The Southern Thai region of Phuket is becoming increasingly popular with tourists from around the world, and also with expatriates looking for a pleasant place to settle with warm weather and easy access to the sea. This is resulting in high demand for properties and pushing up prices, according to information presented at the recent “Economy and Investment Trends for the Tourism Industry” conference.
The conference, which was held at the Royal Phuket city Hotel, resulted from collaboration between the Siam Commercial Bank, the Tourism Authority of Thailand, and Siam Commercial Bank. It was attended by a number of leading financial and property professionals in the region.
Plus Property Co provided statistics for the conference that revealed land prices roughly doubling over the course of only a few years. It was said that a price tag of 50,00-60,000 baht can now be seen on parcels of land that, not so very long ago, would have sold for only 27,000 baht.
This growth in prices is largely being driven by high demand. Some of this comes from expats and people moving to the region from elsewhere in Thailand. This influx of newcomers contributes to the region’s 3% annual rise in population. However, international investment is also a major factor in creating high demand and stimulating value growth. This is largely driven by the region’s strong tourist industry.
According to Wannaprapha Suksomboon, deputy director for Phuket with the Tourism Authority of Thailand, tourists in the area are increasingly renting homes for short-term periods instead of opting for hotels or other dedicated tourist properties. This provides an increased level of comfort and an experience closer to everyday local life.
This leads to large volumes of incoming investment into the regions property market, both from investors within Thailand and those abroad. The high demand that tourists place on property and the strong rents they pay are perhaps catching their attention more than the possibility of renting to the wealth expats who settle in the area for the longer-term.
A look at the figures quoted by Srinarin Paopongpaiboon, who works at Siam Commercial Bank’s Economics and Business Research Centre as a senior analyst, it is not hard to see why Phuket is attracting so much international money. Ms Srinian points out that rental returns on properties in the region tend to be around 6-8%, while rapid value growth means that simply buying a property and selling it a year later will get a return of 10%.
However, property and investment are not the only sectors of the economy to benefit from this, and the positive effects are being felt on-the-ground by residents of the area as well. Thanks to 7% annual growth in the region’s property market and the money that the thriving tourist trade brings in, families who live in Phuket have benefited from a 3% income rise over the last three years.
Barclays currently has five sites that are used for handling claims for compensation over mis-sold PPI. Following a technological fault, one site missed out on a major update to the manual staff were required to follow in dealing with these claims. Potentially hundreds of customers were affected by this error, some of whom may have missed out on compensation they were rightly due.
Those who chanced to have their PPI claims dealt with by the firm’s Leeds office received payouts automatically. Those who dealt with the other four offices, on the other hand, had to endure a much more laborious process in order to achieve compensation.
Barclays insists that no customers missed out on compensation, but many other parties remain unsure. Besides customers, there are also doubts about this claim from the Financial Conduct Authority as well as the MPs that have been levelling criticism at the bank.
Barclays called the mistake a “minor glitch,” but John Mann MP called it “a major issue.” Mann, who is part of the Treasury Select Committee, said that Barclays must now re-examine the cases of those affected and take the necessary steps to “ensure that all their customers are compensated to the maximum amount.” Mann also said he would be bringing the issue to the attention of the Financial Conduct Authority.
Barclays have been a major offender in the PPI mis-selling scandal. They continue to generate a large number of complaints, having sold PPI wrongly to hundreds of people for their Barclaycards when they had no use for it. This has resulted in the bank having to make hundreds of payouts. The value of these compensation payments varies significantly, but averages at around £2,500. The total fund set aside by Barclays for compensation is around £3.95 billion.
The mistake came to light in mid-2013. According to some sources, Barclays were quick to try and move on from the issue while paying it as little attention as possible, but when the problems became known outside the bank’s staff a number of people were concerned that they should make more of an effort to redress any problems it had caused for customers.
An agreement has been reached that will see Swiss bank affiliate UBS Securities purchase a controlling share in Shanghai Pumin Futures Brokerage. The move will see the bank gain access to the Chinese financial futures market, currently a thriving financial arena.
UBS said that it had gained approval from regulators for the purchase, which will see it obtain a stake of 95.42% in the brokerage firm. They will be investing roughly US$14.8 million into the firm, which is taken as a sign of their commitment to their newly-obtained business interest. According to sources close to the organisation, Shanghai Pumin will continue operations under its current name after the purchase.
The Chinese financial futures market is currently thriving, and it is a market the government is actively encouraging. The recently-issued Third Plenum statement from Chinese leaders stated the government’s intention to encourage greater innovation amongst China’s financial markets. It also indicated that they wish to turn the financial futures market into the country into a multi-layered one and expand the range of products on offer.
The first futures product in China was introduced in April 2010. According to the Hushen 300 Index, which is used as a benchmark for Shanghai and Shenzhen shares tracking, the country’s financial futures market has grown significantly since this time. The volume of trading in China’s financial futures market reached levels of CN¥141 trillion last year, including 5-year treasury bonds. Overall, these now account for almost 53% of total trading in futures products that takes place in China, according to UBS. This includes Chinese commodities futures, which have been available for longer.
It is possible to for securities firms such as UBS to access the financial futures market in China by directly applying for a licence. However, this process can be lengthy and complicated. Acquiring a futures broker that is already in possession of a licence, as UBS Securities have now done, can be an easier process for companies that have the funds and opportunity to do so.
Other companies that currently hold such a licence include notable players Haitong Securities, Citic Securities, and Guotai Junan Securities. UBS Securities will now be competing in this market. Given their well-established position in other markets and the extensive backing this brings as well as the scale of their investment, it is likely they will be giving this market a lot of attention and will be in with a strong chance of becoming one of the major players themselves.