Re: Banking Sector

[yellow knifeTop contributor]

Thus when a Government of a country is purely depending on Foreign Advice what else the citizens of that country do ?

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Prostitution is not strictly illegal in Thailand, though solicitation and public nuisance laws are in effect. In practice it is tolerated and partly regulated. Prostitution operates clandestinely in many parts of the country.^[1] Local officials with commercial interests in prostitution often protect the practice. The precise number of prostitutes is difficult to assess; estimates vary widely and are subject to national and international controversy.^[2] Since the Vietnam War, Thailand has gained international notoriety among travellers from many countries as a sex tourism destination


In 2015 Havocscope said that about $6.4 billion dollars in annual revenue was being generated by the trade, a figure which accounted for 10 percent of Thailand’s GDP. Sex workers in Thailand send an annual average of US$300 million to family members who reside in more rural areas of Thailand

[yellow knifeTop contributor]

Thailand is still No 1 Rice Exporter

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[yellow knifeTop contributor]

During and immediately after the Second World War, the absence of Europeans and Americans and the presence of a now more developed state bureaucracy allowed local entrepreneurs to enter banking and insurance for the first time. For substantial Thai financial groups evolved in this period. Indeed the biggest of these institutions Bangkok Bank, became the largest bank in south-east Asia.

Thai Government during this period also began the longest-run strategy of import substitution industrialization in south-east Asia, with numerous sector development campaigns until 1980s..

The private banks financed this. These banks took small equity positions in these businesses. In the absence of export discipline however manufacturers did not make products that were globally competitive.

[yellow knifeTop contributor]

Export tree of Thailand shows the result of these mixed strategies.

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Eventhough Thailand is known as the best pupil of World Bank and IMF, today this is what they say.



Thailand Weakest Asean Economy in 2016 – World Bank
By John Le Fevre on January 7, 2016

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[yellow knifeTop contributor]

Yet IMF and World Bank was full of appraisal and so were the brilliant economists then.

This is the perfect reversal of South Korea. World Bank criticized South Korea, specially when it was moving into Steel Manufacturing with POSCO and later appreciated the country.

[yellow knifeTop contributor]

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This is how the economist saw , the best pupil of IMF in Asean economy then.

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STAR pupils are good models for the lazy and recalcitrant. In the IMF's reformatory for delinquent Asian tigers, Thailand fits the bill. While President Suharto of Indonesia tries to bluster, bluff and blackmail his way out of tough IMF-prescribed reforms (see article), Thailand does nearly everything demanded of it. Partly to show Mr Suharto the error of his ways, the IMF wants to tout a success story. One snag: Thailand, as yet, is not it.

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Chuan recites

There is certainly much to admire in the single-mindedness with which the government of Prime Minister Chuan Leekpai has tackled its troubles since taking office in November. It has cut spending and raised taxes. It has closed 56 finance companies, nationalised four failing banks, and opened the finance industry to foreigners. It is compelling banks to be more candid about their bad loans, and to raise new capital. It has kept interest rates high despite the loud complaints of industrialists, and has an ambitious privatisation programme. Collapsing imports have turned the current account from a deficit of close to 8% of GDP in 1996 into four successive monthly surpluses.

The school swot has been collecting prizes. Mr Chuan has been promised $1.7 billion in American aid. The IMF and World Bank heap praise on his team of economic ministers, and promise extra help. Last August's $17.2 billion IMF-led rescue package now looks positively frugal compared with the much larger bail-outs of Indonesia and South Korea. Even the markets are applauding. The stock exchange has been the best-performing in the region this year, and the currency, the baht, has clawed its way out of the depths (see chart).

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So unlike for South Korea, nice words are flowing into Thailand from all Western aligned sources. Its almost like Sri Lanka being appreciated by JATHYANTHARAYA.

Just compare the words in bold with what we are experiencing now you can see a similarity .

[yellow knifeTop contributor]

Now lets read about the Thai Prime-minsiter who was much praised by Economists , IMF and West.

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Chuan Leekpai


In 1987, when Chuan was Parliament Speaker, his younger brother Raluek Leekpai (ระลึก หลีกภัย) was charged with embezzling 231.8 million THB (approx. 9 million USD in 1987) from Thai Farmers Bank.^[4] Raluek had been an executive at TFB. Responding to accusations in Parliament, Chuan publicly defended the innocence of his brother. Raluek fled the country, and only returned to Thailand in 2004 after the statute of limitations expired on his crime and he couldn't be prosecuted. He had been on the run as a fugitive in Taiwan. Raluek has said he might enter politics in order to restore his reputation, although he said he wanted to live a quiet life in his Trang hometown.

First Term (1992-1995)

In the aftermath of Bloody May, the Democrat Party won the majority of seats in the September 1992 elections, with 79 seats, compared to the Chart Thai Party with 77 seats. Chuan formed a coalition government with the Phalang Dharma and Ekkaparb parties.

Second Term (1997-2001)

Chuan became prime minister for the second time on November 9, 1997.

Corruption

Although generally regarded as relatively clean and honest when compared to other Thai administrations, Chuan's government found itself plagued with corruption scandals and rumors. Key cases of corruption included:

• Rakkiat Sukhthana, Health Minister, was charged with taking a five million THB (125,000 USD) bribe from a drug firm and forcing state hospitals to buy medicine at exorbitant prices. After being found guilty, he jumped bail and went into hiding.
  
• Suthep Thaugsuban, Minister of Transport and Communications, whose brokering of illegal land deals caused the fall of the Chuan 1 government, was linked to abuse of funds in setting up a co-operative in his southern province of Surat Thani.^[13]
  
• The "edible fence" seed scandal, in which massive overpricing of seeds distributed to rural areas happened. The Deputy Minister of Agriculture was forced to resign.^[14]
  
• The Salween logging scandal, where up to 20,000 logs were felled illegally in the Salween forest in Mae Hong Son. Some of them turned up in the compound of the Democrat party’s office in Phichit province.^[14]
  
• Sanan Kajornprasart, Interior Minister, as well as 8 other cabinet ministers were found to have understated their declared assets. Sanan was later barred by the Constitution Court from politics for 5 years.^[15]
  
• Chuan himself was found by the National Counter-Corruption Commission to have undeclared shareholdings in a rural cooperative.^[15]
  

Chuan stepped down as the head of the Democrat Party in 2003

[yellow knifeTop contributor]

Apart from Politicians the Central Bankers do a major role to a country's economy. We have seen that earlier with Malaysian example.

The powerful banking groups which were privately controlled but underpinned by military, royal and government equity-were kept in check by shout east Asia's most independent, orthodox and professional central bank. The Bank of Thailand (BOT) set up in 1942, had close relations from the late 1940s with the World Bank and IMF, which provided ongoing training to the staff.

BOT officials came to see themselves as not so much managers of development but as the honest policemen in a a country prone to cronyistic business behaviour.

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[yellow knifeTop contributor]

Thai Stock Index showing 1997 Financial Crisis

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[yellow knifeTop contributor]

As with Bank Negara Malaysia, there was only a modest and non-inflationary amount of re discounting of bank loans by the central bank.

In Thailand most of this went not to manufacturing but to key export crops, of which much the most important was rice. The share of commercial bank lending going to manufacturing rose only slowly, from 10% in 1958 to around a quarter in 1980s. this was roughly on par with Malaysia.


We in Sri Lanka are not familiar with Re discounting and our percentage of loans to industry sector as shown in COMB.N 's situation.

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[yellow knifeTop contributor]

Time to revisit Banking sector and to update again with the interest of " Who the next Governor of CB ?"

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[You must be registered and logged in to see this image.] by [You must be registered and logged in to see this link.] on Fri Mar 25, 2016 11:50 am
So
Ismail Mohd Ali was leading Malaysian finance for 18 years.

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Alan Greenspan was leading US economy as FED Chairman for 19 years.

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Such long tenures for Central Bank Governors is recommend by Gerorge Bagehot the writer of Lombard street

One weakness of democratic countries is that the ruler cannot plan for long term as his time ends after 4-6 years..

Thus having a Governor of Central Bank for a long period is one best remedy..

Imagine a democratic country where CB Governors are appointed on Trial and Error basis and for short duration....

[xmartTop contributor]

Imagine a democratic country where CB Governors are appointed on Trial and Error basis and for short duration....

[yellow knifeTop contributor]

Its time to revisit and re write this thread...

These days newspapers ( sinhala and english ) is full of bond scam and how the CBSL officers had to face a tough time during this bond issue....

On the other hand Banks are getting ready for a rain of Rights issue, scrip dividends to gear up with Capital Adequacy Ratios...

[කිත්සිරි ද සිල්වාTop contributor]

Quarterly Earnings

[Ethical TraderTop contributor]

Thanks Kith. Seyb.x is still attractive.

[කිත්සිරි ද සිල්වාTop contributor]

   

Seyb.x is still attractive.

[yellow knifeTop contributor]

on Tue Mar 07, 2017 9:13 am

On the other hand Banks are getting ready for a rain of Rights issue, scrip dividends to gear up with Capital Adequacy Ratios...

HNB to rasie Rs 15 Bn via rights issue

[SeyonTop contributor]

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I haven't adjusted right issue effect on NDB and SAMB. This is just extracted from info published

[sereneTop contributor]

Thanks Seyon
All are attractive.

[PANTOMATH]

Thanks Seyon
EPS,PE or PBV alone is not going to make a share attractive. EPS growth and PE growth matter most.Current difficult economic conditions won't allow easy growth for them.

[SeyonTop contributor]

Thanks Seyon
EPS,PE or PBV alone is not going to make a share attractive. EPS growth and PE growth matter most.Current difficult economic conditions won't allow easy growth for them.

True, but there will be growth after right issue, banks loan book will grow, only the fear is NPL due to the current economic condition.

[lanka]

Thanks,

[The Invisible]

Sri Lanka bank NPLs highest in tourism

ECONOMYNEXT - Non-performing loans in Sri Lanka's banks, which are below recent and historic highs, were highest in tourism, a sector which has seen the most dynamism and new investment in recent years, a central bank report said.

Sri Lanka's bad loans had grown by 93.9 billion rupees to 254.6 billion rupees in the eight months to August 2018, which was 3.6 percent of total loans, up from a low of 2.5 percent in 2017.

Bad loans ratio was higher at 6 percent in 2016, the central bank said.

Sri Lanka's credit grew rapidly in 2015 and 2016 amid money printing. Periods of rapid credit growth, tends to reduce the overall bad loan ratio as new loans expand, but bad loans then catch-up as brakes are put on money printing and the economy slows.

In Sri Lanka the rupee has also fallen, due to the operation of a soft-pegged exchange rate, further hurting spending power.

By June 2018, the highest share of bad loans were reported from tourism, which had seen dynamism and new investment.

On one hand new operators with no previous experience in tourism jumped into the sector. While some of the new operators had blazed new trails, innovating the sector, others are now consolidating.

Some established operators are also under pressure, from newer properties.

The central bank said NPL ratio of 5.5 percent was reported from tourism, 5.4 percent from manufacturing, 5.1 percent from information technology & communication services, 4.7 percent from wholesale and retail trade and 4.4 percent from forestry and fishing. (Colombo/Nov01/2018)

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[NIRMALSG]

First Capital Research upgrades Banking Sector to BUY from HOLD with a 42% return over 1 Year.

Banking-Sector-Sri-Lanka-UPGRADE-TO-BUY-Jan-2020-1.pdf

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[spw19721Active Member]

Thanks for the update