KASIKORNBANK. Investor Presentation. Monthly Economic Information By KASIKORN RESEARCH CENTER. June 2017

Transcription

1 KASIKORNBANK Investor Presentation Monthly Economic Information By KASIKORN RESEARCH CENTER June 7 For further information, please contact Investor Relations Unit or visit our website at or Operating Environment: Economic Outlook for Key GDP Forecasts and Assumptions Key Points: The projected base case for 7 GDP growth is.% (range.-.6%). 6 7F 7F* 6 (Previous) 7F* Base Case Range Base Case GDP Private Consumption Government Consumption Total Investment Public investment Private investment Gov't Budget Deficit (% of GDP) to Exports (Customs Basis) Imports (Customs Basis) Current Account (USD bn) Headline Inflation Policy Interest Rate**.... Notes: The current MPC s policy rate is at.% Source: * KResearch (as of July 6, 7 vs forecast in March 7) ** KBank Capital Markets Research (as of December 6, 6) Public spending and the tourism sector remain key growth drivers of the Thai economy, although at a slower pace due to the high base effect Improving exports contribute additional growth to the Thai economy this year Risk Factors: Trade protectionism by the US and other countries BREXIT implementation and fragility in Europe Volatile funds flows due to Fed Funds rate hike Chinese economic uncertainty

2 Monthly Economic Conditions: May - June YTD Units: YoY %, or indicated otherwise Q-7 Jan-7 Feb-7 Mar-7 Apr-7 May-7 Jun-7 7 Private Consumption Index (PCI) Non-durables Index Durables Index Service Index Passenger Car Sales Motorcycle Sales Private Investment Index (PII) Domestic Sales Volume of Cement Domestic Machinery Sales at constant prices Imports of Capital Goods at constant prices Commercial Car Sales Manufacturing Production Index Capacity Utilization Agriculture Production Index Agriculture Price Index No. of Tourists Exports (Custom basis) Price Volume Imports (Custom basis) Price Volume Trade Balance ($ millions) (Custom basis),67,9, 8.9,6, , Current Account ($ millions),6 7,68,,6 6,,6,96, 9,9 Headline CPI Key figures in May 7 suggested Thai economy picked up at moderate pace Private consumption inched up, supported by durable goods and service sector, while private investment remained sluggish Exports performed very well, in both price and quantity terms Current account surplus narrowed, due to a surge in capital goods and raw material imports June 7 headline inflation reported a negative figure, due to a decline in vegetable prices, in addition to high base effect Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), Office of Industrial Economics (OIE), and Office of Agricultural Economics (OAE) Currency and Interest Rate Outlook USD/THB: End Period Bt Q Q Q Q Q Q Q6 Q7F USD/THB Fed increased its policy rate in June meeting to.-.% We expect the Fed to stall its interest rate normalization process and shifted its policy to gradual balance sheet reduction, which could start at the end of Q7 Fed rate hikes and gradual approach in unwinding the balance sheet would result in limited capital outflow from Thailand. Thailand s high current account surplus and being labeled a safe haven in Southeast Asia will help appreciate USD/THB to close at. by 7 year-end % p.a Interest Rate Trend Dec- Dec- Dec- Dec- Dec- Dec- Dec-6 Dec-7F Fed Funds rate BOT's -Day Repurchase rate Thailand economic growth has continued to be supported external sectors like exports and tourism, while domestic economy has yet to recover We expect the BOT to hold its policy rate at.% throughout 7, in order to accommodate the domestic recovery. While a gradual Fed hike should give the MPC flexibility to remain on hold On the chance of cutting, we do not expect the BOT to cut the policy rate as the BOT still concern on search-for yield behavior that could lead to underpricing of risks Note: F is estimated by KBank Capital Markets Research (as of July, 7)

3 Economic Condition Highlights: May - June 7 May7 MPI and CapU picked up, as improving demand in electronics and automobile Activity in the property market plummeted in Q7, due to subdued economic activity and high-based effect %YoY of MPI Jan- Jul- Jan-6 Jul-6 Jan-7 MPI (lhs) %Capacity Utilization SA (rhs) %Capacity Utilization Rate % % % % % -% Q9 Q Q Q Q Q Q Q6 Construction areas permitted in municipal zone Condominium Registration Nationwide New Housing registered in BKK and Vicinity -8% -% -77% Jun7 headline inflation reported a negative figure for months, due to a decline in vegetable prices, in addition to high base effect Property prices growth was slow in Q7, as the market lacked of new catalysts %MoM Jan- May- Sep- Jan-6 May-6 Sep-6 Jan-7 May-7 Headline CPI (MoM-lhs) Headline CPI (YoY-rhs) Core CPI (MoM-lhs) Core CPI (YoY-rhs) %YoY Single House (With Land) Townhouse (With Land) Land Q9 Q Q Q Q Q Q Q6 Q Sources: BOT, MOC, OIE, and REIC (Real Estate Information Center) CCI Million Person Economic Condition Highlights: May - June Jun7 BSI and CCI declined, as concern over economic uncertainties 6 Jan- May- Sep- Jan-6 May-6 Sep-6 Jan-7 Consumer Confidence Index (CCI) Business Sentiment Index (BSI) May7 foreign arrivals rose moderately, as Chinese tourist saw a recovery % 8.7% %.% %.6.%.6 6 BSI %YoY May7 private consumption showed signs of improvement, but private investment remained bleak % % -%.% -.% -.% -.8% PCI PII Car Sales Construction Materials Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), and Office of Industrial Economics (OIE).6% 6 M7 May 7 No of Foreign Tourist Arrival.6 % Tourist Arrival YoY (RHS) % % % % % % -% -%.9% Imports of Capital Goods Q6 Q7 Apr-7 May-7 Consumer's Durable May7 exports maintained a high growth, thanks to a surge in electronics demand Export Value (USD Million) 6.,. 6,, 8, -, - - Jan- Sep- May-6 Jan-7 Exports Exports excluding gold Exports Exports excluding gold.7% 6

4 Exports and Imports: May 7 Exports by Country Imports by Country.% Hong Kong.8%.%.%.9%.%.8%.7% Exports, Custom Basis May-7 Total Exports, 9,9.%.% Electronic machines,96.% % Motor cars, motor vehicles, parts,9.% % Electrical equipment,.% % Rubber products 86.% % Polymers of ethylene, propylene, 7.8% 9% Precious stones and jewellery 77.7% -% Refine fuels 68.% 7% Machinery and parts thereof 68.% % Chemical products 67.% 8% Textiles 77.9% 6% Note: CLMV = Cambodia, Laos, Myanmar and Vietnam Source: Ministry of Commerce CLMV.9% Top Exports by Product 6.% 8.7% 8.9%.8%.9%.% 8.6% Top Imports by Product CLMV.7% Import, Custom Basis May-7 Total Imports, 9,.% 8.% Crude oil,8 9.% 7.% Machinery and parts,77 9.%.7% Electrical machinery and parts, 7.9%.% Chemicals, 7.% 6.% Electrical, electronic equipment and parts thereof,7 6.% 8.7% Iron, steel and products,9.%.% Parts and accessories of vehicles 996.%.% Jewellery including silver bars and gold 97.8% 6.% Other metal ores, metal waste scrap, and products 7.9%.8% Electrical household appliances 6.%.7% 7 Exports and Imports: M7 Exports by Country Imports by Country.6% Hong Kong.% 9.%.%.6%.%.%.% CLMV.6% 7.% 8.% 8.8%.% 9.%.% 8.9% CLMV.% Top Exports by Product (BOP Basis) Total Exports, Custom Basis M7 Total Exports, 9,6.% 7.% Electronic machines,78.8% % Motor cars, motor vehicles, parts and accessories,9.% % Electrical equipment 9,86.6% 9% Precious stones and jewellery,9.6% -% Rubber products,66.% 9% Polymers of ethylene, propylene,,.7% % Chemical products,96.% % Machinery and parts thereof,9.% % Rubber,8.% 6% Textiles,699.9% % Note: CLMV = Cambodia, Laos, Myanmar and Vietnam Source: Ministry of Commerce Top Imports by Product (BOP Basis) Import, Custom Basis M7 Total Imports, 88,.%.% Crude oil 7,9 9.%.9% Machinery and parts 7,67 8.7% -.8% Electrical machinery and parts 6,77 7.6%.% Chemicals 6,67 6.9% 8.% Electrical, electronic equipment and parts thereof,99 6.8%.7% Jewellery including silver bars and gold,86.% 8.% Iron, steel and products,6.%.% Parts and accessories of vehicles,.9% 9.% Other metal ores, metal waste scrap, and products,9.9%.% Electrical household appliances,6.%.8% 8

5 Public Debt to GDP and Fiscal Budget Billion Baht 6, 6,, Public Debt Public Debt % to GDP.9, Sep- Mar-6 Sep-6 Mar-7 Public debt to GDP ratio was.9% as of May 7, still under the 6% limit set under the fiscal sustainability framework Thai government is committed to keep the ratio of public debt to GDP under % Note: Public Debt to GDP has declined since January, due to a change in GDP computation The Bt9bn extra-budget has been included in FY7 budget since April 7 Source: Ministry of Finance (MOF), Fiscal Policy Office (FPO), and Public Debt Management Office (PDMO) 6 % to GDP % Cumulative Budget Disbursement Rate (%) Total Budget Bt.9trn - General Budget Bt.trn - Investment Budget Bt.6trn Budget Disbursement Rate Oct Nov FY 7 FY 6 FY Dec Jan Feb FY7 target Bt.8trn (96%) Bt.9trn (99%) Bt.trn (87%) Mar 8M FY7 actual Bt.86rn (6.7%) Bt.6rn (69.8%) Bt.trn (9.%) Unused FY7 Budget Bt.6trn (6.%) Bt.7trn (.%) Bt.7trn (6.7%) Government budget disbursement rate for 8MFY7 is 6.7%, slightly decline from the 6.8% in 8MFY6 FY7 budget disbursement target is 96%, unchanged from FY6 Apr May Jun Jul Aug Sep 9