Indonesia: spending power of the poor
Selling jewellery to Asia’s newly rich or insurance to the emerging middle class might sound more glamorous than selling sachets of shampoo to the poor.
But in fast-growing Indonesia, lower-cost consumer goods are where it’s at, according to Standard Chartered. The combined spending power of those Indonesians making under $4/day adds up to some eye-catching numbers: they represent over half of household spending. Continue reading »
Indonesia: on the up, unevenly
The wealth controlled by the super-rich in Indonesia grew nearly 50 per cent in the last year, as the commodity boom has lifted their collective net worth to $125bn.
Sounds pretty rich, doesn’t it? Actually, as counted by market researchers Wealth-X, the combined net worth of the richest in Indonesia (the world’s 4th largest country) ranks only 9th in Asia. Who’s ahead? Continue reading »
Malaysia: sharing the prosperity
Photo: Bloomberg
Happy labour day, labourers in Malaysia. On Tuesday the country got its first ever minimum wage, part of prime minister Najib Razak’s ambitious plans to make the country work smarter, not just harder, and double per capita income by 2020. Continue reading »
Indonesia: still junk, says S&P
Third time’s meant to be lucky. But not for Indonesia.
Standard & Poor’s is the only one of the three major rating agencies that has not yet upgraded the country to investment grade. In a review this week of why it has decided to keep its junk rating, S&P listed some notable reasons for its now-contrarian view on Indonesia’s prospects. Continue reading »
Cambodia’s bourse: a game changer?
The debut of the Phnom Penh Water Supply Authority on Wednesday was the most exciting IPO in Asia this year. It marked the start of business on the brand new Cambodian Securities Exchange, underlining the extent of change in this fast-growing country once under the grip of the murderous Khmer Rouge. Plus, it’s already up 55 per cent.
Laos launched its exchange last year and Myanmar is now planning one as well. How much difference can a stock exchange make? Continue reading »
Jakarta: inflation overshadows growth
Indonesia’s central bank seems to have decided it’s gone as low as it’s going to go, at least for now.
The bank left its policy rate unchanged on Thursday at a record low of 5.75 per cent a year, showing inflation is beginning to outweigh slow growth as its main concern. Continue reading »
Indonesia keeps miners in dark
Once again, Indonesia is sowing confusion in the mining industry.
A few weeks after a surprise decision to force foreign miners to sell projects to local investors, a senior minister said he wanted to impose a 25 to 50 per cent export tax on coal and base metal. So far, few people seem to know what will actually happen - except for another uptick in uncertainty in the mineral-rich nation. Continue reading »
Indonesian corporates: no upgrade yet
Indonesia’s promotion to investment grade in January has given investors good reason to be optimistic about the country. But lingering problems with issues such as regulation and corporate governance mean the upgrade will benefit local companies “only gradually”.
The authors of this contrarian and bearish view? None other than Moody’s – one of the rating agencies that upgraded the country in the first place. Continue reading »
Indonesia: the Big Durian disappoints
Investors who were worried about Indonesian shares at the start of the year have been proved right. Equities in the Big Durian haven’t gone totally pear-shaped, but Jakarta has lagged behind the leaders in the 2012 rally.
HSBC on Monday described the country’s “long-term story” as among the region’s best— and then downgraded its equities to underweight. What’s keeping equities wobbly, and when will they pick up again? Continue reading »
Indonesia-China: trade grows despite commercial tensions
Indonesia may have banned the export of raw rattan to insulate furniture makers from China’s demand for the material – but on other fronts trade has racing ahead between the two Asian nations.
At a visit by Indonesian president Susilo Bambang Yudhoyono to Beijing this week, the two nations signed up for new deals worth up to $17bn, according to Chinese state media. While rattan chairmakers might not be too fond of China, Indonesia needs more investment, particularly in infrastructure, and Chinese firms are well-positioned to supply it. Continue reading »
Indonesia’s controls on foreigners: first mining, now the jobs market
Days after imposing new rules on foreign ownership in mining, Indonesia has announced complicated new regulations on foreigners working for wholly Indonesian-owned companies.
Ex-pat managers will be barred from 19 posts to give native Indonesians more chance in the jobs market. It sounds well-intentioned but its effects are unclear – and coming so soon after the legal upheaval in mining it does little to reassure foreign investors. Continue reading »
Why don’t students learn Indonesian?
Language students love complaining about Mandarin, but the promise of participating in Asia’s growth still has them lining up to memorise characters and perfect their tones (or try to).
Indonesia’s economic growth is also taking off, but interest in its language, Bahasa Indonesia, is falling. That’s the finding of a major study from Australia, which (as Indonesia’s neighbour) has long been a stronghold of Bahasa study. Why is interest in learning to speak Indonesian the only thing Indonesian not on the rise? Continue reading »
Indonesia: the pros and cons of cutting fuel subsidies
The price of subsidized petrol in Indonesia could rise by up to a third if the government follows through on plans discussed by ministers this week.
Cutting subsidies in an era of rising oil prices would allow the government to spend more on infrastructure – which the country desperately needs – but the cuts are not without risk. Continue reading »
Malaysia: so far, so good…for now
Malaysia’s growth last quarter beat expectations, and the outlook for 2012 looks pretty solid too.
But with some reforms running into the sand, corruption scandals grabbing headlines, elections looming, and the general gloom enveloping export-driven nations, Malaysia risks backsliding in its attempts to make sure its middle-income economy doesn’t stall. Continue reading »
Corruption and investment: the link
As a country shakes off a reputation for corruption, its economy tends to grow and its capital markets tend to rise.
Correlation or causation? Unclear. But as one Singapore-based economist points out, the link means emerging market investors should be watching how effective countries are not just in reforming, but in convincing the world that they’re reforming. Continue reading »
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