago - เร็วๆ นี้
  • region: a large area of land or space, usually without exact limits or borders - ภูมิภาค, ขอบเขต, แถบ, บริเวณ
  • relative: a member of your family - ญาติพี่น้อง
  • renew: to start something again - เริ่มใหม่
  • respectively: in the order in which they were mentioned - ตามลำดับ
  • resume: to begin again after stopping for a period of time - ดำเนินต่อไปใหม่, กลับมาอีกครั้ง
  • revenue: income from taxes or business activities - รายได้
  • scope (noun): the things that a particular activity, organisation, subject, etc deals with - ขอบเขต
  • service debt (verb): pay interest on money that has been borrowed -
  • swine: an old word meaning "pig" -
  • table a bill (verb): to propose a new law (bill) to parliament to consider making into a law -
  • tensions: the feelings caused by a lack of trust between people, groups or countries who do not agree about something and may attack each other - ความตึงเครียด
  • tepid (adjective): warm when it should be hot; not very excited or enthusiastic when it should be -
  • trigger: to cause - ก่อให้เกิด กระตุ้น
  • value: how much something is worth in money or other goods for which it can be exchanged - มูลค่า
  • victim: someone who has been affected by a bad situation, such as a disaster, illness or an accident - เหยื่อผู้เคราะห์ร้าย
  • violence: physical force with the deliberate intention of causing damage to property or injury or death to people - ความรุนแรง, การใช้กำลังทำลาย
  • vulnerability: a weakness; a weakness that makes someone/something easy to attack - ความอ่อนแอ, ข้อบกพร่อง
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