Japan

North Korean’s Kim Jong Il’s Death Sends Asian Stocks Tumbling

by

The shocking death of North Korea’s leader has sent Asian stocks tumbling, deepening concerns regarding the financial market.

Kim Jong Il’s death was announced last night in Pyongyang, the North Korean capital. Stability in the region has been compromised, and the reclusive regime will now undergo a major change in leadership.

South Korea’s Kospi index initially fell 4.1%, but later regained to trade 3.1% at 1,782.50. The won also slid 1.6% against the dollar. Aside from that common safe haven, the yen and the euro sank as well.

Japan’s Nikkei 225 index fell 1% at 8,314.44, while the Hand Seng plunged 2.5% to 17,833.42. Similarly, the Shanghai Composite Index fell 2.6%.

Tensions on the Korean peninsula have heightened, and South Korea has put both its police and military on high alert. President Lee Myung-Bak also convened national Security Council meetings. Japanese leaders are keeping an eye on markets, and are in touch with the U.S.

“We need to prepare for any contingencies,” said Jun Azumi, according to Kyodo News Agency.

Japan’s Finance Minister Elected as Head of Democratic Party

by

Japan’s finance minister Yoshihiko Noda has been elected as the head of the ruling Democratic party, and is likely to soon become the country’s next prime minister as well. Japan’s next prime minister will undoubtedly inherit the region’s financial situation as Europe’s crisis deepens and economies across the globe struggle to stabilize, as well as the resurgent yen, new energy policies, the nuclear crisis and the rebuilding of the devastated northeast coast.

A political analyst in Tokyo, Hiro Katsumata, said “Noda needs to call for a national election within the next two years no matter what. The main challenge for Mr. Noda will be the cohesion in the party and to win in the national election.”

The latest leader of the Democratic Party, who also served as prime minister, was Naoto Kan. He resigned last week as a result of heavy criticism following the earthquake and tsunami in March, as well as the economic status of the country.

Steve Chao reported that “the question is whether the next leader will overcome the hurdles Naoto Kan did not manage to overcome, and, he has to show the public he is able to make the tough decisions that will help the country overcome its economic hurdles.”

Tamil Nadul: Industrial Hub

by

Making it Big for the Japanese

It seems that Tamil Nadu (located on the Coromandel Coast of the Bay of Bengal in India), might be getting industrial hub status for Japan.  According to an article in IBN Live, various Asian companies have been “growing four-fold in the state during the last five years and plans are underway to set up an industrial township in Mahabalipuram.”

Omega Project

Right now, around 70 percent of the land has been acquired.  According to an official, the Omega project agreement should be finalized “soon.”  All in all though, it will take around a decade to complete, with the first phase due for completion in around half that time.  There has been a quadrupling of the firms from 2006/7 where it stood at around 65 companies to today’s figure of 245.  Anticipation by the state is that this will increase to 300 by the end of 2011.

Attraction of Japanese Investments

Apparently these days, Japanese investments are very attractive in China.  This is because the state may view it as “top government officials from power, Metro Water, non-renewable energy and ports provided insights into where the investments are possible in the infrastructure sector between the two countries at a seminar.”

Japan’s Interest in Chennai

What makes Chennai (Tamil Nadu’s capital city) so attractive to Japan?  Possibly it is due to the fact that around 30 percent of Japanese firms are working in India.  According to Chennai’s Consul-General, Consulate General, Masanori Nakano, “we see the state as being close to the South East Asian countries and as a gateway to the West Asia, Africa and Europe. Availability of highly skilled manpower and investment-friendly policies were the other advantages.” Further, an economic co-operation has been signed between JETRO (Japan External Trade Organization) and the State Guidance Bureau.

Asian Mega Wealth

by

Rich Get Richer in China

It seems if you want to go where the wealth is, China is where it’s at. Today there are over a million millionaires living there; financial growth having escalated in the last year, alongside a thriving currency. Statistics from a BCG Global Wealth Survey show an increase in China of 31 percent of millionaires to 1.11 million from the previous year, placing China “in third place for millionaire households.” In addition, in worldwide figures, China is at number 8 vis-à-vis households having assets at a value of more than $100m.

Inaccurate Stats?

These figures however, only give part of the picture since monies earned from private businesses did not figure in the survey, nor did yachts, art, or fine wines. According to a partner at Hong Kong BCG, Tjun Tang, “this grossly underestimates true overall wealth in China.” As well, only around 5 percent of wealth is held offshore and there is a limit on the amount of products that international wealth management companies are able to offer inside the country.

Asian Affluence

Singapore isn’t a bad place to live either if you want to be bringing in the money. A staggering 15.5 percent of those living in Singapore are millionaires. Qatar came in at 8.9 percent which isn’t anything to be ashamed of either. In general, if you are anywhere in the Asia-Pacific region, the rate for growth wealth has an anticipated growth of 11.4 percent in the next four years. When compared to worldwide figures for the same time-frame, the growth rate is around half of this. Japan wasn’t included in the Asian anticipated economic growth for these years. India isn’t doing too badly either, coming in ahead of Canada with its 190,000 millionaires. Things are going to be getting even better for India too, with an anticipated wealth increase of 14 percent per year over the next five years alongside China’s 18 percent. But China seems to look good no matter which way you turn, as, according to the Bloomberg Economic Momentum Index for Developing Asia, it ranks “first among 22 emerging Asian economies as the country most likely to maintain steady and rapid growth over the next five years.

Awesome Asian Achievements? Coming Soon

by

Asian Job Creation Scheme

The economic climate and job potential in Asia is about to get a kick-start. A group of economic development officials led by Gov. Bob McDonnell just set out on an “11-day job creation and economic development marketing mission,” to China, Japan and South Korea at an estimated cost of $278,000. This scheme will be financed by taxpayers. He is being joined by Jim Cheng, Secretary of Commerce and Trade, Todd Haymore, Secretary of Agriculture and those connected with Virginia.

The group is Virginia Economic Development Partnership which will – through the efforts – be able to try and develop relations with various companies and potentially acquiesce new clients for their projects as their will be a promotion of various investment/business opportunities hopefully also resulting in “job creation initiatives throughout the Commonwealth.”

Project Gets First Lady Backing

Not only is First Lady Maureen McDonnell supportive of this great project, she is showing it by being part of the mission. McDonnell will be traveling to China and South Korea “focusing her efforts on promoting tourism and the Virginia wine industry.” Her husband believes they have much to offer, offering “a great tax, regulatory and litigation environment,” amongst other incentives.

There will be meetings with CEO’s and business executives from around the world who will be told about the benefits of investing in Virginia. It is essential that jobs are created for “our citizens” who need them he said and thus the company “will not sit by and watch as the jobs….are awarded to other states and countries that choose to be more proactive and visible.”

Worldwide Job Creation Competition

It seems that right now there is a lot of competition to try and get more jobs in the private sector area that is set to “power and define the 21st century economy.” McDonnell wants Virginia to “win that competition,” which will lead to extra “jobs and opportunities” for the citizens to ensure a “better and stronger Commonwealth in the years ahead.”

Escalating Chinese Exports

In terms of the export markets, things are going well for China now. In 2000, china ranked number 14 but now it holds the number 2 position. This is why it is now a great environment to receive McDonnell and his mission in an attempt to “promote Virginia’s location advantages to approximately key 100 business executives.”

There is a great chance that this mission will be successful since McDonnell has done it before when he went to Europe last year. At the time he “helped close a lucrative economic development deal that led to the company investing $28.3 million to expand its O’Sullivan Films operation in Winchester.” Over 150 new jobs were created there following this.

So let’s hope McDonnell does it again and Asia’s job market will really benefit too.

Foxy Financial Females?

by

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.

Japan Causes Toshiba Tension

by

 

 

Japan’s crisis has led to a downturn in Toshiba investment.  According to one of the corporation’s American partners (NRG Energy), there will be no additional investment in a Texas nuclear power project, due to the “Japanese nuclear plant” crisis.  There was the intention of developing a further two reactors near Houston but now David Crane, the company’s president has said that the recent crisis created “multiple uncertainties around new nuclear development in the United States which have had the effect of dramatically reducing the probability [of constructing reactors in the South Texas Project] in a timely fashion.”

US Impacted by Japan’s Crisis

This announcement came in reaction to the Japanese crisis.  NRG – as a result of what happened in the Asian region – “will not [be] invest[ing] additional capital in the STP development effort.”  It has been said that this indicates that the Japanese crisis “has directly affected the US nuclear power industry.”  It remains unclear as to whether Toshiba will move forward with its project with other partners.

New Toshiba Projects

But despite its reservations vis-à-vis the Japanese crisis, Toshiba is still forging ahead with other new and exciting projects.  It is due to “launch its first tablet computer” in a couple of months and, according to company’s digital products and services unit president Masaaki Oosumi, “attempt to gain a 10 percent share of the global tablet market by 2013.”  It is an impressive PC tablet, based on Android’s 3.0 operating system, priced at approximately ¥60,000 (US$730) in Japan.

 

Malaysia Strong Asian Investment Opportunity

by

Malaysia: Major Asia Asset

Just two days ago a $3.7bn investment announcement came from Malaysia, set to “to jumpstart foreign interest in its economy even as other Asian countries try to stem speculative inflows in search of higher-yielding markets.” The country’s Prime Minister (Najib Razak) intends to try and get $444bn worth of investments resulting in Malaysia becoming a “developed country by 2020,” including $165m by Asia Media to create digital media infrastructure as well as the establishment of a state-owned energy development agency to be able to attract $106m worth of investments this year. This is all part of the country’s “Economic Transformation Programme,” a project that is due to be put into practice over the next decade.

Other Asian Countries Less Successful

Malaysia has been doing pretty well recently vis-à-vis investments. Indeed it has already attracted around $5bn in pledges from Exxon Mobil and Royal Dutch Shell Pic as well as other (smaller) projects. For example Indonesia, the Philippines and Thailand are having quite a few issues attracting investments anything near to the success of neighboring Malaysia.

But this hasn’t deterred Najib who is determined to ensure Malaysia stays one step ahead, “transforming [it] into a high-income economy within 10 years by generating new growth areas and restructuring the economy to lure investors.” Yet this goal is not as easy as it may seem. Investment blueprints from the past aren’t showing such great results. As well, in general the economy has been suffering from a less-than-skilled workforce to enable it to develop into the “financial services hub” it wants to. Yet it is past the stage of being a low-end manufacturing center,” as countries such as Vietnam now have that role.

Notorious Najib

Still, given all these efforts made by the country’s premier, the public is remaining loyal to Najib. Although one has only to look at the facts on the ground to see where the country really is, given that the exchange was down more than 5 percent from where it was just four years ago. While there is now more opportunity for competition, in general, investors are expecting the government to “take more aggressive steps to reduce its fiscal deficit and overhaul an affirmative action policy they say hinders competition.”

Malaysia PJ: Malaysia Post Japan’s Trauma

It might not have been a surprise if any parts of Asia – including Malaysia – would have been negatively impacted by Japan’s trauma. But in fact this hasn’t been the case, according to Datuk Donald Lim Siang Chai, the country’s Deputy Finance Minister. He claimed that it will “have little impact on the Malaysian economy in 2011.” Vis-à-vis the country’s exports to Japan he said that actually some areas (like plywood and liquid natural gas) would actually probably “increase during the second quarter of this year as Japan increases its reconstruction work of earthquake-damaged areas.”

As well, Malaysia probably won’t be affected by Mid-East and North African troubles either since trade between those countries is anyway only at around 2 percent.

So all in all things are looking good right now for Malaysia. The country has developed a strong enough economy and excellent relations with regions with which to continue exporting to see it through any troubled times Asia may be encountering.

Japanese Properties to Quake?

by

It was bad enough that the whole of Japan was totally shaken up in more ways than one because of the tsunami disaster, but now it seems like the same is going to happen to what remains of its real estate market. Perhaps not surprisingly, companies are now reported as being “cautious” vis-à-vis the country’s property market although they are trying not to enter into drama-panic mode. As Prudential Real Estate Investors Chief Executive J. Allen Smith put it, “we are taking a wait-and-see approach,” given that so little time has lapsed since the disaster, thus rendering it too early to look at the economy and the markets in a stable light.

Real Estate Troubles Pre-Quake

However, what many are failing to realize, is that even before the terrible disasters struck Japan, the country was reeling from real estate woes. Indeed, over the last two-and a-half years, figures showed a drop in the country’s commercial real estate markets by nearly 20 percent (to the end of the third quarter of 2010). Even at the time this was somewhat of a shock, with Japan ranking as the second biggest “commercial property market by value,” being “one of the few major real estate markets to continue to record capital depreciation.” This clearly reflects its stagnant economic growth.

No Long-Term Lull

So the question being asked then – given all this background information – is what chance does the country now stand of beefing up its real estate market? Well, things don’t have to be all that gloomy, at least not for the long-term. While it is the case that companies like Prudential Real Estate Investors are standing back somewhat from jumping on Japanese properties, they hope this will change in the not-so-distant future. Indeed, the country was described by the company as “an important real estate market,” so with that kind of language, it is unlikely to show itself as a fair-weathered friend.

As well, one of Prudential’s new funds has “earmarked about 50% of capital for Japan,” although it is still “taking a step back” vis-à-vis the country and its real estate. Still, there is funding going on in certain specific parts and markets of Japan, like Tokyo’s retail property assets. Thankfully, according to Smith, “the assets weren’t damaged in the massive quakes.”

Prudential Investing

Despite all of this, it does seem that Prudential remains serious about Japan and its real estate market. Even when things were looking particularly gruesome, the company’s financial chair and CEO John Strangfeld committed the Prudential Foundation to putting $6.1 million to “support disaster relief in Japan,” at the end of last month. Moreover, at around the same time, Prudential Real Estate Investors “co-invested with clients on two Pan-Asia funds totaling about $1.5 billion that have ‘meaningful allocations to Japan.’”

So while things definitely could be better for Japan, its economy and its real estate market, given the earthquake and tsunami disaster, as well as the problems it was experiencing prior to all of this in its markets, it seems clear that there is still confidence in the world’s second largest commercial property market, third largest economy and global financial player.

Earth Hour Good for Japanese Morale

by

Earth Hour took place on 26 March between 8 30 and 9 30 pm.  It is a time when people around the globe turn off their lights and make a “commitment to actions that go beyond the hour.”  According to the Earth Hour website, this year “our thoughts are with the people of Japan during this incredibly challenging and sad time for their country.”

Origins of Earth Hour

Earth Hour first emerged in Australia in 2007 as a way of conserving the world’s energy and natural resources which are depleting way too quickly.  This was a great first step but was also then leading to a climate change and is today a global event which is “being observed in more than 134 countries and territories,” coordinated by the World Wide Fund.

Delhi Saves 296 MW Power

Earth Hour was most effective in India.  During the hour more than a thousand individuals came together to dance away to loud rock numbers from the Indian band Euphoria, in complete darkness!  Lights weren’t needed for the energy to spike.  No one stayed home.  From toddlers to seniors, everyone joined in total cohesion to save electricity during the 8 30 to 9 30 Earth Hour.  According to DU student  Sharmishtha Chatterjee, “…it was very wise on WWF’s part to organize an event like this, where everyone was invited,” since otherwise many people would have just stayed home alone and ignored the event – and the idea – and not turned off their electricity.  Indeed, according to Sheila Dixit Delhi Chief Minister, “the city plunged in darkness for a brighter tomorrow….[with the] hope that Earth Hour sensitizes each one of us for making the shift to a better lifestyle.”

There’s Always One Party Pooper

Unfortunately at any party there’s usually one party pooper.  At this celebration it was clearly Toronto.  Millions of people from 134 countries — from Delhi, India to Heidelberg, Germany — switched off their lights and televisions for the fifth annual Earth Hour on Saturday night to show their support for action on climate change, but Toronto witnessed a measly 5 per cent power drop during the event, marking just 50 percent of the country’s achievements last year.  Nonetheless, it’s still seen as a “success” in the country.