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ISSUE 97

ASEAN’s Big Oil Drive Philippines

Growing energy demand in ASEAN will continue to pressure oil prices upwards despite the economic slowdown in the West.

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15 OCTOBER 2012

E

CAPTURES

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CARI

The expansion of ASEAN economies also translates to increasing demand for crude oil

This is reflected in the positioning of companies such as the Chinese National Offshore Oil Corporation (CNOOC) trying to buyout Canada’s Nexen, and Malaysia’s Petronas purchasing Progress Energy Resources to become ASEAN’s energy providers ASEAN represents 5.54% of the global demand for crude oil while demand has been growing at a CAGR of 2.65% since 2000 Even though there are major oil producers, production is declining. In ASEAN, in 2010, Indonesia produced 40% less than its peak in 2000, while Malaysia makes 27% less Only Thailand increases production every year, but is only able to supply 241,000 barrels per day, compared to Indonesia’s 896,000 barrels per day Although ASEAN does not account for a large part of global demand, at 11%, the region’s continued growth will ensure that oil prices do not decline Seeking Alpha (10 October 2012)

ASEAN oil consumption and production


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Philippines peace deal: could it boost the country’s economy?

Philippines The preliminary peace agreement between the Philippines government and the country’s largest Muslim group, the Moro Islamic Liberation Front, could lead the way to economic prosperity, as the peace deal in long-rebellious Aceh did for Indonesia seven years ago. The first foreign investor is Malaysia’s Felda Global Ventures, the world’s largest crude palm oil producer Recently, Total E&P Asia Pacific, the exploration arm of Total SA announced it

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had acquired a 75% interest in exploring and developing a potential oil bloc in the Sulu Sea, West of Mindanao Malaysia, especially Sabah, looks set to benefit from the southern Philippines framework peace agreement as it could pave the way for peace that would help reduce an influx of illegal immigrants from the troubled region into the state, said Defence Minister Ahmad Zahid Hamidi If all goes well, a final peace deal could be reached by 2016, at the end of Aquino’s term North Africa Post (11 October 2012)

IMF Further Cuts Indonesia’s Source: Philippines Palm Oil

Growth on Bleak Outlook

Development Council

Indonesia

The International Monetary Fund (IMF) has once again cut its forecast of Indonesia’s GDP growth to 6% this year, as the country’s exports will still be affected by economic slowdown of the EU, US and China.

The world economic report titled “Coping with High Debt and Sluggish Growth” was released on 9 October Although Thailand, Malaysia, Philippines and Vietnam are quite connected to China, there has been a shift toward domestic demand which is quite robust, IMF

economist Thomas Helbling said Meanwhile, palm oil shipments from Indonesia, the world’s largest producer, are expected to slump by 12% in September due to the global slowdown, amid an increase of production in Malaysia and Indonesia According to Sahat Sinaga, Executive Director at the Indonesian Vegetable Oil Industry and Association, demand is very much based on the prices and export tax Indonesia kept the tax for crude palm oil exports at 13.5% in October, and will decide the November rate using average prices in Rotterdam, Kuala Lumpur and Jakarta The Jakarta Post, Bloomberg (10 October 2012)

World Economic Outlook Projection

Coping with High Debt and Sluggish Growth

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

Economy Myanmar banking officials reassured savers after a bank run on Kanbawza Bank, Myanmar’s largest private bank, started by rumours about its boss being arrested. Customers of the bank in Yangon pulled out around nine billion kyat (US$10.5 million) on 5 October — more than four times the normal maximum amount. Mizzima (8 October 2012)

Myanmar has approved amendments to its Investment Law, raising capital requirements for local SMEs. The Myanmar Industrial Development Bank has been transformed into an SME bank in regional cities to assist businesses. Eleven (9 October 2012)

Japanese automaker Suzuki Motor Corporation plans to build a factory in Myanmar that will produce 20,000 to 30,000 cars a year and push development of the Thilawa economic zone. Suzuki is expected to invest several billion yen in the assembly plant, scheduled for completion by 2015.

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Bangkok condo construction the highest in ASEAN

Thailand The rate of condominium projects in Bangkok are among the highest in the ASEAN capital cities. In the first nine months of 2012, condominium projects grew at a rate of 42% when compared to the same time last year Many factors contribute to the growth of these projects including changing weather patterns, relocation away from flood prone areas, more strict related law, urban

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lifestyles, and elevated and underground electric mass transit extensions Investors also expect increasing demand in the housing market after the formation of the ASEAN Economic Community in 2015 Government Housing Bank real estate information centre director Samma Kitsin said that, “the condominium market is highly competitive. Projects not achieving target sales quotas set by the financial institution will not be given financial credit to continue, so construction will be put on hold” However, real estate prices only increased by 5% and thus there is no sign of a real estate bubble

Thailand’s

MCOT (5 October 2012)

rice quality nosedives

Thailand

The Asahi Shimbun (9 October 2012)

Foreign Affairs Japan’s finance minister Koriki Jojima announced at the G7 meeting in Tokyo on 11 October that Japan will extend US$6 billion in credit to Myanmar and forgive US$3.7 billion, of that debt. This will help Myanmar to clear its debt with international financial institutions but Myanmar owes about US$950 million to the World Bank and the Asian Development Bank. Japan has been increasingly involved with Myanmar since its opening. John Pang, the chief executive of CARI, says the Myanmar government’s pivot toward Japan “is not so much an attraction to Japan as much as a revulsion against the Chinese.” The Japanese, Pang said, “come across as nonthreatening” and had managed to build up trust with Myanmar’s leaders. Bloomberg, New York TImes (11 October 2012)

Myanmar President Thein Sein and South Korean President Lee Myung-Bak agreed on 9 October to strengthen economic ties between the two countries on Thein Sein’s visit to South Korea. The two leaders signed a framework agreement on aid for Myanmar and agreed to strengthen cooperation in energy and resources development, infrastructure and construction. They also pledged cooperation in gas development and power plant projects in Myanmar. AFP (10 October 2012)

The Thai Rice Exporters Association (TREA) warned that Thailand’s position as the world’s largest exporter of fragrant rice will be contested due to the declining quality and purity of the product. Farmers are less interested in the quality of their harvests because the government is willing to buy anything that is sold under the rice pledging scheme, Honorary

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president of TREA, Chookiat Ophaswongse said However, the declining quality of Thai fragrant rice will give its competitors opportunity to increase production quality and market share Pornsil Patcharintanakul, deputy secretary-general of the Thai Chamber of Commerce, said if rice scheme is not restructured, the private sector will have to invest abroad The Bangkok Post (9 October 2012)

Laos Is Poised to Take Last Asean Place in WTO

Laos The World Trade Organisation is poised this month to accept Laos. “It’s another feather in the cap for Asean,” said Markus Taussig, an assistant professor in the business school at the National University of Singapore, who researches emerging economies “With Myanmar having turned from a pariah into the sexy emerging-market story and with Laos in the WTO, Asean can be fully represented in international discussions”

The membership package is scheduled to go to the WTO’s General Council for formal approval on 26 October Laos’ National Assembly will probably complete ratification in December, according to Lao Minister of Industry and Commerce Nam Viyaketh Why it matters: Laotian accession further bolsters ASEAN’s international position, as China and the US compete for influence in the region and Myanmar moves away from decades of political isolation Bloomberg (5 October 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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Rise of pan-Asean global

cyberdefence network

citizens

ASEAN All in Asean, especially Malaysians and Indonesians, need to identify common goals that will bring us closer together, wrote columnist Farish A. Noor The next generation of Asean entrepreneurs and skilled workers will be born in one country, but may be educated in another, eventually work in several others, and may end up settling in several countries in the end Asean will become the common homeland for the next generation of Asean citizens, but only if we work now to open up the opportunity structures for this to become a reality for them

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Asean-Japan

Though it is unlikely that we will ever see a common history textbook for Asean, each and every country can do its part by promoting more knowledge about other Asean countries among the young. As the region moves to the centre of the stage of geo-politics (as recent flareups in the South China Sea have amply demonstrated) a sense of homeliness, common identity and a common destiny is needed All of this points to the emergence of what will be the new pan-Asean community made up of Asean citizens who will be better connected than ever before New Straits Times (8 October 2012)

High grade shopping malls for Indonesia, Vietnam Indonesia, Vietnam

ASEAN, Japan ASEAN and Japan have agreed to establish a cyberdefence network following a series of cyberattacks against Web sites of government offices and corporations Under the system, the Japanese government plans to share information on cyberattack patterns and technologies to defend against these attacks believed to have originated from China, according to The Daily Yomiuri on 8 October quoting unnamed sources It also plans to carry out exercises to verify the effectiveness of the system within the current fiscal year The Japanese government plans to construct a system to facilitate communication between officials in charge of online security in each country so they can share information about attacks It will also be possible for the countries to take joint counter-measures when one of them is attacked ZDNet (8 October 2012)

Indonesia’s growing ranks of wealthy consumers are enticing more luxury brands to Southeast Asia’s largest economy. Paris-based fashion house Hermès opened its third store in Jakarta, a luxurywatch boutique, following on the heels of LVMH Moët Hennessy Louis Vuitton SA’s Fendi brand, Italian fashion label Gucci, luxury-department-store operators Central Retail Corp. of Thailand and SA des Galeries Lafayette of France Meanwhile, in Vietnam, more and more new shopping malls have been set up recently in big cities and commercial hubs According to CBRE Vietnam, a real estate service provider, Hanoi now has 270,000 square metres of shopping mall area with 10 shopping malls (650,000 square metres) to be put into operation from now till the end of 2013, the retail premises supply would double Wall Street Journal, Vietnam Net (10 October 2012) Source : Euromonitor International The Wall Street Journal

Editorial Team: Angela Goh, Manissa van Geyzel, Chayut Setboonsarng 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 97 (15 Oct 2012)  

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

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