Business

Thai Bahts Strength Threatens Local Manufacturing and Tourism

BANGKOK – Thailand is trying to coax the baht down from six-year high territory as the currency’s strength threatens local manufacturing and tourism.

The central bank has cut interest rates and eased capital controls to rein in emerging Asia’s best-performing currency this year.

It is an ironic twist for a country that became the epicenter of the 1997 Asian financial crisis after its currency collapsed. Thailand now finds that its relatively sound fundamentals have made it a safe haven for capital in Southeast Asia.

This has resulted in a rising currency that renders Thai exports less competitive in the global market and makes the country more expensive for foreigners to go on holiday.

The baht traded at 30.3 to the dollar late Tuesday in spot prices tracked by the Bank of Thailand — barely changed from Nov. 6, when it softened just 0.4% following what the central bank’s Gov. Veerathai Santiprabhob hailed as an unprecedented measure.

Cut of Benchmark Rate

The bank cut its benchmark one-day repurchase rate to 1.25%, tying an all-time low, while also making it easier to take funds out of the country as of Nov. 8.

But analysts have expressed doubts about these moves’ ability to take upward pressure off the baht. It has strengthened by about 7% this year, the biggest gain of any emerging Asian currency, Nikkei reports.

“It’s highly likely the baht will remain strong,” said Kota Hirayama, a senior economist at SMBC Nikko Securities, pointing to Thailand’s large current-account surplus.

Meanwhile, the easing measures risk drawing American accusations of currency manipulation at a time when neighboring Southeast Asian nations’ foreign exchange policies are under U.S. scrutiny.

Should the central bank move too strongly to cool down the baht, it risks triggering U.S. sanctions against Thailand as a currency manipulator. In a May semiannual foreign exchange report, the U.S. Treasury Department placed neighboring Singapore, Malaysia and Vietnam on its “monitoring list” of trading partners whose currency practices were deemed to merit attention.

Since its role as the epicenter of the 1997 Asian financial crisis, Thailand has worked to improve its fiscal health. Thailand’s proportion of public debt to gross domestic product is about 40% — far below neighbors like Malaysia and Vietnam, which stand around the 60% level seen as a dangerous level for emerging markets.

Baht’s strength has hurt key industrial exports

Thailand also maintains a wide current-account surplus thanks in large part by exports and tourism, which equate to 50% and 20% of GDP respectively. Its foreign exchange reserves stand at about $220 billion, roughly double the tally for the Philippines or Indonesia.

But the baht’s strength has hurt key industrial exports, such as automobiles, electronics and government surplus parts. Export values for January-September shrank by 2% on the year, owing partly to the U.S.-China trade war as well. The strong baht also makes travel in Thailand more expensive. The Ministry of Tourism and Sports has cut its foreign arrivals forecast for the year to the range of 39 million to 39.8 million people, down from 40.2 million.

The central bank’s easing of capital controls benefits both individuals and businesses. Limits on sending money overseas were removed for individuals who are moving abroad or have relatives outside the country, while retail investors gained the freedom to directly invest up to $200,000 per year in foreign securities without going through a Thai intermediary.

Exporters with proceeds of less than $200,000 per bill of lading would also be able to keep those proceeds in foreign currency with no time limit. Eliminating the need to convert proceeds to baht was expected to ease upward pressure on the currency. The measure sets Thailand apart from many Southeast Asian neighbors who have limited capital outflows to keep their currencies firm.

Scrutiny on perceived manipulators

The easing follows a July move aimed to fight an influx of funds for baht speculation. The Bank of Thailand capped nonresidents’ deposit and securities account balances at 200 million baht ($6.58 million) per person, down from 300 million baht. That measure failed to dent the baht’s rise, however.

In 2018, Thailand’s trade surplus with the U.S. grew to $19 billion. Until around 2017, the Bank of Thailand intervened as needed to restrain the baht. But the Trump administration’s increasing scrutiny on perceived manipulators has made such over action risky.

Washington has already begun turning up the pressure on Bangkok. Last month, the Office of the U.S. Trade Representative said a number of products imported from Thailand would be excluded from preferred tariff status beginning in April. The USTR’s announcement cited failures to sufficiently provide for workers’ rights, but the move was seen by some as designed to trim the trade deficit.

Baht’s strength is costing the country billions

Thai conglomerate Saha Group’s Chairman Boonsithi Chokwatana has said that to maintain exports, the baht should trade in the range of 32 to 34 against the dollar. The Thai Chamber of Commerce has said the baht’s strength is costing the country 200 billion baht to 300 billion baht in export income, in a heavy blow to the national economy.

On the other hand, the strong baht gives Thai groups an edge in investing overseas, and could cause a shift in the country’s heavy reliance on exports. Charoen Pokphand Foods, the country’s biggest food products company, is set to invest 30 billion baht this year in expanding overseas bases, and plans to raise sales abroad to 75% of its total — up from the current 72% — in the next three to five years.

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP