19 SEPTEM BER 20 1 1 I SSUE 46

CARICAPTURES

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25

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BETA

01

Datuk Sri Nazir Tun Razak, Chief

Executive of CIMB Group highlighted

the need for Asian integration

through intra-Asian trade and

investments to foster economic

NAZIR CALLS FOR GREATER

ECONOMIC INTEGRATION

AMONG ASIAN COUNTRIES

ASEAN

growth, citing the example of the

ASEAN Economic Community in

his speech at the Malaysia-China

Trade and Investment International

Conference 2011 in Kuching, Malaysia.

Efforts to promote Asian integration

highlighted by Nazir included an ASEAN

exchange to list the region’s largest companies

and a strengthened financial architecture

through a pan-Asian ratings agency

Integration plans, such as in the ASEAN

equity markets, must be supported by

stakeholders to have an impact

Lower credit ratings in China and India,

compared to default-risky Spain and

Ireland, are increasing the cost of raising

capital for Asian banks and eroding their

competitiveness

The Borneo Post (13 September 2011)

02

ASEAN

SINGLE

MARKET “MAY

DESTROY”

TRADITIONAL

FISHING

Indonesia’s local communities are

contesting the plan to build an

ASEAN Economic Community (AEC)

due to concerns that the free trade

area will threaten the livelihoods of

traditional fishermen, a vulnerable

group with poor access to technology

and capital.

Indonesia

An alliance of NGOs, under the heading

Coalition for Global Justice, filed a judicial

review of the 2008 Law on ASEAN Charter

Ratification, which they claim is the first step

to realising a regional free market

Abdul Halim, a community rights activist

from the Fisheries Justice Coalition said

the AEC will marginalise traditional fishing

communities and protection efforts are

needed such as establishing a strong

upstream-downstream fishing industry,

improving fishing equipment and offering

wider access to much-needed financing for

diversification

Fish harvests are declining as fishing

grounds become shallow from coastal

reclamation, a lack of equipment for deep

water fishing, and rising operational costs

The Jakarta Post (14 September 2011)

13 1909 09‘11 ‘11

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

04

03

Thailand, China

BANK OF

THAILAND

PLANS TO BUY

YUAN DESPITE

RISKINESS

The Bank of Thailand was approved

by China to invest RMB 7 billion

in China’s onshore interbank bond

market but will not include these

investments in its reserves because

the yuan is not fully convertible. Investment in the yuan has become easier

as more yuan-denominated bonds, totalling

RMB115 billion (US$18 billion) in 2011, are

being issued and institutions being granted

quotas to invest onshore

Holding the yuan is considered risky

because China limits the conversion of

the yuan for investment purposes, but it is

expected to achieve full convertibility by 2015

“One of the steps to internationalise

renminbi is to allow more central banks to

hold renminbi as part of their reserves” (Brian

Baker, Chief Executive Officer, Pimco Asia)

Yim Fung (Chief Executive Officer, Guotai

Junan International Holdings) says using the

yuan as a reserve currency is not realistic

because of a lack of investment channels for

the yuan

Bloomberg (9 September 2011)

EXPORTERS TO BE AFFECTED

BY NEW BANK INDONESIA RULE

Indonesia

Indonesian businesses may be required

by Bank Indonesia to repatriate foreign

earnings into domestic bank accounts,

adding US$31.5 billion worth of foreign

liquidity into the Indonesian economy.

The regulation is likely to be finalised within

September 2011

Economists believe the regulation is a

preemptive move by Bank Indonesia to allow

the economy to weather economic shocks

and maintain liquidity

The rule will result in foreign exchanges

to the rupiah, strengthening the currency

and undermining the competitiveness of

Indonesia’s exports in palm oil, tin, and coal

Ambar Tjahyono (Chairman, Indonesian

Furniture Entrepreneurs Association) said

exporters prefer to denominate earnings in

foreign currencies because of the rupiah’s

volatile exchange rates and difficulty in

converting foreign earnings into rupiah

Ade Sudrajat (Chairman, Indonesian

Textile Association) said the inflow of export

earnings due to the new regulation will result

in a more stable rupiah

The Jakarta Post (12 September 2011)

Cooperation agreements between

Indonesia and Vietnam in rice and

fisheries, and between Indonesia and

Thailand in agricultural research and

development is set to improve food

security throughout ASEAN. Cooperation areas identified by Vietnam

and Indonesia include a framework on rice

INDONESIA-THAILAND-VIETNAM COOPERATION TO

ENHANCE ASEAN FOOD SECURITY

trading, boosting of rice production and

identifying joint fishing areas for Indonesia

and Vietnam, with the aim of becoming

ASEAN’s leading provider of rice and fish

Susilo Bambang Yudhoyono (President,

Indonesia) said Indonesia is also looking to

leverage on Thailand’s advanced agricultural

technologies by enhancing investment

cooperation in research and development

Suswono (Minister of Agriculture, Indonesia)

said ASEAN will establish a charter on emergency

food reserve procurement in October 2011 to

improve ASEAN food security

ASEAN+3 food reserves stand at 780,000

tonnes, with 12,000 tonnes provided by Indonesia,

to be used for members’ emergency needs

The Jakarta Post (15 September 2011)

05Indonesia, Thailand, Vietnam

13 1909 09‘11 ‘11

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

07

06

ELECTRICITY CONSUMPTION IN ASEAN (GWh)

The Filipino Department of Energy

expects savings of 191,000 megawatt-

DOE SEES US$ 46.2 MILLION IN

SAVINGS FROM ASEAN INITIATIVE

Philippines, ASEAN

hours of electricity, equivalent to PHP2

billion (US$46.2 million) when the

The Philippines’ participation in

ASEAN’s regional stock trading

system has been boosted after the

Securities and Exchange Commission

settled regulatory issues that could

hinder the scheme. Four bourses – the Philippine Stock

Exchange, Singapore Stock Exchange, Stock

Exchange of Thailand and Bursa Malaysia – will

be the initial participants in the ASEAN Trading

Link, which will be launched in Q1 of 2012

Electronic interconnections will allow

cross-border stock trading, one of the steps

in the wider plan to set up the ASEAN

Economic Community

It was decided that as the link is merely an

electronic connection and not an exchange,

it will not be subject to licensing rules

The issue of whether foreign stocks also

need to be registered with the SEC was also

clarified, with the regulator adopting the

recommendation that securities to be traded by

local brokers under the ASEAN Link be exempted

The issue of whether foreign brokers need

to apply for special licenses, meanwhile,

will be rendered moot if they tie up with a

Philippine partner

The same will apply with regard to the

distribution of research materials: foreign

investment advisors will not be subject to

licensing requirements if they distribute

through a local broker

Still to be settled is the issue of dispute

resolution and enforcement

Business World Online (19 September 2011)

REGULATOR

PAVES

WAY FOR ASEAN

TRADING LINK

Malaysia’s palm oil exports for the

rest of 2011 will be flat at best with

a negative outlook for next year as

refiners are at a price disadvantage

after No.1 producer Indonesia

slashed refined palm oil export taxes,

a top industry official said. Indonesian palm oil refiners will enjoy

a price advantage of between US$72 to

US$129 per tonne against Malaysian refiners

when the change becomes effective on 15

September 2011

While Malaysia does not tax its processed

palm oil exports, its costs have risen due to

tight crude palm oil supplies that it usually

supplements with imports from Indonesia

With Indonesia more than halving its

refined palm oil export taxes and keeping

crude palm oil taxes virtually unchanged,

Malaysia, Indonesia

MALAYSIAN PALM EXPORTS TO

SUFFER AS INDONESIA TAKES

TAX CUT ADVANTAGE

more of the edible oil will get channelled to

its plants, limiting supply for Malaysia and

raising feedstock costs

More Indonesian crude palm oil will be refined

locally, rather than exported to countries like

Malaysia for refining as Indonesia’s crude

palm oil export taxes remain unchanged

Mohammad Jaaffar Ahmad (Chief Executive

Officer, Palm Oil Refiners Association of

Malaysia) predicts no short-term shutdown

in Malaysia’s palm oil refining capacity of

22.9 million tons in 2010, but smaller refiners,

unable to operate profitably, may close in

the longer term

Mohammad says that with almost 70% of

the Malaysian palm oil market at stake, the

government will have to react fast to save

MYR60 billion (US$20 billion) worth of industry

The Jakarta Post (14 September 2011)

08

Philippines

measures in the ASEAN Energy

Management Scheme (AEMAS) are

implemented. The Philippines launched AEMAS in July 2011,

spearheaded by the participation of San Miguel

Yamamura Packaging, Texas Instruments, and

Toshiba Information Equipment

The Philippines expects to train 500 energy

managers to implement the AEMAS over the

next four years

Philippine Daily Inquirer (13 September 2011)

13 1909 09‘11 ‘11

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. As such, CIMB ASEAN Research Institute (CARI) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. Should any information be doubtful, readers are advised to make their own independent evaluation of such information.

1009The Ministry of Transport should accord

MASWings the rights to operate within

the Brunei-Indonesia-Malaysia-

Philippines East Asean Growth Area

(BIMP-EAGA) , including Brunei, to

fill the existing vacuum, said Sarawak

Tourism and Heritage Minister Datuk

Amar Abang Johari Tun Abang Openg. MASWings is yet to gain approval from

Malaysia’s Transport Ministry for its proposed

Kuching-Bandar Seri Begawan route, despite

gaining approval from Brunei’s government

Brunei and Sarawak have no air

connections, following Royal Brunei Airlines’

cancellation of the Kuching-Bandar Seri

Begawan route in mid 2011

POLITICS STILL IN THE WAY OF

INCREASED MOBILITY IN ASEAN?

Malaysia, Brunei

GLOBAL

INVESTMENT

BANKS EXPAND

IN INDONESIA

Indonesia

Major financial institutions such as

Goldman Sachs, Morgan Stanley,

Bank of China, Credit Suisse, and

ICBC are increasing their Indonesian

presence because of the country’s

stellar economic performance, despite

the uncertainty surrounding Indonesia’s

ownership limit for foreign banks. Goldman Sachs and Bank of China are looking

to expand into Indonesia via local acquisitions,

while Morgan Stanley, Credit Suisse and ICBC

continue to expand its already present

Indonesian operations

Foreign firms must compete with state

owned security firms such as Mandiri Securities

and Danareksa which are able to win business

from locally-dominant state enterprises and

have close links with regulators

Financial Times (13 September 2011)

Datuk Wee Hong Seng (Chairman, BIMP-

EAGA Malaysia Tourism Council) said the

slow decision from Malaysia’s Transport

Ministry is unrelated to the policies of the

other three BIMP-EAGA members

Abang Johari said Malaysia’s Transport

Ministry must look into the requirements of

Sarawak and Brunei within the BIMP-EAGA

context in their decision

In another development, a bridge across

the Pandaruan River on the Malaysia-Brunei

border will finally be built to complete the

1,800km-long Pan Borneo Highway

The bridge is an important crossing as it

facilitates daily travel between Sarawak,

Brunei, and Sabah

The Star, Malaysia (12 September 2011)