contrastBtngrayscaleBtn oku-icon


plusBtn crossBtn minusBtn


This site
is mobile


Southeast Asia Internet economy to grow 11pct year-on-year in 2023

Southeast Asia’s internet economy is expected to grow 11 per cent year-on-year in 2023, slowing from last year’s 20 per cent growth, an industry report showed on Wednesday.

The annual report published jointly by Alphabet’s Google, Singapore state investor Temasek Holdings and global business consultants Bain & Company, also said the region’s internet economy is seen worth USUS$295 billion by 2025, down from a previous estimate of US$330 billion.

“Digital economy sectors are showing positive growth trajectories, with travel and transport on track to exceed pre-pandemic levels by 2024,” the companies said in a joint statement.

The region of 11 countries and more than half a billion people has a young population, widespread smartphone usage, and a growing middle class, making it one of the world’s fastest growing internet markets.

Source: Reuters

Southeast Asia Internet economy to grow 11pct year-on-year in 2023

Content Type:


Government policies and incentives will play a crucial role in supporting electric vehicle (EV) demand growth in the transition away from internal combustion engine vehicles (ICE) in Asia, said Sustainable Fitch Inc.

In a note, it said many governments in Asia are utilising a mix of policy tools, including subsidies, rebates and tax exemptions to shift consumer purchasing decisions.

“We believe regulatory trends of tighter efficiency standards and promotion of electric vehicles will boost overall EV sales in the coming years, on top of recent geopolitical oil-price volatility that shifted some demand away from ICE vehicles,” it said.

On the demand side, the company said many governments are offering tax incentives to grow both their domestic EV and related-components industries and to attract foreign direct investment (FDI) from global manufacturers for different levels of the automotive value chain.

It noted that China is the world leader in EV and EV battery production, as well as the largest processor of EV-related critical minerals, while legacy original equipment manufacturers in Japan and South Korea are attempting to gain market share under intense competition from low-cost Chinese brands.

Meanwhile, Southeast Asia has grown as a hub for automotive component manufacturing and is attracting EV-related FDI from companies around the world, it said.

Sustainable Fitch also reckoned that low penetration of EV charging points is a critical issue for wider consumer adoption in Asia, noting that battery swapping is an alternative to conventional charging points, allowing EV drivers to replace depleted batteries with fully charged ones in a few minutes at a swap station.

Malaysia, via its Low Carbon Mobility Blueprint 2021-2030, aims to have 10,000 public charging stations by 2025.

Source: Bernama

Govt incentives key to EV demand growth in Asia — Sustainable Fitch

Content Type:


Negotiations under the ongoing Asean-China Free Trade Agreement (ACFTA) 3.0 are crucial for post-pandemic recovery, says Datuk Seri Anwar Ibrahim.

The Prime Minister also said that talks under the ACFTA 3.0 will be important to enhance Asean-China trade and investment relations, as well as to ensure the free flow of goods and services.

“The inclusion of new growth areas – such as the digital economy, green economy, supply chain connectivity, competition, consumer protection and MSMEs – ensures the agreement’s relevance and foresight.

“Malaysia remains supportive and commends Asean and China’s efforts to conclude the ACFTA 3.0 Upgrade Negotiations by 2024,” said Anwar during his officiating speech for the 20th China-Asean Expo (CAExpo) on Sunday (Sept 17) morning.

CAExpo, from Sept 16 to 19, is taking place at the Nanning International Conference and Exhibition Centre in Nanning, which is in south China’s Guangxi Zhuang Autonomous Region.

At the same time, Anwar said the Belt and Road initiative (BRI) has been instrumental in solidifying relations between China and all participating countries.

“Malaysia, as an early supporter, envisions this initiative as a gateway to new connectivity horizons and growth opportunities across Southeast Asia, Asia Pacific, Africa, Central and Eastern Europe.

“We deeply appreciate China’s unwavering support, particularly in ensuring that economic growth translates into shared prosperity,” said Anwar.

Anwar said the Malaysia-China Kuantan Industrial Park (MCKIP) and China-Malaysia Qinzhou Industrial Park (CMQIP) were examples of BRI projects that were developed under the “Two Countries, Twin Parks” concept.

“Beyond infrastructure, these parks have fostered people-to-people bonds and economic benefits.

“MCKIP has catalysed economic growth in Malaysia’s East Coast Region, creating jobs and establishing a crucial economic link between Malaysia, China and Southeast Asia,” said Anwar.

Anwar said that over the past 19 CAExpo editions, Malaysian companies have achieved commendable outcomes in China and Asean markets.

“The Malaysian Pavilion at this year’s CAEXPO, led by Malaysia External Trade Development Corporation (Matrade), will showcase diverse sectors, attended by various Malaysia government agencies, SMEs, and leading organisations,” added Anwar.

Matrade is coordinating 107 Malaysian companies from various sectors including food and beverages, health and wellness. lifestyles, and among others, at the Malaysian Pavilion.

Meanwhile, Anwar said the Regional Comprehensive Economic Partnership (RCEP) is a testament to Asean and China’s commitment to economic integration, ensuring supply chain resilience and market openness during global challenges.

“This highly ambitious free trade agreement covers nearly 30% of the world’s population, GDP and trade.

“It offers businesses competitive raw material sourcing, thanks to the progressive elimination of 92% of customs duties on goods, while promoting transparency, information sharing and economic cooperation,” said Anwar.

Anwar is set to launch the Malaysia Pavilion on Sunday (Sept 17) morning and he will be having a bilateral meeting with Chinese Premier Li Qiang.

This is Anwar’s second visit to China and second bilateral meeting with Li.

Anwar’s first visit in March saw Malaysia secure a record RM170bil worth of investment commitments from China.

Source: The Star

Asean-China free trade talks crucial for post-pandemic recovery, says PM

Content Type:


FOLLOWING the recently-concluded 43rd Asean Summit in Indonesia, Foreign Minister Datuk Seri Dr Zambry Abdul Kadir looks ahead to the grouping’s continued key role in a complex geopolitical landscape.

Below is his statement in full:

Asean and Malaysia

The recent Asean Summit in Jakarta marked a pivotal moment in the region’s quest for peace, stability and prosperity.

The summit culminated in the determination of Asean leaders to make this region exemplary vis-a-vis other regional groupings around the world.

Indonesia deserves accolades for its remarkable preparations and seamless execution of the summit.

The presence of many world leaders as dialogue partners underscored the importance of Asean in today’s complex geopolitical and geoeconomic landscape.

Indeed, this year’s theme, “Epicentrum of growth”, aptly encapsulates Asean’s impressive economic outlook.

The Asean digital economy for one holds a huge potential and is expected to reach US$1 trillion to US$2 trillion by 2030. This projection is bolstered by the rapid growth of ecommerce and the availability of digital platforms.

The Asean Connectivity Plan, designed to foster integration across multiple sectors further solidifies Asean’s status as an economic powerhouse. From air and land connectivity to the energy sector, and even in the digital sector, this region is poised for remarkable progress.

Amidst the swift-changing geopolitical landscape, Asean remains the primary driving force in regional architecture.

Its cooperation network has transcended to involve all key global players through various Asean-led mechanisms.

Such is the convening power of Asean, where its leading role in regional diplomacy is clearly manifested in bringing together the key countries across the globe.

At the same time, Asean also managed to showcase its diplomatic clout in mediating the great power competition and asserted that the region is not set for a theatre of confrontation.

Malaysia’s role in Asean

Malaysia’s historical role in Asean is undeniably significant. The leadership of then foreign minister Tun Abdul Razak alongside other regional leaders – the founding fathers – played an instrumental role in Asean’s establishment. This explains why Asean is regarded as the cornerstone of Malaysia’s foreign policy.

For what it is worth, Malaysia’s positions within Asean platforms are increasingly important.

This is especially true in the era of geopolitical flux with the emphasis on the South China Sea, Myanmar, and the divergence of Indo-Pacific strategies within the region. These issues demand thoughtful and proactive engagement.

Under the leadership of Prime Minister Datuk Seri Anwar Ibrahim, Malaysia consistently highlights the paramount importance of dialogue and cooperation on issues affecting regional peace and stability.

One of the critical issues is regarding the South China Sea. While it is recognised as a strategic global trade route, the issue remains contentious. Malaysia maintains a commitment that it should be dealt with peacefully and rationally through dialogue and negotiation based on universally-recognised principles of international law, including UNCLOS 1982.

Through Asean platforms, Malaysia is also dedicated to the implementation of the Declaration of Conduct and negotiations on the Code of Conduct in the South China Sea. These mechanisms are crucial to ensure the waterway remains a sea of peace and stability.

Indeed, another issue that topped the agenda is Myanmar. The continued escalation of violence and prolonged suffering of the people, including the humanitarian crisis, cast adverse impacts on regional stability.

Asean has designed its peace plan known as the Five Point Consensus which calls for an immediate cessation of violence, inclusive peace dialogue, and an unimpeded delivery of humanitarian aid, among others. And within this framework, Malaysia remains committed to resolving the Myanmar issue.

Of late, the Indo-Pacific strategy has gained momentum in the region. Several key countries have crafted their own Indo-Pacific strategies to shape the regional architecture in South-East Asia. It is a recognition on the part of South-East Asia that it is a high-value region poised to be among the key engines of economic growth in the world.

With the Asean Outlook on the Indo-Pacific (AOIP) taking the central role, it is important that other Indo-Pacific strategies align with the aspirations outlined by the AOIP. This coordination is key to placing Asean in the driver’s seat in navigating this region.

Moreover, Malaysia took the opportunity to voice out the Muslim ummah-related issues, notably on Palestine and Islamophobia, at the recent summit.

On Palestine, Malaysia is the sole country that espoused the Palestinian plight on Asean platforms.

There is a need for a comprehensive, just and sustainable solution to the conflict to ensure peace and stability in the Middle East.

Regarding Islamophobia, Malaysia asserted that it is an infringement of human rights and a derogation of the right to religion and belief. And that all prominent leaders are urged to resolve these challenges together.

Prime Minister Anwar Ibrahim’s leadership

Beyond the intricacies of Asean’s inner workings, it is also imperative to highlight the leadership that played a crucial role in steering the country on the international stage.

Anwar’s leadership has undeniably elevated Malaysia’s international profile.

First and foremost, his adeptness in leader-to-leader diplomacy has played a critical role in bolstering Malaysia’s image in the region and beyond.

Secondly, Anwar and other Malaysian officials deserve recognition for their relentless diplomacy efforts. After all, the summitry is often known for its tireless schedule of “back-to-back meetings” which may reach up to a hundred meetings within a week.

Looking ahead to 2025, Malaysia will assume the leadership mantle as Asean chair, and expectations will be high from the member states. Indeed, this is a critical juncture as Asean will embark on a new trajectory of a long-term vision for 2045.

Asean Community Vision 2045 is an imperative long-term strategic direction in the next two decades to address current and emerging challenges and opportunities.

Against the backdrop of swift-changing geopolitical shifts in the region, strengthening Asean and solidifying partnerships is vital to promote further peace, stability and prosperity in the region.

As Malaysia takes on this monumental role and with Anwar at the helm, with pride and confidence, this country is well-positioned to play the central role.

Source: The Star

Asean poised for progress in a challenging landscape

Content Type:


The growing use of solar photovoltaic (PV) cells, battery, and electric two-wheeler (E2W) industries in South-east Asia could potentially yield between US$90 billion and US$100 billion (RM417 billion to RM464 billion) by 2030, according to a recent research.

The report titled “Renewable Energy Manufacturing: Opportunities for South-east Asia” suggested that this growth may create six million renewable energy sector jobs by 2050.

Launched at the Asean Finance Ministers and Central Bank Governors Meeting, the report was a collaboration between the Asian Development Bank, Bloomberg Philanthropies, ClimateWorks Foundation, and Sustainable Energy for All.

Achieving this potential could involve expanding solar PV manufacturing capacity from 70 gigawatt (GW) to a range of 125-150 GW, the report noted.

The report suggested establishing a battery manufacturing value chain in Southeast Asia to meet regional and global demand, with the aim to produce 140-180 GW-hours of battery cells.

To accommodate E2W growth, the report recommended raising assembly capacity from 1.4 million to 1.6 million units annually, eventually reaching four million units.

It also emphasised the region’s chance to leverage collaboration, trade, and workforce enhancement for competitive renewable energy growth and net-zero goals.

Other recommendations include expanding the Asean Power Grid, harmonising technical standards for electric vehicles, and optimising the value chain.

“The build-out of the Asean Power Grid to enable higher renewables deployment through multilateral power trade and expanded grid balancing areas could support demand.

“Harmonisation of technical standards for E2W vehicles and charging stations could enable original equipment manufacturers to develop products that suit market needs,” it noted.

The report also warned that without action, the region could potentially face a 30 per cent gross domestic product loss by 2050 due to climate change impacts.

Source: Bernama

Report: SE Asia’s renewable energy sector to generate US$100b potential revenue by 2030

Content Type:


Southeast Asian national oil companies (NOCs) and traditional upstream players are progressively focusing on cleaner and more environmentally friendly energy initiatives with investments set to exceed US$76 billion (RM353.1 billion) from 2023 to 2025, according to Rystad Energy.

The independent energy research and business intelligence company headquartered in Oslo, Norway said the upward trend is set to continue, with a projected total outlay of US$119 billion by the end of 2027.

This expenditure will be driven by investments in wind, solar and geothermal projects.

“Regional NOCs like Indonesia’s Pertamina are expanding their participation in geothermal, while Malaysia’s Petronas aims to establish a notable presence in the carbon capture, utilisation and storage (CCUS) market.

“The Malaysian NOC announced ambitious plans to build the world’s largest dedicated facility by 2025, actively pursuing partnerships with international entities to unlock regional project potential,” senior supply chain analyst Afiqah Mohd Ali said in a statement.

She said when fully operational, the initiative would have the capacity to capture 3.3 million tonnes per annum (MTPA) of carbon dioxide (CO2) and securely store the collected CO2 within the reservoirs of the Sarawak region over its 25-year operational lifespan.

While the total project cost remains undisclosed, Rystad Energy’s estimates suggest it could reach US$260 million by 2025.

Similarly, Gentari, a wholly-owned subsidiary of Petronas, has made substantial investments in solar capabilities, seeking to harness the nation’s considerable renewable energy potential.

Between 2023 and 2026, Petronas will spend US$450 million on CCUS projects and US$330 million on hydrogen developments.

Source: Bernama

Renewable energy investments in SE Asia seen topping US$76b by 2025

Content Type:


Asean economic ministers have endorsed a carbon neutrality strategy aligning with Paris Agreement commitments and could unlock a US$5.3 trillion (RM24.6 trillion) economic opportunity.

The Asean Strategy for Carbon Neutrality aims to foster green industries, set standards and reduce emissions through eight collaborative strategies.

The strategy, supported by the Australia for Asean Futures Initiative, requires urgency in achieving carbon neutrality for a green transformation, the ministers said in a joint statement following their 55th Asean Economic Ministers’ Meeting in Semarang, Indonesia.

The ministers said that addressing Asean’s carbon burden not only mitigates risks but also offers a substantial socioeconomic opportunity.

They said unchecked climate change could lead to an 11% reduction in regional gross domestic product (GDP) by 2100 and displace 87 million people in flood-prone areas across Indonesia, Malaysia, Myanmar, Thailand and Vietnam.

“In contrast, pursuing carbon neutrality could yield a GDP value-add of US$3 trillion to US$5.3 trillion by 2050, attract green investments worth US$3.7 trillion to US$6.7 trillion, and generate 49 to 66 million additional jobs, based on analysis by the Boston Consulting Group.

“The economic benefits will be distributed across Asean countries,” they said.

Cambodia, Laos, Myanmar, and Vietnam might experience GDP growth of 9% to 12%, while Indonesia, Malaysia, the Philippines and Thailand could see growth of 4% to 7%. Singapore and Brunei could improve by 1% to 2%.

The ministers said that in order to achieve the carbon-neutrality goals, Asean must bridge a 2.6 gigatonne carbon dioxide (CO2) gap.

They noted that despite having low per capita emissions, the region’s role as a financial hub is growing, with investments projected to double to over US$2.1 trillion by 2030 from US$962 billion in 2023.

“The region’s diverse economies also offer collaborative prospects for achieving carbon neutrality, with hydropower-rich nations contributing zero-carbon energy, some countries having resources for green-tech nickel batteries, and others excelling in the electric vehicle industries,” they said.

The ministers said the endorsed strategy will now move towards adoption by the Asean Economic Community Council and would be recognised by the Asean leaders at the 23rd Asean Summit next month.

“Afterwards, it will be introduced to relevant Asean stakeholders for ongoing collaboration in realising a carbon-neutral future,” the statement said.

Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz, representing Malaysia at the meeting, said these strategies will shape a more prosperous and sustainable future for the Asean population, which has already reached 672 million.

“Malaysia is committed to achieving net zero carbon status by 2050, and various initiatives are being implemented, including the development of an environmental, social and governance framework for Malaysia’s manufacturing sector,” he said.

Source: Bernama

Asean carbon neutrality can unlock US$5.3 trillion economic opportunity

Content Type:


Chinese new energy vehicle (NEV) makers and battery manufacturers are eyeing overseas production to better explore markets, and South-East Asia sits atop the list of destinations.

Analysts said localised production will enable companies to launch products faster and to come up with products that better meet local demands.

Hozon said it is planning to produce its Neta-branded vehicles in Indonesia from 2024.

The Chinese electric vehicle (EV) startup partnered with PT Handal Indonesia Motor in late July. The two will start to assemble complete cars starting from the second quarter of 2024.

Hozon is showcasing three of its Neta-branded models at the Gaikindo Indonesia International Auto Show from Aug 10 to 20.

Hozon said it would like to introduce China-made smart vehicles into the Indonesian market, which has a population of more than 200 million people.

“We believe that Indonesia has great potential to accept electric cars as vehicles to support daily mobility activities because they are proven to be effective and environmentally friendly,” said Wang Chengjie, assistant president of Neta Auto and vice-president of Neta Overseas.

The carmaker started to explore overseas markets in 2022. Now its models are available in a number of countries, mainly South-East Asia, including Malaysia and Thailand.

Hozon has kicked off construction of a plant in Thailand, which has a annual production capacity of 20,000 vehicles and is due to start operating early next year.

The carmaker’s Neta-branded electric vehicles are popular in the country. Statistics show that Neta was the best-selling EV brand in Thailand in June, seizing a 28.9% share of the market.

Also in Thailand, China’s largest carmaker, SAIC, began construction of a new energy industrial park in May, which is expected to focus on localised production of key auto parts for the company’s new energy vehicles.

The Phase I construction of the park is estimated to be completed this year. Complete construction of the park will be finished in 2025, said the carmaker.

The new energy park, located in Chon Buri province, will cover 120,000 sq m and include standard workshops, a container yard, a logistics warehouse as well as drainage systems and a parking lot.

Several upstream NEV and component enterprises have expressed their intention to settle in the industrial park in the future, said SAIC.

China’s largest NEV maker BYD is expected to produce vehicles in Thailand from next year, which will be sold in the country and exported to markets in South-East Asia.

Its wholly-owned plant, designed with an annual capacity of 150,000 vehicles, will be the company’s first passenger vehicle manufacturing facility.

Liu Xueliang, general manager of BYD Asia-Pacific Auto Sales Division, said: “Thailand has a solid base in the automotive industry with first-class manufacturing capabilities so we chose to build a factory here after careful deliberation.”

EVE Energy, a China-based lithium battery manufacturer, held a groundbreaking ceremony last week for its manufacturing facility in Malaysia with an initial investment of US$422mil.

The company said the new manufacturing facility will focus on the production of cylindrical lithium-ion batteries to support power tools and electric two-wheelers manufactured in the country and across South-East Asia.

Joe Chen, a director at EVE Energy Malaysia, said by relying on EVE’s domestic advantages and operational experience the firm will build a cylindrical battery production base in the country.

“This is an important milestone for EVE to expand our global businesses, enhance our comprehensive competitiveness and to further grow our global market share. And most importantly, to let us contribute to the development of the electrical power ecosystem in Malaysia,” he said.

Meanwhile, Lim Bee Vian, deputy chief executive officer of the Malaysian Investment Development Agency, said that the investment marks a crucial milestone that not only benefits EVE but paves the way for more companies to invest in Malaysia in the electric vehicle industry and its ecosystems.

“By collaborating with industry leaders like EVE, we can foster an environment of innovation and technological advancement,” she said.

She added that the project aligns perfectly with Malaysia’s National Automotive Policy 2020 as the country is committed to achieving net-zero greenhouse gas emissions by 2050.

Source: China Daily/ANN

South-East Asia a hotspot for Chinese EV makers

Content Type:


In recent years, Asean, the regional grouping that forms the fifth-largest economy in the world, has become a compelling destination for foreign direct investments (FDIs). The region is a prime beneficiary of the China-plus-one strategy, in which multinational corporations are moving their supply chains away from China due to the intensifying geopolitical tensions with the US.

As new manufacturing plants, service centres and business offices are built or relocated to Asean countries, is now a good time for equity investors to put money in the region?

While fund managers have different views on the prospects of Asean, the consensus is that large amounts of FDIs are flowing into Southeast Asian countries, a structural trend that will continue in the years to come. Sectors that could benefit from such a trend include semiconductor, tourism, consumer, e-commerce, banking and commodities like nickel.

Pheim Asset Management Sdn Bhd founder and chief strategist Dr Tan Chong Koay says the region received significant FDI inflows last year. He cites the World Investment Report 2023, which states that US$223.307 billion in FDIs flowed into Asean in 2022 — the highest since 2010 and an increase of 27.44% from 2021.

The country that received the largest FDI inflows last year was Singapore (US$141.21 billion), followed by Indonesia (US$21.97 billion) and Malaysia (US$16.94 billion).

According to Tan’s findings, six Asean countries — Vietnam, Thailand, Malaysia, Singapore, Indonesia and the Philippines — saw FDI inflows of US$58.2 billion in the first quarter of this year (1Q2023). The top three recipients during that period were Singapore (US$29.5 billion), Indonesia (US$12 billion) and Vietnam (US$10 billion). Malaysia came in fourth with US$2.7 billion, slightly ahead of Thailand and the Philippines at US$2 billion each.

From a trade perspective, Asean is benefiting mostly from China, said Prof Kishore Mahbubani, distinguished fellow at the Asia Research Institute of the National University of Singapore, during the UOB Asset Management (UOBAM) Mid-year Outlook 2023 Forum held in Kuala Lumpur on July 5.

During the session titled “US-China crossfire: Emergence of China Plus One”, he said the trading value between Asean and China in 2022 amounted to US$975 billion, compared to US$40 billion in 2000. For comparison, the trading value between Asean and the US was US$440 billion last year and US$135 billion in 2000.

However, there is no denying that exports from Asean countries to Western markets, including the European Union (EU), have rapidly increased in recent years. Patrick Chang, chief investment officer for Asean equities at Principal Asset Management Bhd, cites Vietnam as an example.

“If you look at the share of US and EU electronic imports [from Vietnam], it was between 0% and 3% ten years ago. Today, you’re talking about over 30%. And that has accelerated from about 10% in the last five years.”

He adds that the positive investor sentiment on Asean has been partly reflected in the performance of the stock markets, evidenced by their outperformance against the Chinese and Hong Kong stock market indices in recent years.

As at June 30, the FTSE Asean USD Index’s three-year performance was up 9.73% while the Shanghai Shenzhen CSI 300 Index was down 3.54% and the Hang Seng Index had fallen 21.17%.

Clement Chew, CEO of Astute Fund Management Bhd (previously known as Apex Investment Services Bhd), says Asean is a stable region with a population of more than 500 million, about half of whom are below 30 years old. It is a vital source of young and relatively cheap labour for multinational corporations.

“Asean also has supportive policies, cost competitiveness, rising affluence and established manufacturing linkages. As a result, its share of global FDI rose to 13.7% in 2020 from 5.8% in 2015, led by investments in manufacturing such as electric vehicles (EVs), batteries and electronics. Asean has also overtaken the EU as China’s top trading partner,” he adds.

“At the same time, the US is buying more from Asean. Between 2018 and 2022, the share of US imports from Asean grew to 2% from 0.5%, particularly from countries such as Vietnam, Thailand and Indonesia.”

Fund managers favour technology hardware sector

Semiconductor and EV companies are generally favoured by fund managers as they are direct beneficiaries of the massive FDIs flowing into Asean.

“FDI inflows into the region in 2022 were mainly driven by strong investment in the manufacturing, services and technology sectors. Some companies that are seeking to diversify their supply chains away from China see Asean as an attractive destination,” says Pheim’s Tan.

“In Malaysia, sectors that have attracted the most FDIs include tech, manufacturing, mining and oil and gas. All this will benefit owners and operators of industrial land due to the potential increase in demand for industrial land and buildings,” he adds.

For example, Texas Instrument plans to invest up to RM9.6 billion to build two new assembly and test factories in Kuala Lumpur and Melaka, while Amazon Web Services plans to invest RM25.5 billion in Malaysia by 2037.

Principal’s Chang also favours local semiconductor companies, especially the recently listed ones that are moving up the global value chain. “My team likes some of the newly listed counters on the back of what some have called the ‘renaissance’ of the local semiconductor sector. Typically, we do the back-end semiconductor work.

“But what happened after the pandemic was that we realised that we have to move up the value chain. Some local companies started going up the value chain to do things such as the design [of integrated circuits], which are more value added. We like these companies as they are getting higher margins and so forth.”

Astute’s Chew says local investors are in a good position to invest in the technology hardware sector, including semiconductor companies, as many of them can be found in Malaysia. These companies are also part of the global supply chain of artificial intelligence-related multinational corporations.

According to a research report by a foreign bank, the greatest number of technology hardware companies in Asean are based in Malaysia, amounting to about 40 of them, says Chew. Another 15 to 20 of such public-listed companies can be found in other Asean countries.

The weighting of technology hardware stocks in Asia is expected to grow. “The estimated weighting of the technology hardware sector in Malaysia, Thailand, Singapore and the Philippines is about 5%, 7%, 2% and below 2% respectively. The sector weighting, as a percentage of the market capitalisation of the overall stock market in each country, has grown. In Malaysia, it has tripled in the last decade from about 1% to 2% ten years ago,” he says.

Chew favours EV battery parts and components and semiconductor companies in Malaysia, Indonesia and Thailand. In Vietnam, he says, investors can spot companies that are closely linked to the performance of Apple products. In Indonesia, they should keep an eye on nickel mining and smelting stocks, as nickel is an important raw material for the manufacturing of EV batteries, he adds.

However, more public-listed technology hardware companies could be found in other Asean countries moving forward, encouraged by the huge FDI inflows.

During the UOBAM Mid-year Outlook 2023 forum, Francis Eng, its chief investment officer, said: “We think there are a lot of opportunities in the manufacturing space, especially in the area of technology hardware. Closer to home, you only have to take a drive to Penang. It’s booming. There are a lot of businesses there that have grown quite significantly. We think it is an area where there are a lot of opportunities in Asean.

“Currently, most of the public-listed companies in this space are in Malaysia. But we think that as time goes on, because of more FDIs flowing into the region, this will change.”

Other countries and sectors

Besides technology hardware companies, Eng favours the consumer sector, especially in Vietnam and Indonesia. Both countries, he said, are experiencing a rise in their GDP per capita.

“The ratio is reaching a threshold where their disposable income will start to go up and accelerate much faster moving forward. That provides us with a lot of opportunities in the consumer space,” he said at the conference.

Principal’s Chang favours the tourism sector in Thailand, which could benefit from the influx of Chinese tourists following the reopening of its economy.

“We like Thailand’s tourism sector as it accounts for about 15% of its economy. There are also a few industrial estate plays in the country.”

Vietnam is a “classic play” on FDI, he adds. Unfortunately, investors find it hard to invest directly in certain sectors in the country, such as industrial real estate, due to the rules and regulations. But they can buy companies that are proxies to the nation’s growing wealth and economic boom.

“For instance, we believe the Vietnamese stock market can only go up in the future. So, we can talk about stockbroking companies in the country,” he says.

Unsurprisingly, banking stocks are Chang’s favourites when it comes to investing in Singapore. “A lot of money is coming out from China and Hong Kong due to geopolitical risk and into Singapore. You just have to track the number of family offices that were set up recently in Singapore. It is at a record high,” he points out.

In Indonesia, Chang favours companies in the digital economy that are benefiting from the country’s large population, increasing spending power and rising number of smartphone users. These companies may not be making a profit at the moment but their prospects seem bright and he is willing to buy into them at the right price.

“Everybody argues that a lot of these e-commerce [companies] don’t make money. But the statistics, which I was quite interested in, based on a report published by UBS two years ago, was that the total addressable market for the digital economy in Southeast Asia was going to rise from US$220 billion in 2018 to about US$660 billion in the years to come,” he says.

“So, you just imagine. Our e-commerce penetration rate is a shade off the US, EU and China. What happens there can happen in this region. I think previous valuations were not real. But the reality is that valuations are more real now to reflect its long-term potential, which the investors will start to focus on.

“The Grabs of this world [are worth looking at]. I’m not going to mention all the names. But you know they are e-hailing companies and e-commerce companies. Not just in Indonesia, these companies in Thailand, the Philippines and Vietnam will continue to survive. I think this is where the excitement is. We want to build a portfolio with them because these are beneficiaries of the long-term structural trends.”

Not everyone is bullish

For Chang, now is the best time for investors to invest in Asean as it is at the start of a boom cycle. “It is a very under-rated boom happening in Asean.”

The region has always been overshadowed by North Asian markets such as China, South Korea and Taiwan that house some of the larger and more advanced e-commerce and semiconductor companies. But this dynamic is changing, he says.

However, other fund managers have a more cautious view on Asean despite the impressive FDI inflows. Astute’s Chew, for example, says the firm has holdings in Asean, but is not overweight on the region from an asset allocation perspective.

The main concerns are interest rate movements in the US and the further strengthening of the greenback. Emerging markets such as Asean do not do well when the US dollar is strong.

Chew says foreign investors who invested in Asean in the last three months (as of July 10) would have suffered currency losses, as the rupiah, Singapore dollar, Philippine peso, baht and ringgit weakened against the US dollar by 0.6%, 1.4%, 2.2%, 2.7% and 5.3% respectively.

“A strong US dollar has almost always been associated with weaker Asean equities. Asean’s interest rate differential with the US may widen further as the US Federal Reserve is expected to raise rates by up to 50 basis points in the second half of this year before it pauses. This will likely result in net outflows from Asean equity markets. Certain currencies like the ringgit and baht may be weighed down by a weaker yuan too.”

Citing a US bank research report, Chew says there have been nine occasions since 2008 when the US dollar appreciated by more than 5%. On all occasions, the returns from investing in Asean were negative. In contrast, a weaker greenback was partly the reason why the Asean Index peaked in 2013.

Back then, the US Dollar Index (DXY) was around 83. However, it has strengthened since last year. As at mid-July, the DXY was at 102, which is not good news for Asean equities.

It also does not help that many foreign investors perceive Asean to be populated by old economy stocks.

“Moving forward, North Asian markets are likely to continue overshadowing Asean due to their size, liquidity, growth opportunities and larger exposure to technology stocks. We observed that apart from a brief period in 2013, Asean has rarely outperformed Asia ex-Japan in the last 10 years,” says Chew.

Still, he says the advantage of Asean is that investors can find listed companies that are exposed to global tech players. “It is about valuations and being invested at the right stage of the cycle.”

Meanwhile, Pheim’s Tan points out that the Taiwan Stock Exchange Weighted Index recorded a return of 17.2% at end-June, while South Korea’s Kospi returned 12.28%. In contrast, the MSCI All Country Asean USD Index fell 3.89%.

“The Taiwan and South Korean markets are benefiting from the positive sentiment in the tech sector. However, we see the prospect of the Asean markets improving, benefiting from the better economic growth these markets are expected to achieve in 2023 and 2024. Hence, we see room for increased allocation to Asean,” he says.

Source: The Edge Malaysia

Asean becoming a compelling investment destination

Content Type:


South-east Asia’s economic prospects continue to stand out in a world faced with high inflation and soft demand, according to Nikkei Asia.

According to Vietnam news agency (VNA), an article published by the Tokyo-based newspaper on July 25 cited HSBC forecast that the six largest economies in South-east Asia ― Indonesia, Thailand, Malaysia, the Philippines, Singapore, and Vietnam ― will grow 4.2 per cent this year and 4.8 per cent next year,

This pace would far outstrip the 1.1 per cent expansion expected in the developed world in 2023 or next year’s estimated 0.7 per cent.

This acceleration is all the more remarkable given that inflows of Chinese tourism money have not returned to South-east Asia as anticipated.

A recovery in tourism would certainly be a welcome boon for South-east Asia. But meanwhile, trade, the transition to net zero, and digital transformation are set to power the region’s economic growth for decades to come and ensure that this dynamic region remains a global growth engine.

The article also noted that South-east Asia has come a long way as a manufacturing dynamo. It now accounts for 8 per cent of the global exports and, since 2020, has surpassed the European Union as China’s largest trading partner.

The region is benefiting from a restructuring of global supply chains as it sits at the crossroads of two of the world’s largest free trade agreements, the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), VNA reported.

According to a recent HSBC survey, Asia-Pacific companies plan to base 24.4 per cent of their supply chains in South-east Asia over the next one to two years, up from 21.4 per cent as of 2020.

As more companies diversify and adopt a “China+1” production strategy, South-east Asia will continue to gain market share. More global foreign direct investment will be directed toward the region as the centre of gravity of global manufacturing continues to shift.

The transition to net zero is a second structural trend that is bringing tremendous opportunities as South-east Asia races to “green its grid”, the article noted.

Most of the energy powering South-east Asia comes from fossil fuels, so it is encouraging that Indonesia and Vietnam ― two of the region’s most dynamic economies as well as two of the world’s top coal-burning countries ― have each announced Just Energy Transition Partnerships with the Group of Seven and other developed nations.

Under this new funding model, tens of billions of dollars in public and private finance will be mobilised, catalysing the decarbonisation of the two countries’ power sectors and facilitating their clean energy transition.

The third long-term source of optimism about South-east Asia is the digital transformation of the region’s economy, it added.

South-east Asia already has a vibrant digital economy, which was worth nearly US$200 billion (RM911 billion) as of last year and is expected to surpass US$300 billion in size by 2025. Add in an internet-connected population of 460 million, and it is evident why companies are transforming their business models to cater to changing customer behaviour.

As an economic engine with favourable demographics, South-east Asia is well positioned to capture the opportunities stemming from these long-term trends, the article read.

Source: Bernama

Report: South-east Asia’s economic outlook brightening

Content Type:


Asia’s fast-growing economies with significant scope for economic development catch-up has led Nomura Group to say it is now “Asia’s time to shine”.

The Japan-based banking group said a confluence of global push and regional pull factors are aligning, which could shine a positive light on Asia’s medium-term outlook.

As prospects of subdued global growth and policy rate hiking cycles are ending globally, investors are likely to start looking for new opportunities and place a larger value on sound economic fundamentals as well as sustained growth.

“We believe Asia fits the bill as it has stronger economic fundamentals, pro-reform governments that are actively seeking to improve the domestic business climate, and many new, exciting growth opportunities,” said Nomura Group.

It added since the Covid-19 pandemic, investors have remained underinvested in Asia but, as market repricing shines a positive light on Asia, Nomura expects this to change, and the region to attract more capital inflows.

This is in line with its rising weight in the world economy.

Nomura has identified 10 investment themes for the Asia story, such as supply chain relocation tailwinds, infrastructure development on fast track, Japan’s economic and green opportunities in China.

It added Asia is no longer under the impression that China’s economy is plagued with structural problems and geopolitical headwinds and that its growth will be modest over the medium term.

Instead, China’s economy will continue to be a juggernaut in terms of scale, providing more than one-fourth of global growth.

“Even with a slowing China, our medium-term forecasts from 2024 to 2028 have real gross domestic product growth for Asia with 4.2% year-on-year (y-o-y) outperforming other emerging markets (EMs),” it said.

The group believes India and South-East Asia are likely to be the fastest-growing economies this decade instead of China.

Nomura beliefs India and Asean stand to benefit from shifts in the global supply chains while public infrastructure expenditure is now a top priority in EM Asia.

India will be able to maintain its services-driven growth model thanks to digitalisation.

China, meanwhile, despite its structural difficulties, is the world leader in the production of renewable energy, new energy vehicles and lithium batteries.

Indonesia has made progress in going downstream of its metal ores which is likely to gain more traction.

Further, artificial intelligence-driven technology is creating opportunities for component manufacturers in South Korea and localisation beneficiaries in China.

Japan’s economic recovery is also likely to gain from the tectonic shift in its companies’ price-setting behaviour.

“As market repricing shines a positive light on Asia, we expect this to change, with recognition that Asia is well on its way to reassessing the weight in the global economy that, on the basis of its population, it held in the 18th century,” said Nomura group.

The group added by saying that faster growth should attract more capital inflows, lift business confidence and drive domestic investment, known as the so-called accelerator effect.

Despite all the risks such as geopolitical fragmentation, climate change, politics and fiscal execution in EM Asia, Nomura Group believes global investors will soon start to appreciate Asia’s superior risk-adjustment returns.

Source: The Star

Bright prospects for Asia

Content Type:


ASEAN countries have agreed to build an electric vehicle (EV) ecosystem and become an important part of the world supply chain, with the downstream industry playing a crucial role in this plan, according to President Joko Widodo (Jokowi).

“ASEAN has agreed to build an electric car ecosystem and become an important part of the world supply chain. The downstream industry is key to realizing this,” he stated during a press conference of the 42nd ASEAN Summit in Labuan Bajo, East Nusa Tenggara (NTT), on Thursday.

The downstream industry involves the processing of raw materials as an effort to offer greater added value to the market.

He remarked that the summit adopted the Regional Electric Vehicle Ecosystem Development Declaration, with tasks the ASEAN Economic Community Council with overseeing its implementation.

In the declaration, the leaders stated that ASEAN is committed to building a regional electric vehicle ecosystem that involves all member countries.

All ASEAN member countries also support the adoption of the electric vehicle agenda and the development of the electric vehicle industry in ASEAN countries.

Furthermore, the leaders are committed to building ASEAN as a global production hub for the electric vehicle industry to support the region’s sustainable economic growth.

This step was taken by considering the policies of ASEAN member countries in utilizing comparative advantage.

Earlier, Jokowi noted that the estimated market for electric vehicles in Indonesia would reach US$2.7 billion in 2027.

With 23 percent of the world’s nickel reserves, Indonesia is developing an electric vehicle industry ecosystem from upstream to downstream, he added.

He aims to achieve a production of 600 thousand electric cars and 2.45 million electric motorcycles per year in 2030, with a total reduction of 3.8 million tons of carbon dioxide emissions.

The 42nd ASEAN Summit will address four priorities for cooperation: strengthening the health architecture, enhancing food security by ensuring smooth supply chains and trade facilities, boosting energy security including developing the electric vehicle ecosystem, and reinforcing financial stability to manage external shocks.

Source: Antara

ASEAN agrees to build electric vehicle ecosystem: Jokowi

Content Type:


IN a post-pandemic world, perhaps the question that springs to mind in the business community is whether the current geopolitical and economic upheaval will usher in a new era of progress.

Corporate leaders are expected to address a plethora of risks while looking for opportunities in a digitally disrupted economy and amid geopolitical uncertainties. Striking a balance in all these areas, however, may not be as easy as it seems, says Sven Smit, senior partner and chairman of McKinsey Global Institute, the business and economics research arm of the global consulting firm.

He notes that there is a fundamental difference between the global crises of today and those that happened in the past three decades.

“In the last 30 years, the market was dominated by the force of the dotcom boom, the Asian financial crisis and the Covid-19 pandemic. These problems disrupted the demand cycle, where we just stopped spending. However, we managed to see a return in our optimism and grew again. The world typically loses one or two quarters,” Smit tells The Edge in an interview.

“But the next challenge looks different … It has created a supply shortage. We have a very different dynamic now.”

Today, the world sees a combination of supply shortage and geopolitical tensions that has resulted in inflation and the spectre of inflationary recession, he says.

“CEOs didn’t need to have this in mind 20 years ago. You order and somebody will ship at a reasonable price. But now you need to think about where your supply chain is from. Today, we face a supply-side crisis, inherently physical rather than psychological, against a backdrop of a shifting geopolitical landscape in which the crisis needs to be resolved,” says Smit.

It is against this backdrop that McKinsey published its discussion paper titled “On the cusp of a new era?” that extensively discusses the future of global trends, particularly geopolitical orders.

In the paper, McKinsey says the once-familiar unipolar and settled world order is fast becoming multipolar in recent times, particularly among economic superpower countries such as the US, China, India, the UK, Europe, Russia and Ukraine.

“In February 2022, China’s rise as an economic power reached a crossroads as its gross domestic product (GDP) overtook that of the European Union; at the end of March 2022, India [overtook] the UK to become the world’s fifth-largest economy by GDP.

“At the same time, peace in Europe — along with the global economy — was rocked by Russia’s invasion of Ukraine. Western-led condemnation was swift, but China, India and 33 other states abstained from a UN resolution to condemn Russia,” the report states.

Smit says besides economic competition, years of political differences may give way to more political polarisation, both internally and between blocs, affecting cross-border businesses.

“Internationally, a persistent gap separates liberal democracies and some more autocratic regimes. All this occurred against a backdrop of increasing strain between people and institutions, particularly in the West.

“Citizens’ protests are on the rise. Liberal democracy faces not only increasing internal tensions but also opposition from rising powers with alternative ideologies,” the report states, adding that an increasingly multipolar global economy is likely to change the way the world conducts international business.

McKinsey notes that at one end of the spectrum, there could be a gradual transition to a multipolar order, where blocs develop autonomous control over limited, strategically important resources and capabilities — such as energy systems and semiconductor manufacturing — while global collaboration continues more generally.

At the other end, there could be a more abrupt transition with much more limited collaboration between blocs across all dimensions, combined with heightened geopolitical tensions.

Smit says, however, that global institutions could play a powerful and pivotal role in managing an orderly transition.

“The hard work for us is to find and maintain collaboration that is to the benefit of all, while we also navigate the geo-competition that takes place. I do know that, somewhere, materials need to flow across the world if we want this world to work.

“If that fails, global institutions could be sidelined by international blocs while, domestically, shortsighted decision-making leads to a misallocation of resources, exacerbating the strain on society,” he says.

Technology may move to the forefront of geopolitical competition, power

Technology is permeating virtually every sector of the economy, determining competitive dynamics. As geopolitics shift in unpredictable and potentially challenging ways, strategic autonomy on critical technologies are becoming an ever more salient topic, says McKinsey.

“A race for artificial intelligence primacy between major powers is under way, with many recently questioning the belief that the US leads its peers in AI capabilities.

“There is competition for influence in global standard-setting bodies; consider, for example, China’s ambition to take a more leading role through the China Standards 2035 strategy, ” it states.

Smit says, however, AI technologies will present both opportunities and challenges to the nature of society and work, the balance between digital and physical domains, the financial system, and the interplay between humans and machines.

On how technology, institutions and geopolitics interact, Smit says depending on the choices made, a smooth transition to an AI-augmented world could be engineered, or technology could fracture the social order. “Potential future paths range from healthy competition between powers under a broad framework of shared standards and breakthroughs to a decoupled world with a concentration of technological power held within blocs.” 

Source: The Edge Markets

Business community to prepare for ‘multipolar’ world economy, says McKinsey

Content Type:


Association of Southeast Asian Nations (ASEAN) economies must strengthen their positions in global value chains to bolster resilience against new challenges, including future pandemics, geopolitical instability, and climate change, says an Asian Development Bank (ADB) report released on Thursday.

The report ASEAN and Global Value Chains: Locking in Resilience and Sustainability surveys the challenges and opportunities facing global value chains in Southeast Asia as countries seek to build greater resilience and promote sustainability and green development, according to Xinhua.

“As ASEAN countries continue their recovery from COVID-19, we must ensure that economic revitalisation happens in a greener and more sustainable way,” ADB President Masatsugu Asakawa said. According to him, the report proposes concrete measures that governments and businesses can take to decarbonise global value chains.

“Investments in renewable energy and improved efficiency, incentives to reduce trading costs for climate-smart goods, and the acceleration of digitalisation can all contribute to greener and more sustainable value chains in ASEAN and beyond,” he added.

The report finds that global value chains proved more resilient to the impacts of COVID-19 than expected, even as firms had to adjust to the disruption, given their dependence on only a few suppliers for essential inputs and goods. As such, the region needs to build stronger resilience in its global value chain segments while expanding trade, investment, and regional integration.

The report also finds that the competitive advantage of employing low-skilled labour diminishes as new technology upgrades global value chains. Therefore, the region must create a critical mass of workers with the latest technology and technological skills.

It adds that ASEAN economies need to go “green”. They should accelerate trade digitalisation and promote climate-smart trade, green transport infrastructure, and carbon pricing. The best case is that policies promoting decarbonisation strengthen ASEAN’s global value chains.

The report notes that the stakes are high for ASEAN economies. Recent global shocks and geopolitical trade protectionism could disrupt growth in ASEAN and elsewhere. It explores the sizable policy impact and benefits of deepening Asia’s trade cooperation and expanding it to include other regions.

The ADB launched the report on the sidelines of the Southeast Asia Development Symposium (SEADS) in Bali, Indonesia. SEADS, ADB’s annual flagship knowledge event in Southeast Asia, gathers leaders from government, industry, academia, and other sectors to explore innovative solutions to critical issues such as climate change and technology development.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Source: Bernama

Asean must act to strengthen position in global value chains: ADB report

Content Type:


Asia’s manufacturers are improving at the start of the year as the region becomes more optimistic about the boost from China’s reopening, while activity in the euro area shows the downturn is softening as cost pressures ease. 

Factories in South-East Asia (SE Asia) ramped up production and purchasing in January as new orders piled in, data from S&P Global manufacturing Purchasing Managers’ Indexes (PMI) showed on Jan 1. Signs that prices are softening and supply chain disruptions are easing also lifted business confidence for factory output over the next 12 months. 

The gauge for the eurozone improved for the third consecutive month, rising to 48.8 from 47.8 in December. Numbers were on an upward trend across the region. 

The reading for French factories went above 50 for the first time since August, while Italy reversed six months of negative readings. The manufacturing slump in Germany continued for a seventh month, however, although the reading of 47.3 was an unexpected improvement from 47.1 in December. 

The energy market in Europe has stabilised, thanks in part to mild weather and state subsidies, and supply-chain constraints have eased significantly, according to S&P Global Market Intelligence chief business economist Chris Williamson. Business optimism about the year ahead has also surged higher. 

“Although euro-area manufacturers continued to report falling output and deteriorating orderbooks in January, sustaining the sector’s downturn for an eighth successive month, the picture is considerably brighter than the lows seen back in last October,” he said. 

Thailand led SE Asia with a January PMI reading of 54.5 — a jump from 52.5 the prior month. The Philippines and Indonesia also posted readings above 50, the threshold separating expansion from contraction. 

Other countries in the region remained in negative territory last month, but most saw manufacturing conditions improve. Malaysia was the only country in the region where conditions worsened as PMI fell to a 17-month low of 46.5. 

“With supply-side pressures easing, and inflation rates below their post-pandemic averages, this could support further improvements in business conditions in the months ahead,” S&P Global Market Intelligence economist Maryam Baluch said of SE Asia’s performance. “It’s vital that demand conditions continue to recover and are able to support growth momentum into the rest of 2023.” 

Activity in North Asia, however, was more mixed. South Korea’s manufacturing PMI improved slightly to 48.5 from December’s 48.2, although still below 50. Japan was steady at 48.9, the same as the previous month. 

Surveys for both countries, though, suggested that factories were increasing employment in anticipation of improving global economic conditions that would spur new business. That was better than the outlook in Taiwan, where the PMI slump deepened to 44.3 from 44.6. Manufacturers there held a sombre outlook, trimming their buying activity and inventory. 

The data provide a sharper view of how the global demand outlook is impacting some of the world’s most critical trade engines. 

The International Monetary Fund reiterated last week that tight monetary policy among central banks and Russia’s invasion of Ukraine will continue to weigh on economic activity through the year. 

The Washington-based institution still upgraded its global growth forecast slightly, though, in part on optimism that China’s reopening will buttress demand. The emergence of the world’s second-largest economy from its strict Covid Zero strategy last year has also raised hopes in Asia that the region’s biggest trading partner will soon generate more demand for goods. 

“If the message from Jan 31’s strong official PMIs was that China has started a brisk recovery, the message from Feb 1’s Caixin report is that a significant swath of the economy continues to struggle,” said Bloomberg Economics Chang Shu. “To be sure, the rise in the Caixin manufacturing gauge in January reinforces our view that conditions are on the mend. But a reading still below 50 in contractionary territory suggests exporters and small companies are lagging in the recovery.” 

Data in China showed some signs of a pickup last month, though the week-long Chinese New Year holiday likely weighed on factory activity since many workers went home to celebrate the period with their families. Covid’s spread through the country also sickened some workers. 

A private survey of factory activity on Feb 1 showed the sector had yet to recover, though the fall in output and new orders moderated. The Caixin Manufacturing Index — which covers mainly smaller and export-oriented businesses — inched up to 49.2 in January from 49 the month before. The official PMI, which covers larger and state-owned firms, showed a slight expansion earlier last week.

Source: Bloomberg

Factories in SE Asia are firing up as China reopens

Content Type:


Strengthening the connectivity between the European Union (EU) and the Association of South-East Asian Nations (Asean) and deepening the bilateral economic ties will be one of the priorities of the 27-member union this year, according to EU Ambassador to Asean Igor Driesmans.

The diplomat said that the signing of the EU-Asean comprehensive air transport agreement, the first ever region-to-region aviation agreement in 2022, will boost to air connectivity between the 37 countries involved.

The EU wants to invest more in the region, Vietnam news agency (VNA) reported him said, adding that leaders of the union have announced 10 billion EUR (US$10.88 billion) in investment in Southeast Asia in the next couple of years through the “Global Gateway” sustainable investments in the region that aimed to address some of Asean’s big connectivity needs and build on some of the successes in that respect of our previous cooperation.

He noted that the EU has already signed free trade agreements (FTA) with Singapore and Vietnam. The union will open negotiations for FTAs with other Asean countries, while resuming FTA negotiations with Indonesia, Malaysia, Philippines and Thailand.

Driesmans said that the EU’s second priority is to develop a joint green and sustainable agenda with the region, which is a top priority for the EU and for its partnership with Asean.

He said that the union is rolling out the EU Green Deal to make the EU circular, carbon neutral economy by 2050. Therefore, it need to partner with Asean to make that a reality because due to rapid growth, Asean as the entire region is increasingly a CO2 emitter.

“The EU has been developing quite a few cooperation projects and programmes with Asean, for example, to support Smart Green cities to improve biodiversity to manage peatlands more sustainably.

“So we will want to scale up that ambition, do much more in terms of cooperation, and add a political dimension to our work. And we look forward to work with Indonesia to hold the first ever EU-ASEAN environmental ministerial meeting,” he noted.

He said a EU-Asean dialogue on energy will also be held this year.

The diplomat said that the third priority is security partnership as there’s a number of security issues in both of our regions, especially Myanmar in Southeast Asia, and Ukraine in Europe.

VNA reported that the EU also hopes to work with Asean to ensure free and open maritime supply routes in the East Sea in full compliance with international law, in particular the 1982 UN Convention on the Law of the Sea (UNCLOS), he said, pledging that the union will also support the negotiations for a Code of Conduct on the East Sea (COC).

The ambassador also underlined other priorities of the EU in promoting Indo-Pacific partnership, and ensuring a safe, prosperous Asean.

“The EU hopes for stronger and even stronger partnership building on the momentum of the EU-Asean Summit in Dec,” he added.

Source: Bernama

EU to focus on deepening economic ties with Asean, says its ambassador in Hanoi

Content Type:


Taiwan-China cross-strait tensions and governments’ focus on greater control of advanced chips will reshape global semiconductor supply chains in the long term, according to Moody’s Investors Service in a new report.

In a statement on Wednesday (Jan 18), the global credit rating firm said geographic diversification of semiconductor production and investment would be credit negative for the Taiwanese government and chipmakers.

It said rising geopolitical pressure would have a limited immediate effect on semiconductor supply chains but would lead to geographic diversification of the production capacity and investments of Taiwanese semiconductor companies.

“Given the substantial investments required and the potential economic concerns for Taiwan, if it were to move a large portion of high-end manufacturing capacity offshore, we do not expect this process to happen swiftly.

“Still, any disruption to the supply of semiconductors from Taiwan will have effects beyond Asia-Pacific,” managing director Michael Taylor said in a statement on Wednesday (Jan 18).

He said China’s reliance on semiconductor imports is unlikely to diminish over the medium term, given the constraints on its advanced chip production.

However, Taylor said the semiconductor supply chain in China has become increasingly vulnerable to geopolitical disruptions.

“More restrictions on access to manufacturing equipment for advanced chips will slow the progress of China’s plans for semiconductor self-sufficiency; as a result, the country will remain reliant on semiconductor imports.

“We expect cross-strait tensions to remain heightened, with an increased risk of disruption to the supply of semiconductors manufactured in Taiwan,” he added.

Source: Bernama

Moody’s: China-Taiwan cross-straits tension will gradually reshape semiconductor supply chain

Content Type:


The economic growth outlook for Asia Pacific (APAC) in 2023 is expected to be robust despite global risks, said Moody’s Investors Service.

The rating agency said APAC economies would be confronting a dynamic set of hurdles and support drivers.

“Growth will be lower than in 2022, but close to potential in most cases, underpinning broad credit stability.

“While growth in the region will slow after rebounding from the pandemic, it will remain strong compared with other regions,” it said in a note today.

Easing the last remaining pandemic-related border restrictions on leisure travellers and ongoing domestic reopening will sustain services-sector recoveries and catch-up consumption across the region, supporting key sources of employment, said Moody’s.

“Inflation will remain above recent averages as commodity prices stay elevated and output gaps close, but the most acute pressures will subside in many economies,” it said.

Moody’s said weaker export demand from the United States and European Union would drag on growth momentum for export-oriented economies such as China, Japan (A1 stable), South Korea (Aa2 stable), Malaysia (A3 Stable), Taiwan, China (Aa3 stable), Thailand and Vietnam (Ba2 stable).

It added that the Group of 20 (G20) leading advanced and emerging economies are expected to expand at 1.3 per cent in aggregate in 2023, down from its August 2022 forecast of 2.1 per cent, driven by high inflation.

In addition, China’s outlook would shape regional momentum given uncertainty about the economic impact of its relaxed COVID-19 policies and the potential for more protracted stress in the property sector.

Meanwhile, tighter financial conditions would hurt debt affordability for some, even as easing inflation slows the pace of rate rises, said Moody’s.

It said most central banks in APAC have not tightened policy as quickly as the US Federal Reserve and European Central Bank because of weaker demand-side inflation, and more significant fiscal steps to curb inflation such as fuel subsidies, consumption tax cuts and suspension of electricity tariffs.

“Negative credit effects will also be less pronounced for frontier and emerging markets with a significant degree of concessional financing, including Bangladesh (Ba3 review for downgrade) and Fiji.

“This includes those with deep domestic funding such as India, Malaysia and Thailand, where large institutional investor bases and banking systems have helped to anchor debt affordability,” it said.

Moody’s said debt burdens would continue to rise or stabilise at higher levels in countries such as India and Malaysia.

On currency, it said all emerging markets have foreign-exchange reserves that could cover more than three months of imports, although Bangladesh, Cambodia (B2 negative), Malaysia and Vietnam are positioned closer to that threshold.

It said China’s renminbi depreciation could competitively disadvantage other exporters such as South Korea, Malaysia, Thailand and Vietnam.

Source: Bernama

Asia Pacific region’s economic growth to stay robust despite global risks – Moody’s

Content Type:


The Asia-Pacific region is set to remain the world’s fastest-growing region despite ongoing stressors exacerbated by the Russia-Ukraine conflict and global financial volatility, according to Knight Frank’s latest report, Asia-Pacific Outlook Report 2023: Pivoting Towards Opportunities.

The report said even as growth momentum continues to normalise across much of the region, domestic-oriented economies such as emerging Southeast Asia and India are forecast to remain supportive of overall regional growth in the upcoming year.

Asia Pacific head of research Christine Li said with much of the known risks largely priced in and likely to have overshot on current negativity, there remains scope for fundamentals to surprise on the upside, underpinned by the marginal easing of zero-COVID strategy and the lower-than-expected terminal interest rates.

Chinese authorities have currently lowered the duration of quarantine for inbound travellers, a step in the right direction that could set the tone for more calibration and an eventual exit in 2023/2024.

“We can afford to be sanguine given that nascent signs of inflation peaking have crept into the Federal Reserve’s data watch. While it remains to be seen if these can be sustained, the prevailing macroeconomic and policy uncertainties, once rolled back, will narrow bid-ask gaps and pave the way for higher investment activity,” she said.

At a sector level, the report predicts that the market conditions in 2023 will continue to favour tenants as high-amenities office buildings with sustainable credits are being completed and ready for occupancy.

Rents in the logistics sector are forecast to increase by 5.5 per cent, while office rents will rise by 2 per cent across the region.

Overall, real estate offers good diversification benefits with a relatively low correlation to equities and bonds.

Therefore, risk-adjusted returns for direct real estate are unlikely to re-price to the same extent as indirect, it said.

Meanwhile, Knight Frank Malaysia group managing director Sarkunan Subramaniam said the global macroeconomic headwinds will impact upon Malaysian markets.

“However, we are still hopeful that the newly-elected unity government will be able to outline clear and consistent policies in driving economic investments into our country, and encourage all direct measures to revitalise and sustain the growth of the property sector.

“Malaysia needs to bring back investors’ trust and faith in our economic growth, in order to see recovery across all sectors,” he said.

The independent global property consultancy firm also hoped the government will introduce green incentives to property buyers, landlords and developers who are aligned with the nation’s target of becoming a net zero nation by 2050.

It added that it encourages an extension of existing incentives to incorporate tax reliefs or grants to industry players who include green features into their developments, especially renewable energy like solar panels and water harvesting as well as sustainably-built properties from timber and low-carbon cement in place of high-emission materials.

Source: Bernama

Knight Frank report: Asia-Pacific to remain world’s fastest growing despite ongoing challenges

Content Type:


The worldwide semiconductor industry is projected to invest more than US$500bil in 84 volume chipmaking facilities starting construction from 2021 to 2023, SEMI announced in its latest quarterly World Fab Forecast report.

The projected growth in global factory count includes a record high 33 new semiconductor manufacturing facilities starting construction this year and 28 more in 2023.

“The latest SEMI World Fab Forecast update reflects the increasing strategic importance of semiconductors to countries and a wide array of industries worldwide,” SEMI president and CEO Ajit Manocha said in a statement.

“The report underscores the significant impact of government incentives in expanding production capacity and strengthening supply chains. With the bullish long-term outlook for the industry, rising investments in semiconductor manufacturing are critical to laying the groundwork for secular growth driven by a diverse range of emerging applications.”

In the Americas, the U.S. Chips and Science Act has vaulted the region into the lead worldwide in new capital spending as the government investment spawns new chipmaking facilities and supporting supplier ecosystems.

From 2021 through next year, the Americas is forecast to start construction on 18 new facilities.

SEMI said China is expected to outnumber all other regions in new chip manufacturing facilities, with 20 supporting mature technologies planned.

“Propelled by the European Chips Act, Europe/Mideast investment in new semiconductor facilities is expected to reach a historic high for the region, with 17 new fabs starting construction between 2021 and 2023,” it said.

Meanwhile, Taiwan is expected to start construction on 14 new facilities, while Japan and Southeast Asia are each projected to begin building six new facilities over the forecast period. South Korea is forecast to start construction on three large facilities.

Source: The Star

Global chip industry projected to invest more than US$500bil in new factories by 2024

Content Type:


The recovery in Asean compares favourably to the 30% average growth in developing economies, UNCTAD reports

INFLOWS of foreign direct investment (FDI) in Asean increased by 42% in 2021 to US$174 billion (RM765.6 billion), returning to pre-pandemic record levels, according to the latest Asean Investment Report 2022.

The report published by The Asean Secretariat and the United Nations Conference on Trade and Development (UNCTAD) said the rebound underscores the resilience of the region, which has been battered by successive waves of the pandemic. 

“The recovery in Asean compares favourably with the 30% average growth in developing economies. 

“Six member states recorded a rise in inflows and in two, inflows remained flat. 

“This contrasted with the situation in 2020 when only two member states recorded a rise,” it added. 

The report also highlighted that Asean remained a top recipient of FDI in developing regions, second after China in 2021, and continued to be an engine of growth. 

It said the region’s share of global FDI inflows rose from a pre-pandemic annual average of 7% in 2011-2017, to 11% in 2018-2019, and to 12% in 2020-2021. Strong inflows pushed up FDI stock in the region to US$3.1 trillion, an increase of 72% from 2015 (US$1.8 trillion). 

Robust Upturn 

According to the report, several factors led to the robust upturn namely, rising investment across different modalities; a strong rebound in manufacturing; corporate investment strategies focusing on capacity expansion to bolster supply chains and for the post-pandemic recovery; significant investment from key source countries and; investment in infrastructure-related activities, including in the digital economy. 

“Announced greenfield investment project numbers rose by 12%, with most investment in manufacturing and infrastructure-related activities. 

“Three industries (electronics and electrical equipment, energy and gas supply and information and communication) accounted for 68% of announced greenfield investment values in 2021. 

“Cross-border mergers and acquisitions declined in number but rose significantly in value, from -US$4.7 billion in 2020 to almost US$50 billion because of a few megadeals, including the US$34 billion special purpose acquisition company established by Grab (Singapore) and Altimeter Growth (the US). 

“Announced international project finance values increased from US$66 billion to US$114 billion, with the largest increase in renewable energy, followed by industrial estates. 

“These two industries accounted for 75% of international project finance activities in 

2021. The number of international project finance deals rose by 18% to 134,” it noted. 

Apart from that, the report also said a broad-based rise in FDI in manufacturing played a key role in 2021. It pointed out that strong investment in manufacturing, finance and some services industries associated with the rapidly growing digital economy and Industry 4.0 activities were the main industry drivers. 

Investment in manufacturing recorded the strongest growth (134%), to US$45 billion, in industries such as electric vehicles (EVs), electronics, biomedical and pharmaceuticals. 

Finance and banking remained the largest FDI recipient industry with 22% growth, to US$57 billion, underpinned by Asean and foreign banks picking up investment and multinational enterprises in banking resuming their regional expansion plans. 

The active fintech industry in the region was another contributory factor. The strong digital economy helped attract rising investment in data centres and in information and communication activities. 


Meanwhile, robust investment in semiconductors, electronics and EVs were significant drivers of the rise in manufacturing FDI, the report noted. 

It said the announced greenfield investment in electronics and electrical equipment quadrupled to US$33 billion in 2021, increasing the share of these two industries in the total value to 52%, from 12.4% in 2020. 

On top of that, the report also said investment in all FDI components — equity, intracompany loans and reinvested earnings — rose. 

“New equity investment was prominent, suggesting new investment interest or further injection of capital into expanding existing operations,” it added. 

On future prospects, the report noted that it is expected that Asean will continue to receive a high level of FDI flows following the significant rebound. 

However, it said potential new waves of the pandemic, inflationary pressures and a weakening global economy will put downward pressure on both global and regional FDI. 

It added that other developments on the global stage in 2022, such as the Ukraine war, food-fuel-finance crises, recession fears could also dampen the growth momentum. 

Nevertheless, the report said despite the worsening outlook for global FDI, several factors will support continued growth in Asean, including vibrant industrial development, regional integration momentum, growing numbers of middle-income consumers and a consistent policy push. 

“The interaction of internal (such as regional integration, market attraction) and external factors (such as adjustment or strengthening supply chain capacity and regional corporate expansion strategies) favourable to the region will help sustain a high level of inflows. 

“FDI in manufacturing is expected to remain strong particularly in the EV value chain, electronics and semiconductors and in activities related to the digital economy,” it noted.

Source: The Malaysian Reserve

Asean FDI surges 42%, back to pre-pandemic level

Content Type:


The 4th Asean-Japan Smart Cities Network High Level Meeting kickstarted here on Sunday (Dec 4), with Asean highlighting three key efforts in promoting smart and sustainable city development in the region.

Asean Secretary General Datuk Lim Jock Hoi, in delivering his opening remarks at the event, highlighted that firstly, investment in digital infrastructure is critical for smart city development, whereby data can help officials make informed decisions to service their citizens more effectively.

“Robust and integrated central digital infrastructure is necessary to realise excellence in public service delivery, “ he said in his speech, which was pre-recorded, at the event.

In this regard, he said Japan has been supporting Asean through Smart Japan-Asean Mutual Partnership, which conducts feasibility studies to help cities determine the appropriate digital infrastructure for smart city development.

Lim also said Asean emphasised on enhancing human capital, which is essential to seize smart city opportunities, especially when considering various capacities of Asean cities in managing smart city projects.

He said many Asean cities, especially small- and middle-sized ones, require the support of the institutions that could help local government design and implement smart city initiatives.

“As such, Asean and Japan can collaborate to provide strategic and technical support that helps localities in executing smart city plans,” he added.

Thirdly, Lim said that inclusive community participation is crucial to implement Smart City initiatives, with reaching out to people in the problem-solving process, which will subsequently help the local government select appropriate solutions to various community issues in the respective areas.

Thus, he said this will help improve the quality of life of those who work and live in the cities.

Lim said pursuing smart and sustainable city development is high on Asean’s agenda, as the regional grouping strive to tackle urban challenges and empower vulnerable communities in those cities.

“In this regard, I would like to commend the government of Japan for their unwavering support towards realising smart city initiatives in Asean,” he added.

Lim said the Covid-19 pandemic impacted every aspect of urban life, and in response, Asean member states and cities have continued to transform digitally and sustainably to tackle urban challenges, as well as advance their recovering efforts.  

“Thus, I believe today’s meeting will bring enormous opportunity for members of the Asean Smart Cities Network to exchange ideas and experiences with Japan in making our cities more liveable,” he said.  

The two day 4th Asean-Japan Smart Cities Network High Level Meeting, which ends on Monday, is hosted by Japan’s Ministry of Land, Infrastructure, Transport and Tourism, in partnership with Asean member states and related government agencies and municipalities.

This annual international meeting has contributed to building collaborative relationships in the smart city field between Asean and Japan, since its inaugural meeting in 2019.

The high-level meeting held at the University of Aizu in Aizuwakamatsu in Fukushima, is being attended by delegates from Asean states, besides three media personal from the Philippines, Cambodia and Malaysia.

Source: Bernama

Asean highlights three key efforts to promote sustainable city development

Content Type:


WITH electric vehicles (EVs) set to proliferate and become more accessible to drivers around the world, several emerging markets are looking to expand their EV manufacturing.

Once a luxury segment of the automotive industry, EVs have become popular among consumers and companies alike in recent years, with solid growth trends attracting public and private investment.

EV uptake is essential to the global energy transition, as transport remains the sector with the highest reliance on fossil fuels, producing an estimated 37% of CO2 emissions from end-use sectors in 2021.

The number of passenger EVs on the road is expected to triple globally in the next decade to over 77 million, according to BloombergNEF.

Debuting brands in MENA

Although China currently dominates EV manufacturing, accounting for 57 per cent of global output in 2021, several emerging markets – especially in MENA – have announced plans to jump-start domestic production.

In March 2022 El Nasr Automotive Manufacturing Company (NASCO) signed a shareholders’ agreement with the National Automotive Company to establish the country’s first EV distributor, with the first EVs produced by NASCO hitting the market in 2023.

That same month NASCO also signed a memorandum of understanding with Valeo Egypt, a subsidiary of the French automotive supplier of the same name, to design, develop and produce EV components. As of December 2021 the project was seeking some US$127 million in investment and targeting annual production of 20,000 units over a three-year period.

Private players are also seeking to support the EV goals of North Africa’s most populous country. Shifting his investments from social media to green projects, Egyptian billionaire Mohamed Mansour announced plans in November 2022 to produce 15,000 EVs in Egypt over the next three to five years via his company Al Mansour Automotive. The company also plans to import and market five models of Cadillac EVs by 2025.

Meanwhile, Brightskies, an Egyptian company specialising in EVs and power systems, signed an agreement with NASCO and the Engineering Automotive Manufacturing Company in February 2021 to produce the country’s first electric buses, localising and manufacturing the technological components in Egypt.

Elsewhere in MENA, in November 2022 Saudi Arabia’s Public Investment Fund, the country’s sovereign wealth fund, announced a partnership with Taiwan-based tech company Foxconn to manufacture the Kingdom’s first EVs by 2025. The brand, known as Ceer, is expected to draw more than US$150 million in foreign direct investment and contribute $8bn to the Kingdom’s GDP by 2034.

In May 2022 Saudi Arabia’s Ministry of Industry and Mineral Resources said the construction of a US$2 billion EV battery metals plant was already under way, an integral component in the Kingdom’s EV manufacturing plans and in line with its aim of attracting US$32 billion in investment in its mining sector as part of ongoing economic diversification efforts.

Turkey has also joined the regional push into EV manufacturing, with the first SUV models of its domestically produced Togg EVs set to reach the local market at the end of the third quarter of 2023. The country’s Automobile Joint Venture Group, the consortium behind the project, is planning to export the vehicles within 15 to 18 months of their first domestic sales.

Attracting investment in South-east Asia

In addition to the proliferation of domestic brands, some countries – most notably in South-east Asia – are working to attract investment for EV manufacturing and technology uptake from more mature markets.

Already the region’s top auto-manufacturing centre, Thailand has implemented policies to bring in EV manufacturers and boost output, including a cash subsidy for passenger EVs and a planned subsidy for batteries.

The country aims for EV production to account for 30 per cent of total automobile output by 2030.

As OBG reported in April 2022, Indonesia is also set to become a major EV player, as the world’s two-largest EV battery producers are preparing to invest in projects in the country.

The country released its EV Roadmap in September 2020, which includes plans to produce 600,000 four-wheeled EVs and 2.45m two-wheeled EVs annually by 2030, along with complementary metals-refining and battery-production targets.

China’s Contemporary Amperex Technology – the world’s biggest EV battery maker – and a South Korean consortium headed by LG Energy Solution have also signed respective agreements with Indonesian partners on mines-to-manufacturing EV projects worth US$6 billion and US$9 billion.

Upgrading infrastructure

The expansion of ride-sharing services and micromobility options such as electric scooters could help drive EV uptake in emerging markets, especially in urban environments as an alternative to car ownership. For example, 46 per cent of three-wheelers sold from the start of 2022 in India as of April were electric, pushing the share of EVs in overall automobile sales to 2.6 per cent.

Launched by Drive Electric, a global philanthropic campaign supporting transport solutions powered by clean energy, the Leapfrogging to E-mobility Acceleration Partnership has committed US$1 million in grants to 10 projects to boost EV adoption in emerging markets, with the target to eventually raise US$1 billion for the cause.

Subsidies or tax exemptions have proven to be useful tools for encouraging the adoption of EVs. In some states of Mexico, EV drivers are exempt from an annual tax based on car value. In Vietnam, the government has exempted EVs from registration fees for three years, in addition to reducing the excise tax on smaller EVs to three per cent.

The global charging industry is set to grow at a compound annual growth rate of 34.5 per cent from 2022 to 2030, as governments encourage the construction of EV infrastructure and award large-scale contracts.

The UAE, which boasts one of the biggest charging station-to-vehicle ratios in the world, plans to increase the number of EVs on the street to 42,000 by 2030.

Under way since 2015, Dubai’s EV Green Charger initiative aims to boost the number of charging stations in the UAE to meet expected demand, with the number of chargers in the country at 325 as of August 2022.

In March 2022 the first EV and battery logistics hub in MENA opened in Dubai’s Jebel Ali Free Zone. It is designed to bolster the regional circular economy for EVs by providing an area where batteries can be stored, repaired, recycled or processed.

Egypt, meanwhile, is offering private sector players a 40 per cent share in a new company established to oversee pay-to-use charging stations, with a total of 3,000 charging stations in the works, the first of which are set to be launched in Alexandria and Cairo.

This column was produced by the Oxford Business Group.

Source: The Borneo Post

EMs are targeting a share of the global EV market

Content Type:


Global semiconductor equipment billings rose 7% year-over-year to US$28.75 billion in the third quarter of 2022, according to the US-based Semiconductor Equipment & Materials International (SEMI).

In its Worldwide Semiconductor Equipment Market Statistics (WWSEMS) Report released on Wednesday (Nov 30), SEMI said the figure was 9% higher quarter-on-quarter.

SEMI president and chief executive officer Ajit Manocha said semiconductor equipment revenue growth in the third quarter remained in line with positive forecasts for 2022.

“The 9% quarter-over-quarter increase in equipment spending for 3Q reflects the semiconductor industry’s determination to bolster fab capacity to support long-term growth and technology innovation,” he said.

The data is compiled from information submitted by members of SEMI and the Semiconductor Equipment Association of Japan (SEAJ).

The WWSEMS Report is a summary of the monthly billings figures for the global semiconductor equipment industry.

Source: The Edge Markets

Global semicon equipment billings up 7% y-o-y to US$29 bil in 3Q, says SEMI

Content Type:


The 5G network would become the leading technology in South-east Asia (SEA) by 2028 with a penetration rate of 48 per cent, according to Ericsson Mobility Report.

The 5G subscriptions in the region is projected to reach almost 30 million in 2022 and around 620 million by end-2028.

Head of Ericsson Malaysia, Sri Lanka and Bangladesh David Hagerbro said the rapid rollout of the 5G network by Digital Nasional Bhd in Malaysia would accelerate the country’s journey towards becoming digital economy and a 5G leader in the region.

The report said most major service providers are expected to launch commercial 5G services by the end of 2028 in SEA and Oceania.

“5G adoption and growing consumer usage of new immersive services are key factors for growing mobile data usage in the region.

“Mobile traffic per smartphone is expected to grow from 12.5 gigabyte (GB) per month in 2022 to 54 GB per month in 2028, a compound annual growth rate (CAGR) of almost 30 per cent,” it said.

On wider perspectives, the report said global 5G subscriptions remained on track to top one billion by the end of this year and five billion by the end of 2028 despite current and developing economic challenges in many parts of the world.

According to the report, about 110 million subscriptions were added globally between July 2022 to September 2022, bringing the total to about 870 million.

“5G is still expected to reach one billion subscriptions by the end of this year, two years faster than 4G did, following its launch.

“The statistic reinforces 5G as the fastest-scaling mobile connectivity generation. Key drivers include the timely availability of devices from multiple vendors with prices falling faster than for 4G and China’s large early 5G deployments,” it said.

Globally, it said almost 230 communications service providers (CSPs) have launched 5G services to date with more than 700 5G smartphone models announced or launched commercially.

It said global 5G subscriptions are forecast to account for 55 per cent of all subscriptions by the end of 2028.

The report said in that same timeframe, 5G population coverage is projected to reach 85 per cent while 5G networks are expected to carry around 70 per cent of mobile traffic and account for all contemporary traffic growth.

Additionally, it said global fixed wireless access (FWA) connections are forecast to grow at 19 per cent year-on-year through 2022-2028 and top 300 million connections by the end of 2028 driven by accelerated FWA plans in India and expected growth in other emerging markets.

It said more than three-quarters of CSPs surveyed in more than 100 countries currently offer FWA services, which saw almost one-third of CSPs offering FWA over 5G compared to one-fifth a year ago.

It added that almost 40 per cent of the new 5G FWA launches in the past 12 months have been in emerging markets

FWA is a wireless alternative to wireline broadband connectivity for homes and businesses and it is one of the major early 5G use cases, particularly in regions with unserved or underserved broadband markets. 

Source: Bernama

Ericsson Mobility Report: 5G to become leading technology in SE Asia by 2028

Content Type: