al-Assad Meets Arab Businessmen

Last Saturday, President Bashar al-Assad met up with a whole delegation of Arab businessmen, where they discussed the “status of the Arab investments in Syria and their future in light of the comprehensive reforms witnessed in Syria.” Other topics under review included how investments are meant to help the national economy along with their participation in reform and the creation of stability. The President was extremely appreciative of the additional investments to Syria that have been made by Arabs “in spite of all the circumstances,” since such investments have “a promising future.” The investors were also pleased, especially with the reforms occurring in Syria that are said to “reflect positively on all the spheres.” Other potential problems were discussed vis-à-vis what has been making investors’ work tough and how to put into practice various methods needed to ease permits that will assist in improved growth rates while creating additional jobs for youths. The Arab businessmen were delighted with the President and his devotion to reform, especially since he was aware of all the issues that have been “hindering work.” Thus he has been encouraging moving ahead with investment projects in a job creation initiative.

Syrian Investment

There has been increased confidence in Syrian investments and that things in general are going well. Further, new procedural reforms will affect “facilitating investments” especially given the President’s “quarterly meetings with Arab investors to inform him of the problems hindering projects and progress of existing projects, adding that this made the investors very comfortable as there is a mechanism through which they can achieve their goals.” In addition, Anas al-Kezbari, (Investment in Syria Group CEO), said that President al-Assad’s meeting gave everyone much confidence in Syria’s economy and that given the reforms, any investments that are likely to “achieve economic feasibility and benefit[s] Syrian citizens” will receive “great momentum.” Further, Syria’s economy is likely to be subject to a huge “upswing in the next stage,” that will lead to further job opportunities. New investment projects will also begin, further stabilizing the economy. So in general, President Bashar al-Assad’s meeting went really well. There is a lot of confidence and now a lot of potential for the Syrian economy, as well as a real potential for improvement in the quality of life for Syrians, especially those currently unemployed.

Asia Investment Banks (IBs): Overcrowding?

It seems like Asia may be encountering a few too many IBs around at the moment, (15 altogether – nine bank-backed and six non-bank backed). But which ones are doing really well? Apparently the CIMB group has a lot to say for itself, having been described as “ambitious” in its attempts at becoming a “leading universal bank in South- East Asia, providing a full array of banking services ranging from savings accounts to large corporate transactions for fund-raising.”

Going Global

What initially prompted CIMB to become global occurred in 2005 when it acquired RM500mil of GK Goh Holdings Ltd, which apparently gave the bank access to markets in the region, as well as London. Further to that, the bank purchased the Bumiptura Commerce Bank, Southern Bank, PT Bank Niaga and Bank Thai. Acquiring a “strong balance sheet” led CIMB to greater places.

IB Growth

There has been other regional growth for some of the non-bank IBs too. For example, OSK Investment Bank has established various advancement strategies while working hard on putting itself into the “smaller and mid-cap market as well as research capabilities.” Much of its profit hails from Asia, with 30 percent of its “overseas pre-tax profit” hailing from Singapore. Currently the bank is looking to establish its presence in Thailand and Cambodia. In the former country it is doing this with the purchase of BFIT Securities public Co. and in the latter it now boasts “a full-fledged commercial bank with nine branches as well as license for stockbroking and corporate finance.” OSK IB sees the necessity now to pump up its “institutional equity capability.” If it does this successfully in Hong Kong, it will be well on its way to establishing a very solid presence throughout the Asian region since it sees this country as “one of the largest financial gateways.”

There has been significant restructuring in OSK as well as new employees in an attempt to go further in its markets and develop a presence in Europe while “exposing the Asian markets to the Europeans.” As well the company is looking into what they can do in South Korea, Taiwan and China.

It’s Always Sunny in Singapore?

Stable Singapore Stakes

Is it true that things (financially-speaking) are that good in Singapore these days? Is that what is making the area so attractive for hedge funds, financiers and investors? Indeed the answer should be a resounding yes. The country is for sure facilitating things for these financiers as “setting up shop” is now deemed as much easier in Singapore than in any other Asian city.

If you just take a look at Hong Kong you will see just how much harder it is for such financiers to work. Indeed, managers of hedge funds alone are doing it tough, being forced to engage in the “same licensing requirements as mutual-fund managers.” Small funds in Singapore will be able to continue operating without having a license at all. Since it is today Singapore and Hong Kong which are the countries that have the most operation of hedge funds, of course these financiers would choose the former over the latter.

Seductive Singapore Taxes

The taxes haven’t always been so attractive in Singapore. But today they are, given what is going on in the UK. Currently the highest taxes for individuals reaches 20 percent in Singapore but the UK recently put their top rate up to a staggering 50 percent. In addition, the whole of Europe – as well as America – in general works on “tougher rules.”

So it makes sense that hedge funds in Singapore saw a significant development, reaching $48bn at the end of 2009 which was a jump of $10bn from just four years earlier. In 2001 there were only 20 hedge funds; two years ago that figure had escalated to 320 hedge fund managers. All predictors are pointing to a continued hedge fund interest looking to “tap Asia as a source of funds as well as a source of excess returns,” over the next year.

Singapore Squeeze?

While this is great for the country, is it so good for the people and the businesses already in existence there? Apparently there is the fear that “the increasing number of global hedge funds is unlikely to crowd out smaller Singapore-based managers.” There will however, be space for “large and niche players” as long as they keep adding “value to investors.” There is now more focus on “transparency and risk management by investors post-crisis,” also, which will lead to hedge fund managers around the world developing their “mid-bank office infrastructure.”

It’s great that Singapore is providing such an attractive environment for financiers around the world and that for sure will help the country’s economy. But at the same time, it has to ensure it looks after its own.

Indonesian Investments

Indonesia and Malaysia Join Forces

There have been substantial efforts made to encourage companies from Indonesia to make investments in Malaysia which, has also resulted in a re-balance of “bilateral investment between the two friendly neighbors.” According to Datuk Seri Mustapa Mohamed (International Trade and Industry Minister for Malaysia), various companies from Indonesia have been discussion four memorandums of understanding (MoUs) with four companies in Malaysia for possible investment opportunities there. He pointed out that once negotiations are completed, there will be a signing ceremony in Malaysia.

Business Summit

The Asean-EU Business Summit takes place today along with the Asean Economic Ministers’ Meeting, which Mustapa is attending. He is using these meetings to meet up with various figures in the Indonesian corporate world who are involved in these possible investments.

Origins of Success

The way it all started was when Tan Sri Muhyiddin Yassin, Deputy PM of Malaysia, came to Indonesia and met with industry “captains” in the industry a year ago. This was what led to such an optimistic response from investors in Indonesia. This led to Malaysian companies inviting “Indonesian Chinese corporate figures from the Indonesian Chinese Chambers of Commerce and Industry to Malaysia in February to explore investment prospects in Malaysia particularly in projects slated under the Economic Transformation Program.”

The good news for Indonesia is that the economy has grown so fast. But this has resulted in the country’s businessmen looking for investment possibilities outside of the republic. Now Malaysia has invited Indonesians to use its country “as the platform to set a basin foreign investment.” These days Malaysia is definitely doing better vis-à-vis investments between the two countries as trade is up to over $2bn and Indonesia’s is $600m in Malaysia.

Thailand Cambodian Trade News

Border Clashes Negatively Impact Trade

There’s going to be trouble with the Asian economy, and a lot of it. That’s if the situation between Thailand and Cambodia continues. Currently the border clashes there are so detrimental to good sentiments between the two countries, that even though trade is developing, without an end to these clashes, the market share of Thailand goods in Cambodia will be reduced.

According to Kasikorn Research Center (KRC), what will happen is that Thai exporters and potential business investors will lose confidence in placing their businesses in Cambodia. In addition, other countries will start putting pressure on them to take business elsewhere, especially Vietnam.

Good Trading Between Thailand and Cambodia

But it would be a real shame if things went sour. Investment between Thailand and Cambodia has been increasing continuously over the last few years from $1.4bn in 2007 to $2.5bn in 2010. Thailand has been benefitting from this vis-à-vis trade. In addition, trade between the two countries accounts for at least 70 percent of overall trade – that is a huge amount that would be devastating for both places if it things stopped going well.

It’s not all been great news though. In March 2011 there was only a slight increase in export volume. Also, due to border clashes, there was a drop from 34.9 percent in 2008 to 29.9 percent in 2009. There was a large plummet of Thai investment in Cambodia from the 2008 figure of $30.7m to the 2010 figure of $1m.

Vietnam-Cambodia Trade Figures

Consequently there was additional merchandise from Vietnam to the Cambodian market with an increase of 19.5 percent in 2008 to 23.7 percent in 2009. But Vietnamese exports to Cambodia also increased in 2010 by a significant 35.3 percent, culminating in $1.5bn. But anyway Vietnam ranks as Cambodia’s largest investor with “an accumulated investment value of around $49.5m. Thailand comes in second at $47.2m, and Singapore in third place at $24.9m.

So there is work to be done. It would clearly be a huge economic shame if the political situation between Thailand and Cambodia wasn’t resolved – and fast.

Foxy Financial Females?

Are Asian Women Financially Savvy Today?

Years ago the answer for sure would have been a resounding “no.” But today things are somewhat different. It seems that women in Asia (especially those married, 30+, in the workforce) know their won from their yen and their level of competence is likely to increase further “especially among the younger generation.”

For example, women from Thailand topped financial planning (87) and investment (69.3) scores for financial literacy but Vietnamese women also did pretty well, scoring 70.1 overall, placing them in fourth place. There wasn’t much to sniff at with women from the Philippines either (who did extremely well in Financial Planning), but those from Korea and Japan could probably learn a lesson or two on how to get more financially in-the-know.

Survey Assesses Savvyness

It was the MasterCard Index of Financial Literacy that took a survey of these countries. The questions were posed to 24 markets around APMEA (Asia/Pacific Middle East Africa). It looked at three main areas: Basic Money Management (budgeting, savings and credit responsibility); Financial Planning (their understanding of financial products and services as well as ability to make long-term financial plans); Investment (understanding of risks and products associated with investments). In general, Asian women as a whole did best in Financial Planning.

In developed markets it was women from Australia and New Zealand who were most successful in their financial knowledge. Females from Singapore are pretty good at basic money management but were pretty clueless vis-à-vis anything to do with investments. But when looking at financial literacy, India and China don’t seem to be all that with it.

According to VP of Communications for Asia/Pacific, Middle East and Africa, MasterCard Worldwide, Georgette Tan, “this new MasterCard Index has certainly provided us with fresh insights to women’s aptitude for and knowledge of managing their finances. While it is encouraging to see that women across Asia/Pacific have some degree of financial literacy, it is also apparent that there is still work to be done to improve levels across the board.” This is important as complexities increase in the financial world resulting in a necessity for women to become “more financially confident and competent.” MasterCard also seeks to give more power to these women.

Citigroup: Putting Money In; Taking Money Out

Citigroup Asia Investments

Latest news from Citigroup Inc. is the possibility of a $2bn investment in Asia Pacific banking. This is in line with the bank’s attempt to increase its “service offerings to the expanding middle class in the region.” According to the company’s Asia-Pacific region head of consumer banking Jonathan Larsen, “the opportunity is very significant. I think the broad trend will continue, i.e. the growth of the middle class, the increase in concentration of affluent, the increase in growth of consumption.” The stock price has changed -5.9 percent over the last three months.

New Profit Areas for Citigroup

This move will lead to new areas of profitability for Citigroup since at some point it was banned from adding Indonesian wealth management clients due to a potential fraud issue. Since the bank makes tons of its money through emerging markets, this new area will clearly render it a great deal of extra monies.

Bad Citigroup Publicity

Well sometimes even a reputable institution like Citigroup can fall into bad ways or at least be accused of t his. According to Arief Sulistyanto (National Police Director for Economy and Special Crime) it has been alleged that a local relationship manager stole 16.1 billion rupiah from three clients back in 2009-10 “by using blank forms signed by the customers.”

Clearly Citigroup needs to move away from bad things happening and clear its good name. Thankfully it has a pretty good reputation and with its new moves into potential Asia investments, it needs to work hard to maintain (and improve on) this so that they are known for putting money in (vis-à-vis investments) rather than taking money out (alleged stolen money).

Kuwaiti Investments

Kuwait Working with Morocco

North Africa Holding Company (NorAH), a Kuwaiti investment firm has just “acquired a minority stake in a Morocco real estate developer,” with its investment and place on the board in Dar Saada Company (DSC). It looks like there will be significant opportunities for NorAh in the North African housing market that is currently on an up.

NorAH’s Investment Goals

Given NorAH’s strong, solid, stable base, it is the perfect company to make an investment. It works well with various economies in the North African region, having the capacity (with its KD 50 million capital base) to “contribute to the sustainable development” there. It is also “one of the largest pan-regional investment companies.” When it joins up with other companies, it can help them become “premier regional and global players.” Since it recognized that the housing market had huge potential, it made sense for it to move in that direction. Since there hasn’t been such a commitment by the government to respond to the lack of Moroccan affordable housing, the company’s CEO, Emad Anwar Al-Saleh said the sector is likely to undergo “major growth in the next few years.”

NorAH Gets Assistance

NorAH has been receiving significant assistance in raising the necessary $137m for the stake. Companies providing capital include: Wafa Assurances; Aabar Investments (Abu Dhabi), RMA Wataniya and Idraj Capital Development Fund. In addition, NorAH plans to “target investment opportunities arising in North African economies.”

Happy Days for UAE

Well, anyone living and investing in the UAE should be pretty happy. Things are going well which is why it shouldn’t be such a great surprise that the population has more than doubled in the last few years. In fact, figures show that there has been an increase of a staggering 65 percent inhabitants in the region from 2006 to 2010. This could be to do with the economy since most of these newbies to the area are comprised of overseas investors and workers with a mere 11 percent of those living there being UAE nationals at the end of June 2010. It is Abu Dhabi that has had the large influx of investors.

GDP Rise

The region’s non-oil GDP was said to have increased by 3.3 percent over the course of the year, according to figures released by the International Monetary Fund, as opposed to the 2.1 percent figure of last year. Additional development is anticipated due to the UAE’s “low interest rates, strong crude prices and better prospects promote expansion. ” People living in the area are thrilled with the news and “optimistic” that such trends are set to continue.

More Pocket Money?

But, at the end of the day, it remains unclear as to whether all this good news will mean more money in the pocket of the average UAE citizen. Apparently it may not. It looks like salaries are going to either stay the same or just increase a minimal amount. This is despite the fact that it seems to be an employee’s market right now as companies are on the lookout for a not-endless supply of skilled workers. So it seems a bit strange that salaries remain under lock and key. Nonetheless it’s all relative. Despite the lack of rising salaries, according to a study these salaries are still at the top of the entire Middle East market.

Pakistan Investments Increase

Pakistan Packs It In

Despite the crazy floods to strike the country just a year ago, impacting a staggering 18 million people, it looks like Pakistan’s economy is actually growing today. Indeed, it looks like the country will be joining forces with Malaysia and economists expect economic cohesion between the two countries to expand “by at least 10 percent this year.”

According to Datuk Mukhriz Mahathir, Malaysia’s Deputy International Trade and Industry Minister, there could be joint work between the following sectors: chemicals, palm oil downstream products, petrochemicals, and telecommunications. Because both countries have their own strengths, Mahatir told a “Business and Investment Opportunities in Pakistan” conference that he believes the two should take advantage of each other for mutual benefit.

Indeed, this has already been happening. The figure recorded for Pakistani investments in Malaysian manufacturing area reached a total of RM1.099 billion spanning 26 projects. As well, last year trade between the two countries was recorded at RM7.991 billion.

Booming Bahrain

Economic and financial advancement in Malaysia is going beyond the scope of its host country. Indeed its trading with Bahrain shot up to $192.2 million. As well, last year Malaysian exports to Bahrain reached $71.57 million and $120.6 million the other direction.

According to CEO of My Events International, Shahul Hameed, this “increased trade not only reflects a healthy business relationship with emerging countries in the South East Asian region but also shows its eagerness to explore key investment and financial opportunities inside and outside of the Middle East region.”

For sure whenever political issues get ironed out it, the way will be paved for economic and financial development as well.