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property market to drop 20%


junglesoup

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Just saw this article. Theres nothing very attractive about in vesting in Thailand right now.

 

 

Foreign Investment Could Hit 7-year Low In Thailand This Year

 

BANGKOK: -- Foreign direct investment in Thailand is likely to hit a seven-year low this year as a result of the bombing of Bangkok, new capital controls and pending amendments to rules governing foreign-owned firms, a think tank said on Saturday.

 

The Kasikorn Research Centre (KSC), an affiliate of the Kasikorn Bank, said that in the worst case scenario with an increase in violence in the capital, foreign direct investment could plummet to below 3 billion dollars this year, the worst performance in seven years.

 

On New Year's Eve eight bombs were detonated in Bangkok, killing three people and injuring 42 others, including nine foreigners.

 

The government has yet to arrest the culprits behind the explosions, believed to politically motivated, and has warned that more attacks might be carried out during the next two months.

 

The KSC, in its best case scenario, said that if the government could bring the political instability under control quickly, a drop off in foreign investment could be limited to the first quarter of 2007, and total FDI might reach 5.86 billion for this year, down only 38 per cent from last year.

 

Other factors likely to discourage FDI inflows include the Bank of Thailand's decision on December 19 to place a 30 per cent reserve requirement on foreign exchange brought into the country for investments in the bond market and property - a move aimed at stemming speculation in the baht currency - and an amendment to the alien business law that will make it more difficult for foreign entities to set up joint ventures with nominee partners.

 

"The amendment to the alien business law will bring about clearer terms and conditions regarding foreign investment in Thailand, but it will also affect the business performance of some foreign firms," said the KSC, as reported by the Thai New Agency (TNA).

 

--DPA 2007-01-07

 

Realty may drop 20% in 2007 if blasts set by insurgents

 

BANGKOK: -- Thailand's property sector business this year may retreat as much as 10 to 20 per cent if last Sunday's bomb blasts here were caused by southern terrorists, according to a senior property business executive.

 

Thai Appraisal Foundation president Sopon Pornchokchai said the blasts on New Year's Eve may impact the property business sector in 2007 more severely than an earlier projection that it would either remain steady or decline not more than 5 per cent.

 

An estimated of 60,000 new units are projected to be constructed in 2007 with the total value of approximately Bt160 billion.

 

The extent of the negative projection depends on whether the southern insurgency is actually spreading to the Thai capital, and not on political conflicts which could be settled in the nearer future, Mr. Sopon said.

 

According to Mr. Sopon, the property business segments most likely to be hardest hit are office buildings and shopping centres, as foreign investors may delay their buying. Hotels and resort construction will also be hit as the number of tourists dwindles.

 

Prime Minister Gen. Surayud Chulanont and military leaders of the Council for National Security (CNS), which launched the coup last September 19 against the elected government, said earlier that the southern insurgents were not behind the incidents.

 

--TNA 2007-01-07

 

 

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