Indonesia’s bumper IPO crop wilts; Johor-S’pore SEZ promises new pastures
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This week in Asean:
- Singapore: Port congestion eases
- Malaysia: Sarawak eyes carbon trading
- Indonesia: Jakarta – capital no more, but no less either
Dear BT reader,
Rejoice, businesspeople and investors of Malaysia and Singapore. Talks to develop South-east Asia’s first cross-border special economic zone have entered their final leg.
Malaysia’s economy minister said on Wednesday (Jul 10) that the zone will likely be unveiled in September. What this promises is the free movement of goods and people between Johor and Singapore, which already share the world’s busiest land border.
This development is more than welcome by Singapore companies, revealed a survey by the island-state’s apex business chamber. But while 93 per cent say they see Johor as an attractive investment destination, they also raise talent shortages, traffic congestion and tax issues as obstacles hindering cross-border movement, reports our Asean and Greater China journalist Zhao Yifan.
While things are looking up for Malaysia and Singapore – often described as bickering siblings or Siamese twins for their love-hate relationship, their larger neighbour Indonesia may be seeing some choppy waters ahead.
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Last year’s bumper harvest of initial public offerings (IPOs) has unwittingly set the stage for disappointment this year. Amid global economic uncertainty and high interest rates, new listings in South-east Asia’s largest economy nearly halved in the first half of 2024, sinking to 25 from 44 the year prior. Our Indonesia correspondent Elisa Valenta speaks to economists from Schroders Indonesia to understand why investors are holding back and how the tide could be turned.
Now, one of the best things about being a journalist is the people you get to meet, and on my roster this week was Lao Prime Minister Sonexay Siphandone, who was on his first official visit to Singapore. The two Asean neighbours pledged further cooperation in the areas of clean energy, food security and education, and intend to work towards signing a legally binding agreement for the international transfer of carbon credits. Singapore has so far only inked similar implementation agreements with Papua New Guinea and Ghana, and it’ll be exciting to see Laos step up to the podium.
We’ve got such a strong lineup of stories this week from our foreign correspondents, it’ll be a shame if you don’t keep scrolling to read them. Let me know what you think of today’s newsletter too. Have a good weekend.
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What I’m watching: It’s been less than a year since Srettha Thavisin was elected Thailand’s prime minister, and he just might be removed from office by September. Forty senators petitioned in May to oust Srettha for his cabinet appointment of a minister accused of failing to uphold moral standards as he had been jailed for a bribery attempt, and had his law licence suspended.
What I think: Srettha sure is being given a run for his money. First came the digital wallet tale-of-woe. Then came the landbridge plan, which has been lambasted as a white elephant. Weak growth prints leave the underperforming kingdom in the dust behind its regional peers. It sure doesn’t help that most Thais are unhappy with the government and that consumer confidence is at a nine-month low. Somehow, I don’t think this was what Srettha envisioned when he vowed last August to bring about four years of change.
Asean in Brief
- Not a sinking ship: Jakarta aims for ‘global city’ status even after capital shifts to Nusantara While all eyes are on the US$32 billion Nusantara as it takes shape, officials in Jakarta – a city that is sinking at an alarming rate into the Java Sea – have taken measures to preserve its status as an economic and commercial centre that will be attractive to investors and businesses for decades to come. Read more
- Johor Plantations Group jumps 7% in Malaysia’s largest IPO debut since 2022 Malaysian palm oil producer Johor Plantations Group made its debut on Bursa Malaysia’s main stock exchange on Jul 9, with its share price rising 7 per cent from the initial public offering of 84 sen per share. Read more
- Malaysia’s Sarawak seeks billion-dollar gains in global decarbonisation market Malaysia’s largest state Sarawak might be more known for its commodity exports, but it has big plans to enter the lucrative carbon trading business, leveraging on its extensive forest resources and renewable energy projects. Read more
- Malaysia set to become BRICS ‘partner country’ soon: Anwar Malaysia is likely to be admitted as a “partner country” of the BRICS group of economies, pending full membership in the economic bloc, Malaysia’s Prime Minister Anwar Ibrahim said. Read more
- Average wait time at Singapore port cut to two days at most: PSA Port congestion in Singapore has eased, with the average wait time this week reduced to two days or under as a result of a ramp-up in handling capacity, said operator PSA Singapore. Read more
- Asia’s worst stock loser erases Thai founder from billionaire status Somphote Ahunai, whose net worth topped US$4.8 billion two years ago, is no longer a billionaire after a series of unwieldy efforts to diversify one of Thailand’s biggest renewable-power producers into a Tesla-like transport specialist. Read more
- Thai consumer confidence hits nine-month low in June on economic, political concerns Consumers felt that politics had become unstable following a court case that could potentially lead to the dismissal of the prime minister and that the economy was slowing down or recovering slowly because of a lack of clear stimulus measures, said the university that conducted the survey. Read more
- Vietnam carrier becomes world’s best-performing airline stock A surprise return to profit has propelled Vietnam Airlines to become the world’s best-performing airline stock this year, shrugging off the risk of bankruptcy as the company’s post-pandemic recovery finally picks up momentum. Read more
- VinFast seeks US$250 million bank loan to build plant in Indonesia Vietnamese electric vehicle maker Vinfast Auto is said to be looking for a bank loan of about US$250 million to fund construction of its assembly plant in Subang in Indonesia. Read more
- Indonesia’s Prabowo to allow debt-to-GDP to reach 50%: report President-elect Prabowo Subianto will allow the nation’s debt-to-GDP ratio to rise to 50 per cent, provided his administration can boost tax revenues, the Financial Times reported, citing one of his closest advisers. Read more
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