KBank pushes anti-risk products
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Kasikornbank recommends that traders open letters of credit or take out trade credit insurance to reduce the risk from global economic volatility.
“We have tried to persuade traders to open L/Cs first, otherwise they must collect money from customers before sending goods, to prevent risk,” Songpol Chevapanyaroj, executive vice president of KBank, said yesterday.
The euro-zone crisis has caused buyers there to delay or even cancel their payments to Thai exporters. The deferments can run from three to eight months.
Most Thai traders sell to their customers in Europe on credit, which leaves them open to losses because most traders do not open L/Cs or buy trade credit insurance, Songpol said. Buying business interruption insurance (BII) is another good idea, as the premium is only 0.01 per cent.
“We suggest that customers buy BII to reduce risk from volatility. KBank will next year develop financial packages combing BII and an L/C to help save costs for customers,” he said.
Despite the flood crisis, foreign investors are still keen on Thailand.
“In discussions with Japanese investors, they said they were interested in investing in Thailand but location would be selective. A site must be at least 7 metres above water level. The area with potential is eastern Thailand,” he said.
Interest rates next year should not be cut and might be increased in the third quarter, Songpol said.
Operators will have high demand for business-rehabilitation loans to prepare for resuming production in the second quarter and the peak season for exports is the third quarter, which will boost the prices of goods and general inflation. The policy rate is expected to be raised to rein in inflation in the third quarter, he said.
