CARI Captures Issue 613: Six states in Malaysia to hold state elections on 12 August, 2023

9.8 million voters eligible to vote in six state elections to be held on 12 August, 2023
(05 July 2023) Some 9.8 million voters will be eligible to vote in six state elections to be held on 12 August, 2023, where they will be able to choose between Prime Minister Anwar Ibrahim’s multiracial unity government and the Malay-majority federal opposition pact. Nominations for the polls will be on 29 July, 2023, and the Election Commission is allowing for a two-week campaign period. The local polls are seen as the first referendum on the new government formed by Anwar Ibrahim after a general election held in November 2022. Out of Malaysia’s 13 states, the six states up for contest include Kelantan, Terengganu, and Kedah, controlled by the Islamist-leaning opposition, and Selangor, Penang, and Negeri Sembilan, controlled by the current unity government.

Indonesia and Papua New Guinea agree to boost border trade
(05 July 2023) During a visit by Indonesian President Joko Widodo to Port Moresby, Papua New Guinea, on 05 July, 2023, both parties agreed to boost border trade.This follows Papuan lawmakers in March 2023 finally ratifying an agreement governing its 760-kilometer border with Indonesia after a decade-long delay, possibly opening the way to improving relations. Annual trade between Indonesia and Papua New Guinea was about US$200 million a year, a small amount when compared to the latter’s trade with other countries. Indonesia also pledged new aid for Papua New Guinea, including US$15 million for upgrading a hospital in Port Moresby as well as support for current Papuan efforts in building more roads.

Indonesian gold miner set to trade in Jakarta following Indonesia’s largest IPO in 2023
(05 July 2023) Indonesian gold and copper miner PT Amman Mineral Internasional is set to start trading in Jakarta on 07 July, 2023, following Indonesia’s largest initial public offering (IPO) in 2023. The company raised US$711 million in its IPO, making it the largest new share sale in Asia in 2023 outside mainland China. IPOs in Jakarta have raised a total of US$2.2 billion since the start of 2023, already overtaking the tally for all of 2022. Amman Mineral owns the fifth-largest copper mine in the world as of end-2020. The company posted net income of US$1.09 billion in 2022, more than a threefold increase from the previous year’s figure. Proceeds will be used by Amman Mineral for working capital, debt repayment and to fund refinery projects in West Nusa Tenggara province.

Indonesia seeking financing for US$48 billion new capital city Nusantara
(05 July 2023) The Indonesian government is seeking financing for its US$48 billion new planned capital city Nusantara. The new capital city is envisioned as a green, smart city spanning nearly 260,000 hectares to be located in East Kalimantan province. The Indonesian government plans to foot 20% of the total cost of the project while private investors will finance the rest. Indonesia has approached other countries seeking investments into Nusantara, including Saudi Arabia, the United Arab Emirates, Japan, South Korea, Iran, Canada, Germany, and Singapore. Australia has offered support for Indonesia in developing its new capital city, including scholarships for Indonesians to study sustainable urban planning and local government administration, as well as heightened collaboration between government authorities to share information and experiences about building a new capital city. These new commitments by Australia are expected to be formalized via a memorandum of understanding in the coming months.

Central bank sees residential property market in ‘good place’
(05 July 2023) According to the Monetary Authority of Singapore (MAS), Singapore’s residential property market is in a ‘reasonably good place’, with signs that prices are moderating and stabilizing. Singapore has undergone a property boom that has defied a global slowdown, with the Singaporean housing market having seen a buoyant run after an influx of capital alongside a pandemic-induced supply shortage pushed prices and rents to record highs. In response, in April 2023 the government doubled stamp duties for foreign buyers to 60%. It also raised levies for second-home buyers. Home prices declined in the second quarter of 2023 for the first time in three years. According to the MAS, the surge in rental prices will take ‘a little bit of time to resolve’, with rents for private apartments and public housing having surged about 27% and 25% respectively in May 2023 from a year ago.

Inflation rate slows for fifth straight month in a row in June 2023
(05 July 2023) According to the Philippine Statistics Authority (PSA), the inflation rate in the Philippines slowed for the fifth straight month in a row in June 2023. The inflation rate eased to 5.4% in June 2023 from 6.1% in May, bringing the year-to-date rate to 7.2%. This is the fifth time that inflation dropped from a peak of 8.7% in January 2023. The inflation rate in June 2023 is also the lowest rate in 15 months. According to the Philippines’ Finance Secretary, inflation is on track to further decline to within the government’s target range of 2% to 4% by the end of 2023. Inflation is also expected to fall below the lower limit of the target in the first quarter of 2024. The slowdown in inflation in June 2023 versus May 2023 was attributed to the slower movement in the prices of food and non-alcoholic beverages. Food inflation, which tracks price movements in a basket of commonly purchased foods, also declined for the fifth consecutive month in June at 6.7% from 7.5% in May.

Viet Nam welcomed over 5.5 million foreign visitors to country in first six months of 2023
(05 July 2023) According to the Vietnam National Administration of Tourism, Viet Nam welcomed 5.5 million foreign visitors in the first six months of 2023, already exceeding the total number of international arrivals in 2022. Viet Nam’s tourism sector has set a target of 8 million visitors for the remainder of 2023. However, the tourism bureau has since predicted the numbers will likely rise to 10 million. Despite this, international arrivals into Viet Nam are still far off pre-COVID-19 pandemic levels, with nearly 19 million international arrivals being recorded in 2019. Tourism into Viet Nam is expected to get a boost from a new, recently approved visa policy for international visitors. Under the new policy, visa waivers for visitors from selected countries will be tripled from 15 to 45 days. As well, for visitors from countries eligible to apply for an electronic visa to Viet Nam, visas will now be valid for up to 90 days with single or multiple entries.

RCEP Monitor

House prices fall by most in eight months in June 2023 despite interest rates having peaked
(04 July 2023) House prices fell by the most in eight months in June 2023 despite interest rates having reached a peak. House prices fell 1.2% month-on-month and have now declined for 15 straight months. That’s the biggest fall since a 1.3% drop in October 2022. Year-on-year, prices dropped 10.6% compared with 10.2% through May. Property prices have sharply dropped over the past year and a half due to rising interest rates and a slowing economy. The Reserve Bank of New Zealand’s decision in May 2023 to signal no further increases in the Official Cash Rate stoked optimism that the housing market would start to improve in the second half of 2023. The average house price dropped to US$560,000 in June. Prices in the largest city Auckland fell 3% from May and are 12.5% lower year-on-year.

South Korea to allow new bank entrants for first time in 30 years
(05 July 2023) South Korea will allow new bank entrants for the first time in 30 years in order to spur competition in the banking sector. The government intends to allow more online banks, permit commercial banking licenses for existing financial companies and ease the loan-to-deposit rules for local branches of foreign banks. South Korea’s banking sector has been dominated by five lenders, Shinhan Bank, Kookmin Bank, Hana Bank, Woori Bank and NongHyup Bank. This move by the government comes after they criticized the big bonuses recently paid to banking employees as interest rates rise. The Bank of Korea raised its benchmark interest rate from 1% to 3.25% over the course of 2022. The base rate is presently 3.5%.

Japan’s initial public offerings market delivers biggest gains in Asia in 2023
(06 July 2023) The Tokyo equity market has delivered the biggest gains among newly listed Asian shares in 2023, with debutants in 2023 up an average of 75% since their listings. This is more than any other major Asian market that had at least US$1 billion raised through IPOs over the same period. Looking at the first day of trading alone, debutants rose 51% on average, the most in five years. The top performance of Japan’s IPO market comes as the country boasts a stock market that has risen to levels unseen in more than three decades amidst inflows from foreign investors seeking to benefit from a weak yen, reforms in Japanese corporate governance and the Bank of Japan’s relatively easy monetary policy. The two largest listings for Japan in 2023 – Rakuten Bank Ltd. at US$676 million and SBI Sumishin Net Bank Ltd. at US$421 million — are both up more than 30% since IPO prices were set in April and March 2023.

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