Author name: admin

KUCHING: Sarawak is set to finalise the sale and purchase agreement for MASwings, a subsidiary regional airline of Malaysia Aviation Group (MAG), by next month, says Premier Tan Sri Abang Johari Openg. He said that the establishment of a Sarawak-owned airline is aimed at promoting the state to the business community as well as to tourists. “With a well-developed airport, the entire ecosystem in Sarawak will be in place, allowing us to be competitive with other destinations. “This goal is set to be achieved by 2035 while we continue to make progress in other areas of development,” he said when speaking at the Institution of Engineers, Malaysia (IEM) Sarawak annual dinner here on Sunday (Nov 24). Transport Minister Anthony Loke was reported to have said that negotiations between MASwings and the Sarawak government were ongoing for the acquisition. He also said negotiations regarding the purchase of shares in MASwings were also underway with MAG and Khazanah Nasional Bhd. – Bernama

Starbucks Corp is exploring options for its Chinese operations including the possibility of selling a stake in the business, according to people with knowledge of the matter. The coffee chain has been speaking to advisers about ways to grow its operations in China including the potential introduction of a local partner, the people said, asking not to be identified because the information is private. It has informally gauged interest from prospective investors, including domestic private equity firms, the people said. A stake sale could also attract interest from Chinese conglomerates or other local companies with experience in the industry, some of the people said. Starbucks is still evaluating its options and hasn’t made a decision about whether to proceed, the people said. Shares of Starbucks were little changed in early trading before the New York market opened. The stock is down about 5 percent in the past 12 months through Wednesday’s close. Starbucks has faced pressure from activist Elliott Investment Management LP, which wants it to commit to reviewing its Chinese business, Bloomberg News has reported. In previous years, McDonald’s Corp and Yum! Brands Inc have carved out their Chinese operations and sold stakes to private equity firms to tap more growth and better cater to local tastes. China is the second-biggest market globally for Starbucks and generated about US$3 billion of net revenue in the most recent financial year, when the company increased its store count in the country by 12 percent. But local upstarts such as Luckin Coffee Inc are increasingly challenging their position. New Starbucks chief executive officer Brian Niccol told analysts last month that he’s working to better understand the company’s Chinese operations, noting that the competitive environment seems “extreme” and the macro environment is “tough.” Starbucks needs to figure out how to expand in the market and is continuing to explore strategic partnerships that could help it over the long term, Niccol said at the time, without providing further details. “We are fully committed to our business and partners, and to growing in China,” a spokesperson for Starbucks said in response to Bloomberg News queries this week. “We are working to find the best path to growth, which includes exploring strategic partnerships.” Niccol, the former CEO of Chipotle Mexican Grill Inc, took the reins at Starbucks in September after his predecessor Laxman Narasimhan failed to revive its flagging fortunes and was abruptly ousted. Niccol has vowed to redouble efforts to improve Starbucks’s physical locations and speed up service times. Starbucks had 7,596 outlets in China as of late September, accounting for about 19 percent of the global total. Same-store sales fell 14 percent in China last quarter. Other Western chains have also sought local tie-ups in China after struggling to catch up with more nimble rivals. In 2016, KFC operator Yum sold a stake in its Chinese operations to Primavera Capital Group, a private equity firm led by former Goldman Sachs Group Inc rainmaker Fred Hu, and tech billionaire Jack Ma’s  Ant Financial Services Group. That set the stage for it to spin the business off in a separate listing, which came after pressure from activist investor Corvex Management LP. The following year, McDonald’s sold a controlling stake in its China and Hong Kong operators for US$1.7 billion to a group of investors including state-backed conglomerate Citic Ltd, domestic buyout firm Citic Capital Holdings Ltd  and Carlyle Group Inc.–BLOOMBERG

CHICAGO: Motorola Solutions Inc chief executive officer (CEO) Greg Brown said the incoming administration of US President-elect Donald Trump will be favourable to a business that’s already doing very well. Once synonymous with mobile phones and pagers, Chicago-based Motorola has reinvented itself as a provider of high-tech security products for businesses and governments. The company provides two-way radios for firefighters, body cameras for police officers and software that sends email and text alerts during emergencies. Trump has been strident in his support of the police, as he believes city crime should be reduced, and has pledged to build the wall along the border with Mexico, which will require more border agents, Brown said in an interview on Bloomberg TV. Trump has also vowed to cut the corporate tax rate, and the environment for mergers and acquisitions (M&As) should also be more favourable under his administration, according to Brown. “There’s a lot to like about this through the lens of a multinational corporation,” the CEO said. Motorola got out of China years before Trump threatened to increase tariffs on imports from the country by as much as 60%. Regarding Trump’s pick of Howard Lutnick to lead the Commerce Department, Brown said he thinks Lutnick will be “progressive and aggressive.” Motorola has done some 40 deals in the last decade, including two acquisitions of US$1bil or more. The company has strong free cash flow and a low net debt-to-earnings ratio, putting it in good shape to make deals if the opportunities arise. “M&A does play a key role going forward,” Brown said, describing any acquisitions as more likely to be “tuck-ins” than large deals. “It depends on what opportunities come forward and at what price,” the CEO added. — BLOOMBERG

The economic policies of Donald Trump’s potential presidency could add up to RM19.7 billion to Malaysia’s GDP, according to global property firm IQI. Benefits but Risks Remain “It’s too early to predict the exact policies President Trump and the Republican-led Congress will implement,” said Juwai IQI Co-Founder and Group CEO Kashif Ansari. “However, based on the first Trump presidency and his cabinet choices, we anticipate key trends.” One pivotal policy is the intensification of tariffs on Chinese goods, expected to accelerate the shift of manufacturing out of China to Southeast Asia. For Malaysia, this could add 1% to GDP over four years, equivalent to RM19.7 billion—about 40% of the East Coast Rail Link’s cost. The IMF projects Malaysia’s 2024 GDP at US$440 billion. A 1% boost translates to US$4.4 billion or RM19.7 billion at current exchange rates. Risks to Consider Ansari highlighted risks such as rising U.S. inflation potentially driving up interest rates, which could attract capital away from Malaysia and strengthen the U.S. dollar, raising costs for Malaysian manufacturers reliant on imports. Trump’s China Tariffs Benefitted Malaysia During Trump’s first presidency, tariffs on Chinese goods significantly benefitted Malaysia. From 2017 to 2021, Malaysia’s foreign direct investment (FDI) from China and Hong Kong nearly doubled, climbing from 9% to 15.2% of total FDI. The “China Plus One” strategy, where companies diversify manufacturing outside China, saw Malaysia receive over US$4.4 billion in Chinese investments—nearly double Thailand’s share. By 2023, China and Hong Kong were sending RM15.98 billion annually in FDI to Malaysia, triple the level from a decade ago. U.S.-Malaysia Trade and Economic Growth Trade between Malaysia and the U.S. thrived during Trump’s first term. In 2021, Malaysian exports to the U.S. hit US$56.2 billion, a 27.3% increase from the prior year, with a trade surplus of US$41 billion. Malaysia’s economy grew steadily during Trump’s first presidency, with annual growth of 5.8% in 2017, 4.8% in 2018, and 4.5% in 2019, before the pandemic-induced contraction in 2020. Indirect Benefits to Malaysia’s Real Estate Market Trump’s first presidency had minimal direct impact on Malaysia’s housing market, aside from supporting economic growth, which gave consumers more spending power. House prices grew 6.5% in 2017 but slowed to 1.2% by 2020. Over the next four years, Juwai IQI expects house prices to rise, differentiating a second Trump presidency from the first.

SINGAPORE: According to UnaFinancial’s estimates, by 2023, BNPL had been adopted by 20.6% of adults in Southeast Asia. In Singapore, its adoption reached 31.3%, in the Philippines – 27%, and in Malaysia – 24.4%. Indonesia, Vietnam, and Thailand follow, with approximately one-fifth of adults in each country opting for BNPL. Collectively, the Philippines and Indonesia accounted for two-thirds of the region’s BNPL users in 2023, underscoring their central role in Southeast Asia’s BNPL landscape. In terms of transaction volume, the region’s BNPL market reached $14.7 billion in 2023. Indonesia led with $4.28 billion in transactions, followed by Thailand ($2.91 billion), Vietnam ($2.34 billion), the Philippines ($1.97 billion), Malaysia ($1.86 billion), and Singapore ($1.3 billion). Looking forward, analysts predict that BNPL transactions will continue to grow rapidly across Southeast Asia, reaching $53.2 billion by 2027. They comment: “Southeast Asia is characterized by a young and tech-savvy population. Its high concentration of Gen Z consumers, who are generally open to adopting new financial technologies, has fueled demand for BNPL. This payment option has gained traction due to its seamless alignment with the shopping habits of Gen Z, providing them an alternative to traditional banking and credit systems.” Indonesia is projected to be a leader with $16.8 billion of BNPL transactions by 2027, marking a 209% increase from 2024. While Indonesia’s BNPL potential is the highest, realizing this growth will take more time compared to Malaysia and the Philippines. Malaysia is expected to reach $11.3 billion with a 215% growth rate from 2024. Its large Gen Z population (39%) could fuel demand, while a mature banking infrastructure may moderate BNPL’s expansion. The Philippines is anticipated to show the fastest growth at 235%, from $2.45 billion in 2024 to $8.2 billion in 2027. It is driven by an exceptionally young population – nearly half of whom are Gen Z. Moreover, insufficient access to traditional banking positions the country as one of Southeast Asia’s most promising BNPL markets. Thailand, Vietnam, and Singapore present a more moderate outlook. Thailand’s BNPL growth is expected to be slower, contributing $8.2 billion by 2027, as traditional banking remains the main consumer financing source. In Vietnam, BNPL remains an emerging trend. The market is forecast to reach $5.9 billion, supported by a growing cashless payments ecosystem. Finally, Singapore’s BNPL market, at a projected $2.9 billion, is challenged by its established financial system and access to traditional loans.

Knight Frank’s “Quality Life-ing” Report has identified Asia-Pacific as a premier lifestyle and investment destination, with Singapore standing out for individuals considering relocation. In our latest report, “Quality Life-ing: Mapping Prime Residential Hotspots” report, we evaluate 15 prominent markets based on five leading indicators: Economy, Human Capital, Quality of Life, Environment, and Infrastructure and mobility. This comprehensive analysis aims to assist prospective movers in identifying the ideal location that aligns with their specific needs and preferences. Singapore, Australia, Japan and Malaysia lead the rankings as Asia-Pacific’s leading lifestyle and investment hotspots according to this comprehensive analysis. Kevin Coppel, managing director at Knight Frank Asia-Pacific, shares: “As global wealth shifts and geopolitical landscapes evolve, affluent individuals are seeking prime residential hotspots that provide both lifestyle benefits and financial security. Markets like Singapore, Japan, and Australia continue to attract the world’s most discerning investors, offering not only strong economic fundamentals but also exceptional quality of life, infrastructure, and mobility. In this rapidly changing environment, Asia-Pacific remains a key destination for those looking to secure their wealth and future-proof their legacy.”   Christine Li, head of research at Knight Frank Asia-Pacific, adds: “The strong correlation between stock market performance and residential price growth in key Asia-Pacific markets further reflects the wealth effect at play. Japan’s stock market reached an all-time high in 2024, accompanied by a surge in Tokyo’s residential prices. Regional efforts to attract global talent and well-capitalised individuals through targeted visa programs are also adding momentum to Asia-Pacific’s housing markets. For instance, Thailand’s 25% increase in property transfers to foreign buyers, primarily from the Chinese mainland, underscores this policy impact in fostering resilient demand across the region.”   Leading destinations in Asia-Pacific Singapore: Recognised for its stability and development, Singapore emerged the top destination as it ranks among the top five in all indicators. Its robust economy, marked by political stability and a skilled workforce, makes it an attractive destination for businesses and individuals. In Q3 2024, prime residential prices rose 6.9% year-on-year, making it the second most expensive market in Asia-Pacific (Figure 2, at 2,861 US$ per square feet (psf)), 31% cheaper than Hong Kong (US$4,172 psf), but still ahead of Sydney (US$2,172 psf), Shanghai (US$2,061 psf) and Seoul (US$1,848 psf). The city-state’s economic fundamentals remain strong, with low unemployment and projected GDP growth of 1-3% for 2024. Additionally, the Family Office sector has surged from 400 in 2020 to 1,650 by August 2024, reinforcing its status as a global wealth management hub. Australia: Australia is the second most desirable location for investments and relocations, as it came in top 5 for four out of the five indicators in our study. In Q3 2024, major cities like Sydney experienced a 2.2% year-on-year price increase, supported by cash buyers and limited property supply. Despite rising interest rates, Australian cities continue to show positive price trends. The country’s diverse landscapes cater to various lifestyles, with cities like Perth seeing significant population growth of 3.6% in FY2023. Sydney continues to be the financial capital, home to over a third of Australia’s ultra-high-net-worth individuals, and Melbourne ranks highly for quality of life, excelling in healthcare and education retaining the top spot in Australia as the EIU’s most liveable city in 2024. Overall, Australia’s attractive residential market and enviable lifestyle continue to draw investors, expatriates, and international students from around the globe. Japan: Japan excels in Quality of Life and Infrastructure & Mobility aspects, boasting a high life expectancy and sophisticated transportation network. With modest economic growth projected at 0.9% for 2024, rising wages are expected to enhance consumer spending. The Tokyo residential market has shown resilience, with prices increasing over 20% since Q1 2022 and an annual rise of 12.8% noted in Q3 2024 (for the full breakdown, please click here), making it the second best-performing market in Asia-Pacific. This growth is fuelled by high demand for luxury condominiums amid limited supply. Additionally, Japan’s stock market reached an all-time high this year, attracting substantial foreign investment as Tokyo’s population continues to grow with an influx of foreign residents and investors. The Asia-Pacific residential market is poised to remain attractive to HNWIs, expatriates, and investors due to its strong price resilience amid global economic uncertainties, with safe-haven markets like Singapore, Australia, and Japan leading the way. The region’s sustained economic growth and rising affluence are expected to drive stable price growth and returns, particularly as 19 megacities are projected to emerge by 2030, intensifying housing demand. Additionally, the middle-class population in Asia-Pacific is anticipated to reach 1.7 billion by 2030, prompting a significant rise in demand for affordable housing, especially in emerging markets like Vietnam and Indonesia. Furthermore, there is a noticeable shift toward branded residences in the prime market especially in markets such as Australia, India, and Thailand, appealing to both local and international investors who value luxury living combined with high-end services on top of secure investments.

JAKARTA: Apple Inc has increased its offer to invest in Indonesia by almost tenfold, according to people familiar with the matter, in the US tech giant’s latest bid to persuade the government to lift its sales ban on the iPhone 16. The proposal would see Cupertino-based Apple invest almost US$100mil in South-East Asia’s largest economy over two years, the people said, asking not to be identified because they’re not authorised to speak publicly. Apple’s previous investment plan of close to US$10mil would have involved the company investing in a factory making accessories and components in the city of Bandung, located South-East of Jakarta, Bloomberg News reported earlier. After Apple submitted its increased offer, Indonesia’s Industry Ministry, which last month blocked a permit allowing the sale of the iPhone 16, is now demanding that the technology behemoth alter its investment plans to focus more on research and development for its smartphones in the country, the people said. The Industry Ministry hasn’t made a final decision on Apple’s newest proposal, they added. Following Apple’s initial proposal, the ministry called for senior company executives to meet Minister Agus Gumiwang Kartasasmita. But after flying into Jakarta, Apple’s senior executives were told that the minister wasn’t available and so they had to meet with the ministry’s director-general instead. Apple and the Industry Ministry didn’t respond to requests for comment. Apple’s new investment proposal came after the Industry Ministry last month blocked sales of the iPhone 16 on the grounds the United States company’s local unit hasn’t met a 40% domestic content requirement for smartphones and tablets. According to the Indonesian government, Apple has only invested 1.5 trillion rupiah (US$95mil) in the nation via developer academies, falling short of a commitment of 1.7 trillion rupiah. The South-East Asian nation has also banned the sale of Alphabet Inc’s Google Pixel phones because of a similar lack of investment. Indonesia’s hardball tactics appear to be working, with the iPhone 16 ban becoming an example of the pressure new President Prabowo Subianto’s government is putting on international firms to increase local manufacturing as it seeks to boost domestic industries. Indonesia also resorted to such tactics under the administration of former President Joko Widodo, who blocked ByteDance Ltd’s TikTok last year to shield its retail sector from cheap Chinese-made goods. This prompted the hugely popular video app to ultimately invest US$1.5bil in a joint venture with Tokopedia, the eCommerce arm of Indonesia’s GoTo Group. By offering to invest in the country, Apple is seeking to get unfettered access to Indonesia’s 278 million consumers, more than half of which are under the age of 44 and tech savvy. But such strong-arm tactics by Indonesia risk frightening off other firms from scaling up their presence or establishing a footprint in the first place, particularly ones that are looking to decouple from China. It may also jeopardise Prabowo’s aim of attracting overseas investments to grow the economy and fund policy spending. It’s unclear as to which companies Apple’s proposed investment might go. Apple typically backs assembly or components partners such as Foxconn in various countries, which in turn help produce or supply vital parts for its iPhones and iPads. — BLOOMBERG