ASEANREGIONAL

CARI CAPTURES • ISSUE 136

CARICAPTURES

A n o t h e r r o u n d o f Tr a n s -

Pacific Partnership (TPP) talks

hosted in Malaysia concluded.

Malaysia is one of the countries

in negotiations over the TPP;

however it is meeting resistance

from firms in the country. The

agreement is still shrouded from

the public eye.

TheTPPhasbeencriticisedfor

beingnegotiatedbehindclosed

doorswhichismakingitdifficult

to plan for its implementation.

Also the agreement seeks

to create tighter intellectual

property rights which could

restrictfreedomsintheprivate

sector

Malaysia is considering joining

theTPPbutitisfacingopposition

fromfirmswhichareconsidered

01

‘Bumiputra’ (nativeMalaysian).

These firms are given special

economicconsiderationby the

government andmanyoperate

in protected industries, all of

whichwouldberemovedunder

theTPPwhich isat itsheart is

afreetradeagreement(FTA)

TPPwillalsoabolishmostprice

controls and as Malaysia has

strictcontrolovergoodsdeemed

‘necessities’

Manyclaimthatthismayincrease

theburdenonthecountry’spoor

29 JULY 2013

Business Times Singapore (19 July 2013)

TRANS-PACIFIC PARTNERSHIP TALKS 2013

Free trade is advocated almost universally by economists

andtheTPPifimplementedwouldformthelargestfreetrade

agreementintheworld.Thisshouldprovideagoodboostto

economicgrowthasthecountriesinvolvedarebetterableto

specialiseintheircomparativeadvantages

TheTPPisalsoseekingtoimplementregulationswhichremove

anti-competitive policies and strengthen laws governing

intellectual property. The governments involved claim that

thesewillincreasecompetitionanddriveinnovation.However

itremainstobeseenifthespecificlegislationbeinglaiddown

bytheTPPwillbebeneficial

Thesecrecyover thenegotiations isprompting fears in the

privatesectorthatthelegislationcreatedwillbeunfavourable

foralotoffirmsacrossmanysectors.Also,thesecrecymay

preventbusinessesplanningforthemeasureswhichcouldslow

downthepositiveeffectsofthepoliciesiftheyarebeneficial,

makingtheagreementlesseffective

ASEAN

JAPAN

VIETNAM

MALAYSIA

AUSTRALIA

NEW ZEALAND

USA

CANADA

MEXICO

PERU

CHILE

SINGAPORE

BRUNEI

THETRANS-PACIFICPARTNERSHIP

40%OF THE WORLD’S

POPULATION

60%OF THE WORLD’S

TOTAL GDP

US$ 26.9 TRILLIONESTIMATED GDP OF ALL TPP MEMBERS

(UNITED STATES ALONE - US$ 15 TRILLION)

Source: www.fas.org, www.ustr.gov

CARI CAPTURES • ISSUE 136 29 JULY 2013

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. 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.

Channel News Asia (25 June 2013)Reuters (19 July 2013)

ABC (22 July 2013)ABC (19 July 2013)

INDONESIA INCREASES BEEF SUPPLY AS PRICES SOAR04

In response to soaring beef prices

averaging IDR 93,000 (USD 9.03)

per kilogram, Indonesia recently

abandoned an annual import

quota system and allowed for

the unlimited importation of live

cattle.

Meat vendors were quick to

oppose thepolicyandclaimed

Tra d i n g a c t i v i t y o n B u r s a

Malaysia remained buoyant after

the 13th General Election with

interest in the market expected

to remain robust given strong

earnings potential of public listed

companies.

Highertradingvalueofsecurities

traded increased earnings by

45.2% to RM54.82mil in the

secondquarterof2013

BursaMalaysiarecentlyunveiled

new guidelines for restricted

shortselling(RSS)andsecurities

borrowing and lending (SBL),

whichregulateshortsellingon

thelocalmarket

Italsorecentlywidenedthepool

ofsecuritiesavailableforshort

that they still have supplies of

local beef which were bought

atahigherprice

Topreventfuturefoodshortages,

the State Logistics Agency

announced plans to take over

the issuing of all permits for

importingfoodandagricultural

products

Indonesia wi l l cont inue to

02 BURSA MALAYSIA EARNINGS UP AS IT WIDENS ITS SHORT SELLING POOL

LAOS BOOSTING ITS TRADE CONNECTIONS IN ASEAN03

Bangkok Post (22 July 2013)Bangkok Post (12 July 2013)

NNT (2 July 2013)

Laos’s trade with ASEAN has

increased significantly over the

past few years and especially

since the country joined the

World Trade Organisation in

February this year.

Bilateral trade between Laos

andVietnamduringthefirstfive

months of this year increased

by5.6%year-on-year, reaching

LaoandThailand,whichisLao’s

largest trading partner, held a

business matching exhibition

earlierinJulytopromotefurther

tradebetweenthetwocountries

paymentsongolddeposits

US$433.8million

Laos reported a slight trade

surpluswithVietnamofUS$23

million,exportingmainlywood

andagriculturalproductswhile

importing mainly petrol, coal,

steel, vehicles and machinery

fromitsneighbour

In 2012, trade between Laos

and Indonesia nearly tripled

year-on-year, reaching US$27

mil l ion, according to trade

figuresdisclosedduringavisit

by IndonesianForeignMinister

MartyNatalegawa

Lao’s exports to Indonesia

inc luded garment , cof fee ,

tobacco, and fur, while the

country imported fertil isers,

veh ic les , spare par ts and

e lectr ica l appl iances f rom

Indonesia

The Star Online (25 July 2013)The Star Online (18 July 2013)

VIETNAM

monitor the trade, and adjust

the volume and timing of beef

importsinordertokeepdomestic

beefpricesatanaverageofIDR

75,000(USD7.28)perkilogram

Themoveisexpectedtoboost

the cattle and beef trade in

Austra l ia , with Agr iculture

MinisterJoelFitzgibbonrecently

announcing that Indonesia will

takeanadditional25,000animals

overthenextthreemonths

MALAYSIA

sellingfrom100to171asitseeks

tomovetomaturemarketstatus

Post-GE13,short-sellingactivity

onBursasoaredinJunedespite

the100-stocklimittoamonthly

recordofRM293milfromalmost

zeroinMarchlastyear.

Toimprovetransparency,Bursa

saiditwouldsharethelatest10-

daymarketdataonRSStrades

on its website to help curb

excessivelendinginthecountry

THAILANDINDONESIA

INDONESIA

LAOS

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011

200

400

800

US

$ M

ILL

ION

S

YEAR

1000

1200

1400

1600

600

EXPORTS TO ASEAN IMPORTS FROM ASEAN

L A O S T R A D E W I T H A S E A N

166%

IN 2009 ALONE,LAO EXPORTS

INCREASED BY AN AMAZING

29.8%

IMPORTS ALSOINCREASED BY A GOOD

Source: CEIC

CARI CAPTURES • ISSUE 136 29 JULY 2013

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. 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.

justover30,000unitswithin3

years. In order to do this the

firmhas investedRM1.5million

(US$467,600)

Meanwhile, Ford opens a new

sales centre in West Java,

Indonesia as the firm sees to

tap into thecontinuinggrowth

inIndonesia.Thefirmwillinvest

overRp10billion(US$170,000)

foreachdealershipanditplans

toopenninemoreinthecountry

Many largecar-makers suchas

Toyota have chosen to set up

in Indonesia and Thailand due

to their large established car

marketsandfavourableeconomic

conditionscomparedtoMalaysia

whichheavilyprotectsitsnative

carmanufacturers

MALAYSIA’S AUTO INDUSTRY SPREADING ITS WINGS05

IPO NEWS06

Thailand’s True Corp is planning

a n i n f ra s t r u c t u re I P O a n d

Malaysia’s Ranhill‘s IPO has been

delayed.

TelecommunicationsgroupTrue

Corp said it is aiming to raise

US$2.25 bill ion by listing an

infrastructure fund tohelppay

downitsdebt.Thiswouldbethe

largestIPOintheregionthisyear

The auto industry is expanding

rapidly in Indonesia and Thailand

but for Malaysia expansion into

the rest of ASEAN hasn’t been

as quick. Many of its automotive

firms lag behind the two larger

markets but now Naza is finally

expanding into Indochina.

The Naza group of Companies

plans to launch its motorbike

divisioninCambodiainorderto

springboarditsexpansioninto

theIndonchinaregion.Thefirm

willbuilditsfirstsaleandservice

centreoutsideofMalaysiainthe

Cambodiancapital,PhnomPenh

Thegroup’sexecutivechairman

Datuk Wira SM Faisal Tan Sri

SM Nasimuddin said that the

group plans to bring its other

businesses to the country if it

cangrowthebrandintheregion

successfully

Thefirmisplanningoncapturing

upto10%ofthemarketsharein

theCambodiancapitalbysellingThe Sun Daily (23 July 2013)

Jakarta Post (22 July 2013)

THAILAND

INDONESIA

MALAYSIA

reviewofitsconstructionwork

inthestateofMalacca

TheIPOhasbeendelayeduntil

thecompanyprovidesdetailson

howthesuspensionwillaffectits

businessandinvestorsdecideif

they still want to invest in the

firm

Reuters (23 July 2013)Bloomberg (25 July 2013)

The group has a large debt

burdenof around70%and the

IPO would largely go towards

paying it down. The firm is

rapidly expanding its mobile

network which is causing the

firmtorackupdebt

Thefirmhasbeenmakinglosses

as it struggles to compete

with the larger telecom firms

in Thailand and Moody’s has

reduceditsoutlookonthefirm’s

credit rating to ‘negative’.This

ispromptingthefirmtoalsosell

offnon-corebusinessassets

Ranhill was planning a US$235

million IPO however the listing

waspostponedbytheMalaysian

SecuritiesCommission.Themove

came after one of its affiliated

firms received a suspension

notice from Petronas after a

RECORD HIGH FDI IN INDONESIA BUT ECONOMIC GROWTH SLOWING DOWN07

Indonesia is still a FDI hotspot,

but local protests are blocking

a la rge potent ia l Japanese

investment. Despite the high level

of foreign investment, economic

growth is slowing down mainly

due to low commodity export

prices and high inflation.

Indonesia attracted a record

amount of FDI in the second

quarter of the year, or US$6.5

billion

A planned FDI from Japan to

buildaUS$4billionpowerplant

that would provide power to

some 13 million people could

possiblybecancelledduetothe

protestsoflocalslandowners

Around 50 landowners are

refusing to sell their land but

theyownabout40hectaresthat

would account for 20% of the

plannedconstructionsite

The Wall Street Journal (23 July 2013)Bangkok Post (21 July 2013)

The Japan Times (20 July 2013)

Unlessthepurchaseiscomplete

by6Octoberthecompanywill

loseitsrighttobuildthepower

plantandanewroundofbidding

willbeconducted

Despite the increasing FDI,

economicgrowthinIndonesiais

slowingdownbutitisexpected

to be about 6.05% this year,

accordingtoaBloombergsurvey

ofeconomists,slightlylowerthan

the2012levelof6.23%

Theinflationrateisexpectedto

peakinJuly,afterasubstantial

increase over the past two

months, Indonesian Finance

MinisterChatibBasrisaidinan

interviewinMoscowon20July

after a meeting with the G20

finance ministers and central

bankgovernors

MALAYSIA CAMBODIA VIETNAMMYANMAR LAOS

INDONESIA

2

2

2

PROTON & PERODUA’S GLOBAL SALES NETWORK

PROTON

PERODUA

P

22 2

2

2

22

22

2

2

22

2

P

P

P

PP

PP

PP

P

P

PP

P P

P

P

PP

Australia, Brunei, China, Indonesia, Japan, Singapore, Taiwan, Thailand, Bahrain, Egypt, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Bangladesh, Nepal, Pakistan, Sri Lanka, Cyprus, UK, Mauritius, South Africa

UK, Singapore, Mauritius, Brunei, Sri Lanka, Cyprus, Malta, Egypt, Nigeria, Senegal,

Lebanon, Qatar, Saudi Arabia, Syria, Nepal, Fiji and Republic of Ireland

P

P

P

Proton previously had a much larger global sales network. Its cars were sold in South America and throughout Europe and Russia.

However, failure in those markets forced the firm to withdraw from them.

Perodua is a newcomer to the international market and had only sold cars through partnerships with small dealerships in other countries.

They are now targeting to sell more cars by 2017 in a more aggressive international expansion plan.

P

P

P

P

2

FACT

Source: www.miti.gov.my

CARI CAPTURES • ISSUE 136 29 JULY 2013

DISCLAIMER: The news articles contained in this report are extracted and republished from various credible news sources. 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.

ASEAN is getting ready for the impact

of shale gas extracted by a new induced

hydraulic fracturing technology also known

as “fracking”.

The“fracking”revolutioninNorthAmericais

expectedtounleashlargereservesofnatural

gas. This should drive the price of energy

down and reduce the reliance on heavily

pollutingcoal

Singaporewantstobecomeamajorliquefied

naturalgas(LNG)tradinghuband“fracking”

HAZE RETURNS IN INDONESIA10

A month after wafting haze from Indonesia

blanketed Malaysia and Singapore, Indonesia

detected at least 185 fires in plantations

mostly in its Riau province.

DisastermitigationagencyspokesmanSutopo

Purwo Nugroho said smoke from fires set

by slash-and-burn farmers had recently

increased, forcing flight delays in western

Indonesiaandraisingfearsitcouldgetworse

Editorial Team: Sóley Ómarsdóttir, Aaron Tan, Gokul Radhakrishnan Designer: Hizzad Dinno Consultant Editor: Tunku ‘Abidin Muhriz

MYANMARMONITOR08

CTV News (24 July 2013)

INDONESIA

ASEAN

MALAYSIA SINGAPORE

POLITICS Myanmarhasdecidedtorevisethedealover the controversial copper mineLetpadaung which is being built byWanbao,aChinesecompany,officialssaid on 25 July. The decision cameafter a long series of protests whichledtoaviolentpolicecrackdownlastyear.ThenewtermsgivetheMyanmargovernment 51% of the revenue andWanbao will also contribute severalmillion dollars yearly for corporatesocial responsibility (CSR) activitiesandfortheeventualminereclamationprocess.

Channel NewsAsia (25 July 2013)

Myanmar's parliament agreed on 25Julytoforma109-memberConstitutionReview Joint Committee to makeamendmentstothe2008Constitution.The move is seen as an attempt atresolving the dispute about theconstitutioninpreparationforthe2015generalelection.Thedeputyspeakerof the Union Parliament will be thechairmanandcommitteememberswillrepresent proportionally parliamentmembers of both Houses, politicalparties,militaryMPsandindividuals.

Global Times (26 July 2013)

Myanmarreleased73politicalprisonerson23July,astepinTheinSein’splanoffreeingallofthecountry’sprisonersofconsciencebytheendoftheyear.Thousandsofpoliticalprisonershavebeenfreedinbatchesoverthepasttwoyears,but approximately80politicalprisoners are estimated to remain inMyanmar’sjails.

The Wall Street Journal (23 July 2013)

Opposition leader Aung San SuuKyi attended a Union PeacemakingWorking Committeemeeting for thefirsttimeattheMyanmarPeaceCenter(MPC) on Sunday21 July. She joinedthe discussions in an informal rolebutherpresencehadbeenrequestedby the United Nationalities FederalCouncil (UNFC) – a coalition of 11ethnicarmedgroups.PresidentTheinSein just recently announced duringhis European tour that a nationwideceasefire with ethnic armed groupscould materialise over the comingweeks.

The Irrawaddy (23 July 2013)

ECONOMY

Myanmar’s access to the EuropeanUnion’sGeneralSystemofPreferences(GSP) came into effect on 19 July,but Myanmar exports still need tomeetquality standards tobeable tobenefitfromthesystem,accordingtoMyanmar Fisheries Federation Vice-ChairmanHninOo.ThemaindifficultyforMyanmarproductsisqualitycontrolwhich must meet strict internationalstandards,hesaid.

Mizzima (23 July 2013)

FOREIGN AFFAIRS

Myanmar President U Thein Seinpledged on 23 July to advanceties with China. Myanmar will makeunremitting efforts to push forwardthe Myanmar-China comprehensivestrategiccooperationpartnership,hetoldFanChanglong,vicechairmanofChina's Central Military Commission.Mr Changlong is on a tour throughMyanmar,ThailandandKazakhstaninanefforttostrengthenstrategicbilateraltiesintheregion.

Xinhua (24 July 2013)

“FRACK” IT: ASEAN PREPARES FOR SHALE GAS IMPACT09

Business Times Singapore (24 July 2013)

should give a much needed boost to the

market

Malaysiaisalsoinpositiontotakeadvantage

ofthenewtechnologyasitpotentiallysits

ontopofalargeamountofshalerockwhich

containsnaturalgas.However, thismaybe

adouble-edgedswordastheabundanceof

naturalgascouldreducethedemandforoil

whichisoneofMalaysia’smajorexports

nextmonth

'Waterbombing'andcloudseedingefforts

began last week, while more than 370

firefightersweredeployedontheground

Nugrohowarnedthatthehazecouldreachits

peakduringthedryseasonbetweenAugust

andOctober

GASSANDCHEMS WATER

H Y D R A U L I C F R A C T U R I N G T E C H N O L O G Y

SHALEROCK

MAGMA

GAS

GAS

GAS

1

MIXTURE IS PUMPED IN3

MIXTURE IS PRESSURISEDTO A HIGH DEGREE

2

SHALE ROCK IS FRACTUREDWITH HAIRLINE CRACKS,

THE GAS ESCAPES THROUGHTHEM, UP THE DRILL SHAFT

& IS COLLECTED

4

MILLIONS OF GALLONS OF WATER, THOUSANDS OF TONS OF SAND & THOUSANDS OF GALLONS OF CHEMS ARE MIXED

7,000FT

20 MILES+

Source: www.earthworksanction.org, www.dangersofracking.com