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Asean Confidential - Premium Investment Insight

Update alert

Thai imports swing toward recovery

Thailand posted an import contraction of 3.4% YoY in July, the slowest rate of decline in 11 months, while exports slipped 0.5% YoY, reversing the 3.8% YoY improvement seen in June. We believe imports will continue to stabilise, a positive indicator for domestic consumption but a drag on the $7.9bn YTD current account surplus. 

02 Sep

Political crisis in Selangor may soon end

Pakatan Rakyat, Malaysia’s opposition coalition, lost control over Selangor, Malaysia’s wealthiest and most industrialised state, after a leadership crisis erupted. This almost destroyed the political alliance but it may regain control over the state government in coming weeks, after which they plan to cancel MYR12.4bn ($3.9bn) worth of highway projects in the state. This would hurt builders Mudajaya Bhd (MUDAJYA:KLS) and Bina Puri Holdings Bhd (BPURI:KLS), which have been identified as the frontrunners to win the tender for a MYR2.4bn expressway.

22 Aug

Thai coup leader appointed interim prime minister

General Prayuth Chan-Ocha, head of the Thai military and leader of the May 22 coup d'état, has been appointed prime minister by the interim National Legislative Assembly (NLA). The widely expected move does little to affect the immediate political situation in Thailand – we emphasise however that the most significant post-coup political risks still lie ahead.

22 Aug

Macro

Japan's expansionary agenda for South-east Asia

We look into Japan's attempts to increase its strategic and economic influence in the region, and analyse how this is impacting the development of Asean as the Japanese prioritise investment in Indonesia and the greater Mekong area.

06 Aug

Big Call

Japan's rising sun

Japan is trying to increase its influence in South-east Asia and aims to double sales for exports and overseas units by 2020 from 2011 levels. Asean Confidential data indicates that Japan is making some progress towards its goals of challenging China's dominance in the region, particularly with regards to soft power. While our survey shows that Japan trails China as a 'favourite strategic partner' in Indonesia, Malaysia and Thailand, we note that it also ranks ahead of the United States in all three countries.

06 Aug

Finance

1MDB’s debt poses a risk to Malaysia's fiscal health

1Malaysia Development Bhd (1MDB)'s debt has jumped threefold to MYR36.2bn, and AC believes that this makes it possible that the Malaysian government's contingent liabilities could soar to 19% of GDP from the current level of 15.9% should the entity's investments sour. We examined its latest accounts, the state of its finances, and the implications for the government. The sovereign wealth fund recently filed its 2013 accounts for the period ended March 31 after missing its deadline twice. 

30 Apr

Consumer

Samsung and Apple continue to dominate Asean 5 phone market

Nearly half the respondents in our 2Q14 Asean 5 consumer survey indicate that they plan to buy a new mobile phone in the next 6 months. Samsung remains the most popular phonemaker in the region, although we note that its lead has narrowed since our 4Q13 survey. 

05 Aug

Capital Investment

Indonesia construction: rethinking the bull run

Expectations of an infrastructure build-out in Indonesia have fed bullish valuations for related stocks in construction and cement/materials, but weaker fundamentals and looming cement oversupply suggest that investors may be overestimating upside for these firms.

09 Jul

Indonesia hammers out mineral future

Indonesian metal miners may likely resume exports shortly following the government's reduction of the export tax. We note that the KPK has also begun to combat smuggling and we believe that this has had some impact on black market supplies of tin and possibly nickel. We believe that tin prices will likely rise as supply contracts, while nickel slips and aluminium and copper stay roughly level.

06 Aug

Penang’s development shifts towards mainland

Penang is a rapidly growing manufacturing hub, particularly for electronics, with growing wealth and significant FDI, but land shortages are forcing development off the island to satellite areas, such as Batu Kawan. We are optimistic on the city’s growth trajectory, though infrastructure growth faces risks from fragile relations between the state and central governments.

09 Jul

Myanmar gets connected

The opening of Myanmar’s mobile phone market has provoked fierce competition between Telenor and Ooredoo as the new licensees look to exploit a virtually untapped market. We expect rapid growth in the sector, though the telecoms companies will face significant logistical and regulatory challenges. 

06 Aug

Lift-off for Myanmar’s real estate and banking sectors

Our research looks at the rapidly advancing property market in Myanmar, where foreign developers are driving a construction boom, though legal deficiencies continue to provide reasons for caution. Similarly, the opening up of the banking sector is attracting strong foreign interest, though the government will carefully limit the activities of the first foreign licensees.

09 Jul

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