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Tag: Finance

  • UOB: Malaysia’s GDP to grow at 4.8% for 2018, 2019

    UOB: Malaysia’s GDP to grow at 4.8% for 2018, 2019

    Malaysia’s gross domestic product (GDP) growth is expected to remain stable and expand at 4.8% for the full year of 2018 and 2019. UOB Malaysia’s senior economist, Julia Goh said the 2019 forecast has been revised from the 5% projection made earlier, to 4.8% after taking into account the potential impacts from the US-China trade tensions.

    Goh noted that while Malaysia’s economy is not immune to external headwinds such as the trade tensions between the two economic giants, rising US interest rates and commodity prices—Malaysia could certainly find support from its robust domestic private consumption and investment.

    The ringgit is expected to stand at RM4.22 against the Greenback next year on the back of external factors such as the strength of the dollar, crude oil prices and the direction of the renminbi.

    Inflation rate for 2018 is expected to be 1.2% and 2% in 2019.

    “I think it is actually slightly lower than the government’s official forecast. I think the main support for inflation is we are seeing resilient spending even with the reintroduction of the Sales and Service Tax, we did not see any significant effect on the consumer price index,” she said.

    Key risk for inflation I think (will be) in the second quarter of next year where the government announced that they want to float oil prices,” she added.

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  • Vietnam’s new oil refineries to quadruple capacity by 2023

    Vietnam’s new oil refineries to quadruple capacity by 2023

    Vietnam’s total oil refining capacity will nearly quadruple by 2023 as two new refineries go on stream, market data provider Fitch Solutions reports. The Dung Quat refinery in the central province of Quang Ngai operated by the state-owned PetroVietnam’s subsidiary Binh Son Refinery Limited (BSR) remains the sole facility now, with a crude oil processing capacity of 148,000 barrels per day (b/d).

    Dung Quat will soon be joined by Nghi Son refinery in the central Thanh Hoa Province. Nghi Son is currently testing at full capacity and is scheduled to start commercial operations this month.

    The $9 billion Nghi Son project is owned by the Nghi Son Refinery and Petrochemical LLC (NSRP), a joint venture between PetroVietnam, Kuwait Petroleum, Japan’s Idemitsu Kosan and Mitsui Chemical. It will have a designed capacity of 200,000 b/d of crude oil.

    Meanwhile, the long-delayed construction of the Long Son refining and petrochemical complex in the southern province of Ba Ria-Vung Tau resumed in February this year, putting it on track to go on stream by the first half of 2023.

    Licensed in 2008 and initially slated to begin operations in 2014, Long Son hit a roadblock due to site clearance issues and disagreements over the development strategy between the project partners.

    This caused Qatar Petroleum to withdraw from the project in 2015. Thailand’s Siam Cement Group (SCG) increased its stake to 71 percent after it bought the 25 percent stake owned by Qatar Petroleum, while PetroVietnam held the remaining 29 percent.

    In May this year SCG agreed to acquire PetroVietnam’s 29 percent. The refinery is expected to cost $5-6 billion. Once completed it will be able to process 200,000 b/d of crude oil and produce 1.6 million tons of olefins annually.

    “The two new refineries would increase competition in the domestic fuel market, which could require refiners to upgrade, cut costs and move up the value chain to win market share,” Fitch Solutions said in a report released Monday.

    This also spells an end to Dung Quat’s status as the country’s sole refiner, which it has enjoyed since 2010.

    New oil refineries to quadruple Vietnam capacity 2023

    Competition from Nghi Son will be stiff as the government has granted a host of incentives to successfully commission its second standalone refinery, including tax concessions, tariff exemption on crude imports from primary feedstock provider Kuwait and an offtake guarantee from PetroVietnam for the first 15 years of operation.

    The Quang Ngai provincial government in early November sought the same incentives for the Dung Quat refinery to ensure “fair competition”.

    BSR is also planning to invest $1.8 billion over the next three years to expand Dung Quat’s capacity by 23,000 b/d and upgrade the quality of its fuels to Euro 5 from the current Euro 2.

    Fitch Solutions said the upgrade would enable Dung Quat to process higher-sulphur crudes, helping reduce its dependence on Vietnamese light, sweet crudes, mostly from the Bach Ho field, which is depleting and thus becoming more expensive.

    Besides the competition between themselves, the refineries also face significant pressure from imports, mostly from South Korea and Southeast Asian countries, which are of higher quality and priced competitively due to free trade agreements, the report noted.

    “Competition is likely to peak in 2024, when tariffs on fuel imports from ASEAN and South Korea are scheduled to be cut to zero. Concerns about mounting competition have also led both Dung Quat and Nghi Son to consider exports to countries like Laos, Cambodia and Indonesia.

    “Vietnam’s improving self-sufficiency in refined fuels would reduce its need for imports, reorienting trade flows from some of its major fuel suppliers to alternative markets.”

    While insufficient to entirely meet domestic demand, this nevertheless would weigh on the market positions of Singapore, Malaysia, South Korea, Thailand and China, which account for nearly 95 percent of Vietnam’s fuel imports, according to Fitch Solutions.

    Malaysia and Thailand have the highest exposure to Vietnam’s fuel market — 11 percent and 16 percent of imports.

    Major international fuel suppliers are also likely to find room for growth in the Vietnamese market increasingly hard to come by as their quality advantage over locally produced fuels dissipates with the ongoing upgrades, the firm added.

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  • Malaysia’s Central Bank confident of 4.8% GDP growth in 2018

    Malaysia’s Central Bank confident of 4.8% GDP growth in 2018

    Economists have mixed views on Malaysia’s full-year gross domestic product (GDP) growth despite the central bank’s confidence the economy will expand 4.8% this year. Sunway University Business School’s Professor of Economics Dr Yeah Kim Leng expects GDP growth for 2018 to come in at 4.7% to 4.8% while growth in 2019 could be better than this year if there is sustained global demand.

    “For 2019, GDP (growth) would be closer to 5%. It may exceed that if the global economy holds up, in terms of lessening trade tension and strengthening of China’s economy,” he said.

    However, Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said this year’s GDP growth is unlikely to hit 4.8%, as the quarterly expansions have been on the decline.

    “We had 5.4%, 4.5% and 4.4% for the first three quarters (respectively) this year. It would require substantially stronger growth than what we saw in Q3 to hit 4.8% full-year growth,” he said.

    The Malaysian economy grew by 4.4% in the third quarter, Bank Negara Malaysia (BNM) announced on Friday.

    Pong said the final quarter of the year does not have the tail wind that would boost consumption and expects full-year growth to come in at 4.5% to 4.6%.

    “For 2019, it is quite a challenge to forecast due to global growth slowing. We face headwinds from global growth as we are an export dependent economy. Net exports from goods and services are fluctuating,” he added.

    Pong expects GDP growth in 2019 to be similar to 2018’s, due to the unpredictability of global trade.

    Commenting on the economic performance in Q3, Yeah said it was softer than expected, which weighed down on growth momentum.

    “In the third quarter, services (sector) was good, largely due to private consumption. Growth was largely driven by the services and manufacturing sectors. As long as we can sustain the current growth momentum, a lower oil price will not affect GDP growth,” he said.

    On the supply shocks that affected growth in the first nine months, Yeah said the situation is likely to improve as the unscheduled maintenance shutdowns are over, with less disruption and gradual rebound projected.

    Pong, who expected Q3 GDP growth of 4%, said the 4.4% achieved was better than projected in view of the high base of 6.2% a year ago.

    “In Q3, the challenge was the high base in Q3 last year, when we achieved GDP growth of 6.2%. It is difficult to achieve strong year-on-year growth. Many expected Q3 to be strong due to consumption spending following the removal of Goods and Services Tax (GST).

    Retail numbers were stronger than what I expected. Consumption was stronger, therefore services was stronger,” he said.

    He noted that private consumption was stronger at 9% in Q3 (8% in Q2), which is a rare occurrence, while public consumption was also stronger at 5.2% (3.1% in Q2).

    Both Yeah and Pong cautioned that the softening in the plantation sector, especially palm oil prices, could affect smallholders’ income, which would in turn affect consumer spending.

    “If commodity prices fall, it will hit GDP. If CPO (crude palm oil) continues to be weak, it will have a negative impact on consumption. In particular, CPO and rubber. As it is now, commodity prices are weak and are still falling,” said Pong.

    However, Yeah said the impact on consumer spending would not be that large in view of the government’s spending and policies that remain supportive of consumption.

    At a media briefing last Friday, BNM governor Datuk Nor Shamsiah Mohd Yunus said private consumption expanded strongly during the quarter following the zerorisation of GST.

    “On the supply side, the services and manufacturing sectors supported growth, while the mining sector continued to be affected by production shocks.”

    She said growth could have been 0.5 to 0.7 percentage point higher in the absence of commodity shocks, as 17% of the economy (agriculture, mining and quarrying) contracted by 1.3%.

    Nonetheless, Nor Shamsiah believes the economy is on track to register a growth of 4.8% for 2018, supported by private sector activity with gradual recovery in commodity production lending support to growth.

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  • Most SE Asia stocks fall in line with broader Asia; Indonesia climbs 1 pct

    Most SE Asia stocks fall in line with broader Asia; Indonesia climbs 1 pct

    Most Southeast Asian stock markets fell on Tuesday, tracking broader Asia after a selloff on Wall Street overnight. As reported, citing sources from both sides, that China’s top trade negotiator Liu He may visit Washington to prepare for the talks between U.S. President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 summit in Argentina later this month.

    Philippine shares declined 1.2 percent, extending falls into a third session, dragged by industrial and real estate stocks. SM Prime Holdings declined 2.3 percent, while JG Summit Holdings fell 6.9 percent.

    Singapore shares declined for a third consecutive session, dragged by financials. DBS Group Holdings, the city-state’s largest lender, slipped 0.9 percent, while rival United Overseas Bank Ltd fell 1.2 percent.

    Malaysian shares extended falls into a third session, with IOI Corp Bhd shedding 3.1 percent to a near 11-month closing low and IHH Healthcare Bhd declining 2.8 percent to its lowest close since July 2014.

    Trade tensions between the United States and China will create a “domino effect” and prompt other countries to turn protectionist, said Malaysian Prime Minister Mahathir Mohamad.

    Vietnam shares declined 1.4 percent, dragged by financial and real estate stocks. Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) fell 3.7 percent, while real estate investor Vingroup JSC ended 2.7 percent lower.

    Indonesian shares were the top gainers in Southeast Asia with a rise of 1 percent. Consumer staples and financials led the gains with United Tractors Tbk PT and Bank Central Asia Tbk PT rising 5.5 percent and 1.6 percent respectively.

    Thai shares climbed 0.3 percent, helped by consumer staples.

    Glass container manufacturer Berli Jucker PCL rose 1.4 percent, while convenience stores operator CP All PCL climbed 2.6 percent to a more than one-month closing high.

    “Stocks are rising on internal factors like government improving infrastructure and linking of our three airports,” said Teerada Charnyingyong, an analyst with Phillip Capital Thailand.”The government also announced measures to stimulate spending by promoting the tourism sector.”

  • Maybank Asset Management sees AUM expanding US$50m in next 2 years

    Maybank Asset Management sees AUM expanding US$50m in next 2 years

    Maybank Asset Management Group (MAMG) expects its assets under management (AUM) to increase between US$30 million (RM126 million) to US$50 million (RM209 million) in the next two years, following its collaboration with Schroder Investment Management (Singapore) Ltd to co-develop investment solutions for sophisticated investors.

    As of end September 2018, MAMG’s AUM stood at RM33.7 billion.

    MAMG and Schroders Singapore announced their first long-term strategic partnership with the launch of two discretionary portfolios, namely Global High Dividend Equity Portfolio and Global High Conviction Portfolio.

    These solutions will be managed by Maybank Asset Management (MAM) Malaysia, a unit of MAMG, with Schroders Singapore as the investment adviser.

    “This is a very targeted high net worth segment so we are leveraging on Maybank private banking customers,” MAMG CEO Badrul Hisyam said.

    “The (market) sentiment right now is quite weak generally, unless the sentiment improves, then we would see better response to this kind of product,” Badrul added, revealing that at least three more products would be available under this collaboration in financial year 2019.

    “By integrating our strength in local wealth management with their global investment capabilities, the resulting synergy will allow us to deepen our foothold in the Malaysian wealth market, through dedicated offerings designed to achieve investors’ desired outcomes.

    “We recognise the growing demand for sophisticated, outcome-oriented global investment solutions, particularly among the high net worth community. We are therefore committed to delivering a range of global investment strategies to cater to their evolving financial needs,” he noted.

    Meanwhile, Schroders Singapore country head Susan Soh said as part of the continuing partnership, both companies would undertake further collaboration projects to co-develop solutions across other asset classes, including Shariah-compliant investment and private assets.

    “We believe our ability to combine the key tenets of asset management and wealth management offers differentiated value proposition to MAM Malaysia’s clients,“ Soh said.

    According to Badrul, the Shariah-compliant investment is expected to be available to the market by third quarter of 2019.

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  • Australia retail sales miss in September

    Australia retail sales miss in September

    Australian retail sales rose slightly in September 2018, missing industry expectations that the nation’s retail revenues would register a bigger increase for the first month of spring. Domestic retail turnover saw a 0.2 % gain in September, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.

    While the growth remains positive, analysts were predicting a stronger result and forecast retail sales to climb 0.3%, on August’s 0.3% gain in the prior month.

    Year-on-year, September witnessed a rise of 3.67%.

    “Although September’s month-on-month figure isn’t as positive as we would have liked, we need to understand the year-on-year retail growth figure represents a better overview of the current state of Australian retail,” Russell Zimmerman, Executive Director of the Australian Retail Association said.

    “The ARA know personal tax cuts play a big role in discretionary spend, and believe a second round of personal tax cuts before the next election would certainly boost consumer confidence, and see an increase in retail sales in the new year.”

    For the month, café, restaurant and takeaway spending registered the highest growth in September, up 0.5%. This was followed by food retailing, up 0.4%, said the ABS.

    But the month of September was weighed down by lower sales across the clothing, footwear and personal accessories category, with three industries falling 1.2%. Household goods and department stores remained relatively flat from previous months.

    By state, sales were strongest in the state of Victoria and Tasmania, leading by 0.7%. New South wales fell 0.4%, while Western Australia and The Australian Capital Territory were relatively unchanged in September 2018.

    Online retail sales made up 5.6 % of total retail turnover in original terms in September 2018, an unchanged result from August, said the ABS.

    The ABS also released quarterly data that showed seasonally-adjusted retail sales rose 0.2%, a massive drop from the 1 per cent increase in the second quarter.

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  • Vietnam ratifies Asia-Pacific trade pact

    Vietnam ratifies Asia-Pacific trade pact

    Vietnam became the seventh country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Monday afternoon. With its ratification, the National Assembly (NA) has assigned the task of reviewing related bills and legal enactments to the Government, the Supreme People’s Court, the Supreme People’s Procuracy and other relevant bodies.

    Once reviewed, the government agencies shall request that competent authorities amend, supplement or enact new laws in a timely manner to ensure uniformity and adherence to the roadmap for implementing commitments contained in the CPTPP.

    The Prime Minister will be responsible for approving and directing the relevant central or local agencies in implementing the CPTPP pact.

    The CPTPP is a major trade pact between Vietnam and 10 other countries that seeks to boost trade by reducing tariffs.

    Speaking at a recent NA session, Deputy Prime Minister Pham Binh Minh said that the CPTPP “will benefit Vietnam overall.”

    Because the trade pact will cover 13.5 percent of global GDP, Vietnam’s GDP will be able to grow by 1.32 percent, and its exports 4.04 percent by 2035, he added, citing a report by the Ministry of Planning and Investment.

    However, the Deputy PM also enumerated challenges that Vietnam would face when joining the CPTPP.

    Domestic products such as pork and chicken might face strong competition from imported products. Other products that can have trouble competing include paper, steel and cars, Minh said.

    The other six countries to ratify the pact are Australia, New Zealand, Canada, Japan, Mexico and Singapore.

    The four countries still to ratify it are Brunei, Chile, Malaysia and Peru.

    Originally a 12-member agreement known as the Trans-Pacific Partnership (TPP), the pact was thrown into limbo when U.S. President Donald Trump withdrew his country from the deal in January 2017.

    Following the U.S. withdrawal, the remaining 11 countries renegotiated parts of the TPP, removing some of Washington’s demands. In March, they signed the revised CPTPP, also known as TPP-11.

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  • Bank of Indonesia Signs $10b Financial Stability Deal With Singapore

    Bank of Indonesia Signs $10b Financial Stability Deal With Singapore

    The central banks of Indonesia and Singapore said last week that they had agreed to a bilateral deal for a $10 billion backstop to help maintain monetary and financial stability after a recent bout of turbulence in markets. The pact, which will be in place for one year, comprises a local currency swap agreement of around $7 billion equivalent and another $3 billion that allows for repurchase transactions between the two central banks to obtain United States dollar cash using government bonds of major countries as collateral.

    Bank Indonesia has been recently intervening to stabilize its rupiah, which fell to 20-year lows against the US dollar amid a global rout in emerging markets.

    “Economic fundamentals in the regional economies remain sound. But markets can sometimes overreact in the face of heightened uncertainty. This bilateral financial arrangement will instill confidence amongst investors,” said Ravi Menon, managing director of the Monetary Authority of Singapore.

  • Indonesia’s Third-Quarter GDP Growth Slows as Consumer, Export Sectors Struggle

    Indonesia’s Third-Quarter GDP Growth Slows as Consumer, Export Sectors Struggle

    Indonesia’s economic growth slowed in the third quarter, losing momentum from the previous three months and pointing to tougher conditions for Southeast Asia’s biggest economy, which has struggled with capital outflows and weaker exports and household spending.

    Gross domestic product expanded 5.17 percent in the July-September quarter from a year earlier, the Central Statistics Agency (BPS) said on Monday, compared with a 5.15 percent expansion expected in a Reuters poll and the second quarter’s 5.27 percent. The April-June quarter pace was the fastest since late 2013.

    The slowdown was largely due to softer household consumption in the third quarter and a negative contribution from foreign trade.

    Although the expansion was a notch faster than expected, economists warn growth may weaken further.

    “We think growth will tend to be slower in the coming future due to the impact of weakening rupiah,” said Fakhrul Fulvian, a Jakarta-based chief economist of Trimegah Securities. He expects GDP to grow 5.13 percent in 2018 and 5 percent in 2019.

    The rupiah is down around 9 percent this year, making it the second-worst performing currency among emerging Asian markets.

    Though a weaker currency has not stoked inflation, the central bank has raised interest rates five times since May to slow capital outflows in a measure analysts say could dampen domestic demand.

    Alex Holmes, Asia analyst at Capital Economics, said growth will probably stay around 5 percent over the next couple of years.

    “A key drag on growth over the next year is likely to be the export sector,” Holmes said in a note, adding that weaker global growth and subdued commodity prices could hold back export revenues.

    Weaker coal and palm oil prices have been a drag on Indonesia’s exports, with the fall in the local currency unable to offset the hit to revenues from the softer commodity prices.

    The export sector’s contribution to GDP in the third quarter was wiped out by imports. BPS chief Suhariyanto blamed this on declining non-oil and gas commodity prices as well as slower growth in main trading partners like China and Singapore.

    Stronger investment and government spending also failed to mitigate slowing household consumption, which accounts for more than half of Indonesia’s GDP.

    While a trade war between the United States and China is expected to hurt economic growth in the region, most analysts say Indonesia, which is less integrated into global production supply chains than its regional peers, will not be among the worst hit.

    However, the trade war could pressure the Indonesian economy through its financial markets.

    In addition to Bank Indonesia’s rate hikes, the government has delayed infrastructure projects and raised tariffs for a wide range of consumer goods, which could further hurt growth.

    Barclays economist Rahul Bajoria said tighter fiscal policy next year also clouds growth outlook.

    While the government’s official GDP growth target this year is 5.4 percent, Finance Minister Sri Mulyani Indrawati last month told the House of Representatives that 2018 growth was more likely to be 5.14 percent.

    The government projects growth at 5.3 percent for next year.

    Bank Mandiri economist Andry Asmoro said the third-quarter growth figures were unlikely to affect the central bank’s monetary stance.

    “The global challenge is still huge and prioritizing stability over growth remains relevant in the current environment,” he said.

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  • Public Bank launches all-in-one digital payment platform

    Public Bank launches all-in-one digital payment platform

    Public Bank Bhd, in partnership with Revenue Group Bhd, today launched the all-in-one digital payment terminals. This all-in-one digital payment terminal has been piloted at selected merchant outlets of Public Bank and will be made available tomorrow.

    Public Bank managing director and CEO Tan Sri Tay Ah Lek said the first all-in-one digital payment terminal in Malaysia, developed by Revenue, will simplify the payment acceptance process as it will enable the physical retail merchants to accept both card payments and mobile wallet payments in a single digital payment terminal thus providing convenience to them.

    As at end September 2018, Public Bank has more than 60,000 electronic data capture terminals nationwide.

    Tay said it will continue with its strategy of increasing its merchant base and adding on more new acceptance services.

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  • Exporters fret over weaker yuan

    Exporters fret over weaker yuan

    While the weakening yuan has allowed Vietnamese importers to benefit from cheaper material costs, exporters are feeling the pinch. The yuan declined to 6.9075 per U.S. dollar on Nov. 6. The move has dragged the yuan down by almost 9 percent from the beginning of this year, the steepest drop in the last 10 years.

    A yuan was selling for VND3,327 on Monday, down from VND3,595 in February 5, according to Vietnam Customs. This means that the dong has gained 7.4 percent over the yuan in the last nine months.

    Experts say that this is an opportunity for Vietnamese businesses to import cheaper materials.

    Economist Bui Trinh said that the falling yuan will allow local businesses to gain from importing materials and machines, 90 percent of which are obtained from China.

    A Vietnamese plastic importer said as his firm pays with the weaker yuan, it has become more competitive in the market. Up to 70 percent of this company’s materials are imported from China.

    An importer of Chinese fruits said buying fruits from China is cheaper and prices in Vietnam remain the same. “So I’m making more profit.”

    But the falling yuan has created more difficulties for Vietnamese exporters.

    Bui Thanh Van, director of trade firm Van Phat Ltd., which exports produce to China, said that the falling yuan has lowered the amount of orders they used to get.

    Some Vietnamese produce are being priced higher than other countries in ASEAN, such as Thailand and Malaysia, and countries which are lowering their currency values to increase exports to China, he said.

    “The weakening of the yuan has made it a challenge to export to China.”

    Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers, said that as China has been one of Vietnam’s top export markets in the last two years, the weaker yuan would make it difficult for seafood exporters.

    China was among the top four largest importers of Vietnamese seafood in the first eight months this year, along with Japan, South Korea and the U.S., according to the Ministry of Agriculture and Rural Development. These four markets accounted for over 54.1 percent of Vietnam’s total seafood exports in the same period, it said.

    The falling yuan will likely increase prices and lower orders from China, affecting the local seafood market, Hoe said.

    Experts are also worried that the weaker yuan will lead to an increasing number of Chinese goods entering Vietnam with more competitive prices, making the nation’s trade deficit even higher.

    From January to September this year, Vietnam had a trade deficit of $18.45 billion with China, its largest trade partner among over 200 countries and territories, according to Vietnam Customs.

    Trade turnover between Vietnam and China reached $93.69 billion last year, up 23.2 percent from 2016, accounting for 22 percent of Vietnam’s total trade turnover, Vietnam Customs reported. The figure is estimated to reach 100 billion this year.

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  • Malaysia’s September trade surplus climbs to 10-year high

    Malaysia’s September trade surplus climbs to 10-year high

    Malaysia’s exports rebounded by 6.7% year on year (yoy) in September 2018 to RM83 billion after a dip of 0.3% in the previous month, boosting the trade surplus to a 10-year high of RM15.3 billion, the Statistics Department said. The surplus represents an 85.9% jump compared with the same month last year.

    Imports, however, registered a decrease of 2.7% yoy to RM67.8 billion. This was the second lowest import value in 2018.

    Total trade, which was valued at RM150.8 billion, increased RM3.3 billion or 2.3% in September 2018.

    The export growth was contributed by expansion in exports to Hong Kong, Taiwan, Singapore, Australia and South Korea. Lower imports were mainly from India, South Korea, Vietnam, the United Arab Emirates and the European Union.

    The main products which contributed to the expansion in exports were electrical & electronic products (+6.5%); refined petroleum products (+20.5%); crude petroleum (+54.5%) and liquefied natural gas (+1.8%).

    However, declines were recorded for palm oil and palm oil-based products (-11.5%); timber and timber-based products (-0.4%) and natural rubber (-1.9%).

    The lower imports by “end-use” were mainly attributed to intermediate goods, capital goods, and consumption goods.

    MIDF Research said export growth for Q3 averaged 5.3% yoy, moderated from 8.4%yoy in Q2. It was the lowest gain in seven quarters.

    Looking at the final quarter of 2018, it expects exports to perform better than in the earlier three quarters.

    “Amid higher base effects and signs of easing key global indicators, we foresee exports to expand by 7.3% this year (18.9% in 2017). This is supported by lower exports growth for the first nine months which registered at 6.5% compared to double-digit growth of 21.6% in the same period last year.

    “The moderating pace is consistent with gradual rise in global commodity prices, expectation of slight slowdown in overall business performance on top of the heating Sino-US trade conflict.”

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  • Alibaba promises US$200 billion global sourcing plan

    Alibaba promises US$200 billion global sourcing plan

    Alibaba has committed to help import US$200 billion worth of goods from more than 120 countries over the next five years. The company says the move underscores its long-term commitment to globalisation and boosting its efforts to meet the rising demand of Chinese consumers for high-quality international products.

    However, it could also be construed as a move to shore up alternative supply chains in the wake of growing trade tensions between the US Trump administration and China.

    “Globalisation is one of Alibaba’s most critical long-term growth strategies,” said Alibaba CEO Daniel Zhang in a statement. “We are building the future infrastructure of commerce to realize a globalised digital economy where trade is possible for every country around the world.”

    He said using Alibaba’s innovative technology and robust ecosystem, the company is positioned to make global trade more inclusive and fulfil its mission “to make it easy to do business anywhere in the digital era.”

    Zhang outlined Alibaba’s plan at its Global Import Leadership Summit held at the first-ever China International Import Expo in Shanghai. Between 2019 and 2023, Alibaba forecasts it will help import international goods from businesses of all sizes in top countries such as Germany, Japan, Australia, the US, South Korea and Singapore. Several top global brands including P&G, Nestle, JBS, and Refa, have confirmed their holistic partnership with the Alibaba ecosystem.

    By collaborating with various Alibaba businesses units, these brands have been able to effectively engage with China’s massive middle class, a primary engine powering China’s consumption growth.

    Alvin Liu, GM of Tmall import and export, said China’s middle class is booming. “As incomes are rising in China, consumers want faster access to and a wider variety of high-quality products from around the world. Tmall is uniquely positioned to help international brands tap into the growing China market as consumers seek to upgrade their lifestyle.”

    According to a joint report by Deloitte China, the China Chamber of International Commerce, and AliResearch, China’s robust economic growth in recent years has increased the number of middle-to-high income Chinese consumers, who are fuelling the demand for imported, quality goods.

    The report notes that China’s cross-border e-commerce market has grown remarkably, with the proportion of imports to total e-commerce sales growing from 1.6 per cent in 2014 to 10.2 per cent last year. The report also highlights that, between 2014 and 2017, the number of shoppers on Alibaba’s dedicated platform for cross-border shopping, Tmall Global, has grown 10-fold.

  • Malaysia’s exports rebound in September

    Malaysia’s exports rebound in September

    Malaysia’s exports rebounded by 6.7% in September 2018 to RM83 billion year-on-year (y-o-y) after a slight decrease in the previous month, according to Statistics Department. Total trade which was valued at RM150.8 billion increased RM3.3 billion or 2.3% in September 2018, chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said in a statement.

    Mohd Uzir said the trade surplus recorded the highest value since October 2008 at RM15.3 billion, increased RM7.1 billion or 85.9% from a year ago.

    Re-exports was valued at RM16.5 billion registering an increase of 26.2% y-o-y and accounted for 19.9% of total exports, while domestic exports increased 2.7% or RM1.8 billion to RM66.5 billion.

    The export growth was contributed by expansion in exports to Hong Kong, Taiwan, Singapore, Australia and Republic of Korea. Meanwhile, lower imports were mainly from India, Republic of Korea, Vietnam, UAE and EU.

    The main products which contributed to the expansion in exports were electrical & electronic products, refined petroleum products, crude petroleum and liquefied natural gas (LNG).

    However, the department said decline was recorded for palm oil and palm oil-based products, timber and timber-based products and natural rubber.

    For imports, the lower in imports by ‘end use’ was mainly attributed to intermediate goods, capital goods, and consumption goods, it added.

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  • Vietcombank gains preliminary agreements to open US office

    Vietcombank gains preliminary agreements to open US office

    Vietcombank VCB.HM has made a significant step in becoming the first Vietnamese bank to open a representative office in the U.S. The move by Vietnam’s biggest bank by market value comes as diplomatic ties between Vietnam and the U.S. are on the rise and is part of a push to expand internationally as it aims for a place among the world’s top 300 banking and financial groups.

    Vietcombank has obtained approval from the U.S. Federal Reserve and an agreement in principle from the New York State Department of Financial Services to open a representative office in New York City, it said on its website.

    The State Bank of Vietnam, the country’s central bank, owns 77 percent of Vietcombank. Japan’s Mizuho Bank [MZFGAE.UL] is the second biggest investor with a 15 percent stake.

    “As Vietnam becomes more attractive to U.S. investors, Vietcombank’s representative office … will be an extended arm for Vietcombank in the U.S. to support business development in this very potential market,” it said, adding that it aims to obtain a license and open a New York office as soon as possible.

    The representative office would liaise with prospective clients and banks in the U.S. and engage in other non-transactional activities such as analysis of the banking and financial services market.

    The U.S. is now one of Vietnam’s top trading partners and is expected by some analysts to benefit from the continuing U.S.-China trade conflict, offering an alternative investment and trade destination.

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