SINGAPORE
Taylor Swift’s Eras tour causes economists to upgrade Singapore’s GDP forecast
(08 March 2024) The Singapore leg of singer-songwriter Taylor Swift’s Eras tour caused economists to upgrade the country’s GDP forecast for 2024. Economists now predict Singapore’s economy will expand by 2.9% in the first quarter of 2024, and 2.5% for the whole year (from a previous forecast of 2.3%). It is believed her concerts added 0.2% percentage points of GDP to the city-state’s economy in the first quarter. The Singapore leg of the Eras tour involved the singer performing six concerts through 09 March, carrying benefits for Singapore’s hospitality, food & beverage, and retail activities.

THE PHILIPPINES, UNITED STATES
Potential free trade agreement between the Philippines and United States soon
(12 March 2024) A potential free trade agreement (FTA) between the Philippines and the United States will be discussed once a visiting delegation of American business leaders, organized by US President Joe Biden, returns to the US. The Chairman of the President’s Export Council (PEC), mentioned the possibility of a US-Philippines FTA during a forum in Makati City. The PEC advises the US president on trade-related government policies and programs. The Chairman stated that discussions on the FTA would occur upon their return to the US, but warned that FTA negotiations involve multiple branches of the US government, including Congress. Currently, the US ranks as the Philippines’ third-largest trading partner globally, with total trade reaching approximately US$20 billion. The United States presently has 14 FTAs with 20 countries, according to the ITA.

VIET NAM
Viet Nam expected to be upgraded to emerging market indexes by 2025
(09 March 2024) Viet Nam is striving for inclusion in emerging market indexes, with the demand for upfront funding from equity investors posing a significant obstacle. JPMorgan Chase & Co. and HSBC Holdings Plc anticipate an upgrade for Viet Nam’s US$269 billion stock market by FTSE Russell later in 2024, with a target inclusion by 2025. Despite being a strong candidate on paper due to its robust economy and stock market performance, foreign investors are concerned about the requirement for investors to have fully-funded accounts in the country before trading can commence. Vietnam’s progress towards an upgrade has been slower than anticipated, partly due to issues with fund availability checks and cumbersome account opening processes. Another challenge is the cap on foreign holdings in certain sectors, hindering international investment. However, Vietnam aims to address these concerns and increase its stock market capitalization to 100% and 120% of GDP by 2025 and 2030, respectively.

MALAYSIA
Semiconductor manufacturers shifting operations to Malaysia amidst US-China chip war
(11 March 2024) Semiconductor manufacturing firms are increasingly investing in Malaysia amidst the ongoing Sino-US trade war. Much of this influx is driven by a global strategy adopted by semiconductor firms termed “China plus one,” which aims to diversify supply chains away from China. Malaysia’s appeal lies in its established history of semiconductor manufacturing (primarily back-end operations), bolstered by the current government’s ambition to move up the value chain. Malaysia attracted RM60.1 billion in foreign direct investment in 2023, demonstrating its growing attractiveness to investors. However, challenges such as a shortage of engineering talent and political vulnerabilities remain. The influx of Chinese companies may also attract scrutiny from the US, potentially impacting the Malaysian semiconductor industry’s future access to the American market. Despite these challenges, Malaysia is aggressively pursuing high-end investments to position itself as a key player in the global semiconductor market.

MALAYSIA, GERMANY
Malaysia secures potential investments worth US$9.68 billion during Germany visit
(13 March 2024) During his visit to Germany, Malaysian Prime Minister Anwar Ibrahim highlighted significant support and recognition from German leaders and business figures, with potential investments amounting to MYR 45.4 billion (US$9.68 billion). Anwar discussed Malaysia-Germany relations and various economic cooperation aspects with German Chancellor Olaf Scholz. The potential investments span industries such as semiconductors, aerospace, medical devices, chemicals, and services. During a roundtable meeting, attended by over 35 industry leaders, representatives from companies like Siemens AG, B. Braun GmbH, and Airbus Asia Pacific discussed potential business collaborations. Malaysia and Germany have strong trade ties, with Malaysia being Germany’s largest trading partner in ASEAN and over 700 German companies operating in Malaysia, contributing to the creation of 65,000 jobs.

SINGAPORE, JAPAN
Japan’s Toppan Holdings plans to build semiconductor package substrate plant in Singapore
(14 March 2024) Japan’s Toppan Holdings intends to construct a semiconductor package substrate plant in Singapore to begin operations by late 2026, in response to rising demand linked to artificial intelligence. The investment in the plant is estimated at US$338 million, with 200 jobs expected to be created. Further capacity expansions are anticipated in the future, with total investments potentially surpassing 100 billion yen. Toppan’s main customer, Broadcom, may provide financial support for future capacity expansions. The Singapore facility will be strategically located near semiconductor assembly and testing contractors in Malaysia and Taiwan. The chip substrate market is projected to reach US$29 billion by 2028. Toppan received support from Singapore’s government and Broadcom in selecting the plant site and hiring personnel. This move strengthens Toppan’s business continuity plan, complementing its existing production base in Ishikawa prefecture acquired in 2023.

INDONESIA
Trade surplus measures at US$870 million in February 2024, smallest in nine months
(15 March 2024) In February, Indonesia reported its smallest trade surplus in nine months, standing at around US$870 million, significantly lower than the expected surplus of US$2.32 billion polled by Reuters and January’s US$2 billion surplus. This marks the smallest surplus since May 2023. Indonesia, known for exporting commodities such as coal, palm oil, and nickel, experienced a 9.45% drop in exports to US$19.31 billion, driven by declines in coal and palm oil shipments. This decline may be attributed to 2023’s drop in commodity prices and delays in the issuance of mining permits affecting activities in key mines. Meanwhile, imports surged by 15.84% to US$18.44 billion, surpassing market expectations, driven mainly by increased imports of machinery, plastic, and electrical equipment.

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CHINA
Prices of new homes continue sinking despite mortgage rate cuts
(15 March 2024) In February 2024, official data revealed a further decline in the prices of new homes in China, with top-tier cities like Beijing, Guangzhou, and Shenzhen leading a 0.3% monthly drop despite recent mortgage rate cuts. This decline matched the pace seen in January. Year-on-year, prices fell by 1%, attributed in part to a high base effect. Prices for secondhand homes in top-tier cities also decreased by 0.8% in February, indicating continued affordability challenges for many citizens. Other key provincial cities experienced even larger price drops amid subdued demand amidst weaker economic conditions. China’s real estate sector has been under pressure since the implementation of the “three red lines” policy in 2021 to curb overborrowing by developers, leading to defaults among major real estate firms. To support growth while managing risks, authorities hinted at further monetary easing, including maintaining the interest rate on medium-term lending facility loans at 2.5%.

JAPAN
Bank of Japan to discuss exiting negative rate policy next week amidst wage hikes
(14 March 2024) The Bank of Japan (BOJ) is set to deliberate on the potential termination of its negative interest rate policy during its upcoming meeting, spurred by optimism over achieving the 2% inflation target amidst rising wage levels. The decision hinges on the outcome of Japan’s annual wage negotiations, the results of which will be disclosed by Rengo, the top labour confederation, on Friday. If the negative interest rate policy is lifted, it would mark Japan’s first interest rate hike since February 2007, signalling a shift in monetary policy. Discussions also involve the potential discontinuation of yield curve control, coupled with the cessation of asset purchases, including exchange-traded funds and real estate investment trusts. On 13 March, Toyota Motor and other major corporations agreed to meet labour union demands on wages, bolstering expectations for policy adjustments by the BOJ. BOJ Governor Kazuo Ueda emphasised the significance of the negotiation outcomes in the decision-making process.

AUSTRALIA
Australian stocks among world’s worse this week amid China concerns
(15 March 2024) The S&P/ASX 200, a key Australian stock index, experienced a decline of 2.3% during the week, marking its poorest performance since September. The downturn was attributed to concerns over China’s economic condition, particularly in the commodities sector, which heavily influences the Australian market. Mining companies bore the brunt of the losses, despite a rise in copper prices, following perceived inadequacies in Chinese stimulus measures. Additionally, banks suffered significant setbacks, emerging as the worst-performing sector for the week. This decline was exacerbated by discouraging US economic data, which diminished expectations for relaxed monetary policies. Analysts noted that Macquarie’s downgrades of Australian banks further compounded the negative sentiment among investors.

ASEAN, AUSTRALIA
Australia pledges US$41.8 million in funding for maritime security in ASEAN

(4 March 2024) On the first day of the ASEAN-Australia Special Summit 2024, Australia’s Foreign Minister Penny Wong pledged US$41.8 million in funding for maritime security for ASEAN. The funding aims to support maritime cooperation and secure sea lanes, especially in the South China Sea. Although it was not specified which countries the funding would go to, Wong commended Indonesia, Malaysia, Vietnam, and the Philippines for their efforts in delineating maritime boundaries. The summit, held from 4 – 6 March, 2024 in Melbourne, marks 50 years since Australia became a ‘dialogue partner’ of ASEAN. Additionally, Wong highlighted Australian funding for climate resilience in the Mekong region amidst growing regional concerns over a focus on militarisation amid a climate crisis.

INDONESIA
Incoming president Subianto Prabowo vows fiscal discipline and faster growth during his term
(5 March 2024) Indonesia’s presumed president-elect Prabowo Subianto recently outlined his economic agenda at the Mandiri Investment Forum. He aimed for 8% economic growth over the next five years, broadening the tax base, and maintaining fiscal discipline. Preserving fiscal prudence will help bolster Indonesia’s credit profile, with the legal budget deficit cap set at 3% of GDP. Prabowo’s proposed spending initiatives, including free school lunches and milk for 80 million children, aim to enhance health, education, and employment opportunities. This has reportedly faced pushback within the cabinet, particularly regarding fiscal policy, with Finance Minister Sri Mulyani cautioning against an overreliance on state budget expansion. This uncertainty has led to investor apprehension, reflected in recent bond market fluctuations. Prabowo has also pledged to continue existing policies while enhancing efficiency, potentially through state-owned enterprise rationalisation and privatisation. He also seeks collaboration with the financial sector to address inflation, reduce poverty, and bolster food self-sufficiency.

THE PHILIPPINES, UNITED STATES
United States to invest US$30.36 billion in the Philippines
(01 March 2024) According to the Philippines’ Ambassador to the United States Jose Manuel Romualdez, the United States will invest US$30.36 billion in the Philippines. In response to concerns by Filipino exporters that China will reduce the volume of Filipino fruits it imports, Romualduez stated that the US$30.36 billion invested by the United States will help counter economic coercion by Beijing. Noting that the American investment has already been ‘programmed and approved’, Romualdez noted that American businesses are diversifying and will invest in infrastructure, energy, artificial intelligence, health care, manufacturing, and semiconductors.

THE PHILIPPINES
Philippines’ central bank unlikely to return to tightening cycle due to cooling inflation
(6 March 2024) The Philippines’ central bank, Bangko Sentral ng Pilipinas (BSP), is unlikely to resume its tightening cycle, according to BSP Governor Eli Remolona Jr. In its February 2024 policy meeting, the BSP’s Monetary Board opted to maintain key policy rates for the third time, citing a revised inflation outlook for 2024. The target reverse repurchase rate remains at 6.5%, with the overnight deposit and lending facility rates at 6.0% and 7.0% respectively, maintaining the highest levels in 16 years. Since May 2022, the BSP has increased key policy rates by 450 basis points to combat inflation, which averaged 6.0% in 2023, surpassing the target range of 2.0% to 4.0%. The BSP revised its inflation forecast for 2024 to 3.9% from 4.2% in December, stating that it was considering factors like supply-side shocks and potential second-round effects. In February, inflation reversed its downward trend, reaching 3.4%, with rice prices notably contributing to the rise.

MALAYSIA
Malaysian ringgit rises to a one-month high after policymakers ramp up coordination
(04 March 2024) Malaysia’s ringgit rose to a one-month high after policymakers ramped up their coordination with state-linked firms to lift the Malaysian currency from a 26-year low. The Malaysian ringgit advanced as much as 0.6% to 4.7185 per dollar in early Asian trading, its strongest level since 02 February, 2024. Over the past week, the ringgit has emerged as Asia’s best-performing currency. Malaysian policymakers have sought to drive more inflows into the market by urging government-linked companies (GLCs) to repatriate foreign investment income and convert it into ringgit more consistently. Malaysia’s central bank, Bank Negara Malaysia (BNM), will be enhancing its engagement with corporates and investors to further encourage conversions and bolster sentiments towards the ringgit.

MALAYSIA
Malaysia achieves victory in WTO case against EU over ‘discriminatory’ renewable fuel regulation
(6 March 2024) Malaysia has achieved a favourable outcome in its World Trade Organisation (WTO) case against the European Delegated Act, which was perceived as discriminatory towards the country’s palm oil biofuel. Malaysia’s Plantation and Commodities Minister confirmed that the WTO panel’s final report, issued on 5 March, deemed the EU act discriminatory. The dispute originated in 2018 when the EU introduced regulations on renewable fuel usage, particularly concerning biofuels derived from oil palm crops, a key industry in Malaysia. Malaysia argued that these measures violated fair trade practices and initiated legal action against the EU in 2021. The WTO’s final report criticised the EU’s approach to banning palm oil biofuels based on indirect land use change and its lack of consultation with affected economies. The EU has agreed to comply with the WTO ruling, necessitating amendments to its regulations regarding Malaysian palm oil biofuels. The Malaysian government pledges to monitor these changes closely and pursue further action if necessary to ensure compliance.

LAO PDR, VIET NAM
Laotian and Vietnamese provinces partner to jointly promote tourism
(06 March 2024) The northern Laotian province of Huaphan is collaborating with neighbouring Son La province in Viet Nam to organise a joint tourism fair scheduled for 21 – 22 March, 2024. The event will showcase literary and cultural activities reflecting the close relationship between the two provinces, including a theme song symbolising the enduring bond between their peoples. Highlights will include photo exhibitions, displays of tourism and cultural products, and information on tourist attractions and services available in each province. The fair aims to strengthen tourism ties between Huaphan and Son La, fostering friendly relations between Lao PDR and Viet Nam, particularly in the shared border area. Organisers hope the event will attract foreign tourists, boosting cross-border tourism and generating income for local communities.

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CHINA
China to improve policies supporting childbirth and elderly population
(5 March 2024) China will improve policies supporting childbirth as well as the country’s rapidly ageing population. This comes as China’s population fell for the second consecutive year in 2023, with new births dropping to about half of those in 2016, while marriages hit a record low in 2022. According to a report by the country’s state planner, China will seek to improve policies to boost birth rates by refining parental leave policies, improving the mechanism for sharing the related labour costs of employers, and increasing the supply of childcare services. In response to China’s ageing population, the minimum basic old-age benefits for rural and non-working urban residents will be raised, while basic pensions for retirees will continue to increase. Authorities are also seeking to implement a private pension system nationwide.

CHINA
China sets economic growth target of around 5% for 2024
(5 March 2024) On 05 March, 2024, China announced a GDP growth target of ‘around 5%’ for 2024, matching 2023’s goal. China’s economy had expanded by 5.2% in 2023, but matching that this year may be more ambitious given that the economy’s post-pandemic rebound has been considered largely disappointing. China’s economic recovery has been held down by subdued domestic consumption, overcapacity in certain industries, a depressed property sector, and restrained manufacturing activity. In January 2024, the World Bank projected that China’s economy would expand 4.5% in 2024 amid weaker domestic demand and rising geopolitical tensions. The budget deficit target for 2024 is set at 3% of GDP, while consumer inflation is expected to reach 3%.

JAPAN
Japan’s benchmark stock index Nikkei reaches 40,000 for first time
(4 March 2024) On 4 March, 2024, Japan’s benchmark stock index the Nikkei 225 reached the 40,000 level for the first time. Japan’s Nikkei 225 share index rose to 40,314.64 but fell back slightly. It was up 0.5% to 40,150.00 by early afternoon. Shares in Japan have made significant gains over the past year due to strong demand for technology associated with artificial intelligence, the Bank of Japan’s easy credit policy, and a weak Japanese yen. The rally in the Nikkei 225 was led by semiconductor-related stocks such as equipment makers Tokyo Electron and Advantest, which rose by 2.4% and 3.7% respectively. After having risen by 28% in 2023, the Nikkei Stock Average has risen by 19% since the start of 2024.

ASEAN
Many ASEAN social safety nets remain inadequate despite ageing populations
(17 February 2024) ASEAN governments are under pressure to bolster social safety nets to ensure the well-being of their elderly amid ageing populations across the region. According to estimates by the United Nations, the share of working-age people in the region’s 11 countries peaked at 68% in 2023. This ratio already peaked in Thailand in 2013 and Viet Nam in 2014. Indonesia, one of the more youthful countries in the region, is expected to see its ratio top out in 2030. Meanwhile, the ratio of people age 65 or older in the region topped 7%, the threshold for being considered an ‘aging society.’ Despite these figures, in countries like Indonesia and Viet Nam less than 30% of working-age populations are covered by public pension schemes. In many ASEAN economies, social security outlays account for less than 10%, but are expected to grow moving forward.

ASEAN
ASEAN countries implementing more cash handouts to deal with inflationary pressures
(17 February 2024) ASEAN governments are distributing more money directly to households to help them deal with inflationary pressures. Singapore’s recently announced fiscal 2024 budget, for instance, includes SG$600 (US$445) in shopping vouchers for each household, to be distributed across two rounds in June 2024 and January 2025. This follows a SG$500 voucher handout in January 2024. Meanwhile, Thailand’s new government plans to spend US$14 billion to send THB 10,000 through digital wallets to all Thais aged 16 and over who meet certain requirements. Malaysia, for its part, plans to expand its cash aid for low-income households to MYR 10 billion (US$2.1 billion) in 2024 from MYR 8 billion (US$1.7 billion) in 2023. Economists have questioned these expanded cash aid programs, noting that inflation in Southeast Asia has already been cooling. As well, these programs are expected to impact the fiscal health of these economies.

MYANMAR
Number of electric vehicles in Myanmar increases sixfold in a year
(17 February 2024) According to Myanmar’s Ministry of Transport and Communications, the number of registered electric vehicles jumped 6.5 times from a year earlier. Roughly 1,900 EVs were registered in the year through January 2023 alone. This has been attributed to the ruling military regime banning the import of gas-powered cars in 2022 as part of efforts to shore up their dwindling foreign currency reserves. Import tariffs for EVs were also removed in January 2023, and are expected to continue until March 2024. EVs have also become more attractive to Myanmarese consumers due to skyrocketing gas prices, which have been blamed on fuel imports and distribution being disrupted by the shortage of foreign currencies.

THAILAND
Bank of Thailand resists calls to hold emergency meeting to slash rates
(21 February 2024) The Bank of Thailand (BOT) is resisting calls from the Thai government to hold an emergency meeting to slash rates in response to weak economic growth and negative headline inflation. GDP grew by only 1.9% in 2023, missing market expectations. In response to these weak GDP figures, Prime Minister Srettha Thavisin urged the BOT to hold an emergency meeting before the next regular meeting on 10 April, 2024 to cut rates. Refuting claims by Srettha that the Thai economy is in crisis, the governor of the BOT instead pointed to weak spending by Chinese tourists, a slowdown in Chinese imports from Thailand, and a delay in passing the government’s 2024 budget as reasons why the country’s growth remains sluggish. The ongoing dispute between the government and the BOT has raised fears about the long-term independence of the latter.

MALAYSIA
Malaysian ringgit hits lowest level in 26 years
(20 February 2024) On 20 February, 2024, the Malaysian ringgit hit its lowest level since the Asian Financial Crisis of 1998, which was 26 years ago. The Malaysian ringgit fell nearly 0.3% to almost 4.8 against the US Dollar. The ringgit has suffered a more than 4% drop already in 2024, which has been blamed on Malaysia’s poor export performance, uncertainties about China’s current economic prospects, and rising US interest rates. Malaysia’s central bank argued that growth in global trade and Malaysian exports will nevertheless have a positive impact on the ringgit in 2024. Malaysia’s ringgit is also expected to strengthen against the US Dollar after US authorities recently signaled an end to rate hikes.

MALAYSIA, BRUNEI DARUSSALAM
68% of Malaysian diaspora working in Brunei Darussalam are skilled workers
(21 February 2024) According to data by the Department of Statistics Malaysia (DOSM), 68% of the Malaysian diaspora working in Brunei Darussalam are skilled workers, while 24.1% are semi-skilled. It was also found that for those Malaysians working in Brunei, 41.3% were earning monthly gross salaries between BND 1,000 (MYR 3559.51) and BND 3,000 (MYR 10,678.53), while a further 43.5% received between BND3,001 (MYR 10678.53) and BND10,000 (MYR 35,595.09). Most Malaysians were working in Brunei because of job opportunities, higher salaries, and the high exchange rate of the Bruneian Dollar vis-a-vis the Malaysian Ringgit.

SINGAPORE
Singapore hosted regional headquarters for 4,200 multinational firms in 2023
(22 February 2024) According to a Bloomberg Intelligence report, Singapore hosted the regional headquarters for 4,200 multinational firms in 2023, extending its lead and dwarfing the 1,336 found in its lead rival Hong Kong. It was noted that even many Chinese companies are seeking to station their operations in Singapore to hedge their geopolitical risks. Multinational firms are choosing Singapore due to its better relations with the West, broader talent pool, diversified economy, and tax incentives. Furthermore, while Hong Kong has a lower standard corporate tax rate of 16.5%, this is bested by Singaporean programs that can cut its 17% tax rate to 13.5% or less for certain activities.

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SOUTH KOREA
Bank of Korea maintains its growth projections for 2024 at 2.1%
(22 February 2024) The Bank of Korea maintained its growth projections for 2024 at 2.1%, while also pointing to stubbornly high inflation and household debt as potential headwinds. The Bank of Korea also announced it would keep its key rate steady at 3.5%, marking the ninth consecutive session where it has held the rate. The central bank also maintained its inflation projection at 2.6%. Analysts noted that inflation remains higher than the Bank of Korea’s target, and that risks remain in the form of high real estate prices and household debt.

CHINA, MEXICO
China circumvents US tariffs by shipping more goods via Mexico
(21 February 2024) According to analysis data by the Financial Times, China is circumventing US tariffs by shipping more goods via Mexico. According to figures by Container Trades Statistics, the number of 20ft containers shipped from China to Mexico reached 881,000 in the first three quarters of 2023, the most recent period for which data is available, up from 689,000 in the same period of 2022. The rise came as Mexico overtook China as the largest exporter of goods to the US in 2023. Due to tariffs implemented by the Trump administration in 2018 and which were maintained by the subsequent Biden administration, shipments arriving directly from China now account for less than 15% of US imports, down from more than a fifth in 2017.

JAPAN
Japan’s benchmark Nikkei Stock Average closes above all-time high set in 1989
(22 February 2024) On 22 February, 2024, Japan’s benchmark Nikkei Stock Average closed above its all-time high set in December 1989. The average rose to 39,098, up 836.52 points or 2.19% from the previous day’s close, surpassing the all-time closing high of 38,915.87 recorded on 29 December, 1989. Year-to-date, the Nikkei Stock Average has gained 16.8%. It has been one of the top-performing global indexes since 2023, when it rose by around 30%. The rally in the index was led by semiconductor stocks such as equipment makers Tokyo Electron and Advantest. The rise of the Nikkei Stock Average has been fueled by global investors, who have been lured by corporate governance reforms, a weak yen, an ultra-low interest rate environment, and a tax-deferred investment program aimed at small investors.

INDONESIA
Prabowo Subianto on track to win Indonesian presidential election based on quick count of results
(14 February 2024) Former army general Prabowo Subianto is on track to win Indonesia’s presidential election held on 14 February, 2024, based on a quick count of the final results. As of 8 p.m. Jakarta time, the pollsters’ quick counts, based on about 90% of votes counted at sample polling stations, indicate Prabowo winning 57% to 59% of the total vote. In comparison, former Jakarta Govenor Anies Baswedan secured 24% to 26% of the total vote, while former Central Java Governor Ganjar Pranowo secured 16% to 17%. To win the presidential election, a candidate must gain the majority of total votes and more than 20% in at least half of the 38 provinces. If a candidate is unable to secure this, a second round is held on 26 June. The General Elections Commission has until 20 March to announce the final results.

INDONESIA
Indonesian stocks jump in early trading as Prabowo declares victory
(15 February 2024) Indonesian stocks jumped in early trading on 15 February after Indonesian Defense Minister Prabowo Subianto declared victory in the country’s presidential election held on 14 February, 2024. The Jakarta Composite Index rose as much as 2.2%, the most since May 2022, after Prabowo secured nearly 60% of votes in quick counts done by private pollsters. It closed 1.3% higher at 7,303.28 on 15 February. A swift victory for Prabowo is likely to remove the uncertainty that would come from a prolonged election. The defense minister largely campaigned on policy continuity with the current administration of President Joko Widodo, which also appealed to investors.

THAILAND
Government delays approval of draft bill banning recreational usage of cannabis
(13 February 2024) The Thai government has delayed the approval of a draft bill banning the recreational usage of cannabis as it seeks more opinions from other parties. According to Thailand’s Public Health Minister, the Ministry of Public Health could not submit the bill to the cabinet on 13 February, 2024 because more time is needed to seek views. Thailand’s Prime Minister Srettha Thavisin had pledged to limit cannabis only for medical and health-related use during the May 2023 election campaign over public concerns over addiction. The previous administration had implemented landmark legislation in mid-2022 to decriminalize the usage of cannabis, making Thailand the first country in Asia to do so.

MALAYSIA
Malaysia’s economy expands below target at 3.7% in 2023
(16 February 2024) According to Bank Negara Malaysia, Malaysia’s economy expanded by 3.7% in 2023, below the official target of 4% to 5%. This was a substantial drop from the 8.7% growth recorded in 2022. In the last quarter of 2023, GDP growth slowed to 3.0%, from the 3.3% growth recorded in the previous quarter. The fourth quarter performance was worse than the average 3.4% forecast in a Reuters poll of 23 economists published on 14 February, 2024. Bank Negara attributed this slowdown to a ‘challenging external environment’, and pointed to  slower global trade, the global tech downcycle, geopolitical tensions, and tighter monetary policies. Malaysia’s overall trade was down 7.3%, while manufacturing managed just 0.8% growth due to continued weakness in the electrical and electronics industry.

SINGAPORE
Non-oil domestic exports grows 16.8% year-on-year in January 2024
(16 February 2024) Singapore’s non-oil domestic exports grew by 16.8% year-on-year in January 2024, aided by growth in both electronic and non-electronic products. Non-oil domestic exports amounted to US$9.88 billion in January 2023, compared to US$11.5 billion last month. The expansion has continued the growth seen in November 2023, when non-oil domestic exports grew 1% after falling for 13 consecutive months. On a month-on-month seasonally adjusted basis, non-oil domestic exports grew 2.3% in January, after declining 2.8% in December 2023. The biggest expansion was in exports to China, which grew 101.3% year-on-year.

THE PHILIPPINES
Filipino conglomerate San Miguel chosen to revamp and operate main international airport
(16 February 2024) A consortium led by Filipino conglomerate San Miguel has been chosen by the Philippines government to revamp and operate Ninoy Aquino International Airport (NAIA), the country’s main international airport based in Manila. On 16 February, 2024, authorities announced that the winning contract went to San Miguel, which offered the central government 82% of revenue if it was granted a license to operate the airport under a privatization deal that will run for 15 years, with an option to extend it by another decade. The consortium includes RLW Aviation Development, RMM Asian Logistics and South Korea’s Incheon International Airport, and is expected to begin running operations within three to six months.

VIET NAM
Viet Nam records surging number of international arrivals during Chinese New Year holidays
(15 February 2024) According to the Vietnam National Authority of Tourism, Viet Nam recorded a surging number of international arrivals during the Chinese New Year holidays. While the city of Danang welcomed nearly 177,000 foreign arrivals between 8 to 14 February, Hanoi welcomed nearly 103,000 arrivals. During the same period, the number of international arrivals traveling to Ho Chi Minh City hit 75,000, while travelers to the Mekong Delta province of Kien Giang reached 44,370. Meanwhile, the number of arrivals to the Central Highlands province of Lam Dong reached 20,000. Authorities attributed the increase in the number of foreign visitors to favorable visa policies, proper market exploitation, and effective promotion activities.

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JAPAN
Japan’s economy unexpectedly falls into recession on 15 February, 2024
(15 February 2024) Japan’s economy unexpectedly fell into recession on 15 February, 2024 after shrinking for the second consecutive quarter in the last quarter of 2023. Japan’s GDP would contract by 0.4% year-on-year in the fourth quarter of 2023. The economy had shrunk by 3.3% year-on-year in the previous quarter. Japan would also lose its spot as the third largest economy in the world to Germany in US Dollar terms in 2023. While the IMF had predicted that Germany would overtake Japan as the third-largest economy in October 2023, the change in ranking will only be declared by the IMF once both countries have published the final versions of their economic growth figures.

SOUTH KOREA
South Korea prepares US$56.97 billion financial support programme for companies
(15 February 2024) South Korea has prepared a US$56.97 billion financial support program for companies increasing investments into key sectors as well as small businesses struggling with high-interest rates. The program includes US$11.26 billion worth of cheap policy loans from a state-run bank for key industries, such as semiconductor and battery, while commercial banks will also provide US$15.01 billion to support small and medium-sized businesses. South Korea’s Financial Services Commission cited the need for regulatory reform and financial support, pointing to evolving trade relations with China, technological advancement in major industries, and fragmentation of global supply chains.

AUSTRALIA
Unemployment rate stands at two-year high of 4.1% in January 2024
(15 February 2024) According to the Australian Bureau of Statistics, Australia’s unemployment rate in January 2024 jumped to a two-year high of 4.1%. In comparison, the unemployment rate measured 3.9% in December 2023. The economy added 11,100 full-time jobs while shedding 10,600 part-time roles, leaving a net gain for the month of just 500 jobs. This increase in the jobless rate was attributed in part to more people looking for work at the start of 2024. However, the participation rate remained unchanged from December 2023 at 66.8%. The Reserve Bank of Australia will be monitoring these latest numbers as it assesses the impact of 13 increases in official interest rates since May 2022.

VIET NAM
Viet Nam pushes US to change its ‘non-market economy’ classification
(05 February 2024) Viet Nam is pushing the US to change its ‘non-market economy’ classification before the US presidential elections in November 2024. The US continues to classify Viet Nam as a non-market economy, defined as a country in which the state has either a monopoly or near-monopoly on trade. The classification primarily impacts the response to allegations of ‘dumping’. The US uses different criteria to assess dumping in market and non-market economies, with the latter more liable to pay significantly higher anti-dumping duties. On 24 October, 2023, the US Commerce Department announced it would review Vietnam’s non-market economy classification. A decision that must be made within 270 days, meaning around mid-July 2024.

THAILAND
Government to ‘urgently’ move bill to ban the recreational use of cannabis
(06 February 2024) The Thai government is seeking to ‘urgently’ move a Bill that would ban the recreational use of cannabis. Thailand had previously decriminalized the drug in June 2022 under the previous government, which included the pro-decriminalization Bhumjaithai party. The move would prompt hundreds of cannabis dispensaries to sprout around the country, particularly in Bangkok. Critics have called for tighter legislation. Thailand’s health minister said the new Bill – which bans the recreational use of cannabis – will be proposed at the Cabinet meeting next week. The new Bill would be an amendment to the existing one, and will only allow the usage of cannabis for health and medicinal purposes.

THAILAND
Thai SEC announce new criteria for marking troubled stocks on Bangkok bourse
(06 February 2024) On 06 February, 2024, the Thai Securities and Exchange Commission (SEC) announced new criteria for marking financially distressed companies listed on the Bangkok bourse from April 2024 onwards. As part of the new rules, the “C” or caution sign will apply to companies that have reported net losses for three consecutive years or annual revenue below THB 100 million (US$2.8 million), defaulted on loans or bonds, or submitted financial statements with a “no comment” from an auditor. As well, companies with a free-float ratio below the minimum requirement will be marked with “CF,” while those with inadequate audit committee members will receive a “CC.” The new measures come amidst calls for Thailand to raise the standard of listed companies and prevent corporate scandals that contributed to the SET index falling 15.2% in 2023, becoming Asia’s worst-performing market.

THE PHILIPPINES
Inflation rate eases to 2.8% year-on-year in January 2024
(06 February 2024) According to the Philippine Statistics Authority (PSA), the inflation rate in the Philippines eased to 2.8% year-on-year in January 2024 from 3.9% in December 2023. According to the PSA, the inflation rate in January was the lowest since the 2.3% inflation rate recorded in October 2020. In January 2023, the inflation rate was recorded at 8.7%. The downtrend in the overall inflation in January was primarily attributed to a slower annual increment of food and non-alcoholic beverages prices at 3.5% in January from 5.4% in December. Core inflation, which excludes select food and energy prices, decreased to 3.8% in January from 4.4% in December.

SINGAPORE
Singaporean banks’ profits set to peak in fourth quarter of 2023 due to coming rate cuts
(6 February 2024) Singaporean banks’ profits are expected to peak in the fourth quarter of 2023 due to central banks around the world pivoting towards rate cuts. Analysts have argued that the earnings momentum for Singaporean banks has peaked, with the tailwinds enjoyed by rising interest rates in 2023 unlikely to be sustained in 2024. Besides higher global rates, Singapore banks have also benefited from strong inflows of wealth over the last few years. Singaporean banks are also expected to see sharper scrutiny of their wealth management businesses in 2024 in response to an SGD 2.2-billion money laundering scandal that hit Singapore last year.

MALAYSIA
Malaysia’s benchmark stock index ends higher after volatile session
(06 February 2024) On 06 February, 2024, Malaysia’s benchmark stock index, the FBM KLCI, recovered from a volatile trading session to end on a slightly positive note as investors weighed larger developments in the global economy. The day’s trading volume totaled 3.09 billion shares valued at MYR 2.17 billion (US$455 million). Malaysia’s stock market was helped along by bullish sentiments concerning China’s economy, in particular news that Beijing will ramp up support. Among Malaysia’s blue chip stocks, Nestle rose for a sixth consecutive session by RM1.30 (US$0.27) to RM121.30 (US$25.45) as the food & beverage giant is expected to benefit from the seasonal festivities.

INDONESIA
Indonesian economy expands 5.05% in 2023, lower than 2022’s 5.31%
(06 February 2024) According to Statistics Indonesia (BPS), Indonesia’s economy expanded by 5.05% year-on-year in 2023, lower than the 5.31% recorded in 2022. The economy also expanded on a quarterly basis from 4.94% in the third quarter of 2023 to 5.04% in the fourth quarter. The island that saw the largest GDP increase was Kalimantan, the site of the new capital city of Nusantara under construction, followed by Sulawesi and Maluku, which are locations for nickel downstream investments. Maintaining domestic demand was another factor driving growth.

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AUSTRALIA
Australia’s central bank keeps interest rates at 12-year high and suggests further tightening possible
(06 February 2024) Australia’s central bank, the Reserve Bank of Australia (RBA), left interest rates at a 12-year high on 07 February, 2024, and suggested that further tightening may be needed. The RBA kept its cash rate at 4.35%, and stated that a further increase in rates cannot be ruled out. The Australian Dollar rose as much as 0.5% to 65.17 US cents, while yields on three-year government bonds were up 2 basis points to 3.70%. Compared to many of its global peers, the RBA retains a mild tightening bias. The RBA also predicts that core inflation will only hit the midpoint of its 2% to 3% target band in 2026.

JAPAN
Toyota to boost spending on EV production in the US by US$1.3 billion
(07 February 2024) Toyota is boosting investment at a factory in the state of Kentucky in the US by US$1.3 billion. The Japanese automaker announced that the added spending is earmarked for its first U.S.-made EV and other unspecified battery-powered models, and includes money for a battery pack assembly line at the factory. The added investment brings total outlays at the Georgetown, Kentucky, factory to nearly US$10 billion since 1986. The Kentucky location is Toyota’s oldest vehicle assembly plant in the U.S. Toyota has taken a more cautious approach towards introducing fully electric vehicles than peers such as Volkswagen and General Motors.

AUSTRALIA
Australia to propose setting up international standards for ethical and environmentally friendly mining
(07 February 2024) The Australian government has proposed setting up international standards for ethical and environmentally friendly mining in an attempt to command higher prices for its minerals. Australia’s Minister of Resources stated that she will propose the idea at the PDAC 2024 Convention, a mineral industry trade event, in Canada in March 2024. She also noted that Australia intends to cooperate with ‘like-minded nations’ including Canada, which already has high working standards and environmental standards. This comes amidst the falling global prices of metals such as nickel and lithium, which has negatively impacted the Australian minerals industry. The slump follows an EV market slowdown alongside oversupply from countries like Indonesia. An international standard on ethics and the environment could help strengthen the competitiveness of Australia’s minerals, which are relatively expensive compared to other countries.

INDONESIA
Future of planned capital city Nusantara faces uncertainties due to coming election
(31 January 2024) The future of Indonesia’s planned capital city Nusantara faces uncertainties due to the country’s coming elections on 14 February, 2024. The Indonesian government plans to finance 20% of the total funding for the project, while private investors will finance the remaining 80%. However, private funding for the new capital has recently halted, with investors awaiting the election results and what Jokowi’s successor’s views on the project are. Of the three candidates to replace Jokowi, two of them, Prabowo Subianto and Ganjar Pranowo, have declared their support for Nusantara and intend to continue it. The remaining candidate, Anies Baswedan, has expressed skepticism about the project, arguing Indonesia has more urgent problems to fix. As of now, foreign investors have remained hesitant to pledge funding for the project. As of 16 January, the government has received about 345 letters of interest, of which about 207 were from domestic companies.

INDONESIA
Inflation eases to 2.57% in January 2024, midpoint of central bank target
(01 February 2024) According to data by Bank Indonesia, Indonesia’s inflation rate eased to 2.57% in January 2024. This is a slight decrease from the 2.61% measured in December 2023. The inflation rate in January 2024 is near the midpoint of Bank Indonesia’s target range of 1.5% to 3.5% for 2024. The core inflation rate, which excludes government-controlled prices and volatile food prices, also cooled to 1.68% in January, from 1.80% in December. Inflation in Indonesia has stayed within the central bank’s target range since the middle of 2023, helped by Bank Indonesia’s interest rate hiking cycle of 250 basis points between August 2022 and October 2023.

MALAYSIA
Malaysia’s PMI rises to 49.0 in January 2024, a sixteen-month high
(01 February 2024) According to S&P Global, the seasonally-adjusted S&P Global Malaysia Manufacturing purchasing managers’ index (PMI) rose to 49.0 in January 2024, from 47.9 in December 2023 and the highest since September 2022. The latest reading suggests that 2023’s downturn is losing momentum and sets the Malaysian manufacturing sector on course for a gradual recovery. It was noted that new orders, output, and exports were all scaled back to lesser extents in January, representative of a slight pick-up in the rate of GDP growth. Manufacturing new orders also moderated for the seventeenth month running in January, though the latest slowdown was the weakest recorded since October 2022.

ASEAN
Funds raised through IPOs in Southeast Asia drop over 60% in second half of 2023
(31 February 2024) Funding raised through IPOs dropped over 60% year-on-year in the second half of 2023, with companies shying away from listings due to factors such as China’s ongoing slowdown as well as domestic elections. A total of US$1.6 billion was raised in the second half of 2023, down 63% year-on-year. The number of IPOs dropped 21% to 71. Thailand saw the largest fundraising drop in the region, declining by 75% to US$773 million. This was attributed to the political uncertainty that followed the May 2023 election, when there was a delay in setting up the new government. In Indonesia, the number of IPOs in the July-December period of 2023 dropped from 42 to 31, as investors await the results of the coming elections in February 2024. Some analysts forecast the IPO space to improve in 2024 as the interest rate environment begins to stabilize.

ASEAN
Chinese EV maker BYD eyes aggressive expansion in ASEAN
(31 January 2024) Chinese electric vehicle (EV) maker BYD is pursuing an aggressive expansion in ASEAN, particularly in Singapore and the Philippines. The automaker plans to open more than a dozen sales outlets for passenger cars this year in Singapore and the Philippines. In mid-January, BYD launched three of its passenger models in Indonesia, including its Seal sedan, Atto 3 sports utility vehicle, and the Dolphin hatchback. This marked its foray into the Indonesian market. In Singapore and the Philippines, BYD works with local distributors to sell its EVs, namely automotive group Sime Darby Motors and the Philippine conglomerate Ayala respectively.

THE PHILIPPINES
Economy expands by 5.6% in 2023, missing government target of 6% to 7% growth
(31 January 2024) Annual GDP growth for the Philippines for 2023 came in at 5.6%, short of the 7.6% pace in 2022 and missing the government target of 6% to 7% growth. Growth in the fourth quarter of 2023 came at 5.6%, weaker than the 7.1% recorded in the same period in 2022. The Philippines economy faced multiple headwinds in 2023, including soaring food prices and persistent supply chain bottlenecks. In response, the central bank, the Bangko Sentral ng Pilipinas (BSP), raised interest rates to their highest in years, which also dampened household spending power. The BSP currently maintains its benchmark lending rate at 6.5%, after an emergency increase of 25 basis points in October 2023.

SINGAPORE
Investment commitments in Singapore slowed to US$9.5 billion in 2023 from US$16.78 billion in 2022
(30 January 2024) Investment commitments into Singapore slowed to US$9.5 billion in 2023 from a record US$16.78 billion in 2022. According to the Economic Development Board (EDB), these commitments are expected to create 20,045 jobs over the next five years. About 58% of those jobs are likely to be in services, 26% in research and development, and the remaining 16% in manufacturing. The EBD noted that the outlook for 2024 remains challenging due to many headwinds, including ongoing geopolitical tensions, policy uncertainty created by electoral contests in many jurisdictions, increased competition for investments, and macroeconomic uncertainty.

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CHINA
China’s debt-to-GDP ratio climbs to new record high in 2023 despite slow pace of borrowing
(30 January 2024) According to a report by the National Institution for Finance and Development (NIFD), China’s debt-to-GDP ratio rose to a new record high in 2023 despite the slow pace of borrowing, reflecting China’s weak economic growth. The macro leverage ratio, which measures total outstanding nonfinancial debt as a share of nominal GDP, rose to 287.8% in 2023, up 13.5% year-on-year. It was found that the expansion of the overall leverage ratio outpaced the growth of borrowing. The total liabilities of the household, corporate, and government sectors expanded at 9.8% in 2023, largely unchanged from 2022. The limited debt expansion and significant rise of the macro leverage ratio in 2023 were attributed to the slowdown in China’s nominal economic growth. China’s nominal growth measured at 4.6% in 2023.

CHINA
China’s benchmark PMI measures at 49.2 for first month of 2024
(31 January 2024) According to China’s National Bureau of Statistics, China’s benchmark purchasing managers’ index (PMI) came in at 49.2 for the first month of 2024. The reading was higher than the 49.0 measured in December 2023. The slight improvement in January 2024’s PMI was attributed to a rebound in the manufacturing sector. The PMI has been below the 50-point level that separates growth from contraction since October 2023 — and for most of 2023 — amid a global economic slowdown and an uneven recovery in domestic demand. The PMI rose for the first time since October 2023, backed by gains in subindexes including production and new export orders. Readings for imports and finished goods inventory also improved in the period before the country enters the Lunar New Year in early February 2024.

CHINA
Foreign investors sell net US$2 billion worth of mainland Chinese stocks in January 2024
(31 January 2024) Foreign investors sold a net US$2 billion worth of mainland Chinese stocks in January 2024. The month also produced the sixth consecutive monthly outflow since August 2023. This trend marks the ‘strongest’ and ‘longest’ net outflow since the Stock Connect trading link between Hong Kong and the mainland opened in 2014. These outflows came despite measures by the Chinese government to prop up the stock market. This included China’s central bank cutting the bank reserve ratio to boost liquidity. As well, China’s securities regulator said it was suspending stock borrowing via exchanges for short selling. According to Goldman Sachs, the Chinese and Hong Kong markets are performing the worst and third worst in Asia in dollar terms year-to-date, with losses of 10.9% and 9.8% respectively.

ASEAN
Southeast Asian markets poised for turnaround in 2024 on back of cheap valuations
(22 January 2024) Southeast Asian markets are poised for a turnaround in 2024 on the back of cheap valuations and potentially high economic growth. This follows sluggish growth for said markets in 2023. According to research by Maybank Investment Banking Group, improving growth, rising exports, a pick up in manufacturing, and a better-than-expected outlook by Taiwan Semiconductor Manufacturing Company last week all mean that Southeast Asia markets are poised for a better year. The MSCI Southeast Asia Index dropped a little over 3% in 2023, compared with the more than 20% rise in the broader MSCI World Index. It was noted that even a potential US recession will not dampen optimism for Southeast Asian markets, with certain countries such as Indonesia, Malaysia, and Thailand strongly driven by domestic consumption. Meanwhile, other economies in the region are placed to benefit from their growing presence in the chips and electric vehicle industries.

ASEAN
The Philippines, Indonesian and Malaysian currencies reach three-month low
(25 January 2024) The Filipino peso, Indonesian rupiah and Malaysian ringgit were among several Asia-Pacific currencies that reached a three-month low against the US dollar on 24 January, 2024. Meanwhile, the Thai baht was among others which reached its weakest in one or two months. The weakening of many ASEAN currencies is attributed to both a slowdown in the Chinese economy as well as the firmness of the US dollar. Many Asian economies depend heavily on China, meaning any slump in the latter tends to spur selling in their home currencies. The most important industries in these countries for earning foreign currencies depend on the Chinese economy, from electronic devices in the Philippines to tourism in Thailand.

VIET NAM, GERMANY
Germany President visits Viet Nam with business delegation
(23 January 2024) German President Frank-Walter Steinmeier visited Hanoi on 23 January, 2024 alongside a business delegation to explore alternative markets as part of its China de-risking strategy. Steinmeier met with Viet Nam’s President Vo Van Tthuong, where they both signed a memorandum of understanding on facilitating the movement of skilled workers from Vietnam to Germany. According to the German Chamber of Commerce in Viet Nam, German companies have invested more than US$3 billion into Viet Nam. Germany is Viet Nam’s most important trading partner in the European Union, while Viet Nam is one of Germany’s most important partners in ASEAN.

MALAYSIA
Malaysia’s economy to expand by 4.6% in 2024
(20 January 2024) According to RHB Investment Bank (RHB IB), Malaysia’s economy is set to expand by 4.6% in 2024. RHB IB noted that Malaysia’s growth momentum is expected to accelerate in 2024, driven by improvements in external demand. It noted that nominal export growth is projected to rebound by 4.3% year-on-year in 2024, compared to a decline of 8% in 2023. The bank also had a positive outlook on private consumption growth, supported by robust labor market demand conditions. Among the potential upside risks to its 2024 growth forecasts include the continuation of major infrastructure projects, alongside the implementation of business-friendly policies and incentives focusing on priority sectors such as technology, tourism, and agriculture, as well as those with export capacity.

INDONESIA
Troubled state-owned builder PT Wijaya Karya signs US$1.31 billion debt restructuring deal
(24 January 2024) Troubled Indonesian state-owned builder PT Wijaya Karya signed a US$1.31 billion debt restructuring deal with 11 financial institutions, including PT Bank Mandiri, PT Bank Negara Indonesia, PT Bank Rakyat Indonesia, PT Bank Tabungan Negara, PT Bank Syariah Indonesia, and PT Bank Panin. The deal covers 87.1% of the debt being restructured as of 23 January. Wijaya Karya has seen its liabilities balloon amid an aggressive push to build infrastructure under the presidency of Joko Widodo. The company has switched 93% of its projects to a payment mechanism based on monthly progress, a significant increase from the 40% in 2016.

THAILAND
Thai stock exchange to expedite delistings to improve investor sentiment
(23 January 2024) The Stock Exchange of Thailand (SET) has outlined new rules and procedures to monitor listed companies and prevent fraud, as well as to expedite the delisting of companies. This is to improve investor perceptions of the SET, which finished as Asia’s worse-performing market in 2023. The SET Index fell by 15.2% in 2023 amid halting recoveries for manufacturing and tourism plus decade-high interest rates. Among the changes in the bourse’s three-year operational plan include additional grounds for delisting and oversight of companies reporting weak performance. As well, the window for companies to improve their performance before being delisted will also be narrowed. This is to shorten the delisting process, which can take up to seven years at present.

THE PHILIPPINES
Authorities shelve plans for more taxes amid elevated high inflation
(24 January 2024) Authorities have shelved plans to impose new taxes on junk food and sweetened beverages amid high inflation. The Philippines’ Finance Secretary stated that it is ‘not the time’ to impose additional taxes, but to prioritize enforcement of existing laws instead. He stated that there may be a need to ‘temper’ a proposed hike in taxes on motor vehicle users, but was supportive of measures imposing levies on single-use plastic and digital services. In 2023, the country had listed priority measures that the Filipino Congress needed to pass, including reforming the military’s pension system. Under the proposals for military pensions, soldiers and uniformed personnel would pay to their retirement funds instead of the state.

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CHINA
Chinese gaming stocks rise after regulators seemingly take down draft regulations
(23 January 2024) The stocks of Chinese gaming companies rose in Hong Kong after regulators seemingly took down the draft of regulations aimed at curbing players’ spending. The draft of the gaming rules had been removed from the official website of the National Press and Publication Administration (NPPA), China’s gaming regulator, as of the morning of 23 January, 2024. It is unknown if the draft rules were removed due to the rules being scrapped or because the consultation period for the draft regulations had ended. The issuance of the draft regulations in December 2023 wiped out the equivalent of billions of U.S. dollars of Chinese gaming companies’ market capitalizations just one day after it went online, as investors feared a new tech crackdown.

CHINA
Hong Kong-listed stocks hits 36% discount to mainland peers, deepest in 15 years
(22 January 2024) A rout in Chinese stocks listed in Hong Kong has pushed their discount to mainland peers to 36%, their deepest in 15 years. The steeper losses in Hong Kong, where some of China’s most influential firms are listed and there is less interference from Beijing, suggests global investor sentiments towards the Chinese economy remains gloomy. The seemingly endless selloff in Chinese shares has been attributed to a range of factors, from a deepening housing slump to stubborn deflationary pressures to uncertainty about US interest rates. Chinese stocks listed in Hong Kong are often regarded as a better barometer of the health of China’s economy and a more accurate gauge of broader investor sentiment.

SOUTH KOREA
South Korea’s economy maintains 0.6% growth for fourth quarter of 2023
(25 January 2024) According to the Bank of Korea, the Korean economy maintained quarterly growth of 0.6% in the fourth quarter of 2024. This brought overall growth for 2023 to 1.4%. South Korea had earlier registered 0.6% growth in the second and third quarters of 2023. Exports grew by 2.6%, down from 3.4% the preceding quarter, while private consumption registered 0.2% growth, a slight decline from 0.3% the preceding quarter. The Bank of Korea projects the economy to expand by 2.1% in 2024, down from an initial outlook of 2.4%. The IMF has predicted annual growth of 2.2%.

MALAYSIA
Malaysian ringgit vulnerable to drop towards 2023 low due to political risks
(15 January 2024) The Malaysian ringgit is vulnerable to dropping towards 2023’s low due to concerns over the current government’s stability. The ringgit is also facing headwinds from a recent slide in oil prices and falling exports. The ringgit is currently about 3% away from the 25-year low reached in October 2023. Last year, the ringgit was labelled as emerging Asia’s worst performer. RBC Capital Markets has projected the ringgit to drop about 2% from 12 January’s close to 4.75 versus the US Dollar in the first half of 2023. In October, the ringgit slumped to nearly 4.8, the weakest since January 1998, the height of the Asian financial crisis. The ringgit has slid more than 1% in January, adding to losses from the previous three years.

MALAYSIA
Sovereign wealth fund Khazanah Nasional invest US$42 million in Indian fast food chain
(16 January 2024) Malaysia’s sovereign wealth fund Khazanah Nasional invested US$42 million into Indian fast food chain Wow! Momo. Khazanah Nasional acquired a 15% stake in the chain. The fast food chain also raised another US$7.2 million from Indian investment firm, OAKS Asset Management. Wow! Mamo plans to use its newly acquired funds for expansion as well as to provide an exit route to early-stage investors. Wow! Mamo is based in Kolkata in West Bengal state, and was founded in 2008. The company operates about 630 outlets and kiosks in 35 cities under different brands.

ASEAN
Southeast Asian leaders appealing to Tesla to invest in their country
(16 January 2024) Southeast Asian leaders are appealing to electric vehicle (EV) maker Tesla to invest in their countries to curb its dependence on the Chinese market. In May 2022, Indonesian President Joko Widodo visited Tesla CEO Elon Musk in Texas, where he urged Musk to build an EV plant in Indonesia to leverage upon the country’s rich nickel minerals. In July 2023, Malaysian Prime Minister Anwar Ibrahim discussed potential investments and other topics with Musk. Thai Prime Minister Srettha Thavisin met with Musk on the sidelines of the United Nations General Assembly in September 2023. Strettha later stated that he expected at least US$5 billion in total investments from Tesla and other U.S. corporations.

THAILAND
Thailand set to delay launch of US$14.3 billion digital wallet scheme until after May 2024
(17 January 2024) Thailand is set to delay the launch of its US$14.3 billion digital wallet handout scheme until after May 2024. Thailand’s Deputy Finance Minister stated that it is ‘unlikely’ the scheme will be launched in May, and that there is no back-up plan if the scheme could not be implemented. The programme was originally slated for February, before being delayed to May. The scheme would see US$285 transferred to 50 million Thais each via a mobile app to spend in their local communities. The digital wallet was a key election campaign policy of the ruling Pheu Thai party. It is among a raft of stimulus measures that Thailand’s government has promised, alongside debt suspension for farmers and a minimum wage hike.

INDONESIA
Central bank keeps policy rates unchanged on 17 January, 2024
(17 January 2024) Indonesia’s central bank, Bank Indonesia (BI), kept its policy rates unchanged on 17 January, 2024. BI claimed this was consistent with efforts to stabilise the rupiah exchange rate and ensure inflation remains within target in 2024. BI left its benchmark 7-day reverse repurchase rate at 6.00%, where it has been since October 2023. Its two other policy rates were also unchanged. BI has targeted inflation between 1.5% to 3.5% for 2024, lower than 2023’s target of 2% to 4%. The central bank forecasts growth of between 4.7% and 5.5% for 2024, compared with 2023’s forecast of 4.5% to 5.3%.

INDONESIA
Indonesia’s trade surplus shrinks to US$36.93 billion in 2023
(15 January 2024) Indonesia’s trade surplus shrank by almost a third to US$36.93 billion in 2023, down from the record US$54.46 billion recorded in 2022. This shrinkage was attributed to a drop in exports and imports along with commodity prices and weakening global trade. Prices of Indonesia’s main commodities, including coal, palm oil and nickel, fell sharply in 2023. Some economists predict a further drop in 2024 albeit at a slower rate. In 2023, exports dropped to US$258.82 billion from US$291.9 billion in 2022. Meanwhile, imports reached US$221.89 billion last year, down from US$237.45 billion the year before.

THE PHILIPPINES
Government to spend US$1.7 billion to boost rice production
(16 January 2024) The Filipino government plans to spend US$1.7 billion to build more storage and other facilities to boost food production and cut prices, including that of rice. The government plans to build facilities that will minimize post-harvest losses and lessen dependence on imports. According to the Philippines’ Agriculture Secretary, the country seeks to modernize farm and fisheries production and develop its logistics system. Around 30% of the Philippines’ farm production is lost due to poor logistics, and authorities claim eliminating such losses will lower the cost of high-value crops and vegetables by as much as 15%. The country incurs 494,000 metric tons a year in post-harvest losses on the staple grain and corn.

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CHINA
China’s population falls for second consecutive year in 2023 at 0.15% year-on-year
(17 January 2024) China’s population fell for the second consecutive year in 2023 due to a record-low birth rate and a wave of COVID-19 deaths following the end of lockdown measures. According to China’s National Bureau of Statistics, the total number of people in China declined by 2.08 million, or 0.15%, to 1.409 billion in 2023. In comparison, the population declined by 850,000 in 2022. Due to authorities lifting strict nationwide COVID-19-related measures at the end of 2022, total deaths rose 6.6% to 11.1 million in 2023, the highest level since 1974. Meanwhile, new births fell by 5.7% to 9.02 million. The birth rate reached a record low of 6.39 births per 1,000 people, down from a rate of 6.77 births in 2022. China’s 2023 rate of 7.87 deaths per 1,000 people was higher than the rate of 7.37 deaths in 2022.

CHINA
China’s economy grows by 5.2% year-on-year in 2023, beating official forecast
(17 January 2024) According to China’s National Bureau of Statistics, China’s economy grew by 5.2% year-on-year in 2023, beating an official forecast of roughly 5.0%. The growth rate for the fourth quarter of 2023 was also 5.2% year-on-year, up from 4.9% for the previous period, as government spending helped spur a recovery from the COVID-19 pandemic. Quarterly, GDP in the fourth quarter expanded by 1%, lower than the 1.3% recorded in the previous quarter. Authorities also resumed reporting of the youth unemployment rate, which had been suspended after it hit a record high of 21.3% in June. The rate at the end of December 2023 was measured at 14.9%, which does not include fresh graduates looking for work.

CHINA
China’s coal output reached record high of 4.66 metric tonnes in 2023
(17 January 2024) According to China’s National Bureau of Statistics, China’s coal output reached a record high of 4.66 metric tonnes in 2023. This is an increase of 2.9% year-on-year. In December, coal output reached 414.31 million tonnes, nearly flat with November’s 414 million tonnes and up 1.9% year-on-year. Daily output over the month was 13.36 million tons, slipping from November’s record-high daily average of 13.8 million tons. China’s overall power generation, which is dominated by coal-fired plants, rose 8% year-on-year in December. Analysts are predicting another modest coal production increase in 2024.

MYANMAR
Myanmar to begin taxing nationals working abroad to boost foreign-currency inflows
(07 January 2024) Since mid-December 2023, Myanmar’s embassies in key Asian countries have announced a series of new tax rules to impact Myanmar nationals working in said countries in order to boost foreign-currency inflows. For Myanmar nationals currently residing in Japan, for instance, they are now subject to a 2% income tax, with the amount of tax to be paid depending on their respective income bracket. Myanmar nationals working in South Korea, Singapore, Thailand, and Malaysia are also facing a 2% tax rate as a general rule, though the final amounts owed vary depending on residency status and income level. Under tax reforms for fiscal year 2023, the Myanmar government began requiring nationals living abroad to pay income taxes in the foreign currencies they earn, effective 01 October, 2023.

MALAYSIA
State-owned conglomerate Sime Darby Bhd purchases majority stake in UMW Holdings
(7 January 2024) In December 2023, Malaysian state-owned conglomerate Sime Darby Bhd purchased a majority stake of 61.2% in local automobile major UMW Holdings, hoping it will open up further opportunities in Malaysia’s automobile sector by adding the Toyota and Perodua brands to its local sales and distribution portfolios. Sime Darby Bhd has interests in the automobile and industrial sectors through its subsidiaries Sime Darby Motor and Sime Darby Industrial. Sime Darby Motors focuses on retail, distribution and assembly of vehicles, including for brands like Jaguar, Porsche, BMW, Audi, Volvo, Mazda, Ford, Kia, and BYD. For its part, UMW has interests across the automotive, equipment, manufacturing, engineering and aerospace sectors. UMW operates Toyota’s assembly and manufacturing operations in Malaysia through joint venture UMW Toyota Motor, and also controls leading budget car brand Perodua.

MALAYSIA
Malaysia’s small-to-mid-cap stocks outperform biggest companies due to Johor projects
(08 January 2024) Digital infrastructure and construction projects in the southern Malaysian state of Johor are fueling Malaysia’s small- to mid-cap stocks. The MSCI Malaysia Small Cap Index rose by 15.7% in 2023 in comparison to a 2% gain for the large-cap index, the latter of which includes prominent stocks such as Maybank and Petronas Chemicals Group. The state of Johor has emerged as one of the fastest-growing markets in Southeast Asia, with much of this development heavily connected to neighboring Singapore. Malaysia and Singapore are currently seeking to deepen economic ties by setting up a Special Economic Zone (SEZ) in Johor that would bring tighter business links and better connectivity.

MALAYSIA
Malaysia’s total palm oil stocks fall by 4.64% to 2.29 million tonnes in December 2023
(10 January 2024) According to the Malaysian Palm Oil Board’s latest industry performance report for December 2023, Malaysia’s total palm oil stocks fell by 4.64% to 2.29 million tonnes in December 2023 from 2.40 million tonnes in November. Meanwhile, crude palm oil (CPO) inventory decreased by 9.43% to 1.20 million tonnes from 1.23 million tonnes in November. CPO production fell by 13.31% to 1.55 million tonnes, while palm oil exports dropped by 5.12% to 1.33 million tonnes in December from November’s 1.41 million tonnes. Meanwhile, CPO imports stood at 11,103 tonnes in the same month.

THE PHILIPPINES
Transition plan for jeepneys faces pushback from drivers
(08 January 2024) The Philippines government’s plan to force drivers to transition from traditional jeepneys to minibuses has faced pushback from jeepney drivers who argue they cannot afford to transition their vehicles. Due to jeepney’s diesel engines releasing large amounts of air pollution, the government has been seeking to get rid of them. It had set 31 December, 2023 as a deadline for jeepney drivers and operators to switch from operating traditional jeepneys to minibuses prescribed by the Land Transportation Franchising and Regulatory Board (LTFRB). Jeepney drivers would have to pay US$50,000 for a new minibus. Authorities estimate that 40% of the jeepneys in Metro Manila and 70% nationwide have applied to join the cooperatives. Over the recent holidays, thousands of drivers went on strike and protested in front of the Presidential Palace, calling upon the government to cancel the deadline.

THE PHILIPPINES, INDONESIA
The Philippines and Indonesia agree to bolster cooperation in energy and security
(10 January 2024) During Indonesian President Joko Widodo’s visit to Manila, both Indonesia and the Philippines agreed to bolster cooperation in energy and security. Widodo and Philippines’ President Ferdinand Marcos Jr. witnessed the signing of a memorandum of understanding to deepen bilateral relations on energy. The Philippines gets the bulk of its imported coal from Indonesia, and in 2023 Manila received assurance from Jakarta concerning steady access to the commodity. Indonesia also pushed for improvements in border security cooperation, as well as the settlement of continental shelf boundaries. Widodo also pitched to sell anti-submarine warfare aircraft from Indonesia to the Philippine Navy.

CAMBODIA
Per capita income in Cambodia expected to exceed US$2000 in 2024
(08 January 2024) Cambodia’s per capita income is expected to exceed US$2,000 in 2024, marking an increase of over 8% compared to 2023. Economic growth is expected to reach about 6.6%, with the GDP to reach US$34.92 billion. GDP per capita is anticipated to rise to US$2,071 in 2024, up from US$1,917 in 2023 and US$1,784 in 2022. Experts have noted that Cambodia’s exports to international markets in the past year have shown positive trends despite a sluggish global economy. The Cambodian government is aiming for the country to reach upper-middle-income status by 2030, laying the foundations for it to become a high-income economy by 2050.

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JAPAN
Japanese seafood companies seeking to process scallops in Viet Nam after China ban
(06 January 2024) Japanese seafood companies are seeking to process scallops from Hokkaido in Viet Nam in response to China’s recent ban on Japanese seafood imports. Japanese seafood retailer Foodison is partnering with companies including wholesaler Ebisu Shokai and trading houses Ocean Road and Nosui in an arrangement in which scallops from Ebisu are to be purchased by Ocean Road and exported to Viet Nam, where they will be processed and sent back to Japan to be sold to restaurants and retailers by Foodison, Ebisu and Nosui. A lack of manpower in Japan for processing has seen inventories of unprocessed scallops start to pile up after China (where scallops are traditionally sent for processing) imposed restrictions on Japanese seafood imports. These restrictions were in response to Japan releasing treated wastewater from the Fukushima Daiichi nuclear power plant.

JAPAN, CANADA
Honda Motor mulling building electric vehicle plant in Canada
(07 January 2024) Japanese automobile maker Honda Motor is mulling building an electric vehicle plant in Canada, with the project to possibly include the in-house manufacture of batteries. Overall spending on the project could reach up to US$14 billion, making it one of Honda’s largest investments. Honda is currently exploring several sites for the new factory, next to an existing automobile factory in Ontario province. It expects to decide by the end of 2024, with the new facility to go onstream as early as 2028. In December 2023, Canada announced plans to effectively end sales of new passenger vehicles powered only by gasoline or diesel by 2035. Canada also has plentiful renewable energy sources, so its carbon footprint per unit of electricity generated is relatively low, making it an ideal site.

AUSTRALIA
Consumer price indicators rises 4.3% year-on-year in November 2023
(10 January 2024) Australia’s consumer price indicators rose by 4.3% year-on-year in November 2023, lower than economists’ estimate of 4.4% and the smallest annual increase since January 2022. This the second straight month in which Australia’s monthly inflation gauge moderated. When excluding volatile items such as fuel, fruit and vegetables, and holiday travel, the annual rise was 4.8%, lower than October’s 5.1%. This slowdown further bolsters the case for the Reserve Bank of Australia (RBA) to hold rates steady during its next policy decision in February 2024. The RBA has taken its key rate to a 12-year high of 4.35% in an effort to bring inflation down to within its 2% to 3% target band.

ASEAN
Malaysia and Singapore to raise consumption taxes in early 2024
(28 December 2023) Singapore and Malaysia plan to raise their consumption taxes in early 2024 to broaden their financial base in order to support their aging populations as well as return to fiscal sustainability. Singapore will be raising its goods and services tax (GST) from 8% to 9% on 01 January, 2024, the second of a two-tier increase with the first having occured in January 2023. The tax increase highlights Singapore’s desire to shore up its revenue base in the face of climbing health care costs due to the country’s ageing population. In Singapore’s 2023 budget, the country’s total spending on health care tripled to US$12 billion compared with 10 years earlier. In Malaysia, the government plans to raise its sales and services tax (SST) by two percentage points to 8% in March 2024, excluding essential expenses like food, beverages and telecommunications.

THE PHILIPPINES
International tourist receipts top pre-pandemic levels
(03 January 2024) International tourism receipts in 2023 have managed to eclipse the level prior to the COVID-19 pandemic. According to data by the Department of Tourism, the Philippines registered an estimated US$8.7 billion in international tourism receipts in 2023, up 124.9% year-on-year. This has exceeded the US$8.65 billion registered in 2019, prior to the pandemic. Authorities are targeting 7.7 million international visitor arrivals in 2024, with the Philippines having logged 5.45 million international visitors in 2023, surpassing the 4.8 million target but representing only 66% of total arrivals in 2019. South Korea and the United States were the main tourist sources in 2023.

INDONESIA
Indonesia eyeing higher and earlier debt issuance to pre-empt tighter finances
(03 January 2024) Indonesia is eyeing higher and earlier debt sales to pre-empt finances possibly tightening this year due to a weaker global economy and softer commodity prices reducing revenue and inflows. The government is seeking to raise US$15.5 billion from bond sales in the first quarter of 2024, higher than actual borrowings a year ago as well as the last quarter of 2023. Indonesia began marketing three tranches of benchmark-sized dollar bonds, joining a flurry of global issuance at the start of 2024. Indonesia has set its budget deficit at 2.3% for 2024, after enjoying some tax windfall in 2023 that shrank the gap to the lowest in more than a decade. This provided room for Indonesia to reduce borrowings, boosting the performance of its sovereign debt.

INDONESIA
Indonesia’s rice harvests for January and February 2024 expected to drop 46.3% year-on-year
(03 January 2024) Indonesia’s rice output for January and February 2024 is expected to drop by 46.3% year-on-year due to the El Nino weather phenomenon impacting the harvests. A prolonged drought driven by El Nino is expected to reduce rice output by 2% in 2023, while planting for 2024’s main harvest season has been delayed. El Nino is expected to remain in early 2024 and gradually dissipate by April. The rice harvest in January is expected to produce 930,000 tons, while the harvest in February is expected to produce 1.32 million tons, against monthly consumption of 2.54 million tons. Indonesia has set a target of producing 32 million tons of rice in 2024, up 3.56% from an estimated 30.9 million in 2023.

VIET NAM
Viet Nam’s economy expands by 5.05% in 2023, missing official growth target
(29 December 2023) According to Viet Nam’s General Statistics Office, Viet Nam’s economy expanded by 5.05% in 2023, missing the official growth target of 6.5%. This was primarily attributed to slowing overseas demand. This year’s growth was also below the average annual growth of 5.87% during the previous decade. Viet Nam’s economy expanded by 6.72% in the fourth quarter of 2023, a slight increase from the 5.47% expansion recorded in the third quarter and 4.25% recorded in the second quarter. Viet Nam’s annual exports fell by 4.4% from 2022 to US$355.5 billion, with shipments of coffee, a key export commodity, down 9.6% year-on-year to 1.6 million metric tons. Retail sales rose 9.6% year-on-year, while foreign tourist arrivals shot up to 12.6 million visitors from 3.6 million in 2022.

THAILAND, CHINA
Thailand and China set to permanently waive visa requirements for each other
(03 January, 2024) Thailand and China will permanently waive visa requirements for each other’s citizens from March 2024 onwards. Thailand had initially waived visas for Chinese nationals in September 2023 in a bid to boost tourist arrivals. More than 22,000 Chinese nationals entered Thailand in the first two days of the waiver. Thai authorities expect some 3.5 million Chinese tourists to have visited Thailand in 2023, which is short of its 4 million target. This is also less than half the nearly 11 million Chinese tourists who visited Thailand in 2019. The Thai government has set a target of 8.2 million Chinese tourists for 2024.

THE PHILIPPINES
Inflation in the Philippines cools to 22-month low in December 2023
(05 January 2024) Consumer prices in the Philippines rose by 3.9% year-on-year in December 2023, a 22-month low. While inflation eased back to within the Bangko Sentral ng Pilipinas’ (BSP) 2% to 4% goal for the first time since March 2022, the 2023 average of 6% missed the inflation target for a third straight year. Rice inflation accelerated for the second straight month to 19.6% year-on-year, the fastest pace since March 2009. In response, the government is mulling further cutting tariffs on rice imports to help cool rice prices. The BSP stated that they have gauged it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.

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SOUTH KOREA
US$18.8 billion of foreign direct investment flows into South Korea in 2023
(04 January 2024). South Korea drew in a record US$18.8 billion worth of foreign direct investment in 2023, a 3.4% increase year-on-year. The electronics sector alone accounted for US$3 billion of the total, with the rise in investments indicating investors remain bullish about the long-term prospects of South Korea’s technology industries. Semiconductors and rechargeable batteries represent two major pillars of the country’s electronics industry. While global consumer demand for some electronic products remains slow, semiconductors regained strength in late 2023, with the industry shipping 21.8% more year-on-year in December 2023. Exports of rechargeable batteries, used for electric vehicles, slid 1% in December after a brief double-digit expansion in November.

CHINA
China’s BYD overtakes Tesla in electric car sales in last quarter of 2023
(03 January 2024) China’s BYD overtook Telsa in electric car sales in the last quarter of 2023. The company claimed it had sold 526,000 battery-only vehicles in the last quarter, as compared to 484,500 electric vehicles sold by Tesla. This marked the first quarter in which BYD’s battery-only sales have outpaced Tesla’s. However, Tesla sold more electric vehicles for the whole of 2023, delivering 1.8 million. In comparison, BYD sold 1.6 million battery-only vehicles for the whole of 2023, while selling more than 3 million so-called-new energy vehicles (NEVs), which includes both battery-only vehicles and hybrids.

CHINA, EU
China launches anti-dumping investigation into liquor products from the EU
(05 January 2024) China is launching an anti-dumping investigation into liquor products such as brandy from the European Union (EU). Beijing claimed the investigation was instigated by an application from a domestic liquor association, and targets French cognac. It is believed the anti-dumping investigation was launched in retaliation to the EU opening a probe into China’s electric vehicle subsidies. China’s investigations will focus on brandy products that come in smaller than 200 liter containers and hail from the EU. China imported US$1.57 billion worth of spirits from distilled grape wine in 2023 through November. Meanwhile, the country exported about US$12.7 billion worth of electric vehicles to the EU in the same period.