Indonesia’s bumper IPO crop wilts; Johor-S’pore SEZ promises new pastures

This week in Asean: 

• Thailand: 450-billion baht digital wallet handout scheme to include cash
• Vietnam: Net foreign selling of stocks may ease ahead of potential market upgrade
• Indonesia: Fugitive ex-mayor linked to Chinese-run scam centre arrested
• Malaysia: Investors snapping up bonds without hedging, boosting ringgit rally

Dear BT reader,

Are you ready for your next trip?

The Asia-Pacific is set to lead global air passenger traffic growth over the next 15 years, with numbers expected to more than double from 2019 levels, reaching 8.7 billion by 2042. 

Stefano Baronci, the director-general of Airports Council International (ACI) Asia-Pacific and the Middle East, said nine of the world’s 10 fastest growing markets in terms of passenger traffic are in the Asia-Pacific. 

Notably, the Philippines is forecasted to experience a compound annual growth rate of 7.2 per cent during this period.

In fact, four other South-east Asian countries dominate the top 10 list – with Indonesia ranked third, Thailand fifth, Vietnam sixth and Malaysia 10th. Check out the chart prepared by our BT Visuals team to find out which are the top 10 country markets by total passenger traffic volume.

According to BT journalist Goh Ruoxue’s report, the region’s large population and untapped demand for air travel are the two key factors that are driving the growth.

ACI’s optimistic forecast came at a time when the aviation industry is facing supply-chain challenges. Aircraft manufacturers Airbus and Boeing have been struggling to meet their orders due to a shortage of parts and skilled labour, which has translated into airlines cutting flight capacities. 

Malaysia Aviation Group, the parent company of Malaysia Airlines, has announced a 20 per cent reduction in its network capacity this year, stemming from a shortage of planes, parts and manpower.

The sudden flight cancellations are prompting travel agents to create alternative plans for their clients, with some agencies warning customers on the growing risk of flight cancellations. 

An aviation analyst estimated that flight cancellations may affect around one million passengers, potentially resulting in losses of hundreds of millions of ringgit.

In Vietnam, Indonesian ride-hailing and delivery service provider GoTo Group has decided to cease operations on Sep 16, withdrawing from the fiercely competitive market where it has been competing against Grab.

Keep scrolling for more good reads. Have a good weekend.

Trending

What’s going on? South-east Asia has the potential to supply 12 per cent of the world’s demand for sustainable aviation fuel by 2050, said a report developed by the Roundtable on Sustainable Biomaterials. 

Why it matters: Indonesia leads the region in terms of sustainable aviation fuel feedstock availability, followed by Thailand, Vietnam and the Philippines. These four markets account for 90 per cent of the region’s potential sustainable aviation fuel supply capacity.

Asean in brief

• Singapore adds 1.4 GW green power from Indonesia, raises import target to 6 GW by 2035 Singapore is giving the green light for two new projects to import 1.4 gigawatts (GW) of renewable energy from Indonesia. Read more
• Winning the data centre gold rush in S-E Asia Beneficiaries of this surge are likely to be the “picks and shovels” – investors and businesses that are enablers of data centres. Read more
• Indonesia aims to sign US$3.5 billion in deals during Africa forum Indonesia will seek to sign US$3.5 billion of trade and investment agreements with Africa as global trade battles spur a hunt for new markets outside Asia. Read more
• Fresh from farm to feast in 36 hours: Malaysia’s durians hit lucrative Chinese market This is a big milestone for one of the world’s top durian exporters although industry players warn of potential logistics and freshness challenges. Read more
• All about the Thai political dynasty that’s now back in power Ten years after Thaksin Shinawatra’s sister was removed from power, the family that has dominated Thai politics since the turn of the century is back with the appointment of his daughter, Paetongtarn Shinawatra, as prime minister. Read more
• Jokowi’s son to face Indonesia anti-graft query over jet use Indonesia’s corruption watchdog will summon President Joko Widodo’s youngest son to seek clarification over his reported use of a private jet on a recent overseas trip. Read more
• Malaysia central bank keeps interest rate at 3% The central bank’s decision is seen as a widely expected move by economists amid a buoyant outlook on the country’s economic growth, inflation and ringgit performance. Read more
• Thailand to forge ahead with casino plan after public green light Like its predecessors, the new government is trying to legalise gambling amid strong pushback from conservatives in the predominantly Buddhist country. Read more
• Thai July factory output rises for first time in 3 months, beats forecast Thailand’s manufacturing production index rose for the first time in three months in July due to stronger exports, tourism and public spending, the industry ministry said on Aug 30. Read more
• Thailand’s SCG Packaging buys US$652 million stake in Indonesia’s Fajar Surya Thailand-based SCG Packaging has acquired an additional stake worth US$652.4 million in Indonesian packaging paper-maker Fajar Surya, increasing its ownership in the company to 99.7 per cent in a move to expand its operations in South-east Asia. Read more