Our economy in absolute terms is bigger than PeenoyLand. And we only slighly smaller than M’sia. Only Thailand and Indonland bigger than us in absolute terms.
Our economy in absolute terms is bigger than PeenoyLand. And we only slighly smaller than M’sia. Only Thailand and Indonland bigger than us in absolute terms.
Maybe the PAP should add these to its list of institutions to make sure voters make the right choices and if they don’t (think Aljunied) to protect them from the consequences of their actions, whether they reprent or not voting in the oppo (think Aljunied again). Obviously the PA system is not working in Aljunied: otherwise no need to take WP TC to court.
Ten or so other institutions will help to baby-sit the politicians, including a “National Moral Assembly” which will punish those who act unethically, a catch-all term that could be used against government critics. Three-quarters of the 120 seats in a new “National Reform Assembly” will be reserved for toadies now serving in one of the junta’s various conclaves. Their job will be to prevent any future government deviating from a legislative programme that the generals are now laying down.
Singapore – where the ratio of household debt is 75% About 75% of this household debts are mortgage loans – See more at: http://www.straitstimes.com/news/opinion/eye-the-economy/story/spore-not-headed-debt-disaster-20141125#sthash.oh3vAXO3.dpuf
The “affordable” 25 year HDB loan is responsible for S’pore’s high household debt. And remember it’s not freehold not a 99-yr lease from the govt.
S’poreans like Brits are stupid? [T]he economists calculate that homeowners discount future benefits over the very long run at a rate of 2.6% per year. This is lower than the rates used by governments to assess infrastructure projects or by pension funds to evaluate their liabilities, and suggests that the general public is more patient than the authorities give it credit for.
Switzerland has been ranked the happiest country in world.
Singapore is ranked 24th But is tops in Asean and region. Thailand is placed at 34, Taiwan (38), Japan (46), South Korea (47), Malaysia (61), Hong Kong (72), Indonesia (74) and PinoyLand (90). China and India are found lower down the scale at 84 and 117 respectively
Manila’s PSE was the top performer – with a gain of 9.8% in Q1. Thailand wa the worst, the SET pulling ahead by 0.55%. STI managed 2.4% year-to-date.
The Phi;ippines grew at an annualised pace of 6.9 per cent in the final three months of the year, far ahead of the 6 per cent expected by most analysts. The quarter-on-quarter figure of 2.5 per cent was the highest in almost two decades, according to calculations from analysts at Barclays.
TRE reader’s take on PinoyLand and Pinoys could explain why they still not going home, but prefer to stay here or come here
Peenoys overestimate themselves just because the Spore Govt gave them jobs but are in fact is using them as cheap labor. They fail to see that they are being undercut. They get cocky and boastful and are a complete discredit to themselves and their country. And they are just talk and no substance.
Why come to Spore? Because Pinoylands is built on quicksand. If your are worth your salt then go back and contribute to building your slums into a decent habitat.
After all they can discriminate against S’poreans in S’pore
Alleged discrimination based on nationality continued to top the list of complaints received last year by the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP), with the banking and information technology sectors still the most problematic.
These cases made up half of about 300 complaints in total. However, TAFEP general manager Roslyn Ten said many stem from misunderstanding and not from genuine bias, and urged companies to improve communication with job seekers or existing employees by explaining why, for example, foreigners instead of Singaporeans were hired or promoted. (CNA)
Juz wondering if getting paid less than S’porean is a legit reason for discrimination? Juz asking.
Thailand’s aviation sector is under scrutiny after an international safety audit led to a ban on new flights to China, Japan and South Korea.
Last week the International Civil Aviation Organization (ICAO) issued an alert flagging “concerns relating to air operator certification procedures”.
Last week the ICAO issued an alert which triggered increased physical inspections of aircraft operated by Thai airlines serving existing routes to countries such as Australia and Singapore, a regional air hub, as well as a ban on airlines expanding their services.
Fly SIA and associates. Don’t be cheap skate! Can die die if fly Thai. ))))
Update at 5.30am
From CNA on Thurday
The surveillance and ramp inspections of Thai carriers’ aircraft operations in the Republic have been stepped up, said the Civil Aviation Authority of Singapore (CAAS) in a news release on Thursday (Apr 2).
Its statement came after the International Civil Aviation Organisation(ICAO) reported “significant safety concerns” in Thai carriers earlier in the year. The Thai government has since said it would urgently improve airline safety in the country.
CAAS added it has not imposed any restrictions on Thai airlines. This is unlike other countries like Japan, who blocked new flights from Thailand last week – a move which affected charter services by budget carriers such as Thai AirAsia X and NokScoot.
In the release, CAAS said it has in place a Foreign Operators Surveillance Programme (FOSP), under which foreign carriers are required to have an Operations Permit from CAAS to operate in Singapore.
The release said that CAAS evaluates an application for an Operations Permit “using a risk-based methodology”, which takes into consideration factors such as the safety oversight capability of the State of Operator, the operational capability of the carrier and the safety records of the aircraft.
“In assessing a foreign carrier’s operations, CAAS takes into consideration safety information from other aviation authorities including the outcomes of the inspections or audits they conduct,” it added.
“CAAS also conducts periodic ramp inspections on the foreign carrier’s aircraft when they are in Singapore; the frequency of which is dependent on CAAS’ assessment of the carrier.”
The regulator assured that any major deficiencies found in the ramp inspections have to be addressed by the carrier for it to continue operations in Singapore.
Around the time of the Spring Festival celebrations began, the Foreign Trashes managing SGX (president and head rechie are FTs, CEO is leaving) boasted that SGX was planning to attract Chinese cos here. Remember that in Asean, the Thai exchange raises more money than this global financial centre.
Well looks like the FTs still running SGX are hoping that S ‘poreans have forgotten that they lost money in S-chips.
Here’s a reminder that the Cina have not cleaned up their act. During the Spring Feitval hols, London-based directors of Naibu Global revealed they had suspended shares in the Aim-quoted Chinese sportswear maker because executives in China had refused to update them on the co’s finances. Err maybe now that the Spring Festival is over, they’ll contact the London directors. Somehow I doubt it.
Morgan Stanley is recommending going long on the US dollar against the Singapore dollar, the Thai baht and the South Korean won and a long position in the rupee against the Singapore
Of course MS’s assumption is that US raises rates. Didn’t happen lasy yr when that was conventional wisdom.
But India looks pretty good: As Rivals Falter, India’s Economy Is Surging Ahead Long considered a laggard, India is seeing a lift in its stock market as multinational companies look to expand operations there or start new ones, The New York Times reports.
And according to Credit Suisse, India is a major bet for global EM managers these days. Funds on average hold over 15% of their portfolios in Indian companies, double the benchmark weighting. Gd for them: in USD terms, India’s up 41%
The Indian rupee, the Philippine peso, Thai baht and Taiwanese dollar have strengthened against the US dollar, making repayment of dollar debt easier in these places.
Btw, still long Ascendas India Trust.
Malaysia … have to cope with lower tax revenue from energy, minerals and other commodities. In Thailand, the central bank is hoping for a lift in public spending to revive growth; but the military-backed government is finding it hard to spend the 2015 budget.
Thailand will need monetary stimulus this year.
Relatively young countries like Indonesia, Vietnam and the Philippines drag down the average age.
[T]he private sector in Asia-Pacific now owes 1.5 times the region’s combined annual output, according to the Bank for International Settlements. As a big chunk of the borrowing is in the opaque shadow banking system, particularly in China, the debt could be even larger. Either way, servicing the loans requires incomes to increase quickly. Yet, real GDP growth is slowing almost everywhere in the region.
The threat of slowly rising consumer prices slipping into outright deflation is making things worse. Producer prices are sliding across Asia-Pacific. Falling energy costs provide a convenient excuse for margin-starved employers to skimp on pay hikes, just as they did in the late 1980s. That makes the situation harder for borrowers in Malaysia, Korea, Thailand and Singapore, all of which have high household leverage. Persistent lowflation will leave borrowers with higher debt burdens than they expected.
Demographics aren’t helping. Japan, China, South Korea, Singapore and Thailand are ageing rapidly.
(Panama sounds interesting)
And given the strong S$ and the value of property here*, we S’poreans got options to move on and yet remain nearby. Yet people like Goh Meng Seng and Andrew Loh die die want S’poreans to live and die here. They should let S’poreans decide, not insist that real s’poreans sgould stay home.
*Surely the PAP administration has shumething to do with these?
The Pinoys should go home if they really are proud of their country. Maybe coups are gd for the stock market (Egypt, Thailand)
OK it’s Thailand but given the performance of ex-genewrals like BG Yeo, NOL’s CEO and SMRT’s CEO (still can’t fix security issues, let alone get the trains to run on time), if SAF stages a coup after a freak election, we’ll be like Thailand in no time..
Six months after the military coup in Thailand
The latest GDP figures have eked out small increases, leading the government’s economic forecasting agency to predict growth of just 1% this year.
Worryingly, since the coup, tourist numbers have fallen by 20% as travel warnings issued by governments have deterred some visitors.
The Thais can blame the political problems there. Govt here blames the “deft” locals for insisting that govt cuts back on its uber liberal immigration policy? To be fair, we’ve the only developed country in Asean, so lower growth rates are par for the course. Tell that to TRE ranters and other anti-PAP paper warriors: they blame the PAP for everything that isn’t “right” here. .
In a late Sept report, FT reported that the Barings Fund mgr managing an Asean fund is cautious about topping up his exposure to Singapore and Malaysia due to fears about their economic growth prospects.
Mr Lim has large underweight positions in both countries via his $592.4m Asean Frontiers fund, which targets members of the Association of Southeast Asian Nations.
Singapore makes up almost 30 per cent of the portfolio, compared with 33.7 per cent within the benchmark MSCI South East Asia index. The manager has just over 19 per cent in Malaysia, against the index’s 26.5 per cent.
In July, data showed the Singaporean economy had contracted on a quarterly basis for the first time in two years, while Malaysia is going through a process of budget deficit reduction and may miss its 2014 target.
“Singapore and Malaysia are more developed than the rest of the Asean countries … This makes them more expensive and in the long term they don’t have as good growth potential.
“In terms of size, Malaysia is much smaller than the countries we favour, such as Indonesia, so it is less likely to expand rapidly.”
Mr Lim said he can still find selective opportunities in Malaysia, but ones which do not necessarily rely on the domestic economy. Tune Insurance, an online travel-insurance provider based in the country, is one of the latest additions to his portfolio.
“Tune allows us to access the tourism market without investing in airlines, which have to deal with a lot of regulation and are [involved] in price wars,” he said.
In general, he finds growth companies in Indonesia and the Philippines more enticing.
Baring ASEAN frontiers … holds a 3 per cent overweight position in Indonesia. He is confident 2015 will be a strong year for the country, given that the macroeconomic environment has improved.
Investors had been wary of Indonesia as they awaited the results of presidential elections in July. However, as Joko Widodo has been elected and interest rates are expected to rise next year, Mr Lim said there is now a positive outlook.
… had mixed feelings about Thailand, which makes up 15.1 per cent of his portfolio. This is in line with the benchmark.
“Thailand has a higher risk than the rest of the countries in the region, as there remains a lot of political uncertainty around the constitution,” …
In July, Thailand adopted an interim constitution ahead of the October 2015 elections. This constitution preserves the military-led government, called the National Council for Peace and Order.
When I started work in broking in the late 80s, ex-Japan, HK and S’pore were the leading stock mkts. Today, we are not even the leading exchange in SE Asia. Thailand has a bigger exchange despite its political, economic woes.
I note SGX is led by two FTs, an ang moh and and Indian Indian. any surprise if “S’poreans hate Foreign Trashes to pieces”.
Hmm maybe our anti-PAP cyber warriors should take a leaf from Thai oppo.
Thailand’s military leader and premier, Gen Prayuth Chan-ocha, has accused critics of using black magic against him, it’s reported … Prayuth addressed his critics: “If you still want to fight on and go underground, bring it on. If you resort to performing rituals, just bring it on.” … Magical symbolism has long played a role in Thai politics. During the last big wave of protests in 2010, anti-government demonstrators splattered buckets of their own blood outside the PM’s residence as priests cast a curse on the authorities. http://www.bbc.com/news/blogs-news-from-elsewhere-29075681
Maybe anti-PAP cyber-warriors need to splatter their own blood, given that their curses posted on TRE etc don’t have any effect. But then they don’t even bother to turn up at their heloos’ rallies.
Charoen’s empire (Remember he is bidding to buy OCBC group’s shares in UE).
Those who own Frasers’ reits have to take account of the increased risk profile of the reits. There is no longer cash rich, conservative F&N as the fall back, indulgent parent (it rescued FCT by injecting a valuable asset in the 2007/ 2008crisis). There is a Thai billionaire who it seems is geared to his eye-balls and more. In the 1997/ 1998 crisis, he nearly went bust.
Number of foreign visitors received in 2013
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.
Well the Thai jumta now has its very own version.
The army men in charge of the new dictatorship say their aim is to build a “Thai-style democracy”. Their intervention looks more interested in reviving a system of tutelary democracy, in which a bunch of royalist elites control the state, though the new regime denies it. Their alternative explanation, based on a notion of Thai uniqueness, seems to have been pulled out of a hat like a rabbit.
There is an obvious resemblance to the concept of “Asian values”, such as were espoused by Mahathir Mohamad, who ran Malaysia for 22 years. That idea tends to preclude robust democracy, and to justify itself on the back of economic development. It has proven useful to governments like Singapore’s and these days its champions tend to point approvingly to China.
Banyan (19th August 2014)
And of course, the govt here claims that China is juz following S’pore.
Chinese are number 1. lie to friends and family about the marvellous time they had,The survey didn’t give a reason for why the Chinese exaggerate the most about their holidays, but the status of being able to afford to go abroad, ensuring you keep one step ahead of the Wangses, may be a factor. Another explanation could be that the Chinese tourist is a relatively recent phenomenon who could learn a thing or two about complaining from travel-hardened European and American holiday-makers Economist
Both reasons are likely to apply to
the sheep Singaporeans too.
In Asean, Thais are ahead of us. Interestingly, Hongkies, who many locals think are BS artists don’t exaggerate that much. But then they have a reputation for being gd at complaining.
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.
Especially those TRE posters (loonies?) who shout that the Oppo will win the next GE*. They ever tot that if the PAP is as bad as what they claim is the case, the PAP won’t steal the election Cambodian style?
Last yr, in a closely fought election, the governing party (the PM says LKY is a hero of his) won a majority of seats in the parliament. The Oppo alleged fraud and refused to take their seats and called for fresh elections. The govt passed laws to its satisfaction in the absence of an oppo in parly.
Now a deal has been struck. The electoral commission is at the heart of the deal. The CPP-dominated National Election Committee—widely derided as a puppet of the government—is to be overhauled, which requires that the constitution be changed. The two major parties will now have four members on the committee, with a ninth independent member to be agreed on by both sides.
The timing of the deal, so near the anniversary of the contested election, might not be a coincidence. Both sides were feeling the public pressure to reach an agreement. For the opposition, the question was how long they could keep operating as a political force with only rallies and public protests to bind them together, while laws were passed without them in the assembly. The government was faced with the prospect of having to keep defending that one-party parliament to the international community.
The violence the government employed to disperse protesters drew a steady stream of criticism throughout the year. Security forces beat and arrested demonstrators, and at least seven were shot dead.
Just as S’poreans should be watching developments in Thailand,
we should follow developments in Cambodia. There are lessons to be learner especially about the importance of the election organisers (here under PMO).
Interesting the Thais have introduced a law banning gatherings of five people or more. They learnt that from us?
*None of the Oppo parties believe this is possible. Ask SDP, NSP, People in light blue, SDA, JBJ Remebrance Party, Chiams, TJS Team and Pwee Gang.
(Or “What else can the Thais teach us about military rule”)
Further to https://atans1.wordpress.com/2014/06/15/freak-election-training-manual-for-safs-paper-generals-and-us-40-sporeans-too/ based on what is happening in Thailand, when there is a freak election result (2016 as TRE posters are predicting) and the SAF’s paper generals stage a coup to
restore the PAP protect parliamentary democracy, S’poreans will be detained for reading Orwell’s Animal Farm and 1984, and handing out food packets to passer-byes.
In Thailand, a man was detained for reading Orwell’s 1984 outside a shopping mall, while others have been detained for preparing to hand out sandwiches.For some reason, giving out sandwiches is considered a protest against the coup, not other food though.
In S’pore, the public reading of Animal Farm and 1984, will be illegal as well as sharing food. I’m also sure that bloggers who refer to Animal Farm will be prosecuted, and their blogs closed down: for defaming pigs.
But looking on the bright side, the SAF generals may do what the Thai generals are doing: spend money that Thailand may not have
IT DID not take long for Thailand’s ruling junta to discover the first lesson of building popular goodwill: when in doubt, spend. The National Council for Peace and Order (NCPO), the ruling junta led by General Prayuth Chan-ocha, has occupied itself in its first month in office airing out government coffers with a high-powered leafblower. It paid nearly 92.4 billion baht ($2.8 billion) to rice farmers under a subsidy scheme implemented by the deposed government of Yingluck Shinawatra. It is pondering ambitious transport schemes estimated to cost more than $72 billion.
It has also promised to clear a $21-billion backlog of projects awaiting approval from the Board of Investment (BOI)—of which Mr Prayuth has appointed himself chair. At the BOI’s first post-coup meeting, on June 18th, it approved 18 projects worth $4 billion.
The bad news is that investors don’t like coup as the above link tells us.
So the news may be that our paper generals may juz except a freak election result: so long as they can play with their toys.
By 2050, elderly (65 and over) almost 40% of population
Next to Japan only. But no robots here, only FTs.
Japs smarter than us in avoiding the problems that FTs bring, like pushy Pinoys, wanting to change PM from Prime Minister to Pinoy Minister and SPF to S’pore Pinoy Force. But then they have friends like William wan, Kirsten Han, AWARE and Maruah. Their only public opposition is Gilbert Goh and Goh Meng Seng.
The govt should remember that when the Pinoys burnt our flag in the 1990s and it protested, the Pinoy govt gave the S’pore govt the finger, telling it nothing wrong with burning our flag.
Remember the Hard Truth that the SAF could intervene if there is a “freak” election result?
Could what is happening in Thailand tell us what will happen here when in the near future when the PAP (even with the help of its near clones, the People in Blue) is unable to command a parly majority? And the SAF intervenes?
The paper generals could do worse than to follow the Thai generals and give us, for starters, free World cup footie? http://www.bbc.com/news/world-asia-27790396 And if its not a WC yr, then free EPL*?
Thailand’s ruling junta has ordered TV regulators to ensure that football fans will not have to pay to watch any matches at the World Cup.
This will be part of what The military said it was part of its “happiness campaign”, which has seen a number of policy gimmicks, such as free haircuts and concerts. In S’pore, S’poreans would appreciate free hawker food and no PUB bills.
As the Economist reports:
One of their priorities is a push for Gross National Happiness. The day after the coup General Prayuth told diplomats that economic revival was a big priority. Returning happiness to the people is to be counted a separate issue, apparently. A week later, and state agencies have been reported to be working on a Happiness Index. The Nation, a pro-establishment newspaper that has come to read like a Thai variation on one of Vietnam’s Party-controlled papers, reported that under the generals all of the existing economic plans have been amended—in order to boost gross national happiness. Perhaps this is all an allusion to the happiness-minded people of Bhutan, also Buddhists who adore their king? Then try picturing Bhutanese marching through Bangkok in jackboots.
On June 5th the junta organised its first “Return Happiness to the Public” event. Staged at Victory Monument, which had recently been the site of small-scale protests against the coup, it featured dancers in camouflage outfits; a spicy routine by the orchestra of the Royal Thai Army; plus free food, and haircuts. A few hundred or so fans of the army showed up, and its Thai Psychological Operation team says it was pleased with the attendance.
The generals could learn about interrupting tv programmes: Since the coup on 22 May, TV programmes have frequently been interrupted by the army listing names of people they’re summoning for questioning. Though not of course footie games.
And making, All those detained … sign an agreement which states they will not criticise the military government.
And for us S’poreans who did not PAP in GE 2011, we can do what the Thais who are unhappy about are doing
— eat sandwiches (State-run newspapers have warned people against eating sandwiches, and a senior police chief said they’re keeping a close eye on the sandwich-eaters. Eating sandwiches is not illegal per se, he said, but if sandwich-eating is being used as a front – when the real intention is to criticise the coup – then that would be.);
— give the three-finger salute
On a serious note, what the Thai coup is all about: Royalists not happy at who is the heir to the thrown http://m.afr.com/p/world/thailand_secret_story_the_battle_QcvSA6u4clBHmLTFPLFQNJ
What is not reported in the story, is that Thaksin and the crown prince are buddies.
PAP PA is showing WC and EPL matches https://atans1.wordpress.com/2014/06/12/paps-new-secret-weapons/
But this TRE poster is unhappy, he can’t bring his own food and drink:
there is a rule which says:
No outside food and drinks are allowed. Tidbits and drinks (hot/cold) are sold in the football loft.
The reader said, “I am very angry at how the PA is exploiting Singaporeans, even politicizing sports and profiteering from the World Cup!”
He said that he can understand if the place is a food court or restaurant whose primary interest is to make money and it demands that no outside food and drinks are allowed. But he cannot understand why PA disallows residents to bring their own tidbits and drinks.
“I am not allowed to bring outside food and drinks but can only buy the more expensive food and drinks directly from PA???” the reader said. “Why can’t I bring my own water from home?”
“Why this kind of small money PA also wants to make? What about the millions of dollars of budget allocated to PA every year? Not enough?” the reader wondered.
The reader was also angry that priority is not given to Singaporeans to watch the free screenings.
“It does not state if priority will be given to Singaporeans. In previous PA events in which I have attended, such as the monthly walk-a-jog sessions, a certain group of nationality will jump at every chance to hog free drinking water or other goodies after the walk-jog,” he added.
The reader then took issue with the limited seating capacity as the venue could only cater to 150 viewers.
“Is this a joke? In GE 2011, there were 27,701 voters in Hong Kah North SMC and today only 150 out of 27,701 voters can watch the matches for free???” the reader asked.
“That’s not even 1% of the residents!” he exclaimed.
He remarked sarcastically, “The PA must not underestimate that only 150 out of 27,000+ voters will go to the CC – this is not a PAP GE rally!”
“Will the PA please stop treating citizens as sheep?” he asked.
The reader concluded by saying he will not bother to write to the PA, REACH or his MP, Dr Amy Khor.
“Because I am afraid Dr Amy Khor would repeat what she has already said in parliament that ‘Singaporeans first’ policy is not good for the economy!” he said.
Gosh, he think S’pore’s his grandfather’s place is it? And he xenophobe to boot?
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.
The editor and publisher of The Gloom, Boom and Doom Report said that he personally favors emerging market securities that are still “cheap” …
Marc Faber underlined his belief that emerging markets provide a more suitable option for more profitable investments. He added that he has parked cash in countries such as Vietnam, Iraq, Malaysia, Thailand, and Singapore.
“I made some investments more than a year ago in Iraq, because it’s very cheap. There’s lots of problems but the market is very very inexpensive,” he said. “Russia is dirt cheap, but I don’t think there is a hurry to buy Russian stocks.”
As usual he is a super bear over the US.
This week’s Asean’s round-up is all about Temasek or its TLCs.
Singapore state investor Temasek Holdings Pvt Ltd TEM.UL is seeking to sell its $3.1 billion stake in Thai telecom company Shin Corp INTUCH.BK, according to people familiar with the matter, and has approached its SingTel (STEL.SI) unit as a possible buyer. But the troubles in Thailand have put an end to the talks.
TRE and TOC readers will be banging their balls when they learn: The Temasek stake in Shin Corp, founded by former Thailand prime minister Thaksin Shinawatra, is worth $3.1 billion by current market value.
Shin Corp’s shares now trade more than 50 percent above the price paid in 2006 by a Temasek-led consortium, that included Chinese-Thai businessman Surin Upatkoon, when it bought 96 percent of the Thai firm for a total of $3.8 billion.
As for SingTel:
“At a fair price such a deal would make sense for SingTel,” Chris Lane, senior analyst at Sanford C. Bernstein in Hong Kong who covers Asia-Pacific telecommunications. SingTel is 52 percent-owned by Temasek.
Shin Corp owns 40.5 percent of Thailand’s biggest mobile telecoms company, Advanced Info Service Pcl ADVANC.BK. SingTel already has a 23 percent stake in AIS: Adding the Shin Corp stake would cement its position in a bigger market and offset sluggish growth in mature economies where it’s also present, like Australia.
“SingTel executives are involved in the day-to-day operations of the company AIS,” said Bernstein analyst Lane. “Buying the stake from Temasek avoids the possibility of another ‘telco’ securing a significant interest in AIS.”
FPT Corp, Vietnam’s largest publicly traded telecommunications and software company, has asked Temasek to help it identify a Singapore technology company for acquisition to boost sales overseas, the Bloomberg news agency reported.
FPT will spend as much as US$20 million (S$25 million) on a Singapore acquisition, Chief Executive Officer Bui Quang Ngoc said in an interview on Wednesday. The company, which had sales of 28.6 trillion dong (S$1.7 billion) in 2013, seeks to more than triple revenue from overseas to US$400 million by the end of 2016, co-founder Mr Ngoc, who took charge in July, said in Hanoi. “Singapore is a very attractive market,” Mr Ngoc said. “If we can be successful in Singapore, it means we have enough experience to do it in other countries.”
FPT is looking to acquire a Singapore company that specialises in software services such as inventory management, order processing and employee payroll, said Mr Duong Dung Trieu, chief executive officer of FPT Information System, a unit that contributes 25 per cent of the parent’s pretax profit.
The company plans to make the acquisition in Singapore “as soon as possible,” Mr Ngoc said. Temasek holds less than 5 per cent stake in FPT, according to the Vietnamese company.
Finally airport services and catering firm SATS (a listed TLC) agreed to buy a 41.65 per cent stake in Indonesian aviation and food service provider Cardig Aero Services for 1.1 trillion rupiah (S$118 million) to grow its business in South-east Asia’s largest economy.
Indonesia is a priority market said SATS. The country’s topography and a fast-growing economy and middle-class population will continue to drive greater demand for high-quality food and travel, it said. “CAS is an attractive investment opportunity in our core business which will generate sustainable value for our customers, employees and shareholders as Indonesia continues to grow,” said Mr Alexander Hungate, President and Chief Executive Officer of SATS.
And he’s right about Indonesia: http://www.economist.com/news/finance-and-economics/21596989-how-worlds-fourth-most-populous-country-weathering-emerging-market
[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.
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.
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.
But before I go into what I mean here’s something on how Thailand’s woes are benefiting S’pore: Singapore Institute of Purchasing & Materials Management ‘s executive director Janice Ong said (according to BT) that there has been anecdotal evidence that the political turmoil in Thailand is diverting orders to Singapore’s manufacturers. But economists believe that the impact would be slight at best.
UOB economist Francis Tan said that the clusters in which such diversion may occur, such as hard disk drives, make up only a small proportion of Singapore’s manufacturing sector.
Divine compensation for Temasek’s purchase of Shin?
Now back to the subject matter of the title. One aspect of the crisis is the sense of entitlement by the Opposition. It was explained by this analysis
[P]olitical power and economic power no longer coincide in Thailand. The parts of the country that generate most of Thailand’s GDP do not ally with the ruling party, which commands most of the vote. That simple fact no doubt explains some of the bitterness of the country’s crisis. In the chart below, we try to quantify this simple insight.
Thailand’s redshirts back the government and most of them look forward to the election on February 2nd. They support Pheu Thai, the third incarnation of a political party founded by Thaksin Shinawatra, a tycoon and former prime minister whose sister, Yingluck, now heads the government. The protesters, on the other hand, want to derail the election and rid Thailand of the influence of the Shinawatras, whom they accuse of rapacious corruption and ruinous populism. They tend to support the opposition, led by the Democrat Party.
In the last general election in 2011, Pheu Thai won 48% of the votes cast for the national political parties*. They were the leading party in 46 of Thailand’s 76 provinces, helping the party and its allies take control of Thailand’s National Assembly. But, according to calculations by The Economist, the party’s political strongholds account for only 38% of Thailand’s GDP.
The opposition Democrats, by contrast, polled 35% of the party votes. They were the leading party in 30 of Thailand’s 76 provinces and also its capital city. Added together, these territories account for 62% of the nation’s GDP. Bangkok alone accounts for about 30%**. In Thailand, in short, domestic power and domestic product reside in different parts of the country.
… the chart illustrates the enormous gap between the Democrats’ political power and their economic clout. This gap may help explain both their feelings of alarm and their sense of entitlement. It shows the enormous scope for redistribution from Democrat-ruled provinces to those dominated by Pheu Thai. This redistribution, which has been taking place for decades, accelerated in 2001 when Thaksin first became prime minister. Back then the Thai state spent 16% of the national budget on the provinces. Today, under his sister’s government, their share has increased to a quarter.
The figures may also shed light on the opposition’s sense of entitlement. Some in the old Thai establishment no doubt feel that they make a disproportionate contribution to the country’s prosperity and development. To them a constitutional arrangement that gave them about 62% of the political power might feel about right. It would represent a realignment of domestic power with domestic product.
This situation could be replicated in M’sia. Selangor is biggest contributor in GDP terms to M’sia (as of 2013) and Penang is 5th based 0n 2010 data. Both are controlled by the Opposition. Attempts by BN to buy votes need money, and taxes can only come from the richer states. You can guess the rest …
Even in S’pore, such entitlement is not absent. I came across this comment: [O]nly 40% of the population are paying income tax to support 60% of the population. Increasing revenue from direct taxes will penalise the very people who have been contributing to the nation’s coffers. With countries in the region cutting their corporate taxes, Singapore has to rely on higher indirect taxes and reduce the proportion of revenue arising from income and corporate taxes. Otherwise, the minority tax payers can very well vote with their feet and offer their investments and skills to someone else.
Fortunately, this is rubbish. because (based on last yr’s Budget estimates only 14% (third largest) of govt revenues come from personal income tax. The largest contributor is corporate tax (17%). GST at 17% is the second largest contributor.
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
But first Happy Neigh Yr .
S’pore had the second highest number of int’l tourists after HK in 2012. Distant third is Bangkok. KL is 6th. All benefit from Chinese tourists.http://www.economist.com/blogs/gulliver/2014/01/popular-cities
PAP govt must be doing shumething right, TRE , TOC readers? The casinos perhaps, Tan Jee Say?
All the Asean’s currencies are undervalued in purchase-parity terms vis-a-vis the US$. http://www.economist.com/content/big-mac-index
But the S$ is the least undervalued .i.e. its the strongest Asean currency. So if S’pore raises interest rates as TRE posters are calling, money will flood in from the other currencies. And property prices will fly and the economy tank as exports will be uncompetitive. https://atans1.wordpress.com/2013/12/19/tre-readers-are-illiterate-in-economics-and-finance/
Why Thai politics is broken: http://www.economist.com/blogs/economist-explains/2014/01/economist-explains-13
Indonesia’s most popular politician in the yr of presidential elections: http://www.economist.com/blogs/banyan/2014/01/indonesias-most-popular-politician
The problems facing the PM of Cambodia (BTW, he admires one Harry Lee): http://www.economist.com/blogs/banyan/2014/01/future-democracy-cambodia
(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.
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.
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
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$1.1bn spent on tpt is spare change as it’s spread out over five yrs, I think.
**Wormtongue is a minor character in The Lord of the Rings: his name describes his character.
(Or “Anti-PAP bloggers share LKY’s Hardest Truth)
Schroders plc and Baring Asset Management Ltd are avoiding Singapore stocks, the cheapest in South-east Asia, as slower economic growth in the region and cuts to Federal Reserve stimulus drive capital outflows.
The fund managers expect property to lead declines in Singapore amid a real-estate slump and the prospect of higher interest rates. The Straits Times Index was the worst-performing developed market in 2013, dropping 9.5 per cent since Fed chairman Ben Bernanke said in May that bond purchases may be reduced on signs of sustainable US recovery.
Surprised constructive nation-building (but mathematically challenged) BT reported things this way.
In US$ 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
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.
The PAP govt is forever warning that if it loses power, or even loses one more parly seat, chaos will ensure.
Happily 40% of voters no longer believe this self-serving nonsense (hence LKY had to warn Aljunied voters that they would repent; and sneerer of the elderly poor, ACS boy is highlighting every molehill of the WP Aljunied town council), though I must point out that .70% of voters voted for two prominent ex PAPpies in the presidential election. The ex-PAP man who denounced PAP lost his deposit. Dr Chee’s man only got 25%: credible but only ’cause there were two credible ex-PAPpies challenging one another.
So all the more surprising that our constructive, nation-building media hasn’t been highlighting the dire economic situation in Thailand which can be reasonably blamed on Thailand’s more democratic system. Now that BN has closed down, time to bring back Bertha Henson to ST and make her editor? Yaacob’s sis (and Cherian George’s Mrs) isn’t doing the “right” things by the PAPpies, Spock – another bald, pointy ears: SPH’s Managing Editor elder brother?– could conclude.
So far as investors and businessmen crave certainty and predictability, the only thing certain in Thailand these days is unpredictability. The prime minister, Yingluck Shinawatra, Mr Thaksin’s sister, now seems to have only the shakiest grasp on power. It’s a fair bet the election she has called for February 2014 will never even happen. She has assembled forums to discuss vague concepts of “reform”, to appease Mr Suthep. At the same time Mr Suthep pushes for a completely new government to be run by an unelected “people’s council”. That is also known as a coup.
For Thai businessmen, this is coming at the worst possible time: the beginning of the tourist season. Tourism is vital to the national economy. Last year the country pulled in about 22m visitors. Overall, the tourism-and-travel sector contributed about $28 billion to Thailand’s economy, which would make it worth 7.3% of GDP for 2012, according to the World Travel and Tourism Council (WTTC). Including tourism-and-travel’s indirect impact on the economy would make the sector’s value rise to $64.3 billion, or 16.7% of GDP. The sector employs about 2m people directly, and far more indirectly.
There are already signs that the ongoing street protests and occasional political violence and thuggery are putting plenty of people off coming to the country—hardly surprising, as dozens of foreign governments have issued warnings against travelling to Thailand. The political situation is estimated to have reduced the number of inbound tourists in the month to mid-December by 300,000 people, or 8% of the number expected, says Yutthachai Soonthronrattanavate, president of the Association of Domestic Travel.
That is worrying, as is the thought that the current turmoil could drag on to the election in February, or even longer if that proves inconclusive—in other words, throughout the high season. Mindful of the value of the tourism industry, Mr Suthep’s mobs have promised not to occupy and close down Bangkok’s international airport, as their predecessors, the “yellow shirts”, did in 2008. That is now well understood to have hurt the tourist industry, and the wider economy.
That will not be enough to offset the difference however, as even more tourists are now attuned to Thailand’s problems and willing go elsewhere on their merry ways. Bangkok also makes a bundle as a destination for conferences and conventions, but now organisers are actively considering going to other South-East Asian venues rather than endure the road closures and traffic chaos that accompany endless rounds of street demos (to say nothing of the threat of violence).
The government’s own grandiose spending plans have been thrown up in the air too.A key part of the government’s economic strategy had been to boost domestic demand by Keynesian-style spending, the political failure to have a functioning government has effectively undermined that whole strategy. Plans to borrow as much as $68 billion for new railways and roads are to be put on the back-burner as parliamentary and constitutional approval for these bills is delayed indefinitely. Many businesses, such as construction companies, stood to benefit from those expenditures, and now their plans have been derailed as badly as any holidaymaker’s. Thailand’s growth rate for 2013 is likely to weigh in at 3% or so, relatively modest for the region. The government’s hope to achieve a rate of 7% for 2014 now looks wildly optimistic.
Merry Christmas, all, PAPpies and TRe readers, included.
No other Asean news for this week’s Asean-round-up. Lazy leh.
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.
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.
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*.”
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.
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.
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
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.
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/
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.
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.
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:
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.
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.
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.
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.
In the words of the Institute of Southeast Asian Studies (ISEAS), a S’pore govt-funded think tank, in its Oct Asean Monitor
Barisan Nasional’s worst-ever general election performance in May has undermined Prime MinisterNajib Razak’s promise to reform the United Malays National Organization (UMNO) after he took overits leadership in 2009. Outside UMNO, liberal reforms are stridently opposed and resisted by extremist Malay-Muslim groups such as PERKASA and by UMNO-owned media, especially the Utusan Malaysianewspaper. Within UMNO, political momentum favours former Prime Minister Mahathir and his conservative allies, who support preserving the ketuanan Melayu (“Malay ownership”) status quo.
Recognizing that UMNO needs to be further strengthened after its failure to win a convincing majority of the Malay vote, many senior party leaders and veterans will not want the president and deputy president posts, held by Najib and Deputy Prime Minister Muhyddin Yassin, respectively, to be contested duringthe upcoming October party elections. However, the party’s three vice-presidential posts are likely tobe hotly fought over by the incumbents Ahmad Zahid Hamidi, Shafie Apdal and Hishammuddin Husseinand by three challengers, namely Mohd Ali Rustam, Isa Samad and, potentially, Mukhriz Mahathir.
Recent developments have further pressured Najib to follow through with his general-election pledge totackle corruption and crime. The 2013 Global Corruption Barometer report confirms the perception thatthe level of corruption in Malaysia has increased despite the government’s claims to the contrary. Publicconfidence in the corruption-tainted police force received another huge blow from the recent spike inviolent crimes, including more than 30 murder attempts in the past five months.
Because of the country’s deteriorating public finances, a global ratings agency has downgraded Malaysia’ssovereign credit rating outlook from stable to negative. The Malaysian ringgit slid to three-yearlows against the US dollar and to 15-year lows against the Singapore dollar; these slides may generate inflationary pressures. The government announced 10.5 percent and 11 percent hikes respectively in the prices of subsidized 95 RON gasoline and diesel on 3 September, and it is likely that further measuresto strengthen the country’s fiscal position will be introduced.
Key points: The status quo will persist, with conservatives gaining control of the UMNO supremecouncil. Budget 2014 will see the introduction of a GST and the scaling back and rescheduling of publicly funded projects.
The Chinese have to live with the consequences of their vote for Anwar’s group. The Indian community (which marginally supported BN) must be sore with the Chinese.
Other Asean round-up news:
Vietnam R Sembcorp (belated)
UNDETERRED by the many challenges facing Vietnam’s economy, Sembcorp has once again upped its investment in the socialist republic – this time by building central Vietnam’s first large-scale industrial park worth US$337.8 million.
This latest of five Vietnam-Singapore Industrial Parks (VSIPs) is sited in Quang Ngai province, about 90 minutes’ flight south of Hanoi. It offers manufacturers a new and alternative investment locale that is away from Vietnam’s northern and southern regions, where labour markets are tighter and costs continue to rise.
VSIP Quang Ngai will take shape in the form of a 1,120ha industrial park and integrated township; the industrial park will take up 600ha, with the other 520ha slated for commercial and residential purposes. BT 14th August: PM was in Vietnam BTW.
Thailand is to hand over rice and rubber in part-payment for its new high-speed rail system, it’s reported.
The country’s transport minister is expected to formally agree the barter deal with Chinese premier Li Keqiang … The project to link Bangkok with Nong Khai, close to the Laos border, is part of a proposed 2m baht ($30bn, £19bn) infrastructure investment programme to part-financed with agricultural products. The railway is one day envisaged to link Thailand with the Southern Chinese province of Kunming, via the Laos capital Vientiane.
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.
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.
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.
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