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Thailand/Cambodia Emerging Markets & General Items
SingaporeEconomic Singapore looks to be emerging from its worst recession on record after the economy expanded at an annualised rate of 20.4% between April and June. The rapid expansion compares with a revised contraction of 12.7% in the first quarter from January to March. It was the first quarterly expansion in a year, lifted by increased drug sales and construction activity, said the Ministry of Trade and Industry. However, the government still expects the economy to contract for the year. The government now predicts the economy will decline between 4% and 6% for 2009 as a whole, less than its earlier estimate of a contraction of between 6% and 9%. UK Business Activity Highlights from the Singapore Department of Statistics (DOS) survey on foreign investment in Singapore is as follows:
TaiwanEconomic Taiwan’s exports in June continued to improve, rising 4.8% from previous the month. Signs of stronger external demand has broadened beyond China and extended to the region. Imports showed encouraging signs on domestic demand. Firms in machinery and DRAM sectors are more willing to expand their capital expenditure. With better global economic prospects, analysts here have started to debate about how the economy will rebound. The likelihood of a U (a wide-U) or ‘hook’ shaped path are favoured. However, risks remain. UK in Taiwan Exhibitions A series of exhibitions highlighting the UK in Taiwan was opened on 1 July. The exhibitions put a special focus on the cultural relations between the UK and Taiwan and incorporated exhibits from Darwin Now and Swinhoe, UK Creative industries. World Games 2009 in KaohsiungThe 8th World Games took place in the southern city of Kaohsiung over 16-26 July and saw more than 5000 athletes from 103 countries and territories compete in 30+ sports. UKTI Activity The UKTI Team took part in the Developing Successful Client Relationships Workshop. Forward Look
IndonesiaEconomic The bomb explosions on 17 July did not affect the rupiah and stock market significantly. By 21 July, the Indonesian stock market index was back at a 10-month high. June inflation rate, at 0.46%, lowered the yearly average to 3.7%, the lowest rate in nine years and prompted the central bank to cut interest rates from 7% to 6.75%. In a further increase to its fiscal capacity, the Government of Indonesia issued the first samurai bonds worth USD 370 million at the end of July. The Government is currently reviewing the Negative Investment List, which may affect the cigarette industry, refined sugar, pulp, and security printing.
KoreaUKTI Activity Visitors from London included the Lord Mayor and Brian Shaw, MD UKTI Business Group (inward investment). They both met a range of high-profile government officials, business people and journalists and successfully delivered key messages from London. 
PhilippinesEconomic The economy continues to show resilience, with Q2 growth anticipated to be in the region of 0.8 - 1%. Overseas remittances were up 2.8% in the first five months. For the first time in 12 years Moody's upgraded the Philippines' credit rating (to Ba3) and also assigned a "stable" outlook, which maintains this rating for at least the next 12 months. The budget deficit remains within target however the fiscal stimulus programme is not rolling out as fast as originally planned. Disputes on infrastructure projects that are part of the year’s spending program have caused delays.
Thailand left to right: Preecha Ninatkiattikul, General Manager of MINI Thailand, Quinton Quayle, British Ambassador to Thailand and Michael Kordys, President of BMW Group Thailand Economic The steep drop in exports continues to weigh down on the economy in the second quarter, with the five months cumulative export figure registering a drop of 23%. The overall economy contracted 7.1% in the first quarter, but manufacturing activity has picked up slightly towards the end. Support from the Bank of Thailand in terms of interest rate cuts is subsiding as the role of fiscal stimulus is taking over (Bt116bn or £2bn stimulus launched in February is about 70% disbursed as of the end of June). A second stimulus package (17% of GDP spread over 3 years) is being put together, aiming to bolster basic infrastructure (rail, roads), irrigation, biofuels, and education. Consensus forecasts point to a recovery in 4Q 2009 on expectation that private consumption follows the momentum led by these government spending programmes. UK Business Activity HE Quinton Quayle, the British Ambassador, recently hosted a press conference to launch the countdown to the Mini Festival 2009 which will be held on 22 August at the Bangkok International Trade & Exhibition Centre. In 2008 sales of MINI in Thailand increased by 11% to 400 units from 360 units in 2007. The current MINI population in Thailand is around 2,000 units. Gilbert Gilkes & Gordon Ltd/ Anglo Asia Projects & Engineering Ltd The 6mw Mini Hydro-Power Nam San project in North East Thailand contains state-of-the-art turbine generators developed by Gilbert Gilkes & Gordon. UKTI Bangkok worked closely with Anglo Asia to facilitate the completion of the project which is now scheduled for October. HE Quinton Quayle will visit the project on 4th August.
VietnamEconomy With growth rates looking ever more positive, about 4.5 % growth is now expected for 2009 with even the pessimists at the EIU upping their 0.3% forecast significantly. Consumer spending remains high not least due to the income tax holiday Vietnamese have enjoyed for the first six months of the year as part of the wider fiscal stimulus package. This package - estimated at $8 billion by the Vietnamese government, valued at around $4 billion by the IMF - has served, in part, to keep necessary infrastructure projects on the go during 2009. With a growing urban middle class demographic, Vietnam is now estimated to have 20 million of its 86 million population having a purchasing power equivalent to inhabitants of developed economies. This represents an affluent consumer market size equivalent to that of Benelux or Australia. Pointer: Not only do only 10% of the population have bank accounts, they have 80 banks to choose from: banking reform and consolidation is essential. UKTI Activity The Lord Mayor of London visited with a business delegation to promote the UK's financial services offer and demonstrate the enduring strengths of The City. The visit teased out renewed Vietnamese interest in PPP - largely recognition that, in a few years, the country can't have both middle income status and be a heavy aid recipient. The visit also focussed on the Vietnamese aspiration to become a regional financial services centre. Interest in the market remains high with revenue from chargeable services hitting the 31% mark at the quarter point of the year. An emerging focus on the education sector is beginning to come through strongly from the UK.
MalaysiaEconomic Further to the announcement on liberalisation of the services sector in Malaysia on 30 June, the 30% Bumiputra equity requirement for Malaysian companies seeking public listing is now repealed. These companies are now required to offer 50% of the public shareholding spread to Bumiputra investors. Foreign Investment Committee guidelines covering the acquisition of equity stakes, mergers and takeovers have been repealed immediately without any new guideline in place. Liberalisation of 27 services sub-sectors has been announced and followed through with measures to enhance the role of the financial sector as a key enabler and catalyst of economic growth. Malaysia has aspirations to develop nuclear power as an additional source of energy to the current mix and as a result there have been new policies and the first ever International Nuclear Conference (INC) which was held in Kuala Lumpur 29 June–1 July.
Hong KongEconomic Hong Kong’s economy contracted by 7.8% in Q1, the largest decline since the Asian Financial Crisis in 1998. Trade is still declining, but it is hoped that the worst of the free-fall may be over. Liquidity stands at an all time high with the stock market gaining nearly 30% in the first half of 2009. Analysis of Hong Kong’s banking sector shows that the outlook is good but that the asset quality of Hong Kong banks is critically dependent on the macroeconomic performance of Mainland China. There have been further developments on ‘internationalisation’ of the RMB: In July HSBC & the Bank of East Asia launched RMB bonds in Hong Kong and regulators signed a co-operation deal on RMB trade settlement. UKTI Activity Lord Davies of Abersoch, Minister for Trade, Investment and Business visited and spoke at a reception organised by the British Consulate-General, which was primarily aimed at UK companies already operating in Hong Kong. Lord Davies spoke about what the UK has to offer China, UKTI’s strategy for stepping up business engagement with China, and the opportunities for UK companies in China’s regional cities. He also highlighted the role of Hong Kong as a springboard for UK companies looking to enter the mainland market
Emerging Markets & General ItemsEuroCham Seminar on ASEAN Market Entry, Mon 28 Sept, Brussels A seminar highlighting business opportunities in the ASEAN region will be held on Monday, 28 September at Museum des Sciences naturelles, Brussels. For the further details on the programme please contact Following a meeting on 21 July, it has been agreed to establish the ‘FCO Country Updates for Business’ service (www.uktradeinvest.gov.uk/ukti/fcoupdates) as a mainstream part of UKTI's offer of added-value free information for registered business users of UKTI’s website. Evidence from business feedback and online demand has shown there is a clear appetite for the general political as well as economic reporting which is now regularly published for 17 markets. FCO Updates in July: China China Economy: Central Bank Views on Inflation (July 2009) Hong Kong/Shanghai: Zero Sum Game? (July 2009) India Economy: Union Budget 2009-10: Growth Vs Fiscal Health (July 2009) Japan Keen on Remaining Financier to Thailand and Southeast Asia (July 2009) Korea: Economic Trends (July 2009) Taiwan: Business Views on External Investment (July 2009) |
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EDITION 16, JULY 2009 News Letter for the Pacific Rim, Hong Kong & Selected South East Asia Markets