Critics who slam Malaysia for spending beyond its means in racking up a level of household indebtedness that surpasses the US are misjudging the country’s economic resilience, a senior official said.
Abdul Wahid Omar, a minister in the prime minister’s department, told the Financial Times that Malaysia “deserves better” than the negative outlook on its sovereign debt rating that was reaffirmed last month by Fitch, the rating agency.
“We believe we deserve better,” said Wahid Omar, who heads the country’s Economic Planning Unit. “We have demonstrated our ability to manage government finances better (and) we are taking measures to reduce subsidies and introduce the GST (Goods and Services Tax).” Continue reading »
Nations have negotiated trade agreements in one form or another for centuries. And for centuries economists have undoubtedly been facing the same question: Do trade agreements really matter?
The orthodox answer is obviously that they do. When you lower the barriers to trade goods flow more freely across borders and businesses, consumers and economies as a whole benefit as a result. But HSBC and the Economist Intelligence Unit are out with a new business survey that offers some interesting practical realities. Continue reading »
Of all the colonial legacies left by Britain, France and the Netherlands in Asia, one of the least talked-about – yet arguably one of the most lasting and problematic – is the patchwork of legal systems that divides the region.
Doing business in the Association of Southeast Asian Nations (Asean) is gradually getting easier thanks to the elimination of tariff barriers, expansion of supply chains and gradual harmonisation of customs procedures.
Yet one of the big “soft” barriers to greater Asean integration, and one which makes life hard for multinationals and ambitious local companies alike, are the differing jurisdictions across the 10-member bloc. Continue reading »
“When eating an elephant, take one bite at a time”, US Army officer and Vietnam veteran Creighton Abrams once said.
In his new book, The Rise of the New East, Ben Simpfendorfer does just that. His elephant is “The East”, the group of almost 50 emerging markets ranging from Turkey to China that is home to well over half of the world population.
Simpfendorfer gives his topic a thorough treatment. While his insights seem logical and intuitive, taken together they give an impressive oversight of into key trends shaping the region. beyondbrics noted five insights that particularly stood out. Continue reading »
By Jennifer Hughes
Malaysia Airlines was struggling long before its two disasters this year. Higher costs and tougher competition in its own backyard from Tony Fernandes’s AirAsia had already inflicted financial damage in spite of it’s having tapped the markets for $2bn of equity and debt since 2005. Continue reading »
It is a truth almost universally recognised that internet penetration in the 10-member bloc known as Asean – the Association of Southeast Asian Nations – is low, even though the region is humming economically.
Or is it?
UBS has come out with some interesting research that will give the e-commerce crowd something to cheer. The bank finds that Asean has a 32 per cent “internet penetration rate”, or almost 200m users, out of a total population of 620m.
This contrasts with market data apparently widely accepted – and cited by UBS – saying that penetration could be as low as 62m users. Continue reading »
If you are doing business in Asean – the Association of Southeast Asian Nations – be prepared for an electric shock.
Analysts at ANZ have looked at what’s happening with electricity prices across the region and are warning that they are set to rise, making it considerably more expensive to run factories. It will also add half a basis point on average to inflation, which is already inching up. Continue reading »
This was supposed to be the year of the rise of sukuk markets. As the Malaysian economy recovered and the Arab spring passed, another record year of sharia-compliant debt issuance was predicted.
But that changed after a day in May. Ben Bernanke dropped hints that the Fed would taper its bond-buying programme, and sukuk sales shrivelled in the third quarter. The number of issues this year is expected to be just above that of 2011. Continue reading »
Nomura has released its Global Annual Economic Outlook for 2014, and its prognosis for Asia is interesting.
The investment bank states that the region’s economic leaders for the coming year will be: Korea, Malaysia and (despite a devastating typhoon) the Philippines. Continue reading »
Indonesia, the Philippines, Malaysia and Thailand are on the face of it a relatively homogeneous, integrated group of nations with similar trading partners. So why did the first two emerge from the 2008 financial crisis in a much better shape than the latter?
A working paper from the IMF concludes that it was because Indonesia and the Philippines were less open to trade and had greater fiscal stimuli. Continue reading »
Out of 60 countries, Indonesia and the Philippines are home to the most optimistic consumers. Thailand comes fourth on the consumer confidence index compiled by Nielsen, a research company.
Yet ask these consumers how they will spend their cash, and they tell Nielsen they’d prefer to save it, actually. Continue reading »
The UK’s decision to launch an Islamic bond has been a long time coming. For a decade the prospect has been raised at the many Islamic finance conferences that have been held in London; Ed Balls, when he was City of London minister, announced the first Shariah-compliant government bonds from the UK Treasury back in April 2007.
The rationale then, as now, was to bolster London’s standing as an international financial centre. The logic then, as now, was that London ought to offer everything it can to financial markets, and that if launching a sovereign sukuk bond helps to create a benchmark for others to issue against, then that’s what it should do so as not to miss out. Continue reading »
Malaysia is not a market littered with private equity deals. Nor is the wider region of southeast Asia. Dealmakers have struggled with relatively high asset prices in Indonesia, and governance and other concerns in Malaysia and Vietnam.
But on Wednesday KKR, the big US-based private equity firm, closed a deal to invest Rm642m ($200m) in Weststar Aviation Services, a company that operates helicopters for the offshore oil and gas business. Continue reading »
Asian fund passport plans, to borrow the old cliché, are like London buses: you wait ages for one and then three come at once.
Wednesday’s announcement between the regulatory bodies of Singapore, Malaysia and Thailand to create a system for cross-border distribution of mutual funds was the third in the region this year. Continue reading »
When a Legoland theme park opened in southern peninsular Malaysia last year, it provided parents in neighbouring Singapore with a new distraction for their kids, and a nice add-on trip for tourists in the city-state. The facility is less than an hour’s drive away across the causeway that links the two countries.
But it was also a sign of the Danish toymaker Lego’s ambitions in Asia – home to what it says are almost 60 per cent of its “target consumers”, the rising middle class in the region. (Legoland is actually operated by Merlin Entertainments, a UK company, but the benefit to the Lego brand is obvious.) Continue reading »