Archive for the ‘Asia’ category

Asia Sun Investments

March 18th, 2016

solar-panelsIt might just be a good time right now to make an investment in the solar industry throughout Asia. This is because of the increase in populace in the area as well as the dearth of conventional energy sources. As a result, Asia is doing a fine job of promoting its alternative sources of energy.

Solar seems to be the one that is really gaining momentum in Asia. You just need to take a look at India and see how important solar is there; the government has stated that it intends to increase its solar capacity 30 fold in the next four years. At the end of 2015, ASEAN member states discussed the possibility of using renewable energy to solve the problems with limited electricity that the entire region encounter.

And then when you look at China, the revenue for solar power generation there increased at a yearly rate of 145.3 percent from 2010 to 2015, bringing in a grand total of $2.6(US) billion. So that’s real money and a real reason to get on the investment bandwagon for FDIs. Another advantage of solar investments is the increasingly popular promise of environmental consciousness and solving pollution issues.

And then there’s Indonesia. That region’s development as a solar market is likely to get quite substantial, given the Bali Clean Energy Forum’s announcement of a 5 GW goal. Especially given what Sudirman Said, Minister of Energy and Mineral Resources for Indonesia said on the launch of his Center of Excellence for Clean Energy that will expedite the expansion of renewable energy, up to 23 percent of the national energy mix by 2025. This center is set to “support the development of the 35 MW electrification programs [sic], of which 25% or about 8.8 GW will come from renewable energy.”

Ultimately, using renewable energy is a feasible method to generate energy in Asia. In terms of solar power, the South Asian region is privy to pretty much the perfect combination of high solar insulation and a large quantity of potential customers.

What Next for Business in Asia?

November 14th, 2015

mapHow optimistic are Asian businesspeople today about the future of economic conditions?

According to the Asia Business Council Survey, 59% expect conditions to remain at their current pace. In 2014 that figure was 35%, potentially indicating a less optimistic view now.

What they do believe is good for Asia is the region’s “solid economic fundamentals and pro-growth policies.” For example, India is seen as having an inviting economic environment.

But those who felt like nothing would change much (or would deteriorate) spoke of the potential of economic slowdown and uncertainties within China due to its seemingly open-ended reforms. As well, throughout Asia there seems to be a lot of infrastructure development which may not be a good enough environment to back up an escalated level of foreign investment growth.

This China issue can be seen perhaps with the most recent announcement from Australia’s IAG (Income Insurance Australia Group) that its Asia strategy is steering clear of China. However, in a more optimistic note, it added that that fact will not stop it from it expanding in India, Malaysia, Thailand, Indonesia and Vietnam.

Further, if Rohini Kappadath is to be believed, if Australia hides from making real investments in Asia, it is a mistake. He said: “More focus must be invested on the opportunity that is passing us by each day because of under investment in Asia by Australian businesses. There is more at stake by not considering the outsized returns we are foregoing by not taking some risk. This means taking an equity position by making a direct investment and working (as other Asian business leaders do each day) with balancing the risks and volatilities that are part of the terrain in any economic value capture opportunity.”

So yes, there are risks to making investments in Asia. But it is simultaneously the case that ultimately there may be more risks by not making such investments.

AIIB: Time to Put Private Sector to Infrastructure Work

October 13th, 2015

In this video we hear President Designate of the Asian Infrastructure Investment Bank, Jon Licquin say how he hopes that in the future the AIIB will make more effort to encourage private sector involvement in the region’s infrastructure investment.

Uber Investing in Asia

August 9th, 2015

carUber Technologies Inc. is intending to invest $1bn into India over the next nine months in an attempt to make the region its largest presence outside of America. Uber currently operates in 18 cities in India and will expand that number but will also use the investment cash to enhance its operations there.

According to Uber India President, Amit Jain, they “see tremendous potential” in India since it has already “grown exponentially” there. Earlier this year Uber said it would also be investing over $1bn in China, given its status as the world’s second largest economy.


AIIB Launch

July 9th, 2015

pakistanThe Asian Infrastructure Investment Bank (AIIB) was just launched. Last week in Beijing, the UAE signed the Articles of Agreement that set it up, making it a founding member of this institution.

It is anticipated the AIIB will begin its work by the end of this year. Its goal is “to provide new financial resources for infrastructure development and improvement across Asia, while maintaining balanced economic growth in the countries of the region while addressing the financial challenges facing infrastructure projects.”

As well, it is hoped that the AIIB will play a key role in boosting investment activities, focusing in productive sectors which result in a “long-term economic impact on the region.” Another benefit to the bank will be how its focus on its members who are on the lower-end of the economically developed spectrum, and provide them with greater assistance.

According to Director General of Abu Dhabi Fund for Development (ADFD), His Excellency Mohammed Saif Al Suwaidi: “The signing of this agreement with AIIB is aligned with the vision of the UAE leadership to promote international collaboration towards fulfilling the development goals of developing countries.” This positive sentiment was echoed by Indonesia’s Finance Minister Bambang Brodjonegoro who said: “Indonesia has been involved in the discussion regarding the establishment and governance of AIIB. So far, we are satisfied because experiences from the World Bank and ADB have been used fully in the discussion. In fact, we’re trying to improve what have been doing well, both in the World Bank and ADB, in order to make the AIIB better.”

Ultimately, if the AIIB “bridges infrastructure financing gap in Asia” as finance Minister for Pakistan, Ishaq Dar is hoping, not only will Asia as a region benefit, but global companies seeking FDI environments will follow suit.

Asia: Where Best to Invest

June 9th, 2015

Asia-businessIt’s already been a while that FDI has been thriving in Asia. But now the question is, what part of Asia does this refer to most?

According to a recent Economist study, fast forward five years to the year 2020 and the Asian expansion will be most focused in China, India and Malaysia. If you look even further ahead – to the next 35 years – factories and offices are likely to open up in Myanmar, Thailand and Vietnam.

Much of this expansion and planned expansion is connected to the liberalization of “intra-regional trade and investment” which is in the program of various Asian governments over the next few years. But perhaps just as importantly, the fact that there is in existence, greater economic integration between companies in the area.

China unfortunately might be losing some FDI given its significant increase in labor and overhead costs. Those that would have bought their investments to China are instead choosing countries in the ASEAN region like Indonesia and Vietnam – places that don’t have such crippling prices.

Asia: Development Strategies

March 9th, 2015

AsiaSince Asia is becoming more focused on its attractiveness to other countries for investments, what has become crucial for the region is the establishment of a secure environment. What this means is that Asia must be able to present itself as an economically and politically stable nation.

Following the negotiation of the ASEAN free trade in the early 1990s and the simultaneous creation of cooperative trade institutions, free trade is now a crucial part of the ASEAN Economic Community Blueprint for a single market and production base that is to be negotiated this year.

Perhaps as a result, there has become a shift from the US to Asia vis-à-vis substantial investments in digital marketing. One example of this hails from Incubate Fund, a Japan-based venture capital which recently raised around $91 million, having previously focused on seed investments. Now it is moving toward early-stage Asian startups.

Such funding for startups in Asia is most welcome in the region, as historically, acquiescing such funding was quite challenging. But now Japanese-based firms in particular are realizing the benefits of regional investments like the one above as well as Rakuten (an e-commerce leader) and others.

Gold and Oil: East and West

December 7th, 2014

drop-148198_1280Asia recently encountered a drop in gold prices. Meanwhile, investors have been showing increased interest in China manufacturing data. Since the stronger US dollar made gold less appealing, there was a five year drop in worldwide oil prices. Currencies in emerging markets escalated vis-à-vis the dropping dollar but there was a dip in Japanese stocks following its credit rating.

Tokyo likewise encountered a drop in the precious metal, which was more surprising given its high record over the last year.

Moving over to India, the region recently encountered an alleviation of the rigid restrictions that have been in place on gold imports. They originally existed in order to diminish the burgeoning account deficit. But it led to frustration in the jewelry industry, simultaneously with an increase in gold smuggling.

After China, India is the biggest importer of gold. The Reserve Bank of India has now lifted the rule that requires the re-export of at least a fifth of the gold importers bring in.