BitesizeBKK Newsletter Edition 8

Friday 15th December 2023

Whilst we have comfortably reached halfway through December, with festivities and more in full swing, Thailand’s news cycle is slightly subdued, leaving us wishing for brighter, more optimistic headlines to report. This is what's on our minds this week, from a poor-performing stock market to reports on mounting debt and debt forgiveness programs.

On a slightly more upbeat note, have you guys pre-ordered your turkeys?

As always, if you like what you’re reading, please forward this email to a friend, think of it as an early Christmas present!

The Big Bites

1. Thai Government Tackles Big Debt

   
   

   What a big undertaking. Thailand’s sky-high household and informal debt have long been a deeply rooted structural problem and impossible to tackle without taking out all the other kinks (wages, financial literacy, corruption), but we have to start somewhere.

   
   

   Merely two days ago, Prime Minister Srettha Thavisin announced a series of debt relief measures for Thai citizens, with an actionable debt restructuring program. The program will apply to four main groups:  individuals and SMEs hit by the pandemic, individuals with regular income who are in debt to banks and credit card bills, individuals with irregular income such as farmers and student loan debtors, and the final group, those with long-term non-performing loans.

   
   

   Most of these debts will be on pause, coupled with lower interest rates and monthly repayments.

   
   

   According to Kitirat Na Ranong, an advisor to the PM and former Minister of Finance in Yingluck Shinawatra’s government, the sky-high household debt of 90.7% of our GDP is recorded from the official credit bureau and excludes several key debts. He also said that credit card debt in Thailand is concerning, with 67 billion baht out of 540 billion baht total debt classified as “at risk.”

   
   

   Out of this big group, 1.1 million Thais are classified as extremely vulnerable to risk and will be eligible for the Bank of Thailand’s debt relief program, which will offer special interest rates of 3-5%.

   
   

   🥤 Bitesize Take: Beyond high household debt, informal debt is a massive problem in Thailand, and as we reported above, so is credit card debt. 1.1 million Thais may seem manageable, but it’s a sizeable representation of the problem that has seemingly worsened since the pandemic. We can easily blame it on spending or financial illiteracy, but it speaks of a bigger structural problem of a significant population needing help, relief, and guidance.

   
   

   If we investigate our own monthly spending, it’s important to keep track of bills and payments, and ideally, we should be able to pay off our credit card bills in full every month to avoid getting into debt. When we head into the new year, this is an important financial habit to keep in check.

   
   

2. No Santa Claus Rally Yet for SET

   
   

   On 13th December, the lagging Thai stock market (SET) reportedly closed at a three-year low of 1,357.97 points, down by over 15.95 points. Those who were wishfully hoping for a December rally, or at least a more positive turn for their portfolio before the year's end, may have to reassess which stock will make it in 2024 with the market in dire conditions.

   
   

   Thailand’s SET has taken a beating this year, fueled not only by macroeconomic conditions and the appeal of US treasuries but also by lackluster growth across Thailand’s economy and industries. Earlier this week, analysts also cited capped electricity charges as a key factor for the rapid sell-off of power plant companies.

   
   

   The market has also been weary of the government’s debt relief program this week.

   
   

   🥤 Bitesize Take: Thailand’s economy seriously faces short- and long-term headwinds. Next year, analysts expect some government policies to kick in and take effect, but overall, we are losing to our regional peers.  The market is a true reflection of sentiment, and there’s a lack of confidence right now surrounding Thailand’s growth prospects.

   
   

3. Global Bites 🌎:  TikTok Figures Out a Solution For its Ecommerce Ban in Indonesia

   
   

   TikTok has a US$1.5 billion solution to its very big Indonesian problem. The Chinese social media company will invest $1.5 billion for a controlling stake in a unit under the Indonesian super app GoTo (a combined entity between ecommerce giant Tokopedia and super app GoJek), to resume ecommerce operations on the platform.

   
   

   With the price tag, TikTok will take a controlling stake of 75.01 percent in Tokopedia, and Tokopedia will acquire TikTok Shop’s Indonesian unit for US$340 million.

   
   

   Shares of GoTo fell by more than 12% on the news earlier this week.

   
   

   This mega move by TikTok came after the Indonesian government issued a blanket ban on transactions on social media platforms a couple of months ago.  

   
   

   🥤 Bitesize Take: TikTok’s willingness to spend highlights the strategic and monetary importance of the Indonesian market (driven by social sellers), and its sheer size alone rationalizes the deal. Indonesia is one of the social media platform’s most important markets, and this takeover could provide a template for overcoming regulatory hurdles in other markets, according to analysts.

   
   

   Tokopedia enjoys a large slice of Indonesia’s ecommerce pie, a bigger share than TikTok. This way though, it avoids future costly subsidies and competition wars with the social media giant.

   
   

The Michelin Guide is essentially a global standard of who’s who in the dining (and soon-to-launch hotel scene), just unveiled Thailand 2024’s list of winners, losers, and new entries. Six new restaurants, ranging from Samrub Sumrub Thai to contemporary Indian eatery INDDEE received their first stars, while Baan Tepa and Gaa got promoted to two stars. Meanwhile, the fine dining institution Le Normandie at the Mandarin Oriental Hotel lost one of its two stars.

Thailand’s food scene is thriving. From gastronomic fine dining institutions with a two-month waitlist to contemporary Thai eateries in Charoenkrung and our beloved street food stalls, there’s never a better time to be a foodie. People often cite the good old Michelin Guide when they’re scouting for special occasion places, and Thailand’s Guide is sprawling with diverse selections from Bangkok to Phuket.

The Guide began awarding stars to restaurants in 1926, and five years later, it began ranking restaurants by two and three stars. Another fun fact? 30 million copies of the guide have been sold worldwide.

Our take? Thailand’s food scene is seriously giving other countries a run for its money, and whilst eating out well has certainly gotten more expensive here, it’s a testament to our aspiring chefs and an industry that should continue to be supported. Beyond tourism and spending, we need a “soft power,” as the government says.

Weekend Checklist

Bitesize’s Weekly Picks

Source: Pattaraphan Instagram / Copenn Instagram / Adoptable Puppy Cafe Instagram

✅ Don’t miss out on Pattaraphan’s Holiday 2023 Treat for timeless and genderless fine jewellery - they’re offering 20% off on silver/brass items and 10% off on new arrivals and 14k gold pieces. Perfect for last-minute gift shopping, or treat yourself.

✅ Sticking with the giving theme, design concept store Copenn is having a gift festival pop-up at Central World 1st floor from now until 10 March 2024, with curated New Year's gift sets for various budgets - from perfume hand creams to stainless steel oil burners.

✅ Send simultaneous love to your human and furry friends - The Adoptable Puppy Cafe is making personalised Christmas eCards in exchange for a THB100 donation to support them in finding forever homes for rescue dogs!