Weekly business news quiz: October 21-25, 2013

Weekly business news quiz: October 21-25, 2013

Check if you understand the issues and vocabulary in this week's most important business news stories.

Vocational students learning practical job skills at a vocational school.

Questions on articles included below with articles.

Answers to quiz are here

To study vocabulary see original articles:

October 21, 2013

October 22, 2013

October 24, 2013

October 25, 2013

What's new in business news: October 22, 2013


Notebook sales continue to fall 

This year is poised to become the worst in history for Thailand's notebook market, with a 20% contraction with sales of 1.6 million units, down from the 2 million targeted. 

High household debt and a sluggish economy have been blamed for the sharp drop in sales. Tablets and smartphones have thrived at the expense of notebooks. At least 300 IT retail outlets have closed down this year and others are relocating their stores to cheaper locations.

1. Recently, sales of notebooks....

a. Increased.

b. Decreased.

c. Remained the same. 


B500 foreigner fee for entry into Thailand   

The government is considering a plan to charge foreigners a 500-baht entry fee from January next year. Government officials expect the extra charge would lead to an increase in the quality of tourists entering Thailand. When reporters asked the Public Health Minister Mr Pradit if the plan could backfire and result in fewer tourist arrivals, he said the tourism ministry did not oppose the plan. The feedback from the tourism sector, however, has all been negative. 

Sitdiwat Cheevarattanaporn, chairman of the Association of Thai Travel Agents (Atta) said it is not a good move and not in line with the government's plan to promote tourism.  "The plan will affect the tourism industry, both in the short run and the long run, because tourists will feel bad about Thailand and they may feel they are being cheated," Mr Sitdiwat said.

Porntip Hirunket, vice chair of the Tourism Council of Thailand, said collecting entry fees from foreigners would dampen the tourism atmosphere. Authorities should do a better job of screening tourists, enforcing the existing laws and preventing tourists from being conned, she said.

2. Why do people in the tourism industry not like the 500 baht entry fee to Thailand? 

a. The tourism ministry does not oppose the plan. 

b. Thailand needs higher quality tourists. 

c. Tourists may feel they are being cheated. 

d. Tourists will get health insurance with the new entry fee. 


Govt bank to borrow another B140bn for rice program 

The Bank for Agriculture and Agricultural Cooperatives (BAAC) will borrow 140 billion baht with the Finance Ministry's loan guarantee to fund the 270-billion-baht budget set for the government's rice-pledging scheme for the current harvest year. The remaining 130 billion baht will come from rice sales from the state stockpile. The borrowing is possible because the Finance Ministry still has some room to guarantee the loans. By law, the ministry can guarantee loans for the state-owned bank up to six times its capital fund, or around 600 billion baht.

The government has also capped the debt incurred from running the scheme at 500 billion baht by the end of 2014. This means the Commerce Ministry needs to sell at least 270 billion baht worth of rice from the stockpile to achieve the target. Over the past two harvest years, the BAAC spent 179 billion baht on top of the 500-billion-baht budget to fund the scheme and all 679 billion baht was transferred to 4.2 million farmers through the BAAC's accounts. The BAAC has to date been repaid 130 billion baht by the Commerce Ministry, which is in charge of rice sales. The remaining 49 billion baht has yet to be repaid. The cabinet has approved to repay the bank another 25 billion baht from the budget and the remaining 24 billion baht is expected to come from rice sales. The Commerce Ministry is confident of selling 10 billion baht worth of rice each month between October and December this year to repay the BAAC.

[As for the state bank's financial health, it extended 149 billion baht in new loans during the six months to Sept 30 this year, excluding those to the rice-pledging scheme, raising outstanding credit to 1.21 trillion baht. Its deposits increased by 19.4 billion baht during the period to 1.02 trillion baht. The BAAC's accounting year starts from April 1. Its revenue and net profit during the March-to-September period amounted to 34.49 billion baht and 5.1 billion baht, respectively. Its non-performing loans were 5.63% of outstanding loans at the end of September, while its capital adequacy ratio was 11.13% of risk-weighted assets - well above the 8.5% minimum requirement of the Bank of Thailand.]

3. What allows BAAC bank to borrow 140 billion more for government rice purchases? 

a. A 500 million baht cap on debt. 

b. A loan guarantee by the Finance Ministry. 

c. Repayment in full of previous amounts borrowed. 

d. Selling more rice than expected. 

What's new in business news: October 22, 2013


New celebrities app from AIS, stocks fall with surprise amnesty bill & labour-intensive industries cut from investment incentives.


Thai stocks tumble most worldwide

Bloomberg News agency

Thailand’s stocks fell the most in a month, with the benchmark index posting the biggest drop worldwide amid speculation that a bill granting amnesty for political offenses will spur protests against the government. The benchmark SET Index (SET) dropped 2.4% to 1,448.54 at the close in Bangkok, its biggest decline since Sept. 23 and the steepest drop among global equity gauges tracked by Bloomberg. 

A parliamentary committee voted last week to add a clause to the ruling Pheu Thai party’s bill that would annul legal cases stemming from the country’s 2006 coup including the conviction of former prime minister Thaksin Shinawatra. The opposition Democrat Party will oppose the bill in parliament and support public demonstrations to prevent the measure Abhisit Vejjajiva, former prime minister and the party’s leader, said on the party’s website on Monday.

4. Did the surprise amnesty bill this week make the prices of Thai stocks rise or fall? 

a. Rise

b. Fall 

c. No change. 


BOI cuts investment incentives for labour-intensive industries 

The Board of Investment (BoI) has cut the number of SME business categories eligible for investment privileges to 39 from 57, mainly labour-intensive ones in which Thai businesses can no longer compete with neighbouring countries. BoI's new investment policy focuses on high technology and value-added products and services.

The 39 categories of eligible SME businesses will be divided into four groups - value-added farm production; industries that use manufacturing skills such as auto parts, machinery electronics and electrical appliances plastic products and printing; creative industry including clothes, textile jewellery and ornaments furniture, software and designs; and service and supporting businesses for the tourism industry such as hotels, cultural centres and movie shooting These businesses will be entitled to exemptions from machinery import tax and corporate income tax for eight years without restrictions on zone or size of investment.

5. What kind of industries did the BoI reduce incentives for this week? 

a. Technology industries. 

b. Industries using a lot of labour. 

c. Tourism industry. 

d. Farming industry. 


AIS introduces celebrities app for new revenue

Mobile leader Advanced Info Service (AIS) is extending its chargeable mobile content service in a drive to boost the strength of its non-voice business and increase revenue

The company launched yesterday what it calls a celebrities app in which celebrities earn revenue for self-generated content sold to fan clubs via mobile devices AIS spent 14 million baht on TV star Jirayu "James" Tangsrisuk as a brand endorser for 3G. Now AIS is collaborating with Mr Jirayu on the new James' Life app which offers stickers with his photos and video clips of his activities. The application works on iOS and Android and can be downloaded by dialing *303*3# at a cost of 29 baht per download.

AIS has 13 million mobile internet users, 9 million of them social-media users. As of June, he said the company's non-voice revenue accounted for 30% of total consolidated revenues Mobile data services made up half of AIS's non-voice revenue followed by chargeable premium content at 35% and SMS service 15%. Non-voice revenue in Japan and South Korea accounts for over half of mobile operators' revenues Mobile payment service is a major revenue source for AIS. As of October, Thailand has 17.7 million 3G subscribers AIS had 12 million users, DTAC's 5 million and True Move 700,000.

6. To boost non-voice revenue AIS is planning to sell content from:

a. Politicians. 

b. People in your family. 

c. Celebrities. 

d. Famous footballers.

What's new in business news: October 24, 2013


Upgrade of farmer loan cards to credit cards, 75,000 more vocational students for infrastructure projects & rise in non-performing loans (NPLs).


Upgrade of farmer loan cards to credit cards 

The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) will upgrade the features of  about 10% of its loan cards for farmers to credit cards within one year.  

The BAAC has issued 4.13 million loan cards to farmers with a combined credit line of 63.2 billion baht.  The cards, a key Pheu Thai campaign pledge offer a credit line for up to 70% of the production value grown by the farmer, with farmers able to pay for fertiliser seeds, agricultural machinery and pesticides at participating suppliers using the cards. Each farmer spends about 25,000 baht on average via the cards.

The cards allow farmers access to capital at a cheaper rate than loan sharks. An interest rate of 7% per year is charged for overdue amounts and offers a five-month interest-free period. The bank requires farmers pay their outstanding debts in full within the time frame of their farming operation typically one year. A farmer who fails to meet the payment deadline three times is deemed a non-performing debtor As of Sept 30, the outstanding balance for the farmer cards was 17 billion baht, with non-performing loans at 1.9%.

7. How many times must a farmer miss a payment deadline before he becomes a non-performing debtor on his government issued loan card? 

a. One time.

b. Two times. 

c. Three times. 

d. Four times. 


75,000 more vocational students targeted for infrastructure projects 

The Education Ministry wants to increase the number of vocational students by 75,600 next year to provide skilled vocational school graduates to meet labour market demand and infrastructure investment plans.

Education Minister Chaturon Chaisaeng announced his policies to develop vocational education to be comparable to international standards and to increase the ratio of vocational to mainstream students to 51:49 by 2015. The ratio of vocational to mainstream students now stands at 36:64.

The Office of the Vocational Education Commission (Ovec) hopes to increase the vocational component from 36 to 45 in the next academic year Ovec must encourage 75,600 more Mathayom 3 (Grade 9) graduates to further their studies in vocational institutions and is holding roadshows and open houses on vocational education to persuade lower secondary students to study at vocational institutions More dual education ventures between Ovec and the private sector are also planned.

8. Why does Thailand need more vocational students? 

a. Future infrastructure projects. 

b. To go to open houses and road shows. 

c. Local standards are below international standards. 

d. Not enough people are graduating Matayom 3. 


Non-performing loans rise at banks

Outstanding non-performing loans (NPLs) for 9 of the 11 SET-listed commercial banks rose by 6% between the end of last year and Sept 30, a sign that borrowers' debt-servicing ability is deteriorating amid the lacklustre economy. Tisco Financial Group experienced the largest increase in NPLs followed by Bank of Ayudhya (BAY) and Kiatnakin Bank (KKP). Among the country's four largest banks, the NPLs of Bangkok Bank (BBL) rose but the ratio is not expected to exceed 2.5% of total loans  

Commercial banks with a focus on auto loans have seen their bad credit rise at a rapid pace as the used-car market has been distorted from the sharp slump in prices prompted by the government's tax rebate scheme for first-time car buyers. The market is now returning to normal after the tax scheme lapsed at the end of last year.

Higher commercial bank NPLs are not a major concern at the moment as the NPL ratio the ratio of bad loans to total loans is still low. Only five of the 11 lenders saw their NPL ratio increase from the end of last year.  Lenders also have a high provision coverage ratio - a measure of funds set aside by lenders for potential bad debt losses. Banks set aside funds as a counter-cyclical buffer against future uncertainty with coverage ratios more than 70% of NPLs.

9. Why did the government first-time car buyer's scheme cause a temporary increase in NPLs? 

a. Not enough people qualified for loans. 

b. People could not pay back new car loans. 

c. Prices fell for used cars. 

d. The economy was bad. 

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


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


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).

10. Which has suffered from non-performing loans recently? 

a. Bangkok bank.

b. SME bank.

c. National Credit Bureau. 

d. Bank of Thailand.


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.

11. What are some problems with low Thai sugar prices? 

a. Sugar smuggled out of Thailand.

b. Farmers do not make enough money.

c. Reform is slow. 

d. Government subsidies. 


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.

12. What has caused increased stock price movement at SET recently? 

a. New circuit breaker. 

b. Large-cap stocks. 

c. Institutional investors. 

d. New high-frequency trading system. 


  • practical: suitable for the situation in which something is used - ที่ขึ้นอยู่กับความเป็นจริง
  • skill: the ability to do something well, usually as a result of experience and training - ฝีมือ, ทักษะ
  • vocational: teaching the skills necessary for particular jobs - การสอนวิชาชีพ
  • vocational students: students attending a school which provided the skills necessary for particular jobs - นักเรียนอาชีวศึกษา
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