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Posts Tagged ‘Philippines’

Why PAP should be afraid but not not too afraid

In China, Humour, Internet, Malaysia, Political governance, Vietnam on 10/03/2014 at 4:49 am

Paper warriors can cause serious problems for paper generals. Take heart Richard Wan, SgDaily, Terry Xu etc. And NSP should put more effort and time on online activities, rather than pounding the streets and climbing stairs, even though P Ravi of NSP gets great workouts: but Ravi, skip the teh tariks at the end. And the Chiams start an online presence.

Online activism can be an accurate indicator of where revolutions might take place next, according to University of Manchester research.

Argentina, Georgia, the Philippines and Brazil are claimed to be most at risk of upheaval, according to this measure.

The Revolution 2.0 Index* was developed last year and identified Ukraine as the most likely to see political upheaval.

This index sees revolution being forecast by computer experts rather than political analysts … It provides a different view of how regimes are put at risk by protest movements, looking at online factors rather than street demonstrations.

The index produces a risk factor based on the level of repression and the ability of people to organise protests online.

(http://www.bbc.com/news/education-26448710)

But Yaacob, MDA, and the ISD can still relax a little: The highest risk comes in countries where there are protests against perceived injustices – but where there is relative freedom online.

Err we knowthat S’poreans don’t like to sweat at Hong Lim: ask Gilbert Goh. (Alternative reason: http://atans1.wordpress.com/2013/10/11/gg-crashes-new-indian-chief-needed/)

So get the people out in their tens of thousands to Hong Lim Green and keep up the online volume, then sure can effect regime change. But fortunately for the PAP, only the LGBTs can get out the crowd. Aand then only once in a pink moon.

Still if PM and the ministers want to make sure they get to keep their mega-salaries then they should start sending study teams to  Ethiopia, Iran, Cuba and China: At the lowest end of this 39-country index are countries such as Iran, Cuba and China because there is a lower level of risk of revolution in repressive countries with tight controls over the internet.

Actually, it juz might be easier to ban Facebook and other forms of social media on the grounds that users waste time on them during office hours (all those cat photos that a certain social activist posts during office hours). Users are subversives, undermining the govt’s productivity drive, the aim of which is to make S’poreans richer slaves.

Talking about the Ukraine, professor Richard Heeks from Manchester University, the creator the index, says: “But social media has been the core tool used to organise protests and maintain them by letting protesters know where they can get nearby food, shelter, medical attention, and so on.

“It has spread word about violence and has garnered support and assistance from overseas.”

BTW, S’pore, Cambodia and Laos are not on the index but the rest of Asean is

The Philippines (4th)

M’sia (14th)

Indonesia (26th)

Vietnam (29th)

Thailand (33rd: err data was up to 2012)

Burma (35th)

———————————————————-

*The index combines Freedom House’s Freedom on the Net scores, the International Telecommunication Union’s information and communication technology development index, and the Economist’s Democracy Index (reversed into an “Outrage Index” so that higher scores mean more autocracy). The first measures the degree of Internet freedom in a country, the second shows how widely Internet technology is used, and the third provides the level of oppression.

 

 

What does S’pore have in common with US, Australia, Canada, China, Germany, Philippines,?

In Uncategorized on 23/02/2014 at 4:24 am

The only countries that have laws against jaywalking is the answer.

This BBC Online article on jaywalking in the US reminded me that when I went to study in London, I waz surprised that I could jaywalk. I had tot that jaywalking was a British inheritance and the absence of penalties in M’sia was ’cause it was M’sia leh where laws are never enforced. Article says: “Even in Singapore, where repeated jaywalking offences can lead to a $1,000 fine or a six month jail term, rules are routinely flouted.”. Glad to read that the usual suspects who compare us to the sheep of Animal Farm are wrong: some of the time perhaps?

In the US, [C]ar lobby groups also started taking over school safety education, stressing that “streets are for cars and children need to stay out of them”. Anti-jaywalking laws were adopted in many cities in the late 1920s, and became the norm by the 1930s.

—-

*Juz before going to London, I had been caught jaywalking at Hill St by a Vigilante Corps officer.  No action was taken against me because I told his superior that the light had already turned red, stopping traffic, when I crossed the street. Was I expected to walk to the crossing, then wait for the light to turn red again?  It was a one-way street and there was no traffic because of the red light. He saw my point.

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.

 

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.

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)

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.

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

Where S’pore and other Asean countries most vulnerable to Fed tapering

In China, Hong Kong, India, Malaysia, Vietnam on 14/09/2013 at 5:36 am

This chart from Reuters shows the vulnerability of major Asian economies to Fed policy of tapering

http://graphics.thomsonreuters.com/RNGS/2013/AUG/ASIARANKINGS/ASIARANKINGS.html

S’pore is vulnerable

Slowing GDP: Most vulnerable

Growing Public Debt : Second most vulnerable

Uncompetitive Currency: Second most vulnerable

Growing Credit Intensity: Fourth most vulnerable. Another view: Banks with large property loan portfolios will face higher risks when interest rates start to rise — this as highly-leveraged households begin to have difficulty paying their mortgages.

Economists said this could lead to credit tightening by banks, and a hard landing for the property sector.

If that happens, DBS Bank said Singapore and Hong Kong will be hardest hit within Asia.

In other Asean round-up news

surpluses of Thailand, Hong Kong and Malaysia have narrowed even more since the second half of 2007. However, this is partly because Thailand and Malaysia have boosted domestic investment, which lifts imports.

Malaysian and Indonesian companies are grappling with a margin squeeze: The two commodity-producing economies have witnessed the biggest rise in their real cost of capital. The Philippines has the opposite problem: Falling inflation-adjusted returns for savers.

Rightly or wrongly, though, the sovereign debt issued by developed countries is perceived as safe. Malaysia is not in the same league, and it is pruning petrol and diesel subsidies to control its growing public debt problem.

Unlike in 1997, most Asian countries have relatively straightforward choices. Malaysia can introduce a goods and services tax to control the 14 percentage point increase in its sovereign-debt-to-GDP ratio since 2007. Indonesia can raise interest rates to tame 9 percent inflation. The main problem is India, with its cocktail of slumping growth, high inflation, a creaking banking system, reckless fiscal policies and political uncertainty. Other Asian nations can’t take rising U.S. interest rates lightly, but they are far from a crisis.

http://blogs.reuters.com/breakingviews/2013/09/05/not-all-asian-countries-need-to-fear-the-fed/

Indonesia’s central bank raised its benchmark interest rate 25 basis points Thursday afternoon in a move that defied market expectations and continued a swift phase of tightening efforts as the nation’s economic growth showed signs of stumbling.

The interest rate increased to 7.25 percent, the fourth hike in as many months, as Bank Indonesia moved to stabilize the increasingly volatile rupiah while controlling inflation and the widening trade deficit.

The danger of capital controls in Asean (Note this is new link and chart, not the one originally posted)

http://www.economist.com/news/finance-and-economics/21586569-error-apology-and-revision-spreadsheet-different

Asean trade with China (FT charts)

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”.

China sneezes, effects on Asean vary

In Economy, Indonesia, Malaysia, Vietnam on 29/06/2013 at 8:50 am

http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u=2013_06_25_02_09_f82ae67b8b074f939b48a00c4e962d23_PRIMARY.jpg

As these charts show, S’pore’s economy is more exposed to China than Indonesia, Philippines, Thailand, Vietnam and M’sia. (BTW, no Asean round-up this week)

http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u=2013_06_25_02_09_f82ae67b8b074f939b48a00c4e962d23_PRIMARY.jpg

http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u=2013_06_25_02_16_19b6271f49d347d89d8c26ed2ba7bb44_PRIMARY.jpg

Asean round-up

In Casinos, Temasek on 08/06/2013 at 9:27 am

Thais love debt: CP All, the Thai retailer controlled by tycoon Dhanin Chearavanont, borrowed $6 billion in May to fund a $6.6 billion takeover of Siam Makro, the Thai cash-and-carry group. Low interest rates and the hidden value in Siam Makro’s property portfolio mean the purchase can support hefty borrowing without any synergies. 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.

Easy come, easy go:The main Philippines equity index has tumbled 11% and the Thai index 8.4%  since May 22 when the Fed’s chairman talked of restraining QEIII. Still up on the yr, unlike S’pore.

Convert to gambling and the Philippines? Fullerton Fund Management Company (FFMC), a subsidiary of Temasek Holdings, has bought a 5.02% stake in Melco Crown Philippines Resorts Corp.

FFMC has acquired 222.2 million Melco shares, according to the company, which is listed on the Philippine Stock Exchange.

Melco is the Philippine unit of Nasdaq-listed Melco Crown Entertainment, which is backed by Lawrence Ho, a relative of Macau casino mogul Stanley Ho.

BBC discovers Burma

http://www.bbc.co.uk/news/business-22721804

http://www.bbc.co.uk/news/business-22781224

http://www.bbc.co.uk/news/business-22776521

Asean round-up

In Vietnam on 01/06/2013 at 1:40 pm
The Thai central bank by 25 basis points from 2.75 % to 2.5% a year, in an attempt to stem a rise in the baht, which hit a 16-year high last month. And the govt is considering capital controls. But a strong currency is gd for Thai. acquirers.
C.P. Foods of Thailand Looking for Acquisitions Charoen Pokphand Foods of Thailand wants to buy assets in the United States and Europe after it failed to acquire the American pork producer Smithfield Foods.

Warburg Pincus-Led Consortium Buys Stake in Vietnamese Retailer A consortium led by the private equity firm Warburg Pincus has agreed to buy a 20 percent stake in the Vietnamese retailer Vingroup Joint Stock Company for $200 million. REUTERS

The Philippines economy grew 7.8% (beating even China) in the first quarter from a revised 6.8% the previous quarter, beating analysts’ expectations of an increase of just 6%, as sharply higher investments and government spending offset the impact of faltering demand from China, America and Europe that slowed economies elsewhere in the region.

Asean round-up

In Indonesia, Malaysia, Vietnam on 20/04/2013 at 1:57 pm

M’sia too will suffer because of drop in PC sales juz like S’pore http://atans1.wordpress.com/2013/04/11/when-economy-slows-not-nec-its-cause-ft-supply-ltd/ because Penang too is part of the Mircosoft ecosystem. And it too is not part of the Apple or Google ecosystems.

Asean round-up

In Indonesia, Malaysia on 06/04/2013 at 7:32 am

Indon IPOs: Private-equity firm PT Saratoga Investama Sedaya, and Indonesia’s biggest taxi operator Blue Bird Group, have picked underwriters to prepare their initial public offerings (IPOs) as they seek to raise money ahead of a 2014 general election.

Burmese telco update: Telecoms will be among the first industries to be liberalised under Burma’s reformist government, which hopes to place mobiles into the hands of between 75% and 80% of its 60 million citizens by 2016, up from an estimated 6% today.

If take-up is high, the entire mobile market in Burma – renamed Myanmar by the ruling military junta – could be worth $10bn (£6bn) a year, with networks generating $7.3bn of those revenues, research by Ericsson found.

Foreign companies are eager to partake in what has been described as a mouthwatering opportunity, and by Thursday’s deadline 22 bids had been submitted.

http://www.guardian.co.uk/business/2013/apr/04/vodafone-china-mobile-burma-telecoms

SingTel and Temasek are also trying their luck. but LKY’s remarks about “stupid” generals (a few yrs ago) can’t be helpful.

Iskandar: Some issues are beginning to surface as highlighted in a recent Business Times article which said that investors are not getting assurances in black and white on issues like land zoning, mortgage loan quantums and Bumiputra employment quotas, among others.

Foreigners investing in Iskandar might do better if they can understand that most policies in Malaysia are instituted by politicians of the day. When the politician leaves, a new policy replacing the old one is to be expected. When doing business in Johor, one has to factor in such risks.

Remember that Putrajaya, the state administrative capital of Malaysia, is still struggling after more than 20 years in the making. When Iskandar was mooted in 2006, authorities were confident about getting funds from Middle Eastern investors. Obviously, that plan didn’t work out and the focus is now back to Singaporean investors.

http://www.tremeritus.com/2013/04/01/perils-of-investing-in-iskandar-malaysia/

Thailand is the “Detroit of the East”. And it is Japanese carmakers in particular that use the country as a manufacturing hub. In 2012 production reached 2.45m vehicles of which 1m were exported. This made Thailand the 7th largest car exporter globally.

http://www.economist.com/blogs/schumpeter/2013/04/thailands-booming-car-industry

Eat yr hear out Dr M. Remember, he started Project Proton because he wanted to kick-start M’sia into becoming a leading vehicle manufacturer.

Pinoys ahoy: Over 10m Filipinos, equivalent to about a quarter of the country’s labour force, live or work abroad, permanently or temporarily, legally or illegally, in over 200 countries. Their remittances are equivalent to 8.5% of GDP, helping the country to plug its trade deficit and amass over $80 billion of currency reserves. As a result, the Philippines has become a net creditor to the rest of the world … , not just a net supplier of labour.

These impregnable external finances are one reason why Fitch, a ratings agency, awarded the Philippines its first ever investment-grade credit rating on March 28th.

http://www.economist.com/news/finance-and-economics/21575812-archipelago-has-never-been-more-creditworthy-ratings-heaven

Asean round-up

In Airlines, Casinos, Indonesia on 23/03/2013 at 6:33 am

Airbus has won a record order for 234 A320 planes worth 18.4bn euros (US$24bn) from Indonesia’s Lion Air.The order trumps last year’s record order for 230 Boeing planes – also from Lion Air.

Last Saturday, Bloomberry Resorts Corp’s was opened by Philippine President Benigno Aquino.

Big casino operators will be scrutinising the Philippines’ debut as Asia’s newest top-end gambling destination this weekend to see if Manila can deliver on promises of better profit margins and lower costs than global betting capital Macau, says Reuters.

They also want to know whether Bloomberry Resorts Corp , whose shares have climbed 40% in the last six months on hopes of quick returns, can overcome national security concerns and flawed infrastructure to bring in VIPs from China to place bets at its US$1.2 billion Solaire casino resort.

Its rivals are Melco Crown Entertainment Ltd and Genting Hong Kong Ltd, with their respective local partners Belle Corp and Alliance Global Group Inc.

“There are high rollers coming in to play … I am expecting at least 1-1.5 billion pesos (US$25 million to US$37 million) to be wagered tomorrow night,” Cristino Naguiat, head of local regulator the Philippine Gaming Corp (Pagcor) told reporters.

The advantage that the Philippines has is that junket operators are welcomed, unlike in S’pore. Junket operators have a reputation for laundering money, and ties with organised crime.

Bangkok skytrain operator BTS Group Holdings Pcl has received commitments worth $850 million from 20 cornerstone investors for Thailand’s biggest initial public offering, a source with direct knowledge of the plans told Reuters on Friday.

The investors in the infrastructure fund IPO include insurer AIA Group Ltd, hedge fund Azentus Capital Management and global asset managers Fidelity and Capital Research and Management, added the source, who was not authorized to speak publicly on the matter.

BTS on Friday week filed a prospectus for the up to $2.1 billion IPO, but the document did not include the names of the cornerstones.

The fund will likely yield between 6-6.2%, Reuters reported.

PT Matahari Department Store (LPPF)’s owners raised 12.7 trillion rupiah (US$1.3 billion) selling stock in the Indonesian retailer, Bloomberg reported.

CVC and Lippo Group sold 1.167 billion shares at 10,850 rupiah. The shares were initially offered at 10,000 rupiah to 11,250 rupiiah

The sellers, seeking to capitalize on investor optimism about consumer spending in Indonesia, asked for as much as double the median valuation among department stores in emerging Asia, price-to-earnings data compiled by Bloomberg show T(he shares were offered for as much as 28 times Matahari’s forecast 2013 earnings). Jakarta’s stock benchmark is up 11.3 percent this year and hit a record high earlier this month.

Temasek GIC is a cornerstone investor despite selling some shares too.GIC also committed to buy a 1.8% stake in the share sale as a cornerstone investor at the same time as its private equity arm was one of the main selling shareholders. Temasek too was a cornerstone investor. There were 15 cornerstone investors each with less than 5%.

(Update: Last para amended and expanded on 24 March 2013.

Asean round-up

In Casinos, Corporate governance, Indonesia on 23/02/2013 at 6:49 am

The Philippine unit of Macau casino company Melco Crown Entertainment Ltd  said on Tuesday it plans to sell up to 1 billion shares as it prepares to develop a $1 billion casino-resort project with local partner Belle Corp.

Melco, run by Australian billionaire James Packer and the son of Macau gambling tycoon Stanley Ho, bought a 93% in Manchester, a formerly illiquid stock with investments in pharmaceutical and real estate businesses. Melco paid Manchester shareholders 1.3 billion pesos for the backdoor listing.

Melco and Belle, controlled by the Philippines’ richest man, Henry Sy, formalized their partnership in October.

Belle plans to build an integrated entertainment resort complex called Belle Grande Manila Bay, which features a 30,000-square-metre casino in a sprawling gaming complex being developed near Manila Bay. Melco will operate the casino.

There are three other groups with casino licences in the Philippines.

Financier Nathaniel Rothschild has lost his bid to oust the current board of coal mining giant Bumi, the company he helped to found.

Chairman Samin Tan survived a vote to remove him but informed the board he was stepping down.

Mr Rothschild had wanted to rejoin the company and expel 12 of the 14 board members, including the chief executive and chairman.Allegations of financial irregularities at Bumi’s key Indonesian operating subsidiary, PT Bumi Resources – in which it owns 29% alongside the Bakrie family – first emerged in September 2012 , after Mr Rothschild received information from a whistleblower.

Thailand’s economic growth exceeded expectations in the last three months of 2012 as it continued to recover from the previous year’s devastating floods.

Gross domestic product surged 18.9% in the October-December period, from a year earlier. Most analysts had forecast a figure close to 15%.

Compared with the previous quarter, the economy grew by 3.6%. But inflation is a concern.

Asean-round up

In Malaysia on 16/02/2013 at 7:11 am

In Thailand – up 7.5% since the New Year – the market has been helped by a raft of initial public offerings and a boom in cross-border takeovers by Thai companies.

But the Stock Exchange of Thailand is also becoming a hub, connecting its securities trading with that of Malaysia and Singapore, and helping Laos develop its fledgling equity and bond market.

It has also signed a memorandum of understanding to help Burma do the same. FYI, the Laos market, tiny and illiquid, is up 17% in the last five weeks.

The Philippines has for decades resolutely defied the expectations that have been heaped upon it since the end of the Marcos era, and underperformed with monotonous regularity.

However, the fundamentals do look convincing now: low inflation of about 3-3.5%, growth estimated at above 6% through to 2016, strong consumption, election spending and rising foreign investor interest.

The economist Nouriel Roubini, who predicted the 2008 financial crisis (and got the recovery dead wrong by continuing to maintain a determinedly gloomy attitude to the world economy ever since), had surprising comments for the Philippines earlier this month, predicting 7% growth and praising its economic success based on fiscal and governance reforms.

He even predicted the rating agencies would grant it an investment grade rating – a stamp of approval for foreign investors. At present, the country’s rating is a notch below investment grade.

By contrast the economy in Vietnam is now in the doldrums and experts pointing to decades of economic mismanagement as the cause. Many Vietnamese are now saying their trust in the government has gone. Sounds familiar?

Another exciting year is in store for initial public offerings (IPOs) in Malaysia. A recent report by HwangDBS Vickers Research identified close to 30 companies that may be floated on the Malaysian bourse this year.

Among the biggest IPOs set for this year are Malakoff Corp Bhd, Iskandar Waterfront Holdings Sdn Bhd, the power assets of 1Malaysia Development Bhd (1MDB), AirAsia X and possibly Westports Malaysia.

Corporate bonds issuance hit nearly RM124 billion (S$49.7 billion). A record amount of nearly RM146 billion was raised through corporate bonds and IPOs, an 89% jump over the RM77.2 billion raised in 2011, going by capital market statistics released by the Securities Commission.

The corporate bond market raised 73% more than the RM71.2 billion raised in 2011; it was the highest amount raised to date, with sukuk issuances amounting to RM97.5 billion or 79% of total bond issuances.

The increase in government-guaranteed assurances boosted growth in private debt securities (PDS) and 2013 issuances are expected to be even higher.

Asean round-up

In Banks, Telecoms, Temasek, Vietnam on 02/02/2013 at 7:08 am

In Vietnam, the government’s planned sale of a 20% in Sabeco, a brewery,  is expected this year, according to bankers.

Wilmar, one of Asia’s largest agribusinesses, and Cargill, the commodities’ trader are setting up in Burma.

18 companies, including Malaysia’s Axiata, Norway’s Telenor Group, parent of the Thai mobile operator DTAC, Digicel, the Caribbean based operator, and two Singaporean companies, Singapore Telecommunications, one of southeast Asia’s biggest telephone companies, and ST Telemedia, a unit of Temasek Holdings, have submitted proposals for the two telecoms licences

The Burma has abolished a 25-year-old ban on public gatherings of more than five people: more liberal than S’pore.

Malayan Banking Bhd (Maybank) has made a US$100 million capital injection into its Philippines operations.The banking group, the fourth largest in the region, on the previous Friday launched a new corporate head office in Manila and announced plans to double its number of branches in that country to 100 by 2014, and thereafter to 200 by 2018, Malaysia’s Business Times said.

It currently has 54 branches there, with another expected to open in the city of Davao by the end of this month.

Maybank Philippines Inc (MPI), which has been operating since 1997 and is now the 24th largest bank by assets, may eventually go for a listing there. The Philippine central bank had last year issued a directive, requiring banks controlled by their foreign counterparts to go for a listing on the Philippine Stock Exchange.

Asean round-up

In China, Indonesia, Vietnam on 12/01/2013 at 5:08 pm

Gd news for SE Asia. China has reported better-than-expected trade data, adding to optimism that growth in the world’s second-largest economy may be rebounding.Exports, a key driver of expansion, rose 14.1% in December from a year earlier. Most analysts had forecast a figure closer to 4%.Imports also rose, climbing 6% and indicating stronger domestic demand.

The US has filed a complaint with the World Trade Organization (WTO) against Indonesia’s restrictions on imports of horticultural and animal products. BBC report. Other agricultural exporters like Australia and Thailand have been unhappy about Indonesia’s restrictions too.

Thailand is considering measures to help companies cope with the country’s rise in the minimum wage (35% up from level of last year), but has rejected business warnings of job losses, factory closures and a shift by some manufacturers to neighbouring countries

Thailand’s central bank left its benchmark interest rate unchanged at 2.75% on Wednesday, as expected, saying the global economy continued to recover while growth this year could be higher than thought and inflation was stable.

The International Monetary Fund has warned that a credit boom in Cambodia poses a threat to economic growth. Banks have been cutting interest rates to win customers and private sector credit has increased by almost a third in the past 12 months, the fund said.

A $US200m deal with Masan Group by KKR is the largest by a private equity firm so far in Vietnam. It comes in addition to an earlier $159 million investment by KKR. Masan is Vietnam’s leading fish, soya and chilli sauce producer. As well as sauces Masan makes instant foods such as noodles, cereals and coffees. The firm estimates that 90% of local households use its products.http://www.bbc.co.uk/news/business-20954875

Japan was in talks with the Philippines on Thursday to enhance maritime co-operation amid their separate territorial rows with China.

“We talked about the challenges that we appear to be facing in view of the assertions being made by China,” Philippine Foreign Secretary Albert del Rosario told reporters after meeting with his Japanese counterpart, Fumio Kishida, in Manila.

Part of the co-operation may include 10 new patrol vessels from Japan to boost the Philippine coast guard, as well as communication equipment, Mr Del Rosario said.

Asean round-up

In Malaysia on 01/12/2012 at 5:33 am

The Philippines economy grew 31.5% more than forecast in the third quarter, boosted by increased consumer and government spending and a recovery in exports.

Following violent anti-govt protests at the weekend, Thai Prime Minister Yingluck Shinawatra, on Wednesday, easily survived a no-confidence vote. She was accused her of failing to crack down on corruption.

The actions against this protest shows that the changes in Burma are still a work-in-progress. The protest also highlights China’s growing image problems amid intensifying local opposition to its extensive natural resources and infrastructure projects. In fact, one of the reasons why the generals opened up was their fear of Chinese domination.

“Najib said the 13th general election would be the decisive point for the future of the country and the people should be able to judge for themselves the advantage of choosing BN over the opposition.” (CNA). Actually what he means is that it determines his wife’s position as FLOM: First Lady of M’sia. LOL. She gets heself called FLOM, even though she is not the queen. Non-parisan analysts don’t expect Bn to lose power, but neither do they expect BN to regain its two-thirds majority in parliament, UMNO’s holy grail. If Najib can’t deliver this, there will be a new PM.

Asean round-up

In Malaysia on 24/11/2012 at 7:45 am

This week, shares in Universal Entertainment, a Jap co fell on reports that one of its affiliates made illegal payments to an associate of the former head of the Philippine gaming regulator.

Last Tuesday, it was reported that Thailand’s economy has slowed in the third quarter after weak global demand dented exports to the US and Europe.Gross domestic product increased by 3% in the three months to the end of September from a year earlier. That is down from 4.4% in the second quarter. Analysts expect growth to pick up in the coming months as domestic demand offsets weaker foreign sales. Thailand’s GDP increased by 1.2% when calculated on a quarter-on-quarter basis, slightly more than many analysts had forecasted.

Carrefour sell Indonesian Operations for US$672.7m. Another French biz bites the dust in region. French car makers rarely sell cars in the region, and major French banks have ceased providing US$ trade financing.

And fly AirAsia at yr own risk? The M’sian authorities have renewed its safety licence for only six months, instead of the usual one year. More probably, shaking mgt for money? Elections are coming.

And talking of elections, Indian and Chinese voters will be most “daft” to vote for PK. While Anwar’s gang and DAP are secular parties, PAS is a branch of the Muslim Brudderhood. Not only do the Brudderhood want to cut-off limbs and ban partying, but in Egypt it has just reinstated a regime based on a presidency that  has the powers of a pharaoh: something that secular Egyptians died to overthrow just over a year ago.

Private equity increases focus on SE Asia

In Indonesia, Malaysia, Private Equity, Vietnam on 30/10/2012 at 5:58 am

Buyout Firms Increase Focus on Southeast Asia Moves by the Carlyle Group and K.K.R. show their “increasing interest in one of the world’s most promising, but complicated, emerging markets: Indonesia.”

Indonesia attracted a record US$5.9 bn in foreign direct investment in the third quarter. It is a hot despite a bleak global outlook and worries about corruption and corporate governance http://www.reuters.com/article/2012/10/22/us-indonesia-economy-fdi-idUSBRE89L04220121022.

Note KKR has juz opened an office in S’pore.

FT says the economies of Indonesia, Malaysia and the Philippines are being driven by relatively strong corporate balance sheets, commodity exports and robust consumption amid the emergence of a rapidly urbanising middle class with purchasing power, hence the PE interest.

If Vietnam gets its act together, it could join these countries. Thailand has the corporates and the middle class but not commodities. It manufactures. So it too will be on PE radar.

And taz why the PEs have set up shop here. Convenient hub.

Around Asean: recent financial news

In Indonesia, Malaysia on 14/10/2012 at 6:51 am

Shares in the London-listed Indonesian coal miner Bumi rise sharply for a second day after a proposal from Indonesia’s powerful Bakrie family to split from the firm. The dynastic Indonesian Bakrie family has proposed a split from Bumi that they helped to create with the British financier Nathaniel Rothschild. Wonder what the guy who bot at 11 thinks?

A.I.A. to pay US$1.7bn for ING’s Malaysia business. A.I.A. said the acquisition will catapult it to the No. 1 position in Malaysia’s lucrative life insurance market. For the Dutch insurer ING, it is the first major deal in its plan to divest its Asian assets.

The founders of Malaysia’s AirAsia, Tony Fernandes and Kamarudin Meranun, are set to launch three IPOs in 2013 worth more than US$500 million (S$614 million).

Tune Group, a financial services-to-discount hotel conglomerate owned by Fernandes and Kamarudin, is expected to launch US$65 million IPO of its insurance arm, Tune Insurance, not later than the first quarter of 2013, according to two sources with direct knowledge of the deal.

Meanwhile, AirAsia’s long-haul arm, AirAsia X, recently hired CIMB, Malayan Banking Bhd and Credit Suisse Group for a US$250 million IPO expected early next year.

The group is looking to list its Indonesia operations, Indonesia AirAsia, by the first quarter of next year in a deal that could raise up to US$200 million.

The listing plans also come at a time when Fernandes is stepping down as the chief executive officer of the Malaysian-listed airline to focus on regional growth through Indonesia. The group’s plan to buy up to 100 Airbus jets, potentially worth about US$9 billion, is designed to fuel the growth of what is becoming a cluster of related airlines under Fernandes, who placed a record order for Airbus jets last year.

With an operating fleet of more than 116 aircraft, AirAsia has ordered a total of 375 Airbus jets as part of dramatic expansion plans that include the acquisition of Indonesia’s Batavia Air.

DBS Group, South-east Asia’s largest lender, is selling more than half of its 20.3% stake in The Bank of Philippine Islands (BPI) to conglomerate Ayala Corp for 25.6 billion pesos (S$757.3 million). “With the divestment of a 10.4 per cent interest in BPI, DBS will hold an aggregate 9.9 per cent investment in the bank. DBS will continue to have representation on the BPI board.”.

DBS, which has been a strategic investor in BPI since 1999, would realise a gain of about S$450m against the carrying value of the investment.

Ayala is the biggest shareholder in BPI, the Philippines’ largest bank by market capitalisation.

DBS is selling the stake at a time when the Philippines stock market is among the best performing markets in South-east Asia. The Philippines main index has gained some 23% this year, with BPI 42%.

Nice little profit in a rising market. Can’t blame DBS for not trusting the bullishness that the Philippines has got its act together finally.  It’s cyclical, juz like another peace treaty signed with Muslim rebels in the South.

Japan intends to start lending Burma money aiming to help transform Burma into a production and investment hub to rival Vietnam.  “Japan’s big trading companies are at the forefront of the investment effort. Mitsubishi, Marubeni and Sumitomo have signed an agreement with the Myanmar government to develop the initial phase of Thilawa, a 2,400-hectare site close to the southern port of Yangon, which will feature housing, commercial space and an industrial park,” reports FT

Education: England learning from S’pore

In Political governance on 26/09/2012 at 1:15 pm

Aimdst all the angst (a foreign publication’s take) about our educational system (tuition, PSLE exams etc), pause and reflect please especially netizens.

In England, reforms are underway so that

– Slower learners will try to pass the new exam a year or two later than their peers (like our 5 yr  O levels and 3 yr A levels, while

– “using the best performers in international tables as a guide (expect things to look a lot more Singaporean in the next few years)”. http://www.economist.com/node/21563330

And the Philippines is looking to S’pore for inspiration http://blogs.wsj.com/searealtime/2012/09/14/philippines-draws-inspiration-from-singapore/ utm_medium=twitter&utm_source=twitterfeed&WSJASIA_article_outbrain=&obref=obinsite

What say you haters of all things PAP: KennethJ, GMS, Dr Chee and groupies, TOC*, xmen and various bloggers? Bang yr balls in frustration. Stop living in an echo-chamber.

The policies of the governing PAP are not all bad. And S’poreans know this.

*I exclude TRE because it is very clear that its mission is to counterbalance the constructive, nation-building local media. Juz like them, it makes no pretensions of being objective.

Thailand & Philippines hip: Indonesia is history

In Indonesia, Malaysia, Vietnam on 02/08/2012 at 5:53 am

http://blogs.wsj.com/searealtime/2012/07/19/investors-look-to-thailand-philippines-as-indonesia-love-affair-fades/

http://blogs.wsj.com/searealtime/2012/07/11/indonesian-rules-dousing-u-s-investor-enthusiasm/

But Indonesia has a few things going for it:

– two major exports are recession-proof

    — lower cost producer of thermal coal and closer to China (tpt costs lower) than Oz means there will still be demand for its coal; and

    — palm oil cooking oil is the cheapest cooking oil;

– cheap labour attracting the likes of Foxcomm;

– last yr’s floods in Thailand are prompting MNC manufacturers to a “Thailand + one” strategy; and

– consumption now accounts for two-thirds of gross domestic product in Indonesia.

Malaysia is one of the most vulnerable Asian economies should a “perfect storm” of a disorderly debt default in Europe, a slowdown in China and the United States and rising tensions in the Middle East materialise, Roubini Global Economics said in a recent report.

The research firm, which predicted the 2008 global financial crisis, said Malaysia had the highest exposure to a pullout of capital as its euro zone and US bank claims amount to more than 25% of GDP.

The report said Malaysia was among the lowest ranked in terms of monetary and fiscal capacity to respond to a crisis, coming in ahead of only Thailand, Japan and Indonesia.

“Malaysia, Taiwan, South Korea and Vietnam appear to be the most exposed to a perfect storm through their trade and financial linkages, while South Korea, Australia, Vietnam and the Philippines … have the most policy space to offset such an external shock.”

Filipino super bull

In Banks on 09/06/2012 at 6:01 am

BDO Unibank Inc., the Philippines largest lender on Tuesday priced the country’s largest share sale (US$1bn 1-for-3 rights offering at a 24.9% discount to its 15-day VWAP to give a total deal size of Ps43.5bn,US$1bn),  to give the bank funds to compete for infrastructure lending. Details.

Teresita Sy-Coson, vice chairwoman of SM Investments Corp., said “Infrastructure is not our area of expertise, but we intend to join the government’s initiatives by providing funding for those who will take up those projects.” She is the daughteer of the controlling shareholder.

.The bank aims to reduce its dependence on consumer loans by tapping credit demand from the nation’s biggest companies, including Ayala Corp. (AC) and San Miguel Corp. (SMC), as they bid for $16 billion in infrastructure projects unveiled in 2010 by President Benigno Aquino. The fund infusion will also bolster Manila-based BDO’s risk buffers and spur overseas expansion, Sy-Coson said.

http://www.bloomberg.com/news/2012-06-03/billionaire-sy-plans-record-share-sale-for-bank-southeast-asia.html

The Philippines’ PSE Composite Index is up 15% since the start of the year.

BDO Unibank is not the only bank bullish on the Philippines. In early May, CIMB  agreed to buy just under 6o% of the Philippines’ Bank of Commerce (BOC) for 12.2 billion pesos (M$881 million) in cash, a move analysts said gives it early mover advantage in a market with high-growth banking potential.

Maybe if DBS can’t get its deal on Bank Danamon through or on acceptable terms, it should look North.

DBS has a 21.4% stake in BPI via its 40% stake in Ayala DBS where Ayala has the majority 60% stake. UOB seems to have a 2% stake in BDO Unibank. OCBC doesn’t seem to have a presence in the Philippines. All three local banks have subsidiaries in Indonesia.

Temasek is Filipino-lite. It doesn’t own anything direct in the Philippines: no banks, no telcos.

Its largest exposure is via Singtel which has a major investments in the Philippines (via Globe 47% which it controls together with Ayala 32%. Global is the second largest telco in the Philippines.

Keppel has some exposure via a shipyard but its not big.

If Temasek wants to go big in the Philippines, then DBS could be used.

Related post: http://atans1.wordpress.com/2012/06/02/philippines-reasons-for-optimism-and-scepticism/

Philippines: Reasons for optimism and scepticism

In Emerging markets on 02/06/2012 at 10:41 am

(Or “Why CIMB is buying a bank in the Philippines”)

Brokers have upgraded their full-year economic growth forecast for the Philippines after the government announced a surprising 6.4% growth in the first quarter (better than other countries in the region)

Example– Nomura now expects the economy to expand by 5.1% this year from an earlier 4.6%.

“[First quarter] GDP soared to 6.4%… beating expectations. This was led by high public sector spending and still-robust private consumption …  We upgrade our 2012 GDP growth forecast to 5.1% from 4.6% as we believe these drivers will not only persist, but will also be augmented by faster increases in private investment owing to on-going reforms.”

Nomura noted that the country is also expected to improve its position in an annual competitiveness ranking, “The Philippines has fallen two spots to 43rd due to a weak ranking in the economic performance criterion, which we think is related to last year’s under spending by the government.”

As the Economist wrote a few weeks ago: Future prospects are indeed enticing: besides the unexploited mineral resources, business-process outsourcing is booming, already employing some 600,000 people. Remittances from all those Filipinos overseas have remained strong through economic crises. As costs rise in China, the Philippines is among places manufacturers eye as an alternative. Tourism has huge potential, recognised by the government’s nicely pitched campaign: “It’s more fun in the Philippines.”

The government has also started making some important reforms. In an effort to raise its revenues—at present a paltry 12% of GDP—it wants to jack up “sin” taxes on alcohol and tobacco. The bill enacting this made important progress in May when it passed a House of Representatives committee—a triumph over powerful tobacco and alcohol lobbies. It still has to pass the full House and the Senate, however.

But it remains sceptical: In fact, the Aquino administration has little concrete to show for its two years in power. The centrepiece of its programme, public-private partnerships to tackle the inadequate infrastructure which is such a hindrance to all the nation’s economic hopes, is only now stuttering to life after just one of the ten projects scheduled for approval last year saw contracts awarded. The pursuit of Mrs Arroyo and the chief justice is a distraction as well as a mission. Securing Mr Corona’s conviction might entail so many promises to senators that the point of the exercise—enhancing the government’s clean image—is lost.

http://www.economist.com/node/21555906

Well CIMB for one is bullish. In early May, CIMB  agreed to buy just under 6o% of the Philippines’ Bank of Commerce (BOC) for 12.2 billion pesos (M$881 million) in cash, a move analysts said gives it early mover advantage in a market with high-growth banking potential.

It got in into Indonesia on the cheap in 2002 before the ang mohs rediscovered Indonesia yet again. It bot into the government’s recapitalisation of a major local bank (Bank Niaga)  that was nationalised after the 1997/1998 financial crisis. 

The PBOC could be an encore.

Call me: Software powers a Philippines success

In Emerging markets on 19/05/2012 at 6:22 am

(Or “Why the Philippines is the country to watch”)

Last year, with more than 600,000 call centre workers, the Philippines officially overtook India as the world’s call centre capital.

If you phone up to book a flight, buy a theatre ticket or complain that water is cascading out of your washing machine, you’re now more likely to speak to a Filipino than an Indian.

The Philippines has a number of obvious advantages when it comes to call centres. Wages are low and most Filipinos speak English in an accent which, given the American colonial influence here, is easy for US customers to understand.

Filipinos also pride themselves on being approachable and friendly – a trait which is essential for speaking to strangers on the phone every day.

But its also high tech software that plays a big part.

http://www.bbc.co.uk/news/business-18061909

But the Filipinos are ambitious. Going for Business Process Outsourcing

The Philippines may have more call centre agents, but India still has more BPO employees – and every year a great proportion of them work in the more lucrative and more skilled non-voice-based services.

Looking at the returns, it’s easy to see why the Philippines wants to follow India down this route. In 2010, India’s overall BPO revenue was $70bn, compared to just $9bn in the Philippines.

A move away from voice-based services will need more staff, more training and more hardware.

But Jojo Uligan, head of the Contact Center Association of the Philippines, is bullish about the future.

His projections show the Philippines more than doubling its BPO employees by 2016 – from about 600,000 to 1.3 million people. Take this projection with a latge pinch of salt, Filipinos love to talk big. But the trend is right.

Philippines not safe for PRC nationals warns China

In Casinos, China on 12/05/2012 at 6:26 am

China told its citizens on Thurday  they were not safe in the Philippines and its state media warned of war, as a month-long row over rival claims in the South China Sea continued.

Chinese travel agencies announced they had suspended tours to the Philippines, under government orders, and the embassy in Manila advised its nationals already in the country to stay indoors ahead of protests on Friday. Five hundred protested outside the Chinese embassy, in the event.

And the Philippines wants Chinese gamblers to visit Manila, and the Chinese to invest in the country. What a joke!  Want Chinese money but intent on upsetting China. Filipinos are not realists.

The Philippines: Other side

In Emerging markets on 04/05/2012 at 6:17 pm

Last Saturday, I blogged that it’s day in the sun may finally be coming.

Hopefully, for the poor, that day will become soon. These pixs brought back memories (I was a stockbroker in Manila in1996-1997, living off the fat of the land) of how poor the poor are in the Philippines, and how the rich and poor live literally beside one another.

If the government wants to make sure of the PAP retaining power, one gd way would be to organise school trips to the slums of Manila, and then lecture the impressionable minds abt the perils of too much democracy. Yes, of course taz a dumb way of summarising the reasons for the poverty there, but the young wouldn’t know.

The Philippines: Its time has come finally?

In Emerging markets, Temasek on 28/04/2012 at 10:25 am

With even my dogs knowing abt the Indonesian story, while investors are getting excited about Cambodia and Burma, rightly, and rediscovering Vietnam (later abt it in the week), the Philippines has been quietly (a surprise as Filipinos tend to be excitable, boastful and noisy) getting things right.  

But some investors are aware and reaping the benefits. Last yr, the Philippines stk market was the 7th best performer (and I think tops, 2.% rise, in Asia: yup was a bad yr overall for Asian and global mkts), and so far this yr it is among the top 10 globally, up more than 20%.

The Philippines, after years of indebtedness, is a net creditor.
the country is getting its fiscal house in order. … The deficit has narrowed from a worrying 5-6 per cent a decade ago to a manageable 2 per cent …
the political situation is vastly improved. (The FT (recently) via Today.

Remember that Brazil is finally becoming the powerhouse it always had the potential to be after almost 100 yrs of disappointing investors regularly. But then Argentina has gone the other way. Bulls can only hope that Filipinos are more like Brazilians, even though they like the Argies have Spanish blood, rather than Portugese blood)

BTW, Temasek is Filipino-lite. When it was unfashionable to own shares in the Indonesia, it had major stakes in Danamon (now being sold to DBS) and BII (sold at very high valuation to sucker MayBank) and in Indosat (sold at nice profit). It doesn’t own anything direct in the Philippines: no banks, no telcos.

Local banks presence is pretty light in the Philippines when compared to Indonesia. DBS has a 21.4% stake in BPI via its 40% stake in Ayala DBS where Ayala has the majority 60% stake. UOB seems to have a 2% stake in BDO Unibank which has juz called a massive US$1bn rights issue. OCBC doesn’t seem to have a presence in the Philippines. All three local banks have subsidiaries in Indonesia.

Singtel has major investments in the Philippines (via Globe 47% which it controls together with Ayala 32%) and in Indonesia. Global is the second largest telco in the Philippines.

A Gamble Too Far? Pinoys gamble on China

In Casinos, China on 15/03/2012 at 9:45 am

The Philippines is not just ahead of other new casino markets [like South Korea, Japan and Taiwan]; it also has several key benefits over the more established ones, according to Gustino De Marco, vice-president at the Hong Kong-based brokerage BTIG and a specialist in this area.

Firstly, it has a strong domestic demand and the type of games Filipinos like to play are the high risk-high reward games such as slot machines, which give better returns to the casino operator than card tables.

Another attraction is geography, with the Philippines only a few hours flight from China, Japan and South Korea, where most high-rolling Asian gamers come from.

And while it is near China, it is not under any kind of Chinese jurisdiction. So, unlike Macau, which in recent years has had to ramp up its gambling tax and impose certain visa restrictions on Chinese gamers, the Philippines is free to offer all the incentives it can.http://www.bbc.co.uk/news/business-16753960

But is it realistic for the Filipinos to expect the Chinese authorities* and patriotic Chinese to co-operate when the Filipino government is the most hawkish of all the ASEAN nations when it comes to territotial disputes with China? The Institute of Southeast Asian Studies (a S’pore government statutory board thhin-tank) says in its inaugral ASEAN Monitor dated February 2012: Despite the weakness of its armed forces, the Philippines has assumed the role as the most outspoken of four Southeast Asian claimants against China’s assertiveness in the South China Sea. President Benigno Aquino has taken the lead in trying to rally ASEAN behind a common policy on the South China Sea, mainly to present a united front in negotiations with Beijing over acode of conduct. Defying threats from official Chinese media, Manila has encouraged the US to increase its military presence in the Philippines and supply the country with additional resources to patrol its waters … Will the Philippinegovernment maintain its hard line over the South China Sea, or prove as susceptible to China’s entreaties as some of its predecessors?

—–

*They could make travelling to the Philippines inconvenient.

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