"Brexit's" impact on Thailand

[Gaybutton]

I would imagine many of you from the UK, currently present in Thailand, made sure to exchange as much money as you could before the Pound had time to really crash to its low point today. I hope you did. Asian currencies were affected too.

Thailand predicts the first major casualty will be the tourist industry.
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Thailand assesses Brexit impact on many fronts

24 Jun 2016

Thailand has begun to assess the impact of the shocking decision by Britons to leave the European Union. There will be implications for trade and diplomacy but tourism is expected to be a short-term casualty, officials admit.

The plunge in the value of the pound and the euro following the outcome of Friday's UK referendum on European Union membership is expected to deter Europeans from travelling abroad.

Last year, 5.6 million visitors from Europe travelled to Thailand, accounting for almost 25% of all foreign arrivals, according to the Tourism Department. Travellers from the United Kingdom topped the table from Europe with 946,000 arrivals. The most recent figures show that 81,455 Britons, or 3% of all travellers, visited the country in April of this year.

Tourism Authority of Thailand governor Yuthasak Supasorn said the agency expected a decline in tourists from the UK and Europe, as currency exchange rates tend to be a factor behind the rise or fall of visitors generally.

A study by the TAT showed that when the pound depreciated by 3-10%, visitors to Thailand from the UK dropped between 1% and 5%, the governor said. When the euro was weaker by anywhere from 5% to 20%, the number of overall visitors from the euro zone fell by up to 5%, he added.

Both the pound and euro plummeted after the referendum ended with a win for the voters who wanted to leave the European bloc.

Locally, Bangkok Bank was buying pounds on Friday afternoon at 47.29 baht and selling at 50.42, compared with 51.25 and 52.96 baht on Thursday. Its buying and selling rates for the euro were 38.41 and 40.13 baht, compared with 39.24 and 40.49 baht the day before.

Mr Yuthasak said he expected travellers from Finland, Germany, Italy and Spain to drop by as much as 10%, citing their sensitivity to the situation. Visitors from France and the Netherlands could be affected as well, he added.

But the TAT governor expects the number of tourists from Europe to rebound as early as next month or within three months as currency volatility eases once people have a clearer idea of how the UK and the EU tend to negotiate their divorce.

Market volatility

The Brexit vote also resulted in Thai stocks plunging 1.6% on panic sales as investors sought safe havens including gold. The SET Index closed at 1,413.19 points, down 23.21 points on the day and 0.5% from a week earlier. Trading turnover on Friday was 88.2 billion baht, double the normal daily figure.

The baht fell 0.4% to 35.247 per dollar on Friday morning before ending at 35.28 later in the day.

Securities and Exchange Commission secretary-general Rapee Sujaritkul said he expected only short-term volatility for stocks in Thailand and other regions. Listed companies in Thailand could experience some short-term effects but their fundamentals remained solid, he said.

He called for calm from investors as the process of the UK leaving the European bloc would take about two years.

Somchai Sujjapongse, the permanent secretary for the Finance Ministry, said he foresaw only short-term impacts on the Thai currency and stocks and said the government was well prepared to handle the situation.

Bank of Thailand governor Veerathai Santiprabhob said uncertainty was certain to increase in the global economy as the decision to leave the EU would have impacts on the UK and EU economies.

Commerce Minister Apiradi Tantraporn has ordered trade diplomats based in European capitals to closely monitor the situation but remained upbeat that the country's exports could meet the 5% growth target set by the ministry for the year.

Thailand's trade with the UK accounted only for 2% of total trade. It is not in the top 10 export destinations led by China and the United States.

Firm diplomacy

Foreign Ministry spokesman Sek Wannamethee said Thailand respected the decision of UK voters and was closely monitoring the situation.

Whether the UK was in or out of the EU, Thailand still recognised it as an important strategic partner and close ties between the two countries remained unchanged, he added.

"Our relationship is based on mutual benefits at all levels: governments, the private sector and people," he said.

http://www.bangkokpost.com/business/tou ... e-casualty

[Gaybutton]

BOT warns of greater Brexit risks

THE NATION
June 25, 2016

Thailand will face only a limited direct impact from the United Kingdom’s decision to exit the European Union, but would face greater risks from global financial market volatility in the short-term and uncertainties from possible moves by other EU members, according to the Bank of Thailand.

In its initial report, the central bank said the Brexit would not significantly affect Thailand's trade and financial sector. Only 1.8 per cent of Thailand's total exports go to the UK, while Thai banks' direct exposure in the UK and Europe-wide financial sector is only 1.31 per cent of total assets.

The central bank noted that the baht's depreciation yesterday was in line with regional movements. It acknowledged that the capital market would be volatile in the short-term, with possible outflows, though small, from the equity and bond markets.

However, in the long run a change in strategies by private companies and other EU trade partners could cause uncertainties in trade and investment, which could stall global economic recovery.

"The central bank would closely monitor the situation and stand ready to maintain economic and financial stability, if necessary. Private companies are urged to hedge against currency risks as financial volatility would stay for some time," it said.

Anusorn Tammajai, dean of Rangsit University's Faculty of Economics, foresees significant consequences to the global and Thai economy in the short and long-term.

The UK's status as the biggest financial centre would be weakened as some financial institutions may move to other EU countries. The pound could fall by as much as 20-30 per cent, while the euro could weaken by 15-20 per cent.

"Economic nationalism" would gain momentum, leading to more protectionism and a slower growth in global trade and investment.

Former World Trade Organisation director-general Supachai Panitchpakdi is among those who believes the UK will be fine outside the EU. In his speech on Thursday, he was confident that the UK would maintain its role as a key financial centre for Europe due to Frankfurt's limited capacity and the relatively weaker positions of non-UK financial institutions.

"Britain has been an EU member that has not used the single currency, but it has prospered well. The EU now is like putting together patches of people, not a true federation," he said.

He expected Brexit to encourage other EU members to consider leaving, particularly Greece and the Baltic states.

He also expected greater ease for Asean in striking a free-trade agreement with the UK. A deal with the EU is complex, given the bloc's reluctance to reduce its huge agricultural subsidies, he said.

Ittirit Kinglake, president of the Tourism Council of Thailand (TCT) said the separation of UK from the EU would not have any great negative impact on Thailand's economy and tourism in the short term. Both Britain and EU would take time to reform and restructure their economy system.

After separation, some tourists in EU and Britain may consider pausing planned overseas trips for a short period.

However, Thailand's tourism is expected to still enjoy inbound travel as it is one of the top destinations for European tourists.

"In the long term, Britain's trading is likely to benefit more as its regulations are not as tough as that of the EU," Ittirit added.

Isara Vongkusolkit, chairman to the Board of Trade of Thailand, said that despite the challenges for trading and the fluctuating exchange rate, Britain's exit should make free-trade negotiations easier, in particular if Thailand would like to negotiate an FTA with Britain.

Vallop Vitanakorn, vice chairman to the Federation of the Thai Industries, said traders are closely monitoring other countries, in particular Spain, wanting to leave the EU as it could shake global economic growth.

http://www.nationmultimedia.com/busines ... 89063.html

[Trongpai]

http://www.schwab.com/public/schwab/nn/ ... or-Markets

Bottom line don't panic and wait it out. It's causing some volatility now but it will pass.

[Jun]

Brexit's impact on Thailand. Almost nothing.

However, newspapers have to have some news to sell, so they wrote some articles.

[Gaybutton]

Brexit's impact on Thailand. Almost nothing.

I don't think it's as simple as that. If the Pound to Baht exchange rate plunges, and stays plunged, that is bound to have an effect on tourism, at least in the short term. Thailand is already losing Russian tourists because the Ruble plunged. And the Chinese - Thailand complains that plenty of Chinese tourists come, but they cause a lot of problems and spend very little. The tour buses must be making a nice profit, though.

Fewer people from the UK will be able to afford a holiday in Thailand and many who still can are likely to spend much less when they get here. If that turns out to be the case, somebody is going to suffer financially. People from the UK living in Thailand are suddenly seeing quite a bit less baht for their money, assuming the source of their money is the Pound.

It could also have an effect on exports. If it becomes significantly more expensive for the UK to buy from Thailand, then Thai exports will suffer a loss.

Those things sound like an impact to me. Just how much of an impact there will be remains to be seen, but whatever happens I don't foresee it being a positive impact for Thailand.

I think an appropriate question to ask those of you from the UK, although the question may be premature - has Brexit caused you, in any way, to alter or rethink plans for a holiday in Thailand?

[Nasherich]

I might rethink my plans if the pound dropped below 40 baht, but otherwise no.

[Daniel]

Gaybutton, what you say is quite logical. I was in Thailand for a month in February/March. I am hoping to visit again over the Christmas period, which I haven’t done for many years. I had considered stretching the month to six weeks. Whilst a weak pound would not put me off visiting Thailand, if it hasn’t strengthened before I book, I will stick to a month’s vacation. I know if I just plan to spend less per day, I won’t do it, so it’s better to be there for a shorter period.

I imagine those who receive a State and/or private pension from the UK will notice the difference. For some, it will mean looking at their spending habits.

As the article above states, the UK only purchases 2% of Thailand’s exports. I doubt we would buy less; we would just pay more for them in sterling.

Most of us from Great Britain and Northern Ireland feel the weak pound is temporary. We have to be optimistic, as there’s no going back now.

[Oliver]

Those of us who support our boyfriends in Thailand (in my case, in a new business undertaking) will certainly be affected by the exchange rate.

[Jun]

A small loss in UK tourists will soon be replaced by growth elsewhere, so for Thailand as a whole, no effect. For businesses marketing to UK visitors, perhaps some effect.