Page 1

13 MAY 2013

CARI CAPTURES • ISSUE 125

CARI

CAPTURES

ASEAN REGIONAL

ADDRESSES THAI 01 MPC BAHT APPRECIATION THAILAND

THAI BAHT APPRECIATION

BANK OF THAILAND ‘TOOLKIT’ Requirements that foreign investors do foreign exchange hedging Sets the minimum period that foreigners must hold Thai government bonds Prohibits foreign investors from buying the Levies fees on central bank's offshore investors bonds profiting from bond investment

THB /US$1

31.9

32.0 31.6 31.2 30.8 30.4 30.0 29.6 29.2 28.8

28.6

28.4 MAY 2012

JUN 2012

JUL 2012

AUG 2012

SEP 2012

OCT 2012

NOV 2012

DEC 2012

JAN 2013

FEB 2013

MAR 2013

APR 2013

MAY 2013

Sources: www.bloomberg.com, www.investing.com

Last week saw significant progress in addressing growing concerns of the appreciation of the Thai baht, which has seen a steady rise of 5.3% from THB31.13/US$ to THB29.48/US$ in the last 12 months. The Bank of Thailand’s (BoT) Monetary Policy Committee (MPC) has come under intense pressure recently by public and private stakeholders including Ministry of Finance, Prime Minister Yingluck Shinawatra, and numerous trade associations to revise the benchmark overnight policy rate as the export-driven economy suffers from a decrease in competitiveness The baht is considered amongst the world's strongest currencies as investors eye the local bond market offering attractive yields amid promising domestic economic growth with the improving sentiment from the resolution of the US fiscal crisis further bolstering the upward pressure on growing Asian economies as US and European ones remain stagnant A ‘policy mix’ has been agreed on to curb the currency’s appreciation with the BoT’s proposed package of measures being hailed by market

participants as expected to be effective whilst not causing panic in the bond market, as it will not affect existing money in the debt market but still block fresh inflows Monetary policy is determined by the MPC and operates under a law which protects it from political interference; the MPC has said it will act only if the state of the economy warrants intervention with credibility of monetary policy of concern, especially with respect to borrowing costs for the government’s THB2 trillion (US$67.4 billion) infrastructure project - the MPC will have a better insight into the economy when the first-quarter gross domestic product data are released before its next meeting on 29 May

Bangkok Post (1 Bangkok Post (6 Bangkok Post (8 Bangkok Post (9 Bangkok Post (10 Bloomberg (10

May May May May May May

2013) 2013) 2013) 2013) 2013) 2013)


13 MAY 2013

CARI CAPTURES • ISSUE 125

02

13TH GENERAL ELECTION AFTERMATH CONTINUES

MALAYSIA T h e re p e rc u ss i o n s a n d a f te r effects of Malaysia’s 13th General Elections (GE13) continue to grip the nation after the incumbent ruling coalition Barisan Nasional (BN) retained the federal government in what has been the most tightly contested election in the country’s 56-year history since independence. The Malaysian economy has seen a major uptick after the uncertainty and concerns of i nve sto r s we re s e t t l e d w i t h M a l ays i a ’s R i n g g i t c u r re n c y

having its strongest rally since 2 0 1 0 g a i n i n g 2 .1 % re a c h i n g R M 2 . 9 6 / U S $ a n d t h e Ku a l a Lumpur Composite Index rising as much as 7.8% a day after the conclusion of the election International ratings agency M o o d y ’s h a s s a i d t h at B N ’s retention of government assures the continuation of Malaysia’s pro-growth policy, an outcome which is credit positive, for the sovereign rating and the ratings of government-related issuers with the removal of election uncertainty coupled

with additional fiscal transfers promised during the campaign sustaining the momentum of investment and economic growth over the next two years An observer watchdog report on the election produced by t h e i n d e p e n d e n t c ro s s partisan think-tanks Institute for Democracy and Economic Affairs (IDEAS) and Centre for Public Policy Studies (CPPS) has been released describing the election as “only partially free and not fair ” being marred by “serious flaws” such as uneven

constituency delineation and heavily-biased national media P o l i t i c a l i n st a b i l i t y re m a i n s as opposition against alleged fraud during GE13 reached new heights as a mass rally in Kelana Jaya Stadium on the outskirts of KL peacefully protested the legitimacy of the election results, with eye-witnesses claiming a presence of close to 200,000 people Borneo Post Online Borneo Post Online Al-Jazeera News SBS

(7 (8 (9 (9

May May May May

2013) 2013) 2013) 2013)

2012 PASSENGER MOVEMENT STATISTICS FOR MAJOR ASEAN AIRPORTS SOEKARNO–HATTA

INTERNATIONAL AIRPORT

SUVARNABHUMI AIRPORT

SINGAPORE CHANGI AIRPORT

KUALA LUMPUR

INTERNATIONAL AIRPORT

NINOY AQUINO

INTERNATIONAL AIRPORT

TAN SON NHAT

INTERNATIONAL AIRPORT

03

57,772,762 Passengers 53,002,328 Passengers 51,181,804 Passengers 39,887,866 Passengers 31,558,002 Passengers 16,688,400 Passengers

VIETNAM

Growing passenger traffic h a s e n co u ra g e d co u n t r i e s to engage in airport expansion and renovation projects, both to keep up with short term increase in demand and to increase handling capacity in the long run. On 10 May 2013, Airports of T h a i l a n d P l c ( A o T ) b o a r d approved the planned 10 billion baht (US$ 335.8 million) major overhaul of Bangkok’s old airport - Don Mueang Airport (DMK) to transform it into a fully-fledged aviation hub, expected to be ready in 2016 The upgrade of DMK will include the revival of a terminal and the upgrade of another, as well as the broadening of runways a n d t a x i ways to a l l ow D M K to a cco m m o d a te t h e A 3 8 0 superjumbo aircraft AoT appears to be gearing up the DMK overhaul primarily to keep up with the fast-growing traffic generated by low-cost carrier AirAsia, which moved its

CENTRAL BANKS IN THE REGION FEAR REAL-ESTATE BUBBLE

THAILAND

MALAYSIA

base to DMK from Suvarnabhumi, the other international airport of Bangkok The Ministry of Construction’s plan to build the 5,000-ha Long Thanh International Airport in Long Thanh district in three phases and completed by 2035 has been approved by Vietnam’s Prime Minister Nguyen Tan Dung The Ministry of Construction estimates that the first phase to 2020 will cost about US$ 6.7 billion and allow the airport to handle 25 million passengers and 1.2 million tonnes of cargo a year, which will be raised to 100 million passengers and 5 million tonnes of cargo after completion in 2035 M a l ays i a A i r p o r t s H o l d i n g s Bhd (MAHB) has announced a likely six months delay in the completion of the Kuala Lumpur International 2 (KLIA2), which was scheduled for opening on 28 June 2013 Bangkok Post (30 April Business Times (6 May Borneo Post (9 May Business Times (7 May

www.aci.aero

04

PASSENGER TRAFFIC SURGE PROMPTS AIRPORT UPGRADES

THAILAND

I CAR IR A

2013) 2013) 2013) 2013)

PHILIPPINES

The central banks of Thailand and the Philippines are concerned about the rise in property prices and worry it could be a price bubble. The Bank of Thailand is worried a b o u t a p o te n t i a l p ro p e r t y bubble that could result in a property crisis with huge losses and a slow recover Developers on the other hand claim that the housing market has changed and it is dominated by large firms that can respond quickly to any risks Thailand’s Housing Business Association warned that wrong measures, such as imposing a lower loan-to-value ratio, may fail to prevent the problem and could potentially harm real buyers A c c o r d i n g to Prasert Taedullayasatit, chief business officer of the SET-listed Pruksa Real Estate Plc, the total market value totalled at 626 billion baht (US$ 21.2 bilion) last year and about 86% of projects were run

by the top 10 developers, who always do market research which decreases the likelihood of a property crisis The rise in the property market is due to market mobilisation and new real demand of middleto-low-income first-time homebuyers, he said Meanwhile, the Philippines is tightening its property regulations to limit the influence of speculative demand from neighbouring economies on the local real-estate market Bangko Sentral ng Pilipinas (BSP) has not decided the exact cap but will push the new regulations soon to prevent any risk of a property price bubble

Bangkok Post (9 May 2013) Business Inquirer (6 May 2013)

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.


13 MAY 2013

CARI CAPTURES • ISSUE 125

05

ASEAN BANKS DELIVER PROMISING RESULTS

MALAYSIA

INDONESIA

A number of ASEAN banks have achieved significant milestones in the past few months, with four banks making it to the top 20 list of the world's strongest banks. Malayan Banking Bhd (Maybank) has emerged as the 13th strongest bank in the world in Bloomberg Markets magazine's third annual ranking of the world's strongest banks, and is the only Malaysian Bank to make the list Maybank chief executive officer Datuk Seri Abdul Wahid Omar

SINGAPORE

said the bank plans to extend its footprint to all 10 ASEAN members as the region moves toward the planned ASEAN Economic Community by 2015 Indonesia Shariah banking sector reaches a new height, achieving 4.9% of the global market share for the first time ever in Q1 of 2013 and recording a year-onyear growth rate of 37.8%, much higher than the global average of 15% to 20% Singapore’s big three banks – United Overseas Bank (UOB),

VIETNAM DBS Bank Ltd and OverseaChinese Banking Corporation Ltd (OCBC) have all beaten market expectations in their first quarter results despite low interest rates dampening profitability. The three banks have also achieved 6th, 5th and 2nd place respectively in Bloomberg’s world strongest bank ranking. CIMB Bank Bhd of Malaysia has been granted a banking license in Hong Kong by the Hong Kong Monetary Authority (HKMA)

Vietnam sees a few bank merger deals to take place: the Dai A Bank and HDBank merger has been approved by the central b a n k ; t h e m e rg e r p l a n s by Maritime Bank, Sacombank and Eximbank were submitted to their shareholders and approved; while Military Bank has obtained approval from shareholders to seek for a merger partner Asia One Business Jakarta Globe Straits Times Business Times Business Times

(3 (8 (3 (9 (3

May May May May May

2013) 2013) 2013) 2013) 2013)

WORLD OIL PRODUCTION

TOTAL OIL SUPPLY BY REGION (THOUSAND BARRELS PER DAY) IN 2012 89090.07 WORLD MIDDLE EAST 26977.80 17899.66 NORTH AMERICA 13427.58 EURASIA 10032.94 AFRICA 8956.65 ASIA & OCEANIA 7813.90 CENTRAL & SOUTH AMERICA 3981.51 EUROPE

06

PETRONAS SCORES BIG AND ENTERS NEW MARKETS

MALAYSIA Malaysian national oil company Petroleum Nasional Bhd, more commonly known as Petronas, has announced the success of mining operations carried out in the Cendor Graben-2 oil field within Block PM304 offshore Peninsular Malaysia and the imminent acquisition of two offshore blocks in Brazil. The oilfield was discovered in 2001 and initially regarded as uneconomical for development with a yield of 12 million barrels estimated but an aggressive appraisal and development campaign since has led to a revised assessment to an increased estimated recoverable resource of over 200 million barrels, more than 16 times the initial appraisal The well dug in Cendor Graben-2 drilled to a depth of over 1,000 metres with confirmed presence of oil and gasbearing reservoirs and has spurred on further development in Block PM304 with efforts fast-tracked and expected to commence in 2013 expecting to propel production to approximately 30,000 barrels per day by years-end Petronas is set to make its maiden entry into the exploration and production business in one of the world’s top holders of hydrocarbon reserves when it acquires interests in two offshore blocks for RM2.6 billion (US$850 million) in Brazil’s Campos Basin with the transaction subject only to relevant regulatory approvals Borneo Post (3 May 2013) Borneo Post (9 May 2013)

TOTAL OLD SUPPLY BY COUNTRY (THOUSAND BARRELS PER DAY) IN 2012

RANK

COUNTRY

1 2 3 4 5 6 7 8 9

SAUDI ARABIA

OIL SUPPLY 11545.68

UNITED STATES

11095.50

RUSSIA

10396.97

CHINA

4416.17

28

MALAYSIA

CANADA

3867.98

IRAN

3538.38

UNITED ARAB EMIRATES

3213.19

IRAQ

2986.64

MEXICO

2936.17 639.81 U.S. Energy Information Administration

07

MAJOR THAI COMPANY GEARING UP FOR THE AEC

THAILAND Thai company CPN is expediting its ASEAN expansion in order to benefit from the formation of the ASEAN Economic Community (AEC). Central Pattana Plc (CPN), Thailand’s largest retail developer, has decided to go ahead with regional projects previously on hold in order not to lose out on opportunities arising with the implementation of the AEC CPN is shifting its focus on ASEAN instead of China and is currently looking to invest in Malaysia, Indonesia, and Vietnam Kobchai Chirathivat, the president and chief executive, said that the company is also planning major investments within Thailand as the Thai economy continues to grow and will be a hub of Indochina once the AEC is implemented Bangkok Post (3 May 2013)

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.


13 MAY 2013

CARI CAPTURES • ISSUE 125

08

MYANMAR MONITOR

09

FRESH CONCERNS RAISED BEFORE ELECTIONS

PHILIPPINES

POLITICS President’s Office Minister and chairman of the Myanmar Investment Commission (MIC) Soe Thein has been replaced as chairman of the MIC by Win Shein of the Finance and Revenue Ministry. The change of chairmanship follows complaints in parliament about the MIC’s lack of transparency. Soe Thein remains as minister in overall charge of economic matters. The Financial Times (8 May 2013)

ECONOMY The Ministry of Labour has suspended 12 of the country’s largest employment agencies following allegations of corruption and exploitation of workers. The companies will be unable to send migrant workers to Thailand until an investigation is completed into their business practices. The Migrant Worker Rights Network has called the system “extortionate in practice”, both for the high fees migrants must pay to enter Thailand and for the bad work conditions.

Fresh concerns have been raised ahead of midterm elections in the Philippines scheduled to be held on 13 May 2013 as widespread p owe r o u t a g e s a c ro ss M e t ro M a n i l a a n d surrounding provinces raises worries on the integrity of the elections’ automated systems and applicability of election-specific rules remain unclear. A transmission line malfunction left parts of Luzon, including metropolitan Manila, without electricity on 7 May 2013 with affected capacity representing some 45% of peak Luzon demand as five major power plants were diminished, fuelling worries for the automated counting machines which were quashed by President Aquino assuring that every step was being taken to ensure adequate power The effort to curb vote-buying was dealt a blow as the five-day “money ban” introduced by the Commission on Elections (Comelec)

prohibiting the withdrawal of more than PHP100,000 (US$2,400) from banks and possession, transportation or carrying of more than PHP500,000 (US$12,000) in cash was struck down by the Supreme Court on 10 May 2013 two days after its supposed implementation and just three before the 13 May election Together with the “money ban” directive, Comelec passed an alcohol ban in its directive, prohibiting the sale and consumption of alcohol in public until the morning of 14 May 2013 being an extended period of five days from the regular period of two days; Comelec’s liquor ban resolution was chided by the Supreme Court but not struck down

SunStar (10 May 2013) Borneo Post Online (9 May 2013) Business World Online (8 May 2013)

The Myanmar Times (9 May 2013)

FOREIGN AFFAIRS

2012 TOURIST ARRIVALS FOR ASEAN COUNTRIES

M ya n m a r i s o n a l e r t a f te r re p o r t s about possible terrorist attacks in the country. The government has beefed up security measures and tightened control over travelling visa, according to the Headquarter of Myanmar Police Force. Indonesian cleric Abu Bakar Bashir has recently called for a ‘jihad’ in Myanmar, rousing Islamic militants.

MALAYSIA - 25,030,000 THAILAND - 22,303,065 SINGAPORE - 14,400,000 INDONESIA - 8,044,462 VIETNAM - 6,847,678 PHILIPPINES - 4,272,811 CAMBODIA - 3,584,307 LAOS - 3,330,072 MYANMAR - 1,058,995 BRUNEI - 241, 000

Eleven Myanmar (5 May 2013)

Myanmar parliamentarians and officials from the Ministry of Education went on a study trip organised by the British Council to the United Kingdom last week to study universities to prepare for education reforms in Myanmar’s education system and an upgrade of Yangon University. At the end of the tour, Aung San Suu Kyi called on UK to help rebuild Myanmar’s university system, via a video message to representatives of UK universities on 9 May. The Financial Times (9 May 2013) Eleven Myanmar (7 May 2013)

SOCIETY The government is moving internally displaced persons (IDPs) to emergency shelters as cyclone Mahasen heads for Myanmar and Bangladesh. The 140,000 IDPs are seen as particularly vulnerable to the cyclone which is expected to make landfall on Thursday morning. Bangkok Post (13 May 2013)

10

ASEAN WELCOMES TOURISTS WITH TRANSPORT AND TRADITION

ASEAN ASEAN is making efforts in boosting tourism both at the national and regional level, with plans of simplifying visa rules, infrastructure upgrading works and the showcase of local culture. ASEAN secretary-general Le Luong Minh said plans to simplify visa procedures are moving forward, with Thailand and Cambodia agreeing on a single visa for both countries, and the region contemplating the feasibility of a common ASEAN tourist visa ASEAN is also focusing on completing the ASEAN Highway Network, which will contribute to the development of intratourism within the region The Philippine government is spending a total of 46 billion pesos (US$ 1.12 billion) over this

year and the next on a tourism infrastructure programme that will make tourist spots more accessible from major roads In order to promote Lao traditions and culture and showcase the characteristics of the nation, the Laotian government is requiring its national formal wear be used instead of normal suits on important domestic and international occasions Laos has been named world's best tourist destination for 2013 by the European Council on Tourism and Trade, and has welcomed 3.3 million tourists in 2012, a 22% increase from 2011 The Nation Thailand Bangkok Post The Nation Thailand Bangkok Post

Editorial Team: Sóley Ómarsdóttir, Oh Joo Ken , Lim Zhi Bang Designer: Hizzad Dinno Consultant Editor: Tunku ‘Abidin Muhriz DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

(6 (7 (8 (8

May May May May

2013) 2013) 2013) 2013)


CARI Captures Issue 125 (13 MAY 2013)  

Captures is CARI’s weekly news monitoring report, each time presenting the top 10 stories affecting ASEAN

Read more
Read more
Similar to
Popular now
Just for you