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14 MAY 2012

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CAPTURES

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CARI

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ISSUE 76

Asean Banks Vie for Rank in Region

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Investors’

confidence boosted with

ASEAN

ample LIQUIDITY ASEAN, Malaysia Asian financial markets have enough liquidity to withstand any market pullback even in the face of renewed fears over the eurozone crisis.

Asean’s top banks are racing through acquisition deals to capitalise on a wave of regional growth. Regional banks struck deals close to US$8 billion in recent weeks, with DBS offering US$7.3 billion to purchase Indonesia’s PT Bank Danamon and CIMB acquiring 60% stake in Philippines Bank of Commerce for US$288.6 million The banks are trying to expand their regional footprint, in order to seize on lower barriers to trade, investment and labour flow of the region becoming a single community in three years’ time Each of the top banks has its own gameplan that partially overlap, such as CIMB wanting a presence in most ASEAN

markets while DBS and UOB target Indonesia and Malaysia Markets with too many small banks such as those in Indonesia and Thailand are expected to consolidate in order to compete These consolidations are perceived to be good for the banking industry as markets with too many banks tend to be less efficient and more likely to run into debt problems “Asian integration is happening even without deliberate policies or initiatives. It is market-driven,” said Iwan Azis, head of Asian Development Bank’s Office of Regional Economic Integration The Wall Street Journal (8 May 2012)

“Liquidity is ample. What is not noticed internationally is that ever since the 1997/98 crisis, most ASEAN+3 countries have significantly de-risked, especially in terms of leverage and exposure to foreign currency funding, and strengthened their financial systems significantly to be in a much better position to absorb external shocks”, said Lee K. Kwan, deputy group CEO and head of corporate banking, treasury and markets, CIMB Group, agreeing with Bank Negara governor Zeti Akhtar Aziz’s statement that regional markets had sufficient liquidity Malaysia funds, in search of value, had been selling since February, noted Pong Teng Siew, head of research at Interpac Securities Foreign funds may be leaving many countries but not Malaysia where many of them were still parked, added Pong The Star (9 May 2012)


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Indonesia Syariah Banking Grows By 40% Annually

Indonesia Indonesia’s syariah banking grew by 40.2% over the past five years, outpacing conventional banking which grew at 16.7% over the same period. Syariah banking will comprise 15 to 20% of the banking sector in 10 years, compared to the current 4.1%, according to Halim Alamsyah, deputy governor of Bank Indonesia, at the opening of the second Bank Indonesia International Seminar on

Islamic Banking in Bandung Bank Indonesia is committed to expanding syariah banking as it would contribute greatly to economic growth, financial system stability and social well-being, he stressed This is because syariah banking products are more transparent thus reducing speculative risks and more able to withstand financial crisis, he explained

Laos on

track for sustainable growth Laos

ASEAN Affairs (7 May 2012)

Indonesia’s Islamic Banking Profile

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Long considered a less developed member of ASEAN, Laos has been growing steadily in the last 10 years and has become a lower-middle income economy in 2011 based on a World Bank report. Domestic growth, coupled with good governance, makes Laos ready for regional and global integration, according to the report The World Bank attributed Laos’ growth to government efforts in harnessing natural resources such as minerals, hydropower and forestry products But the country needs to “strike a balance between the resource and non-resource sectors,” for sustained growth, said the World Bank, adding that the non-resource sector was expected to contribute more than half of Laos’ real GDP growth Laos is also embarking on an ambitious target of becoming a full member of the World Trade Organisation this year, a move supported by its ASEAN neighbours and key trading partner, China

ASEAN launches university

Business Mirror (9 May 2012)

partnership

ASEAN A new regional umbrella organisation which will identify social, environmental and economic challenges that universities can help tackle in alliance with grassroots organisations, was officially launched in Malaysia last week. AsiaEngage, with its secretariat at Universiti Kebangsaan Malaysia (UKM), will work in collaboration with community organisations and industry “This is a platform that is not just for

universities. It is for NGOs, foundations and industries to collaborate with us,” said Saran Kaur Gill, deputy vice-chancellor for industry and community partnerships at UKM AsiaEngage brings together AsiaTalloires Network of Community Engaged Universities, which already has 64 members in 16 countries; ASEAN University Network’s thematic university social responsibility and sustainability network set up in October 2010; and the ASEAN Youth Volunteer Programme

Meanwhile, the International University of Japan in Niigata has launched a new course in its MBA programme, called ‘Entrepreneurship Strategy for ASEAN Markets’, which includes market research field trips to ASEAN countries Why it matters. Strengthening the civil role of universities will support the development of ASEAN communitybuilding University World News, Market Watch (7 May 2012)

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.


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MYANMAR MONITOR

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Economy

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China, Singapore to build US$16 billion high-tech zone China, Singapore

David Bonderman, co-founder of US private equity group TPG, visited Myanmar last week in the latest sign of growing investor interest in the country. In the first visit by a top US private equity investor since the reformist government came to power in early 2011, Bonderman met U Soe Thein, Myanmar’s minister for industry; government officials; opposition leader Aung San Suu Kyi; and local business leaders Financial Times (14 May 2012)

Lee Myung Bak headed to Myanmar for the first visit by a South Korean president since an assassination attempt by North Korea on his predecessor, Chun Doo Hwan, on a similar visit almost 30 years ago. Lee will meet President Thein Sein. A total of 108 Korean companies have invested US$2.93 billion in Myanmar as of June 2011, according to the Korea Trade-Investment Promotion Agency. South Korea is the fourth-largest investor in Myanmar after China, Thailand and Hong Kong Bloomberg (14 May 2012)

Foreign banks may be allowed to enter Myanmar by 2015. Foreign banks have been granted a limited representatives office licence, but the central bank has not offered branch licences. A central bank official indicated the process would be gradual so that domestic banks can develop before partnering with foreign banks in joint ventures

The Singapore-Sichuan High-Tech Innovation Park was jointly launched by the provincial government and Singapore’s state-owned Temasek Holdings. The US$16 billion project will be operated by the Singapore-Sichuan company SinoSingapore High-Tech Innovation Park Development Company Ltd, jointly invested by Temasek Holdings and Chengdu Hightech Investment Group

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The park will focus on eight industries, namely information technology, service outsourcing, digital media, biomedicine, environmental protection, precision machinery, finance and training Singapore is the fourth largest foreign investor in Sichuan Singapore has over 20 years of experience investing in Sichuan, said Low Sin Leng, executive chairwoman of Sembcorp Development Xinhua, Sacramento Bee (10 May 2012)

Filipino Plan May Pressure Vietnam’s CATFish Industry Vietnam, Philippines

The Star (12 May 2012)

President Thein Sien announced the country’s plan to re-join the United Nations World Tourism Organisation (UNWTO). The UNWTO promotes tourism that is environmentally responsible and drives sustainable economic growth through its technical assistance projects for members. In 2011, the tourism industry generated US$1.7 billion in income and created 726,500 jobs in Myanmar Global Travel Industry News (11 May 2012)

Politics The resignation of Myanmar’s vice president Tin Aung Myint Oo may signal a cabinet reshuffle, wrote Larry Jagan in a commentary. President Thein Sein, according to sources close to him, is wrestling with various options, among the most critical is whether members of the NLD apart from Aung San Suu Kyi might be offered ministerial posts. The current speaker of the lower house, Shwe Mann, seems to be the hot favourite to take on the vice president’s role Radio Free Asia (10 May 2012)

The Philippines’ plan to develop its own catfish industry will reduce imports from Vietnam. The Philippines Bureau of Fisheries and Aquatic Resources hopes catfish production will be able to replace current imports from Vietnam by 2016 Catfish farming and processing, popular in Cambodia, Thailand, the Philippines and

Vietnam, is profitable because the fish grows rapidly, is easy to raise and is widely marketable Imports from Vietnam fell drastically in 2010, as the Philippines bolstered its catfish industry Vietnam’s catfish industry is also under pressure from falling prices and tight financing VietNamNet (7 May 2012)

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.


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ConnectING for prosperity Thailand, Laos, Vietnam

Source: Internet World Stats

The ASEAN Economic Community project is spurring companies in Thailand and Laos to accelerate the use of Information Communication Technology (ICT).

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Thai companies and public organisations are mobilising ICT-skilled labour, enhancing connectivity among ASEAN countries and promoting data exchange via cloud-based systems

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Thailand aims to be at the forefront of ICT skill standards in the region, with its software development facilities, ICT project development, enterprise architecture design, network and system administration, and information system and network security, says Methinee Thepmanee, of the ICT Ministry Meanwhile, Laos’ growing Internet access has encouraged Lao Securities Exchange, among other companies, to launch online stock trading this year The country’s Trade Promotion and Development Department has teamed up with the ASEAN Centre to establish a website for Lao traders to post handicraft products for sale However, in Vietnam’s case, its small and medium-sized enterprises have not yet taken full advantage of online business opportunities as only about 5% of them have an online marketing presence Why it matters. Collaboration among ASEAN members will likely reshape the business models of ICT services in the region Vientiane Times, VietNamNews Bangkok Post (8 May 2012)

New ASEAN website helps protect consumers

ASEAN ASEAN has launched a new website as a channel for consumers in the region to complain or claim on any product or service. The ASEAN Committee on Consumer Protection (ACCP) website also provides consumers with information on recalled and banned products, as well as consumers rights and redress, according

to a statement released by the ASEAN Secretariat on 4 May “It facilitates consumers to access information on consumer protection in ASEAN through a single platform”, says Mahani Tan Abdullah the outgoing Chairperson of the ACCP and also Malaysia’s deputy secretary-general of the

ministry of Domestic Trade, Cooperatives and Consumerism Malaysia led the development of the new website after Indonesia completed the first compilation of recalled and banned products in ASEAN countries between November 2011 and April 2012 VietNamNet, Jakarta Globe (6 May 2012)

List of recalled or banned items in ASEAN

Source: aseanconsumer.org Editorial Team: Angela Goh, Manissa van Geyzel, Han Fang Rong, Chayut Setboonsarng, Lore Kin Nyung Consultant Editor: Tunku ‘Abidin Muhriz Designer: Iqbal Hakim 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.


CARI Captures Issue 76 (14 May 2012)