Property News: Thailand, China and Hong Kong

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Looking into various parts of Asia, one might not want to seek out a new home there just right now.  Property prices are going through the roof, excuse the pun, and wealthy Thailand is taking advantage.  According to an article in the Bangkok Post, a property developer from Thailand, Pace Development, just recently “launched sales of its luxury Bangkok project MahaNakhon to Hong Kong buyers.”  Records over a mere three days show of “sales worth 350 million baht.”

On the flip side, for those who have something to sell, now is the time.  According to executive director for investment and project marketing of property consultant CB Richard Ellis, Rebecca Shum, now is “the best time to sell property to Hong Kong buyers as prices there were very high.”  The prices for property in Hong Kong are really high these days.  Indeed, they have gone up around 20 percent in the last year and just haven’t come down at all.  Hong Kong and Chinese investors are seeking out properties in other parts.

Hong Kong Prices Peak

Indeed, Hong Kong prices are these days five times more than for the same size in Bangkok.  New units are approximately 1.2m baht per sq m.  Hong Kong and mainland China investors these days therefore seem to prefer “buying property as an investment as the interest rate for deposits was only 2%, which is unattractive to those who refuse to carry cash.”

Bangkok Boom

The truth is, as Shum has noted, “Bangkok is still a top-two destination for lifestyle in the eyes of investors in Hong Kong. Their interest in luxury Thai property is driven by a lift in optimism about the overall political and economic environment in Thailand.”  In addition, the new government has promised to put policies in practice that with “stimulate economic growth immediately.’  This will result in the progression of “major infrastructure projects,” as well as “provide long-term support to economic expansion and be reflected in asset price appreciation, particularly for luxury properties.”

Vietnamese Investment Interests

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Laos, Land of Opportunity?

Just yesterday, a seminar took place on investment possibilities and cooperation at the Laos Vietnamese embassy.  Over two hundred Vietnamese business representatives were in attendance.  Ta Minh Chau, Vietnamese Ambassador, addressed the seminar and pointed out that Laos is a “peaceful country” with huge potential in many areas, especially financial.  Vietnam and Laos have a “special relationship,” with significant support from the Lao Government that has worked hard to establish optimistic and facilitative conditions for the thriving of Vietnamese business investments there.

Indeed, such good relations can be witnessed in the success various Vietnamese businesses are enjoying in Laos, most notably, the Hoang anh-Gia Lai Group, Lao-Viet Bank, Long Thanh Golf, and Song Da Corporation.

In addition, there are many areas in Laos that Vietnamese businesses could be interested in, such as: coffee, rubber, cotton, banking, agriculture and more.  According to a news report the embassy was asked to give Vietnamese  businesses, “information on the legal requirements of both countries to facilitate their investment in Laos.”

It seems that Laos is quite a popular place for foreign investments these days.  According to the Investment Promotion Department of the Ministry Planning and Investment, India is now ranking in the top 10 foreign investors there with more than $359m.  Other countries on the list are: Australia, China, France, Japan, India, Malaysia, Republic of Korea, Singapore, Thailand and Vietnam.  Thailand is definitely the number one investor, ranking in at over $2bn.  The most popular area for investment is the field of electricity.

Big Burmese Bucks

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In the last year, Burma was the recipient of $20bn in foreign investments.  Not only is this figure alone  impressive, but it is a huge development when looking at last year’s figure which was $302m.

So where did all of this money come from? Well, according to a recent BBC News article, it seems the Chinese are pretty big fans of Burma, making the largest investment of foreign countries, mainly in power-based projects.  Indeed, according to another Chinese-investment-based news report, Chinese companies have been the financier of a great deal of Burma’s major hydropower projects, despite political unrest in the region.

It has not been an easy ride all the way for China making these investments though.  Nonetheless, according to the Ministry of National Planning Development, its staggering $8.27bn investment from March 2010-11 was substantially larger than the next country in line being Hong Kong at $5.3bn and then Thailand at $2.94bn.

In addition, it was reported that “China is looking only for minerals, they are looking for economic benefit. That is all. That is damaging the country. They are not even making peace.”  So the fact that China has been desperate to make such efforts at pursuing investment returns, no matter what the cost, hasn’t been great for the country.  For sure it on some level makes sense for China to invest in places the West avoids as it doesn’t have to deal with such a high level of competition but still, various events including the work conducted “on the China-backed Tasang Dam in Burma proves that China is not immune from the same geopolitical concerns that keep others from parking their capital in ‘rogue states.’”

Political Impacts

Of course, the political scene is bound to have an impact on all of this too.  When polls were taken in Burma last November, it was the military based parties that won the most amount of seats.  Indeed, just looking at the 2008 constitution, a staggering quarter of seats were anyway reserved for this group.  It might have been just this fact that led to the criticism of polls by western nations and opposition groups; it seems that there is no choice pretty much, but to back a military-based party.

Big Bahrain Banknotes

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Good times in Bahrain vis-à-vis its business sector. Recent news from the region is that according to a Yahoo news article, its “business firm sector saw strong first quarter growth with an increase of more than 40 percent in managed assets compared to last year.”  Principle investments also jumped the equivalent of $325.22m.  According to Rahman Al Baker (CBB Executive Director of Financial Supervision), “this sector has shown substantial growth since its inception and still is promising further growth in the coming few years.”  Now that has to leave Bahrainians smiling, or at least its business people.

IB Breakthrough

It seems that one of the reasons for this is the development of the IB license.  Before that was in the place there was an “antiquated and cumbersome licensing process for firms wishing to provide investment products and services like asset management and brokering and advisory services.”  The introduction in 2006 of this new one by the Central Bank of Bahrain (CBB) has led to the escalation of IB’s from 22 to 51 in five years.  As Baker pointed out, “the creation of this license has attracted a number of prominent regional and international financial institutions to establish investment business firms in Bahrain.”

Great Potential for Bahrain

All of this spells great news for Bahrain irrespective of the “economic uncertainty” plaguing major parts of the world.  This led Ayman Al Tajer (CBB Director of Financial Institutions Supervision Directorate Mohammed) to feel “optimistic” about the country’s “ultimate recovery and growth.”  He said that “the global economic crisis had put pressure on the region’s capital markets and investors.  However, it is an established fact that any crisis or slowdown is a time phase of a given economic cycle and problems would always bring about opportunities.”

Bulgarian-Turkish Investment

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According to a recent report from Bulgarian News Agency BTA, Trakia Glass Bulgaria which is owned by Sisecam (a Turkish-owned glass-maker) – is due to make a $60m investment “in capacity expansion in 2012.”

As reported in a news article on the web, these funds will be put towards “increasing the capacity of an existing tableware furnace and opening a second furnace at its plant near Bulgaria’s northeastern town of Turgovishte.”  This upgrade will do a lot.  Indeed, the current furnace’s daily glass output will be expanded by a staggering 18 tons.  As well, at the new facility, there will be an increase in production of up to 200 tons of tableware glass each day.

As well, at some point, this will lead to a job-creation scheme and provide a further 200 jobs.  Right now anyway the employee count at Sisecam’s tableware glass unit stands at 1,000.  Just a few months ago, earlier this year, the fifth production facility was opened at the plant which is set to “manufacture motor vehicles.”

To date, the invetment in the Bulgarian unit made by Sisecam has reached $405m.

Good News for Indian Economy

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When a country gets a big investment, not only is it good for the company bringing the capital, it’s also great for the recipient country.  Thus, both India and Tata Consultancy Services (TCS)  should be smiling right now, according to a recent report in Money Control.  The AMR contract (automation of metering and billing) has just been awarded to TCS “of high tension industrial consumers in Haryana.”

According to “an official spokesman of power distribution company Uttar Haryana Bijli Vitran Nigam (UHBVN), the contract will involve 3,200 consumers in 11 districts.  These include: Panchkula, Ambala, Yamuna Nagar, Kurukshetra, Kaithal, Karnal, Panipat, Sonepat, Rohtak, Jhajjar and Jind.”

In addition, the project is meant to be finished in the next half a year.  Much of the work will be based on the most up-to-date GPRS technology and is the first time this has been used in Northern India (with the exception of Delhi).

GPRS Use

All the HT Industrial consumer premises will receive GPRS modems and meter data “will be transferred to server installed in Head office at Panchkula through these modems.”  Through the project, the consumers’ meter reading will be “transferred online to the headquarter.”  What’s great about the project is that it will require no human intervention because of the use of “automatic meter reading, billing and regular data analysis.”  As well, there will be the opportunity for close observation of the consumption of electricity that will “help the UHBVN in preventing the losses due to pilferage of power.”

Improved Accounting

In addition, this project is set to improve the accuracy of billing and make savings in manpower.  In addition, the transfer of power factor will be covered, as well as “time of day consumption, tamper events and half load survey data etc.”

India Gets Mega Software Investment

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When you have money, you can use it to make more money.  That’s how the rich get richer.  And it seems that the largest software services provider in India – Tata Consultancy Services (TCS) – is doing just that.  For the 2011-12 financial year, TCS will be making an investment of Rs 2,300 crore.  Nonetheless, in a report in Money Control, it seems that the company was questioned as to why it hadn’t given out a special dividend.  To which Ratan Tata responded, “it’s true that I could have paid you more this time. But we would also like to have some more liquidity in case we see opportunities to acquire companies. But eventually, you will get more dividend once we do that.”

TCS Attacks

The company has also been attacked as of late too.  But Tata insisted that the investigation of his company for “tax benefits on onshore services,” was unwarranted.  He pointed out that “we have not received any such notice. I am not too sure of the veracity of that report. Unfortunately, people read these reports and assume that they are gospel truth. But that is simply not true.”  Indeed, he also noted how TCS’s attrition rate was on a higher scale than “the industry average.”  He pointed out how well the company motivates its employees, by giving them an opportunity to “bag an overseas assignment, which gives them experience of working abroad. We are the largest when it comes to giving employees overseas assignments. So we do keep them motivated enough.”

Expanding Markets Globally

While it’s true that much of the TCS markets are in North America, the company is now also “in the process of doing more business in Europe and other markets. About revenue from large clients, we need big anchor clients.”

 

The Changing Face of the Chinese Economy

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Many investment partners today have their eyes on China.  And for good reason.  Consumer spending in China is predicted to come close to doubling by 2015 in the retail sector alone, according to a new report by the Chinese Academy of Social Science (CASS).  And this comes on the back of spending that has already been increasing a great deal, as companies like ARC Investment Partners have noted.

From 2006 to 2010, retail spending saw an average growth rate of 18.1% each year, according to the National Bureau of Statistics.  It is Chinese women who are leading this wave of consumer spending and that are helping to secure the future economic growth in China.

As reported in a recent financial newsletter by Adam Roseman of ARC Investment Partners, 3000 women were recently surveyed in 12 Chinese cities by China Market Research Group to see what their spending habits are like.  85% of those surveyed said that they planned to spend more in the coming six months than they did in the previous six.

This key sector of the economic market in China has yet to be taped into by western brand managers – but women are not only influencing the household budgets in China.  They are influencing the overall decision-making in the home and even in the homes of their parents.  Forbes has actually reported, in a report last year, that half of the world’s 14 self-made billionaire women are Chinese.  Raised in one-child families in China, millions of girls have been told that their parents’ futures’ rely on them; and they are fulfilling those expectations to ensure proper care for their retiring parents.

POW Wow Goes East?

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It seems like Spiderman may be climbing the Great Wall China in the near future.  Apparently, as reported in a recent Google news article, POW Entertainment creator Stan Lee has just joined up with an investment company in Hong Kong “that aims to roll out a new superhero franchise targeted at Chinese and foreign audiences.”  Magic Storm Entertainment is the name of the new company that is set to work on its “first film project later this summer.”  Lee is incredibly excited, and commented in a statement, “I have been eagerly awaiting this great opportunity — a chance to combine the best of American superhero epics with the best of Chinese and Asian classical filmmaking for a motion picture that would be excitedly received worldwide.”

 

New Characters for China?

 

There is no news right now if there will be a development of new characters for the new movie or if a new story will be written for this “flagship characters, many of which have already been adapted for the big screen.”  Right now no one knows if the movie will feature real actors or be an animation either.  Time will tell.

 

Getting Down to Business

 

In terms of business, the partnership will take place between Panda Media Partners and Ricco Capital Holdings as well as a conjoining of POW! Entertainment with Fidelis Global Enterprises, headed by Eric Mika (former Hollywood Reporter publisher) a media consulting company.  It’s likely to be a success given historical statistics of Lee’s company.  Indeed, over 2 million comic books “have been published in 75 nations and in 25 languages,” so clearly this is a good sign for the new Chinese venture.

 

Or is it?  Maybe not. Apparently, according to the Google article, they “do not appear to have a big following in mainland China.”  Does that mean all hope is lost?  Absolutely not.  Lee’s characters have been adapted in movies that have “done strong business in China, which is “fast becoming one of Hollywood’s key markets despite a quota that effectively limits the country to 20 major foreign productions a year. Lee’s strategy is likely to capitalize on the popularity of those movies.”

 

No Nickel and Diming

 

At the end of the day, the $$$s speak for themselves.  There is no fear of lack of success when Spiderman climbs the Great Wall of China.  And this is because of how successful Spiderman I, II and III have been in China, reaping a combined $30m.  It seems like that simple statistic is all the data Lee will need before he starts enjoying a plate of deep-fried rice and bowl of wonton soup.

Australia Entering Armenia

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More Sheep Farms in Armenia

It seems like anything goes in these days of global investment opportunities. Indeed, in a recent news report from Arka, the Armenian Development Agency (ADA) will be privy to a new investment program by a (yet to be named) Australian company. By next month, this will enable the set-up of sheep-breeding farms there, with a capacity of 5,000 sheep. This will take place in conjunction with regional administrations in Armenia and a “territory for building the farms will be defined.” The main goal of this program will be the “farming of genetically traditional semi-stiff-haired types of sheep in Armenia.”

Australia: Armenia’s Auxiliary

So what does Australia have to offer Armenia? According to the ADA’s General Director, Robert Harutyunyan, the Australian company is going to “introduce a standard plan of a sheep-breeding farm in the investment package,” and that later on, there will be a defining of territories for farms through the regions.” ADA’s main aim is to finally eliminate “old soviet standards,” and thereafter develop “new sheep-breeding farms in accordance with international standards.”

Additional Armenian Investment Opportunities

But that is not all. At the moment there are also a few other potential investors hailing from CIS and Arab countries that are looking into these projects with interest and are seeing Armenia as a good place. Plus it seems sheep farming is on the rise since figures for last year showed that “customs cost of 135 thousand sheep increased by 56% making about $14 million compared with 2009.” In addition, according to Harutyunyan, a cheese company in Armenia is looking into expanding its export volumes this fall, following its successful 5 ton export to Russia a few months ago.

Indeed, “if supply exceeds demand here in Armenia, greater volumes may be sent outside.” Forecasts suggest that such supply may indeed “exceed demand by 10 to 20 percent.” Russians like Armenian cheese, and according to another related Arka article, “the Armenian Cheese company was set to export 120 to 140 tons of cheese in Sept-Oct 2010 to Russia and 80 tons to the United States. However, nothing like that happened, since cheese prices jumped in Armenia, and it was decided to refrain from exporting cheese and postpone these plans for 2011.”