Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.
ASEAN
Startup funding in Southeast Asia in 2024 drops to USD 4.56 billion, a 42% year-on-year decline
(22 January 2025) Southeast Asia’s startup funding in 2024 dropped to USD 4.56 billion, a 42% decline from 2023 and just 20% of its 2021 peak of USD 23.4 billion, according to DealStreetAsia. The number of deals decreased by 10% to 633, with late-stage funding rounds experiencing a 72% drop in value to USD 1.23 billion across 21 deals, marking the first time in six years late-stage funding was eclipsed by early-stage investments. Singapore accounted for 68% of regional funding, followed by Indonesia (9.6%) and the Philippines (9.4%). Financial services, including fintech and digital banking, dominated large fundraisers, with Atome securing USD 300 million in debt financing, the largest deal of 2024. The only unicorn minted was Tyme Group, which raised USD 250 million, led by Nubank, at a USD 1.5 billion valuation. Investors cited macroeconomic pressures, higher U.S. interest rates, a strong dollar, and geopolitical uncertainties under Donald Trump’s presidency as key factors for reduced activity. Early-stage deals are expected to dominate while local investors await improved exit conditions.
THAILAND
Thailand signs trade agreement with European Free Trade Association
(23 January 2025) Thailand will sign its first trade agreement with European countries on Thursday in Davos, partnering with the European Free Trade Association (EFTA), comprising Iceland, Liechtenstein, Norway, and Switzerland. In 2023, EFTA imported USD 1.8 billion worth of goods and services from Thailand and exported USD 1.4 billion. Negotiations for the agreement began in 2005, stalled due to political instability in Thailand, and concluded in November 2024. The pact will reduce or eliminate customs duties on industrial and seafood products, streamline trade procedures, and enhance transparency. The Thai government aims to use the agreement to expand export markets and attract foreign investment amid trade uncertainties linked to U.S. tariffs under the Trump administration. Key Thai exports to EFTA include electronics-making machinery, mechanical appliances, vehicle components, and clock parts. Thailand’s Commerce Minister emphasised the need for structural reforms to boost high-tech exports and attract investment. Thailand is negotiating additional trade agreements with the EU, South Korea, Bhutan, the UAE, and Canada. However, the EU deal remains stalled due to differences over standards in government procurement, intellectual property, and labour protections.
SINGAPORE
Monetary Authority of Singapore eases monetary policy for first time since 2020
(24 January 2025) Singapore’s central bank, the Monetary Authority of Singapore (MAS), has eased monetary policy for the first time since 2020, citing heightened global trade policy uncertainties and moderating inflation. The MAS announced it would reduce the rate of the Singapore dollar’s appreciation against a basket of trading partner currencies, effectively lowering borrowing costs in Singapore’s trade-dependent economy. This decision follows December core inflation data showing a 1.8% year-on-year increase, the second consecutive month below 2%. The MAS also revised its 2025 inflation forecast to 1–2%, down from the previous 1.5–2.5% range. Singapore’s GDP growth is projected to decline from 4% in 2024 to 1–3% in 2025, reflecting external economic uncertainties. The MAS, which manages monetary policy through exchange rate adjustments rather than domestic interest rates, noted that imports account for 40% of Singapore’s consumer spending and gross trade exceeds 300% of GDP. The Singapore dollar initially weakened following the announcement but later traded at SGD 1.3526 per US dollar.
SINGAPORE, MALAYSIA
Malaysia and Singapore announce Johor-Singapore Special Economic Zone to enhance economic collaboration
(21 January 2025) Malaysia and Singapore have announced the Johor-Singapore Special Economic Zone (JSSEZ) to enhance economic collaboration amid rising US-China tensions and global trade fragmentation. Modelled after China’s Shenzhen economic zone, the JSSEZ aims to add USD 26 billion annually to Malaysia’s GDP by 2030, creating 20,000 skilled jobs and attracting 50 new projects. Malaysia is offering a 5% corporate tax rate for 15 years to attract investments in artificial intelligence, quantum computing, and high-end manufacturing. Johor, which has already attracted over USD 25 billion in data centre investments from companies like Nvidia, Microsoft, and ByteDance, will provide land, water, energy, and labour, while Singapore will leverage its global financial and logistics networks. The initiative reflects Malaysia’s strategy to integrate more closely with Singapore and diversify economic risks from geopolitical uncertainties. Bilateral plans include collaboration on green energy, infrastructure, cross-border electricity trading, and transport links. Malaysia’s Economy Minister emphasised the zone’s potential to function as an economic unit, combining Johor’s resources with Singapore’s global connectivity.
SINGAPORE
Private residential property prices rise by 2.3% in Q4 2024
(24 January 2025) Singapore’s private residential property prices rose by 2.3% in Q4 2024, matching earlier estimates, with a full-year increase of 3.9%, according to the Urban Redevelopment Authority (URA). Developers sold 6,469 new units in 2024, slightly up from 6,421 in 2023, driven by new project launches and lower mortgage rates, as the three-month Singapore overnight rate averaged 2.92%, the lowest since November 2022. Rents for private homes remained flat in Q4, contributing to a 1.9% annual decline, the first drop since 2020. Prices for second-hand public housing apartments increased for the 19th consecutive quarter, with a 9.7% annual rise, the highest since 2022. Strong demand at private residential launches in early 2025 has prompted analysts, including those from Citigroup and Barclays, to predict potential new cooling measures, possibly announced during the annual budget on 18 February. Approximately 27,300 private units are expected to be completed between 2025 and 2027, but supply constraints continue to sustain elevated prices. Singapore’s National Development Minister indicated the government is open to new curbs but emphasised patience to allow existing measures to take effect.
INDONESIA
Indonesia considering reducing nickel ore production quotas to stabilize prices
(21 January 2025) Indonesia is considering reducing nickel ore production quotas to stabilise prices amidst a global surplus, according to its Ministry of Energy and Mineral Resources. Nickel prices have declined by approximately 40% over the past two years to around USD 16,000 per tonne, pressuring domestic producers and causing mine closures outside Indonesia. While specific figures were not disclosed, media reports suggest the 2024 quota could be set at 150-200 million tonnes, down from an estimated 270 million tonnes in 2023. Indonesia, which accounts for 57% of global refined nickel production, produced 2.02 million tonnes last year, with output expected to rise to 2.38 million tonnes in 2024, according to Benchmark Mineral Intelligence (BMI). Analysts warn that significant quota cuts could lead to domestic ore shortages, increased smelter costs, and greater reliance on imports, particularly from the Philippines. Macquarie estimates last year’s global nickel market surplus at 200,000 tonnes, predicting a smaller 60,000-tonne surplus in 2024, partly due to anticipated quota reductions and recovering EV battery demand. A sharp quota cut to 150 million tonnes would remove 35% of global supply, but such a drastic move is considered unlikely due to its potential impact on government revenue and the economy.
VIET NAM
Viet Nam’s economy projected to grow by 6.5% in 2025
(23 January 2025) Viet Nam’s economy is projected to grow by 6.5% in 2025, according to the Asean+3 Macroeconomic Research Office (AMRO), aligning with Viet Nam’s target range of 6.5% to 8% but below the 7.09% growth recorded in 2024. Inflation is forecast to reach 3.5%, within the target range of 3% to 4.5%. Vietnam’s growth is attributed to strong export performance, with 2024 exports rising 14.3% to USD 405.53 billion and imports increasing 16.7% to USD 380.76 billion, resulting in a trade surplus of nearly USD 25 billion for the ninth consecutive year. Key growth drivers include diversified trade relationships, competitive labour markets, and investments in high-tech manufacturing and digitalisation. Vietnam’s growth outpaces regional peers such as the Philippines (6.3%), Indonesia (5.1%), and Thailand (3.1%), with Asean+3 regional growth forecast at 4.2% for 2025. However, the Plus-3 economies (China, Japan, South Korea) face slower growth of 4.0% due to rising trade barriers, including higher US tariffs on Chinese goods, which could reduce Asean’s growth by 0.1 percentage points. AMRO highlighted the risks of escalating trade tensions and their impact on external demand in the region.
RCEP Monitor
SOUTH KOREA
Financial Services Commission announces stricter delisting rules to improve stock market quality
(21 January 2025) South Korea’s Financial Services Commission (FSC) announced stricter delisting rules to improve stock market quality. The market capitalisation requirement for Kospi-listed companies will rise from KRW 5 billion to KRW 20 billion in 2026 and KRW 50 billion in 2028, while the improvement period following a delisting warning will be halved. Firms with a market cap under KRW 100 billion will face increased revenue thresholds, reaching at least KRW 30 billion by 2029. IPO regulations will also tighten, requiring 40% of shares to be allocated to institutional investors with lock-up periods by 2026. Additional restrictions on institutional investor participation in book-building will take effect in April and July 2025. Currently, 62 Kospi and 137 Kosdaq firms, representing 7%-8% of each market, fail to meet the new standards. Over the past decade, no firms were delisted under the existing thresholds, which the FSC criticised for inefficiencies in capital allocation and eroding market trust. Despite increased listings, South Korea’s MSCI index gains remain low at 3.8% compared to over 65% growth in the U.S., Japan, and Taiwan, highlighting the need for these structural reforms.
AUSTRALIA
IPOs start slowly in 2025 due to concerns over US protectionist policies
(22 January 2025) Australian initial public offerings (IPOs) have started slowly in 2025, with only four companies planning to list on the ASX in the first quarter, according to HLB Mann Judd. This follows USD 2.4 billion raised in IPOs in 2024, exceeding the combined totals of 2022 and 2023 but below the USD 5.9 billion annual average recorded before 2020. A corporate advisory partner at HLB attributed the sluggish start to concerns over US protectionist policies under the Trump administration, particularly tariffs and their impact on electric vehicle demand and commodity prices. These policies are expected to have a greater influence on market activity than Australia’s federal election in May. The Chinese economy’s vulnerability to US tariffs is also cited as a factor potentially affecting Australian IPO activity. Prospective issuers are reportedly cautious, with some deals in 2024 scrapped for not meeting listing requirements. HLB anticipates limited improvement in IPO activity until later in the year.
JAPAN
Bank of Japan raises interest rates by 0.25 percentage points to 0.5%
(23 January 2025) The Bank of Japan raised interest rates by 0.25 percentage points to 0.5% on 24 January, marking its highest level since 2008 and the third increase within a year, as inflation remains above the 2% target for 33 consecutive months. Core consumer prices rose 3% in December, while base pay has reached post-1990s highs, with 2023’s spring labour negotiations producing the largest wage increases since 1991. The central bank’s monetary tightening aims to embed inflation, address inefficiencies, and stimulate productive economic growth, though inflation has outpaced wage growth, straining household budgets. Japan’s gross domestic product, adjusted for inflation, has grown only 25% since 1994, with the IMF projecting 1.1% growth in 2025 following a 0.2% contraction in 2024. While private consumption has recovered in recent quarters, spending remains weak after prolonged stagnation.
15 participating countries |
20 chapters |
2.2 billion |
US$26.2 trillion |
28% |
ASEAN member states, Australia, China, Japan, South Korea, New Zealand | trade in goods and services, investment, intellectual property, e-commerce, competition, SMEs, economic and technical cooperation, and government procurement | combined population, 30% world’s population | combined GDP, 30% global GDP | global trade (based on 2019 figures) |