Sun. Jan 20th, 2019

Asean Investor

Approved projects reach $3 billion in first half

Cambodia has approved more than $3 billion in investment projects in the first half of the year, nearly double the total value signed up in the whole of last year, the latest data from the Council for the Development of Cambodia shows. The government signed of on $3.1 billion from January to June, compared to just $1.6 billion in the entirety of 2014, according to the CDC. China tops the list with value of projects registered, followed by South Korea, the European Union, Malaysia and Vietnam. The main sectors are tourism, industry and services according to the data, although the CDC did not provide a detailed breakdown. Independent Economist Srey Chanthy said the lure of cheap labour, when businesses were eyeing the benefits of the upcoming ASEAN Economic Community, where among the attractions for investors coming to Cambodia. Although, Chanthy added, that not all approved projects are likely to see the light of day. “Normally, it does not take long for the CDC to approve requested or proposed investments as long as investors have all required papers. But real investments is something else because sometimes certain investments are not worthwhile, so investors just drop them,” he said. Song Saran, the owner of Amru Rice, one of Cambodia’s largest rice exporters, said the agriculture industry has a lot of potential for further investment, but said it was challenging for local investors who could not source capital as cheaply as foreign investors. “It is a big concern for local rice millers and exporters. We have already lost some market share to international investors, as they have more marketing networks, financing, and experience,” he said. In early July, the International Monetary Fund projected that Cambodia’s GDP to grow by 7 per cent this year, at a similar rate to last. Growth would be driven by construction, real estate and garments exports while the inflation is expected to rise moderately to 2.6 per cent by the year’s end due to the sharp oil decline in oil prices, the IMF said. By phnompenhpost.comThe post Approved projects reach $3 billion in first half appeared first on Asean Investment | Marc Djandji Blog.

One Asean stand may stop China

10-nation bloc urged to protest land reclamation THERE is a chance that China will stop its island-building spree in the West Philippine Sea (South China Sea) and other areas if all members of the Association of Southeast Asian Nations (Asean) and Japan agree to issue a united stand against Beijing’s sea activities, the Armed Forces of the Philippines (AFP) said. “In this part of the region, a collective voice is much stronger than a few. The whole of Asia, Asean is a very strong voice. If [Asian nations] can [stay] together, much better,” Col. Restituto Padilla, AFP spokesman, said in a statement released Sunday. Padilla added that China will likely listen if more countries will speak out against its dredging activities in a number of reefs that are also being claimed by the Philippines, Vietnam, Malaysia and Japan. “Maski na mali kami, kami pa rin ang tama parang ganun ang mentalidad nila, kasi kung titingnan nyong mabuti ang history ng China, talagang ganyan ang ugali nya, ang treatment nya sa sarili nya sya yung sinimulan ng sibilisasyon, siya yung center ng mundo [Even if we are wrong, we are still right, that’s China’s mentality. If you will look at the history of China, that has been its attitude. It sees itself as the start of civilization, the center of the world],” he pointed out. The AFP spokesman noted that concerns voiced by various think thanks and the issues they present are the same issues that the Philippines has been raising all along. “It only goes to show that what we have been saying is shared by many and that all nations ought to speak out as well so that hopefully, with that one voice, China will listen and not use might versus what is right and it may as well go by the rules-based approach that all peace-loving nations conform [with],” Padilla explained. In a recent report, The New York Times said China’s land reclamation projects in disputed territories had created seven new islets in the region at an alarming speed. “The announcement marks a change in diplomatic tone, and indicates that China has reached its scheduled completion on several land reclamation projects and is now moving into the construction phase,” the report said, quoting Mira Rapp-Hooper, director of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies. It said China has built port facilities, military buildings and an airstrip on these islands. Padilla said other countries are hesitant to speak out against China because they are protecting their interests, particularly on the economic front. He, however, opined that China will not slap economic sanctions on these countries because Beijing is also dependent on trade. “Dependent siya kasi sa paglabas ng trade para naibebenta niya yung goods niya. Dependent rin siya sa pumapasok na goods na kailangan niya para mag-produce so give and take yan, so pag naging solitary economic unit lang siya, hindi siya magpo-prosper [Because China is also dependent on trade right? It needs other nations to be able to sell its goods. It is also dependent on the goods that are coming in [from other countries]. So it is just give and take. If it becomes a solitary economic unit, it will not prosper],” Padilla said While the G7 or Group of 7 that is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States have spoken against China’s unilateral actions such as large-scale reclamations in disputed waterways, the AFP spokesman also noted that the Asean had been silent on the issue. “[That is our challenge. Asean should have one solid voice],” the AFP official said. Last month, the Philippines sent a delegation to The Hague to convince a United Nations-backed international tribunal to take jurisdiction of the complaint filed by Manila challenging China’s claim to almost the entire West Philippine Sea. The Philippines and fellow Asean members Brunei Darussalam, Malaysia and Vietnam have competing claims to South China Sea areas along with China and Taiwan. The dispute grew increasingly tense in recent years with the Philippines at the forefront of accusing China of “bullying” in asserting its claim to the South China Sea, a crucial lane and fishing ground also believed to hold vast mineral resources. In recent months, the Philippines had raised the alarm over China’s land reclamation to turn outcroppings in the sea into artificial islands that can host military outposts. Asean, which also includes Indonesia, Cambodia, Laos, Myanmar, Singapore and Thailand, has been pushing for the establishment of a “Code of Conduct” with China that would bind the rival claimants not to take actions that could spark conflict in the region. Despite their appeal for unity, Asean members have diverging agendas, and the bloc has had difficulty taking a common stand on China, which has close relationships with several members. Hotline Also on Sunday, the Department of Foreign Affairs (DFA) said Asean and China are discussing setting up a “hotline” in case of an emergency regarding the territorial disputes. The proposed hotline was discussed during a meeting of senior diplomats from China and Asean in Tianjin last week, Charles Jose, DFA spokesman, said. Jose added that the matter had been referred back to a joint working group and was still far from fruition. “Although this was agreed in principle as an early harvest measure, it needs thorough discussion,” he said in a statement. Jose added that the hotline will not be unveiled at an upcoming meeting of Asean foreign ministers. Experts, however, said Asean should look at the bigger context of its ties with China and not be bogged down by the territorial disputes in the South China Sea. “The territorial flashpoints in the South China Sea are not going away, but then again Asean-China relations have always been more than just the South China Sea,” Benjamin Ho, a maritime security researcher, said. Ho, associate research fellow at the Institute of Defense and Strategic Studies, Nanyang Technological University of Singapore, said the Asean-China relations are largely very stable at the moment. Such ties were further strengthened with the Asean support for the recent Asian Infrastructure Investment Bank initiative by the world’s second largest economy. Ho said having a “Code of Conduct”or COC will certainly help clarify interests of the respective countries. Nonetheless, a COC does not guarantee that tensions will ease among the parties, which have interests in the area involving two island chains — the Paracels and the Spratlys, a major shipping route and home to fishing grounds that contribute to the livelihoods of people across the region. Meanwhile, Universiti Sains Malaysia’s (USM) Center for Global Sustainability Studies director Dr. Kamarulazizi Ibrahim said there was a need for Asean to extend further its friendship to China, which could provide a platform for Asean members to discuss with dialogue partners on issues surrounding the South China Sea. Kamarulazizi said the members of Asean, whose population is about 600 million, need to sit and discuss the territorial claims, not only those affecting borders but economic activities like fishery, shipping routes as well as safety of the area. “We should project to China that the Asean region is a growing economy, where China is also benefiting from the rapid growth. Asean needs to promote its success and show the superpower the bloc’s rapid improvement,” he added. Meanwhile, USM Pro-Chancellor Tan Sri Mustafa Mansur said Asean members should work cohesively for solidarity in addressing the South China Sea disputes. “We have to be very careful in handling this matter,” added the former president of the Federation of Malaysian Manufacturers. By FERNAN MARASIGAN – manilatimes.netThe post One Asean stand may stop China appeared first on Asean Investment | Marc Djandji Blog.

China to invest $1.75 billion to build Vietnam power plant

China will invest a whopping USD 1.75 billion in energy-hungry Vietnam to build a 1,200-MW thermal power plant that will help promote the neighbouring communist nation’s economic development. Chinese enterprises will build the new units at Vinh Tan 1 thermal power plant in Vietnam’s southern Binh Thuan province, state-run People’s Daily reported. With a total investment of USD 1.75 billion, the contruction of the plant, reportedly the largest project in Vietnam operated by Chinese companies, is expected to be completed in four years. It is a joint investment venture of China’s Southern Power Grid Company, China Power International Development Company (95 per cent of investment) and the Power Corporation under the Vietnam National Coal-Natural Industries Corporation. The project includes two generating units, with each 600 megawatts. The first unit will be put into use by the end of 2018, and the second one will be operated six months later. The plant, which is constructed under the build-operate- transfer contract, will help increase the power supply, create jobs, promote economic development and improve people’s livelihood, said Hu Zucai, deputy director of the National Development and Reform Commission of China, before the opening ceremony of the construction of Vinh in Hanoi on July 18. Vietnam is struggling to meet its increasing energy demand and has been cutting coal exports to save the fossil fuel for its use. In the first half of this year, Vietnam’s coal exports dipped an estimated 76.3 per cent from a year ago to 1.08 million tonnes. By moneycontrol.comThe post China to invest $1.75 billion to build Vietnam power plant appeared first on Asean Investment | Marc Djandji Blog.

Indonesia clearing hurdles to attract foreign investment

The investment board in Indonesia is ramping up initiatives to attract funds into the country as it launches a massive infrastructure programme designed to accelerate modernisation and promote growth. In June, the Indonesia Investment Coordinating Board (BKPM) announced plans to cooperate with the Bank of China in promoting Indonesia’s investment potential at a roadshow in Zhejiang and Fujian Provinces in July. While such moves underline BKPM’s aim of reaching out to potential investors in strategic countries such as China, the slow pace of investment as well as regulatory challenges for foreign investors remain key concerns. Infrastructure spend The BKPM said in April that China had, for the first time, broken into the top 10 biggest foreign investors during the first quarter, investing US$75.1 million in 200 projects in Indonesia. However, this was dwarfed by Singapore at US$1.2 billion and the US at US$292 million. Boosting investment will be crucial to funding the government’s planned US$150 billion infrastructure programme, including new ports, power stations and roads, over the next five years. “The upgrading of our ports and other maritime infrastructure depends on whether we can attract large pools of investment, due to the government’s limited budget and insufficient resources to make the necessary infrastructure improvements,” BKPM’s chairman, Franky Sibarani, told OBG. Sibarani told media in June that total direct investments would need to increase by more than 15 per cent per year on average over the next five years to achieve the government’s annual economic growth target of seven per cent by 2019. The early signs are good: foreign direct investment rose 14 per cent year-on-year to 82.1trillion rupiah (US$5.4 billion) in the first quarter of this year, according to BKPM data released in April. This represented a significant recovery after weak foreign inflows in 2014 due to uncertainty caused by legislative and presidential elections. One-stop shop for investment To attract more foreign investment, in January the administration of Joko Widodo launched a one-stop service for investment at BKPM that aims to streamline and simplify licensing procedures for foreign investors. “The one-stop service will play a key role in [improving the investment climate]. We provide a simple and integrated licensing programme to facilitate the process for investors,” Sibarani told OBG. The government has also introduced a new package of tax incentives and relaxed regulatory conditions. For example, investment in the power generation sector previously required as many as 49 permits and took more than two years to process. Now only 25 permits are needed and the process is completed in nine months. In the energy exploration sector, the number of licences needed has been reduced from 52 to 42. However, field operators still need to secure a staggering 341 licences from relevant ministries and another 101 licences from local governments. Alongside the regulatory challenges, the government also has to overcome jitters about policy enacted by the previous administration, including a ban on unprocessed mineral exports, which critics say has closed off some avenues to foreign investors. No-entry signs on some sectors In May 2014, Indonesia revised its negative investment list, which specifies business activities closed to non-Indonesians, with sectors ring-fenced for domestic investors including energy, agriculture, retail and storage, among others. Meanwhile, Article 50 of a Trade Law enacted the same year allows the state to arbitrarily impose limits to protect government interests, and Articles 67-72 allow restrictions as a measure to preserve domestic demand. In a June report, investment bank Morgan Stanley said private investment in Indonesia was likely to disappoint. “Companies were discouraged with overlapping regulations and increased uncertainty potentially impacting their investment plans in the foreseeable future,” it said. The current government is trying to mend bridges with foreign investors and has admitted mistakes were made. For example, Jakarta is looking to delay a ban on exports of copper and other mineral concentrates due to come into effect in 2017, though bauxite and nickel are still expected to be retained for domestic processing. Jakarta pressed on with last year’s ban on mineral exports, even though there is not enough domestic smelting capacity to process the country’s output. The new government’s efforts are already having an impact. Following meetings in May, business leaders from China and Japan have separately told Widodo that they remain committed to their engagements in Indonesia and intend to follow through on their investment plans. By The post Indonesia clearing hurdles to attract foreign investment appeared first on Asean Investment | Marc Djandji Blog.

Thailand grows solar power investment in Southeast Asia

Come December, Thailand will have more solar power capacity than all of Southeast Asia combined as record sums of money is poured into the sector in the hopes of nurturing a new energy source to help drive the region’s second-biggest economy. Thailand has been shifting away from natural gas as once-plentiful reserves are expected to run out within a decade, forcing it to rely on imported fuel more than any other country in the region except Singapore. A plunge in solar-component costs and subsidised tariffs have also helped feed the country’s solar boom. About 1,200-1,500 megawatts of solar capacity will be connected to the grid this year, requiring as much as 90 billion baht ($2.7 billion) of investment, Pichai Tinsuntisook, chairman of the Federation of Thai Industries’ renewable energy division, told Reuters. Thailand’s solar capacity will rise to 2,500-2,800 MW this year from about 1,300 MW in 2014. That is almost six times more than the capacity added last year. The new capacity, while modest compared to Japan or Germany, will turn Thailand into the first significant solar power producer in a region where the sector has barely taken off. “Thailand has strong potential for both solar farms and rooftop solar systems,” said Sopon Asawanuchit, managing director of advisory firm Confidante Capital, adding that its location in the sunny tropics is an advantage. While the bulk of the power will come from solar farms, rooftop solar panels may have enough capacity over the next five years to supply as many as 250,000 households in urban areas, renewables analysts say. Thailand aims to increase its solar capacity to 6,000 MW by 2036. That would account for 9 percent of total electricity generation, up from 4 percent in 2014, and be able to meet the electricity needs of up to 3 million households. Despite Southeast Asia’s solar potential – thanks to abundant sunshine – Thailand is largely alone in boosting its capacity to harness the sun’s energy. That’s because its neighbours either have ample supplies of other energy sources such as oil, gas or geothermal power, or their governments lack the budget to invest in new technology and to support the sector with subsidies. The Philippines is starting to prepare similar plans, though they are still in an early stage. The Thai government is supporting the country’s solar sector with feed-in-tarif subsidies of up to 6.85 baht ($0.2) per kilowatt-hour paid out over 25 years to energy producers. The boom has attracted foreign investors including Japan’s Kyocera Corp, U.S.-based First Solar and China’s Yingli Green Energy. Low maintenance “Sunlight is free,” said Jormsup Lochaya, chairman of Bangkok-listed Superblook PCL, which has set a budget of 30 billion baht to invest in solar energy this year. “We have no (ongoing) material cost and no problem with staff expenses because the project needs about three staff to monitor,” he said. Kessara Tanyalakpark, executive director of property developer Sena Development Pcl, agreed and added that solar has the lowest risk while other renewables such as garbage or tapioca may face unstable raw-material costs. Sena is among the latest companies diversifying into the solar business as the domestic property market slows in line with a sluggish economy. Shares in companies which aim to invest in solar power have outperformed the overall Thai stock market this year. Among them are Sena, Superblook, Gunkul Engineering and Communication and System Solution. Despite the current boom, some investors are worried solar power may be used as an excuse for some retail punters to speculate in the stock market, the Federation of Thai Industries’ Pichai said. Pichai said some listed companies had also bought solar farms only to sell them later following gains in share prices due to the acquisitions. “Stock manipulation will undermine growth,” Pichai said. ($1 = 33.8100 baht) By ReutersThe post Thailand grows solar power investment in Southeast Asia appeared first on Asean Investment | Marc Djandji Blog.

Japan is trying to court influence in Southeast Asia through ODA

Japanese Prime Minister Shinzo Abe pledged 750 billion yen ($6.1 billion) in financial aid to the “Mekong Five” countries that include Cambodia, Laos, Myanmar, Thailand and Vietnam at the Japan-Mekong summit held in Tokyo over the weekend. The scale of this Official Development Assistance (ODA), which will be granted over three years from fiscal 2016, is the largest since the summit was launched in 2009, with 500 billion yen offered in 2009 and 600 billion yen in 2012. This move comes amid China’s active efforts to promote the Asian Infrastructure Investment Bank (AIIB), which Japan sees as a challenge to the Asian Development Bank led by itself. In recent years, the deteriorating Sino-Japanese relations have overshadowed Japanese investment in China and bilateral trade. With some other factors such as China’s rising labor costs and the devaluation of the yen, Japan has looked to the ASEAN nations for investment opportunities. During the weekend summit, Abe said, “The peace and stability of the Mekong region is of great importance to Japan.” Due to the region’s vast market, rich resources, economic potential and low operation costs, ASEAN remains Japan’s important trade partner. After Abe became prime minister in 2012, he chose Vietnam, Thailand and Indonesia as his first destinations, in an effort to expand trade relations with Southeast Asian countries and to raise Japan’s regional clout. Infrastructure is a potential area for investment in the region. Not long ago, Japan announced it would invest $110 billion to support Asia’s infrastructure, in an apparent bid to compete with the China-led AIIB which aims to help the region achieve sustainable economic growth. Japan has advantages in environmentally-friendly innovation and advanced industrial structures, while China has the upper hand in industrial capacity and cost-effectiveness, project construction ability and ability to adapt to different environments. There has already been a heated competition between China and Japan over the two over the construction of high-speed trains in Thailand. It is expected they will also face similar contentions in countries like India, Indonesia and Malaysia. It is worth noting that Japan is not only courting influence in the region to boost its image economically, it is also becoming increasingly vocal against China in territorial and other disputes. At the summit, Abe and other leaders made an implicit warning against China’s land reclamation on some islands and reefs in the South China Sea, saying the recent developments in the South China Sea will “further complicate the situation” and may “undermine regional peace, security and stability.” Japan is not a South China Sea claimant, and it has its own disputes with China over islands in the East China Sea. Japan does not want to see a close relationship between China and ASEAN. Under current circumstances, by picking up the South China Sea disputes and intensifying the situation, Japan wants to alienate China and ASEAN. This will help Japan further woo ASEAN and add to its own clout in its disputes with China over the East China Sea. Over the weekend, the nations in the Mekong region, except Vietnam, were reluctant to lean on Tokyo. Economically, the region can gain more assistance and investment from the rivalry between China and Japan. Diplomatically, it will have more leverage to seek a balance between big powers and maximize its own interests. Therefore, as China necessarily promotes its own strategies, it should emphasize its vision of long-term strategic cooperation with ASEAN. On some concrete issues, China should take ASEAN’s demands and interests into consideration. For example, it should not only provide technological assistance and cultivate local talent, but also care about labor welfare and environmental issues. This will prove conducive to a win-win outcome. By globaltimes.cnThe post Japan is trying to court influence in Southeast Asia through ODA appeared first on Asean Investment | Marc Djandji Blog.

VN urged to tap China trade, investment

China is expected to import more than $10 trillion in goods and services and invest $500 billion abroad in the next five years, offering opportunities for Viet Nam and other countries in the Asia-Pacific region.Speaking at a seminar held yesterday in HCM City, Li Zhenmin, commercial and economic counselor at the Chinese Consulate General, urged Viet Nam to seek Chinese partners for long-term cooperation in trade and investment.Viet Nam’s trade deficit with China has ballooned in recent years, and now stands at $9.8 billion.While Vietnamese officials have urged China to increase imports, Zhenmin said that China had opened its doors to Vietnamese exports.Citing statistics from China’s Customs department, he said China’s import turnover from Viet Nam had recorded an average growth of 15-20 per cent per year in recent years, a relatively high rate.For many years, China has been the largest buyer of agricultural exports from Viet Nam.Viet Nam is the second largest trade partner of China in the ASEAN region.This year, bilateral trade between the two countries is expected to reach $100 billion, Zhenmin said.”To increase cooperation, a transnational e-commerce floor for the two countries should be established. We can take advantage of the internet to increase information transparency, which would create favourable conditions for the two countries’ businesses,” he said.Chinese importers did not understand the Vietnamese market fully, he said, adding that Vietnamese businesses also encountered obstacles and should seek only competent and reliable Chinese importers.Zhenmin advised Vietnamese businesses to increase export quality, avoid violations of intellectual property rights, and refuse to make or buy counterfeit products.Nguyen The Hung, deputy director of the HCM City branch of the Viet Nam Chamber of Commerce and Industry, said bilateral relations between Viet Nam and China had shown impressive growth but there was still unexploited potential.Last year, the total export-import turnover of the two countries reached $58.7 billion, an increase of 16.5 per cent compared to the same period last year.Viet Nam’s exports in 2014 totalled $14.9 billion, up 11.8 per cent. Imports were $43.8 billion, an increase of 18.2 per cent.In the first five months of this year, Vietnamese exports to China reached US$6.1 billion, a decrease of 1.2 per cent over the same period last year.Viet Nam’s imports totalled $15.9 billion, an increase of 19.1 per cent in the first five months.Viet Nam’s main exports to China are crude oil, telephones and parts, rubber, rice, fruit, vegetables and seafood, while it imported machinery, equipment, steel and fertiliser from China.Last year, China had the largest number of tourists to Viet Nam (1.9 million), an increase of 2.1 per cent over 2013.In the first five months, the number of Chinese tourists to Viet Nam reached 700,000.China had a total of 1,112 projects with total registered capital of $8 billion by March this year, ranking ninth among 100 countries and territories investing in Viet Nam.China had 99 investment projects in Viet Nam with total investment capital of $253 million in 2014.  By VNSThe post VN urged to tap China trade, investment appeared first on Asean Investment | Marc Djandji Blog.

UK investment bank eyes bigger Asean share

London-based Religare Capital Markets has made another move to expand its operations in Southeast Asia with the appointment of the Asean trading head. Stephen Conway’s appointment is the second senior hire disclosed this month by the investment bank, coming three weeks after Matthew Lutter, who joined as managing director and head of Asean equities.  Religare has also added seven senior executive partners to its team since the start of the year and is looking to fill 10 or more positions in sales, trading and research in Singapore and Hong Kong in the coming months. The banking and securities company has been building up a strong backlog of deals in India, Singapore, the Philippines and Indonesia. Earlier this month, it said it had formed an exclusive joint venture with Trinity Securities in Thailand for the provision of advisory, execution and investment banking services. In April, Religare Capital Markets signed an agreement with FSG Capital of the Philippines to provide investment banking services to rapidly growing companies.  The investment bank is also in discussions to form strategic tie-ups in Indonesia, Malaysia, Japan, Taiwan and China. The firm has a staff strength of 110 across India, Hong Kong, Singapore, Australia and the UK. “We are pleased to have Stephen on board to lead our next phase of growth and expansion in Southeast Asia. Steve has very strong credentials and a proven track record. I am confident he will be a real asset as we focus on building our business in the region,” Lutter said. “We are definitely on a roll. We believe we have hit the sweet spot in identifying the underserved segment of the market and we have responded by attracting talents with an entrepreneurial approach in the way we conduct our business and compensate our people.” By nationmultimedia.comThe post UK investment bank eyes bigger Asean share appeared first on Asean Investment | Marc Djandji Blog.