The surging baht is making smartphones cheaper


It is the best performer among major Asian currencies so far this year
Chief Investment Office22 Aug 2019
    Photo credit: AFP Photo


    CURRENCIES

    While Thailand’s surging currency is squeezing exporters, the nation’s largest consumer-electronics retail chain is benefiting as the strong baht attracts customers by making iPhones and Samsung smartphones cheaper.

    Com7 Pcl’s 72% total return this year through Monday (19 August) on its stock ranks as the world’s best performance among electronics sellers with a market value of at least USD500m, according to data compiled by Bloomberg. Earnings growth will enjoy “strong momentum” for the rest of this year, partly helped by the baht, after a record profit in the second quarter, according to the company.

    Com7 operates BaNANA and Studio 7 stores that specialise in smartphones, personal computers, and other electronic devices manufactured by brands such as Apple Inc, Samsung Electronics Co Ltd, and Huawei Technologies Co Ltd. The Bangkok-based retailer has been in talks with those companies about plans to cut product prices following the baht’s gain, Chief Executive Officer Sura Kanittavikul told investors last week (ended 16 August).

    The baht has gained about 5.5% this year, the best performer among major Asian currencies tracked by Bloomberg. Com7’s net income in the April-June period jumped 36% from a year earlier to THB294m (USD9.5m), the highest quarterly earnings since the company listed in 2015, according to data compiled by Bloomberg.

    To be sure, the baht’s strength is not welcomed everywhere in Thailand. Southeast Asia’s second-biggest economy grew at the slowest pace in almost five years in the second quarter as exports and tourism were buffeted by US-China trade tensions and the strong local currency. – Bloomberg News.

    The US Dollar Index (DXY) rose 0.11% to 98.295, while the euro dipped 0.14% to USD1.1085 and the pound fell 0.33% to USD1.2130. The yen also weakened 0.37% to 106.62 per dollar.

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