markets

Asian Companies Lead Investment in IT

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According to AT&T, Asian companies are leading in IT investment, surging past their European rivals.

Research that was published by Insead reveals that Asia-Pacific companies are spending the majority of their IT budgets on the newest technologies, including mobile devices and the cloud. The business school explains that investment in emerging technologies like these increases competitiveness significantly.

Insead lists three primary categories: mobile internet-connected devices like smartphones, laptops and tablets; cloud services; and collaboration tools such as conferencing and instant messaging. On the other hand, there is the more traditional side of IT which includes hardware and enterprise software.

Asian companies have revealed their plans to increase their IT budget by 30% before 2015. While European companies also intend to spend more on new technologies, they will not be able to match Asian budgets.

Still, the report warns that Asian companies “must be careful not to rush too quickly to adopt new technologies” without a platform.

AT&T regional vice president Andrew Edison added:

“Increasing productivity is one of the primary challenges facing European companies today. New technologies like cloud offer great opportunities to do this, which some high performers are demonstrating.

“However, simply adopting the newest technologies is not the answer, and is in fact a great risk. The secret is a mature platform and avoiding the creation of ‘infrastructure spaghetti’ in the rush to adopt the latest tools.”

 

Standard & Poor’s Downgrade; Asian Stocks Slip

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Standard & Poor’s recently downgraded nine European countries, including France. The ratings imply that a solution to the issues in the region has yet to be found as the Eurozone debt crisis festers. Though the downgrades were expected by many, the situation remains shaky as concerns begin to spread.

“The downgrade set a nervous for this week’s markets as we approach more significant hurdles in the evolution of the Eurozone crisis,” said Ric Spooner of CMC Markets.

Asian stocks have slipped as a result of the ratings. MSCI’s index of Asia Pacific shares, excluding Japan, fell 0.3% after reaching a one-month high last week, while Japan’s Nikkei slid down to 1.51%. Hong Kong’s Hang Seng fell 1.01%, the Shanghai Composite 0.75%, and Korea’s Kospi dropped 1%.

Markets across the globe are bracing themselves as negotiations regarding the Greek and Eurozone debt remain relatively stagnant despite several efforts to get them moving.

“Failure of these negotiations remains a significant contagion risk,” Spooner explained.

At the moment, experts have projected an 8.7% growth in China’s economy for 2012. This growth will have a significant impact on the region, and will ease numerous financial pressures. If GDP does not, in fact, meet expectations, it may result in export-led downturns that China will be unable to resolve.

Indonesian Investments

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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.

South Korea Smart Grid Investment

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A nationwide smart grid is to be built by 2030, receiving a staggering $7.18 billion investment from South Korea’s state-run Korea Electric Power Corp (KEPCO), in an attempt to “curb the country's carbon emissions and improve efficiency in its electricity market.”  There have been various greening efforts in South Korea such as 131-acre rooftop gardens; electric scooters for local police etc.
Ultimately the smart grid will provide for more efficient power distribution and maintenance.  Consumers are able to participate in a more active role to determine power usage via home appliance monitoring and direct grid feedback.