G20 finance chiefs begin Sunday two days of talks aimed at quelling
fears of a global economic downturn amid a persistent eurozone debt crisis and
a looming fiscal crunch in the United States.
Finance ministers and central
bank governors from the Group of 20 top economies will gather in Mexico City as
debt-riddled Greece continues to trouble Europe while Spain fights off pressure
to seek a bailout.
While Madrid avoids the bailout
route, the problems in Greece are still haunting Europe’s single currency, more
than two years after Athens received its first multibillion-euro rescue.
Debt-laden European nations will
lobby Asia’s economic dynamos for help to calm the crisis raging in the
eurozone at a major summit next week in communist Laos, one of the world’s
poorest countries.
A heavyweight contingent including
French President Francois Hollande and Italian Prime Minister Mario Monti is
due at the two-day meeting that opens on Monday, underscoring Europe’s growing
engagement with Asia’s rising stars.
The Europeans “are aware of
Asia’s growing importance as an engine of global economic growth”, said a
Southeast Asian diplomat who asked not to be named.
Indonesia
Falling exports may have rattled
the Indonesian economy in the year’s third quarter, but strong domestic
spending and rising investment are likely to deliver a growth rate above 6
percent compared to a year earlier, economists say.
Gross domestic product rose 6.2
percent in the three months to September, down from 6.4 percent the previous
quarter, according to the median estimate of six economists surveyed by the
Jakarta Globe. The Central Statistics Agency (BPS) will announce the third
quarter growth figure on Monday.
“Net exports are still in
negative territory, weighing down on growth,” Anton Gunawan, an economist at
Bank Danamon Indonesia, said on Friday. Net exports — the difference between
exports and imports — contracted 26 percent in the third quarter, compared to a
29 percent contraction in the previous three month period, Anton said. In
addition, “there has been a slight decline in investment growth contribution,”
Anton said.
Combined domestic and foreign
investment grew at 34 percent in rupiah terms in the third quarter, lower than
41 percent growth in second quarter, the Investment Coordinating Board (BKPM)
said.
Anton forecast a 6.2 percent
economic growth pace for the third quarter.
Destry Damayanti, chief economist
at Bank Mandiri, agreed with Anton, saying that weaker exports will likely
result in slower growth in the third quarter. She also estimated GDP growth of
6.2 percent.
Philippines
Universal and commercial banks in
the country registered higher profits in the first semester, as growth of the
economy spurred an increase in demand for loans and other banking products and
services.
Monetary officials said the
double-digit pace of income growth enjoyed by large banks would also boost
their appetite to lend more to consumers and businesses.
Data from the Bangko Sentral ng
Pilipinas showed that the combined net incomes of universal and commercial
banks reached P55.15 billion in the first half, up by nearly 19 percent from
the P46.47 billion reported in the same period last year.
Banks generated P99.07 billion in
net interest income, which is revenue out of interests charged on loans less
expenses for the payment of interest on deposits. This amount was up by 3.2
percent from the P95.99 billion seen in the same period a year ago.
Non-interest income—which is
derived from non-lending services, such as underwriting and dealership of
securities, bills payments, wealth management, etc.—amounted to P64.41 billion.
This was up by 13.4 percent from P56.8 billion.
Banks posted a significant
increase in profit despite the decline in interest rates to historic lows this
year.
Industry members said the
low-interest rate environment would dampen the interest income of banks. But
the institutions are now maximizing revenue sources to counter that dampening
effect.
Aurelio Montinola III, president
of Bank of the Philippine Islands, earlier said banks would have to compensate
for low interest rates by increasing volume of transactions and aggressively
wooing more clients.
Montinola said the adverse effect
of low interest rates on income per loan transaction could be offset by an
increase in demand for loans.
A spike in loan demand is a
consequence of cheaper cost of borrowings, he added.
The BSP cut the key policy rates
for the fourth time this year.
The key interest rates, which
influence commercial interest rates, now stand at historic lows.
Last month’s rate cut brought the
overnight borrowing and lending rates of the BSP to 3.5 and 5.5 percent,
respectively.
Singapore
DBS Group Holdings posted a
higher-than-expected third-quarter net profit of $856 million, up 12 per cent
from a year ago and 6 per cent from the second quarter.
The better results were driven by
strong growth in property loans in Singapore, record fee income and sharply
lower provisions.
The latest earnings of South-east
Asia’s largest banking group beat the average forecast of $795 million in a
survey of five analysts by Thomson Reuters.
For the first nine months, net
profit rose 13 per cent to a record $2.6 billion from higher net interest
income and customer- driven non-interest income, DBS said yesterday.
But the economic slowdown is
beginning to bite.
Excluding currency effects, loans
edged up one per cent to $202 billion from a slowdown in the region and a
concentration of maturing trade loans during the quarter.
Deposits grew 5 per cent before
exchange translation effects to $240 billion, resulting in an easing of the
loan-deposit ratio to 84 per cent from 89 per cent in the previous quarter. Net
interest margin declined five basis points to 1.67 per cent, reflecting prudent
liquidity management and margin pressures in China, the bank said.
The impact of both factors was
partially offset by higher net interest margin in Singapore and other markets.
Still, DBS chief executive Piyush
Gupta was optimistic, saying: “I’m reasonably upbeat.” He noted that the United
States was recovering, that Europe had pulled back from the brink, and that
while Asia was slowing, it was still remarkably resilient.
Singapore’s economy slowed in Q2
and contracted in Q3 as sluggishness in trade-related sectors spread to the
previously resilient services sectors, the Monetary Authority of Singapore had
said on Tuesday.
Malaysia
AirAsia X Bhd, the medium haul
budget carrier of AirAsia Bhd, is offering for sale 790.12million shares or
33.3% of the company in an initial public offering (IPO) that will utilise
proceeds to reduce bank borrowings and for capital expenditure.
The IPO will comprise 592.59
million new shares and 197.53mil existing shares, with the new shares
representing 75% of the IPO proceeds while the remainder of the proceeds will
go to its promoters.
Reuters reported that the IPO,
expected to debut by January, was expected to raise about US$250mil (RM750mil)
for AirAsia X.
Based on Reuters’ own
calculation, the total IPO of 790.12 million shares could be worth 97 sen per
share.
However, AirAsia X has given no information
on pricing, size of the listing or a timeframe for the IPO. The par value of
the shares is at 15 sen a piece, and the price of the IPO will only be fixed
after a book building exercise, for which the dates were not disclosed in the
document.
Meanwhile, Bernama quoted chief
executive officer Azran Osman-Rani as saying that the company submitted the
proposal to the Securities Commission few days ago and expected to receive the
nod by middle of next month.
“We are expecting to get the
approvals by mid-December and if everything goes well, we hope to be listed by
early next year,” he told reporters at AirAsia X’s fifth anniversary
celebrations here yesterday.
In its draft prospectus released
yesterday, AirAsia X said it would use more than half or 55.1% of the proceeds
to repay bank borrowings, while 21.5% for capital expenditure which includes
the acquisition of engineering and aircraft, as well as for expansion of new
hubs in the future.
It said the balance 20.2% would
be used for working capital and the rest for listing expenses.
AirAsia X currently serves 12
destinations across Asia, and Australia, and conducts chartered flights to the
Middle East. Operating a fleet of nine A330-300s and two A340-300s, it
represents the largest low cost carrier wide-body aircraft seat capacity in the
Asia Pacific region.
For the six months ended June 30,
2012, the company recorded a net loss of RM29.1mil on a revenue of RM941.9mil.
Thailand
Ananda Development Company
Limited IPO
Ananda Development Company Limited
(ADC) was founded in 1999 by Chanond Ruangkritya. Ruangkritya family has been
in the real estate business in Thailand far more than 20 years. The development
under its credential including the golf course and housing estate to name as a
few Green Valley Bangkok, Green Valley Rayong, Green Valley Chiengmai,
Windmill, Saint Andrew etc.
Gaining business background from
the family has greatly helped Chanond in setting up and running the business by
himself aiming initially to be a full service housing development company
taking opportunity of the economic recovery after the crisis and the strong
housing demand of the resident of Bangkok, the capital of Thailand.
With successful development of
housing projects, offering customers a unique design and life style concept,
ADC has grown through the years and built up a strong and experienced in-house
team ready to cope with the business expansion.
ADC has turned itself to be a
professional real estate asset management when Pramarica Real estate Investor
Asia has decided to invest in Thailand and selected ADC as an exclusive partner
to manage the housing project around a newly developed Suvanabhum international
airport.
The project started in 2005 with
a total project value of Baht 14 billion in sale proceeds of 7 projects and
3,800 housing units. Potential growth around Suvanabhum international airport
area would definitely enhance housing demand and successful in sales. Some of
the projects have already launched sales while all of them would complete sale
launch within 2008.
In 2007 ADC has started to manage
another real estate fund invested in residential condominium along mass transit
rail line. With Pramerica Real estate Investor Asia as a partner, the fund has
targeted to develop 8,400 units worth Baht 21 billion in sale proceeds to serve
demand of young generation of Bangkok residences with life style has been
changed due to the establishment of mass transit rail line. The projects are
currently in the construction process.
There is plenty of opportunity
for real estate investment in Thailand. “ADC as a successful professional real
estate asset management is looking forward to a potential developments serving
consumer urban lifestyles.”
Business & Investment Opportunities
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