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Large corporates feel the pain of trade war, baht rise

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Large corporates feel the pain of trade war, baht rise

By The Nation

 

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The trade war between the United States and China and the appreciation of the baht against other currencies have started to impact large corporates, say bankers.

 

Although large corporates are resilient to any impact and their ability to repay debt remained sound compared with small and medium-sized enterprises, the prolonged trade war had started to impact revenue and sales of large corporates, said Wasin Saiyawan, senior executive vice president and chief of wholesale banking at Siam Commercial Bank.

 

Also, the depreciation of the Chinese yuan against the baht had reduced exports to China for some corporates. This had  led to a year-on-year decline in income for these corporates, he said. So the bank has to take care of clients to ensure their ability to repay debts would not be affected.

 

He did not expect growth in lending to large clients. Currently outstanding loans to large corporates stand at Bt900 billion, according to Wasin. Bad debts or non-performing loans (NPLs) account for 1 per cent of total loans and the bank would try to prevent it rising over 2 per cent, he added.

 

Senathip Sripaipan, chief wholesale banking officer at TMB Bank, said that some large corporates have delayed investments, especially in overseas projects, because of the impact of the slow growth of the global economy and the ongoing trade war.

 

The bank is worried about large agri-business firms. The bank has not yet seen signs of debt default or rising bad debt. “But we have to closely monitor them,” he added.

 

Payong Srivanich, president and CEO of Krungthai Bank, said that some big businesses have started to cut their capacity utilisation from full utilisation to about 70 per cent. Some property developers have also delayed their investments in new projects, he added.

 

Pornchai Padmindra, co-head for wholesale banking and head of corporate banking and investment banking at CIMB Thailand, said that the trade war and the global slowdown had some impact on large firms.

 

Some of them have started to relocate their production base to avoid the impact of tariff hikes. “Big corporates could export their products to new markets,” he added.

 

Source: https://www.nationthailand.com/business/30376182

 

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-- © Copyright The Nation Thailand 2019-09-14

 

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3 hours ago, trainman34014 said:

so i hope the pain continues until it becomes unbearable for the Thai Super Rich because then, and only then, will things start to change.

But the Thai ' Super Rich ' became even richer with the strong baht . Now they can invest in or import from another country  for a cheaper price . I doubt that they want to change this .... ?

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9 hours ago, rooster59 said:

Although large corporates are resilient to any impact and their ability to repay debt remained sound compared with small and medium-sized enterprises,

Wait for the medium and small enterprises to close who supply the large corporations.... then you will see the backlash start!

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Complete and utter BS.  Trade war does not affect currencies of Vietnam, PI, Taiwan, South Korea. Japan etc.  Only Thailand has the dubious distinction of an extreme currency rise,  And BoT is all talk, as they keep their foot on the gas with hot money inflows.

I should stop right here—because the T.V. Baht apologists will attack me if I mention China’s ambitions...

Edited by Isaan sailor
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4 hours ago, trainman34014 said:

But wait....we were told by the Brainless of Bangkok that the U.S.-China trade war would have no impact on Thailand whatsoever !

 

The Baht is in their own hands but they are failing to do anything substantial about it, so i hope the pain continues until it becomes unbearable for the Thai Super Rich because then, and only then, will things start to change.

Your first paragraph is spot on. The second, is certainly interesting. 

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Somebody should show the reporter the difference between the Baht sign and the BitCoin Sign in the accompanying picture for the article.

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12 hours ago, Isaan sailor said:

Unfortunately, Thailand eats from the hand of China.

Many large and mid-sized Japanese companies operate over here, once the baht strength coupled to higher export costs hit home then watch the production move to another country.
Japan will ride it in the short term, but if things don't slide back then you'll see.

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