Recent industry reports have shown that investors in Hong Kong are focusing on real estate in Southeast Asia. Demand for investment properties remains strong in the sector, with transactions climbing 19% each year to approximately $61 billion in the first half of 2017.

“Bangkok’s property prices are just about a quarter of Hong Kong’s,” explains Gordon Cheung, an investor who recently purchased a property in new project Life Asoke Rama 9 in Bangkok. “The location is also great, at the heart of Bangkok’s central business district near the Chinese embassy,” he added.

AP (Thailand) and Mitsubishi Estate Group’s development, which has 154 units for Hong Kong investors, sold more than 95% in its first two days on the market.

According to Vittakarn Chandavimol, AP’s chief condominium officer, “foreign buyers of Thai properties mostly want a stable rental income, unlike those who buy properties in Western countries for their Children’s education. Average rental yield of Bangkok’s property is 5.15 per cent. As only 49 per cent of flats can be sold to foreign buyers, the supply to each market is limited.”

Chandavimol explained the difficulties in breaking in the Chinese market. “Chinese citizens are limited to exporting $50,000 per person, per year. But buyers can split payments, not to mention the fact that a lot of flats are cheaper than that. Prices of high-floor studios on this project start at HK$670,000.”

“Despite capital controls, we expect continued Chinese interest in APAC gateway cities in the near term,” he said. “Thereafter we foresee material Chinese investment in Belt and Road markets in Southeast Asia. This should be a long-term trend.”

Financial firms across the globe are branching out into the Chinese investment market. In recent months numerous firms have launched funds in China, including BlackRock, UBS Asset Management, Vanguard and Fidelity International.

Chantal Grinderslev of Z-Ben, an investment management consulting firm based in Shanghai, said: “”You can no longer ignore China. You have to plan on being there.”

According to data from Z-Ben, assets under management at Chinese private funds increased 54.6% last year, reaching $398 billion. Between 2005 and 2015, institutional assets in China climbed 500%, starting at $1.1 trillion and hitting $7.1 by the end of 2015.

UBS Asset Management received a license to manage private funds in China this past summer. The firm’s managing director and head of China strategy and business development Aries Tung explain in an email: “China is a key growth market for UBS Asset Management. Our goal is to be a leading asset manager in China for both onshore and offshore investors. The license allows UBS Asset Management to start managing money for mainland institutional and high-net-worth investors in the world’s second-largest economy for the first time.”

In July, the Boston Consulting Group predicted that China will become a leading source of “significant” gain over the next few years. Their report states: “The Chinese market and its investors are becoming more sophisticated. An aging population and the growth of wealth are expanding demand for dedicated products, including target-dated funds and ETFs.”

According to EisnerAmper’s Timothy Speiss, “China could very well be number two or number three in hedge funds and private equity within the next two to three years.”

Sony is finalizing talks to acquire Believe Digital, a music distribution and label services provider based in France. With business operations in over 25 countries, Believe was founded in 2005 and owns TuneCore, the American company that provides indie music to significant online distributors, including Apple. The company has annual sales of around $250 million, and focuses on indie music and works with 150,000 international artists. The upcoming transaction is estimated at between $355 million and $444 million, and will include a majority stake and an information technology investment fund.

 

In recent years, Sony Music Entertainment has acquired several major players in the music industry.

 

According to Nikkei Asian Review, “The Japanese conglomerate made the world’s largest music publisher, Sony/ATV Music Publishing, a wholly owned subsidiary last year by purchasing the remaining 50% interest for $750 million. In 2015, it turned indie-music distributor Orchard Media into a wholly owned subsidiary.

 

It continues, “Sony’s music segment generated a 75.8 billion yen operating profit in fiscal 2016, accounting for 26% of overall group profit. The company is sharpening focus on steadily earning profits from a stable customer base, and the broader music content and distribution operations are seen contributing a significant chunk of earnings going forward.”

 

Bitcoin has been proven over the last few months to be a high performing financial asset and is thus gaining increasing popularity as an option for investors in Asia. Indeed, in less than one quarter Bitcoin value has doubled. Likewise altcoin is doing well.   In a recent Financial Times article Richard Walters wrote that “alt-coins are the simplest of tech companies.” All they do is release a very small piece of code. The idea is for them to develop “cryptographically secure ways to enable transactions between parties that have no other contact or way of authenticating each other online.”

In other words, there is movement toward the entire industry of cryptocurrencies which is proving time and again to be a trusted financially-performing asset with an oft-better opportunity than conventional investment options. Evidently in Asia, investors are putting money into these opportunities. This is especially true in Korea and Japan, with financiers choosing these investment markets over others. Over in Malaysia too, investors are dipping their ink in the same pot with Luno’s (a Bitcoin startup) connection with the Bank Negara Malaysia. Indeed, according to Luno Countries Associate, Mriganka Pattnaik, the bank has been successful in really starting to learn more about the Bitcoin industry and scan prevention. He added that:

“With regards to policy, (regulating bitcoin is) not a very easy thing to do. I can’t comment on when or how BNM will regulate the industry, but they are always in touch with us about this and we are more than happy to provide them with input.”

Meanwhile, Ripple – a Blockchain startup that crated a digital payments network for RTF transactions – owns a staggering 61 percent (worth approximately $16 bn) of Ripple XRP (the fastest and most scaleable digital asset). Just last month the company signed up 10 new financial institutions, illustrating it is here to stay in the cryptocurrency Asian market.

Asia has been reaping the fiscal benefits of its exports in various industries (including clothing and gadgets) for many years.  Orient Craft Ltd. is one such factory that employs 400 workers, manufacturing ladies clothing that is sent to Ann Taylor, Gap and J. Crew among others.

Located just outside of New Delhi,  Orient Craft is one of 26 such facilities in India.  Assembled they export around 250,000 items of clothing EACH day.  Over 60 percent of these go to America.  Annual revenues today stand at over $300 million.

Clearly there are indications that there is just huge demand from the west for everything Asian.  But the question is, will this last?

Politically, things in the west are changing and concerns are coming up that this could negatively impact the demand for Asian exports.  First, Trump promised to bolster US jobs by scaling back on imports. Those most impacted by this would be in Asia, specifically in China, Japan, South Korea and Vietnam – regions that have the largest bilateral trade surpluses.

As such, founder of Orient Craft Sudhir Dhingra is concerned.  He noted that: “The US under Trump could impose some additional duties, that’s a worry.  People will find out that you can’t move everything back home. People won’t pay those prices.”  And on a more global level for Asia, exports are exceedingly important.  Being the world’s fastest growing economy (around 30 percent of international growth) Asia relies heavily on trade. Indeed, when looking at the UK, one such problem could arise for Japanese auto manufacturers manufacturing cars in the U.K. and selling them to the British who want to avoid tariffs on these if exported into the EU.

Right now, things are good for Asia and its export economy.  But it is advisable for the region to start looking at how to shake things up as things evolve.

In this video, co-CIO of Mirae Asset Global Investments (Hong Kong), Rahul Chadha, talks about Asia as an attractive location for equities given the current protectionist climate, the benefits of investing in a specific company rather than the firm’s entire industry, multi-year portfolio themes, as well as China’s role in the Fourth Industrial Revolution.

Thanks to Real Estate Investment Trusts  ETF and Straits Trading, investors will be able to track REITS outside of Australia, Japan and New Zealand.  Therefore, investors will be able to get greater exposure to these REITS in Asia.  In addition, they’ll have another option on the Singapore Exchange.

This particular ETF is benchmarked to the FTSE Russell Epra/Nareit Asia ex-Japan Net Total Return REIT Index; which forms part the benchmark which is used for ETFs.  It has approximately US$10 billion (S$14 billion) in funds tracking it. The underlying portfolio of the ETF, according to Phillip Yeo, head of International Product at Nikko AM, is to deliver a gross yield of approximately 6 percent.  this is based on Bloomberg’s forward yield weighted average calculation for the 23 REITs. He further believes that the fund should be able to “deliver at least a 5 per cent yield fairly regularly, in line with Epra/Nareit Index’s historical range of 5 to 6 per cent.”

Meanwhile the status of REITs in Singapore is changing from when they used to be incredibly popular due to their reputation for high yields, property and steady income.  Now though, trust holders are not faring as well since the industry does not look all that good.  Even though indicated dividend yields remain untouched as return on assets dip.  Still, if the REITs can pay out the large dividends that the investors are hoping for, this is only because of leverage.

Ultimately though, Christopher Langner concluded: “The outcome may not be so bad, simply because there are stronger REITs and potential buyers of those very assets, in spite of their dwindling returns. It’s almost a rule of thumb among Singapore bankers that once a REIT’s shares trade below 70 percent of net asset value, it’s just a matter of time before a buyer comes in.”  It is that which investors have to hang on to.

For those travelers looking for options for five-star hotels in Vietnam, the Amanoi resorts and residences are a great choice. Located along the southern coast of lush, Southeast Asian country, they offer the perfect balance between luxurious accommodations and an authentic exotic experience.

 

In particular, Amonoi is situated right between one of Vietnam’s most beautiful national parks, Nui Chua National Park, and an exquisite marine reserve. Adventurers will find miles of untouched wilderness as they hike peacefully through a green tropical forest teaming with a rainbow of flowering plants, colorful birds, and towering trees. At the marine reserve, visitors come to explore the pristine waters of the Vinh Hy Bay, filled with rare coral, uniquely vibrant schools of fish, and a beauty and serenity impossible to describe.

 

Back at the resort Amanoi’s five-star hotel, status is clearly evident. Guests can treat themselves to the pampering of a host of treatments along the shores of a tranquil, lovely lake covered in deliciously fragrant lotus blossoms. There are specialty scrubs, facials, hair care opportunities, and both half-day or whole-day wellness experiences. Amanoi offers their own brand of all-natural products to complete the perfect spa experience.

 

Dining at Amanoi is an unforgettable experience. Open to non-residents as well as hotel guests, all enjoy the freshest fish from the Vinh Hy Bay, delivered anew each day straight from the fishing boats that ply the bay for its incredible culinary delights. The fish is prepared with traditional simplicity using local ingredients, resulting in an incomparable dining experience. The meal is unforgettably complemented by a panoramic view of the bay beyond the green, rolling hills of the surrounding area.

 

Amanoi offers the option of the purchase of a villa. Owners have access to a private beach and all of the resorts amazing facilities, including the Aman Spa overlooking the lotus-filled lake. The incredible location, superior accommodations, and abundant dining choices collaborate to make an Amonoi Villa purchase an amazing life-style choice.

In 2016 the economy in Japan encountered a 1 percent growth while both capital investment and exports expanded.  Does this mean that Japan is now the place for investors looking toward Asia?

Although there are some fears of Tokyo’s poor attempts vis-à-vis deflation, the GDP data indicated substantial growth – more consistent than at any time since 2013 of four consecutive quarters.  On the other hand, the annual figure remained lower than that of the 1.2 percent increase that was registered in 2015.  In addition, Japanese consumers are living cautiously.

According to Merrill Lynch Japan Securities Chief Economist Izumi Devalier, what Japan is currently encountering is an “export-driven recovery.”  Given the limits on private consumption, growth will be thwarted unless that changes.

Meanwhile, the PM, Shinzo Abe, in Dubai (following his recent visit to speak with Trump in the US), said that the UAE’s creation of an “oasis of tolerance” would be tantamount in future economic bolstering in the Asian region. With its recent launch of both the Ministry of Tolerance and the Ministry of Happiness, he believes such efforts will result in a broader platform for doing business, which will in turn benefit Japan.  And in Japan, given the benefits of their unique educational system (incorporating both self-discipline and mutual cooperation while encouraging the development of courage justice, and loyalty), he believes that “the Japanese government’s investment in education is one of the reasons for the rapid economic recovery that took place after the Second World War.”

With the Samurai ethos of courage, loyalty and justice practiced in Japan, it has the potential to become even greater in its economic platform.

According to a report set to be released at the upcoming Dubai Annual Investment Meeting undertaken by the Abu Dhabi Global Market (ADGM), within West Asia, figures for 2015 showed that the most FDI was received by Turkey and then the UAE.  Regarding this, vis-à-vis the UAE, CEO of the ADGM’s Financial Services Regulatory Services, Richard Teng said:

“ADGM is pleased to be part of the AIM 2017 that brings together local and international industry leaders, policy makers, and the investment community to share best practices, discuss industry developments and establish new partnerships. FDI is a key contributor of UAE’s  economic and investment growth.  As an international financial centre, ADGM works actively on efforts and initiatives that enhance UAE’s and Abu Dhabi’s strength as an attractive financial and investment destination for local and international entities.”

Meanwhile in Indonesia FDI figures were not as promising.    There was a significant deceleration in Q4 16.  That could lead to a thorn in the side at efforts being made at bolstering the growth of the economic expansion in the region.  It has been suggested that this might be the backlash of Jakarta’s political tensions due to this month’s regionals and Trump’s presidency and thus are concerned about prospects for emerging markets. Still there was a 2.1 percent increase in FDI in Q4 16 vis-à-vis Q4 15 but that was the smallest increase in the last five years.

Vietnam had better figures.  It encountered a 9 percent FDI increase in 2016, resulting in a record US$15.8 billion for that time frame.  And from the end of 2015, the manufacturing industry encountered a staggering 13.61 percent increase.

So overall FDI in the region is not faring too badly but political climates have to – as always – be handled.