Fear of impact on exports

Concern has risen that ongoing unrest in Hong Kong is likely to affect Thai exports and businesses if the situation worsens.

Thai banks and businesses with branches and offices in Hong Kong, which is one of China’s special administrative regions, are preparing contingency plans, as pro-democracy protesters have paralysed parts of the city.

Stocks went down yesterday amid investor worries over the Hong Kong chaos. 

Vallop Vitanakorn, vice chairman of the Federation Thai Industries (FTI), said further escalation of violence in Hong Kong could affect the Thai export industries if the situation starts to hamper shipments. This could slow down the delivery of goods to third-party companies on the other side of the world.

He said that if the temporary suspension of operations of 29 commercial bank branches in Hong Kong prolongs, it could pose a difficulty for financial transactions between Thai exporters and counterparts in Hong Kong. The logistical process in the city could also be affected if port workers join the protest, which could lead to a possible postponement of deliveries.

The operation of Thai export firms with offices in Hong Kong could also be affected by a slowdown in quality control processes due to a shortage of workers if the tensions escalate to port areas, he added.

“Any shipments from Thailand to third countries, such as the United States, European countries, and the Middle East would be delayed if the protest starts to affect Hong Kong’s logistic sector. Some shipments from Thailand to those countries have to pass through and offload from a smaller freighter through to a bigger cargo ship in Hong Kong,” he said.

Stock Exchange of Thailand’s index yesterday fell 14.37 points, or 0.9 per cent, in line with the region as investors worry about the chaos in Hong Kong, while the investors resumed profit taking ahead of “trigger” funds due to mature soon.

The index closed at 1,585.79 points with total trade volumes of Bt60.92 billion.

Foreign investors showed net sells of Bt1.746 billion, while securities accounts also recorded net sells, of Bt1.878 billion. But local investors showed net buys of Bt3.58 billion. 

Thai Airways International (THAI) office in Hong Kong was closed early yesterday due to a protest nearby, said Suraphon Israngura Na Ayuthya, executive vice president of THAI’s Commercial Department. This was done for the safety of THAI customers and staff, he said.

However, THAI still operates five flights per day on the Bangkok-Hong Kong route normally. 

“The load factor on the Hong Kong-Bangkok route is very good now – nearly 100 per cent due to shopping season in Hong Kong – but we will keep an eye on the situation,” he said.

Suraphon said if the situation gets worse, the company would close its city office and relocate staff to Chek Lap Kok International Airport instead.

He said the airline would closely watch passenger movements as well as cancellations for few days before making any decision.

Passengers of THAI may contact the Hong Kong office at +852-2179-7777 until 4pm. For flight schedules, people should contact THAI’s phone centre on 02-356-1111 or THAI’s Hong Kong airport office on +852-2769-7421 (9am to 10pm).

A representative of the Thai Travel Agents Association (TTAA) – the group of outbound operators – said there had been no significant cancellations for groups planning to visit Hong Kong. But many tour operators are asking customers to postpone trips or shift to other destinations like Macau or mainland China.

Sisdhivachr Chevarattanaporn, managing director at Quality Express Travel, said Thai people were still travelling to Hong Kong, and Kong Kong tourists were still coming into Thailand.

“The situation is limited in just a small area and that is not tourist attraction so tourists should not worry,” he said.

The company still planned to bring Thais to Hong Kong as scheduled.

He added many others travel companies also put Hong Kong on sales for the Thai market.

Meanwhile, Bangkok Bank officers in Hong Kong have drawn up a crisis management plan in the case its office in the central district is unable to service customers.

Chaiyarit Anuchitworawong, the bank’s executive vice president, said its Hong Kong branches were still open as usual. All staff were going to work as usual. Yet the branches were monitoring the situation and the bank had a business continuity plan in place, which has been drilled regularly.

He said that banks in general operate as usual except some bank’s branches near the protest area. 

BBL has two operations in Hong Kong, one is central district and the other is a sub-branch in Kowloon.  Kowloon sub branch is set to service customers if the central branch near the demonstration is affected.

Kasikorn Research Centre deputy managing director Pimonwan Mahuj-chariyawong said the escalation of protests in Hong Kong would pose minimum threat as most tourists going to Thailand are from mainland China. And as long as shipments and other logistic operations are uninterrupted, the impact on Thai exports should be minor.