Government Policies impact on the SET

Given that much of the news over the past four weeks has been either about the Euro Debt Crisis or the Flooding in Thailand not many market commentators nor analysts have spoken much about how the new government’s policies are going to impact the market here. Within the past two weeks the government has ratified two major policies, 1.) the increase of minimum wages to THB 300/day and 2.) the decrease in corporate income tax from 30% to 23% to 20% over the next two calendar years. I’ll post more later over the next week regarding its impact on specific companies but in the meanwhile see below for a brief table we sent out to clients last week.

Sector Impact Comments
Banks + Infrastructure spending, tax benefits for first time home-buyers and first-time car buyers, and decrease in corporate income tax from 30% to 20% by 2013
Telecoms + Speeding up 2.1GHz 3G license bidding by 2012.
Retail + Minimum wage increase to THB300, easier credit access, social benefits and price subsidies
Property + Promised 0% five-year mortgage rate, exemption of transfer fees
Building Mats + Infrastructure spending will continue
Media Neutral Potential for increased spending leading to higher ADEX
Healthcare Neutral No real direct impact on this sector
Energy Potential higher government intervention in the form of subsidies
Agri & food Potential higher government intervention in the form of price controls, but export oriented firms will be fine
Transportation Possible government intervention in the state enterprises THAI and AOT
Electronics Negative for low-value added manufacturers because of increased minimum wage.
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