CARI Captures Issue 580: ASEAN holds 40th ASEAN Summit and other meetings in Phnom Penh, Cambodia
ASEAN holds 40th ASEAN Summit and other meetings in Phnom Penh, Cambodia
(13 November 2022) ASEAN held the 40th ASEAN Summit in Phnom Penh, Cambodia, on 11th November, 2022, while other meetings were also held in conjunction with it, including the East Asia Summit and the US-ASEAN Summit. Among the main takeaways from the ASEAN Summit included the fact that no joint statement was released following the East Asia Summit after the US and Russia failed to agree on the necessary language. No progress was also made with regards to the ongoing Myanmar Crisis, with ASEAN merely stating they would continue to review Myanmar’s representation at ASEAN meetings should the situation require it. On the other hand, US-ASEAN ties were elevated to a comprehensive strategic partnership, while East Timor was granted observer status in ASEAN, paving the way for full membership.
Malaysia’s political leaders offer slew of promises ahead of general election on 19 November, 2022
(18 November 2022) Malaysia’s political leaders are offering a slew of promises ahead of its general election on 19 November, 2022. Prime Minister Ismail Sabri and his ruling United Malays National Organization has promised new infrastructure projects including improved online connectivity and highways to the East Malaysian state of Sarawak. He has also promised to create a new deputy prime minister post to be helmed by a leader from Sarawak. The ruling National Front coalition’s election manifesto has focused on people’s welfare and improving the country’s competitiveness. The opposition Hope Pact for their part has pledged to address Malaysia’s aging society by creating a special agency to look after citizens’ welfare, as well as make Malaysia a data center hub. The Hope Pact’s leader, Anwar Ibrahim, has also pledged to forgo his salary if he becomes Prime Minister.
INDONESIA, UNITED STATES
Rich countries pledge to raise at least US$20 billion to help Indonesia wean off coal
(15 November 2022) Rich nations, including the United States, Japan, Canada, and six European countries pledged to raise at least US$20 billion to help Indonesia wean off coal and reach carbon neutrality by 2050, a decade earlier than initially planned. An accord was signed with Indonesia on the sidelines of the G20 summit in Bali. Under the deal, Indonesia pledges to be carbon-neutral by 2050, — 10 years earlier than previously planned — and to almost double its renewable energy generation by 2030. As part of the deal, Indonesia had committed to a shift towards clean energy in return for US$10 billion in public sector finance and US$10 billion in private funding over three to five years. The financing provided will include grants, concessional loans, guarantees, and private investments.
Thailand’s bourse plans to offer ETFs and depository receipts on foreign companies
(16 November 2022) Thailand’s bourse plans to offer exchange traded funds (ETFs) and depository receipts (DRs) on foreign companies to boost business and attract international investors. As part of their plan to promote the Thai exchange as a trading center for overseas stocks, the Stock Exchange of Thailand is working with other Asian trading venues to promote such products. Foreign investors who do not want to invest directly into Myanmar, Lao PDR, Cambodia and Viet Nam, can instead invest in those equities through ETFs and DRs on the Thai stock exchange. International funds have poured more than US$500 million net into local equities in Thailand in November 2022, drawn to the strong growth outlook in tourism, restaurant, hotel and healthcare shares.
Singapore’s non-oil domestic exports contract by 5.6% year-on-year in October 2022
(17 November 2022) Singapore’s non-oil domestic exports contracted by 5.6% year-on-year in October 2022. This presented the first decline since November 2020. This was a reversal from the 3.1% growth registered in September 2022. On a seasonally-adjusted monthly basis, non-oil domestic exports decreased by 3.7% in October, extending the 3.9% decline in the preceding month. The export of electronics products fell 9.3% year on year in October, continuing the previous month’s 10.6% contraction, while non-electronics exports fell by 4.5% from the previous year, reversing from September’s 7.6% expansion. According to certain experts, the decline in both industries signal a slowdown in global growth.
THE PHILIPPINES, INDONESIA
The Philippines and Indonesia hike key interest rates to tame inflation
(17 November 2022) The Philippines and Indonesia both hiked their key interest rates on 17 November, 2022, as both countries seek to tame inflation. Bank Indonesia raised its seven-day reverse repurchase rate by 50 basis points to 5.25%, the highest since September 2019. Inflation in Indonesia has dropped to 5.71% in October 2022 from 5.95% in September, above Bank Indonesia’s target range of 2% to 4% in 2022. The Philippines’ central bank, for their part, raised its key rate by 75 basis points to 5.0%, the highest since March 2009. Inflation in the Philippines accelerated to 7.7% in October 2022, the highest level since 2008. That puts the year-to-date average to 5.4%, well above the government’s 2% to 4% target.
Tourist arrivals in Brunei Darussalam has seen steady increase since easing of travel restrictions
(18 November 2022) Tourist arrivals in Brunei Darussalam have seen a steady increase since the easing of travel restrictions and the re-opening of land borders. Hospitality and tourism service providers have seen an increase in bookings and visits from foreign tourists, signaling the tourism industry is returning to pre-pandemic levels. Fifteen leading hotels in the country reported a hike in room bookings, from 8,271 to 12,406 – or a 50% increase – from August to September in 2022. The Acting CEO of Royal Brunei Airlines has stated that the increase in flight frequencies and resumptions of flights in the coming months will boost the number of travelers coming into the country.
Regulators ask banks to report on their liquidity after rapid selloff in bonds
(17 November 2022) Chinese regulators have asked banks to report on their liquidity after a rapid selloff in bonds triggered a flood of investor withdrawals from fixed-income products. The queries from regulators comes as China witnesses the biggest decline in short-term government bonds since mid-2020. Spurred by a shift toward riskier assets including stocks, this prompted retail investors to pull money from wealth-management products, fueling a spiral of price declines and accelerating withdrawals. These losses also spread to top-rated corporate bonds, fueling a record surge in yields this week. The turbulence in the bond market comes as China’s overall economy begins to pick up, driven by the government easing COVID-19 restrictions, rolling out a rescue package for the property sector, and cooling tensions with the West. As money is now flowing towards riskier assets such as shares, safe haven investments such as bonds have suffered.
New home prices fall at their fastest pace in seven years in October 2022
(16 November 2022) New home prices in China fell at their fastest pace in seven years in October 2022, weighed down by COVID-19 restrictions and problems in the property sector. New home prices slumped 1.6% year-on-year after a 1.5% fall in September 2022. This was the sixth month of contraction and the biggest annual drop since August 2015. Regulators presented a rescue package on 13 November, 2022, aimed at boosting liquidity in the property sector. The property sector has struggled with defaults and stalled projects since authorities began clamping down on excessive leverage in the mid-2020s, which impacted market sentiment. New home prices declined 0.3% month-on-month after easing 0.2% in September.
Jobless rate in Australia drops to 3.4% in October 2022, matching five decades low
(18 November 2022) The jobless rate in Australia dropped to 3.4% in October 2022, matching a five decade low. The jobless rate had dropped from 3.5% in September. According to data by the Australian Bureau of Statistics, net employment rose 32,200 in October from September, when they fell a revised 3,800. Full-time employment jumped 47,100, bringing total job gains for the 12 months to October to a massive 762,000. The Reserve Bank of Australia (RBA) sees unemployment rising only slightly to 3.7% by end-2023, while forecasting inflation at 4.7%, which is still well above its long-term target band of 2% to 3%. Australia’s tight labor market have raised expectations of the RBA continuing to raise interest rates.