Asean

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 »

Najib Razak, Malaysia’s prime minister, is so pleased that his country’s currency, the ringgit, is at its strongest level since 2012 that he felt the need to tweet it on Wednesday.

He added that – insha-Allah, or God willing – the growth rate of the majority Muslim nation would “remain anchored by strong domestic demand”.

If a report just out by Moody’s Investors Service is correct, Malaysia will need all the help it can get to ensure it remains on a healthy growth trajectory, with such reliance on domestic demand. Continue reading »

By Michael Power of Investec Asset Management

MSCI has moved in mysterious ways, its wonders to perform… and again left Chinese stocks out of its global benchmark indices. At the same time, we learn that, after three years in index limbo, it will not add South Korea and Taiwan to the family of developed markets. These decisions have happened despite the fact that all three nations are among the world’s top 25 economies: China at number 2, Korea at 15 and Taiwan at 25. Continue reading »

By Gavin Bowring, Asean Confidential

China’s two-way trade with the 10 nations of the Association of Southeast Asian Nations (Asean) has grown more than fivefold over the past decade and is on course to reach nearly $500bn this year. However, Chinese direct investment into Asean has been relatively anemic by comparison, accounting for only 7 per cent of China’s total foreign direct investment (FDI) stock.

But if Beijing gets its way, this is set to change. China plans a fivefold ramp up of its FDI in the region to a cumulative $150bn by 2020 from $30bn currently. Over the same period, it sees a doubling in bilateral trade to $1trn by 2020. The map below sets out the current trade flows and dynamics. Continue reading »

Brewed coffee may not be an obvious market in southeast Asia, a region with a strong tea-drinking culture thanks to the region’s ethnic Chinese populations.

But Costa Coffee and its rivals think otherwise. The UK-based coffee chain – part of the London-listed Whitbread brewing and hotels group – is in the early stages of expanding into the region, home to 620m people and a growing middle class. 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 »

By Kim Kyung-Hoon of SERI

Global investors who have shifted to “safer” Korea from southeast Asia should not assume they are unbuckled completely. Korea is raising its bet on Asean and its corporations’ balance sheets should increasingly reflect the economic direction of the 10-nation bloc.

Fronting the push is President Park Geun-hye’s self-styled “sales diplomacy.” 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 »

Singapore’s Club Street is one of its liveliest spots for the bar-hopping crowd and is a good indicator of the economic “feel-good factor” in the Asian city state.

It is also an indicator of the health of the Asian hedge fund industry. Before the global financial crisis the neighbourhood, known for its preserved Chinese shophouses, was also home to a community of boutique hedge funds. Continue reading »

The victory for Japan’s ruling Liberal Democratic/New Komeito coalition in Sunday’s elections to the upper house puts Prime Minister Shinzo Abe in a commanding position. It raises big questions about Japan’s relations with the US, China and its other neighbours – and about Abe’s commitment to Abenomics, his three-part programme to revitalise Japan’s moribund economy.

But for some of Japan’s neighbours, a large part of the outcome may already be decided. And Frederic Neumann at HSBC says it is likely to be strongly positive. Continue reading »

By Leif Lybecker Eskesen of HSBC Global Research

Japan’s economy has struggled for decades, weighed down by the debt hangover from the era of burst bubbles and other structural impediments. However, this may change if “Abenomics” delivers on its promises, which in turn has major trade and investment implications for the Asean-5 countries of Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Continue reading »

The Philippine economy grew 7.8 per cent in the first quarter from a revised 6.8 per cent the previous quarter, beating analysts’ expectations of an increase of just 6 per cent, as sharply higher investments and government spending offset the impact of faltering demand from China, America and Europe that slowed economies elsewhere in the region. Continue reading »

The top emerging stock markets over the past two years were the Philippines and Thailand. Denise Law, director of financial research at the FT’s newly launched Asean Confidential service, discusses with Long View columnist John Authers what’s driving southeast Asian stocks and what risks and opportunities lie ahead.