ASEAN REGIONAL CARI CAPTURES • ISSUE 136 CARI CAPTURES Another round of Trans- Pacific Partnership (TPP) talks hosted in Malaysia concluded. Malaysia is one of the countries in negotiations over the TPP; however it is meeting resistance from firms in the country. The agreement is still shrouded from the public eye. The TPP has been criticised for being negotiated behind closed doors which is making it difficult to plan for its implementation. Also the agreement seeks to create tighter intellectual property rights which could restrict freedoms in the private sector Malaysia is considering joining the TPP but it is facing opposition from firms which are considered 01 ‘Bumiputra’ (native Malaysian). These firms are given special economic consideration by the government and many operate in protected industries, all of which would be removed under the TPP which is at its heart is a free trade agreement (FTA) TPP will also abolish most price controls and as Malaysia has strict control over goods deemed ‘necessities’ Many claim that this may increase the burden on the country’s poor 29 JULY 2013 Business Times Singapore (19 July 2013) TRANS-PACIFIC PARTNERSHIP TALKS 2013 Free trade is advocated almost universally by economists and the TPP if implemented would form the largest free trade agreement in the world. This should provide a good boost to economic growth as the countries involved are better able to specialise in their comparative advantages The TPP is also seeking to implement regulations which remove anti-competitive policies and strengthen laws governing intellectual property. The governments involved claim that these will increase competition and drive innovation. However it remains to be seen if the specific legislation being laid down by the TPP will be beneficial The secrecy over the negotiations is prompting fears in the private sector that the legislation created will be unfavourable for a lot of firms across many sectors. Also, the secrecy may prevent businesses planning for the measures which could slow down the positive effects of the policies if they are beneficial, making the agreement less effective ASEAN JAPAN VIETNAM MALAYSIA AUSTRALIA NEW ZEALAND USA CANADA MEXICO PERU CHILE SINGAPORE BRUNEI THE TRANS-PACIFIC PARTNERSHIP 40% OF THE WORLD’S POPULATION 60% OF THE WORLD’S TOTAL GDP US$ 26.9 TRILLION ESTIMATED GDP OF ALL TPP MEMBERS (UNITED STATES ALONE - US$ 15 TRILLION) Source: www.fas.org, www.ustr.gov
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ASEANREGIONAL
CARI CAPTURES • ISSUE 136
CARICAPTURES
A n o t h e r r o u n d o f Tr a n s -
Pacific Partnership (TPP) talks
hosted in Malaysia concluded.
Malaysia is one of the countries
in negotiations over the TPP;
however it is meeting resistance
from firms in the country. The
agreement is still shrouded from
the public eye.
TheTPPhasbeencriticisedfor
beingnegotiatedbehindclosed
doorswhichismakingitdifficult
to plan for its implementation.
Also the agreement seeks
to create tighter intellectual
property rights which could
restrictfreedomsintheprivate
sector
Malaysia is considering joining
theTPPbutitisfacingopposition
fromfirmswhichareconsidered
01
‘Bumiputra’ (nativeMalaysian).
These firms are given special
economicconsiderationby the
government andmanyoperate
in protected industries, all of
whichwouldberemovedunder
theTPPwhich isat itsheart is
afreetradeagreement(FTA)
TPPwillalsoabolishmostprice
controls and as Malaysia has
strictcontrolovergoodsdeemed
‘necessities’
Manyclaimthatthismayincrease
theburdenonthecountry’spoor
29 JULY 2013
Business Times Singapore (19 July 2013)
TRANS-PACIFIC PARTNERSHIP TALKS 2013
Free trade is advocated almost universally by economists
DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. 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.
Channel News Asia (25 June 2013)Reuters (19 July 2013)
ABC (22 July 2013)ABC (19 July 2013)
INDONESIA INCREASES BEEF SUPPLY AS PRICES SOAR04
In response to soaring beef prices
averaging IDR 93,000 (USD 9.03)
per kilogram, Indonesia recently
abandoned an annual import
quota system and allowed for
the unlimited importation of live
cattle.
Meat vendors were quick to
oppose thepolicyandclaimed
Tra d i n g a c t i v i t y o n B u r s a
Malaysia remained buoyant after
the 13th General Election with
interest in the market expected
to remain robust given strong
earnings potential of public listed
companies.
Highertradingvalueofsecurities
traded increased earnings by
45.2% to RM54.82mil in the
secondquarterof2013
BursaMalaysiarecentlyunveiled
new guidelines for restricted
shortselling(RSS)andsecurities
borrowing and lending (SBL),
whichregulateshortsellingon
thelocalmarket
Italsorecentlywidenedthepool
ofsecuritiesavailableforshort
that they still have supplies of
local beef which were bought
atahigherprice
Topreventfuturefoodshortages,
the State Logistics Agency
announced plans to take over
the issuing of all permits for
importingfoodandagricultural
products
Indonesia wi l l cont inue to
02 BURSA MALAYSIA EARNINGS UP AS IT WIDENS ITS SHORT SELLING POOL
LAOS BOOSTING ITS TRADE CONNECTIONS IN ASEAN03
Bangkok Post (22 July 2013)Bangkok Post (12 July 2013)
NNT (2 July 2013)
Laos’s trade with ASEAN has
increased significantly over the
past few years and especially
since the country joined the
World Trade Organisation in
February this year.
Bilateral trade between Laos
andVietnamduringthefirstfive
months of this year increased
by5.6%year-on-year, reaching
LaoandThailand,whichisLao’s
largest trading partner, held a
business matching exhibition
earlierinJulytopromotefurther
tradebetweenthetwocountries
paymentsongolddeposits
US$433.8million
Laos reported a slight trade
surpluswithVietnamofUS$23
million,exportingmainlywood
andagriculturalproductswhile
importing mainly petrol, coal,
steel, vehicles and machinery
fromitsneighbour
In 2012, trade between Laos
and Indonesia nearly tripled
year-on-year, reaching US$27
mil l ion, according to trade
figuresdisclosedduringavisit
by IndonesianForeignMinister
MartyNatalegawa
Lao’s exports to Indonesia
inc luded garment , cof fee ,
tobacco, and fur, while the
country imported fertil isers,
veh ic les , spare par ts and
e lectr ica l appl iances f rom
Indonesia
The Star Online (25 July 2013)The Star Online (18 July 2013)
DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. 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.
justover30,000unitswithin3
years. In order to do this the
firmhas investedRM1.5million
(US$467,600)
Meanwhile, Ford opens a new
sales centre in West Java,
Indonesia as the firm sees to
tap into thecontinuinggrowth
inIndonesia.Thefirmwillinvest
overRp10billion(US$170,000)
foreachdealershipanditplans
toopenninemoreinthecountry
Many largecar-makers suchas
Toyota have chosen to set up
in Indonesia and Thailand due
to their large established car
marketsandfavourableeconomic
conditionscomparedtoMalaysia
whichheavilyprotectsitsnative
carmanufacturers
MALAYSIA’S AUTO INDUSTRY SPREADING ITS WINGS05
IPO NEWS06
Thailand’s True Corp is planning
a n i n f ra s t r u c t u re I P O a n d
Malaysia’s Ranhill‘s IPO has been
delayed.
TelecommunicationsgroupTrue
Corp said it is aiming to raise
US$2.25 bill ion by listing an
infrastructure fund tohelppay
downitsdebt.Thiswouldbethe
largestIPOintheregionthisyear
The auto industry is expanding
rapidly in Indonesia and Thailand
but for Malaysia expansion into
the rest of ASEAN hasn’t been
as quick. Many of its automotive
firms lag behind the two larger
markets but now Naza is finally
expanding into Indochina.
The Naza group of Companies
plans to launch its motorbike
divisioninCambodiainorderto
springboarditsexpansioninto
theIndonchinaregion.Thefirm
willbuilditsfirstsaleandservice
centreoutsideofMalaysiainthe
Cambodiancapital,PhnomPenh
Thegroup’sexecutivechairman
Datuk Wira SM Faisal Tan Sri
SM Nasimuddin said that the
group plans to bring its other
businesses to the country if it
cangrowthebrandintheregion
successfully
Thefirmisplanningoncapturing
upto10%ofthemarketsharein
theCambodiancapitalbysellingThe Sun Daily (23 July 2013)
Jakarta Post (22 July 2013)
THAILAND
INDONESIA
MALAYSIA
reviewofitsconstructionwork
inthestateofMalacca
TheIPOhasbeendelayeduntil
thecompanyprovidesdetailson
howthesuspensionwillaffectits
businessandinvestorsdecideif
they still want to invest in the
firm
Reuters (23 July 2013)Bloomberg (25 July 2013)
The group has a large debt
burdenof around70%and the
IPO would largely go towards
paying it down. The firm is
rapidly expanding its mobile
network which is causing the
firmtorackupdebt
Thefirmhasbeenmakinglosses
as it struggles to compete
with the larger telecom firms
in Thailand and Moody’s has
reduceditsoutlookonthefirm’s
credit rating to ‘negative’.This
ispromptingthefirmtoalsosell
offnon-corebusinessassets
Ranhill was planning a US$235
million IPO however the listing
waspostponedbytheMalaysian
SecuritiesCommission.Themove
came after one of its affiliated
firms received a suspension
notice from Petronas after a
RECORD HIGH FDI IN INDONESIA BUT ECONOMIC GROWTH SLOWING DOWN07
Indonesia is still a FDI hotspot,
but local protests are blocking
a la rge potent ia l Japanese
investment. Despite the high level
of foreign investment, economic
growth is slowing down mainly
due to low commodity export
prices and high inflation.
Indonesia attracted a record
amount of FDI in the second
quarter of the year, or US$6.5
billion
A planned FDI from Japan to
buildaUS$4billionpowerplant
that would provide power to
some 13 million people could
possiblybecancelledduetothe
protestsoflocalslandowners
Around 50 landowners are
refusing to sell their land but
theyownabout40hectaresthat
would account for 20% of the
plannedconstructionsite
The Wall Street Journal (23 July 2013)Bangkok Post (21 July 2013)
The Japan Times (20 July 2013)
Unlessthepurchaseiscomplete
by6Octoberthecompanywill
loseitsrighttobuildthepower
plantandanewroundofbidding
willbeconducted
Despite the increasing FDI,
economicgrowthinIndonesiais
slowingdownbutitisexpected
to be about 6.05% this year,
accordingtoaBloombergsurvey
ofeconomists,slightlylowerthan
the2012levelof6.23%
Theinflationrateisexpectedto
peakinJuly,afterasubstantial
increase over the past two
months, Indonesian Finance
MinisterChatibBasrisaidinan
interviewinMoscowon20July
after a meeting with the G20
finance ministers and central
bankgovernors
MALAYSIA CAMBODIA VIETNAMMYANMAR LAOS
INDONESIA
2
2
2
PROTON & PERODUA’S GLOBAL SALES NETWORK
PROTON
PERODUA
P
22 2
2
2
22
22
2
2
22
2
P
P
P
PP
PP
PP
P
P
PP
P P
P
P
PP
Australia, Brunei, China, Indonesia, Japan, Singapore, Taiwan, Thailand, Bahrain, Egypt, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Bangladesh, Nepal, Pakistan, Sri Lanka, Cyprus, UK, Mauritius, South Africa
UK, Singapore, Mauritius, Brunei, Sri Lanka, Cyprus, Malta, Egypt, Nigeria, Senegal,
Lebanon, Qatar, Saudi Arabia, Syria, Nepal, Fiji and Republic of Ireland
P
P
P
Proton previously had a much larger global sales network. Its cars were sold in South America and throughout Europe and Russia.
However, failure in those markets forced the firm to withdraw from them.
Perodua is a newcomer to the international market and had only sold cars through partnerships with small dealerships in other countries.
They are now targeting to sell more cars by 2017 in a more aggressive international expansion plan.
DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. 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.
POLITICS Myanmarhasdecidedtorevisethedealover the controversial copper mineLetpadaung which is being built byWanbao,aChinesecompany,officialssaid on 25 July. The decision cameafter a long series of protests whichledtoaviolentpolicecrackdownlastyear.ThenewtermsgivetheMyanmargovernment 51% of the revenue andWanbao will also contribute severalmillion dollars yearly for corporatesocial responsibility (CSR) activitiesandfortheeventualminereclamationprocess.
Channel NewsAsia (25 July 2013)
Myanmar's parliament agreed on 25Julytoforma109-memberConstitutionReview Joint Committee to makeamendmentstothe2008Constitution.The move is seen as an attempt atresolving the dispute about theconstitutioninpreparationforthe2015generalelection.Thedeputyspeakerof the Union Parliament will be thechairmanandcommitteememberswillrepresent proportionally parliamentmembers of both Houses, politicalparties,militaryMPsandindividuals.
Global Times (26 July 2013)
Myanmarreleased73politicalprisonerson23July,astepinTheinSein’splanoffreeingallofthecountry’sprisonersofconsciencebytheendoftheyear.Thousandsofpoliticalprisonershavebeenfreedinbatchesoverthepasttwoyears,but approximately80politicalprisoners are estimated to remain inMyanmar’sjails.
The Wall Street Journal (23 July 2013)
Opposition leader Aung San SuuKyi attended a Union PeacemakingWorking Committeemeeting for thefirsttimeattheMyanmarPeaceCenter(MPC) on Sunday21 July. She joinedthe discussions in an informal rolebutherpresencehadbeenrequestedby the United Nationalities FederalCouncil (UNFC) – a coalition of 11ethnicarmedgroups.PresidentTheinSein just recently announced duringhis European tour that a nationwideceasefire with ethnic armed groupscould materialise over the comingweeks.
The Irrawaddy (23 July 2013)
ECONOMY
Myanmar’s access to the EuropeanUnion’sGeneralSystemofPreferences(GSP) came into effect on 19 July,but Myanmar exports still need tomeetquality standards tobeable tobenefitfromthesystem,accordingtoMyanmar Fisheries Federation Vice-ChairmanHninOo.ThemaindifficultyforMyanmarproductsisqualitycontrolwhich must meet strict internationalstandards,hesaid.
Mizzima (23 July 2013)
FOREIGN AFFAIRS
Myanmar President U Thein Seinpledged on 23 July to advanceties with China. Myanmar will makeunremitting efforts to push forwardthe Myanmar-China comprehensivestrategiccooperationpartnership,hetoldFanChanglong,vicechairmanofChina's Central Military Commission.Mr Changlong is on a tour throughMyanmar,ThailandandKazakhstaninanefforttostrengthenstrategicbilateraltiesintheregion.
Xinhua (24 July 2013)
“FRACK” IT: ASEAN PREPARES FOR SHALE GAS IMPACT09
Business Times Singapore (24 July 2013)
should give a much needed boost to the
market
Malaysiaisalsoinpositiontotakeadvantage
ofthenewtechnologyasitpotentiallysits
ontopofalargeamountofshalerockwhich
containsnaturalgas.However, thismaybe
adouble-edgedswordastheabundanceof
naturalgascouldreducethedemandforoil
whichisoneofMalaysia’smajorexports
nextmonth
'Waterbombing'andcloudseedingefforts
began last week, while more than 370
firefightersweredeployedontheground
Nugrohowarnedthatthehazecouldreachits
peakduringthedryseasonbetweenAugust
andOctober
GASSANDCHEMS WATER
H Y D R A U L I C F R A C T U R I N G T E C H N O L O G Y
SHALEROCK
MAGMA
GAS
GAS
GAS
1
MIXTURE IS PUMPED IN3
MIXTURE IS PRESSURISEDTO A HIGH DEGREE
2
SHALE ROCK IS FRACTUREDWITH HAIRLINE CRACKS,
THE GAS ESCAPES THROUGHTHEM, UP THE DRILL SHAFT
& IS COLLECTED
4
MILLIONS OF GALLONS OF WATER, THOUSANDS OF TONS OF SAND & THOUSANDS OF GALLONS OF CHEMS ARE MIXED