Market slows as launches face delays

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Greater Bangkok's property market is set to slow down in the fourth quarter as the launches of 4,000 condo units are expected to be postponed until next year due to unfavourable market sentiment.

Samma Kitsin, director-general of the Real Estate Information Center (REIC), said yesterday many condominium developers have put off new launches in the last quarter to next year.

"Market sentiment is unfavourable so the new condo supply has been held over. But single house and townhouse supply will keep launching as it can be launched on demand," Mr Samma said at the REIC's annual seminar.

REIC estimated there will be around 20,000 residential units newly launched in the fourth quarter, down from 24,000 units earlier planned and 29,000 units launched in the same period last year.

Overall, the number of new residential units to be launched in Greater Bangkok this year is estimated at 94,000 units, comprising 52,000 condo units and 42,000 units of single house and townhouses, down from 107,000 units last year.

During the first nine months of 2016, the number of new residential units launched in Greater Bangkok totalled 70,200 units from 313 projects, down 8.7% from 76,900 units from 318 projects in the same period last year. Of the amount, 37,200 units were condos, a 17% decline from 44,900 units, while 33,000 units were low-rise houses, a slight increase of 3%.

Yotsawat Rungkhanawuti, president of the Phitsanulok Real Estate Association, said like other provinces nationwide Phitsanulok's property market remains tepid in line with the country's economic condition.

However, there are many opportunities as the government has been revving up infrastructure development.

Phitsanulok itself is also a strategic province located on an intersection where the Bangkok-Chiang Mai high-speed rail would pass.

There are around 40-50 residential developers in Phitsanulok. The most popular residential units are single houses priced from 3-5 million baht while condos are becoming more acceptable among consumers.

Channarong Buristrakul, president of the Khon Kaen Real Estate Association, said the province's property market has also slowed down, but new mass-transit development by the private sector is expected to give a boost to the market in the near future.

E-tax ready by mid-2017, voluntary

By mid-January, large firms will be able to take care of their taxes online, but the system is not yet ready for ordinary citizens. (Photo by Wichan Charoenkiatpakul)

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The government's e-tax scheme will be rolled out in mid-2017, with plans to encourage companies to enter the system voluntarily rather than forcing them, says Finance Minister Apisak Tantiworavong.

"We will begin with the large firms first as they are more ready to enter the system right now. We might need to take three years to encourage businesses of all sizes to enter the e-tax system," said Mr Apisak.

The Thai government's e-payment scheme comprises an IT system and regulations to accommodate e-payments, e-tax invoicing and e-withholding tax in a bid to collect tax efficiently.

The scheme is also designed to encourage national digital economy development.

• See also: Public hearings set on cybersecurity bills

He said the government will not force companies to enter the system. The government delayed the roll-out of e-withholding tax and e-tax invoicing until next year rather than encourage them through incentives.

The Finance Ministry has pitched the idea of business operators being able to deduct their expenses for the installation of electronic data capture (EDC) machines up to two times actual expenses. Shops can also deduct EDC usage fees by two times.

The ministry's main effort will be in encouraging business operators to use a single account as duplicates will complicate their e-tax filings.

"A single account will make your life easier. For example, if you want to claim the value-added tax you can make a settlement right after the end of every month if you have only single account, as is global practice," said Mr Apisak.

He acknowledged it will not be easy for small and medium-sized enterprises to enter the e-tax system in the short term as most of these firms are family businesses.

"We have to give them some time to adjust, but they have to know sooner or later they must comply with the new rule as the country needs to make changes to be in line with global standards," said Mr Apisak.

Regarding the development of PromptPay, after its customer-to-customer system was postponed until the first quarter of next year because of a technical testing delay, Mr Apisak insisted the ministry will roll out the scheme by the first-quarter deadline.

He said for the e-wallet system, which is designed to accommodate low-income earners in using state services for free, such as public transport and utilities, the government should start launching some services soon and by the middle of next year all services and welfare will be available electronically.

Some 7.8 million out of 8.4 million low-income earners have registered with the government to verify they are eligible to receive state assistance measures specifically designed for that group.

Alla sets IPO price at B2.88

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Alla Plc, a manufacturer of material handling equipment, has priced its 150 million initial public offering (IPO) shares at 2.88 baht per share, with trading due to start on Nov 8.

Managing director Ong-ard Puntuyakorn said the company discussed the matter with an adviser and underwriters before settling on 2.88 baht. He said it is a reasonable price for both the company and investors.

Alla appointed Advisory Plus Ltd (Thailand) as financial adviser and Capital Nomura Securities as the main underwriter, with six other securities companies as co-underwriters of its IPO.

Mr Ong-ard said details of the share price were filed to the Securities and Exchange Commission and the shares are expected to start trading on the Stock Exchange of Thailand Nov 8.

The company produces and distributes material handling equipment such as cranes and hoists, industrial doors, dock levellers, and PVC strip curtains used in manufacturing, construction and logistics sectors.

Alla and its subsidiary, Onvalla Co, are the sole sales agents of Stahl and Abus, German producers of hoist and crane components.

He said Alla earmarked 80 million baht of IPO funds to expand its warehouse in Pathum Thani and another 60 million to expand its factory in Chachoengsao.

The rest of the funds from the IPO will be used to pay debt of around 50-60 million baht and as working capital, said Mr Ong-ard.

Alla wants to set up a joint venture in Indonesia next year where it would hold 33% of the shares, said Mr Ong-ard.

"We think Indonesia offers a great opportunity for us because of the population size and the developing industrial sector that needs our products and services," he said.

The company posted revenue of 924 million baht in 2013, 1.07 billion in 2014 and 870 million in 2015.

In the first half this year Alla posted revenue of 292 million baht with net profit of 29 million. Second-half sales will be similar to the first half, said Mr Ong-ard.

"2017 will definitely be a good year for us as we already bid to provide products and services on a number of projects, especially in the waste-to-energy sector," he said.

NTT pushes Thailand to be digital hub

ICT firm urges market liberalisation

Kahara: Thailand risks losing out

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Thailand must become a digital content hub by 2018 to lure internet content giants to base their servers here or it risks lagging behind the other tech hubs in the region, says an industry boss.

Being a digital content hub will also enhance the country's competitiveness and reduce the cost for internet connections, said Manabu Kahara, president of NTT Communications (Thailand), the local operating unit of Japan's NTT Communication Corporation.

Thailand's data centre and cloud-based service market are projected to grow by at least 20% from 2016-18.

More importantly, Mr Kahara said Thailand needs to ease restrictions on foreign ownership for submarine cable infrastructure business here.

"The government should liberalise the market by allowing foreign firms to wholly invest in submarine cable infrastructure, removing the 49% limit on total foreign ownership," he said.

There are only eight submarine cable lines in Thailand compared with over 15 in Singapore -- the main reason why internet content giants like Google or Facebook routed their internet traffic through Singapore and Malaysia.

The cost of international internet connection fees in Thailand is 10 times higher than in the US and five times higher than in Singapore, said Mr Kahara.

He said Thailand has high potential to become a digital content hub thanks to its geographical position.

Mr Kahara also urged the Thai government to provide tax incentives to companies that want to invest in submarine cable infrastructure.

Sanit Kashemsanta Na Ayudhaya, product and service director of NTT Thailand, said the company will upgrade its existing cloud services to enterprise-grade cloud service 2.0 in 2017 to serve the development of the country's digital economy.

"Thailand will be the third country in the region to move to Cloud 2.0, after Singapore and Hong Kong, of those housing our 14 cloud service centres," said Mr Sanit.

Teerawut Sunamalai, vice-president and chief financial officer of NTT Thailand, said the company plans to spend 300 million baht on construction of the second phase of its data centre in Chon Buri next year.

A report conducted by global research firm IDC Thailand suggested local demand for data centres will continue to increase by at least 20% during 2016-2018, as more companies are embracing digital transformation.

The firm projects the local data centre supply in Thailand will rise by 30%.

Berli Q3 profit doubles on forex gains, Big C purchase

A taxi driver waits for his customers next to the logo of Big-C department store in central Bangkok on March 4, 2016. (Reuters photo)

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Berli Jucker Plc , the retail flagship of tycoon Charoen Sirivadhanabhakdi's TCC Group, said its quarterly net profit more than doubled, due to foreign exchange gains and the consolidation of Big C Supercenter.

Berli posted a net profit of 1.8 billion baht for July-September, up 118% from a year earlier. It also booked a foreign exchange gain of 1.08 billion baht after a loan repayment, the company said in a statement

Third-quarter revenue jumped 241% to 38 billion baht, mainly due to consolidation of Big C's performance.

Berli raised about $6 billion from the sale of new shares and bonds to repay the short-term debt raised with banks to fund its $6.2-billion-baht acquisition of hypermarket chain Big C in May.

It holds 97.94% of Big C after winning a hotly contested tender offer for French retailer Casino's 58.6% stake in February.

Its interest-bearing debt-to-equity ratio rose to 1.4 times in the third quarter versus 0.7 times the same period a year earlier due to the Big C deal, Berli said.

Big C, the country's second largest hypermarket operator, reported a 14.6% rise in net profit of 1.54 billion baht in the third quarter, due to improved margins and resilient rental and service income growth.

Analysts expect Berli's profit to rise sharply in 2017 as it will fully benefit from the Big C acquisition, which gives Berli access to large-format retail business and well-invested supply chain.

Berli, which operates a wide range of trading, packaging to healthcare supply chain, is already the third largest grocery retailer in Southeast Asia in terms of retail sales, according to the company data.

It competes with CP All, controlled by billionaire Dhanin Chearavanont's Charoen Pokphand Group, and Tesco's Thai unit.

Berli shares (BJC) were down 2.84% to 51.25 baht in the morning session on Friday, after a surge of nearly 4% on Thursday ahead of the earnings announcement. Big C shares (BIGC) were 0.49% higher to 207 baht.