– Thailand news selected by Gazette editors for Phuket’s international community
PHUKET: Consumers and investors have regained their confidence and banks are seeing a rise in demand for loans just one month after a coup saw the National Council for Peace and Order (NCPO) swiftly end the political conflict that had engulfed the country since late last year, officials said.
The tourism industry, however, is still reeling from a plunge in visitors to the “Land of the Smile”, they said.
Bank of Thailand spokeswoman Roong Mallikamas said the political uncertainty that began late last year had hit the financial market hard. Inflows of foreign funds fell compared to other countries in the region, which weakened the baht, she said.
Domestic investors, however, were quick to regain confidence after last month’s coup, with the turnaround beginning earlier this month, she said. Once they started showing confidence, foreign investors began following suit, Roong added.
Following months of decline against the US dollar, the baht has stabalised, rising slightly over the last month. As of Friday it was trading at 32.46 to the dollar compared to 32.54 on May 20.
Stock Exchange of Thailand (SET) president Kesara Manchusree said post-coup confidence had also sparked a rally on the market.
The SET Index is up 4.5 per cent, or 64.37 points, since the day before the coup. It closed at 1,467.29 on Friday compared to 1,402.92 on May 21.
Bank executives say they are also seeing a rebound in demand for loans from small and medium-sized enterprises.
Major corporations, however, are still a bit shy. They are reviewing investment plans that were shelved during months of political turmoil, which only ended after a military takeover on May 22.
Banking executives say it could still take some time before major corporations resume investing.
Prior to the coup, the banking sector cut its loan-growth target as demand for credit slowed across all sectors.
The property sector is also showing some signs of revival, following a dismal first quarter. The number of new projects launched in the January to March period plunged about 40 per cent from the same period last year. Since the coup, however, there has been a rise in the number of new residential projects launched, and sales of homes are picking up, industry executives say. Demand for new residents is up 10 per cent so far this month, according to Pruksa Real Estate.
Its CEO and president, Thongma Vijitpongpun, pointed to swift action by the coup leaders for the sector’s apparent revival.
“The NCPO is solving all of our problems faster than we expected,” he said. “This is boosting confidence and the market is rebounding quickly.”
— Phuket Gazette Editors