Mekong Monitor: Investors concerned over Thai economy due to political instability and COVID-19


Photo Credit: Reuters

 

TRADE, ECONOMY, AND INVESTMENT

 

THAILAND

Investors concerned over Thai economy due to political instability and COVID-19
(3 September 2020) Global investors are increasingly worried over the future prospects of the Thai economy due to both the economic impact of COVID-19 (with Thailand suffering its worst contraction in the last two decades in the second quarter of 2020) and political instability related to student protests. There have also been disruptions to the Thai government’s policy agenda by the recent resignation of Finance Minister Predee Daochai. The Thai baht dropped about 0.6% on the dollar between 1 and 2 September 2020, its steepest two-day slide in about two weeks, while its stock market is down 17% for 2020, having suffered foreign outflows every month until August 2020. Long-dated government bonds in Thailand have also seen a global sell-off.
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THAILAND

Thai government announces US$2.2 billion worth of fiscal stimulus in light of COVID-19
(2 September 2020) The Thai government announced on 2 September a US$2.2 billion worth of fiscal stimulus in cash handouts and job measures to support the Thai economy, which has been severely affected by the COVID-19 pandemic. The government plans to spend US$1.4 billion on 3,000 cash handouts for 15 million people to boost domestic consumption, as well as US$750.4 million to help fund the private sector’s hiring of 260,000 new graduates for a year. The government intends to continue introducing additional measures to help domestic activity and investments. These measures are part of the US$60.7 billion COVID-19 response package to help the economy.
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MYANMAR, INDIA

India-Myanmar Chamber of Commerce claims Indian investors interested in tapping into Myanmar
(2 September 2020) Investors from India are interested in investing in Myanmar, despite travel restrictions and other restrictions, according to the India-Myanmar Chamber of Commerce (IMCC). The IMCC has conducted several virtual fairs with both the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry to highlight growth opportunities in Myanmar. The majority of Indian businesses are reportedly interested in growing beans and pulses in Upper Myanmar. As of now, most Indian investments into Myanmar have been in the oil and gas sector. The IMCC has urged the Myanmar government to level the playing field for Indian investors, including in terms of greater transparency and clarity with regards to big projects in the country.
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CAMBODIA

Cambodian rice exports rise 31.0% year-on-year in first eight months of 2020
(1 September 2020) Cambodia’s rice exports rose 31.05% year-on-year in the first eight months of 2020, reaching 448,203 tonnes, according to the country’s National Phytosanitary database of the Ministry of Agriculture, Forestry and Fisheries. However, in August 2020, rice exports only reached 22,130 tonnes, as compared to 34,032 tonnes in August 2019. Cambodia’s total rice export consisted of fragrant rice (352,802 tonnes), white rice (89,699 tonnes), parboiled rice (5,679 tonnes) and others (23 tonnes). China was Cambodia’s top rice export market, with 159,253 tonnes exported in the first eight months of 2020. Among ASEAN countries, Malaysia imported about 23,201 tonnes of rice from Cambodia; Vietnam, 12,836 tonnes; and Brunei, 10,500 tonnes.
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VIETNAM

E-payment solutions provider aims to raise US$60-100 million in pre-IPO placement
(31 August 2020) Vietnamese e-payment solutions provider NextPay Holdings is considering a pre-IPO placement to raise around US$60-100 million in the first quarter of 2021, ahead of a planned stock market listing in 2022. The company is in talks with five investors from the US, Japan and South Korea for the private placement, and will offer them a 20% stake in the company. Proceeds from the private placement will be used to broaden NextPay’s merchant network in Vietnam and expand in overseas markets including Indonesia and Myanmar. The company plans to raise US$100 million when it debuts on the Vietnamese stock exchange in 2022. NextPay was formed in June 2019 and has 1.5 million e-wallet users and more than 35,000 acceptance points across 45 cities.
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About Greater Mekong Subregion (GMS)

The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.