FinanceAsia Magazine

Issue: November 2014

Rules for trade and investment are key to understanding who  will hold sway over fast-growing Southeast Asia.

The US, Japan and China would like to tie Asean, a group representing 10 of the region’s governments, to competing trade blocs. But Asean members have their own ideas.

Asean has a road map for a single market by 2015 dubbed the Asean Economic Community. It is unlikely to meet its own deadline, particularly for sticky issues such as foreign ownership investment caps, but has made strides towards lowering trade barriers. Given Asean represents 600 million people, this is no small thing.

About 75% of intra-Asean trade is now tariff free. Trade with other members generates 14.2% of the bloc’s GDP, including 6.3% with Japan and 5.5% with China. 

FinanceAsia this month has selected the Asean companies it believes are spearheading this regional integration by trading and investing across borders within the bloc.

Such business champions are important if Asean is to cohere as a bloc that can control its own destiny. Without greater linkages, outside powers still find it relatively easy to pick off Asean member governments and drive their own agenda. 

For example, Asean is increasingly reliant on trade flows with Japan. Just two days after the US Federal Reserve ended its programme of quantitative easing, the Bank of Japan stepped into the breach with a major expansion of its balance sheet. Japanese companies and banks are likely to redeploy part of this liquidity into Asean markets.

Trade with Asean’s second-biggest external trading partner China also continues to grow. Singaporean bank OCBC bought Hong Kong’s Wing Hang with the intention of intermediating more trade flows between China and Asean. 

Asean can be a counterweight politically to Japan and China but will continue to be buffeted by ebbs and flows of finance from China and Japan. Southeast Asia’s governments can do more to harmonise policy and open doors to neighbouring companies and investment.

 

About FinanceAsia Magazine

Established in 1996, FinanceAsia is the leading publisher of financial news in the Asia-Pacific region. Our combination of print and online products provide the latest news, analysis and insight into Asia’s financial markets.

Published monthly from our office in Hong Kong, FinanceAsia magazine provides our readers with the latest financial trends, interviews, features and investigative reports. The publication has a readership of key decision-makers at corporations, governments, investment and commercial banks, institutional investors, asset managers, brokers, traders and financial intermediaries.

Our regular sections include:

Data Story
We look at the key data behind a topical theme in Asian finance, showcased with an array of graphs and tables.

Greenshoe
A monthly opinion column from the FinanceAsia editorial team. We provide our thoughts on a topic making the headlines.

Deal of the Month
Our regular two-page spread with its signature artwork and in-depth analysis examines the equity, debt or M&A deal that we feel has had the biggest impact on the Asian capital markets that month.

Investor Dialogue
For company CEOs and CFOs, what investors think is a critical concern, and in this column we help them understand just this. Each month we speak to a Chief Investment Officer of a top fund and outline their views on corporate governance, what stocks they like and where they expect to generate the best returns.

Soapbox
A monthly opinion piece from a respected author or commentator on Asian business, finance or economics.

People on the Move
Here we summarise the key hires, fires and moves at the region’s banks, highlighting at least one major move each month.

Deal Tracker
We examine the major primary markets deals of the month and comment on the quality of the debt or equity transaction and the secondary market performance.

The Arts of Finance
A light-hearted look at investment opportunities surrounding the arts business in Asia.