BANGKOK/SINGAPORE, September 27 (Fitch) Fitch Ratings (Thailand)
Thailand's resilience continues with broadly Stable Outlooks on
sovereign rating, as well as on major Thai financial
corporations, although the agency notes that eroding buffers,
the potential for
further regional volatility, and rising private sector leverage
This was the key message at Fitch Ratings' annual Thai
concluded successfully in Bangkok today.
Dr. Prasarn Trairatvorakul, Governor of the Bank of Thailand,
was the guest of
honour at the event and provided the keynote opening address.
Heads of Fitch's Asia-Pacific analytical teams also discussed
challenges and credit implications for their respective sectors.
Mr. Andrew Steel, Head of Asia-Pacific Corporates, remarked that
ongoing disruption to financial markets resulting from changing
policies of the world's major central banks. This disruption,
asset quality deterioration, has the potential to negatively
markets across the Asia-Pacific region and cause difficulties
for corporates in
many sectors as refinancing of the previous 'hot money' flows
falls due over the
next 12-18 months. That said, the magnitude and impact of risks
Asia-Pacific credit markets remain far lower than those of
concern in the US or
European markets, said Mr. Steel.
Fitch's Head of Asia-Pacific Sovereigns, Mr. Andrew Colquhoun,
noted that credit
profiles have strengthened since 1997 in various ways, including
countries much higher foreign reserves and reduced external
However, those buffers have been eroding for some economies
Fitch thinks the resilience of Emerging Asian sovereign credit
depend to a large degree on the credibility and consistency of
management. Thailand's sizable net external creditor position
public debt provide a considerable buffer and the economy has
not been afflicted
with the kind of volatility experienced by Indonesia or India.
Thailand's combination of an eroding current account surplus,
low real interest
rates and a widening fiscal deficit coupled with high private
are outliers among Emerging Asian economies that could still
prove to be sources
A risk for the region and Thailand has been the rapid build-up
of credit and
whether this will lead to substantially higher credit losses
conditions become more challenging, said Mr. Mark Young, Head of
Financial Institutions. For Thailand, one of the concerns
relates to the
build-up of household credit that has occurred since 2010, which
is partly due
to the high auto loan growth that stemmed from tax incentives,
he added. While
Fitch expects overall loan growth to decline in the short term,
a sizeable part
of the growth that occurred was outside the commercial banks in
government-owned specialised financial institutions and private
cooperatives which are more susceptible to credit losses due to
A roundtable discussion addressed the outlook and challenges in
corporate and infrastructure sectors in Thailand. The panelists
Mr. Boontuck Wungcharoen, chief executive, TMB Bank Public
Company Limited; Mr.
Chawan Theungsang, executive director, Emerald Capital Asia Ltd.
and Mr. Win
Phromphaet, CFA, head of investment, Social Security Office of
discussion was moderated by Mr. Vincent Milton, Managing
Director of Fitch
Ratings (Thailand) Limited.
The conference was attended by over 350 senior executives and
the investor, regulatory, financial and corporate sectors.
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