Business

Thailand’s Baht One of the Worst-Performing Regional Currencies of 2023

Economic Implications of Thailand's Baht

Thailand’s baht has fallen in value this year, making it one of the worst-performing regional currencies in 2023. On Tuesday, the currency fell to 37.14 per US dollar, its lowest level since November 2022.

The recent drop in gold prices, which lost almost 5% of their value, or $7.45 per ounce, increased demand for dollars to acquire the commodity, causing the Thai baht to depreciate even further.

The baht has lost almost 6.8% of its value this year, falling from 34.61 to the US dollar at the end of last year. When compared to its regional peers, the Thai baht is the third poorest performer this year, trailing only the yen and the Korean won, which have fallen by 12% and 7.7%, respectively.

The Malaysian ringgit has fallen in lockstep with the Thai baht, losing 6.8% year to date.

“But if we look at depreciation since August, when the new government took office, the decline has been faster than other currencies in the region,” Kanjana Chockpisansin, head of research at Kasikorn Research Centre (K-Research) told the Bangkok Post.

The think tank cut its forecast for the Thai currency rate to 37.55 baht to the dollar on Tuesday, down from 36.60. According to her, the centre made the change when the baht plummeted past 37 to the US dollar on Tuesday morning.

Bank of Thailand Introduces New Measures to Protect Consumers from Cyber Risks in Mobile Banking

Central Bank Monitoring Baht

The Bank of Thailand stated that it is watching baht movement as a result of external factors, which is consistent with regional peers. The central bank stated in a statement that it is ready to handle the currency if there are any abnormal movements, and that investors are waiting for clarification on the incoming government’s budgetary intentions.

“The dollar is strengthening because the Federal Reserve may keep interest rates on hold for longer than expected,” said Sakkapop Panyanukul, senior director of the central bank. Other issues, he noted, include pressure from dropping gold prices and rising oil prices.

According to K-Research, main causes contributing to the baht’s depreciation include a dismal second-quarter Thai GDP growth rate, interest rate hikes by the Fed, a slowing Chinese economy, yen depreciation, and high oil costs.

Thailand’s export decrease, which has resulted in a growing current account deficit, as well as concerns over a worsening fiscal position due to increased spending by the new administration to fund economic stimulus, have all contributed to the Thai currency’s devaluation, according to the think tank.

A recent hawkish comment by Fed members about interest rates remaining higher for prolonged periods of time pushed the currency higher and caused US bond yields to climb.

federal reserve news

The Fed could raise interest rates

The US economic data was stronger than expected, convincing the market that the Fed could raise interest rates at its November or December meetings. As part of its efforts to reign in stubborn inflation, the Fed has raised interest rates 11 times in the last 18 months to 5.25-5.5%, a 22-year high. In August, the US consumer price index was 3.7%, significantly above the Fed’s 2% objective.

Oil prices above $90 per barrel have fueled inflation and demand for dollars, weakening the baht. According to K-Research, Thailand’s current account could suffer if oil prices continue high.

According to the think tank, continued capital outflows from the Thai Stock Exchange (SET), which is among the world’s worst-performing bourses this year, as well as the Thai bond market, partially to buy US bonds, have fueled the baht depreciation.

According to K-Research, as of October 2, foreigners have net sold 158 billion baht worth of Thai stocks this year, while net selling in the bond market totaled 146 billion baht.

According to Asia Plus Securities (ASPS), the baht has depreciated this year as a result of 300 billion baht in accumulated foreign net selling as of Tuesday, of which 160 billion is in equities and 140 billion is in bonds.

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Interest Rates in Thailand

The interest rate differential between the United States and Thailand has grown, with the US presently at 5.5% and Thailand at 2.50%. According to the brokerage, Thai exports have dropped this year due to the global economic slowdown, resulting in a trade imbalance in August.

While the central bank is monitoring currency fluctuations, Prime Minister Srettha Thavisin, who is also the finance minister, has ruled out government involvement in the baht.

According to Mr Srettha, the depreciation boosts the export and tourist sectors, which typically contribute 50% and 20% of GDP, respectively.

He believes that a weak baht will raise the price of imported oil and other related costs. Thailand cannot do much in the short term to avoid the impact of rising energy prices because the country is significantly reliant on imported energy, according to Mr Srettha.

According to ASPS, the local currency will weaken less and gain more, trading in a range of 35-35.5 baht to the dollar.

Economic stimulus measures such as the 10,000-baht digital wallet giveaway, a three-year debt moratorium for farmers, and infrastructure investment, according to the brokerage, should increase consumption and investment.

According to ASPS, tourism should perform well in the fourth quarter because it is peak season, boosting demand for the baht.

According to the brokerage, economic numbers are likely to improve in the fourth quarter, with the trade deficit shrinking and the services balance improving, resulting in a current account surplus and strengthening the baht, as it did in September 2022.

According to ASPS, the baht strengthened by 3.4% on average in the fourth quarter from 2017 to 2022.

“The currency is expected to stop depreciating and start strengthening in the fourth quarter, swinging around 37.00-37.50 baht to the dollar in the short term,” the brokerage stated.

According to Ms Kanjana, K-Research expects the baht will trade at its present level in the immediate future.

“Once the Fed stops hiking rates, possibly by the end of this year, the baht should strengthen, possibly by year-end or early next year,” she stated.

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