(Bloomberg) -- Thailand’s economy shrank the most in a decade as exports and spending slumped, pushing the nation into its first recession since the Asian financial crisis.
Gross domestic product fell 7.1 percent last quarter from a year earlier, after declining a revised 4.2 percent in the previous three months, the government said today. The median estimate of 17 economists in a Bloomberg survey was for a 6.5 percent drop.
“The first quarter should be the worst,” said Rajeev Malik, a Singapore-based economist at Macquarie Group Ltd. “There is a strong likelihood the economy will grow in the fourth quarter.”
Exports, Thailand’s main economic driver, sank 16.4 percent last quarter, prompting companies including General Motors Corp. and Seagate Technology Inc. to cut production and fire workers. The central bank said last week there are signs the contraction is moderating, and the stock market is poised for its best quarterly advance since 2003.
“We can see light at the end of the tunnel,” Ampon Kittiampon, secretary-general at the National Economic and Social Development Board, said at a briefing on the economic report today. “We hope the government’s second stimulus package can jump-start the economy by the fourth quarter.”
The government “will do whatever we can” to ensure economic expansion by this year’s final quarter, Prime Minister Abhisit Vejjajiva said on May 20. The same day, the Bank of Thailand ended its most aggressive string of rate cuts ever, keeping borrowing costs at 1.25 percent even while saying risks to the economy remain.
‘Worst is Behind’
Production has picked up in electronic and automotive industries and exports, and consumer demand is recovering, Finance Minister Korn Chatikavanij said May 7.
“Orders have started to come back,” said Santi Vilassakdanont, chairman of the Federation of Thai Industries, a group of manufacturers. “The worst is behind us and things should get better now.”
Thailand’s economy will contract less each quarter before returning to growth in the final three months of this year, the median estimate of the economists surveyed by Bloomberg shows. The Bank of Japan on May 22 raised its view of the economy on signs that a record contraction in the first quarter represented the worst of the recession. Singapore and Taiwan last week said their economies may be past the worst.
Stocks, Baht
Exports have fallen for six months through April, the longest contraction in seven years.
Thailand’s SET Index of stocks declined 0.3 percent to 552.42 as of 10:30 a.m., trimming the quarterly advance to 28 percent. The baht slipped 0.1 percent against the dollar.
“I don’t see any strong sign of recovery yet,” said Veeravat Kanchanadul, Senior Executive Vice President at Charoen Pokphand Group, Asia’s biggest animal-feed producer. “We can’t be sure about the state of the economy when small players are still struggling.”
Manufacturing declined 14.9 percent in the first quarter, compared with a revised 6.7 percent drop in the previous three months. Private consumption fell 2.6 percent. Total investment retreated 15.8 percent.
GDP may shrink as much as 3.5 percent this year, the government’s economic adviser, the NESDB, said today. That would be the first annual contraction in 11 years and matches the median estimate of economists surveyed by Bloomberg. The economy grew 2.6 percent last year.
Far From Good
Consumer confidence is at its lowest level in seven years. An emergency decree was imposed for 13 days in Bangkok last month to quell anti-government riots that left two people dead.
“Business was really bad after the riots,” said Doris Gerecht, general manager at Bangkok’s Montien Hotel, adding that occupancy has averaged about 50 percent so far this year compared with 75 percent a year ago. “We’re starting to see a bit of a pickup in corporate bookings, but things are still far from good.”
Thailand’s economy hasn’t shrunk for two straight quarters since the first three months of 1999. That was the last of eight quarterly contractions triggered two years earlier, when the nation cut a peg to the dollar that had overvalued the baht and slashed exports. The economic crisis eventually extended to the Philippines, Indonesia, Malaysia, Taiwan and South Korea.
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Sunday, May 24, 2009
Barclays May Hire Up to 65 Bankers for Europe M&A
(Bloomberg) -- Barclays Plc may hire as many as 65 bankers for its European mergers advisory business this year as Britain’s third-biggest bank seeks to become one of the top three global securities firms.
Barclays Capital, the investment-banking unit, plans to add 30 to 40 bankers in Italy, Germany and France, and 15 to 25 in the U.K., Paul G. Parker, global head of mergers and acquisitions, said in an interview on May 21. The firm named Mark Warham and Matthew Ponsonby co-heads of European M&A last week.
Barclays Capital, which previously focused on bonds, loans and foreign exchange, surged to fifth in U.S. takeovers after the acquisition of Lehman Brothers Holdings Inc.’s North American unit in September, according to data compiled by Bloomberg. The London-based firm ranks 21st in Europe, where Lehman’s operations were bought by Nomura Holdings Inc.
“It makes sense to hire more bankers as they need to improve industry coverage,” said Katsunobu Komizo, chief executive officer of Tokyo-based Executive Search Partners Co. “It will take time and is challenging for Barclays, which used to focus more on debt, to profit from merger advisory because the business requires strong and long-term relationships with top corporate executives.”
Barclays Capital advised Pfizer Inc. on its $64 billion acquisition of Wyeth, the biggest takeover this year, and Verizon Communications Inc. on its $5.25 billion sale of phone lines to Frontier Communications Corp. It helped Dow Chemical Co. sell a stake in a Dutch oil-refining venture with Total SA to Valero Energy Corp. for $725 million.
Hiring Teams
“We aim to be top three across all products and regions” in investment banking, said Parker, who is spending a significant part of his time in Europe, helping recruit bankers. Barclays Capital wants to be a leader in cross-border deals “by combining the firm’s global perspective with local expertise.”
Barclays Capital plans to hire teams in the U.K., Germany, France, and Italy, including heads of M&A for the countries, said Parker, 45. The additions will build upon existing coverage of the Iberian region, overseen by Inigo Paneda and a team hired last year from Nomura, Japan’s biggest brokerage.
The firm also has about 30 former ABN Amro Holding NV bankers who will continue to focus on mergers and acquisitions in eastern and central Europe, as well as a team of about 15 in Asia, also primarily from ABN Amro, according to Parker.
‘Strong Brand’
Barclays Capital has advised on European takeovers worth about $7.7 billion this year, giving it under 3.5 percent of the market, Bloomberg data show. That includes the firm’s agreement to sell its iShares exchange-traded funds business to CVC Capital Partners Ltd. for $4.37 billion.
Credit Suisse Group AG is No. 1 in European mergers, followed by Citigroup Inc., Deutsche Bank AG, Morgan Stanley and JPMorgan Chase & Co., Bloomberg data show. Goldman Sachs Group Inc. ranks seventh after Zurich-based UBS AG.
“Barclays’s strong brand in Europe coupled with its strong lending and fixed income relationships positions us well to work with existing and new clients globally on transactions,” said Parker, who joined Barclays after the takeover of Lehman, where he ran global mergers with Mark Shafir, now at Citigroup.
Jerry del Missier, president of Barclays Capital, said earlier this month that expanding in mergers advisory and stock underwriting in Europe and Asia was the “single-biggest initiative this year.” The firm aims to add about 300 people for European and Asian equities by the end of 2009.
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Barclays Capital, the investment-banking unit, plans to add 30 to 40 bankers in Italy, Germany and France, and 15 to 25 in the U.K., Paul G. Parker, global head of mergers and acquisitions, said in an interview on May 21. The firm named Mark Warham and Matthew Ponsonby co-heads of European M&A last week.
Barclays Capital, which previously focused on bonds, loans and foreign exchange, surged to fifth in U.S. takeovers after the acquisition of Lehman Brothers Holdings Inc.’s North American unit in September, according to data compiled by Bloomberg. The London-based firm ranks 21st in Europe, where Lehman’s operations were bought by Nomura Holdings Inc.
“It makes sense to hire more bankers as they need to improve industry coverage,” said Katsunobu Komizo, chief executive officer of Tokyo-based Executive Search Partners Co. “It will take time and is challenging for Barclays, which used to focus more on debt, to profit from merger advisory because the business requires strong and long-term relationships with top corporate executives.”
Barclays Capital advised Pfizer Inc. on its $64 billion acquisition of Wyeth, the biggest takeover this year, and Verizon Communications Inc. on its $5.25 billion sale of phone lines to Frontier Communications Corp. It helped Dow Chemical Co. sell a stake in a Dutch oil-refining venture with Total SA to Valero Energy Corp. for $725 million.
Hiring Teams
“We aim to be top three across all products and regions” in investment banking, said Parker, who is spending a significant part of his time in Europe, helping recruit bankers. Barclays Capital wants to be a leader in cross-border deals “by combining the firm’s global perspective with local expertise.”
Barclays Capital plans to hire teams in the U.K., Germany, France, and Italy, including heads of M&A for the countries, said Parker, 45. The additions will build upon existing coverage of the Iberian region, overseen by Inigo Paneda and a team hired last year from Nomura, Japan’s biggest brokerage.
The firm also has about 30 former ABN Amro Holding NV bankers who will continue to focus on mergers and acquisitions in eastern and central Europe, as well as a team of about 15 in Asia, also primarily from ABN Amro, according to Parker.
‘Strong Brand’
Barclays Capital has advised on European takeovers worth about $7.7 billion this year, giving it under 3.5 percent of the market, Bloomberg data show. That includes the firm’s agreement to sell its iShares exchange-traded funds business to CVC Capital Partners Ltd. for $4.37 billion.
Credit Suisse Group AG is No. 1 in European mergers, followed by Citigroup Inc., Deutsche Bank AG, Morgan Stanley and JPMorgan Chase & Co., Bloomberg data show. Goldman Sachs Group Inc. ranks seventh after Zurich-based UBS AG.
“Barclays’s strong brand in Europe coupled with its strong lending and fixed income relationships positions us well to work with existing and new clients globally on transactions,” said Parker, who joined Barclays after the takeover of Lehman, where he ran global mergers with Mark Shafir, now at Citigroup.
Jerry del Missier, president of Barclays Capital, said earlier this month that expanding in mergers advisory and stock underwriting in Europe and Asia was the “single-biggest initiative this year.” The firm aims to add about 300 people for European and Asian equities by the end of 2009.
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South Korean Stocks, Won Drop After North Tests Nuclear Weapon
(Bloomberg) -- South Korea’s stocks and won slumped after North Korea said it had successfully tested a nuclear weapon, seven weeks after launching a long-range missile.
The Kospi index declined for a third day after the North’s official Korean Central News Agency said the successful underground test would “bolster its nuclear deterrent for self- defense.” The won fell the most in more than a week as the U.S. Geological Survey detected a 4.7 magnitude earthquake in the northeast of the communist nation.
The test would complicate efforts to get North Korean leader Kim Jong Il to return to six-nation talks aimed at eliminating its nuclear weapons program. The U.S., Japan and South Korea have accused the reclusive country of developing long-range missile technology to carry a nuclear device.
“This is not a pretty picture, especially with the North’s stern stance,” said Kim Yong Tae, a fund manager at Yurie Asset Management Inc. in Seoul, which manages the equivalent of $1.2 billion in assets. “Investor sentiment will be negatively impacted and it’s going to be difficult to expect big gains in the market in the short-term.”
The won fell 1.2 percent to 1,261.80 per dollar as of 12:25 p.m. in Seoul, paring its gains to 20 percent in the past three months. The benchmark Kospi index dropped 2.3 percent to 1,369.46. Share markets across the region fell with the MSCI Asia Pacific Index down 0.2 percent, reversing an earlier advance of as much as 0.8 percent. The Hang Seng Index of Hong Kong shares dropped 0.8 percent.
United Nations
North Korea launched a rocket that flew over Japan on April 5. It was the second time Kim Jong Il’s regime detonated a nuclear device. The first was in 2006.
The Kospi earlier declined as much as 6.3 percent to the lowest this month. All but one of the 19 industry groups in the index declined. About six stocks fell for every one that rose in the benchmark index.
Samsung Electronics Co., Asia’s biggest maker of chips and flat screens, retreated 2.2 percent to 538,000 won. Posco, Asia’s third-largest steelmaker, fell 2.5 percent to 388,000. KB Financial Group Inc., the owner of South Korea’s biggest bank, dropped 3 percent to 44,050 won. Hyundai Heavy Industries Co., the world’s largest shipyard, lost 2.9 percent to 221,500 won.
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The Kospi index declined for a third day after the North’s official Korean Central News Agency said the successful underground test would “bolster its nuclear deterrent for self- defense.” The won fell the most in more than a week as the U.S. Geological Survey detected a 4.7 magnitude earthquake in the northeast of the communist nation.
The test would complicate efforts to get North Korean leader Kim Jong Il to return to six-nation talks aimed at eliminating its nuclear weapons program. The U.S., Japan and South Korea have accused the reclusive country of developing long-range missile technology to carry a nuclear device.
“This is not a pretty picture, especially with the North’s stern stance,” said Kim Yong Tae, a fund manager at Yurie Asset Management Inc. in Seoul, which manages the equivalent of $1.2 billion in assets. “Investor sentiment will be negatively impacted and it’s going to be difficult to expect big gains in the market in the short-term.”
The won fell 1.2 percent to 1,261.80 per dollar as of 12:25 p.m. in Seoul, paring its gains to 20 percent in the past three months. The benchmark Kospi index dropped 2.3 percent to 1,369.46. Share markets across the region fell with the MSCI Asia Pacific Index down 0.2 percent, reversing an earlier advance of as much as 0.8 percent. The Hang Seng Index of Hong Kong shares dropped 0.8 percent.
United Nations
North Korea launched a rocket that flew over Japan on April 5. It was the second time Kim Jong Il’s regime detonated a nuclear device. The first was in 2006.
The Kospi earlier declined as much as 6.3 percent to the lowest this month. All but one of the 19 industry groups in the index declined. About six stocks fell for every one that rose in the benchmark index.
Samsung Electronics Co., Asia’s biggest maker of chips and flat screens, retreated 2.2 percent to 538,000 won. Posco, Asia’s third-largest steelmaker, fell 2.5 percent to 388,000. KB Financial Group Inc., the owner of South Korea’s biggest bank, dropped 3 percent to 44,050 won. Hyundai Heavy Industries Co., the world’s largest shipyard, lost 2.9 percent to 221,500 won.
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