TAIPEI: On Thursday, August 3, as the slow-moving Typhoon Khanun skirted past the region’s east amid warnings of storms and strong winds, Northern Taiwan shut down businesses and schools while airlines canceled tens of flights. Typhoon Khanun, which Taiwan’s weather service classifies as the second-strongest typhoonic level, moved slowly inContinue Reading
Singapore: The largest bank in Singapore, DBS Group, announced on Thursday( Aug 3 ) that its second-quarter profit increased by a forecast-breaking 48 % to set new records as higher interest rates helped fuel income growth and predicted growth in its net interest margin ( NIM ). Sudden second-half increasesContinue Reading
shabby graphicsAlia Bhatt, one of Bollywood’s most sought-after young women, is officially cashing out three times after launching her clothing line Ed- a Mamma. According to Indian papers, her business will be purchased for 3 billion rupees($ 36 million,£ 28 million ) by the wholesale division of one of India’s largest companies, Reliance Industries.
According to early-stage investor Bhaskar Majumdar, the deal do” push” the now-established trend of Indian movie stars investing in start-ups and owning consumer-facing brands.
Bhatt is just one of many Bollywood celebrities who have just been actively investing in start-ups. Around the same time that her husband, actor Ranveer Singh, purchased a stake in the beauty company Sugar Cosmetics, her contemporary Deepika Padukone introduced her own skincare line, 82 ° E, last year.
The fad isn’t fresh, according to industry observers. It all started when India’s startup picture gained momentum in the early 2010s. When Salman Khan, one of Bollywood’s most well-known players, acquired a majority interest in the travel website Yatra in 2012, he was among the first to enter the industry.
However, this has gained more momentum as India becomes the third-largest start-up habitat in the world.
According to Aviral Jain, managing director of Kroll’s valuation consulting services practice,” Celebrities nowadays don’t want to be seen as only movie stars but also as clever investors.” ” Alica Bhatt has demonstrated how a celebrity can use her fame and fan base to turn an eco-conscious, homemade product into an effective business.”
In the past, when several actors would happily admit to relying on family members to manage their finances, this is a major change from how Indian actors approached cash and investing. Stars like Amitabh Bachchan and Jackie Shroff faced bankruptcy because they invested the majority of their money in a high-risk endeavor like video production, despite the fact that many people, including Shah Rukh Khan, went on to become successful entrepreneurs by investing in sports businesses and eateries.
However, today’s stars are a more financially savvy group, and according to Navjot Kaur, associate producer at Epiq Capital, in addition to making investments in established industries like public markets, real estate and equipment, they are also allocating capital to start-ups as’ diversification tools from an investment portfolio standpoint.
She continues,” Indian venture capital is attracting funds from domestic ultra-high net worth individuals( UHNIs ), and many celebrities are a subset of that.”
According to Mr. Jain, many celebrities have also established family offices to handle their investments professionally.
According to experts, collaborations between famous people and businesses may be advantageous for both parties.
Getting opportunities and offers from a brand gives start-ups credibility right away and helps them reach millions of customers. According to Shauraya Bhutani, companion at Breathe Capital, these start-ups typically have limited resources, so” preserving income by giving away capital is frequently a smarter approach.”
According to Benaifer Malandkar, Raay Global Investments’ chief investment officer, start-ups can” use a person’s internet presence to publicize the brand.” Additionally, the connection to a well-known star gives branded goods immediate recognition and makes them appear more reliable to consumers.
The same thing happened to Blue Tribe Foods when actor Anushka Sharma and bowler Virat Kohli invested in the fledgling plant-based meat business.
” We wanted to raise awareness of the issue with the latest foods value chain and provide an alternate solution.” Instead of just promoting the brand, their endorsement has increased category awareness across the nation, according to Sohil Wazir, the company’s main business officer, who spoke to the BBC.
Stars get to participate in the face if the business does well and invest their money in companies that align with their own individual ethos by taking equity in a organization more than receiving cash up front. Kohli and Sharma are both eaters who frequently support the rights of species.
But, K Ganesh, a serial entrepreneur and producer, asserts that relying only on the notoriety of famous people may not be sufficient to expand one’s company. He also cautions that celebrities should exercise caution when supporting start-ups, examining both the” reputation risk” associated with a business as well as its” business risk.”
Some well-known Indian start-ups have lately been rocked by governance scandals, and many of them have also seen their valuations decline as a result of the funding crisis.
However, Mitesh Shah, companion at the god fund Physis Capital, claims that rather than viewing this as a deterrent, it might actually be an excellent time to take advantage of the opportunity.
According to Mr. Shah, these start-ups have the potential to long-term generate significant money for investors thanks to their appealing valuations.
Celebrities in the West have made sizable returns on their investments, including Jay-Z, who bought a$ 2 million stake in Uber, and Ashton Kutcher, an active investor who now owns venture capital.
According to Mr. Bhutani,” we can expect a couple billion dollar new-age consumer brands to be built or supported by Indian celebrities in India in the next ten years.”
PUBLISHED: 3 August 2023 at 4:00 p.m.
According to Rachada Dhnadirek, a deputy government spokesperson, the government is working to steadily expand the Regional Comprehensive Economic Partnership( Rcep ), which will be aided by expanding online sales channels.
In the first five weeks of this year, commerce between Thailand and RCEP members has increased.
Particularly, Thai imports of processed land materials to important markets like Asean, China, and Japan have increased.
Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam are the free business agreement’s 15 members. Together, they make up about 30 % of the world’s GDP and 70 % of its population.
According to Ms. Rachada, the intra-trade of processed land goods, such as sugar and canned fruit, vegetables, and seafood, has grown extraordinarily.
Fresh, frozen, and dried fruits are among the Rcep’s most well-liked agricultural goods.
Automobiles, automobile accessories, and plastic products are also experiencing strong growth in intra-bloc business.
Thailand’s exports from January to April increased by US$ 422 million($ 14 billion baht ), or 107 %, from the same time last year. The majority of these imports go to South Korea, Japan, China, Vietnam, and Australia.
According to Ms. Rachada, the state is promoting Thai fruit export via online shopping channels.
According to her, the Commerce Ministry frequently talks about ways to broaden the buying channels for Thai goods using e-commerce platforms and contemporary business businesses.
TAIPEI: Taiwan will shut markets and schools in northern parts of the island including the capital Taipei on Thursday (Aug 3) as slow-moving Typhoon Khanun was expected to brush past amid warnings of floods and high winds. Typhoon Khanun, categorised by Taiwan’s weather bureau as the second-strongest typhoon level, slowlyContinue Reading
TAIPEI: On Thursday, August 3, Taiwan will close businesses and universities throughout the area, including Taipei, the nation’s capital, as slow-moving Typhoon Khanun was predicted to pass amid instructions of flooding and strong winds. With maximum winds of 209 km / h, Typhoon Khanun, which Taiwan’s weather bureau classified asContinue Reading
SINGAPORE: Market indices do not serve as “direct benchmarks” to assess the financial performance of government investment firm Temasek Holdings, said Senior Minister of State for Finance Chee Hong Tat on Wednesday (Aug 2).
“Broadly speaking, Temasek has outperformed these market indices over the long term,” he told the House.
“But it is important to recognise that Temasek is not a portfolio fund manager and the MSCI indices are not direct benchmarks for Temasek’s performance.”
Mr Chee noted that Temasek began its investments with Singapore companies before expanding its portfolio to include firms in other parts of Asia and more recently, North America and Europe.
This means the state investor’s portfolio remains Asia-centric for now, with the region making up two-thirds of its exposure. On the other hand, the composition of market indices varies “significantly” from Temasek’s portfolio, Mr Chee added.
Citing the MSCI World Index and MSCI All Country World Index (ACWI) as examples, he noted that these indices have larger weightages to the US stock market, which has done well over the past decade when compared to Asian stock markets.
“This is why there will be occasions when Temasek’s returns are higher than the MSCI World Index and ACWI, and other occasions when the returns are not as high as these indices,” he said.
Mr Chee was responding to parliamentary questions on Temasek’s latest annual results, and how they measure up to other market benchmarks and other sovereign wealth funds.
For the financial year ended Mar 31, Temasek’s net portfolio was valued at S$382 billion (US$287 billion), down 5.2 per cent or S$21 billion from the record S$403 billion it achieved a year ago.
Its one-year total shareholder return, which takes into account all dividends distributed to the shareholder minus any capital injections, turned negative to -5.07 per cent from the 5.81 per cent gain a year ago.
This performance for the past year can largely be attributed to a fall in equity valuations, both in the public and private markets, the state investor said in its latest annual review.
Temasek also registered its first net loss due to a change in accounting standards, as it had to take into account unrealised mark-to-market losses posted by companies in which it had less than a 20 per cent stake.
SINGAPORE: Singapore’s monetary policy focuses on keeping inflation low and “does not take into account any potential impact” on the central bank’s profits, said Minister of State for Trade and Industry Alvin Tan on Wednesday (Aug 2).
This is a similar approach taken by other major central banks around the world, which have also reported losses from monetary policy operations over the last year, he added in a parliamentary reply.
“MAS’ monetary policies focus purely on keeping inflation low and ensuring medium-term price stability. It does not take into account any potential impact on MAS’ profits because to do so would undermine its mission.
“MAS’ financial performance is a necessary consequence of its conduct of monetary policy,” said Mr Tan in response to several parliamentary questions about the record loss posted by the Monetary Authority of Singapore (MAS) in the last financial year.
For the financial year ended Mar 31, MAS recorded a net loss of S$30.8 billion (US$22.8 billion), widening significantly from a S$7.4 billion loss in the year before that.
This was largely due to the central bank’s aggressive monetary policy tightening to bring down inflation, which paved the way for a “broad appreciation” of the Singapore dollar against other currencies – such as the US dollar, euro and yen – that the official foreign reserves were held in.
As MAS’ financial results are reported in the Sing dollar, it saw “significant” negative currency translation effects of about S$21.4 billion, or 70 per cent of the annual net loss, the central bank said in its annual report last month.
MAS also incurred higher interest expenses of S$9 billion as part of mopping up excess liquidity in the banking system. This made up around 30 per cent of the loss MAS incurred in the last financial year.
These two factors outweighed a “small” investment gain of S$0.6 billion made on the country’s official foreign reserves, the central bank had said.
Speaking on MAS’ investment performance, Mr Tan, who is a MAS board member, said last year was an “unusual year” for financial markets where both bond and equity markets performed badly.
The central bank’s investment performance will have to be viewed from a longer-term perspective, he said, while adding that MAS’ investment portfolio had benefited from an unusual period of low inflation and low interest rates since the 2008 global financial crisis.
“Including this latest year, MAS recorded an annual average investment gain of S$11.7 billion in the last 15 years,” he told the House.
“Over a 20-year period, MAS’ average annual investment gain was 3.7 per cent. Notwithstanding the financial loss that we had been discussing, MAS’ (official foreign reserves) position remains strong.”
Japan’s central bank left interest rates unchanged last week despite rising inflation, but suggested that it could gradually discontinue years of ultra-cheap money, sending the yen soaring and stocks tumbling.
The Bank of Japan (BOJ) said it kept unchanged its short-term interest rate at minus-0.1% and maintained its target for the yield on 10-year government bonds at around 0%.
But the central bank of the world’s third-largest economy also noted that it would employ a more flexible stance to controlling the yield on government bonds, which affects borrowing costs, “diluting a key pillar of its long-standing ultra-loose monetary policy,” as an analyst on CNN recently said.
With Japanese inflation now at 4.2%, there are growing calls, perhaps unsurprisingly, for the BoJ to tighten monetary policy much faster.
For instance, the sooner the BoJ moves to a “more normal structure and let bond markets, equity markets do their work that they need to do,” the better it will be for financial markets, Kevin Hebner, global investment strategist at TD Epoch, told CNBC’s Squawk Box Asia on Monday.
However, instead of rushing to increase interest rates, the Bank of Japan should focus on complementing its monetary policy with clearer fiscal plans, as advocated by Prime Minister Fumio Kishida’s government.
Enhancing worker productivity and supporting innovation in the private sector would be instrumental in achieving sustained wage growth, aligning with the 2% target.
However, the current debate in Japan primarily revolves around the government’s inclination to raise defense spending and fund it through methods like the potential sale of shares in telecoms company NTT, which can be seen as mere gimmicks.
If Japan is indeed approaching sustainable inflation levels and is getting closer to achieving its target, it is crucial for the government seriously to consider implementing a fiscal policy that aligns with this economic environment.
While the BoJ governor’s initiatives may have shown promising results, it’s essential now to recognize that the Bank of Japan cannot tackle this challenge singlehandedly.
Collaborative efforts between the government and the central bank are necessary to ensure the success of any economic measures aimed at maintaining stable and on-target inflation.
Nigel Green is founder and CEO of deVere Group. Follow him on Twitter @nigeljgreen.
TOKYO – Few policymakers in Asia, if any, are more anxious to see the US Federal Reserve halt its tightening cycle than Rhee Chang-yong in Seoul.
Data show that no major financial system in the region is getting whipsawed more by Fed interest rate hikes than South Korea’s. According to Bloomberg, investors who bet on Korean debt over the last year lost 15%, the worst in developing Asia.
This puts Governor Rhee’s team at the Bank of Korea directly on the frontlines of all 11 rate hikes Fed Chairman Jerome Powell executed over the last 17 months. It follows that the BOK is a top beneficiary of the Fed declaring it’s done tightening.
Powell hasn’t formally done that. On July 26, when the Fed raised its benchmark to roughly 5.3% from 5.1%, highest level since 2001, Powell left the door open for another tap of the brakes in September.
For all intents and purposes, though, the Fed’s most aggressive rate cycle since the mid-1990s is done. Already, US consumer prices have fallen to a 3% pace of increase from more than 9% a year ago..
The breathing room that a cessation of Fed austerity creates is stellar news for the Bank of Japan and People’s Bank of China, both under new leadership.
The Fed isn’t the only Washington variable preoccupying Asia. On Tuesday, Fitch Ratings stripped the US of its AAA rating, echoing a 2011 move by Standard & Poor’s. The step comes as the US national debt approaches US$33 trillion and lawmakers in Washington play politics with borrowing policies.
“The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions,” Fitch says.
These challenges come as the new leaders of the BOJ and PBOC face their own unique challenges at home. One glaring similarity, though, is that both Kazuo Ueda in Tokyo and Pan Gongsheng face the central banking equivalent of a baptism by fire.
Ueda, just 115 days in the BOJ top job, has gotten a serious wake-up call in recent days. On July 28, the BOJ announced that 10-year yields would be allowed to exceed 0.5%.
For most central banks, it would be dismissed as a highly technical tweak to account for a widening spread between US and Japanese rates. Yet for an institution stuck in the quantitative easing matrix for 23 years now, it was nothing short of shocking in market circles.
Ueda’s team spent the last few days cleaning things up. On Monday, as 10-year yields topped 0.6% for the first time in nine years, the BOJ scrambled to buy yen to halt the rise in rates. That day alone, Ueda’s team bought in excess of US$2 billion of government bonds.
By Tuesday, BOJ officials were signaling to local media that the big policy changes aren’t assured. This sets the stage for a tug of war between the BOJ and bond traders.
“The markets are likely to test the BOJ’s resolve, as it probably will seek to engineer a gradual shift away from its [yield curve control] policy over the next year or so, while leaving the short-term rate target unchanged, as it still believes that Japan needs supportive monetary policy,” says economist Duncan Wrigley at Pantheon Macroeconomics.
Yet there’s no doubt that a BOJ’s U-turn is now in motion. That will have far-ranging implications far and wide, says economist Mathias Dollerup Sproegel at Sydbank A/S in Copenhagen.
Though Tokyo’s policy shift seems “a matter of fine-tuning” it can have “a major impact on Danish homeowners with fixed-rate loans,” he says. If the BOJ “continues to tighten monetary policy and thus allows higher and higher interest rates in Japan, this may mean that it will become more expensive to buy a home in Denmark.”
Yet the Fed wrapping up its tightening cycle buys some time for Ueda’s team in Tokyo. For one thing, the BOJ can look forward to fewer strains in local credit markets. Each Fed rate hike forces the BOJ to regulate liquidity flows accordingly. The wider the US-Japan yield gap, the more work the BOJ must do to address market dislocations.
Though few expect actual BOJ rate hikes anytime soon, less rate turbulence from the US gives Ueda space to figure out how to normalize Japanese rates. Devising a plan to withdraw from a government bond market in which the BOJ owns more than half of all outstanding issues won’t be easy.
The same goes for the stock market. During the decade Ueda’s predecessor spent running the BOJ, Haruhiko Kuroda grew its balance to the point where it topped the size of Japan’s US$5 trillion economy. During that time, the BOJ became the biggest holder of Japanese stocks via exchange traded funds.
That multi-year buying binge made the BOJ the largest holder of Japanese shares — even bigger than Japan’s US$1.4 trillion Government Pension Investment Fund, the largest such entity in the world. It also makes it hard for the BOJ to withdraw without cratering the equity market.
In recent months, the Nikkei Stock Average surged to 30-year highs. The BOJ will be loath to pull the rug out from under a rally in which Warren Buffett has played a headline-grabbing role. This unwinding process may have a greater chance of success if global debt markets are calm.
In Beijing, Pan’s first week on the job proved supremely hectic. Pan assumed the role of PBOC governor on July 25, three days before Ueda’s big splash in global financial circles.
Tumbling home sales are adding to already extreme pressures on developers grappling with a multi-year credit crisis. News that Country Garden, a top Chinese private-sector developer, scrapped a US$300 million stock offering added to the sense of gloom hovering over the economy.
Right out of the gate, Pan confronts a worsening slowdown, an economy on the verge of deflation, a property sector in crisis, record youth unemployment and capital leaving the second-biggest economy.
This week also brought fresh reminders that manufacturing is sputtering. Activity contracted for a fourth consecutive month in July, a dynamic that makes reaching this year’s 5% growth target less and less likely. The Caixin/S&P purchasing managers index fell to 49.2 in July from 50.5 the previous month.
“Looking forward, policy support is needed to prevent China’s economy from slipping into recession, not least because external headwinds look set to persist for a while longer,” says economist Julian Evans-Pritchard at Capital Economics.
Recent data, says economist Xu Tianchen at the Economist Intelligence Unit, point to a “potential death spiral” in the real estate sector that spreads more widely around the economy.
Economist Katrina Ell at Moody’s Analytics notes that “forward indicators, including new export orders, suggest ongoing near-term weakness. Goods demand will remain soft from the US and Europe through the remainder of 2023.”
Thomas Gatley, economist at Gavekal Dragonomics, notes that there are probably two main reasons China’s manufacturers ended up holding more inventory than normal. “First,” he says, “they were concerned about disruptions in their supply chains, and wanted to hold more raw materials in case deliveries of those key inputs were halted or delayed. Second, they anticipated higher levels of consumer demand than actually materialized, which caused finished goods to pile up in warehouses.”
Explanation No. 1, Gatley says, looks most relevant to the machinery and electronics sectors, where many products are produced by complex global supply chains that were particularly vulnerable to the disruptions in global shipping which occurred during the pandemic. Inventories of raw materials held by the machinery and electronics sectors rose from around 1.15 months of sales before the pandemic to a peak of nearly 1.3 months of sales in 2022.
At the same time, China’s service sector also faced intensifying headwinds. In July, activity in the non-manufacturing sector fell to 51.5 from 53.2. Economist Robert Carnell at ING Bank notes that while mainland authorities have been vocal in their support for the economy, “so far, that has not translated into the sort of sizable fiscal policy stimulus many in the market have become used to expecting. We don’t think it’s coming.”
Carnell says that the one component that stands out from the rest, is expectations, which looks like an unrealistic outlier compared with what is going on elsewhere.
“We can only put this down to continued hope that the government will pull something out of the bag that will re-invigorate the economy,” Carnell says. “However, while we believe that a great many micro measures will be implemented to improve the functioning of the economy, including a reduction in constraints on the private sector, we aren’t at all convinced that there is a fiscal bazooka waiting to fire up the economy. So, if those expectations aren’t fulfilled and begin to wilt, then this PMI could well join the manufacturing sector in contraction.”
As China slows and Japan underperforms, officials in Beijing and Tokyo are hopeful for a quieter second half of 2023 from the external sector.
Clearly, the Fitch news throws a new wrinkle into the mix. US Treasury Secretary Janet Yellen called the downgrade “arbitrary” and “outdated.” But for officials in Japan and China, which hold the world’s largest stockpiles of US Treasury securities, the downgrade is a stark wake-up call. Tokyo is sitting on US$1.1 trillion of Treasuries, while China is stuck with more than US$870 million.
Amid extreme uncertainty, this much is true: Doubts about the dollar’s trajectory, and peak Fed rates, are a game changer in global markets, adding to the reasons for Asia investors to fasten their seatbelts.
