CanCham’s Crystal Ball Prognosticators

CanCham proudly presented the “Multi-Chamber Crystal Ball Economic Outlook & Business Luncheon – the year ahead” on January 16, 2019 at the Landmark Bangkok Hotel.

This CanCham flagship event saw five leaders in their respective fields look into their crystal balls to provide their perspective and outlook on the economic, regulatory, political, digital, and investment landscapes for the year ahead.

Paul Gambles, Managing Director, MBMG Group, and a former Crystal Ball panelist, was the moderator, and the panelists were: Andrew Stotz, President of CFA Society Thailand and an award-winning equity analyst; Steven Ladd, Lead Customer Engagement and Commerce & Consulting, Ogilvy; Audray Souche, Partner & Thailand Managing Director, DFDL; Virot Ali, Lecturer in International Politics, Thammasat University; and Dr. Soraphol Tulayasathien, Senior Executive Vice President, The Stock Exchange of Thailand.

The global economy was optimistic at the start of 2018, this confidence was partly explained by an upswing in global trade and manufacturing through 2017. However, business confidence gradually fell as trade and industrial production slowed. This loss of momentum is partly explained by the implementation of tariffs by major economies and the responding retaliatory measures taken by others. Most notably, the trade tensions between China and the United States. Despite these tensions, the US economy expanded rapidly in 2018 and the US dollar has appreciated against most other currencies for 2018. Nevertheless, some emerging market economies have come under stress due to this general appreciation of the US dollar.

Andrew Stotz, President of CFA Society Thailand

To lead the discussion on the global economy for 2019, focusing on macro trends in China, EU, US, & Japan, Andrew Stotz took the stage as the event’s first speaker. Mr. Stotz is the founder and current CEO of A. Stotz Investment Research (ASIR) and a member of the Advisory Board at Thammasat University’s Business School.

Andrew predicted the US stock market is set for a fall with peaking profits as the net profit margin is at its highest peak since 1990. Factor in high valuation—the EV/EBITDA has only been higher in the US before the dot-com bubble burst, and he perceives a dip as inevitable.

He also noted that the global pressure is rising on small and medium-sized companies due to peaking net profit margins for large and medium companies; falling efficiency due to malinvestment; and the crash conversion cycle shows vulnerability to a credit crunch and/or an economic slowdown.

Audray Souche, Partner & Thailand Managing Director, DFDL

Thailand has consistently been recognized for its open market-oriented economy and its willingness to accept FDI. After the 1997 Asian financial crisis, the Thai government entered an IMF-sponsored economic reform program which was mainly designed to promote a more transparent and competitive climate for foreign investors. Thailand still favours policies for open investment and continues to support its economic reform process. Ms Audray Souche was next up on the podium, telling us what foreign investors can expect regarding legal/regulatory developments and foreign investment conditions for Thailand in 2019.

Audray is a Partner and the Country Managing Director of DFDL Thailand and has been working in the region since 2004. As Managing Director of DFDL Thailand, she manages DFDL team members in Bangkok, Phuket, and Samui.

She focused on four themes: Elections (What are the effects on the business environment; Steady macro environment; the impacts on Public-Private Partnership projects); Green Impulse (Amended Power Development Plan; Introduction of net metering elements; Independent Solar Rooftop Program); US-China Trade War (Take advantage of the tension to attract investment relocations; Maintaining relationships with both sides; Maintaining a subtle and balanced role; and Post-2018 Continuation (Merger Control Notification under the Trade Competition Act; Data Protection Act; Private Asset Management Act).

Steven Ladd, Lead Customer Engagement and Commerce & Consulting

To give further insight on the topic of digital transformation and customer experience, Steven Ladd was up next. As a Customer Experience professional at Ogilvy and he earned his Master of Business Administration from the National University of Singapore. Furthermore, Mr. Ladd is a recipient of the Queen Elizabeth II Diamond Jubilee Medal for public service in Canada.

Digital transformation is driving companies to adjust their business models and adapt to the new reality of the market. This change is not being driven by the companies, rather it is being driven by the customers. In today’s market, customers expect relevant content in relation to what they are doing at any time, anywhere and on the device of their choosing. Today’s businesses must embrace technology to bring forth an unparalleled customer experience in order to keep up with this new kind of “consistently-connected” customer.

As we went into the Crystal Ball forum uncertainty surrounded the date of when the Election Commission would hold the next general election. Dr. Virot Ali, a returning panelist from the 2017 Crystal Ball in 2017, was on hand to give us his thoughts, and accurately predicted the election would be held on the 24th of March. A highly distinguished lecturer in International Politics from Thammasat University. Dr. Virot earned his PhD in Political Science and International Studies (POLSIS) from the School of Government and Society at the University of Birmingham in England. Dr. Virot was prescient enough to table a number of different election outcomes, but as we went to press the election results had yet to be officially recognized.

Virot Ali, Lecturer in International Politics, Thammasat University

The Stock Exchange of Thailand (SET) 2018 market report showed that the SET Index ended 2018 at 1,563.88 points which was down 10.8 percent from end-2017. Dr. Soraphol Tulayasathien, the SET Senior Executive Vice President said that the SET index in 2018 was weighed down by external factors, while Thai economic fundamentals remained robust and the growth outpaced a year earlier. However, in contrast to the decline of the SET Index for 2018, the average daily trading value of the SET and the Market for Alternative Investment (MAI) in 2018 surged 15.1 percent to THB 57.67 billion (USD 1.75 billion).

SET has continuously grown in the time of the rapidly changing environment of the capital market. Thailand has become the most liquid capital market and the largest fund-raising venue in ASEAN since 2013.

CanCham was honoured to have Dr. Soraphol on the panel this year to lead the discussion on investing trends in Thailand. In October, SET appointed him as Senior Executive Vice President to oversee strategy, international relations, and research.

Dr. Soraphol Tulayasathien, Senior Executive Vice President, The Stock Exchange of Thailand