atans1

Archive for the ‘Indonesia’ Category

Don’t overlook these high SGX highish yielders

In Indonesia, Japan, Reits on 20/09/2014 at 6:28 am

LMIR Trust to acquire Jakarta mall for 3.6 trillion rupiah

Lippo Malls Indonesia Retail Trust (LMIR Trust) plans to bulk up its portfolio by acquiring a five-storey shopping centre in southern Jakarta, Indonesia, for 3.6 trillion rupiah (S$385.7 million) which it plans to pay with cash and new units.

The acquisition of Lippo Mall Kemang (LMK) from PT Almaron Perkasa – a company incorporated in Indonesia which is 92 per cent indirectly owned by the trust’s sponsor PT Lippo Karawaci – could potentially raise the trust’s portfolio by 27 per cent from S$1.42 billion as at end-June to S$1.8 billion.

LMIR Trust’s manager, LMIRT Management, has proposed to issue up to 301.37 million new units to PT Almaron Perkasa, which under the conditional sale and purchase agreement signed on Sept 14 will receive 3.18 trillion rupiah in cash and 420 billion rupiah in units for LMK.

The firm deemed the deal to buy LMK, which enjoyed a high occupancy rate of 93 per cent as at June this year, a “strategic acquisition of a prominent retail mall” located close to residential apartments, a hotel, a wedding chapel, a school and a country club. LMK also serves as the podium of the proposed JW Marriott Hotel, Pelita Harapan school campus, a planned hospital and three condominium towers. (BT this week)

And

From now till end-March 2017, acquisition strategies will be executed in full swing by Accordia Golf Trust (AGT).

The first Singapore-listed business trust with golf course assets in Japan, and also Asia’s first golf trust, AGT currently manages 89 golf courses in Japan, with a combined value of about 160 billion yen (S$1.89 billion).

Together with its sponsor company, Tokyo-listed Accordia Golf, they own 133 golf courses in Japan, and they are the largest golf operator in Japan, with a 5.5 per cent share of the market.

In a media briefing on Monday, chief executive officer Yoshihiko Machida said the trust is now poised to acquire an additional 50 billion yen worth of golf assets, with a preference for 19 golf courses currently owned by Accordia Golf, of which AGT has the first call options right to purchase. (BT this week)

I own a bit of the former and and still thinking of the latter. The issue with these is the strong S$. (Yen was at an all time low against S$ this week).

Equity mkts: India, Indonesia & Pinoyland looking gd/ Don’t forget S’pore

In ETFs, India, Indonesia on 13/09/2014 at 4:34 am

Examining recent price trends, India has stabilized in dramatic fashion following its dismal performance in 2013.  With superior demographics, a skilled work force, and pro-business leadership, India could prove to be an excellent growth engine over the coming decade.  However, investors should also bemindful of the higher than normal price volatility and look to hold any new investment with a long-term viewpoint.

Circling the globe and focusing in on to the Pacific Rim, Indonesia has had a stellar year following a major decline of over 20% in 2013.  The Market Vectors Indonesia (IDX) is currently up 26.5%, yet appears to still have a lot of room to run to reach its all-time highs.  This ETF is weighted primarily towards large and mid-cap financials, consumer staples, and consumer discretionary stocks.

Indonesia stands to build on excellent GDP growth rates that exceed 5% on a year over year basis. Two thirds of their economy is driven by domestic consumption, which could continue to perform well given their stable democracy and large middle class.  Indonesia also boasts one of the lowest debt to GDP percentages in greater Asian region, which should allow the government to continue its key investments in infrastructure.

Finally, stocks in the Philippines are beginning to show signs of life, with a year to date return of 23.4%.  The iShares MSCI Philipines (EPHE) is dominated by 42 large cap stocks primarily centered around the financial, industrial, and telecom sectors.

Although the Thai protests last year pushed the region into a state of disarray, the Philippines has managed to overcome those fears and has held up relatively well.  The Filipino economy is poised to continue its 2014 run on the back of robust economic growth, increased tourism, and a strong fiscal balance sheet.

In addition, the Filipino peso has been very strong relative to the U.S. dollar and other emerging market currencies.  As a result, GDP growth has exceeded 6.5% over the last two years. These two factors bolster EPHE’s chances of trending higher in the near-term, even despite the country’s moderate levels of wage inequality and foreign investment restrictions.

http://www.investopedia.com/articles/investing/082914/these-little-known-emerging-market-countries-are-star-performers.asp?utm_source=newstouse&utm_medium=Email&utm_campaign=NTU-9/5/2014

Three-month flows into Singapore exchange-traded funds (ETFs) are on course to reach the most since Markit Ltd began tracking the data in 2009. Investors took money out of the stock and bond funds for five straight quarters through June, the Markit data show. The benchmark Straits Times Index has rebounded 13 per cent from this year’s low on Feb 5 and Singapore’s sovereign debt returned 3 per cent this year.

Singapore shares are the most attractive among Asia ex-Japan and emerging-market equities, beating Hungary, Chile and China, according to a Morgan Stanley study using measures from earnings to corporate governance and technical indicators. The investment bank predicts companies in the South-east Asian city-state will beat consensus earnings forecasts after the economy expanded at a quicker-than-expected pace in the second quarter.

“The Singapore market is somewhat undervalued for a pretty strong growth environment with positive earnings revisions,” said Jonathan Garner, Hong Kong-based head of Asia and emerging-market strategy at Morgan Stanley. “We also like the fact that the market scores very highly in terms of our political risk and corporate governance model.” BT on Tuesday)

Tourism potential of Indon, Vietnam & Burma

In China, Hong Kong, Indonesia, Japan, Malaysia, Vietnam on 24/08/2014 at 4:58 am

Number of foreign visitors received in 2013

  • Thailand – 26.5 million
  • Malaysia – 25.7 million
  • Hong Kong – 25.6 million
  • South Korea – 12.1 million
  • Japan – 10.3 million
  • Indonesia – 8.8 million
  • Vietnam – 7.5 million
  • Myanmar – 2 million

I’m surprised that Indonesia has only 8.8m visitors given the popularity of Bali.

Still Mynamar is the place to invest in the tourism biz. Opportunities there from recent BBC article.

Qn for Swee Say: How cheap you want us to be?

In China, India, Indonesia, Vietnam on 14/08/2014 at 4:36 am

manufacturing wages

When I saw the above table, I tot of the Deaf Frog’s “Cheaper, Better, Faster”. There is always somewhere cheaper as above from FT article shows. And MNCs will move there: now moving from Jakarta and Vietnam to central Java. (Btw, $ + US$)

“Cheaper, Better, Faster’

The apologist version of what he meant by a website funded by a organisation headed by one Philip Yeo after being approached by one BG Yeo (taz the rumour). With credentials like these how not to believe meh?

In 2007, Lim coined the phrase to exhort Singaporean companies to increase their competitiveness.

Companies have to be cheaper and better than their competitors internationally, because those who used to be cheap (China) are now getting better, and those that used to be good (United States) are now getting cheaper as well. Hence, Singaporean companies have to be cheaper and better than them, and yet turnaround faster.

He obviously didn’t do an MBA: it’s accepted wisdom that one cannot have all three, only two. Attempts to have all three results in failure. This should cheer on TRE posters: Swee Say is urging a policy doomed to failure.

 

US broker bearish on Indon, bullish on S’pore

In Indonesia on 12/07/2014 at 5:20 am

In its latest ASEAN equity strategy report (written before the presidential polling date ), Morgan Stanley said that it prefers Singapore over Indonesia, global cyclicals over domestic consumption stocks, and defensives over domestic cyclicals. But on its buy list is a stock that is based in Indonesia.

Actually there is another reason to be bearish about Indonesia, short term. We may not know the result until August and a close vote may hobble the “doer” if he wins, as expected.

Back to Morgan Stanley’s report. It argues that based on profitability trends that Singapore and global cyclicals stocks’ profitability has likely bottomed out, while Indonesia and domestic consumption stocks’ profitability has likely peaked. “We believe the trend in quarterly profitability, particularly in Indonesia and Singapore, is likely to be the key incremental catalyst over the next 1-2 months. Signs of cracks in margins have emerged in Indonesia and early signs of improvement in Singapore’s profitability were observed in Q1. Consensus expects profitability to deteriorate in Indonesia and stabilize in Singapore in Q2.”

Although they said that macro developments will continue to play an important role in driving equity markets, the authors believe that incrementally, investors are likely to turn their attention to the outlook for profitability.

Consensus is expecting improvement in Singapore’s profitability in 2015 and 2016, but Morgan Stanley is more optimistic. It expects (for the stocks they cover) expect a Singapore margin (ex REITs) of 7.5% 2014, compared to consensus’ 6.9%.

Similarly for the Morgan Stanley coverage universe, the analysts estimate 7.6% for 2015, compared to the consensus estimate of 7%.

SingTel, Singapore Airlines and Indofood Agri Resources are among the stocks on its buy list.

For SingTel, it ss expecting margin improvement mainly from Optus in Australia.

For SIA, it expects operating margins to improve on yield and load factor improvements. Near-term yield drivers should come from:

i) healthy domestic market and North Asia demand, particularly from China, Europe and Australia;

ii) strategic moves to focus on mid-haul North Asian routes to avoid competition with low cost carriers on short haul, and

iii) effective capacity management to shift capacity from weak demand routes like America/Africa to Europe, Australia and North Asia.

Longer-term yield improvement from FY15 onwards should stem from i) introduction of premium economy class in 2H15, and ii) retrofitting a new cabin design on 19 new aircraft in 2015 and 2016.

As for Indofood Agri, “operational difficulties in South Sumatra are behind us” and yields in the last two quarters since 4Q13 have shown solid improvement”, which supports the call for a recovery.

“In addition, 2Q14 earnings may surprise on the upside as the Street has not fully factored in the gain from inventory destocking, we believe.”

Indon election: The shouter or the doer? And why it matters to us

In Indonesia on 09/07/2014 at 4:26 am

Here’s the best analysis I’ve come across on today’s election on the difference between the two candidates. The election matters to us because one of the candidates has stressed the importance of military might, saying international respect is based on prowess. Given that the Indonesian governing elite has outstanding grievances against S’pore (largely out of frustration, anger that we don’t kow tow to them), if he gets into power, relations will be tenser than normal. No gd for economic ties.

“You cannot understand these two figures [meaning the two candidates, Joko Widodo, known universally as Jokowi, and Prabowo Subianto] without placing them in the context of ten years of SBY,” the acronym by which Indonesia’s current president, Susilo Bambang Yudhoyono, is known …

But Mr Yudhoyono’s rule has been exceptionally disappointing for many Indonesians. Mr Winters identifies Mr Yudhoyono’s two major flaws as “his inability to follow through and get things done, and his incapacity to show leadership and make tough decisions.” To compensate for the first failing—which Mr Winters described to me more succinctly as “great PowerPoints, no action”—Indonesians have Jokowi, whose reputation first as mayor of Solo and then as governor of Jakarta rests on nuts-and-bolts administrative competence. As has been amply demonstrated during his campaign, he appears to be incapable of making an electrifying speech. Instead, he likes systems and solutions: as he explained, “I go to the ground, I go to the villages, I go to the riverbank, I go to the market to meet the people. I ask them what they want and what they need and we give solutions.” He wants to move as much of Indonesia’s governance online as possible as a way of avoiding, and thus trimming the power of, Indonesia’s incompetent and sticky-fingered bureaucracy.

Unfortunately, “systems and solutions” is not exactly a to-the-barricade rallying cry. And that is where Mr Subianto comes in: he compensates for Mr Yudhoyono’s second flaw, his indecisiveness, by presenting “a message of firm resolve and calls for national dignity”. He is a former soldier, and his rallies often have a military mien. Where Jokowi is calm and low-key, Mr Subianto has shouted himself hoarse during the campaign. His speeches are full of references to “foreign stooges” and “all of you who have a vision of Indonesian broken apart, a poor Indonesia”.

http://www.economist.com/blogs/banyan/2014/07/indonesias-election

It’s a close race.

S’poreans should hope the doer wins as a rich, growing stable Indonesia is better for us. Foreign investors certainly prefer him: Deutsche Bank reports that if Mr Prabowo wins, 56% of investors surveyed would sell their Indonesian assets and just 13% would buy, while a Jokowi win would cause 74% to buy and just 6% to sell.

True, if the shouter wins the dirty money will keep on flowing. But there will be more rows and tantrums with S’pore. Mr Subianto (Shouter) has stressed the importance of military might, saying international respect is based on prowess. In addition to the uncertain economic climate that these rows will generate, the rows will give the PAP the excuse maintain and even spend more on defence.

And the full potential of Indonesia’s potential middle class will remain untapped. If the Indonesian middle class expands and grows richer, S’pore will benefit as they come here as tourists and gamblers.

S’pore is Asean equities mkt of choice

In Indonesia, Uncategorized on 14/06/2014 at 4:37 am

Singapore equities are Morgan Stanley’s Asean choice compared with those of Thailand and Indonesia, because of their attractive valuations and defensive nature.

“In a rising rate environment, we believe Singapore could be a relatively safe haven (despite its higher earnings volatility), excluding its relatively vulnerable property sector,” a report by Morgan Stanley Research said yesterday.

In a huge plug for the PAP govt (eat yr hearts out TKL, KenJ, TRE readers), S’pore’s relatively low political and policy risk and its healthy banking system, and well managed cash-generating firms are what makes S’pore its top pick in Asean..

This contrasts to the continued political uncertainty in Thailand and the fact that positive developments on the Indonesian macroeconomic front appear to have already been priced in by equity investors. Morgan Stanley report was neutral on Indonesia, and Thailand was the analysts’ least-preferred market.

Who is right? PM? Heart Truths? Consumer survey?

In Economy, Humour, India, Indonesia, Political governance on 05/05/2014 at 4:51 am

Recently PM said the problems S’pore were facing were the results of success*. Here I asked: Success what success? Real wages grew by only 0.4% while GDP grew by 5.9% . while the prices of public housing apartments went up in a recession.

Meanwhile, many new media warriors (posters on TRE; Heart Truths, near relation to Hard Truths; Han Hui Hui, an FT turned new citizen, who is proof that the Bumis in M’sia are right not to trust the local Cina: Uncle Chua etc) are always full of how hard life is for the average S’porean.

This so-called suffering doesn’t chime with what I observe in shopping malls, restaurants, or even hawkers’ centres or coffee shops, or what my friends, relations or biz connections tell me: S’poreans are  feeling more confident of confident of their prospects, and hence are spending more. Note, I’m not saying that there are no S’poreans suffering, but I take issue that the majority of S’poreans are suffering.

Well a recent Nielsen survey** of 501 S’poreans seems to confirm my view: that things are OK and improving, but not as great as PM is spinning. After all he got a GE to win.

Consumer confidence in Singapore is at its highest level in 10 consecutive quarters, with people remaining upbeat about personal finances and being more willing to spend.

According to the latest consumer confidence index released by Nielsen, Singapore recorded an index score of 99 in the first quarter, up two notches from 97 in the previous quarter … but still shy of the 100 baseline, has yet to reach optimism. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. [If things are as great as what PM, his ministers and their trumpeters*** in the constructive, nation-building media saying, shouldn't the score be 150 and rising?]

The head of Nielsen Financial Services in Singapore and Malaysia was quoted as saying “The positive outlook on the economy and personal financial circumstances is starting to trickle down to consumers’ spending intentions: we notice an increase in the number of Singaporeans who are willing to spend money on discretionary expenses . . . if these intentions materialise, they could act as a further stimulus to the economy.”

So am I, Nielsen and those S’poreans spending more living in the same S’pore as our PM, or the people complaining via new media? Who is more reflectively of the reality of life in S’pore? PM and Heart Truths and friends are aliens that landed here on UFO Goh Meng Seng, the scourge of Pinoy Pride here?

Jokes about aliens and GMS aside, maybe

– PM and his ministers are out of touch, what with their huge salaries? Yesterday, I wrote “Of course Mah Bow Tan http://www.tremeritus.com/2014/05/01/netizens-agog-at-mah-bow-tans-fortune/and other millionaire ministers (present and retired) are not among these ‘lesser mortals”” in a piece of  EFTs that mimic the strategies of hedge funds.

– It’s these new media warriors who are the suffering underclass and they think that they are representative S’poreans? Or they are fruscos who think that they should have been talent-spotted by the PAP? They are always claiming that the suffering is always the fault of the PAP govt, never an issue of personal responsibility or sheer bad luck, so maybe they have personal grievances against the PAP? BTW, I exclude TRE’s Richard Wan as he knows he has a comfortable living, and knows it.

My serious point is that whatever new media or PAP media or anyone says about any topic, those of us who are rational have to ask ourselves,”Chime with what I observe?”. Don’t get carry away with the views of others. They could have agendas, delusions to propagate.

BTW, more details from BT (1 May) on the Nielsen survey:

– Some 54 per cent of respondents from Singapore consider their finances to be “good” or “excellent”, unchanged from the previous quarter.

– There is an uptick in Singaporeans who intend to invest in stocks and mutual funds, up six percentage points at 32 per cent … continue to be prudent with their money. Some 70 per cent would channel their spare money into savings, up six percentage points compared to the previous quarter and well above the global average of 47 per cent … more Singaporeans intend to increase their discretionary expenditure on a vacation and new clothes. Some 54 per cent intend to spend their spare cash on a holiday, while 37 per cent would spend it on new clothes, a quarterly increase of five and 11 points, respectively.

Interestingly, two of the three countries with the highest consumer confidence levels are in Asean Indonesia (124),  and the Philippines (116). BTW, India (121) is in between.

*Singapore’s economy has fared better than expected over the last decade, but the country’s success also brought about its own set of challenges.  PM Lee made this point in a wide-ranging discussion with regional newspaper editors  recently.

He said the country had paid the price of this fast growth, as infrastructure wasn’t able to keep up with the rapid development.

Mr Lee was asked about Singapore’s success during his time as Prime Minister and if anything exceeded his expectations.

He said yes, the country had done economically better than expected and grown faster — attributing it to favourable conditions.

As investments poured in, the government had put in resources and brought in foreign labour needed to grow. As a result, developments at the Marina Bay area sprung up in within a decade, instead of the expected 20 to 30 years.

He said that in terms of infrastructure, the country had not been able to catch up and had paid a price, and added that the government had been working hard over the past three to four years trying to come back up to speed.

He said that if the government had been able to foresee the outcome, it would have acted sooner.

But that, he said, was with the benefit of “20-20 hindsight”.

“We succeeded more than we expected, and so in terms of the infrastructure, we were not able to catch up — our public transport, building houses,” said Mr Lee. “And we paid a price.”

“We have spent the last three, four years working hard to try and come up back to speed. I wish we had been able to foresee this outcome, and then we would have acted sooner.

“But that’s 20-20 hindsight.”

Mr Lee also emphasised that it’s important for Singaporeans to feel they have a sense of belonging to the country — and that is something that is still a work in progress.

But Mr Lee acknowledged that this growth had come with a cost.

CNA extract

**The survey, conducted from mid February  to  early March this year, polled more than 30,000 online consumers in 60 countries,

***These public grievances [on healthcare costs immigration, ministerial salaries] and expert doubts did appear in the media; they were not completely blacked out. But, they were always toned down and set in a context that ensured that the government’s voice remained dominant. When there was undeniable distance between public opinion and the government’s position, leaders required the press to work towards a consensus by shifting the ground rather than nudging the government.

By dampening doubts and dissent, by allowing government to operate in an echo chamber, the media gave yesterday’s policy makers an easier ride. But, today’s policy makers are paying the price. There is now more for them to undo as they move their frame of reference back to the centre-left. Furthermore, a lack of responsiveness resulted in lower levels of trust, which now make it harder for the government to persuade the public when it needs to.

The flawed media policy is behind the current government’s biggest failure – its inability to sell its Population White Paper, which by its own reckoning was a vitally important strategic blueprint for the future. Because it had been unwilling to subject its immigration policies to even the gentle probing of friendly national media in the past, it lost touch with public sentiment and lost precious political capital. Today, it is unable to carry the ground on immigration issues.

Even when it speaks sense – like when the Prime Minister chided Singaporeans for their irrational, tribal response to the upcoming Philippine Independence Day celebration – it meets a wall of cynicism and hostility.

http://www.mediaasia.info/how-singapores-media-restrictions-have-hurt-even-the-pap/

Author is hubby of  ST’s editor.

Think up another “clarification”, general

In Indonesia on 19/04/2014 at 5:15 am

(Or “The lies Indon officials tell”)

“Wasn’t me, was an impostor,” the head of the Indonesian Armed Forces should have said. Or, “I no speak English”. LOL

Some 48 hours after his interview with Channel NewsAsia aired on Tuesday, the head of the TNI deaplogised an apology he made during the interview.

General Moeldoko said on Thursday that he had not apologised to the Singapore government for the naming of a warship after two Indonesian marines who bombed MacDonald House in Singapore in 1965.

Instead, he clarified that he was expressing his regret that the naming decision was final and would not be changed.

On Tuesday night, Channel NewsAsia aired an exclusive interview with General Moeldoko, during which he touched on the relations between Singapore and Indonesia, among other issues.

He was asked by Channel NewsAsia senior Southeast Asia correspondent Sujadi Siswo about the decision to name a warship Usman Harun after the two Indonesian marines, and the ties between the two countries.

“Once again I apologise. We have no ill intent whatsoever to stir emotions. Not at all. Second, relations between the two countries are on the mend. There’ve been communications among leaders. Singapore’s Chief of Defence and I have spoken,” General Moeldoko had said. (CNA)

What could be clearer? He did apologise.

So he’s a talk cock general? I prefer our paper generals.

Seriously, I was surprised at his unambiguous apology and wondered why the TNI had eaten crow. Now we know, “He didn’t mean what he we heard.” So TNI still believes in killing civilians is a legitimate military tactic.http://atans1.wordpress.com/2014/02/17/govt-sporeans-that-blur-on-indons-ship-naming/? Tell the Americans.

Still want us to trust Indonesia Mad Dog Chee?

Related posts: http://atans1.wordpress.com/2013/06/24/haze-what-raffles-would-have-done/

http://atans1.wordpress.com/2014/03/29/investing-in-indonesia-is-like-eating-puffer-fish-tre-readership/

http://atans1.wordpress.com/2012/09/25/indonesia-even-friends-get-screwed/

Impt of Indonesia to Jardine’s and other local listcos

In Indonesia on 15/04/2014 at 6:03 am

Inonesia was the largest revenue generator for many Singapore-listed companies in their most recent financial year, according to Singapore Exchange (SGX).

One in 10 stocks listed on SGX reported revenues specifically from Indonesia. Of those 80 companies, slightly more than a quarter reported Indonesia as the country that accounted for their largest revenue share.

This excludes stocks which segment revenue to South-east Asia, Asia and the Middle East, or Asia-Pacific regions, such as Jardine Matheson Holdings and Wilmar International.

Jardine Cycle & Carriage (JC&C), a member of the Jardine Matheson group and part of the Straits Times Index, has an interest in Indonesia-listed conglomerate Astra. Together with its subsidiaries and associates, JC&C employs people across Indonesia, Malaysia, Singapore and Vietnam. It has a total market capitalisation of $17.3 billion and a year-to-date total return gain of 35 per cent.

(BT 10 April)

JC&C is the Jardine group’s crown jewel, which reminds me, “Jardine [Matheson] shares have multiplied 10 times in 12 years, never mind the dividends,” according to a recent FT piece. I missed this. In early noughties, I tot of selling HSBC and buying Matheson or Strategic. Never did. Well HSBC (bought in 84) outperformed Jardines in 80s and 90s but went AWOL or MIA in noughties.

I had tot that based on history, Jardines would goof when I decided against the switch. In its attempts to diversify out of HK before the reds came in and ruined HK, it bot rubbish in Hawaii and elsewhere. HSBC backed people like Superman and other local tycoons while diversifying out of HK and into the US and UK. A sensible strategy more in line with Perfidious Albion. In the noughties, it was HSBC that crashed buying a US subprime lender. The losses there would have ruined a Citi or any other more efficient manager of capital. Happily HSBC had lots of fat to lose. And a massive rights issue almost doubled my holding. HSBC is getting its act together.

Still, Jardines would have been better .

Commodity prices are close to the bottom of the cycle?

In Commodities, Indonesia, Malaysia on 10/04/2014 at 4:23 am

FT reported on April 3 that traders in an annual commodities seminar are getting bullish.

And this appeared earlier this yr

GROWTH has slowed in China, the destination of most of the world’s exports of iron ore, copper and other metals, as well as increasing quantities of oil and corn. Many analysts have declared that the China-driven commodities “supercycle” has run out of steam. But that may be premature. While global population growth is slowing, the number of people added each year is still increasing. Similarly, China’s economy will be 65% bigger in 2014 than it was in 2008. Macquarie, a bank, reckons that the growth of global demand for steel will slip to 3.1% a year between 2012 and 2018, compared with 3.3% in the previous six-year period, but that in absolute terms it will go from 45m tonnes a year to 50m tonnes a year. The same trend will apply to copper, aluminium, nickel, lead, zinc and tin. In terms of its impact on demand, Chinese growth of 7.5% today is the equivalent to 12% growth in 2008. On top of this there is growth from other Asian economies and the recovery of the American economy. The pace of increase in commodity prices may not match that of yesteryear, but the next upward climb looks set to start in 2014. See full article.

Related article:

Materials (Sector Equity)

  • The materials sector has fallen out of favour with investors in 2013, with the MSCI AC World Materials Sector index gaining just 0.3% (in SGD terms) last year.
  • Similar to the situation with the global financials sector in 2008/2009, massive write-downs have been undertaken by the sector; while this has reduced net asset values of resource companies, it also makes valuations (on a PB basis) more conservative.
  • As a beneficiary of a global economic recovery, we believe the conservatively valued materials sector may emerge as a “dark horse” this year.
  • Our recommended fund for global resources equities: First State Glb Resources

https://secure.fundsupermart.com/main/article/Idea-Week-Capture-Investment-Opportunities-2014-9073

SunT sometime back (sometime last yr) had a bullish piece. http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={27464576-17202-5110879539} Either ahead of the the curve, too early or clueless. LOL. What do you think?

If palm oil, rubber and energy cheong gd for Indonesia, M’sia and Thailand (rubber), and for some SGX counters. Think Olam, Noble and the plantation stocks for starters. And think property developers: think esp CapitaLand. Exposure here and in China.

MH370 fallout hurts us too

In Economy, Indonesia, Malaysia, Tourism on 06/04/2014 at 4:49 am

The incompetency of the M’sian defence officials (no explanation yet on why aircraft were not scrambled when aircraft veered off course) and there are allegations that the veering off course was not detected forb hours), and the perceived failures may affect us.

Demand for inbound tours featuring Singapore and Malaysia could see some ripple effect, following the backlash that Malaysia has received in China …

SA Tours’ manager for inbound tours, Dan Tan, said that he has seen a 40 per cent decrease in demand for such combined packages. Mr Tan said that the bulk of the drop comes from Chinese tourists, as demand from tourists in other countries have held steady.

At this time of the year, SA Tours usually receives enquiries from Chinese tourists for large tour groups of 80 to 100 people for the mid-year holiday period. However, for now, the company has received enquiries only from small groups of three to five people.

Mr Tan said that while business has already declined because of a weaker global economy, he believes the MH370 incident is another reason behind the drop in numbers for combined inbound tours. “There’s a lot of debate online between Malaysians and the Chinese, and the Chinese are saying they won’t come to Malaysia again,” said Mr Tan.

To assure tourists, Golden Travel Services’ managing director, Cindy Chng, has told them that travelling to Malaysia is still safe, that the incident “should have no linkage with the place itself” …  no cancellations thus far from Chinese tourists coming in July for combined tours … they have expressed some concerns. “They may not have a good impression of Malaysia and don’t want to travel there,” …

She added that she is open to making changes for tourists if they want to forgo the Malaysia leg of the tour. [Package with Bali leh]

While CTC Travel does not have combined tour packages … said that he expects such sentiments to cause a drop in Chinese tourists coming to Singapore. “We’re pretty close neighbours, and people tend to link us together,” …does not think the impact will be huge … CTC … not been affected much as the company does not have many Chinese customers and focuses more on outbound travel.

Timesworld Travel & Educational Tours and Chan Brothers said that the incident has not impacted combined inbound tours, possibly because they run more corporate and educational tours which could be less affected.

But Timesworld … said that they could face a 10 to 20 per cent drop in demand for the peak season. People are still unsure and are waiting for others to take the first step, she said.

Tour operators say that the number of Chinese travellers on combined tours in the upcoming months will depend on how the situation is handled and resolved …

(BT 5 April)

A Balinese festival that we shld adopt

In Holidays and Festivals, Indonesia on 05/04/2014 at 4:43 am

Renumber that dumb idea to hold a Thai festival where water features prominently without the water?

Here’s an idea that should resonate among everyone living here (locals, FTs): a day of silence:

Tourist areas and economic centres usually bustling with activity on the Indonesian island of Bali were deserted on Monday, as its Hindu population observed a day of silence, it appears.

Foreign tourists were required to stay in their hotel compounds, and the island’s airport as well as sea ports were closed, the Jakarta Post newspaper says.

Nyepi marks the start of a new year according to the Balinese lunar calendar. Nobody works or travels, as it is traditionally a day of introspection and fasting. A special group of guards are usually the only people out on the streets – making sure everybody else stays at home.

(http://www.bbc.com/news/blogs-news-from-elsewhere-26833923)

But we have to make sure make sure that the organisers do not organise the festival omitting the silence.

As this is a Balinese Hindu festival, and Hinduism albeit the Tamil version) is a major religion here, no-one can object to this festival on being a foreign import. It’s a foreign applicable variation of a major local (originally imported, as are all our major religions).

To avoid increasing the number of public hols (remember productivity) and causing offence if an existing public hol has to be removed from the list of public holidays, this “day of silence” could be celebrated on a Saturday or Sunday. Of course retailers, cinema owners  etc will be unhappy. So will employers who at present pay people to work on the weekend.

 

Investing in Indonesia is like eating puffer fish/ TRE readership

In Humour, Indonesia, Temasek on 29/03/2014 at 7:01 am

What do I mean by the former?

S$ is a strong currency, the rupiah a weak one; but this yr the rupiah has outpeformed

The rupiah has risen 7 per cent against the US dollar this year, making it the world’s strongest performing currency, while the Jakarta stock market is also rallying, now up 10 per cent. Yields on 10-year government bonds have also come down to 8 per cent, having jumped as high as 9.2 per cent last summer – another sign of fresh enthusiasm for Indonesia’s growth story. FT on 13th March).

Gd that we have a neighbour liddat as China’s growth slows. And Indonesia’s a MINT.

And whatever TRE posters* and Chris Balding say, Temasek has made gd money in Indonesia (think telco and banking, though it has yet to exit the latter) despite a hostile political environment. Money talks.

Too bad about its aggressive, civilian-killing armed forces that would loot and plunder S’pore if given half a chance. Whether we need to spend 25% of the Budget on defence is open to reasoned debate (something which the PAP govt rubbishes) but there is no doubt that we should continuing be a poisonous shrimp to deter Indonesian generals and admirals who want to loot and plunder. The Indonesian govt does not control the military, as the constant outbreaks of internal lawlessness (including the murder of civilians) by the armed forces shows.

Example: Two Indonesian ministers have expressed regret over the inappropriate conduct by two Indonesian marines who had posed as the MacDonald House bombers at the Jakarta International Defence Dialogue exhibition on Wednesday.

In response to media queries, a statement from Deputy Prime Minister Teo Chee Hean’s office said Mr Teo confirmed that Indonesian Coordinating Minister for Political, Legal and Security Affairs, Air Chief Marshal (Ret) Djoko Suyanto telephoned him on Friday afternoon regarding the incident.

Coordinating Minister Djoko expressed regret over the inappropriate conduct by the soldiers, and assured Mr Teo that there was no such policy to do so.

Those views were also repeated by Indonesian Defence Minister Purnomo Yusgiantoro, who spoke with Defence Minister Ng Eng Hen on the phone on Friday.

Dr Purnomo added that the Chief of Staff of the Indonesian Navy, Admiral Marsetio, had launched investigations to determine who was responsible for the inappropriate act. (CNA)

Or maybe juz two-timing? What do you think?

Taz another problem. The Javanese ruling elite loves to intrigue . Raffles knew what to do when they were two-timing, he sent in the army.

As to the quality of ministers: Indonesia’s communications minister, who has campaigned against pornography, has caused an uproar on social media after he followed a Twitter porn account …

http://www.bbc.com/news/blogs-news-from-elsewhere-26680779

Bottom line: Indonesia is a difficult place to invest in (as I can personally tell you), but get it right (I didn’t) and it’s life eating puffer fish. Can die, if not careful.

Related article: http://kementah.blogspot.sg/2014/03/not-business-as-usual-for-indonesia.html

———-

*Yes, TRE readers have written to me telling me that the majority of TRE readers are not losers like “oxygen” and those who call me names, but are “Calm Persistence” and “Hard-pressed Anxiety” types). They dislike being associated with losers: they are hard-working S’poreans who think that the PAP has betrayed them. As to why they don’t fund TRE, they say that that as typical S’poreans, they are free-loaders by nature and that I’m wrong to associate “Calm Persistnce” and “Hard Pressed Anxiety” with community spirit and generosity of spirit. . If they were not free-loaders and apathetic, then TRE would not be the voice of S’poreans. Err, kinda confusing. I got to think thru this paradox.

Neighbours show up the S’pore system, for gd and bad

In Indonesia, Malaysia, Political governance, Public Administration on 22/03/2014 at 5:41 am

The governor of Jakarta has been in the news recently because he was nominated by a major Indo political party to be a presidential candidate. He is a very popular choice because he is seen as being against inefficiency, maladministration and corruption.

What our constructive, nation-building and PAP-allied media doesn’t tell us is that he before he entered politics, he sold furniture. He was no scholar, general or admiral like paper generals Kee Chui and MoM Tan (and before them Lui, Pinkie, Teo or Cut and Run George). He was an ordinary citizen who cared enough to enter politics.

This reminds me: a PAPpy-hater complained that http://trulysingapore.wordpress.com/2014/03/17/adequate-water-supply-is-common-sense-not-foresight. Well going by the following BBC extract,

London-based Inmarsat said its engineers realised at an early stage that the aircraft had probably flown for several hours on a northern or southern track, and it was very unlikely that the plane could have headed north over countries with sophisticated air defence systems.
The company further said that it had informed the Malaysian authorities of the information, through an intermediary company, on 12 March, but this was not publicly acknowledged until 15 March.
Furthermore, the authorities continued to search in the South China Sea and Malacca Straits during that time, despite the information suggesting that the plane had flown on much further.

The M’sian officials lacked common sense. At least the then PAP cabinet had the common sense to do make sure we had adequate water supplies. I can’t be sure of the present cabinet. What do you think?

Flooding the city with FTs but not increasing the supply of hospital beds. Worse denying that there is a shortage. http://www.tremeritus.com/2014/03/21/dr-amy-khor-need-to-put-hospital-bed-crunch-in-context/. Err actually this gd TRE piece shows that there are advantages in having an elite schoolboy and scholar on the team. TeamTre has one such person. The TeamTRE-generated analysis is a lot better than the TOC team’s inhouse generated analysis.  For reportage TOC is miles ahead.

BTW, TOC, the chamion of free speech and a free internet, has disallowed my FaceBook avatar from commenting on their FB wall. Gee and they got the cheek to call for the govt to allow greater freedom of expression? Juz as intolerant as MIW? At least MIW are not hypocrites. They openly endorse the idea that only the “right” tots are allowed to be expressed. LOL.

TRE, in contrast, republishes pieces where I ridicule the readership’s excesses in hating all things PAP. Now that is walking the walk of freedom of expression.

Calling Indons’ bluff and other Asean tall tales

In Indonesia, Malaysia on 08/03/2014 at 5:02 am

On 1 March, S’pore upped the stakes in its ongoing row with Indonesia on responsibility for the haze

Singapore has reiterated its call to the Indonesian government to share evidence relating to any involvement by Singapore-linked companies or Singaporeans in illegal land clearing practices in Indonesia.

The Ministry of Foreign Affairs (MFA) said this on Saturday in response to media queries on comments by Indonesian Coordinating Minister for People’s Welfare Agung Laksono.*

Now that S’pore has passed laws allowing it to prosecute , the Indons cannot bitch too hard about S’pore’s failures if it can’t provide evidence, what can S’pore do?. Note that Indon refused to give M’sia and s’pore details of where the fires occurred (which would help identify the culprits) saying “secret lah”. They had earlier bitched that M’sian and S’porean cos had started fires but so far have provided no evidence, despite requests.

Note the Indon parly has just started procedures for ratifying the Asean 2002 treaty on haze pollution.  When will it be ratified 2022? CNA reported on 3 March

Indonesia’s parliament is a step closer to ratifying the ASEAN Agreement on Trans-boundary Haze Pollution.

Parties representing nearly 65 per cent of lawmakers have agreed to ratify the treaty.

Only two political parties – the PDI-P and PKS – have opposed it.

They cited concerns over the violation of sovereignty, as the agreement would allow firefighters from ASEAN countries to extinguish fires on Indonesian territory.

The next step will see a draft bill being discussed, before the agreement is formally ratified in parliament.

Related light reading:

http://atans1.wordpress.com/2013/06/26/why-plan-suffocate-sporeans-failed/

-    –  -

The chief minister of Selangor must be laughing all the way to the bank. Anwar Ibrahim was planning to depose him (both belong to the same gang) by first standing in a state by-election so that he could get into the state assembly. Well Anwar has now been convicted of sodomy http://www.bbc.com/news/world-asia-26479642.

The court decision will affect Mr Anwar’s plans to compete in a key by-election in the state of Selangor this month, reports say.

A victory for Mr Anwar would mean he could become Selangor’s chief minister – widely seen as a powerful post.

The court said he could remain free on bail while he appeals against the verdict to the country’s highest court, AP news agency reported.

————————————————————————————————————————————–

*Mr Agung had said publicly that since 2013, the Indonesian police have launched 41 investigations against errant companies and individuals that may be involved in illegal land clearing practices in Indonesia.

Mr Agung said some of these cases involved Singapore-linked companies or Singaporeans.

MFA said that the Singapore government takes a serious view of these allegations.

It added that if there is credible evidence that Singapore-linked companies or Singaporeans were involved, the Singapore government intends to take further steps against these errant companies and individuals.

The ministry also urged the Indonesian government to take the necessary legal and enforcement action against errant companies or individuals, regardless of their nationality.

It said the primary responsibility for legal and enforcement action lies with Indonesia, where these companies and individuals were allegedly conducting such illegal activities.

MFA noted that a state of emergency has been declared in Riau province due to the severe haze arising from the ongoing forest and peatland fires there as well as fires elsewhere in Sumatra.

Singapore hopes that the fires will be quickly dealt with to prevent a recurrence of transboundary haze.

Govt, S’poreans that blur on Indons’ ship-naming?

In Indonesia on 17/02/2014 at 4:38 am

The govt missed the opportunity to kick the Indonesian govt in the balls. It could have made the Indon govt look stupid and crass internationally. S’poreans (govt* and all the commentators bar one Voice, see below) are behaving like frogs in a well in their reaction to the Indonesian brazenness over the naming a naval vessel after two “heroes” who killed S’porean civilians in the 1960s.

Seriously, the issue is bigger than our sensitivities about the Indonesian govt’s view that we are a Little Red Speck that it can trod on or push around like East Timor or West Papua.

It’s about whether Indonesia views attacks against civilians as a legitimate military tactic, contrary to the rules of war, Even the hegemon accepts that killing civilians is wrong even if its drones keep killing civilians (“Accident leh. Not on purpose”). So the US and the int’l community should want to know if Indonesia views killing civilians as a legitimate military tactic. The behaviour of Indonesia’s armed forces in Acheh, Sulawesi, West Papua and East Timor provides evidence that the military (at least) condones the killing of innocent civilians.

Taking a step further does Indonesia implicitly or covertly condone terrorism as a legitimate response to grievances (legtimate or otherwise)? S’pore should be asking the US and the int’l community to ask Indonesia. After all, Indonesia considers the two men who killed innocent civilians “heroes”. Isn’t this glorifying and condoning terrorism which is the killing of innocent civilians to publicise or further a cause? Even North Korea who has engaged in terrorist attacks against airliners and in third countries (such as Burma in 1983) doesn’t go round naming warships after the “killers”.

I’m bullish about Indonesia’s economic prospects but I’m not blind to the flaws in Indonesian governance. I’ve written: The Indonesian army has form in bullying its people and invading neighbours: Aceh, Sulawesi, East Timor, West Papua, Malaysia. Remember the Indonesian army planted bombs here in the 1960s?

Other instances of bad Indonesian behaviour

http://atans1.wordpress.com/2010/07/09/indonesia-bullying-instincts-arising/

http://atans1.wordpress.com/2013/07/05/haze-pm-silence-is-not-a-solution/

The above musings was “triggered” by this letter to Voices:

From

Haj Mohamed

Published: 13 February, 4:04 AM

I refer to the report “Jakarta ‘meant no ill will’ in naming of frigate” (Feb 12). The issue is not merely about bilateral relations per se.

Indonesia’s decision to name a ship after the MacDonald House bombers sends a confusing signal about its stand on terrorism.

The bombing was done in a civilian area, killing civilians, and the world is clear that such bombings, including suicide bombings, are acts of terrorism. So, what is Indonesia’s stand on the Bali bombers?

There is a saying that one man’s terrorist is another man’s freedom fighter, which I believe holds only when one considers the other as an enemy.

Now that Indonesia has clarified that there is no enmity between our two countries, it must clarify its stand on terrorism and its criteria for defining heroes, so as not to reinforce a few of its citizens’ wrong perception that Jemaah Islamiyah members are heroes.

Related post: http://atans1.wordpress.com/2013/06/24/haze-what-raffles-would-have-done/

Update at 5.00am

Riau Islands Governor Muhammad Sani has told the Batam chapter of the Indonesian Chambers of Commerce and Industry (Kadin) to reconsider its plan to build a statue in honour of former Marines Usman and Harun to prevent further friction with Singapore.

Singapore had reacted strongly to Indonesia’s recent move to name a warship after the two Marines who carried out the bombing of MacDonald House in Singapore in 1965.

“With the current situation, please reconsider (the plan) and do not add more problems,” Mr Sani was quoted as saying by the Antara news agency on Sunday.

Mr Sani said that Batam Kadin should bear in mind that Batam is a stone’s throw away from Singapore.

“What is the benefit for us?” Sani asked.

The building of the statue is subject to approval from the Batam Free Trade Zone Management Agency.

A spokesman for the agency has cited several factors it needs to consider before granting a permit — aesthetics, maintaining good relations and Batam’s location — noting that many Singaporean businessmen invest in Batam.

A Batam resident who goes by only one name, Parulian, warned: “What if Singaporeans pull their investment?” (CNA report)

Money talks.

*Actually the govt’s behaviour was measured but two ministers who were paper generals spoiled the gravitas that Shan and MFA pitched the issue at with their comments. Kee Chui and MoM Tan should have sat down and shut up. but one assumes they wanted to how lien their patriotism, if not their stupidity and crudeness. They came across as the Indonesian generals do: paper tigers. Maybe they practising to be like Indonesian ministers: talk cock, sing song clowns? LKY would be appalled.

Asean looking gd: gd for us

In Indonesia, Malaysia on 15/02/2014 at 4:15 am

[S]outheast Asia has confounded the sceptics. Thailand, Indonesia and the Philippines – the “Tips” – weathering the latest storm with relative ease.

The Jakarta equity index has recorded the biggest gain of any major market – emerging or otherwise – this year, rising 5.2 per cent in dollar terms since the start of January. Financials have led the charge with Bank Rakyat jumping by more than a fifth.

The Philippine market has risen 1.5 per cent, while Thailand’s loss of 0.4 per cent looks tame compared with other EMs. For the same period, Russia’s Micex is down 7.2 per cent and Brazil’s Bovespa is 7.9 per cent lower.

A similar pattern has played out in currency markets. The Indonesian rupiah and the Thai baht are the top EM performers against the dollar this year. [EM means Emerging Markets]

Previous rallies in southeast Asia have been driven by aversion to China – the Tips are less reliant on exports to the country than are many other places in the emerging world. As concerns about economic growth and the financial system bubble up again in China, southeast Asia appears to be benefiting.

However, Bill Maldonado, chief investment officer for Asia at HSBC asset management, says more country-specific factors are at work. (Except from FT blog of 10th Feb)

– Thailand is cheap, juz as profitable as Indonesia: politics makes it cheap.
— Indonesia is growing faster than expected having taken steps earlier to fix its deficits in budget and current account and there there is an election is coming,

Both stk markets are cheap on a price to book basis, the Jakarta index is at a four-year low, while Thai stocks are trading at two-year lows.

Given Indonesia’s proximity to S’pore, we’ll benefit too. Too bad M’sia is not in better shape*. If it is, there will be a GE in 2015.

*Update at 7.30 am: M’sia could be getting better– BT reports: Analysts have revised their estimates for Malaysia’s 2014 growth upwards, with the country having reported fourth-quarter growth of 5.2 per cent, confounding the market’s estimate of 4.8 per cent.

Details released by the central bank indicate that domestic demand remains the key driver of the economy, despite concerns that this would be hit by rising living costs; private consumption remained resilient, rising 7.3 per cent from a year earlier.

In reports released on Wednesday, Bank of America-Merrill Lynch forecast this year’s growth at 5 per cent; Barclays Bank pegged its estimate at 5.4 per cent, while the Malaysian government’s own forecast was between 5 and 5.5 per cent.

If turns out to be correct, GE 2015, after National Day 2015.

S$, Baht & Rupiah looking gd

In Currencies, Indonesia, Japan, Malaysia on 13/02/2014 at 4:43 am

Given that a senior cabinet minister and NTUC chief, and a jnr minister from NTUC is giving the PAP govt a bad name, maybe it’s time to remind S’poreans that the PAP govt is not all full of NTUC clowns. On Tueday I reported that Khaw and MoM Tan had the developers concerned, and today I’ll remind S’poreans that PM’s economic team (headed by Tharman) are keeping int’l investors onside (too bad about TOC, TRe readers, but then they can take comfort that locals like me too like a strong S$.)

(4 Feb) – Recent alarmist commentary may have stirred up concerns about Singapore’s economy, but in the midst of the emerging market rout, safe-haven seekers’ faith appeared unshaken as they scooped up its currency.

“We have noted its safe-haven status within the Asian region is getting stronger in past years. So when you have a broad risk off, in general the Singapore dollar will outperform,” said Ju Wang, senior foreign-exchange strategist at HSBC.

Earlier this week, global markets largely sold off, but the Singapore dollar strengthened, with the U.S. dollar fetching as little as 1.2666 on Tuesday, compared with around 1.2790 Friday. Against the currency of its neighbor Malaysia, the Singapore dollar has touched its highest level since 1998.

http://www.cnbc.com/id/101390521

But To be sure, it isn’t clear the Sing’s climb is sustainable or would withstand a more extended market rout.

“When people want to take money off the table, the safe-haven tag may not be helpful,” Song said. “We can’t avoid spillover from contagion in Southeast Asia.”

Now that would have TOC, TRE readers happy, ’cause they can blame it on the govt.

BTW, here’s an interesting article on the flows in and out of Indonesia and the other Fragile Five. http://www.economist.com/blogs/buttonwood/2014/02/emerging-markets. Actually the rupiah has done relatively better than most other emerging markets currencies against the US$. So has the the Thai baht despite the political problems.

But the currencies of  Thailand Indonesia, M’sia  and the Philippines have fared worse against Japan’s yen than they have against the US dollar. This means that Japanese financial ,institutions may slow down their investments in the region: investing here could be like catching a falling knife. So, they’ll likely wait.

 

A MINT next door

In Indonesia on 02/02/2014 at 6:32 am

(Asean round-up: Indonesia special)

Last yr Indonesia’s stk mkt in US$ terms was -23%. A fitting tribute to it being a member of the “fragile five”: South africa, Turkey Brazil, India and Indoesia. who are dependent on foreign inflows of capital and hence QE tapering is problematic. This week three of them SA, Turkey and India have craised rates in response to weakish currencies; Turkey has doubled rates by some benchmarks.

But Indonesia (and Turkey) are part of MINT: if Mexico, Indonesia, Nigeria and Turkey get their act together, some of them could match Chinese-style double-digit rates between 2003 and 2008.

http://www.bbc.co.uk/news/magazine-25548060

The coiner of the term MINT was the guy who coined BRIC: Brazil, Russia, China and India, and readers should know how ell the economies did until recently.

And recently it was reported that Taiwan’s Foxconn Technology Group, the major supplier of Apple Inc’s iPhones and iPads, may build high-tech factories in the United States and low-cost plants in Indonesia as the appeal of ‘made in China’ fades into a burden.

So maybe he will right again. But to be fair, he is least bullish on Indonesia: Indonesia, I am less sure about. The country’s challenges are as big as I thought and I didn’t hear too many things that made me go “Wow” in terms of trying to deal with them. The country needs more of a sense of commercial purpose beyond commodities, and has to improve its infrastructure.

His less bullish stance is supported by a recent govt measure.

The country introduced a controversial ore export ban on Jan 12, although last-minute amendments aimed to ease the impact of the export ban on concentrate miners like Freeport McMoRan Copper & Gold and Newmont Mining Corp. They now face a progressive export tax on concentrates.

“There has been no concentrate export since Jan 12,” Bachrul Chairi, director general of foreign trade at the trade ministry told Reuters … “As of now, no miners or companies have requested export approval for concentrate or processed ore from the trade ministry.”

Freeport Indonesia and Newmont are in talks with the government over the new rules and are yet to resume exports since the new tax was introduced, while the Mineral Entrepreneurs Association has filed a legal challenge against the ore export ban.

The ban on mineral ore exports from Indonesia, the world’s biggest nickel producer, is poised to benefit miners in the neighbouring Philippines, who are predicting an increase in sales. Shares of Nickel Asia Corp advanced to the highest intraday level in two months.

The ban is positive as demand and prices for Philippine supplies will increase, according to Emmanuel Samson, chief financial officer at Nickel Asia. The Taguig City-based company accounts for about a third of Philippine output, Mr Samson said.

While the Indonesian ban is intended to encourage local processing and boost the value of commodity shipments from Southeast’s Asia’s largest economy, the curbs may hand an advantage to rival producers such as Nickel Asia.

Buyers in China, the top user, stockpiled ore before the ban and it may take as long as six months to work off that extra inventory, according to Mr Samson. Producers in China also need to adjust to the lower grade of ore that comes from the Philippines, he said.

Related post: http://atans1.wordpress.com/2010/03/20/our-neighbour-the-new-brazil/

 

Chinese zodiac’s animals: global distribution per capita

In Humour, Indonesia, Malaysia on 01/02/2014 at 4:33 am

To herald China’s most important holiday, we [Economist] have taken a light-hearted look at the global distribution of the animals of the Chinese zodiac. The Middle Kingdom is home to some of the world’s largest herds, flocks, packs, and broods. It has the second-largest number of horses, 6.7m, after America’s 10m (although neither feature in our charts, which account for population). Instead, Mongolia, where horses are integral to its nomadic tradition, tops the ranking. Similarly, there are four times as many pigs in China as anywhere else, but Denmark’s huge pork industry means it has the highest pig-to-person ratio. Of the ten animals shown, China is among the top nations in total numbers for all but tigers, dragons (Komodo) and rats (guinea pigs in Peru and Bolivia, the only numbers available from the FAO). Snake (the departing year) and monkey are omitted for lack of data. Xin Nian Kuai Le!

Asean countries– Brunei (Rooster), M’sia and Thailand (Tiger), Indonesia (Dragon) and Laos (Tiger and Ox) — appear on several of these charts.

Click link to see all all the charts or in bigger format http://www.economist.com/blogs/graphicdetail/2014/01/daily-chart-19

Intellectual netizen hero critiques doom monger & govt policy

In Economy, Indonesia, Malaysia, Property on 18/01/2014 at 4:56 am

(Or “Are S’pore & other major Asean economies are doomed?)

Even though Singapore is no longer an emerging market nation, I consider its bubble economy to be part of the overall emerging markets bubble that I have been warning about due to its strategic role and location in Southeast Asia, which is also known as ASEAN (Association of Southeast Asian Nations). My recent reports on Malaysia, Thailand, the Philippines, and Indonesia show that the entire region is caught up in a massive bubble, and Singapore is benefiting from this bubble by acting as ASEAN’s financial center.

(http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown)

This piece and its sequel have been well publicised, and the central babk has critiqued the first piece (It would wouldn’t it?)

Readers may recall that Donald Low is a scholar who has liberal viewers despite being the Associate Dean (Executive Education and Research) at the Lee Kuan Yew School of Public Policy. He served fifteen years in the Singapore government and I’ve been told he was one of the fathers of Workfare (a scheme I support though I think it’s too mean). He critiqued the article on Facebook as regards S’pore. I’ve paragraphed hos comments to make it easier on the eye:

Donald Low’s FC

There’s a Forbes article on an impending crash in Singapore circulating widely on FB. I won’t dignify it by posting it but here are my thoughts about it: I read the article a while ago and wasn’t at all convinced with his line of argument. It’s just far too sweeping.

Above all, if you look at the usual triggers of financial crises, they are mostly non-existent in Singapore. We don’t have a large current account deficit – on the contrary, we have a huge current account surplus. We don’t have a large fiscal deficit – we run structural budget surpluses. And we don’t have an highly leveraged/indebted household or corporate sector.

On his point about a housing bubble in Singapore fueled by low interest rates, he is partially correct. But to claim that we are on the verge of financial collapse on account of that is utter nonsense. Our leverage ratios are still healthy and I suspect a large part of the run-up in housing prices in recent years is inadequate supply – a problem which has now been largely corrected. Will we see house prices fall this year? Yes, quite possibly. My guess is 10% but even if house prices were to fall 20%, I don’t think it will impact the health of our banks or even our households. There will be households that have negative equity, but as long as they have the cash flow to service their mortgages, it will not precipitate a financial crash.

But there is one argument from the article that is worth highlighting and which I mostly agree with. And that is booms which are led by real estate development and the financial sector are mostly illusory. They create the impression of economic dynamism without creating any real productive capacity in the economy (think back to Bangkok, KL and Jakarta just before the Asian crisis). They also distort and re-direct resources away from productive activities. Real estate and finance are inherently distributive, not creative, activities – they move money and wealth around, but they don’t produce any productive capacity and technological capabilities for the economy.

So when I argue that the Singapore government should look not just at the quantity of growth, but also the quality of growth, I have in mind not just equity and distributional considerations, but also the composition of growth. Is the growth coming from manufacturing and high value-added services, or is it dominated by real estate and finance? If it’s the latter, we have a structural problem.

Finally, I would also highlight that what this article reveals is the failure of government efforts to attract high net worth individuals to Singapore, to make Singapore a wealth management hub for the rich, and to bring in more billionaires even if they increase inequality. I think the costs to the economy and society of such efforts far outweigh their benefits. What productive capacity do property speculators and HNWIs who park their monies in Singapore help to create? So yes, we get a tiny wealth management industry that employs a few thousand people and manages several billion dollars. We can easily do without these ‘benefits’. Meanwhile, their costs in terms of raising property prices, the competition they create for positional goods, and their ostentatious lifestyles undermine our egalitarian norms and values. They also reduce the trust and mutual regard citizens have for one another, undermining their willingness to contribute to more redistribution. All in, I would say that the efforts to attract rich foreigners to Singapore are incredibly misguided.

Indonesia: Carry on burning

In Indonesia on 12/01/2014 at 4:37 am

Global map of forest change

The map shows forest change from 2000-12. Green areas are forested; red suffered forest loss; blue showed forest gain; pink experienced both loss and gain. Meanwhile, the govt continues smoking M’sia and S’pore by making promises that it has no intention of fulfilling.

Related post: http://atans1.wordpress.com/2013/07/20/haze-over-indons-start-two-timing-again/

Welfare: Govt still missing the point

In Indonesia, Malaysia on 08/01/2014 at 4:25 am

Two Saturdays ago, I blogged:

After the general election (GE) in May, Malaysia was put on notice by the international rating agencies that it had to get its fiscal discipline right. Prime Minister Najib Razak responded by first cutting fuel subsidies and raising petrol prices by 10 per cent in September.

In his October Budget, Mr Najib abolished sugar subsides and pledged to cut total subsidies by 17 per cent in the financial year. The Budget did not achieve that, so most commentators expect more fuel subsidy cuts possibly in the second half of the year. Mr Najib also promised a 6 per cent goods and services tax (GST) by next April.

Indonesia too has a problem with its fuel subsidy: it’s eating up a growing share of the budget, and meanwhile Thailand has a problem with its rice subsidy for farmers. It’s so bad that there are reports that there are farmers not receiving the subsidy. The govt doesn’t have the money.

S’pore govt doesn’t have this problem: the govt doesn’t do subsidies (except in public housing, healthcare and public tpt*: though even PAP Wormtongues** like that Jason chap cannot explain where the subsidies are in healthcare and public housing: they can only repeat parrot-like the govt’s statements about the subsidies, which is there is a subsidy).

The govt claims a more focused, targeted approach in helping the needy.

But sadly in its targeted, focused approach in helping the needy, it believes in the values of Scrooge as I blogged here. I won’t go into the details on its meanness in helping poorer or older S’poreans ’cause Uncle Leong has repeatedly provided the numbers detailing its Scrooginess. But juz to remind, here is one example: Workfare is gd in principle (better than minimum wage) in my view, but too mean.

And even when it increases welfare spending by a few pennies: Acting Culture, Community and Youth Minister Lawrence Wong has cautioned against getting Singapore into debt, even as the government ramps up social assistance.

He said state spending has to be kept sustainable to avoid passing the burden to future generations.http://www.channelnewsasia.com/news/singapore/singapore-must-be-careful/889756.html

And despite their S$ 2.5bn++ annual contribution, manual FT workers don’t get help, when they should.

M’sia, Indonesia and Thailand have got their finances messed up because of the use of subsidies but they understand one thing: that spending on welfare is an investment in human resources. What they got wrong is welfare by way of subsidies.

Our govt has got the right idea on subsidies: they are often wasteful, always juz grow and grow, and, often, the people who don’t need them benefit the most, example middle class people  and the wealthy benefit the most from any fuel subsidy, not the poor.

But it hasn’t got it: that spending on welfare can be an investment in people. This is something that developed countries, our Asean neighbours, China, India understand. But our govt doesn’t seem not to understand: it’s a Hard Truth thatwelfare spending is a waste of resources. The money could be given to Temasek and GIC to punt the markets is another Hard truth.

If the PAP wants to reconnect with the 40% of voters who voted against the PAP in the last GE, and please its base (including the 35% that “Die, die must vote PAP” , it should rethink its Hard Truth that welfare spending is consumption, not investment. However anti-PAP paper activists should be glad that the govt is unlikely to change its thinking.

As ex-scholar Donald Low put it: “What all this points to is that we really need a more robust welfare system that gives Singaporeans much greater assurance of income when they are unemployed, old or sick. The low fertility rate and the desire of even well-to-do Singaporeans to retire somewhere else are signs that the state needs to craft a new social contract with Singaporeans, that it needs to develop more mechanisms to pool risks and give Singaporeans security.

The argument that we cannot afford all these because the population is ageing is mostly a bogeyman. It is partly because we don’t have a proper welfare system that the population is ageing as rapidly as it is. This has also been the experience in much of East Asia – where the relative absence of social security led to falling fertility rates and eventually, rapid ageing.”

But anti-govt activists should be worried that he is Associate Dean (Executive Education and Research) at the Lee Kuan Yew School of Public Policy. Maybe, juz maybe, there’ll be changes in the mentality of the PAP.

—-

*Even the S$1.1bn spent on tpt is spare change as it’s spread out over five yrs, I think.

**Wormtongue is a minor character in The Lord of the Rings: his name describes his character.

BT: Comparing apples to oranges again?

In Emerging markets, Indonesia, Malaysia, Vietnam on 28/12/2013 at 7:27 am

(Or “Anti-PAP bloggers share LKY’s Hardest Truth)

Schroders plc and Baring Asset Management Ltd are avoiding Singapore stocks, the cheapest in South-east Asia, as slower economic growth in the region and cuts to Federal Reserve stimulus drive capital outflows.

The fund managers expect property to lead declines in Singapore amid a real-estate slump and the prospect of higher interest rates. The Straits Times Index was the worst-performing developed market in 2013, dropping 9.5 per cent since Fed chairman Ben Bernanke said in May that bond purchases may be reduced on signs of sustainable US recovery.

Surprised constructive nation-building (but mathematically challenged) BT reported things this way.

In US$ terms, among the bigger Asean stock mkts, only the M’sian stk mkt was better than us. Taz not saying much as only M’sia index ended in positive territory (juz) juz before hols

M’sia:          +3.2%

S’pore:          -6.0

Thailand:     -8.5

Indonesia:   -23.0

Got subversives in BT meh?

In the minnow Asean mkts Vietnam  was +24%, while Manila was +3.4% according to the MSCI indices.

Next yr is not going to be a gd yr for Asean countries, so the fact that Schroders and Barings are “avoiding” S’pore is no big deal for anti-PAP bloggers to brag about. Don’t know about you, but I get the sense that some of them hate the PAP so much that they end up cheering and being cheerful when S’pore tanks, for whatever reason. Looks like they agree with one LKY that S’pore and the PAP are one. They may hate him but they accept his premise?

Asean round-up returns next yr, god willing.

Asean’s prospects in 2014

In Indonesia, Malaysia on 07/12/2013 at 6:25 am

(Asean round-up)

The Centre for Economics and Business Research (Cebr) says Asean is looking gd: Asean as a whole to grow 5.0 per cent this year, still weighed down by Thailand’s recession. And although the country is tipped to recover in the second half of this year, it may be affected by China’s soft landing, which is projected to extend into next year and dampen its demand for Asean’s goods and services.

As for individual countries (I’ve excluded S’pore as I will analyse it next week with reference to politics):

Not only is economic growth in the Philippines expected to take a hit, the report says intra-regional trade will suffer, hampering growth in other Asean countries.

Strong government spending and higher exports to China in the second half of the year were tipped to boost the Philippine GDP to 6.9 per cent this year, but Typhoon Haiyan is expected to make growth “noticeably weaker” in the final quarter of the year.

Slower government spending and a tighter US monetary policy will cap growth at 5.8 per cent next year, said the report.

Stubbornly high unemployment and extreme poverty, along with the need to lift interest rates to attract capital, will trim the country’s GDP growth to 4.8 per cent in 2015, it added.

The Cebr report’s prediction for Thailand is that its economy will grow 3.4 per cent this year. Thanks to healthier consumption and export growth, it will jump by 4.4 per cent next year; stronger exports to Western markets will nudge the Thai economy up 4.5 per cent in 2015. [Note thar report was written before the recent bout of trouble]

In Malaysia, growth will be at 4.6 per cent courtesy of a lift from China’s economy. But weakened Chinese growth will depress Malaysia’s growth to 4.2 per cent next year.

A revamped general sales tax in 2015 could further hinder growth, but a stronger global economy should ease this somewhat. Cebr forecasts that Malaysia’s GDP growth will be 4.1 per cent in 2015.

Indonesia, Asean’s biggest economy, is likely to grow 5.7 per cent this year, as a slight uptick in the Chinese economy in the second half of the year is expected to soften the effect of China’s cooling economy on Indonesian exports.

But the report said the US’ tighter monetary policy and higher interest rates will lower Indonesia’s growth to 5.6 per cent next year and the year after.

(http://www.businesstimes.com.sg/premium/top-stories/spore-economy-stay-pink-next-2-years-20131205)

2014: Last chance for govt to increase prices?

In Economy, Indonesia, Political governance on 30/11/2013 at 5:51 am

(Asean round-up)

Ministers no longer joke about COE prices not affecting core inflation, (related post) ’cause increase in food prices is affecting core inflation.

In addition to Thai meat, maybe Burmese rice (see below) will help curb food inflation prior to next GE. Remember that public tpt fares are going up soon despite lack of much improvement. This is ’cause SMRT needs $ (scholar, ex-SAF chief says biz model broken, but nothing that higher fares can’t fix) and 2014 is last possible time that fares can rise. GE must be held in 2016, and increasing fares in 2015 may be too risky for PAP. As an election may be held in 2015, January to June 2014 is the last window of opportunity for us to kanna pay and pay.

Burma plans to more than double rice shipments as the country that used to be the largest exporter embraces trade and opens its economy, challenging Thailand, Vietnam and Cambodia for sales amid a global glut.

Shipments may increase to 2.5 million tonnes in 2014-2015 from an estimated 1.8 million tonnes in the year that started on April 1, according to Toe Aung Myint, director-general of the Department of Trade Promotion at the Ministry of Commerce. Exports are targeted to increase to 4.8 million tonnes in 2019-2020, he said when Hong Kong.

Indonesian coal and property firms could find obtaining loans increasingly difficult next year as banks tighten their lending due to higher interest rates, slowing economic growth and a weakening rupiah, industry officials said. The rupiah has fallen nearly 20 per cent so far this year, hitting 12,000 per US dollar yesterday for the first time in almost five years.

The central bank this month issued guidance to banks to slow loan growth to 15-17 per cent next year, from 18-20 per cent this year, in an effort to protect the financial system from potential turbulence amid heightened global uncertainties. In response, Bank Mandiri, Bank Central Asia (BCA), Bank Tabungan Negara, and other top financial institutions are becoming more particular about companies they lend to.

“We haven’t turned cautious for any sector, but we see challenges in infrastructure, construction, coal, cement, and real estate because of several policies. We are expecting a slowdown,” said Eugene Gailbraith, a BCA director, at an investment conference. He said that the country’s biggest bank by market value plans to “take a breather” and will lend less than its expected 45 trillion rupiah (S$4.79 billion) target this year.

Loan growth at Bank Mandiri is seen slowing to 17-18 per cent in 2014 from 19-20 per cent this year, while Bank Jabar Banten eases to 22 per cent from 33 per cent, company officials said. “We will be more cautious on sectors that are sensitive to interest rates,” said Pahala Mansury, Bank Mandiri chief financial officer. Indonesia’s increased hesitation to lend to coal companies comes as no surprise with banks around the world curbing their exposure to the industry due to a sharp fall in demand and prices. For the property sector, Bank Indonesia has made the industry less attractive to banks by implementing several policy measures to curb the purchases of second homes. Financial institutions are expected to favour consumer driven industries, such as retail and food companies, as domestic consumption continues to remain strong. – Reuters. (BT report)

Indonesia’s most aggressive rate tightening in eight years has barely dented a current account deficit, prompting calls for more increases and other measures before the Federal Reserve cuts stimulus.

Bank Indonesia has raised borrowing costs by 1.75 percentage points to 7.5% since early June, the quickest since 2005.

Following data which recently showed the country recorded its second-highest current account shortfall on record in the three months through September, JPMorgan Chase & Co and Standard Chartered now see a further 50 basis points of increases in the first half of next year.

Foreign funds pulled US$3.8bn from Indonesian stocks and local currency bonds in June after the Fed said it could cut stimulus, and a lack of progress on improving the current account before the US does eventually taper leaves the country vulnerable to another sudden outflow.

In addition to ongoing political unrest in Thailand:

Thai factory output shrank more than expected in October, adding to a string of weak data that prompted the central bank to unexpectedly cut interest rates to support the economy as mounting political tension dents confidence.

The Industry Ministry now expects output to fall 2.8 per cent this year, rather than growth of 0.5-1.0 per cent projected earlier, but predicts a rise of 2 per cent next year.

October was the seventh straight month in which output has declined, falling 4.02 per cent from a year earlier. The median forecast of a Reuters poll was for a decline of 3.3 per cent.

In September, output dropped 2.9 per cent. (BT report)

– Thailand’s central bank unexpectedly lowered the cost of credit Wednesday as escalating protests to topple the government add to pressure on the economy.

The central bank lowered its policy interest rate by a quarter percentage point to 2.25 %, hoping to stimulate lending and investment, saying  in a statement that the “ongoing political situation” could compound existing weaknesses in Southeast Asia’s second-largest economy. Business confidence is fragile and government plans for $69.5 billion of spending on high speed rail and other transport infrastructure have been delayed by legal challenges.

Thailand’s third quarter economic growth was weaker than expected and a recovery in exports has not gained traction, the bank said. Earlier this month, Thailand’s economic planning agency cut its growth forecast for this year to 3% from 3.8-4.3% predicted in August.

Where S’porean traits produce world-class TLCs

In Energy, Indonesia, Temasek, Vietnam on 28/11/2013 at 6:25 am

More to irritate Temaeek and S’pore (self) haters, especially TRE readers*. There are advantages to S’poreans’ reputation as the Prussians of the East: hardworking, careful, conscientious and mindlessly efficient. These are very qualities that make Keppel and SembCorp world beaters in rig-building.

Singapore’s two main yards, Keppel and SembCorp Marine, have also invested heavily in quality and efficiency. They specialise more in deep-sea rigs than in drill-ships and carriers. Keppel, the bigger of the two, is building a record 20 such monsters this year; next year it will deliver the first of three giant, $600m “jack-up” rigs (ones that are floated into place then jacked up on their legs).

Time is money

The Singaporeans are also good at building things on time, which is vital in an industry where late delivery can cost the operators of rigs and drill-ships over $500,000 a day. Over the past five years, rigs ordered from Keppel and SembCorp were, on average, delivered ahead of schedule, whereas Chinese yards delivered 50-250 days late, says IHS Petrodata, a research firm.

http://www.economist.com/news/business/21590496-korean-and-singaporean-yards-have-adapted-well-chinas-challenge-deeper-better

As to China’s cost advantage, having facilities in Indonesia helps provide cheap labour for SembCorp’s rig building biz. Keppel too has an Indonesian operation, though its tiny compared to SembCorp’s.

And with Vietnam having problems with China over maritime boundaries, one wonders if Chinese built-rigs are allowed in its waters. Remember, energy cos are exploring for oil off Vietnam. Still, the waters do not require the sophisticated rigs built by these TLCs.

Related post: http://atans1.wordpress.com/?s=Temasek+Fab+5

*Though TRE readers will be pleased that these TLCs are not led by ex-generals or ex-Temasek MDs. The CEO of Keppel is a scholar, but I’m not sure of the background of CEO’s SembCorp. But both have worked that these TLs for many yrs. They were not parachuted in like in NOL to teach executives to suck eggs.

Govt faciliates spying and tax avoidance, but bans Ashley Madison: Uniquely PAP

In Economy, India, Indonesia, Malaysia, Political governance, Telecoms on 27/11/2013 at 5:05 am

In the space of a few days, the govt is facing or is likely to face uncomfortable questions from other govts about its activities: activities that the usual suspects, could reasonably argue, show the two-timing nature of the PAP govt that they (they the usual suspects) detest and wish it all the ill-will in the world.

Malaysia said it will summon Singapore’s high commissioner today to respond to allegations of spying which risk damaging improved political and business ties between the Southeast Asian neighbors.

Indonesia and Malaysia have been key targets for Australian and U.S. intelligence cooperation since the 1970s, facilitated in part by Singapore, the Sydney Morning Herald reported yesterday, citing documents leaked by former U.S. intelligence contractor Edward Snowden. Malaysia’s foreign ministry said it was “extremely concerned” and had already acted against earlier claims of espionage by the U.S. and Australia.

The reports could also spur friction between Singapore and Indonesia, Tan said. “The Indonesians would probably be concerned whether the information is also being shared with Singapore intelligence, besides the Australians*.”

(http://www.bloomberg.com/news/2013-11-26/malaysia-summons-singapore-commissioner-as-spying-claims-widen.html)

As SingTel was singled out for mention by the Oz newspaper**, and as it has extensive mobile operations in Indonesia and Thailand, and a major stake in a major Indian telco, it could face problems in these countries.

Then there is the issue of how European and US cos are using S’pore to avoid taxes, at a time when there is growing resentment among politicians and voters that these cos are not paying their fair share of taxes. The Indian, Japanese, Taiwanese and Korean govts will also not be too happy too with S’pore’s corporate tax-regime if they read the Economist.

“Taxing times for Singapore as corporate strategy faces scrutiny” was a Reuters headline on 24 November 2013 (BT and Today carried the report too). It gave details of how Apple used S’pore as a tax-saving centre and went on, “Companies justify booking significant amounts of revenue and profits in Singapore by the fact they often run key business functions such as finance and operations, hold intellectual property rights there or base regional executives in the city.”

The chart below (via the Economist) shows a hypothetical scenario where a company moves its headquarters from Singapore (a very low-tax economy) to another country. http://www.economist.com/blogs/schumpeter/2013/11/corporate-tax-rates

S’pore very cheap place (tax wise) esp compared to Japan. Minister Zorro must be happy: juz as happy as looking as his monthly CPF statement.

The Reuters article went on: Singapore has so far largely stayed out of the debate raging in Europe and the United States about the ways multinationals try to lower their tax bills.

But revenue-hungry governments are looking to impose tougher rules on so-called transfer pricing that could make it harder for firms to trade goods, services or assets between their Singapore and overseas entities.

As a result, accountants warn that the city-state will need to review the level of transparency in its tax incentive schemes and get stronger justifications from companies on their transfer pricing arrangements to fend off challenges from other jurisdictions.

“Singapore’s challenge is to ensure that it stands ready to adequately address any kind of unilateral tax action taken by other countries,” said Abhijit Ghosh, a partner at PricewaterhouseCoopers in Singapore.

“In this brave new world of fiscal competition for the tax dollar, dispute resolution will be on the increase and Singapore will need to focus more resources on enforcing and defending its principles of value creation in international forums.”

The city-state’s government says it is against artificially contrived arrangements constructed “solely for the purpose of flouting or exploiting loopholes in tax rules”, according to a spokeswoman from the Ministry of Finance.

However Singapore is also arguing that it should not be singled out because it has low tax rates.

“We must guard against new forms of protectionism masquerading as tax harmonisation,” the spokeswoman said. “We should avoid converging on high taxes globally as this would only hurt growth and jobs.”

Looks like the owl that visited PM was a harbinger of bad news for PM.

Seriously, the “usual suspects” could reasonably argue, if they tot about it, that the “chickens are coming to roost”.and that while moralising on adultery, the PAP govt helps the ang mohs spy on our neighbours, while helping ang moh and other Asian cos avoid tax. And PritamS wants the WP to be in coalition with the PAP?

*Remember that Indonesia suspended military co-operation with Australia, after allegations emerged of Australian spies bugging the phones of the president and his inner circle.

**Access to this major international telecommunications channel***, facilitated by Singapore’s government-owned operator SingTel, has been a key element in an expansion of Australian-Singaporean intelligence and defence ties over the past 15 years.Read more: http://www.smh.com.au/technology/technology-news/new-snowden-leaks-reveal-us-australias-asian-allies-20131124-2y3mh.html#ixzz2lkSC0P8c

***SEA-ME-WE-3 cable as well as the SEA-ME-WE-4 cable that runs from Singapore to the south of France.

Still want to buy M’sian properties?

In India, Indonesia, Malaysia, Uncategorized on 23/11/2013 at 6:00 am

(Asean round-up)

KL property owners, an estimated 10-16 per cent of whom are foreigners, are facing sharply higher assessment payments of up to 300 per cent following the latest move by City Hall (DBKL) to boost its coffers. http://www.businesstimes.com.sg/premium/top-stories/kl-homeowners-facing-sharp-assessment-hikes-20131119

But otherwise M’sia’s looking pretty gd

– ECONOMISTS have turned more bullish on the Malaysian economy as a result of its unexpectedly strong showing in the third quarter.

They have upgraded their forecasts, and one has even dismissed the second quarter’s sharply reduced current account surplus on the balance of payments as an “abnormal”, one-off glitch.

Malaysia’s growth accelerated to 5 per cent in the third quarter, above the street’s 4.7 per cent, and sharply higher than the 4.4 per cent posted in the second quarter. The expansion was largely driven by domestic demand and a turnaround in exports.

The figures suggest that, despite criticism from rating agencies such as Fitch and an uncertain global economy, the Malaysian economy remains resilient, and continues to maintain steady economic growth.

– THE ringgit is undervalued as it has underperformed its peers since Prime Minister Najib Razak’s Budget almost a month ago, a British bank said.

In a report yesterday, Barclays Bank said the currency’s underperformance stemmed from doubts over the country’s “fiscal credibility”. But it said any such doubt should now be “diminished” after international rating agency Moody’s raised Malaysia’s sovereign outlook to “positive” from “stable” in a report released on Wednesday.

The news should boost Mr Najib’s credibility as a finance minister; he has been flayed by critics who have accused him of going on a profligate spending spree to boost the Barisan Nasional coalition’s popularity. In the run-up to the May 5 general election, government debt had ballooned to more than 54 per cent of GDP, just a whisker away from the legally mandated debt ceiling. Although the BN won, it did so with a weaker mandate.

In July, global rating agency Fitch had affirmed Malaysia’s investment-grade sovereign rating but cut its outlook to “negative” from “stable”. That raised the level and intensity of the criticism against Mr Najib.

(Excerpts from BT)

But M’sia (like Thailand) is doing less than Indonesia to prepare for tapering: Indonesia has raised short-term interest rates and India has attracted deposits from its large diaspora. Both are now accumulating foreign-exchange reserves to help prepare them for the eventual end of quantitative easing. So are South Korea and Taiwan.

Malaysia and Thailand are not taking the same precautions. Neither country has managed to recoup the reserves it lost in August. That’s a worry, considering foreigners own 28 percent of Malaysia’s sovereign bond market. Pending the implementation of a goods and services tax from 2015, the country’s public finances remain shaky. At the peak of the summer turmoil, the cost of insuring against default on Malaysian government bonds was slightly higher than for Philippines debt, which carries a lower credit rating. The gap has widened since.

Finally, debt is soaring. In Thailand, bank loans to individuals have jumped 20 percent in the first nine months of the year, higher than last year’s 18 percent growth. Meanwhile, the Thai economy has lost momentum, the politics has become unstable, and the current account has tipped into a deficit. Instead of easing, Asia’s fear of the Fed is spreading wider.

http://blogs.reuters.com/breakingviews/2013/11/21/asias-fear-of-fed-is-now-infecting-more-economies/

Indon origins of our Batman Suparman

In Indonesia, Malaysia, Vietnam on 16/11/2013 at 4:59 am

(Asean round-up)

Batman bin Suparman’s family appear to be originally from the Indonesia island of Java – where the name Suparman is very common, explains Ben Zimmer, a language columnist for the Wall Street Journal, who has worked in Indonesia and who has written about Suparman.

“Su” has Sanskrit origins and is a common prefix in Indonesia, featuring in a whole rung of Indonesian presidents’ names – including the current one Susilo Bambang Yudhoyono. “Bin” means “son of” in Arabic, making it very likely that Batman’s father was also called Suparman.

The Batman part is a bit harder to explain, however says Zimmer, as it’s not a traditional name in the region. The most likely explanation is that his parents chose it as a joke – Batman the superhero is popular there, and Indonesians are often playful in the names they choose, says Zimmer. “I see the name as this interesting juxtaposition of local naming with Western pop culture.”

http://www.bbc.co.uk/news/magazine-24911186

Illegal logging and mismanagement of Indonesia‘s forestry industry may have prevented more than US$7 billion flowing to state coffers from 2007 to 2011, costing the government more than its health budget, Human Rights Watch said.

In contrast, the Indonesian government’s 2011 revenue from timber royalties and reforestation fees was US$300 million, said Emily Harwell, the lead author of a report released by Human Rights Watch.

“This is a very conservative estimate,” Dr Harwell, a partner at Natural Capital Advisors LLC, said at a briefing in Jakarta on Nov 8 of lost revenue. “The calculation doesn’t include any wood that’s smuggled.”

The report indicates that weak governance is chipping away at revenues in the world’s fourth-most populous nation, as budget and current-account deficits this year hurt the rupiah. BT report.

Malaysia has the highest English language proficiency level in the entire Asian region, according to a latest research by Swiss-based international education company EF Education First (EF).

The nation also climbed two notches higher to 11th place from 13th position last year in the EF English Proficiency Index which saw over 60 countries being surveyed.

The results revealed that Malaysia, which was placed in the ‘High Proficiency’ category, had overtaken Singapore who fell behind to 12th position in the world ranking. Malaysia scored 58.99 points in the survey while neighbouring Singapore received a 58.92 score.

Money for Vietnamese start-ups and buy-outs

– Ministry of Science and Tech in Vietnam pours $110 million into startups

http://www.techinasia.com/ministry-science-tech-vietnam-pours-110-million-startupsministry-science-tech-vietnam-pours-110-million-startupsministry-science-tech-vietnam-pours-110-million-startupsministry-science-tech-vietnam-po/

– Franklin Templeton Investments (BEN)’ venture in Vietnam said the time is right for buyout firms to invest in the country as it expects monetary and fiscal reforms to take effect over the next three to five years.

Low valuations, constrained bank lending and an improved corporate landscape mean private-equity investors have an opportunity to buy companies in the Southeast Asian country before the economy picks up again, said Avinash Satwalekar, chief executive officer of Vietcombank Fund Management, Templeton’s venture with Joint-Stock Commercial Bank for Foreign Trade of Vietnam.

“The best time to make investments is when the water is murky,” Satwalekar, 39, said in an interview in Singapore yesterday. “When its gets clear, that’s when everybody can make investments.”

http://www.bloomberg.com/news/2013-11-06/buyout-opportunities-seen-in-vietnam-imbalances-southeast-asia.html

Philippine Finance Minister Cesar Purisma has told the BBC that the devastation caused by the Typhoon Haiyan Mr Purisma says that the worst affected region accounts for 12.5% of the Philippines economy and a steep slowdown there could slow the overall economy by one percentage point next year. IMF has earlier this yr said GDP growth would be 6% next yr.

Mr Purisma also said it would take “many years” to rebuild the infrastructure damaged by the storm.

S’pore, Asia, West hsehold debt levels compared

In Energy, Indonesia, Malaysia on 09/11/2013 at 7:00 am

Asean round-up

S’pore (at 61% of debt to GDP) is third in Asean, M’sia tops the list (81%), followed by Thailand (68%) , according to a World Bank report. (http://www.economist.com/news/economic-and-financial-indicators/21588882-household-debt-asia)

A recent World Bank study identified Malaysia and Thailand as having the largest household debts, as a share of GDP, among eastern Asia’s developing economies. In Malaysia, where household debt now exceeds 80% of GDP, the government has been seeking to curb credit growth. Thailand’s government boosted access to credit following the country’s big floods in 2011. The recent slowing of growth in many Asian economies raises concerns about the sustainability of all this personal debt.

Note two weeks ago, I reported Currently, M’sia‘s household debt stood at about 83% of gross domestic product. Household debt in S’pore now accounts for 75% of gross domestic product, having doubled in the last 13 years. According to Standard Chartered, a private bank, household borrowing as a share of national income now stands at 68% of Thailand’s GDP, much higher than in bigger Asian countries, such as China (20%), India (18%) and Indonesia (17%).

(Related post: http://atans1.wordpress.com/2013/07/28/the-maths-of-salaries-when-mortgage-rates-rise-50/)

In other Asean news

Indonesia‘s economy expanded at its weakest rate in four years in the third quarter as a result of slowing exports and subdued domestic demand.

Its economy grew 5.6% in the July-to-September period from a year earlier, down from 5.8% in the previous quarter.

Indonesia’s exports have been hurt by slowing demand from key markets and a drop in commodity prices.

Meanwhile, domestic demand has been impacted by rising fuel prices and rising interest rates.

Fuel prices in the country surged earlier this year after the government removed its subsidy programme.

Petrol prices went up by 44% while diesel prices rose by 22%, leading to higher transportation costs and electricity bills.

http://www.bbc.co.uk/news/business-24831172

And as usual Indonesia is repenting the nationalistic policies it always implements when the economy is doing well. It is again, as usual, lifting restriction on foreign investments, to attract foreign capital.

Thais are in the streets, protesting a controversial amnesty bill. http://www.economist.com/blogs/banyan/2013/11/unrest-thailand

And an energy boom in the region. http://www.thefinancialist.com/an-oil-and-gas-boom-for-southeast-asia/

Govt’s reaction to rising food prices?

In Indonesia on 02/11/2013 at 5:27 am

On 24 October, it was reported that

Singapore has lifted a ban on the import of Thai frozen chicken and is also considering allowing the sale of frozen pork from Thailand.
After banning Thai poultry from its market for nine years, Singapore has finally allowed frozen chicken from Thailand back in, reports The Nation of Thailand.

http://www.thepoultrysite.com/poultrynews/30426/singapore-lifts-ban-on-thai-chicken-imports October 24th via http://singaporenewsalternative.blogspot

Timing of ban lighting, not coincidental, methinks

On 29th October, it was reported: Inflation in Singapore will pick up over the next few quarters before tapering towards the end of 2014.

This is according to the Monetary Authority of Singapore’s (MAS) Macroeconomic Review.

The central bank said domestic food inflation is expected to rise from around 2 per cent in 2013 to close to 3 per cent in 2014, although this is still lower than the 3.4 per cent average over the last five years.

In particular, cooked food vendors are likely to pass on the increases in labour and rental costs to consumers, as these account for a significant share of their operating expenses compared to non-cooked food establishments.

The MAS said cooked food is estimated to make up 14 per cent of average household expenditure.

http://www.channelnewsasia.com/news/singapore/inflation-in-s-pore-to/865788.html

Today reported: The MAS expects the core inflation rate, which strips out the cost of accommodation and private road transport, to increase from between 1.5 and 2 per cent this year to between 2 and 3 per cent next year.

Better than these non-actions:

http://atans1.wordpress.com/2012/09/03/err-lee-what-did-you-say-abt-food-inflation/

http://atans1.wordpress.com/2012/08/13/inflation-why-the-misleading-picture-minister-media/

http://atans1.wordpress.com/2012/05/25/will-hougang-make-the-pap-moan-the-inflation-blues-not-joke-abt-it/

In other Asean round-up news:

Burma is getting its first online music store, which aims to stamp out the problem of illegal downloads, according to the Eleven Myanmar news site. “The traditional distribution system has been plagued by piracy,” the man behind the website, Ko Ko Lwin, is quoted as saying. His Myanmar Music Store apparently trialled operations for a week ahead of an official launch, with home-grown star Lay Phyu’s record, Diary, selling 4,000 copies.

http://www.bbc.co.uk/news/blogs-news-from-elsewhere-24743082

SingTel may still get into Burma. While it failed to get one of the two licences granted this yr, the govt has asked leading telecos (including SingTel) to offer help to the govt-owned operator as it upgrades.

Workers across Indonesia begun a two-day strike on 31 October demanding higher salaries, the latest industrial action to hit the South East Asian economy.

The workers say their cost of living has gone up amid rising inflation and a hike in fuel prices.

http://www.bbc.co.uk/news/business-24753469

Thailand‘s lower house of parliament has passed a political amnesty bill that critics say could allow the return of former PM Thaksin Shinawatra.

The amnesty applies to offences committed during the political turmoil after Mr Thaksin was ousted in a coup.

The lower house passed the controversial bill in the early hours of Friday. It now goes to the Senate.

The opposition Democrat Party has warned that the passage of the bill will trigger street protests.

http://www.bbc.co.uk/news/world-asia-24768110

M’sia, S’pore tops Asean in household debt

In Indonesia, Infrastructure, Malaysia on 26/10/2013 at 7:31 am

Currently, M’sia‘s household debt stood at about 83% of gross domestic product. Household debt in S’pore now accounts for 75% of gross domestic product, having doubled in the last 13 years. According to Standard Chartered, a private bank, household borrowing as a share of national income now stands at 68% of Thailand’s GDP, much higher than in bigger Asian countries, such as China (20%), India (18%) and Indonesia (17%).

In other Asean round-up news:

Burma‘s Yangon had passed Singapore’s office rental rates of US$74 a square metre by the first quarter of this year according to estate agents Colliers. To give some context to this piece of info, something from yesterday’s BT: AT S$11 per square foot (psf) per month, or US$103 psf per year, the extended central business district comprising Raffles Place and Marina Bay is the eighth most expensive office area in the world, according to a Jones Lang LaSalle study.

Taking into account quoted rents from only premium office space in top sub-markets, Singapore was inched out by other Asian locations such as Hong Kong’s Central which commanded rents of HK$105 psf per month (US$162 psf per year) and Beijing’s Finance Street where corporates paid rents of 750 yuan per square metre per month (US$137 psf per year).

S’pore is sharing with Indonesia with its best practices in public-private partnership (PPP) in water and waste-water infrastructure projects.

Led by Singapore Cooperation Enterprise (SCE), an integrated arm of International Enterprise Singapore, and Temasek Foundation, the partnership programme will be delivered over a two-year period by a team of Singapore experts from both private and public sectors to 200 Indonesian government officials from various provinces and cities as well as ministries including the Ministry of Finance and Ministry of Public Works (Bappenas).

Singapore will provide knowledge in planning and procurement of water and waste-water infrastructure projects; and help cultivate a core group of officers from PT Sarana Multi Infrastruktur (Persero), a government partner promoting infrastructure development in Indonesia, who will develop public-private partnership training materials.

Blame Apple, Google for declining exports, growth

In Economy, Indonesia, Malaysia on 19/10/2013 at 6:26 am

The following pieces of bad news came as no surprise even though I’m no economist

– Singapore’s non-oil domestic exports (NODX) fell year-on-year for an eighth straight month in September.

Overall, exports declined by 1.2 per cent on-year in September.

Still, economists say the contraction was smaller than what the market was expecting.

Better-than-expected export performance in September was driven by non-electronic exports like ships and petrochemicals.

This helped to offset lower electronics exports such as PC parts and disk media products.

Electronic export has been declining year-on-year for 14 consecutive months due to weak external demand.

Vishnu Varathan, a senior economist at Mizuho Bank, explained: “The higher value-add items such as the part for the integrated circuits — they did better; whereas PC parts, the lower-end items, disk drives — these did much worse. So this underlies the fact that Singapore’s competitiveness must be at the higher end of the range given our cost base, and that’s where we’re losing out. So in terms of restructuring, it’s going to be a difficult period for electronics despite coming from a low base.”

The top three contributors to the export contraction were the European Union, South Korea and Japan.

On a month-on-month basis, exports rose 5.7 per cent in September, versus the previous month’s 6.6 per cent decline.

http://www.channelnewsasia.com/news/business/singapore/singapore-s-nodx-down-1-2/850428.html

– [A]n advance estimate showing the city-state’s economy shrank 1.0 percent on quarter in the July-September period, better than expectations for a 3.6 percent contraction, but a significant deceleration from 16.9 percent growth in the previous three months.http://www.cnbc.com/id/101109030

This is because on 10 October I read a BBC report:

Global PC shipments drop to a five-year low

Global shipments of personal computers (PCs) have hit a five-year low, according to new figures from the research firm Gartner.

Shipments totalled 80.3m units in the three months to September, down 8.6% from a year ago.

PC sales have now fallen for six quarters in a row, hurt by the growing popularity of tablets and smartphones.

Gartner said falling prices of tablets had further hurt sales of PCs in emerging markets.

“Consumers’ shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets,” Mikako Kitagawa, principal analyst at Gartner, said in a statement.

“A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets.”

Decline

Research firm IDC, also released figures on Thursday, which showed global shipments of PCs fell by 7.6% to 81.6m units over the period.

As I explained before (example), S’pore and M’sia belong to the Microsoft ecosystem, not those of Android or Apple.

Not gd news for Msia either.

In other Asean-round-up news,

In M’sia, Umno V-Ps favoured to hold on to posts. They are up against three challengers, including Mahathir’s youngest son, Mukhriz

And maybe we can learn something from Indonesia‘s

– youth growing interest in politics and civil society matters (http://www.bbc.co.uk/news/world-asia-24549654); and

– how to grow old gracefully by going against tradition (http://www.bbc.co.uk/news/business-24530350).

M’sia mkt outperforms Asean

In Gold, Indonesia, Malaysia, Vietnam on 05/10/2013 at 6:10 am

Lex

Not saying much as above chart from FT shows that its flattish unlike the other Asean mkts. Seems the big local funds are buying.

Other Asean round-up news:

According to OSK-DMG while Indonesia will be increasing its oil production over the next few years but only a few offshore marine players here can benefit from this because of an Indonesian rule that protects jobs in the industry for Indonesians.

While rig builders here could stand to gain in the near term, it appears that the cabotage law in Indonesia is being expanded to include Indonesian shipyards as well, boding well for rig builders with Indonesian-based yards. Indonesia has cabotage rules requiring all work in the oil & gas sector to be done only by Indonesian-flagged vessels.

Thailand is the third biggest buyer of gold in Asia, after China and India having overtaken Vietnam.

Phew, Asean can relax a little, but not too much

In Indonesia, Malaysia, Vietnam on 28/09/2013 at 6:59 am

The Fed’s decision to delay unwinding its $85-billion-a-month money-printing programme eases the pressure on the two Asian countries with the biggest dollar addiction – India and Indonesia – to cure their habit by squeezing domestic demand. Investors reacted accordingly: the Indonesian Rupiah jumped 1.9 percent against the dollar on the morning of Sept. 19, while Jakarta stocks rose 5 percent.

… Asian countries cannot afford to relax. From just before the onset of the global financial crisis, private sector debt has swelled by 73 percentage points of GDP in Hong Kong and 45 percentage points in Singapore. While these small, open economies can arguably live with large swings in capital flows, the credit surge in Malaysia and Thailand is more worrying. The longer the global liquidity glut lasts, the more painful the hangover will be.

http://blogs.reuters.com/breakingviews/2013/09/19/fed-brings-asia-short-term-relief-long-term-risks/

Burma: Lady’s still sceptical

how sceptical she was about the reform process in Myanmar …

Yet, she pointed out, Myanmar is still not a democracy, and neither at peace, nor under the “rule of law”. She and her party are campaigning to change a constitution which, besides debarring her from the presidency she hopes to assume in 2015, guarantees the army a blocking minority in parliament. She said many members of the government are betting that economic success will enable them to hold back democracy. “How quickly and reliably can mindsets change?” she asked, recalling that Myanmar has had half a century of military dictatorship and just three of tentative reform.

And although ceasefires have been signed in most of the score of ethnic conflicts that have simmered since independence in 1948, a comprehensive peace deal remains a distant dream. She identified this—“national reconciliation”—as the biggest task facing Myanmar.

http://www.economist.com/blogs/banyan/2013/09/aung-san-suu-kyi-singapore

UOB Vietnam has launched a unit to advise Vietnamese businesses expanding into Asia.

“Vietnam has prospered from steady economic growth over the last decade and we have seen many of our customers develop from small businesses to companies that are ready to spread their wings to the rest of Asia,” said Thng Tien Tat, executive director of UOB Vietnam.

From the first half of last year to the same period this year, UOB’s business flows between Vietnam and Asia increased 20 per cent. Trade between Vietnam and Asia grew 46.7 per cent to US$150.4 billion from 2010 to 2012, according to the International Monetary Fund.

The new FDI Advisory Unit will give UOB customers expanding in and out of Vietnam access to the bank’s full suite of corporate and personal banking products. BT

Floodwater encircled an industrial estate to the north-east of Bangkok yesterday, adding to fears that Thailand could see a repeat of the devastation caused by floods in 2011, but the estate’s director said the water will not enter the complex.

The 2011 floods killed more than 800 people around the country and caused major disruption to industry, cutting economic growth that year to just 0.1 per cent.

Since Thailand is a big supplier of electronic parts, hard disk drives and car parts, international supply lines were disrupted, too.

The government has insisted there will be no repetition, partly because rain has been less heavy this time but also because dams are nowhere near as full as they were then. BT

A Thai transgender student who protested against having to wear a male uniform could end up in court, it’s reported. BBC report

Why the rupiah can’t recover

In Indonesia on 26/09/2013 at 5:32 am

Other Asian countries’ currencies are recovering.

The rupiah touched levels around 11,580 against the U.S. dollar Tuesday, its weakest level since April 2009, shedding around 20 percent of its value this year. The declines continued even after the country’s central bank raised rates by 150 basis points since June, including surprise rate hikes in August and September that brought rates to 7.25 percent.

One reason: “Without the depth of liquidity, it’s difficult to know the true price at the moment. I’m really looking for when we do have that liquidity coming back,” he said. “Once that happens, the currency will be better placed to stabilize, though there are still some structural issues that need to be tackled to see an improvement in the medium term outlook.”

http://www.cnbc.com/id/101057430?__source=ft&par=ft

Might want to monitor First Reit or Lippo Malls if bullish on Indonesia. Might have buying opportunities. Same with Ascendas India.

M’sians, Pinoys & Indons love F1 S’pore

In Indonesia, Malaysia on 21/09/2013 at 5:02 am

F1 in Singapore … as in the past five races, the proportion of foreign fans hovers around the 40 per cent mark. It was highest at the inaugural race in 2008, with visitors buying 41.7 per cent of the 100,000 tickets, but dipped to 39.2 per cent in 2010 on 81,350 tickets.

 Last year, it was 40.9 per cent of the total 84,317 tickets sold … according to race promoter Singapore GP, the top 10 countries are (in no particular order): Australia, India, Indonesia, Japan, Germany, Malaysia, the Philippines, the United Kingdom, the United States and Taiwan. (BT report on Wednesday)

Other Asean round-up news

Gambling revenues round Asia compared

Way of presentation is v.v gd.

http://www.economist.com/blogs/graphicdetail/2013/09/daily-chart-5

Thank us ethnic slitt-eyes, who gamble on anything

In January 2011 the Chinese city of Tianjin opened an “art exchange” in which artworks’ ownership is divided into tradable shares. Demand was enormous: Chinese households have limited investment options for their savings. Within a year more than 50,000 investors had bought shares in less than two dozen artworks. At least 34 similar art exchanges cropped up elsewhere in China, says Zhao Li, a professor at the Central Academy of Fine Arts, a state school in Beijing.

But frenzied trading on the new exchanges soon turned the market frothy. Tianjin’s exchange halted trading on two paintings after their values multiplied seventeenfold in less than three months; other exchanges have also limited trading. To protect investors, the central government has drawn up regulations that have stifled activity. “We have to be careful not to cause trouble,” says Chen Zongsheng, a city official behind the Tiajin exchange.

Meanwhile an ang moh exchange folds.

http://www.economist.com/blogs/schumpeter/2013/06/investing-art

PM wrong on haze, hope he correct on “no repeat of 1997 crisis’

In Economy, Indonesia on 15/09/2013 at 5:47 am

(Or “1997/ 1998 revisited”)

Earlier this week, PM said: “On balance, I would take a sanguine view. I think the Asian economies are in a stronger position than they were in 1997 when the crisis came. I think we’ve got more safeguards instituted now, over the last decades since the Asian crisis to deal with the likely consequences of big capital flows. CNA

Well, Indonesia’s central bank has raised interest rates for the second time in two weeks as it looks to stem the sharp decline in its currency, the rupiah.

It raised its key rate to 7.25%, the highest level in more than four years.

Indonesia’s currency has dipped nearly 18% against the US dollar since May this year as investors pull out of emerging markets, stoking concerns about the economic impact.

The central bank also cut its growth forecast for the current year.

On Thursday, it said that it now expects the economy to grow between 5.5% to 5.9% compared with its earlier projection of a growth between 5.8% to 6.2%.

That will be the lowest pace of growth since the global financial crisis in 2009.

http://www.bbc.co.uk/news/business-24075745

But he got the haze issue wrong: he said would return “for weeks”. Hasn’t has it? And haze season is almost over. I’m glad he was wrong on this.

Here’s hoping he’s right on the Asian economies because if not

vivid memories of the 1997 crisis in Indonesia … watching in disbelief as a once stable currency slid, gently at first, from 2,400 rupiah to the US dollar in July, to 4,000 by early December, and then, dramatically to more than 16,000 in January.

The economy seized up, and within months Indonesia was in chaos.

… something else too.

The foreign fund managers, who had been cheerleaders for the investment boom before the crisis, privately admitting that the corporate data they were given by Indonesian companies was suspect.

But they continued buying into the country’s broader economic growth story, despite nagging fears about corruption and the persistent current account deficit.

“Start Quote

Today the Thai economy is very different. Because we learned things like risk management, corporate governance, the ability to be flexible”

Jada Wattanasiritham SCB

I remember the World Bank and other respected international experts telling us, after Thailand’s economic collapse in July 1997, that Indonesia was different, its fundamentals were sound. It would not be infected by the disease, they said.

For anyone who experienced those bewildering months, and especially those who were victims of the crisis, they left a lingering mistrust of official reassurances, and an anxiety that they could be caught out again.

She seems to have forgotten:

– Fresh from leveraging up to buy a stake in insurer Ping An (he borrowed US$5.5bn), Dhanin Chearavanont is borrowing US$6 billion to finance a takeover of Siam Makro. Combining the Thai cash-and-carry group with his 7-Eleven convenience store chain makes sense. He co-founded Siam Makro with Dutch group SHV in the late 1980s, but was forced to sell out in 1998 when the Asian crisis left his empire overextended (soon to be repeated?). Sentimentality aside, the combined business should also be in a stronger position to expand into neighbouring Southeast Asian countries such as Laos and Myanmar.

The reunion is expensive. The offer price of 787 baht per share is 75% above where Siam Makro was trading at the beginning of January, and values the business at 53 times last year’s earnings. The advantage is that both Siam Makro and CP All, Mr Dhanin’s partially listed Thai retail company, currently have no debt.

– And in January another Thai tycoon, Charoen Sirivadhanabhakdi, won the battle for control of Fraser and Neave with a debt-heavy $11.2 billion offer based largely on breaking up the Singaporean conglomerate.

1997/1998 again? Both had problems then, esp the former.

Related post: http://atans1.wordpress.com/2013/08/22/why-regional-mkts-are-tanking-why-its-a-risky-moment/

Govt doesn’t highlight subsidy problems in M’sia, Thailand & Indonesia; wonder why?

In Indonesia, Infrastructure, Internet, Malaysia, Vietnam on 07/09/2013 at 5:58 am

The govt likes to warn about the dangers of subsidies, forever quoting the deficits in the West. Well what about telling us about problems nearer home? And how come it’s ok to “subsidise” HDB flats at home? ‘Cause it not really a subsidy is what the usual suspects would argue.

Malaysia has cut fuel subsidies for the first time in more than two years as it tries to reduce its budget deficit.

The subsidy on petrol has been cut by 20 sen (6 cents; 4 pence) a litre and on diesel by 20 to 80 sen a litre.

Prime Minister Najib Razak said the cuts would result in savings of about 3.3bn ringgit ($1bn; £650m) a year.

The government spent 24bn ringgit on fuel subsidies last year, which contributed to a widening budget deficit.

Malaysia’s budget deficit was 4.5% of its gross domestic product (GDP) last year.

http://www.bbc.co.uk/news/business-23926411

Some analysts said that the cut in fuel subsidies was an attempt by the government to increase investor confidence and persuade them to leave their money in the country.

Malaysia’s ratio of public debt to gross domestic product (GDP) “is approaching worrying leve according to a Bank of  America Merrill Lynch (BOAML) report. It said that the country’s debt-to-GDP ratio had risen to 54.6%  at the end of the second quarter, from 53.8% in the first quarter.

The figure is just short of the country’s mandated debt ceiling of 55% of GDP. In the 1960s, the limit was made law by then-finance minister Tan Siew Sin to ensure fiscal prudence.

BOAML said that it could worsen. “Rising longer-term bond yields (and hence higher debt-servicing costs) may accelerate the climb.”

Meanwhile, total debt including guarantees is piling up.

“Government guaranteed debt came in at RM147.3 billion (S$56.4 billion) in the second quarter, slightly lower than RM147.8 billion in the first quarter. Adding this to public debt brings the quasi-public debt to about 70.2 per cent of GDP at the end of the second quarter, up from 69.4 per cent during the first quarter.” [BOA report added after first publication)]

Other Asean round-up news

Thailand‘s Thaksinonmics runs into trouble

Thaksinomics has always been about two things. First, it was about establishing a secure hold over the voters, and in that it has unquestionably been successful.

But it is also supposed to be about driving the domestic economy.

The original schemes for micro-credit, affordable healthcare and local product promotion have lifted the living standards of millions of poorer Thais, as has this government’s decision to raise the minimum wage.

But the benefits of the car and rice purchase schemes are more doubtful, especially given their cost.

Thailand still remains heavily dependent on exports and on foreign direct investment for its growth.

http://www.bbc.co.uk/news/business-23903476V

What Viki’s US$ 200m exit says about S’pore’s, M’sia’s and Indonesia’s startup environment

And one of the reasons for the flight of money from Indonesia, is it’s failure to tackle the rising cost of its fuel subsidy. http://www.bbc.co.uk/news/world-asia-23015511

http://sgentrepreneurs.com/2013/09/02/what-vikis-usd-200m-exit-says-about-singapores-startup-ecosystem/?utm_source=rss&utm_medium=rss&utm_campaign=

CNA Group’s Vietnam-based subsidiary, CNA-HTE Vietnam Co, has landed a $10.6 million contract to renovate, upgrade and expand the domestic terminals in Ho Chi Minh’s Tan Son Nhat International Airport.

Under this project, CNA will provide mechanical, engineering and plumbing services such as the air-conditioning, ventilation and electrical systems at the airport’s new two-storey domestic terminal. CNA will also upgrade the airport’s existing domestic terminal, which will be equipped with a new bus terminal building and a VIP lounge. Its roof will be upgraded.

The project is slated for completion in October next year and will contribute to the group’s financial performance for the fiscal year ending Dec 31, 2013. It boosted CNA’s order book to $74.2 million, from $63.6 million as at June 30.

This is CNA’s second airport-related project in South-east Asia this year; it won a contract for Laos’ Luang Prabang Airport in April for common-use terminal equipment, typically used to facilitate passenger check-ins. BT

SingTel affected by rupiah, rupee collapse

In China, India, Indonesia, Malaysia, Telecoms, Vietnam on 31/08/2013 at 5:08 am

In its latest set of results announced a few weeks ago, the profit contribution from regional associates climbed 14% to S$552 million in the quarter on higher results from Indonesia, Thailand and India, the company said.

SingTel gets 12% of its profit before tax from India and 22% from Indonesia, with those earnings in future likely to take a hit when translated back into Singapore dollars. Remember too the weakish A$, Baht, and Filipino peso will affect its earnings.

Other Asean round-up news

At an emergency meeting on Aug. 29, the monetary authority raised its benchmark and overnight deposit rates. It’s a decision Bank Indonesia should have made at its last official gathering less than two weeks ago. An obsession with economic growth stayed its hand. http://blogs.reuters.com/breakingviews/2013/08/29/currency-markets-rude-wakeup-call-stirs-indonesia/

Politics is back on the streets in Thailand, after a relative lull of more than two years, with a protest over the weekend. It underlines the persistence of divisions in Thailand and raises the prospect of a return to the political turmoil that left more than 90 people dead in Bangkok in 2010.

Thousands of demonstrators gathered in a vacant lot in Bangkok on Saturday, as speakers threatened to “overthrow” the government.

But unlike in previous years, this time the protesters were members of Thailand’s oldest political party, the Democrat Party, which has long had a reputation as the staid, well-mannered and intellectual voice of the Bangkok establishment and has been firmly dedicated to resolving differences inside Parliament, where the Democrats lead the opposition.

The acrimony between the Democrats and the government of Prime Minister Yingluck Shinawatra centres on a number of legislative issues, chiefly an effort by the government to pass an amnesty law for those involved in the 2010 protests.

The Democrats oppose the Bill, saying it might also apply to those who insulted the monarchy or committed serious crimes.

But the broader conflict appears to stem from their feeling of powerlessness in the face of the resurgence of Thaksin Shinawatra, Ms Yingluck’s brother, who sets the broad policy lines for the government and the Pheu Thai Party despite living abroad since 2008 in self-imposed exile to escape corruption charges.

The weekend protests followed another peaceful one earlier this month involving some 2,500 supporters of the Democrat Party and royalist groups at Bangkok’s Lumpini Park, throwing fresh light on Thaksin’s divisive influence in Thailand.

(Extract from NYT)

Malaysia‘s government is exploring the possibility of hiking the real property gains tax to rein in rising housing prices and curb speculation in the market. Bernama quoted Housing Minister Abdul Rahman Dahlan as saying that current property tax levels had failed to stabilise house prices with the house price index continuing to rise.

Malaysia’s GST will take 14 months to implement if announced in the budget in October, a ministry official said

The Philippines posted better-than-forecast economic growth, fuelled by its services sector and higher consumer and government spending. Its economy grew 7.5% in the April to June quarter, from a year earlier. It is the fourth quarter in a row its economy has expanded by more than 7% – defying a regional trend which has seen growth slow down in many countries. The Philippines’ 7.5% second-quarter growth matched that of China but is higher than Indonesia, Vietnam or Malaysia,

However, the country has been hurt in recent weeks by investors pulling out of the region’s emerging economies. This despite under emerging mkts, given the follow of remittances from workers overseas, it will not have to worry about investors’ outflows unlike other mkts.

Japan’s All Nippon Airways has said it will acquire a 49% stake in Asian Wings Airways, an airline based in Burma..

The Japanese airline will pay 2.5bn yen (US$25m) for the stake.mIt is the first time a foreign carrier has invested in a Burmese-based commercial airline. It currently operates domestic flights to all major tourist destinations in Myanmar.It t plans to “extend its wings to regional destinations through scheduled flights as well as chartered ones”.

Wheels coming off Thailand, Indonesia, M’sia & Vietnam

In Indonesia, Malaysia, Vietnam on 24/08/2013 at 5:04 am

Asean round-up: Bad news abounds

(Update: Related post http://atans1.wordpress.com/2013/08/22/why-regional-mkts-are-tanking-why-its-a-risky-moment/)

Indonesia’s benchmark Jakarta Composite Index – the biggest loser among emerging markets – has plunged over 20% in the past three months, putting it in bear market territory. Neighboring Thailand and the Philippines are not far behind, with losses amounting to over 17 and 11%

Thailand has fallen into recession after the economy shrank unexpectedly in the second quarter of the year.

The 0.3% contraction in gross domestic product between April and June followed a previous fall of 1.7% during the first quarter of 2013.

Previously, Thailand had been recording strong economic growth, outpacing other economies in the region, with expansion of more than 6% during 2012.

Many analysts had expected this performance to continue.

Sanjay Mathur, head of economics research at RBS, told the BBC that weak exports and domestic demand, plus fading business confidence, were to blame for the downturn.

http://www.bbc.co.uk/news/business-23751846

I’m not only guy critical of Indon’s way of fighting inflation

http://blogs.reuters.com/breakingviews/2013/08/16/indonesia-imitates-indias-costly-growth-obsession/

– And on 19th August: Indonesia’s rupiah fell to 10,500 per US dollar for the first time since 2009, stocks dropped by the most in 22 months and government bonds plunged after the current-account deficit widened to a record last quarter.

The Jakarta Composite Index of shares has fallen 8 per cent in two days, and is now the world’s worst performer this quarter.

The yield on 10-year notes surged to the highest since March 2011 after Bank Indonesia (BI) said late on Aug 16 the current-account shortfall was US$9.8 billion, the largest in data compiled by Bloomberg going back to 1989. Inflation quickened to a four-year high and economic growth slowed to the least since 2010, figures showed last week.

As at Wednesday, the Indon market entered its bear phase after falling 20% since May http://www.bbc.co.uk/news/business-23763829

A fund manager with local investment bank Lautandhana Securindo. “The measures taken by the government and the central bank [to fix the current-account deficit] haven’t brought about the desired results.”

Indonesia’s July consumer confidence index fell to the lowest level since May last year, and follows a sharp rise in fuel prices in late June, a Bank Indonesia survey showed on Monday.

The July index was 108.4, down from 117.1 the previous month and compared to 109.0 in May last year.

A reading above 100 indicates that consumers in general are optimistic

The survey of 4,600 households in 18 major cities in the archipelago showed that consumers were pessimistic over the current economic environment, particularly related to jobs and wages.

Concern over fewer jobs and lower wages is expected to be a feature of coming months.

However, the survey said price pressure is expected to decrease in January 2014, as demand ease after Christmas and New Year.

The central bank according to a recent report has lost 13.6% of its central bank reserves from the end of April until the end of July defending the currency. Well August would have added to the losses. And as the chart shows, it hasn’t that much money in the first place.

Malaysia’s growth was below expectations and the central bank, lowered its forecast for the year to 4.5-5%, from 5-6%. A sharp fall in the current account surplus highlighted fears that the country could be vulnerable to market turmoil.

Gross domestic product grew 4.3% in the second quarter of 2013 from the same period a year earlier, data showed yesterday, well below economists’ expectations of 4.9 per cent in a Reuters poll.

Forecasts had ranged from 4.2 to 5.2%, following growth of 4.1% in the first three months of the year.

Still, while the Thai, Indon and S’pore equity markets were in local currency terms below their 31Dec 2012 levels, M’sia is juz ahead by about 3%. All are down in US$ terms.

Vietnam was the country that was viewed as the “next China” due to its stable transition has started to generate concerns about a looming debt crisis.

http://www.bbc.co.uk/news/business-23755593

Update: Related post http://atans1.wordpress.com/2013/08/22/why-regional-mkts-are-tanking-why-its-a-risky-moment/

SCCCI SME Survey proves LKY’s point?

In China, India, Indonesia, Malaysia, Vietnam on 17/08/2013 at 1:41 pm

Indonesia has overtaken China as a preferred investment destination for small and medium-sized enterprises (SMEs), This was a key finding of the Singapore Chinese Chamber of Commerce and Industry (SCCCI) SME Survey 2013, which polled 516 companies in June and July.

Of the 63% SMEs which are venturing into markets abroad, 39.9% favour investing in Malaysia and 28.1% Indonesia, a hair’s breadth more than the 27.2% looking towards China.

One reason given is that as the Chinese economy develops and wages rise, Indonesia could stand to position itself as an undertapped source of low-cost labour. As I blogged here, a few days back, LKY said that SMEs would flee S’pore if FTs were not allowed in by the cattle-truck load: they want cheap labour. The survey indicates that securing cheap labour is all that SMEs care about?

Other Asean-round up news:

Express link to KL

M’sia should talk to billionaire inventor Elon Musk. He wants to build a Hyperloop that would cut travel time between SF and LA to 35 minute. 12 minutes to KL based on the 35 minutes time

http://www.bbc.co.uk/news/technology-23681266

Shrimps

THe US Commerce Department declined to set duties on shrimp imports from Thailand and Indonesia. It has imposed duties on shrimp imports from five nations.

The ruling applies to about US$2bn of shrimp imports, from India, Ecuador, China, Malaysia and Vietnam. The Commerce Department found that those nations had been subsidising their shrimp producers.

Malaysia faces the highest duties of up to 54.5%, the lowest were set for Vietnam which faces duties of up to 7.8%.

A final approval is needed by another government body, the International Trade Commission (ITC), before the duties can take effect, The ITC will consider whether US producers have been threatened by the imports and make its decision in September.

Fighting inflation the Indon way

Bit like the way they fight the haze: wayang all the way.

Indonesia’s central bank held its benchmark interest rate on Thursday and took steps to contain loan expansion to battle inflation without taking any more steam out of slowing economic growth.

Many economists do expect another rate hike later this year but the central bank faces a tricky combination of surging prices, a falling rupiah, a stubborn current account deficit and slowing economic growth.

Triple confirm, SE Asia is slowing down

In Indonesia, Malaysia on 10/08/2013 at 4:55 am

First HSBC’s results and now StanChart’s result show that regional economies are slowing down

http://blogs.reuters.com/breakingviews/2013/08/06/stanchart-shows-not-all-emerging-markets-are-equal/

Example Singapore, where first half income fell 3% and profits dropped 12% (not reported by our constructive, nation-building media).

Other Asean round-up news

And here’s the third confirmation. Indonesia’s exports are dropping, GDP growth is slowing and inflation is rising.

Forget about India, China, Thai or Indon markets

Think frontier markets: like Vietnam, Cambodia. Laos and Burma are coming too

http://www.economist.com/blogs/graphicdetail/2013/07/daily-chart-22

And here’s a plug for M’sia

http://www.bloomberg.com/news/2013-08-06/formula-one-joins-legoland-in-plan-to-remake-malaysia-s-south.html

Another Lion Air air crash since May (then into sea)  this year: now into into a cow

And UOB recently set up a unit offering loans to Chinese companies looking to move into the region, including in renminbi

DBS, Temasek, Indonesia all lose

In Indonesia, Temasek on 06/08/2013 at 5:02 am

Maybe DBS should blame VivianB (and the PM) for taking a hard stand on the haze issue, even though this blog supports their stance because the Indon govt is naturally devious on this and other issues.

Seriously, DBS, Temasek and Indonesia all lose following DBS’ decision to allow its agreement to buy Temasek’s stake in Bank Danamon to lapse after the Indons only allowed it to buy up to 40% of Bank Danamon. It wanted DBS’s entire 67% stake and more: see Backgrounder at end of article for details.

Why DBS loses

Piyush Gupta, pulling his [US]$6.5 billion bid for PT Bank Danamon Indonesia, said his ambitions in Southeast Asia’s largest economy may be set back by about five years.

The lender had sought a controlling stake in Danamon as part of a strategy to expand in markets outside Singapore and Hong Kong, which jointly accounted for 83 percent of its profit in 2012. Average net interest margins for banks in its home market are 1.82 percent, according to data compiled by Bloomberg based on the latest company filings, lagging behind lenders in the rest of Southeast Asia. In Hong Kong, the measure is even lower at 1.66 percent, the data show. [Note that DBS gets 80% of its profits from S'pore and HK.]

In contrast, Indonesian lenders are the most profitable in the world’s 20 biggest economies, data compiled by Bloomberg show. Banks with a market value of at least $5 billion boast an average net interest margin of 6.6 percent, the data show.

DBS’s net interest margin shrank to 1.62 percent last quarter from 1.72 percent a year earlier, today’s earnings report showed. That’s the 15th straight year-on-year decline.

http://www.bloomberg.com/news/2013-07-31/dbs-drops-6-5-billion-danamon-bid-after-failing-to-win-control.html

Note too that DBS doesn’t have much of an Asean presence outside S’pore. It has no retail network in peninsula Malaysia, unlike UOB and OCBC: a failure of its botched attempt to takeover OUB in the early noughties. And unlike Maybank and CIMB, its M’sian rivals, it has only “peanuts” in Indonesia. They, Maybank, in particular, have thriving and biggish S’pore operations.

“DBS missed out on a value-creation opportunity,” Kevin Kwek, an analyst at Sanford C. Bernstein & Co. … The bank “will have to build up a presence in Indonesia the longer and harder way.”

“Indonesia was supposed to give them a leg up in terms of growth,” said Julian Chua … at Nomura … “There may not be that many willing sellers of such a sizable bank.”

If you are wondering why the shares are up then, investors think DBS may use the $ to return some capital. Besides, the issue of shares to Temasek would have been dilutive. And Indonesia’s economy is slowing.

FTs can be blamed for these historical failings, though Gupta and his deputy are exceptions to the rule that in DBS the “T” stands for “Trash”, not “Talent”. They have stabilised DBS’ operationally. And are trying to repair the damage done by DBS’ earlier FT inspired strategy of buying non-controlling stakes in regional banks.

Why Temasek loses

Its involvement as a shareholder in both banks helped spark an anti-Singapore political backlash in Indonesia. The value of its investment has also been reduced by new Indonesian restrictions which limit single bank shareholders to a 40 percent stake. That makes Danamon a less attractive target because Basel capital rules make it expensive for banks to hold minority stakes in other lenders.

However, Temasek can also take comfort. It is under no immediate pressure to sell. And though Danamon shares fell by more than 13 percent on Aug. 1, Temasek’s 67 percent shareholding is still a highly successful investment.

The Japanese banks are seen as interested in the 40% stake that it can sell. They have been buying minority stakes in Indonesia and the region http://atans1.wordpress.com/2013/07/06/asean-round-up-30/, http://atans1.wordpress.com/2012/12/29/jappo-banks-step-up-presence-in-asean-region/

Why Indonesia loses

lost http://blogs.reuters.com/breakingviews/2013/08/01/indonesia-biggest-loser-from-bank-merger-flop/

Here’s an alternate view that DBS and S’pore lost more than Indonesia: http://www.themalaymailonline.com/what-you-think/article/singapore-loses-much-more-than-indonesia-in-dbs-decision-vincent-lingga. I’m sure TRE posters and Balding would agree with this view.

Backgrounder from Bloomberg

DBS had proposed acquiring the 67.4 percent stake in Danamon held by Fullerton Financial by allowing it to swap its Danamon holdings into DBS shares. The exchange was to be at a price of 7,000 rupiah for each Danamon share and called for DBS to issue 439 million new shares to the Temasek unit at S$14.07 apiece, increasing the stake held in DBS by Singapore’s state-owned investment company to 40.4 percent from 29.5 percent.

Following that transaction, DBS would have made a tender offer for any remaining Danamon stock at 7,000 rupiah a share, taking its holding in the Indonesian bank to 99 percent.

Cambodian elections harbinger of S’porean GE?

In Indonesia on 03/08/2013 at 5:07 am

Cambodia’s opposition party says it narrowly won Sunday’s general election, challenging the ruling party’s earlier declaration of victory.

Hours after the poll, PM Hun Sen’s ruling party said it won 68 seats in parliament to the opposition’s 55. Previously, the ruling party dominated had two-thirds majority.

What should interest S’poreans is

Hun Sen, one of the world’s longest-serving prime ministers, has been in power in Cambodia for 28 years.

Many here credit him with having steered the nation out of a civil war and raising living standards for the population of 14 million.

Under him, Cambodia has seen strong economic growth, thanks to a combination of foreign aid, development, tourism and garment exports.

All very PAP-like achievements.

–the Opposition there finally united by combining forces;

“I think Mr Rainsy and his party have a very simple message,” said Mr Cox. “It is striking a chord with people. Do you like the way things are or do you want change?

– ‘Many Cambodians are screaming for change.” … that certainly appears to be the sentiment among many of the urban youth in Phnom Penh.

I sat down with a group of young men and women in a cafe in the city, and many expressed a desire for greater political participation in their country.

“I acknowledge that the current government has made huge improvements and strides in this country since the days of the war,” says 32-year-old Chulsa Heng.

“But we want more. I still think Cambodia has a long way to go, and it’s still not enough.”

First-time voter Ngoun Somaly said that regardless of who she ended up choosing on polling day, there were many issues that the current government was not paying enough attention to.

“Human rights violations, land grabbing from rural peasants and a lack of job opportunities for Cambodia’s graduates – we need to see more firm action on that,” she said.

“Whoever wins the election must work hard to fix these problems. I really want to see these human rights issues solved.”

– And “There is also no longer that cloak of fear, the way it used to be in the past. People aren’t afraid to be out on the streets and true to themselves.”

http://www.bbc.co.uk/news/world-asia-23461127

BTW, the media there is tightly controlled. And the govt regularly sues opponents, winning damages.

So no wonder PM is working hard on his National Day Rally speech. All to play for in next GE.

Lest I be accused of being anti-PAP http://atans1.wordpress.com/2013/07/13/why-young-sporeans-should-be-sent-to-yangon/

Asean round-up con’td

China imports gas from Burma

The gas pipeline that connects China, Myanmar and the Indian Ocean has officially begun operating, and China has begun importing gas from Burma.

Related post http://atans1.wordpress.com/2013/06/13/implications-for-spores-port-as-burma-opens-up/

Indons learning Japanese

Indonesia has more high school pupils studying Japanese than any other country (872,000) other than China

Japan keeps Asean’s economies motoring along

In Indonesia, Japan, Private Equity, Vietnam on 27/07/2013 at 5:26 pm

Asean round-up

Gd summary from FT on Japan’s reemergence in region

China’s slowdown and the prospect of less easy US money have sent a chill through southeast Asia. Benchmark indices in Jakarta, Bangkok and Manila have lost almost half of the one-fifth gains they had made this year to mid-May. The real economy is weakening, too. Last week the Bank of Thailand cut its growth forecast below 5 per cent and recent comments from Bank Indonesia suggest it accepts growth will slip below 6 per cent. Hardly a disaster then, but nor is it what these countries or their followers are used to. Enter Japan and, crucially, its direct investment. In terms of trading with the region, Japan’s significance has slipped over the past decade as its economy stagnated, but at a shade over $200bn it commands the same share as China. Its FDI of $60bn into the region over that period, however, is 10-times greater than its giant neighbour, according to HSBC. Japan is either the largest or second-largest investor in each country.

 During the past two months, Japanese banks and insurers have spent almost $6bn buying stakes in their southeast Asian counterparts. More deals are expected as they try to escape a weak and ageing home market.

Background

Meiji Yasuda Life Insurance Co is expected to acquire a 15% stake in Thai Life Insurance Co. in what would be one of the biggest investments ever in Asia by a Japanese life insurer With the planned investment worth about ¥70 bn (US%700bn), Meiji Yasuda wants to make the major Thai insurer into an equity-method affiliate and dispatch executives, the sources said.

Like other Japanese insurers, Meiji Yasuda is looking to expand overseas earnings, especially in Asia, amid sluggish business at home due to the aging of society.

Sumitomo Life Insurance Co. has made a ¥28 bn investment in Vietnam’s top insurance group, while Dai-ichi Life Insurance Co. in June announced a ¥34.3 bn investment in Indonesia. Sumitimo which lost out to Yasuda is now looking to Indonesia where Bank Negara is looking to sell up to 40% of its life business for up to $800m, according to the FT.

Japanese banks have been active too. http://atans1.wordpress.com/?s=Mitsubishi

Cambodia’s growing

Low labour costs and Cambodia’s proximity to key markets such as China and other emerging economies in South East Asia are attractive to foreign investors.

And with wages in countries such as Thailand and China on the rise, Cambodia is likely to become even more attractive.

http://www.bbc.co.uk/news/business-23429693

Vietnam R private equity

http://blogs.reuters.com/breakingviews/2013/07/18/vietnam-is-back-in-the-game-for-buyout-firms/

Haze over, Indons start two-timing again

In Indonesia, Insurance on 20/07/2013 at 5:15 am

Asean round-up

Indonesia

This two-timing was predicted:

Despite Indonesia committing to ratify the regional pact on transboundary haze pollution by early next year, at the latest, and agreeing to share digitised concession maps with other governments, Singapore’s Minister for the Environment and Water Resources Vivian Balakrishnan left yesterday’s regional meeting on the haze problem “disappointed (but) not surprised”, in his own words …

Only two of the four outcomes that Singapore had sought were fully met after the four-hour meeting: Getting the participating countries — Singapore, Malaysia, Indonesia, Brunei and Thailand — to involve high-level officials from all relevant ministries and agencies from each country in the MSC process, and getting a commitment from Indonesia to ratify the ASEAN Transboundary Haze Pollution Agreement “expeditiously”.

Singapore was unable to get an agreement from Indonesia to renew their collaboration to reduce forest fires at Jambi and other provinces if possible, with Indonesia issuing a noncommittal response to offers of bilateral collaborations from Malaysia and Singapore.

While it welcomed the offers, Indonesia is “currently identifying the areas of cooperation which will maximise and bring mutual benefits for all parties concerned”, a press released issued after the meeting said.

Singapore had also hoped to get the participating countries to submit their concession maps and agree a date for the public launch of the ASEAN Sub-Regional Haze Monitoring System (HMS) platform to enable identification errant companies engaging in slash-and-burn practices.

Maps from the Indonesian govt are the only way S’pore can establish whether S’pore-based companies are telling the truth about where the fires are burning. If the accounts of the S’porean (mostly controlled by Indonesians) are taken at their face value, the fires are almost always anywhere except on their land. Note that despite the allegations by Indon officials that S’pore companies started fires , only one co, a M’sian co,has been charged.

Related post: http://atans1.wordpress.com/2013/06/26/why-plan-suffocate-sporeans-failed/

Thailand/ Insurance

Meiji Yasuda Life Insurance Co is expected to acquire a 15% stake in Thai Life Insurance Co. in what would be one of the biggest investments ever in Asia by a Japanese life insurer With the planned investment worth about ¥70 bn (US%700bn), Meiji Yasuda wants to make the major Thai insurer into an equity-method affiliate and dispatch executives, the sources said.

Like other Japanese insurers, Meiji Yasuda is looking to expand overseas earnings, especially in Asia, amid sluggish business at home due to the aging of society.

Sumitomo Life Insurance Co. has made a ¥28 bn investment in Vietnam’s top insurance group, while Dai-ichi Life Insurance Co. in June announced a ¥34.3 bn investment in Indonesia.

Sumitimo which lost out to Yasuda is now looking to Indonesia where Bank Negara is looking to sell up to 40% of its life business for up to $800m, according to the FT.

Japanese banks have been active too. http://atans1.wordpress.com/?s=Mitsubishi

Haze: PM, silence is NOT a solution!

In Indonesia, Political governance on 05/07/2013 at 6:20 am

The PM was wrong about the haze returning (conditions are getting better) and S’pore, Indonesia and M’sia have kissed and made up. Sort of. “ASEAN’s foreign ministers have agreed on a process to task officials from Singapore, Malaysia and Indonesia to examine what is happening on the ground and to report to the leaders in managing it … Mr Shanmugam, together with his counterparts from Malaysia and Indonesia, met to discuss the haze issue and to recommend to the grouping ways to tackle the problem.Mr Shanmugam felt it was a very positive development as it gave ASEAN a framework to move ahead on the matter.” (CNA)

So back to the days of the Asean way: keeping quiet, and working behind closed doors (like how WP MPs, according to Auntie, deal with the PAP govt? To be fair WP MPs are starting to get vocal; sadly its PritamS, the loose canoon )

The situation is more like making up until the offending partner in a relationship cheats again. And going by Indonesia’s track record on fighting haze, it’s reasonable conclude that it will try to “smoke” M’sia and S’pore, once we sit down and keep quiet. Remember VivianB shouted, “Rape!”*, while M’sia took tougher but quieter action: it sent a diplomatic note of protest, but made it public that it had sent a protest note.In olden days, this was often a prelude to war.

And countries also said publicly that they would raise the issue at an Asean meeting, thereby making it publicly an Asean issue. (They did, hence the “agreement”.)

Only after this public display of anger, did Indonesia got to work http://atans1.wordpress.com/2013/06/24/haze-what-raffles-would-have-done/.

Still not convinced Indons officials are dishonest? There is this ST story (http://www.straitstimes.com/the-big-story/asia-report/indonesia/story/spore-funded-efforts-fight-haze-face-challenges-ground-201) on how aid is wasted or offers of help ignored. (Of course, the usual suspects would discount this story, but it ties in with what their ang moh HR and environmental friends are saying.)

Given this track record of mendacity, it is important not to forget what Indonesian Energy and Mineral Resources Minister, Jero Wacik said juz before his boss apologised**.

At the opening of a meeting of senior energy officials from Asean countries in Nusa Dua, Bali  on 24 June, Indonesian Energy and Mineral Resources Minister, Jero Wacik said that both Singapore and Malaysia had made much profit from Indonesia all this while. He said Malaysia had benefited from bilateral cooperation with Indonesia, including electricity imports from Indonesia. Likewise, Singapore had benefited from Indonesia’s gas supply as well as the large number of Indonesian tourists visiting Singapore.

But he seems to have forgotten S’pore and M’sia didn’t get electricity and gas these things for free. Their companies or govts paid cash, much of which found its way into official’ bank accounts (albeit according to the Indon govt in S’pore). As for tourism, Indonesia benefits from our wealthier tourists visiting Indonesia.

He then went on to say Singapore and Malaysia were trying to discredit Indonesia globally when they should help, he added. said, “Let me remind our friends from Malaysia, Singapore, don’t just because of the haze, tell stories to the world.” He said Singapore and Malaysia should “know themselves” (tahu diri) over the haze, accusing both of trying to discredit Indonesia over the haze issue. “It’s called sharing, you go through good times together, don’t make noise to the world when things go bad. It’s just like husband and wife, don’t take your quarrel outside.”

Err didn’t M’sia and S’pore offer to help fight the fires but were told to bugger off? And haven’t both countries been telling Indonesia for years to do something about the yearly haze, and Indonesia promises to do so, anually, despite refusing to ratify a 2002 Asean treaty*** on the issue? And as related above, our offers of help are ignored or our aid wasted.

And despite him saying,“Both countries should sit together to resolve the problem without making a big deal of it to the world.”, one senior official publicly said  that Malaysia and Singapore linked companies were involved in the burning. But two other senior Indonesian officials publicly contradicted him and said that there was no basis for saying this. Indonesia has acknowledged that its officials have been contradicting each other on this point, and that what is needed is a proper investigation. all the companies have also denied publicly the allegations.

He also said that the Indonesian government is doing its utmost to put out the fires. So how come it comes around around as regularly as the monsoons? And what about ratifying the 2002 Asean treaty on fighting haze?

Finally, Indonesian politicians criticised their president for apologising, showing their belief that Indonesia had a right  to smoke its neighbours, juz as it has the right to invade and rule West Papua and East Timor.

So until Indonesia shows it is serious about solving the annual problem that hurts millions of its people, S’pore and M’sia have to be willing to name and shame Indonesia publicly and in int’l forums like Asean meetings, or worse come to the worse at the UN This, it seems, is the modern equivalent of Raffles sending in the army to burn down palaces to teach recalcitrant sultans  to respect the British http://atans1.wordpress.com/2013/06/24/haze-what-raffles-would-have-done/.

Let’s hope Pinky has found his balls to stand up for S’pore! Silence is not an option!

Related post: http://atans1.wordpress.com/2013/06/20/the-haze-and-regime-change/

* In a strongly-worded statement on Facebook he bitched that “no country or corporation has the right to pollute the air at the expense of Singaporeans’ health and wellbeing”, Starting to like him despite his sneering at the poor when a pAP MP asked him to spend more on them. while throwing our money at the Kiddie Games.

**My take on the apology

***Only now is the govt taking steps to get it ratified.

Follow

Get every new post delivered to your Inbox.

Join 210 other followers