Money &Banking to celebrate the 10th Money Expo with the theme “The Road to Wealth”

Money and Banking magazine organizes Money Expo 2010 with special theme “The Road to Wealth” to celebrate its 10th year anniversary and support Thailand economic recovery to distribute wealth to all Thais. The first event, bringing great wealth to Eastern Seaboard, is Money Expo PATTAYA 2010.


Mr.Santi Viriyarangsarit, Money and Banking magazine editor and president of Money Expo 2010 announces that “after its 9 successful years in 2009 with total 5,185,500 visitors and transactions value of 646,000 million baht, Money Expo 2010 will celebrate its 10th anniversary in 2010 in 4 regions in the country with the theme “The Road to Wealth”.

Money Expo brings together best investments and finance offers from nation’s leading commercial banks, financial institutions, along with varied life insurance options available in the market so that retail customers and SMEs can access directly to “funding source” and “Investment Choices”. At the same time, opportunities are opened for Bank and financial institute to expand both retail and SMEs base.

The first Money Expo 2010 The Road to Wealth, the roadmap to achieve wealth for all Thais, will be held in Pattaya of Chonburi province with title “Money Expo Pattaya 2010” during 5-7 February 2010 at PEACH, Royal Cliff Beach Resort Hotel where 22 organizations, including commercial banks, financial institutions together with leading organization from private sector and government agencies will participate.

These organizations will roll out golden promotions for their quality products and services, ranging from low-interest lending rate, special mortgage rate, auto loan, education loan, SMEs loan, credit card, cash card to attractive deposit rates. The best conditions will be offered for investment in stock market, bonds, derivatives, life insurance. Meanwhile, investment guidance and consultancy services will also be provided to those interested. Moreover, liveStage performances from leading superstars are scheduled to entertain visitors.

Commercial banks participate in Money Expo PATTAYA 2010 are Krung Thai Bank Pcl. , Bangkok Bank Pcl. , Kasikorn Bank Pcl. , Siam Commercial Bank Pcl. , Bank of Ayudhya Pcl. , TMB Bank Pcl. , The Siam City Bank Pcl. , CIMB Thai Bank Pcl. , The Thai Credit Retail Bank Pcl. , Commercial banks participate Government Housing Bank , Islamic Bank of Thailand , Muang Thai Life Assurance Co. Ltd. , Ayudhya Capital Auto Lease Plc. , AEON Thana Sinsap (Thailand) Pcl. , Asia Forestry Management Co., Ltd. , Profitable Group , Bank of Thailand , The Revenue Department , The Stock Exchange of Thailand , Securities and Exchange Commission , Office of Insurance Commission and The Agriculture Futures Exchange of Thailand

Chonburi province is the economic, commercial and tourism center of the East given purchasing power of 1.2 million population. At the end of 2008, Gross Provincial Product (GPP) stood at 492,051 million baht, rose by 38,165 million baht from end 2007, while GDP per Capita was 416,003 baht, increase by 27,829 million baht from the end of 2007.

As of September 30, 2009, Chonburi shelters 280 of Banks’ branches. All of which provided 153,324 million baht net credits and raised 191,457 million baht net deposits. From January to October 2009, there are 35 projects applied for investment privileges from BOI.

In addition, there are positive signs of economic recovery given the revised 2010 GDP growth forecast to 3.3 to 5.3% from previous 3.0 to 3.5% by the The Bank of Thailand.

“All indicators show that there are strong demand for loans in Chonburi and the whole Eastern region and consumers still look for better yields in deposits and investment. I’m confident that Money Expo PATTAYA 2010 will again succeed as highly as the first Money Expo PATTAYA held during 6-8 February 2009 that has attracted 45,000 visitors and generated 19,213.68 million baht worth of transactions” Mr.Santi said.
Three other Money Expo 2010

Central - Money Expo 2010 at Queen Sirikit National Convention Center, 6-9 May 2010

North Eastern - Money Expo KORAT 2010 at MCC Hall, The Mall Korat, 8-10 October 2010

North - Money Expo Chiangmai 2010 at Chiangmai University Convention Center, 12-14 November 2010

New Generation Trading System for China Foreign Exchange Trade System (CFETS) goes live nationwide

Tata Consultancy Services, the leading IT services, business solutions and outsourcing firm today announced that the Reminbi currency trading platform for the Chinese inter-bank market, an initiative of China Foreign Exchange Trade System (CFETS), a subsidiary of People’s Bank of China (PBoC) has successfully gone live nationwide. The New Generation CNY Trading System (NGCNYTS) is a forward-looking trading system, which aims to incorporate the future vision of the Chinese Interbank market and relevant international best practices. It is designed to meet the fast growing requirements of the Chinese financial market with efficient risk management and real time monitoring systems. It supports multiple trading methods, including special features for market makers.


NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.

Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”

“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.

TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.

Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.

TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.

Euroclear Bank to automate syndicated loan settlement

Euroclear Bank announces the industry’s first and only multi-currency, delivery-versus-payment (DvP) settlement service for secondary market trades in syndicated loans. Launch of the new LoanReach feature will take place in the first quarter of 2010. The new, automated DvP settlement service fills a major efficiency gap in the syndicated loan business, reducing costs and risks for secondary market loan trading. DvP settlement means that the cash and loan components of the trade will be exchanged simultaneously, unlike today where movements of loan positions and cash occur manually and asynchronously. DvP settlement is the industry standard for trades in most other asset classes, such as equities and bonds.


Euroclear Bank’s extended LoanReach service will eliminate most of the credit and settlement risks, and substantially reduce the counterparty risks, associated with the settlement of syndicated loans.

Furthermore, Euroclear Bank’s initiative aims to significantly shorten the length of the settlement cycle. Today, syndicated loan transactions settle on a T+20-25 basis. Euroclear Bank’s service targets the benchmarks set by the Loan Market Association (LMA) and the Loan Syndications and Trading Association (LSTA) of T+10 and T+7, respectively, for conventional trades. Shorter settlement cycles will reduce counterparty default risk and increase liquidity.

Jurgen De Weghe, Director, LoanReach Product Management, said: “We are proud to deliver the benefits of automation and standardisation to syndicated loan investors. In close collaboration with agent banks, the introduction of multi-currency trade matching and DvP settlement is critical in this cost- and risk-conscious environment. Euroclear Bank’s LoanReach service is the most comprehensive in the market, with more features, such as E-messaging and collateral management, to come in the near future.”

"We strongly support the development of market platforms for syndicated loans,” said Martin Lelong, Project Director at Société Générale Corporate & Investment Banking (SGCIB). “We are particularly interested by Euroclear’s announcement, as their service offer fits very well with the specificities of the European market, which is of key importance to us: a tool working seamlessly and with all major currencies from trade matching to final settlement. We are convinced that these types of solutions will bring operational risk reductions, increased liquidity and productivity gains to the whole sector."

LoanReach was launched in June 2008, offering a service to allocate unique identification codes for syndicated loans, a centralised loan database, as well as agent and lender portfolio reporting systems.

With the launch of its second phase in September 2008, LoanReach introduced a portfolio reconciliation service enabling lenders to reduce their operational workload by reconciling their portfolios against balances uploaded by their agents in the centralised loan database maintained by Euroclear Bank. This service feature significantly reduces the number of reconciliation failures between agents and lenders, resulting in more efficient and accurate processing of cash-related operations, such as interest payments.

Citi mandated to raise first syndicated SME financing for a microfinance institution

Citibank, N.A., Dhaka Branch today announced that it has been mandated for the country’s maiden syndicated facility of up to BDT 2 billion (US$29 million) to provide financing for small and medium enterprises (SMEs). This local currency facility will be for BURO Bangladesh, a leading microfinance institution and SME-financing NGO (non-government organization) in Bangladesh. The facility will be utilized by BURO to make credit available to SMEs, especially in rural and semi urban areas. SME financing is a priority area for Citi in Bangladesh and Citi is committed to further participating in the development of the sector.


“This Citi-led initiative is aligned with the Bangladesh Bank’s [the Central Bank of Bangladesh] objective to promote the development of the SME market. We are honoured to have this opportunity to support BURO. Once closed, this deal will provide long-term, local-currency solutions to BURO for the expansion of its SME portfolio,” said Mamun Rashid, Citi Country Officer Bangladesh. The transaction is expected to close in the first quarter of 2010.

This transaction is a follow-on to a recent transaction where Citi Bangladesh successfully closed the country’s first ever syndicated agricultural term facility of BDT1.5 billion (or US$21.7 million) to BURO Bangladesh, to support its expansion of micro-lending to the agriculture sector.

“We'll expedite our SME financing programs across the country using such funds," said Zakir Hossain, Executive Director of BURO, adding that the agency is now running their SME programs in four divisions including Dhaka.

Established in 1990, BURO Bangladesh serves more than 700,000 customers, of which more than 99% are women. BURO has a presence in 51 districts of Bangladesh through over 400 branches. As part of its 2009-2013 expansion program, BURO has plans to open 215 new branches covering 1.65 million total customers.

Thai SMBs Take the ‘Hero’ Approach to Running Their Business

PayPal survey reveals that Thai SMBs rank creativity and imagination as top start-up skills


Thailand, 14 December 2009 – According to a regional PayPal study released today, when it comes to the way Thai SMBs conduct business, more than a fifth (21 percent) liken themselves to ‘heroes’ – committed to meeting any challenge before them and leading their business through all types of conditions.
Keys to success

Over a third (32 percent) of Thai SMBs consider creativity and imagination as the most important skill when starting your own company, followed by self-confidence (30 percent) and industry expertise (30 (percent).

The Internet is also playing an increasingly important role in the success of Thai SMBs, with over a third (37 percent) of annual turnover derived from online sales, equating to US $182,000. Global reach, additional sales revenues and staying ahead of the times were cited as the top three drivers for going online. Currently, 66 percent of Indian SMBs have a company website and 52 percent are engaging in e-commerce activities such as offering online orders (89 percent), online payment (56 percent) and online delivery (9 percent).
Potential roadblocks

Almost three quarters (73 percent) of the SMBs surveyed in Thailand intend to grow their business steadily in the next two to three years. However, they are encountering some challenges in meeting their goal. Forty-seven percent are concerned about surviving the current global downturn, 43 percent are facing increasing competition in their industry and 37 percent are having trouble building an online business.

Thai SMBs see e-commerce as one way to overcome those roadblocks and believe it will provide an additional avenue for more sales (71 percent), help them to increase global reach (53 percent) and keep up with the times (51 percent).
The future looks bright

The average annual sales turnover for SMBs in Thailand is currently US$492,200 and the majority of Thai SMBs (80 percent) are either very or quite optimistic about business growth in the next 12 months, with more than 2 in 5 looking at up to 20 percent growth. With over 1.6 billion Internet users worldwide, it is clear that e-commerce will play a very important role in Indian SMBs achieving that growth.

“Our research shows that Thai SMBs clearly recognise the value of ecommerce with the highest proportion (over 50 percent) across the four countries surveyed already engaged in ecommerce activities,” said Mario Shiliashki, General Manager of PayPal Southeast Asia and India. “Convenience, security and minimal set-up costs will help Thai SMBs to overcome their current roadblocks and satisfy their desire to grow internationally and drive additional sales revenues. With over eleven years of experience connecting buyers and sellers across the globe, we offer merchants a cost-effective, convenient and secure way to get started online and grow their business. Plus, research has shown that SMBs can receive an average sales increase of 14 percent when they add PayPal to their site. ”
About PayPal

PayPal is the faster, safer way to pay and get paid online. The service allows members to send and receive payments without disclosing financial information, with the flexibility to pay or get paid using a variety of secure payment options, including account balances, bank accounts (in approved countries), credit cards or promotional financing. With more than 78 million active accounts in 190 markets and 24 currencies around the world, PayPal enables global ecommerce.

In the U.S., PayPal is the most preferred payment service on the Web after Visa. In the UK and Australia, PayPal is the most preferred payment service on the Web .

PayPal’s Total Payment Volume, the total value of transactions in 2008 represented nearly 9 percent of global e-commerce .

PayPal is headquartered in San Jose, California. Its international headquarters (PayPal Pte. Ltd.) is located in Singapore.

PayPal is an eBay company. More information about the company can be found at www.paypal.com

Consumer advisory - PayPal Pte. Ltd., the holder of PayPal's stored value facility, does not require the approval of the Monetary Authority of Singapore. Users are advised to read the terms and conditions available at www.paypal.com carefully before use.
About the survey

The PayPal survey was conducted by BlackBox in August and September 2009 in India, Singapore, Malaysia, and Thailand. In each country, 300 small-medium businesses (SMB) with 5 to 50 staff and either an existing ecommerce site or plans to implement one in the next 12 months were surveyed. Respondents were either SMB owners, decision-makers or managers with financial authority or influence.

The Financial Sector Master Plan Phase II

The Economic Cabinet approved the Financial Sector Master Plan Phase II (FSMP Phase II), jointly proposed by the Ministry of Finance (MOF) and the Bank of Thailand (BOT), reflecting the importance placed on the setting of goals and strategic direction for continuous development of financial institutions system. The FSMP Phase II is to be implemented during 2010 – 2014, following the implementation of the FSMP Phase I during 2004 – 2008.


The FSMP Phase II aims to enhance the efficiency of the financial institutions system, thereby enabling financial institutions to perform their financial intermediation role more efficiently, become more competitive, be able to serve a broader group of households and businesses, and maintain resiliency in face of the fast-changing environment. With greater efficiency, the financing cost of individuals and businesses would decline while the economy would be more competitive. Key measures of the FSMP Phase II can be summarized under 3 pillars: 1) reduce system-wide operating cost; 2) promote competition and financial access; and 3) strengthen financial infrastructure, with details as follows:

1. Reduce system-wide operating cost to enhance management efficiency of financial institutions, which would translate to lower costs of providing services to consumers and improved ability to compete with foreign competitors. Important measures include the followings:

1.1 Reduce regulatory costs that affect operating costs and opportunity costs for financial institutions. Improvement in financial institutions regulations is still based on the key principle that such rationalisation of regulation would promote efficiency and lower costs, without compromising stability and soundness of financial institutions and the economy as well as consumer rights.

1.2 Reduce costs from remaining NPL and NPA. Important measures include tax measures and enhancement in demand for NPA by allowing banks to partner with private firms to work on increasing the attractiveness of foreclosed immovable properties. The efficiency in trading of NPA would also be promoted by establishing an NPA information centre, and fostering an effective mechanism for foreclosure and subrogation by buyers.

2. Promote competition and financial access through various measures such as introducing new service providers into the system, expanding the scope of business of existing service providers to induce greater competition in price and service quality, and fostering greater opportunity for all sectors of the economy to access financial services from the financial institutions system. Such measures would enhance the efficiency of the overall economy. Salient features include the followings:

2.1 Promote competition within the financial institutions system by setting policies based on the following 5 principles:

1) Build a financial institutions system that provides strong and resilient support for the economy under all scenarios.

2) Encourage financial institutions to become larger through voluntary mergers while having in place measures to prevent anti-competitive behaviour to safeguard fair consumer treatment. As a result, there would be gain from economy of scale and scope, thereby lifting competitiveness of the Thai financial institutions system.

3) Promote competition by enabling financial institutions to be more flexible in managing their branch network and business scope, thus enhancing the role of existing service providers. Moreover, new service providers would be introduced in order to further increase competition, thereby raising the efficiency of the financial institutions system.

4) Allow new service providers into the financial institutions system regardless of nationality while still preserving the One Presence rule. Emphasis would be placed on new service providers with the ability to fill gaps within the system in order to enhance the efficiency and stability of the financial institutions system, in line with the trend of Thailand’s international trade and investment. Approval would be on a case-by-case basis and consideration by the MOF and the BOT would be based on appropriateness for the Thai financial institutions system.

5) Support the role of Specialized Financial Institutions (SFIs) in focusing on providing financial services to low-income population and micro businesses that do not have access to services provided by commercial banks. Government ownership in the commercial banking system after the crisis in 1997 would also be reduced.

2.2 Promote financial access to various groups of the population so as to better suit their needs at a more reasonable price, especially for micro businesses and low-income individuals. There would be measures to encourage private financial institutions to adopt business models suitable to serve the population groups that currently lack the opportunity to access financial services. For example, new entry would be permitted for service providers with expertise and proven success in microfinance. In this connection, the MOF and the BOT would consider new licenses on a case-by-case basis, subjected to rules and conditions stipulated. Meanwhile, there would be measures to support the role of the government and SFIs in filling the gaps left open by commercial service providers.

3. Strengthen financial infrastructure. Efficient and more complete financial infrastructure is an important prerequisite for enhancing efficiency of the financial institutions system. Among the key infrastructures for financial institutions are those relating to the lending mechanism, which is the main business of financial institutions. Under the FSMP Phase II, there are 5 areas of financial infrastructure improvement.

3.1 Enhance the capability and tools for risk management of financial institutions, including for credit, market, liquidity, and settlement risks, in response to financial system and economic development.

3.2 Improve the information system to support risk management of financial institutions, as well as facilitate their strategic planning and service expansion. Such improvements would include capacity enhancement of the National Credit Bureau and exploring development of a data pooling system, with due consideration for appropriate protection of client confidentiality.

3.3 Review financial laws that support risk management of financial institutions with regard to lending and managing NPA, including: 1) the secured transaction law; 2) the foreclosure law; and 3) the bankruptcy law. The review aims to establish the necessary legal infrastructure that is conducive to risk management of financial institutions while providing individuals and small businesses with potential better opportunities for improved access to the business restructuring process.

3.4 Promote greater efficiency in the use of information technology (IT) and reduce cost of providing financial services. This measure aims to support more efficient use of IT and review of related supervisory standards to ensure security of such services to enhance confidence of users.

3.5 Enhance the capacity of human resource in the financial institutions system by improving the skills and expertise of staff, enhancing the role of the Thai Institute of Banking and Finance Association and encouraging financial institutions to set clear policies on staff training and development.

The MOF and the BOT anticipate that implementation of the FSMP II would benefit individuals, businesses, the financial institutions system and the country as a whole, in the following ways.

1) An efficient financial institutions system, with good risk management and corporate governance, that is strong, not burdensome for the country, and supportive of economic development in both normal and crisis scenarios.

2) Reduction in costs of services provided by financial institutions, that would help raise income of Thai people and lower operating costs of the private sector, thus increasing the country’s competitiveness.

3) Improving access for users to a broad range of financial services that is appropriate for their needs, especially through the promotion of microfinance to help reduce burden from resorting to informal market.

4) Strengthening of grass-root communities through knowledge sharing between successful microfinance experts and local grass-root micro institutions, which would lead to greater financial strength and financial immunity for all groups of the Thai society.

5) Creation of opportunities for improved access to the business restructuring process for individual debtors and small business debtors with potential, thereby enabling the continuation of their businesses and safeguarding value-added for the overall economy.

6) Infrastructure for the financial system that is conducive to risk management of financial institutions, enabling them to deal with remaining non-performing loans and assets more effectively, and thus leading to lower operating costs and greater readiness to serve customers.

After the principles stipulated in the FSMP Phase II have been approved, the FSMP Phase II Implementation Committee, chaired by the Minister of Finance, would be formed to oversee the implementation of the Plan.

In this regard, the BOT would arrange for a hearing with all financial institutions in November, this year.

POPULAR LONG-TERM CORPORATE BONDS ARE LICENSED TO SELL

       One result of the past year's financial turmoil has been much greater corporate bond issuance in Thailand.
       Circumstances have been favourable. Banks are more risk averse due to the economic slowdown and have not been actively extending loans. Meanwhile, lower yields and reasonable credit spreads mean that rates are appealing for borrowers. At the same time, very low bank interest rates make bond yields attractive to savers.
       Already this year, corporations have sold more than Bt250 billion in longer-term bonds, not including short-term commercial paper, for an increase of 120 per cent from the same period last year.
       The two main distribution methods for bonds are selling directly to retail investors, or selling to institutional investors such as mutual funds or insurance companies, which in turn distribute them to the general public.
       The current craze for corporate bonds is to sell directly to retail investors.
       On the surface, this appears to be more efficient. However, direct retail sales have major limitations with two key concerns - credit risk and liquidity risk.
       Years ago, retail sales of bonds started out with issuance by the government, or by the very best corporate names. However, it has since evolved into virtually any company selling bonds to the general public, significantly raising the potential credit risk.
       This has several implications:
       Retail bond investors usually have exposure to only a few names and underestimate downside risks, while lack of diversification raises the possible loss should any transaction go bad.
       Retail investors often do not have the resources to monitor and analyse changes in corporate credit risk on an ongoing basis.
       Retail investors may not be knowledgeable enough to demand appropriate pricing to match the risk involved.
       The other key concern is that retail-oriented bond issues usually lack liquidity in the secondary market. Even if savers plan to buy and hold bonds until maturity, unforeseen circumstances could make them change their minds.
       If sales are possible at all, bid-offer spreads are likely to be very large to the small investor. In case of a forced sale, there could also be mark-to-market losses that are difficult for retail investors to hedge, unlike institutional investors that may be implementing yield curve strategies.
       For all these reasons, institutional investors theoretically have many advantages over individuals in buying and managing bonds.
       At the moment, local financial institutions still have room for development. Bond mutual funds tend to be focused on short-term money market debt, rather than on longer-term corporate bonds. There is a lack of activity in the secondary market, while hedging is still not widely used.
       Over time, however, the market should continue to develop. Greater issuance will lend depth to the market. Institutional investors will gain in scale and sophistication. And hedging tools such as interest rate futures and repurchase agreements will become available, or more widely used.
       In the medium term, this would be healthy for the local financial system, and would be better for consumers as well.

Kbank refocuses on corporate lending

       Kasikornbank is refocusing on coporate lending to boost fee-based income, with a plan to increase corporate loans by 3-4 per cent next year.
       Vasin Vanichvoranun, first senior vice president, Corporate Busniess Division, said that this year the bank expected to expand corporate lending to Bt290 billion from Bt280 billion at present, and that next year's level would be in line with the country's economic-growth forecast of 2.5-3.5 per cent.
       With growth of 3-4 per cent, the porfolio will rise to Bt301.6 billion.
       "Income from corporate-banking business this year will be Bt11 billion, and this will rise 12 per cent next year. While the fee and interest income ratio is 45:55 this year, it will be balanced next year," he said.
       A bank survey of 10,000 corporations found that 20 per cent were Kasikornbank clients. The companies' annual sales range from Bt400 million to more than Bt5 billion.
       Vasin said the percentage was more satisfactory than the bank's market share in the corporate-loan market, as it reflects corporate customers' satisfaction with its services. In the previous survey, the Kasikornbank percentage was 16-17 per cent.
       He added that the bank's strategy next year was to continue being in partnership with customers, but it would try to be an adviser rather than simply a lender in order to develop long-term relationships that could establish the bank's position in their minds.
       Corporate clients are now offered a veriety of services, including transaction financing such as cash management, trade solutions and supply-chain assistance.
       Meanwhile, as interest rates may start to rise next year, along with inflation and oil prices, some customers may take the opportunity to adjust their financial structure. The bank is ready to serve this development through syndicated loans and advice on bond issuance, said Vasin.
       Besides, it will provide a merger-and-acquisition service in order to satisfy customers who would like to expand their business in line with economic expansion.
       Among the major constituents in Kasikornbank's corporate business are companies in the electrical, construction, construction materials and export-oriented industries, including those making electrical appliances and electronics, agricultural products and machinery.

NEW ZEALAND'S HOME BUILDING APPROVALS INCREASE 3.3 PER CENT

       Home-building approvals in New Zealand rose for the fifth time in six months in September, signalling lower mortgage rates are helping to kick-start demand for property.
       Permits increased 3.3 per cent from August, Statistics New Zealand said, citing seasonally adjusted fugures. Excluding apartments, approvals rose 2.8 per cent to a 13-month high.
       Reserve Bank Governor Alan Bollard said he was unlikely to raise borrowing costs from a record low until the second half of next year, to help the economy emerge from its worst recession in three decades. There are signs the economy is growing again.
       "The pace of increases is not substantial but is in line with what would be expected given the increase in house sales, low interest rates and improvement in net migration," said ANZ National Bank economist Philip Borkin.
       Economists monitor approvals excluding apartments because apartment consents are volatile. There were 155 apartment approvals in September, up from 30 in August and down from 366 in September 2008.
       Excluding apartments, approvals in the third quarter increased 31 per cent quarter on quarter. Economists expect building approvals to keep pacing gains in house sales, property prices and immigration.
       Home sales rose 44 per cent year on year in September, the Real Estate Institute reported. House prices increased 1.9 per cent from August. The number of permanent migrant arrivals exceeded departures by 17,043 in the year ending September 30, the most since 2004, the government said last week.
       "With house sales still rising, further consent increases are likely over the next six months, and this should see residential construction make some reasonable contributions to growth over 2010," Borkin said.
       Property construction has slump year on year because of the recession, which began in last year's first quarter, and as a credit crisis curbed development projects. In the 12 months ending September 30, approvals fell 35 per cent.
       The value of approvals for home building and renovations declined 14 per cent in September from a year earlier to 480 million New Zealand dollars (Bt11.56 billion), the agency said.

HK TIGHTENS REGULATIONS ON SALES OF DERIVATIVES

       Officials in Hong Kong said yesterday regulations on the sale of complicated investment products have been tightened after thousands of local retail investors were burned by Lehman Brothers-backed derivatives last year.
       But lawmakers said the new measures fall short and urged the government to prosecute banks that misled investors and to ban some risky products outright.
       Under the new regulations, banks must issue risk warnings for complex products and record conversations between their sales staff and clients to prevent deception, KC Chan, Secretary for Financial Services and the Treasury, said at a legislative hearing yesterday. The government is also considering setting up an investor education body and a financial services ombudsman, he said.
       The measures come after 30,000 Hong Kong small investors who bought US$1.8 billion (Bt60.2 billion) in Lehman-linked derivatives were left in limbo after the US investment bank collapsed September last year. They weren't fully aware of the risk their investments carried, many of the complex derivatives were innocuously labelled "mini-bonds", angry investors took to the streets.
       Hong Kong regulators announced a settlement with 16 local banks in July that returned up to 70 per cent of principal to the buyers, or up to $6.3 billion Hong Kong dollars (B27.2 billion).
       Opposition lawmaker Ronny Tong criticised the government for not focusing on legal action. "I think it's strange that there is not a single case of prosecution after investigating for more than a year," Tong said.
       Another lawmaker, Albert Ho, asked Chan why the government didn't consider banning certain risky products altogether, as do a number of other developed markets when it comes to selling to retail investors.
       "Your approach is still disclosure-based. As long as you disclose the risks, if the disclosure is fair and comprehensive, you can cell anything. But shouldn't the government exercise discretion and ban certain products that are very complicated, very risky or whose terms are unfair to investors?" Ho said.
       Chan argued disclosure-based regulation is the international norm, adding that the new measures require bank staff to explan their products in layman's terms and assess their clients' appetite for risk.

DEUTSCHE BANK EXECUTIVE WANTS TO OPEN A POLITICAL ACCOUNT

       As the managing director and head of the Global Markets division of Deutsche Bank in Thailand, responsible for more than 133 billion baht in assets and liabilities, and a mother of three young children, Ornkanya Pibuldham could be regarded as a "Thai Superwoman".
       She is also one of the best paid and increasingly influential women in Thailand and is looking beyond business, aiming to enter politics and maybe become a senator or even a minister one day.
       Ms Ornkanya, also known as Mook and who turned 40 in September, was born in Bangkok."My father used to run an engineering consulting firm and my mum was a professor of engineering at Chulalongkorn University. As both my parents were engineers,I also became one. After graduating with a bachelor's degree in engineering from Chulalongkorn University, I helped my dad, working for his company."
       But engineering didn't suit her, and pursuing an early interest in golf, she opened the first golf school in Thailand while still in her early twenties. She also became the publisher of Golf Digest Magazine . However, the business wasn't successful and seeing so many of her friends doing well in banking,she went to the University of Exeter in the UK in 1995, and emerged two years later with an MA in finance and investment.
       "After that I took a job at Standard Chartered Bank in London as a foreign exchange trader and management trainee. I was with them [in London] for one year and another four in Thailand.
       "I was approached by Deutsche Bank in 2000, and have worked here since. We are the largest bank in Germany and one of the biggest foreign banks in Thailand. My first position was in corporate foreign exchange sales, and my career took off," Ms Ornkanya said.
       "I was appointed to my current position in February 2007. I look after the bank's balance sheet, trading, sales activities, clients,markets, managing the cash-flow for the bank and so on. I have 15 people in my team, and they are all smart. I like them to be smarter than me, so that I can work less," she joked.
       "Since I'm in trading and sales, the work is quite intensive. It involves a lot of stress because we are trading. I'm so lucky that I do well. The Deutsche Bank group market department is the major contributor of the bank's revenue," Ms Ornkanya said.
       Commenting on the current economic situation in Thailand, she added:"Last year was a good year for us because the market was volatile - the stock market moved and the currency moved, because of all the news about the global economy. We were lucky that we could catch the trends so we could make money.
       "However, if you ask me about the economy, I think that Thailand is lucky because of the Bank of Thailand (BoT). It has stringent rules and regulations, but doesn't control the banks, and it has very good, well qualified people working for it. The BoT is very strict,both for local and foreign banks. That's why most of them here weren't affected [by the crisis].
       "Thai banks survived the crisis and are generally doing well in comparison to many banks abroad that collapsed because of the 'sub-prime' crisis. They [Thai banks] have plenty of cash and because of it they can lend to their clients, and for that reason the companies here have a lot of money as well.The fact that Thai companies went out buying assets in other regions is because they have access to cheap liquidity and use it as an opportunity to buy cheap assets.
       "Thailand is a country with liquidity because the banks were not affected by the crisis. We are an exporting country, so when other countries are not doing well, it is difficult for us to do well, but in general, because we have liquidity, the country has the money to muddle through the crisis.
       "The worst of the financial crisis in Thailand is most probably over. However, political uncertainties and rumours in the market are factors that discourage investors who can choose to invest somewhere else," she warned.
       And she had some advice for foreign investors:"If you ask me for advice for corporate investors, I'd need some parameters before I could advise what company or sector they should look at.
       "But for those coming here as individuals,I strongly recommend they invest in property in Bangkok, especially in the business districts.This is a very attractive investment and you can make money. To me, Bangkok is Thailand.Twenty per cent of the Thai population live here and the numbers are increasing every day. If you can't afford to invest in these areas, then buy a piece of property on the outskirts of Bangkok. As long as it's within Bangkok, you will be fine. All the infrastructure will come to you. With our current pace of development, I can't really see Chiang Mai or Khon Kaen becoming Boston or Manchester in the near future - you're not going to make money there.
       "Thailand is a good place for foreigners to invest - great infrastructure, rigid laws and regulations, a strong financial system. We may have instability on our politics, but we all know by now that it is just 'our way of life'.
       "We might not have been able to come this far without this instability," she stressed,adding:"I haven't found a foreigner who has a negative view of Thailand. They all love Thailand. Sometimes I ask myself whether Thai people love Thailand as much, whether we are proud to be Thai and say enough good things about our country.
       "Of all the foreign banks in Thailand, I'm the only female who does this kind of work.The others are all men. This job is very demanding, especially for a woman with three children to look after, plus I do a lot of travelling abroad."
       On her priorities, both personal and in business, Ms Ornkanya said:"I work for the bank, so I want the bank to be successful,because then I will be as well. As for my personal life, my priority is to make sure that my kids are doing well in a secure environment.
       "As to the future, I'm at the top at Deutsche Bank, so what next? Whatever happens, I want to live and work in Thailand. When I was young, I used to think about working abroad, but not now. If you talk about job security, or your value to an international firm, it is here."
       Commenting on her biggest achievements and failures, she said:"To have my three beautiful kids and to be a good mum to them. My family and my job are equally important to me, but of course, family is the most important. I can walk away from being a Deutsche Bank executive, but not from being a mother. No major failures as yet,definitely not in my business."
       As for her biggest challenges, Ms Ornkanya said:"Maybe I'll sit here for another few years. I need to move on at some time so my people can grow. One day, I'd like to be in politics to be able to do something for my country. My day-to-day work gives me the opportunity to get to know people and to understand their organisations and their needs. I'm making my way up there. I was approached to join a political party, but I haven't made any decision at this time. Don't you think Thai politics has many more colours than other countries? It can get you into a big fight with your best friend, and make your parents stop talking to each other."
       Ms Ornkanya attributes her success to her parents, who are also her role models:"My mum gave me self confidence and my dad gave me a great sense of humour. When people have self confidence, they tend to be surrounded by smart people.
       "And a sense of humour stops you from becoming arrogant. By the way, I'm not that successful, I have another 20 years to go before retirement. Let's talk about my 'success'then."
       Finally, Ms Ornkanya had some advice for young Thai women:"You should be committed and persistent in whatever you do.We have to make choices every day, so make sure that you make the right choices. Women always make decisions based on emotion.That's why we make wrong choices all the time. I have made wrong choices, and I have to live with them," she said without elaborating.

Advisers named for SCIB sale

       Tisco Securities and UBS were engaged yesterday as financial advisers for the sale of the 47.58 per cent of Siam City Bank (SCIB) held by the Bank of Thailand's rescue fund.
       The other applicants for the job were Quant Group, Trinity Advisory 2001 and Phatra Securities.
       Tongurai Limpiti, the assistant governor supervising the Financial Institutions Development Fund (FIDF), said strategy, planning and also the experience of the financialadvisers in terms of human resources and organisation were most in line with the requirements of the FIDF.
       All qualifications met the terms of reference and gained the highest marks, he said.
       Tisco completed the paperwork on October 22 and started meeting to prepare for the share sale on the same day.
       It has been given a one-month deadline to finalise the plan.
       The central bank may sell its shares in Siam City Bank in the second quarter of next year if the market is favourable, Tongurai said.
       The FIDF seized the lender in the aftermath of the Asian financial crisis more than a decade ago.
       SCIB is the seventh-largest bank, with Bt413.8 billion worth of assets at the end of June, according to a central bank statement.
       Recently, Thanachart Bank expressed strong interest in FIDF's stake in SCIB.
       Thanachart has asked for shareholder approval to increase its capital by Bt40 billion to support its intention to buy SCIB.
       The Industrial and Commercial Bank of China is also a strong contender to buy the SCIB shares.

CIMB THAI BANK SELLS ITS SATHORN OFFICE

       CIMB Thai Bank yesterday sold its office block on Sathorn Road for just over Bt1 billion to an undisclosed buyer. The deal will be completed in December.
       "We're pleased with the sale price, which we believe reflects the fair value of the property," said president and CEO Subhak Siwaraksa. "This sale forms part of the bank's rationalisation exercise to improve efficiency and reduce costs.
       "We're operating with excess space at the moment, as the bank's office operations in Bangkok are spread between its buildings on Sathorn and Soi Langsuan. By early next year, we'll all be operating from one site in the Langsuan building."
       The bank's board approved the sale of the Sathorn building earlier this month after an extensive bidding process attracted 20 interested buyers. The 2,706-squaremetre property consists of a 26storey tower block and a threestorey building.
       Customers with accounts at that branch can continue to do business there until further notice.
       CIMB Thai Bank, formerly known as BankThai, was acquired by the CIMB Group in January. As of June 30, it had Bt134 billion in assets and Bt7.1 billion in shareholders' funds.

Dollar hits 14-month low vs basket, euro nears $1.50

       The dollar hit a 14-month low against a basket of currencies yesterday on a cocktail of policymaker comments,but options-related buying kept it from pushing through $1.50 against the euro and 90 yen.
       Strength in global stocks, fired by Apple Incs forecast-beating third-quarter earnings overnight, also fed traders appetite to sell dollars for higher-yielding currencies and assets more closely correlated with economic recovery.
       Comments on the euros strength from an adviser to French President Nicolas Sarkozy and a Market News International report quoting an unnamed Chinese government source calling for a reversal of the dollars slide had limited impact.
       Until the market hears much stronger rhetoric from leading policymakers like European Central Bank President JeanClaude Trichet, low US interest rates coupled with rising asset and commodity prices will probably weigh on the dollar,analysts say.
       The dollar has been under sustained pressure this year due to expectations for low US interest rates and questions about its status as the worlds reserve currency.
       At 1000 GMT the dollar index, a measure of its strength against six major currencies, was down 0.4% at 75.21 after dipping as low as 75.103, its lowest in 14 months.
       After failing to take out options barriers at $1.50, the euro was last at $1.4978, up 0.1% on the day. It earlier touched a 14-month high of $1.4994, and slipped to $1.4955 after the Market News repor t on an unnamed Chinese gover nment sources concern over the dollar.

GREENSPAN URGES BREAK-UP OF BIG BANKS

       US regulators should consider breaking up large financial institutions considered "too big to fail", former Federal Reserve chairman Alan Greenspan said yesterday.'
       Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on foreign Relations in New Your.
       "If they're too big to fail, they're too big," Greenspan said. "In 1911 we broke up Standard Oil - so what happened? The individual parts became more valuable than the whole. Maybe that's what we need to do."
       At one point, no bank was considered too big to fail, he said. That changed after the Treasury Department under then-Secrretary Hank Paulson effectively nationalised Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns and American International Group.
       "It's going to be very difficult to repair their credibility on that because when push came to shove, they didn't stand up," Greenspan said.
       Fed officials have suggested imposing a tax or requiring higher capital ratios on larger banks to ensure the firms' safety and reduce some of the competitive advantage from the implied subsidy. Greenspan said that would not work.
       "I don't think merely raising the fees or capital on large institutions or taxing them is enough," he siad. "I think they'll absorb that, they'll work with that, and it's totally inefficient and they'll still be using the savings."
       He said while "just really arbitrarily breaking down organisations into various different sizes" goes against his philosophical leanings, something must be done to solve the too-big-to-fail issue.
       "Failure is an integral part, a necessary part of a market system," he said. "If you start focusing on those who should be shrinking, it under mines growing standards of living and can even bring them down."

Strong baht could hurt export targets

       Thailand's exports are unlikely to achieve 10% growth next year if the government leaves the baht's appreciation unchecked,exporters warn.
       "Ongoing baht strength will harm Thai shipments and weaken our competitiveness," said Pornsil Patchrintanakul,deputy secretary-general of the Board of Trade.
       Mr Pornsil was one of a group of leading executives from more than 50 trade associations who yesterday met with Veerasak Jinarat, the vice-minister for Commerce.
       The baht, quoted yesterday at 33.35 to the US dollar, is currently trading at a 14-month high and is up 4.4% since January.
       Exporters said the baht has appreciated significantly faster against the dollar than competing currencies such as the Chinese yuan or the Vietnamese dong,hurting Thailand's trade competitiveness.
       Exporters yesterday called on the central bank to help maintain the baht at about 36 baht per dollar to keep Thai exports competitive particularly for agriculture and food.
       But Bank of Thailand Governor Tarisa Watanagase said the baht was moving in line with other Asian currencies. There was no need for a repeat of the 2006 capital controls to try to prevent a rise in the currency's strength.
       "We are still taking care of the baht,"she said."But there is no need to have any capital controls as we have not seen speculation in the currency yet."
       The central bank does plan to diversify its foreign reserves with other currencies in coming weeks, she said.
       "We will do what we can," she said.The BoT has intervened steadily to slow the baht's rise to help Thailand's export-driven economy, but the currency's value against the dollar has still increased by about 2% since September.
       The government is facing calls to help control costs by cutting import tariffs on raw materials and introducing a carbon tax.
       Exporters urged the the government to accelerate establishing its own carbon and wastewater standards.
       "The national carrier Thai Airways International, for instance, is subject to pay 800 million baht carbon tax to the EU in 2012 as it flies over EU's territorial sky and emits carbon dioxide to the global atmosphere," said Mr Pornsil."The Thai government should also issue the same standards and requirements requiring other airlines to pay carbon tax to Thailand."
       Vollop Vitanakorn, vice chairman of Thai National Shippers' Council also warned Thailand was expected to suffer from an unskilled labour shortfall of about one million people over the next five years, as unskilled workers return to the agricultural sector as agricultural product prices rise.
       In addition, the government's free education programme is expected to yield a skills improvement that will add to segment's labour shortage, he said.

TEN YEARS HAVE SHOWN REMARKABLE PROGRESS IN EUROPEAN SECURITY

       2009 IS A LANDMARK YEAR for the European Union's role in the world. It marks 10 years of the European Security and Defence Policy (ESDP), during which the EU became a global provider of security, making a real difference to people's lives all over the world. At the same time, we are on the threshold of a new era when then Lison Treaty enters into force and provides fresh impetus for our external action.
       In 10 years, we have deployed 20 operations on three continents to help prevent violence, restore peace and rebuild after a conflict. From Kabul to Pristina, from Ramallah to Kinshasa, the Eu is monitoring borders, overseeing peace agreements, training police forces, building up criminal justice systems and protecting shipping from pirate attacks. Thanks to our achievements, we are receiving more and more calls to help in a crisis or after a war. We have the credibility, the values and the will to do this.
       The EU was ahead of its time in 1999. The comprehensive, multifaceted nature of our approach was novel. And the EU remains the only organisation that can call on a full panoply of instruments and resources that complement the traditional foreign policy tools of its member states, both to pre-empt or prevent a crisis and to restore peace and rebuild institutions after a conflict.
       This is where the EU's unique added value lies. We combine humanitarian aid and support for institution-building and good governance with crisis-management capacities, technical and financial assistance, and political dialogue and mediation. The EU's joint civilian-military approach makes us flexible and able to offer tailor-made solutions to complex problems. Today's conflicts demonstrate lmore clearly than ever that a military solution is neither the sole nor the best option, particularly during the stabilisation of a crisis - a truth US President Barack Obama has also emphasised.
       The ESDP first cut its teeth in the Balkans. When the Yogoslav wars broke out in the 1990's we watched as our neighbourhood burned because we had no means of responding to the crisis. We learned our lesson and organised ourselves, acquiring a set of capabilities coupled with decision-making procedures and a security doctrine. In 2003, we prevented a fresh out-break of hostilities in the former Yugoslav Republic of Macedonia through our diplomatic efforts and then deployed Operation Concordia. In 2004, Operation Althea took over from the Nato peacekeeping force in Bosnia and Herzegovina. Today, we are still deeply engaged in the Balkans, fighting organised crime and building up the institutions of law and order. For example, Eulex Kosovo is the largest EU mission to date, with some 2,000 staff, working in the police and judicial system and in mobile customs teams.
       The EU's crisis-management and peace-building activities are not restricted to its backyard. We have made a real difference in Africa, helping for example to provide a secure environment for elections in the Democratic Republic of Congo and protecting refugees and aid workers from the fall-out of the Darfur crisis. Last year, we mounted Eunavfor, our first-ever naval operation, to compact piracy in the waters off Somalia. Who would have guessed 10 years ago that the EU would one day lead a taskforce of 13 frigates in the Indian Ocean that would cut the success rate of pirate attacks by half?
       This year the EU has 12 operations running concurrently - more than ever before. Since 2003, some 70,000 men and women have been deployed in 23 crisis-management operations. They come from EU member states and non EU countries that also take part in our operations, including Norway, Switzerland, Ukraine, Turkey and the United States.
       Of these 23 millions, six have been military and the other 17 civilian. We deploy army or navy personnel when and where they are needed but our business is peace-building, not waging war. The EU is not a military alliance. The solution to any crisis, emergency or conflict must always be political our ESDP actions are always firmly anchored in political strategies, formed by consensus.
       Our ESDP missions have taken us as far field as Aceh, Indonesia, where we monitored the peace agreement reached after the 2004 tsunami, following decades of civil war. Working closely with the Association of Southeast Asian Nations, we mediated between rebels land the government and oversaw the decommissioning of weapons.
       As we gain experience and expertise we are mounting increasingly ambitious operations. Our success with Operation Artemis, in the Democratic Republic of Congo, where the EU intervened in 2003 after violent clashes and a humanitarian crisis in Bunia, helped prepare us to mount our Eufor operation in Chad and the Central African Republic and Euvafor Somalia, which South Africa has expressed an interest in joining.
       Last year, we showed how rapidly we could mobilise when we dispatched a monitoring mission to the Caucasus in less than three weeks to help defuse the crisis between Russia and Georgia, following the EU-mediated peace agreement. As a member of the International Quartet, the EU is deeply engaged at a diplomatic level in the Middle East peace process and the moment and agreement is reached between the Isralis and Palestinians we will be ready to help implement it on the ground. We already have a mission in the West Bank helping to build up the Palestinian civil police and criminal justice system. In Somalia, we are considering security-sector reform measures to complement Eunavfor Somalia and the humanitarian aid and political support that we are already providing.
       To respond to the growing calls to help tackle regional and global security challenges, the EU must improve the efficiency and coherence of its external action still further. We currently have a gap between our ambitions and our resources, which must be addressed. Clearer priorities and more sensible budgeting decisions are needed. And we need to strengthen our civilian and military capabilities and boost their funding in order to back up our political decisions.
       The EU's unique, joint civilian-military approach must be further developed to make us yet more flexible. Our capacity to deploy rapid reaction forces also needs strengthening. In the second decade of ESDP, the Lisbon Treaty will put all this within the EU's grasp.

STARWOOD, TPG SCRAMBLE TO BUY DISTRESSED ASSETS

       Starwood Capital Group and TPG's agreement to buy US$4.5 billion (Bt150 billion) of Corus Bankshares' real estate assets shows investors are ready to bet on distressed property - as long as the US helps finance the deals.
       The private-equity firms led a group that won the auction for loans and properties of the failed Chicago lender, offering $554 million, the Federal Deposit Insurance Corp said last week.
       They will take a 40-per-cent stake and manage the portfolio, while the FDIC keeps 60 per cent and lends the buyers as much as $2.39 billion to complete the sale.
       The investors, who are paying about 60 cents on the dollar, beat out seven other bidders.
       The losers, including Colony Capital and Related Co, will have more chances to acquirs distressed mortgages.
       As many as 1,000 US banks may fail by 2011, according to John Duffy, chief executive officer of KBW Inc, a New York-based firm that advises financial institutions.
       "There are going to be hundreds of banks that are going to be seized and we're just getting started," said James Corl, managing director of Sigular Guff, a New York-based firm that manages about $9 billion.
       "Auctions of non-performing bank loans are going to comprise the next wave of opportunities for distress-oriented real estate investors."
       The FDIC will provide the Starwood-TPG group with $1.39 billion of zero-coupon debt to help pay for the purchase and as much as $1 billion in working capital.
       Similar financing was included by the agency in deals involving IndyMac Federal Bank and BankUnited Financial.
       The government will have to continue offering such low-cost debt to persuade investors to absorb troubled bank lains and real estate, according to John Grayken, founder of Lone Star Funds, a Dallas-based firm that buys distressed assets including mortgages.
       "Unless the seller is willing to finance, you have to do these deals with all equity," Grayken said.
       The FDIC probably will make similar arrangements in future sales, Chairman Sheila Bair said.
       "I think we will use this structure again, absolutely," Bair said October 6. "We're pleased with the results."
       Corus Bank, taken over by regulators on September 11, was a 51-yeard-old Chicago lender crippled by construction loans for condominiums after the housing market slumped and the credit crisis worsened.
       It was one of 98 banks seized this year as lenders fail at the fastest pace in almost two decade. Corus' $7 billion in deposits and 11 branches were sold to Chicago-based MB Financial.
       Starwood, based in Greenwich, Connecticut, is run by Barry Sternlicht, who was chairman of Starwood Hotels from 1997 to 2005.
       Fort Worth, Texas-based TPG's investments include casino owner Harrah's Entertainment and Neiman Marcus Group, a luxury retailer.
       Their partners in the deal are Perry Capital, a New York-based hedge-fund firm with about $7 billion in assets, and WLR LeFrak, a joint venture of the real estate firm LeFrak Organisation of New York and WL Ross and, a unit of Atlanta- based Invesco that is run by billionaire Wilbur Ross.
       Investment managers are raising between $118 billion and $138 billion to buy properties and real estate secutiries, according to surveys by Institutional Real Estate Inc of San Ramon, California, and Real Estate Alert, an industry newsletter in Hoboken, New Jersey.
       Lone Star is seeking $20 billion for two new funds.
       Distressed assets including residential and commerical mortgages and bonds backed by such loans will be sold over the next several years as banks go into receivership or seek to strengthen their balance sheets. Commercial and investment banks together hold about 80 per cent of the devalued assets that will change hands, according to the Lone Star presentation.
       About $524 billion of commercial mortgages held by US banks and thrifts are scheduled to come due before 2012, half of which probably would not quality for refinancing because they exceed 90 per cent of the property's value, accoridng to Lone Star.
       At least $410 billion, or two-thirds, of commercial mortgages bundled and sold as bonds coming due by 2018 will have difficulty refinancing, according to data from Frankfurt-based Deutsche Bank.
       The Washington-based FDIC used partnerships with private investment firms two decades ago to sell the assets of savings and loans that failed amid plunging oil prices and real estate speculation.
       The government formed the Resolution Trust in 1989 to merge or liquidate insolvent thrifts, and by 1995 the RTC had handled 747 thrifts, eventually recovering about $395 billion of assets with a book value of about $452 billion, and limiting losses to taxpayers.

       The investors, who are paying about 60 cents on the dollar, beat out seven other bidders.

BOT STEPS INTO FOREX MARKET TO CALM BAHT

       The skyrocketing gold price has pushed the Bank of Thailand (BOT) into stepping into the foreign-exchange market to calm the baht, which has been floating up on increasing capital inflows.
       Higher gold prices, which hit a new high of US$1,058 (Bt35,265) per ounce yesterday, have led to heavy selling of bullion by exporters, boosting the current-account surplus and driving the baht beyond its fundamentals.
       The baht rose 0.5 per cent to 33.30 per dollar as of 5pm, according to data compiled by Bloomberg. It earlier touched 33.23, the strongest level since June 2008.
       Suchada Kirakul, assistant central bank governor, said the continual intervention by the central bank was aimed at stabilising the baht, which has surged past its fundamental value given the sluggish economy.
       One key factor that caused baht to appreciate was the weakening of the dollar after US private sector confidence fell with unemployment higher than expected.
       Domestically, the serlling current-account surplus as well as net capital inflows of Bt60 billion so far this yearcompared to a meagre Bt16 billion for last year - were contributing to the baht's strengthening, she said.
       Capital has also been flowing back after local asset-management firms saw their foreign investment funds invested in Australia reach their due dates, she said.
       Most importantly, the huge exports of gold recently on global gold prices jumping to historic highs has caused higher demand for baht, as exporters want to exchange their sales proceeds denominated in US dollars into the local currency.
       Locally, gold bar prices were quoted at Bt16,450 per 15 grams for buying and Bt16,550 for selling.
       The central bank said the baht's moving up against the dollar was not out of line with its regional counterparts so far this year. It has gained about 4 per cent, which ranked it in the middle compared to regional currencies.
       For example, Australia's dollar has shot up by 20 per cent from early this year as it has enjoyed a robust economy and property boom.
       In September, employment there jumped by more than 40,000 jobs from the previous month, better than the projection by economists of a decline of 10,000 jobs.
       The Australian central bank had to hike its policy rate by 25 basis points to 3.25 per cent.
       The economies of Indonesia and the Philippines have also been much improved with capital inflows growing. Indonesia also depends less on oil than Thailand.
       The US dollar is continuing to trend down after the unemployment rate there rose more than expected, which undermined confidence in the unit.
       Although one of the US Federal Reserve governors mentioned a hike in the policy rate, the central bank believes that it will not be the case soon.
       For Thailand's policy rate, the central bank still needs to shore up the economy, whose recovery is still fragile, she said.
       On October 21, the central bank's Monetary Policy Committee will meet to consider a policy-rate adjustment. On May 20, the committee decided to keep the one-day repurchase rate unchanged at 1.25 per cent.

       Local gold bar prices were Bt16,450 per 15 grams for buying and Bt16,550 for selling.

Baht eases back from high

       The baht fell yesterday from a 14-month high on concern that a US government report will show the jobless rate climbed to a 26-year high, dampening the outlook for US consumer spending and Asian exports.
       The currency dropped for a second day as the MSCI Asia-Pacific Index of regional shares lost 2.1% following a private industry report yesterday showing US manufacturing unexpectedly declined. The Dollar Index, which tracks the greenback against currencies of six major trading partners, rose to a threeweek high as investors sought relative safety on doubts about the pace of a global recovery.
       "We've seen some unwinding of riskier assets and dollar short-covering," said Chutima Nuphan, a foreign-exchange trader at TMB Bank in Bangkok."The market is concerned about a recovery because the jobless rate may be worse than people think. The stock markets are falling as well."
       The baht fell 0.1% to 33.49 per dollar late yesterday in Bangkok. The currency reached 33.38 on Thursday, the highest level since July 2008. It completed a fourth weekly gain, rising 0.2%.
       The Bank of Thailand would stem volatility in the baht and aimed to keep its movements in line with other currencies in the region, governor Tarisa Watanagase said last week. Policymakers have no plans to implement measures to control capital flows, she said.
       Overseas investors had bought $136 million more Thai equities than they sold this week as of yesterday, taking net purchases for the year to $1.7 billion.

Time for decisiveness on logistics

       If Thailand wants to achieve its hope of becoming the logistics centre for Southeast Asia, the government must act decisively and rapidly to develop the infrastructure for logistics, said former finance minister M.R. Pridiyathorn Devakula.
       M.R. Pridiyathorn, also a former Bank of Thailand governor, wants to establish a decision-making body to develop local infrastructure and industrial sector competitiveness.
       "The country's economic competitiveness relies very much on logistics costs. The government already knows what to do but the decision makers are still very slow to do anything," he said.
       He made the comments at a seminar called "Logistics Asia 2009: Repositioning Thailand in the Global Value Chain",organised by the Thailand Management Association (TMA) in collaboration with the Thai Chamber of Commerce (TCC)and the Transport Institute of Chulalongkorn University to discuss the future direction of local logistics development.
       M.R. Pridiyathorn said the economic crisis shifted the world's economic growth engine to Asia. That could translate into brisk trading traffic in the region.
       To accommodate this change, logistics cost reduction would promote Thailand as a logistics hub to serve this upsurge in goods transport.
       "Cheaper cost will support local in-dustrial competitiveness and attract more foreign investment to the country,"M.R. Pridiyathorn said.
       "There are lots of projects that are in different stages - some are already planned and ready to be implemented - but what is needed is a decisionmaker who has the guts to make a decision."
       The country's logistics system relies on road for over 80% of traffic, with 2%marine transport and the rest through rail. But road transport is the most expensive and fuel-thirsty, so Thailand needs to develop other modes, he said.
       The first step is developing sea transport as it is the easiest and can be done by private sector investment.
       "Two important port routes are those linking Laem Chabang and Bangkok to the South. For rail, more dual-track routes are needed while a rail extension to link Thailand with southern China would also improve our trade with the giant economy," he said.
       Extension of airport facilities to accommodate more human traffic and cargo also needs to go ahead.
       "A more open-eyed approach at how Thailand would play as a regional logistics centre also needs to be considered,"said M.R. Pridiyathorn.
       "We need a tool to link the east and west, linking the Gulf of Thailand and the Andaman Sea through a landbridge.Once accomplished, crude transport from the Middle East to Korea and China will be able to go through this route.This will allow us to be a regional transport route in Asia."
       He added that infrastructure such as a landbridge and the long-delayed Southern Seaboard would also be crucial in accommodating more investment in petroleum and related sectors such as petrochemicals.
       "Establishing the link would also open our export routes to Africa and the Middle East, which are growing markets.China would also be interested in using this route to provide to emerging markets," he said.
       He also criticised the government for paying too little attention to economic issues, adding that the Map Ta Phut court order that halted 76 projects was the result of indecisive action to tackle pollution problems by past governments.
       "The government must take the case as a lesson for future infrastructure development and also to win back investment," said M.R. Pridiyathorn.

Dollar index flat ahead of US jobs, G7; euro up

       The dollar was flat against a basket of major currencies yesterday as dealers squared positions ahead of US jobs data later in the day and a meeting of Group of Seven finance chiefs over the weekend.
       The euro ro se broadly on a Market News report citing 'well-placed monetary sources' that the European Central Bank was discussing raising interest rates and unwinding its liquidity provision programmes, even though it would not do so for some time.
       But trading ranges w ere narrow before the US employment repor t for September at 1230 GMT, the economic indicator that has probably the single biggest impact on financial markets.
       At 0940 GMT the euro was up 0.2% on the day at $1.4555, rebounding from a threeweek low of $1.4502 hit earlier in the day.
       Dealers reported good demand from Asian reserve managers in the low $1.45s and stronger support at $1.4450, a break of which to the upside in early September was key and so could be equally significant if it gave way on the downside.
       Traders also reported options expiries at $1.4550 rolling off later yesterday.
       The euro pared losses against the yen to trade flat at 130.15 yen and was up 0.5% against sterling at 91.60 pence.
       "While it's prudent for central banks to discuss the possibility of raising rates at some point, (it is) less prudent for any of the big three central banks - the US, UK and euro zone - to move any time in the coming six months," said Lauren Rosborough, senior currency strategist at Westpac in London.
       "These comments are being taken too literally," she said, refer ing to the Market News report.

BofA considers short-term CEO

       Bank of America Corp's board of directors is considering hiring a short-term chief executive, a move that signaled CEO Kenneth Lewis' plan to depart caught the bank flat-footed.
       The company said on Thursday it might hire a chief executive for two years,allowing internal candidates more time to grow into the job. But that decision sends a worrisome message to investors who are looking for stability at the embattled Charlotte, North Carolina-based bank and are weary after more than a year of crises.
       "Not having an announced successor is going to hurt the bank," said Matt McCormick, a Cincinnati, Ohio-based portfolio manager with Bahl & Gaynor Investment Counsel."I believe that is going to increase volatility and increase focus on them."
       The company's stock sank 4.2% to $16.21 on Thursday, reflecting concern about the bank's plan.
       "The board's evident lack of prep-aration for Lewis' departure is surprising," experts said.
       The board has not assembled a search committee or hired an outside firm to manage the hunt for a new CEO, a company spokesman said.
       But Lewis has been under siege from prosecutors, politicians and the public for months over his handling of Bank of America's acquisition of Merrill Lynch & Co, and critics have called for Lewis'departure for months.
       "The board should have had a plan in place for this contingency. You don't always have years to groom and plan a successor," said Karen Brenner, a business professor at New York University specialising in corporate governance issues.
       Picking a short-term candidate quickly, and settling on the permanent CEO later could be a risky strategy, recruiters noted.
       The wrong temporary leader may delay making necessary changes.
       Lewis, in an letter to employees announcing his departure, said he expected the next two quarters to be difficult for Bank of America.
       "This is like playing roulette," said Joel Koblentz, an Atlanta-based executive search consultant."You don't know who to bet on, but in this case, you have to get it right. This is not one you recover from if you make a mistake."
       A list of internal candidates include:wealth management head Sallie Krawcheck, consumer banking chief Brian Moynihan, chief financial officer Joe Price, investment bank chief Thomas Montag, mortgage head Barbara Desoer and chief risk officer Greg Curl.
       Early external candidates cited by various media reports include GMAC Financial Services CEO Alvaro de Molina,a former Bank of America executive who spent two decades at the bank, and Bob Steel, former Goldman Sachs executive and Wachovia Corp CEO when that bank was bought by Wells Fargo in 2008.
       "The bank is hoping to avoid the situation that Citigroup Inc faced in late 2007, when its chief executive, Chuck Prince, stepped down, and finding a replacement took several months," the Wall Street Journal reported.

UNDER-FIRE FED DEFENDS ITS ROLE AS KEY PROTECTOR

       Federal Reserve chairman Ben Bernanke on Thursday told lawmakers that protecting consumers of fincancial services is "vitally important", while omitting prior criticism of an Obama administration proposal to shift such powers from the Fed to a new agency.
       "It is vitally important that consumers be protected from unfair and deceptive practices in their financial dealings," Bernanke said in testimony to the House Financial Services Committee.
       "Strong consumer protection" helps preserve savings and promote confidence in financial firms and markets, he said.
       Bernanke did not discuss the proposal for a separate agency in the testimony, after saying in July that there would be disadvantages to creating one.
       That may soften a clash with Representative Barney Frank, the panel's chairman, who said at a hearing that the Consumer Financial Protection Agency must be created because the Fed and other bank regency, Frank said.
       Frank, a Massachusetts Democrat, released a "report card" on September 23 that he said demonstrated the Fed's "poor record" in "using the tools provided by Congress to protect consumers from abusive financial-industry practices".
       The 55-year-old Fed chief previously testified on potential changes to financial regulation in July, when he said there would be disadvantages to creating a consumer financial-protection agency.
       Rules created by the Fed in recent years "benefited form the supervisory and research capabilities" of the central bank, Bernanke said in July.
       Representative Mel Watt, a North Carolina Democrat, noted the length of comments on consumer issues in the Fed chief's prepared statement, telling Bernanke that "five sentences" was not enough. "It's just not a good message to send," said Watt, who chairs a subcommittee on US monetary policy.
       Bernanke did not respond to Watt's criticism. In a July-22 Senate hearing, the Fed chairman said consumer protection should be added to the Federal Rreserve Act as a formal policy goal along with low inflation and full employment.
       Answering questions from lawmakers, Bernanke said he does not see an "immediate risk" to the US dollar's status as the world's main reserve currency.
       Al the same time, US leaders must "take the appropriate steps to manage our fiscal position and keep in flation low", he said.

CIT launches debt-swap plan

       CIT Group Inc launched on Thursday a debt-exchange plan that the struggling lender to small and midsized companies hopes will prevent it from filing for bankruptcy.
       CIT, however, also asked bondholders to approve a prepackaged plan of reorganisation that would allow it to initiate a voluntary filing under Chapter 11 if the debt exchange failed.
       The lender, founded more than a century ago, said around a third of its bondholders agreed to participate in the exchange offer or vote for the prepackaged plan of reorganisation.
       Under the terms of the exchange offer,a tendering holder of an existing debt security would receive a pro-rata portion of each of five series of newly-issued secured notes, with maturities ranging from four to eight years, and/or shares of newly issued voting preferred stock,CIT said.
       The exchange offers are conditional upon the company achieving a debt re-duction of at least $5.7 billion in aggregate, with specific targets for the periods from 2009 to 2012.
       The exchange offer expires on October 29.
       "We believe this plan ... can be executed quickly and effectively through a series of voluntary debt exchange offers or an expedited in-court restructuring process," chief executive Jeffrey Peek said in a statement.
       CIT, which serves almost one million small and mid-sized companies, said the plan has been approved by its board of directors and by a committee of bondholders.
       CIT's problems emerged in recent years following Peek's idea to tap into potentially profitable but risky businesses such as subprime mortgages and student loans.
       The financial meltdown triggered a sharp rise in CIT's loan losses and credit costs, leaving the company on the verge of collapse. The lender to businesses from retailers to sport teams has lost close to $5 billion since the end of 2007.
       For the 12 months ending August 31,2010, CIT's unsecured debt funding needs are about $7.6 billion. The financial company has about $40 billion of long-term debt.
       CIT's longer-term plan is to essentially turn itself into a bank. The company is one of scores of lenders and underwriters that relied on bond markets to fund their operations, only to suffer as the credit crunch has raged for two years.
       In a regulatory filing, CIT said it expected to seek permission to transfer certain business platforms into its CIT Bank unit within 12 to 18 months after the completion of its restructuring.
       It plans to diversify the bank's funding base by adding commercial and retail deposits, it said.
       CIT received $2.3 billion in December under the government's Troubled Asset Relief Programme (TARP), but federal regulators this year rejected requests by CIT for more help.
       The Obama administration also declined help, saying it had set high standards for granting aid to companies and leaving private investors as the one alternative to avoid collapse.

Bath falls on US job worries

       The baht fell from the strongest level in 14 months on concern a US government report yesterday would show the jobless rate climbed to a 26-year high, dampening the outlook for consumer spending and Asian exports.
       The currency dropped for a second day as the MSCI Asia-Pacific Index of regional shares lost 1.9 per cent following a private industry report showing US manufacturing had unexpectedly declined.
       The Dollar Index, which the ICE uses to track the greenback against currencies of six major trading partners, rose toward a three-week high as investors sought relative safety on doubts about the pace of a global recovery.
       "We've seen some unwinding of riskier assets and dollar short-covering, "said Chutima Nuphan, a foreign-exchange trader at TMB Bank, "The market is concerned about a recovery because the jobless rate may be worse than people think. The stock markets are falling as well."
       The baht fell 0.1 per cent to 33.51 per dollar as of 10.23am yesterday in Bangkok. The currency reached 33.38 on Thursday, the highest level since July 2008. It headed for a fourth weekly gain, rising 0.2 per cent.
       The central bank will stem volatility in the baht and aims to keep its movements in line with other currencies in the region, Bank of Thailand Governor Tarisa Watanagase said last week. Policy-makers have no plans to implement measures to control capital flows, she said.
       Overseas investors bought US$136 million (Bt4.55 billion) more Thai equities than they sold this past week as of Thursday, taking net purchases this year to $1.7 billion.

SME BANK LENDING BT2.5 BN TO CREATE 50,000 FRANCHISES

       The Small and Medium Enterprises Development Bank of Thailand will provide loans worth a combined Bt2.5 billion to Thapisuj Foods Group's franchisees, with a view to creating 50,000 entrepreneur jobs around the country.
       Thapisuj Foods Group is the franchisor of Prikkareang pork noodles and grilled-pork meatballs.
       SME Bank president Soros Sakornvisava yesterday said he expected the Bt2.5 billion to be released to Thapisuj Foods Group's franchisees within six months.
       The Prikkareang franchise is the first such operation for which SME Bank has approved loans. The agreement is for Bt50,000 to be lent to each frachisee.
       Soros said SME Bank expected to enter into similar agreements with two other franchise businesses by the end of the year. The bank will focus on the food business as its main priority, as this type of activity is easy to access for people wanting to run their own enterprises, he added.
       The loan period is for a maximum of five years, while the interest rate will fall into one of two categories: 5 per cent for franchisees who are members of the Social Security Fund, and the minimum lending rate for others.
       Industry Minister Charnchai Chairungrueng said he backed SME Bank's venturing into this kind of lending, as food-business franchises were a good way to reduce the unemployment rate.
       Meanwhile, Labour Minister Phaithoon Kaeothong said the unemployment rate had declined to 500,000 from about 1 million people early this year, due to a resumption of recruitment in major industries such as automobiles and electronics.

SCB GEARS UP FOR AGGRESSIVE GROWTH OF WEB-BASED SERVICES

       Siam Commercial Bank will next year aggressively expand its Internet and mobile banking services including SMS banking, mutual funds, insurance and financial planning.
       A month ago, it launched a widget as a new banking channel for making financial transactions easier.
       Executive vice president, said yesterday that the key feature of the widget was convenient access, as users did not have to open a browser and key in the URL name.
       But they could do the same financial transactions as with Internet banking by using the widget, which could be downloaded on their mobile phone or computer from the Internet banking channel.
       At present, 10 per cent or about 800,000 customers use Internet banking, while the bank has eight to nine million accounts. But Internet banking accounts for 20 per cent of the total 50 million transactions each month.
       SCB plans to expand Internet banking users next year to 20 per cent of total customers or about 1.5 million customers. The bank has gained Bt60 million in fee income from this channel so far.
       Next year, the bank would introduce more complex financial products to Internet and mobile banking.
       Customers will be allowed to make transactions such as checking account balances and transferring money via SMS on their mobile phone when they send the code and bank account number. This channel would be suitable for those who still use the old version of mobile phones and not the Internet.
       SCB will promote its SMS-alert service to customers first, and then gradually introduce new SMS banking services to them.
       It will also sell insurance products online, including life insurance, personal assurance, auto insurance both first and third class, and insurance according to the traffic victim protection law. The bank will have customers fill in their information for calculation.
       The same with financial planning - customers can also do it online with no need to contact the bank's branches.
       The bank can save a lot on operating costs when it can encourage customers to increasingly use Internet banking.
       Internet banking was an informationrich channel, so if customers used it more, the bank could extract savings from its call centre service, which costs at least Bt20 per call.
       Bank staff would have more time to introduce sophisticated products to customers.
       Internet penetration in the country has reached 20 million users, so the bank expects to expand its Internet banking offerings.
       However online communities were not satisfied with hard selling, so the bank had to be very careful in doing marketing among online customers.
       Marketing would be in form of information and entertainment, such as in the middle of this month, when the bank would promote the widget by holding an online game, with prizes.

       SCB plans to expand Internet-banking users next year to 20 per cent of customers, or about 1.5 million customers. It has gained Bt60 million in fee income from this channel so far.