Asian Economies: The Good, The Bad and the Ugly

May 21st, 2017 by admin No comments »

Asian economies contribute substantially to the global outline of fiscal opportunity.  As such, once in a while it is potentially helpful to look at what they are – and are not offering.  In a nutshell, here are some oversights of current status of economies in the region and how they impact investment opportunities.

The Good

Anticipated growth for economies in the region throughout this year, is 5.5% which is a little higher than the number for 2016.  In addition, according to data released through the “2017 Regional Economic Outlook for Asia and Pacific: Preparing for Choppy Seas,” policy stimulus is maintain a healthy domestic demand in both China and Japan in the short term.  This is positive for all of Asia’s economies.

The Bad

With the growth in economies, there are two potential problems (one shorter term and one longer):

  1. Making worldwide fiscal conditions more stringent.
  2. With the aging populations, there is the emergence of limited productivity union.

There are possible solutions to this such as an influx of women and migrant individuals joining the work force; more secure pension systems; supplementary trade and FDIs, etc.

The Ugly

While there is predicted additional growth for 2017 in the region, when looking at 2018, this seems to be reversed, most notably with Japan which has a predicted 0.6% growth rate.  This has been explained as being due to the consolidation of fiscal policy and the proposed increase to consumption tax.

Ultimately, there is much to watch in the short and long-term with Asia’s economies.

 

 

 

Asian Regions: World Bank Predictions for Growth

April 21st, 2017 by admin No comments »

According to a recent study undertaken by the World Bank, these are the regions to watch in Asia for investment and economic success. They are: Laos, The Philippines, Cambodia, Myanmar and China.

The Laos economy — that has historically been regarded as the poor relation of fiscal success — is set to surge by 7% this year due to investments in the power sector alongside a more solid amalgamation with the 10-member Association of Southeast Asian Nations.

The Philippines – will probably remain the fastest growing economy from the Association of Southeast Asian Nations 6 (ASEAN-6). This is due to increased domestic demand alongside an escalation in infrastructure expenditure, the growth in the middle class and the upsurge in the Business Process Outsource (BPO) industry.

Moving over to Cambodia, it seems that the microfinance industry is what is currently propelling growth. Over the last 20 years or so, thanks to this sector, the economy has encountered significant growth, simultaneously mitigating poverty in the region. These two factors – growth and poverty elimination – are two high priorities for the government.

Most notably, the private PRASAC Microfinance Institution has played a huge role in this. Over this same time frame of Cambodian growth, PRASAC has become the country’s “largest and most sustainable MFI in Cambodia in terms of business size, customer care, flexible and sound financial solutions, and a wide network of offices and ATMs [having] developed a modern, transparent and dynamic core banking system.” As such it has received various awards for its part in putting the country’s economy on the Asian investment map.
Myanmar’s new oil pipeline has had a huge impact on its economic attractiveness. When activated, this will measure around 770 kilometers from western port city Kyaukpyu to the Chinese border. It has been hailed as “the crown jewel of economic cooperation agreements,” that was signed in Beijing.

And then of course let’s not forget China, which has always been known as the hero of growth and investment. Most recent figures from March showed an increase in trade surplus and exports (16.4%) a reversal of the 1.3% decline from February. Further, predictions for Q1 of growth in the region from economists is 6.8% from last year so that’s indicative of strength in economy too.

So for companies and high net-worth individuals looking to Asian locations to invest, watch these regions.

Asia and GCC

March 21st, 2017 by admin No comments »

The most dynamic economy today in the world, is Asia.  Comparative to North America and EU economies (encountering deceleration of optimistic economic activity), the markets throughout Asia are truly thriving.

Consequently, thriving countries in the Gulf Cooperation Council (GCC) region are becoming increasingly aware of the advantages of working with Asia, in particular they want places that are fiscally able to purchase their energy exports.

Looking at current relations between members of the GCC and Asia, we find that strong ones exist (and are growing in leaps and bounds) in particular with East and Southeast Asian regions.  Indeed, the economic bonds between these regions have shown particular burgeoning since 2007.  For five years from that time, exports from Saudi Arabia to China encountered a growth from around $17 billion to $55 billion.

Further, in 2014, GCC yields became more appealing for new issue investors with new issuers coming to the bond market with the capacity to diversify their investments more. it is likely that the trend of the GCC bringing in more foreign investors (most notably from Asia regions) will continue.  When investment links strengthen, this will further bolster the process.

Opportunities in Vietnam’s Luxury Hotel Resort Market

March 6th, 2017 by admin No comments »

Newly enacted laws liberalizing real estate investment for foreigners have caused a boom in real estate investment in the Southeast Asian country of Vietnam. Along with apartments, townhouses, and other residential units whose sales have been going gangbusters all over the country, so to have villas located within the confines of a five star hotel. Vietnam has a huge choice of incredible such luxury resorts; for instance, the Amanoi Spa Hotel and luxury resort offers villas for sale to investors looking for incredible value for their investment.

Buyers of villas at Amanoi reap the benefits of this high-end vacation getaway located along the southeastern coast of Vietnam on the Vinh Hy Bay. Villa owners have access to the pristine and privately owned beach. They can use the resorts exceptionally appointed facilities, including a spa situated on the banks of a lotus-filled lake. There are several highly-acclaimed eating venues located at the highest point of the resort, affording spectacular views of the boulder outcrops and the coastline of the Nui Chua National Park.

Other five-star hotels in Vietnam are joining the boom. In the Khanh Hoa Province where the Nha Trang Bay is, upwards of 2,800 four and five-star hotel rooms are in the building stages, with the expectation that they will be open this coming year.

The ONYX Hospitality Group of Thailand recently signed a deal with the HB Group of Vietnam to manage a resort valued at over $1.5 billion which is now under construction in Hoi An.

“Vietnam is one of the region’s fastest growing travel destinations, and we are excited to have OZO Hoi An as part of our continuing expansion plan,” Peter Henley, CEO of ONYX Hospitality Group, said.

Those looking for the next big opportunity in real estate should consider luxury resort five-star hotels in Vietnam.

Why Singapore is a Good Investment Option

February 21st, 2017 by admin No comments »

According to head of Fixed Income (Singapore) at Manulife Asset Management, Murray Collins, Asia is a good investment option right now, in particular Singapore.  As such, the company has established the Manulife SGD Income Fund which seeks to “deliver higher stability and lower risk, with an emphasis on income” for its clients, with at least 50 percent of holdings in Singapore dollar-denominated bonds. The way the firm limits its clients’ currency risks is by transferring all the non-Singapore dollar exposures into Singapore dollars.

Boasting over two decades of experience in the industry, Collins has the knowledge to realistically anticipate that there are existing options for income-focused investors to gain exposure in the higher-quality issuers in the Singapore market with investment-grade bonds predicated by Singapore’s solid credit rating, still look good.

Indian firms are finding the region attractive too with it being the top destination for total direct overseas investment in 2016.  Overall that investment figure escalated by 32 percent and in December alone, companies from India invested a staggering $2.06 billion into Singapore (more than 82.5 percent of the total commitment).

Furthermore, the Monetary Authority of Singapore (MAS) announced earlier this month that an additional 3 application channels have been opened for the Singapore Savings Bond (SSB) program. Attractive to small savers, these are: OCBC’s Internet banking portal, OCBC’s mobile app and UOB’s Internet banking portal.

Investing in Thailand

January 21st, 2017 by admin No comments »

FDI’s in Thailand remains a top priority for the government for 2017, with the additional of legal amendments and regulations in an effort to achieve this, in line with the escalated target (of 450 to 550 billion baht) set by Somkid Jatusriptak, the country’s Deputy Foreign Minister. The impact of this is the necessity of the BoI to hold more foreign roadshows. Investment approved by the BoI included steel cord manufacturing, petrochemicals, aviation, logistics and land development in industrial estates.

According to a statement from the office of the Prime Minister, the country is actually expected to undergo a transformation from a middle-income to a high-income country through the promotion of new investments in 10 targeted industries.  This will be part of a large program entitled ‘Thailand 4.0’

The industries are: automotive and auto parts, including electric vehicles; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services which will focus on added valued to products through advanced technology and innovations, which means Thailand needs investment in those areas.

Why Invest in the Maldives

December 21st, 2016 by admin No comments »

For those looking for a gateway into Asia investments, Minister of Economic Development in the Maldives, Mohammed Saeed explains why his region is a good option. While it’s been traditionally seen as a popular tourist destination, since it is now encountering fast economic growth, it is becoming a popular investment destination. Industries include: tourism, financial services, agribusiness, renewable energy and more this results in “several sunshine sectors,” being available in the Maldives.

America’s Trading Support of Asia

November 21st, 2016 by admin No comments »

asiaAsia is encouraging Donald Trump to give his support to a Beijing free trade deal with the Asia Pacific. Given that during his campaign, Trump labeled the Trans-Pacific Partnership a “disaster,” now is the time for action and a move away from Obama’s framing of the TPP resulting in an effort to write Asia’s trade rules before Beijing had the opportunity.

China has expressed concerns that America could use the TPP to force it to open markets by signing up or face isolation from other regional economies. Beijing is just relieved that it is appearing increasingly less likely that the TPP will materialize. And China is in the process of engaging in initiatives toward the Free Trade Area of the Asia Pacific as well as the Regional Comprehensive Economic Partnership.

Meanwhile, Griffith University Business School’s research dean said that Trump’s TPP repudiation (which excludes China) as well as his “open disdain for asymmetrical alliance arrangements — in other words all US alliance ­arrangements,” can be cause for concern.

Property Investments

October 21st, 2016 by admin No comments »

asia-homesForeign investors are looking into Asia for property developments. With these emerging markets come tremendous opportunities. This is especially the case in Southeast Asia, although growth was encountered throughout the ASEAN region, of 4.7% in 2015. It is anticipated that this elevation will continue in the next few years.

Thus property – again, most notably in Southeast Asia – is becoming an increasingly attractive option for FDIs. According to ecommerce consultant Lisa Froelings, the cities that are particularly good for real estate investment in the region include: Thailand’s Chiang Mai, Malyasia’s Kota Kinabalu and the Philippines’ Davao City.

Part of Singapore is also being seen as a top destination for foreign real estate investments. Experts in Singapore are pointing to the Indian diaspora region as the country’s “largest listed real estate developer.” A global representative office was recently set up in Singapore by Godrej Properties (GPL) that has its headquarters in Mumbai. According to the firm’s Executive Director, Mohit Malhotra: “Indian nationals living abroad and people of Indian origin in the region have a high disposable income. They also actively invest in India, so we would like to tap the opportunities in Singapore where there is a large Indian community with strong cultural linkages with India.”

GHL is targeting Singapore for its 350,000 ethnic Indians, and 350,000 Indian nationals working in the following sectors: IT, fiscal services, construction and marine. Malhotra believes that being physically present in the region will help widen their market share.

Investing in Asia: After Brexit

September 19th, 2016 by admin No comments »

In this video, CIO of Manulife Asset Management Ronald CC Chan, presents an analysis of how Asia’s investment markets are being influenced by Brexit.