Hong Leong, TPG acquire Columbia Asia hospitals in Southeast Asia

KUALA LUMPUR: Hong Leong Group and private equity firm TPG Group have jointly won a bid to acquire Columbia Asia Hospitals in Southeast Asia worth US$1.2 billion.

Both parties recently entered into a definitive share purchase agreement, which is expected to close at the end of this year.

The transaction includes all 17 hospitals and one clinic in Malaysia, Indonesia and Vietnam. – Bernama

India's review of it Asean FTA won't affect RCEP talks, says minister

KUALA LUMPUR, Sept 12 — India’s decision to review its free trade agreement (FTA) with Asean is not seen as affecting the talks on the Regional Comprehensive Economic Partnership (RCEP), which are expected to be completed by year-end….

'Oracle of oil' T. Boone Pickens dies at 91

NEW YORK, Sept 12 — T. Boone Pickens, a celebrated corporate raider and energy industry magnate who built an empire out of an initial US$2,500 (RM10,417) investment, died yesterday at age 91. The Oklahoma-born tycoon, known for his folksy speech…

Malaysian furniture sector a winner amid US-China trade war

PETALING JAYA: The Malaysian furniture sector appears to be emerging as a clear winner of the trade diversion arising from the US-China trade war, but share prices of furniture stocks remain lacklustre.

According to AmInvestment Bank Research (AmResearch), it is understandable as such players generally have small market capitalisation and share liquidity. In addition, the sector is under-researched and lack investor relations initiatives.

The research house said as furniture exports from Malaysia are spared from the tariff spat, it translates into a tremendous price advantage for Malaysian furniture exporters over their Chinese peers in the US market.

“We gathered from furniture companies we met up with recently that they have indeed benefited from the trade diversion from the ongoing US-China trade war.”

AmResearch observed that the furniture exporters have seen increased orders in their operations in Malaysia and some players have also seen a similar trajectory for their expanded operations in Vietnam.

“Poh Huat Resources for instance, has guided for its sales to the US from its Malaysian operations to increase by another 30% in October 2019, after surging by a third in FY18,” it said.

The company has spent close to RM20 million in capex for its Malaysian operations over the last 24 months, a four fold increase from the amount spent in 2016-2017.

A similar trajectory can be seen in Homeritz, a relative newcomer to the US market, as it has signed eight new customers so far in 2019.

The company is embarking on an expansion plan that will come onstream over the next three to five years, subject to the demand from its customers.

AmResearch projected furniture exports from Malaysia to grow 6.1% to US$2.7 billion (RM11.3 billion) in 2019, a 3.1% growth against 2018 .

Worth to mention is that key Malaysian furniture players already have a significant presence in Vietnam.

However, the research house is mindful of the risk that the US Department of Commerce could impose duties on Vietnamese goods to stamp out the rerouting of Chinese goods to the US.

“This could completely erase the price advantage of Malaysian players in Vietnam over Chinese players,” it said.

AmResearch highlighted that Malaysian furniture manufacturers could capitalise on the situation by entering into a genuine joint venture model with Chinese parties, aside from the usual “rerouting” model.

It explained that in such partnerships, the Malaysian partner could provide land and buildings, labour and local knowledge including the supply chain.

The Chinese partner could bring in scale, additional capital, new technology and a more extensive international clientele.

The research house noted that Vietnam has been the top choice for relocation from China given its low wages, a sizeable workforce and domestic market.

However, the influx of foreign investments has pushed up land prices and labour costs, created bottlenecks along the supply chain and choked the public infrastructure.

“This brings foreign investors’ attention to the alternatives such as Malaysia, Thailand, Indonesia and South Asia.”

On another note, AmResearch is mindful of the potential competition posed by foreign players (particularly the Chinese) if they decide to set up their manufacturing plants in Malaysia.

“In the case of wood-based furniture under the blue-sky scenario, it takes a foreign player only about 18 months to build the factory, train the workers and commence production. Armed with capital and efficiency (driven by scale and technology, particularly automation), they will surely give the local players a run for their money,” it said.

AmResearch believes the only way the local players can defend their turf is to boost efficiency (including investment in auto-mation to counter the ever-rising labour cost), step up product innovation and offering and expand their global market reach.

Philippines’ Duterte says Xi offering gas deal if arbitration case ignored

MANILA, Sept 11 — Philippine President Rodrigo Duterte said his Chinese counterpart has offered Manila a controlling stake in a joint energy venture in the South China Sea, if it sets aside an international arbitral award that went against…

M’sia pins hope for RCEP deal success with good progress made

BANGKOK: Malaysia sees a positive progress towards concluding the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade pact, by year-end even though there are still some outstanding issues that needed to be resolved.

International Trade and Industry Minister Datuk Darell Leiking (pix) said the 27th round of the RCEP negotiations in China last month made a good progress where a lot of issues were ironed out.

“We still have some outstanding issues. Instructions to the trade negotiators are to complete and settle the issues by the next meeting in Da Nang, Vietnam from Sept 19 to 27.

“All countries involve (in the negotiations) will look at a bigger picture for the future direction of the 3.4 billion market economy that we have,” he told Bernama here.

Darell and his counterparts from ASEAN member countries and its six dialogue partners gathered here on Sunday for the 7th RCEP Ministerial Meeting to review developments in the RCEP negotiations since the ministers last met in China on Aug 2-3.

The RCEP is a multilateral trade agreement between the 10 member states of ASEAN — Malaysia, Brunei, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam — and its six FTA partners, namely China, Japan, South Korea, Australia, New Zealand and India.

A source close to Malaysia’s trade negotiator said the marathon-like RCEP talks in Zhengzhou, China last month made a good progress as it solved a number of issues, including to ease Investor-State Dispute Settlement clauses on Business Standard.

“The negotiations progressed better than the past seven years,” the source said.

As pressures mount to conclude the deal this year, Darell assured that Malaysia’s interest and sovereignty are the top priority in concluding the agreement.

“When we create a new economic bloc, we have to listen to the people and our interest… We have to make sure we avoid all the pitfalls,” he said.

Citing an example, he said the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which was signed before Pakatan Harapan (PH) took over the government in May last year, does not fit it into the current policy.

Darell disclosed that some of the chapters and clauses closed before the change of government could never be reopened.

“Unfortunately, good or bad, we have to accept those chapters as they were negotiated before the PH government took over. However, we will use our policy on the outstanding chapters. We will not compromise the sovereignty of the country to conclude the trade deal,” he said.

Meanwhile, in a joint statement after the 7th RCEP Ministerial Meeting yesterday, the ministers reaffirmed their collective resolve to bring negotiations to a conclusion.

“The ministers are committed to avail negotiators with the necessary resources and mandate to bring negotiations to a close. The ministers made the collective call to negotiators at all levels to translate this commitment into constructive actions and positive outcomes,” it said.

The ministers also recognised that the negotiations have reached a critical milestone as the deadline for their conclusion draws near.

Notwithstanding the remaining challenges in the negotiations, RCEP participating countries are working on addressing outstanding issues that are fundamental to conclude the agreement this year as mandated by the leaders.

“Ministers agreed that participating countries should not lose the long-term vision of deepening and expanding the values chains in the RCEP.

“The Ministers underscored that, successfully concluded, the RCEP will provide the much-needed stability and certainty to the market, which will in turn boost trade and investment in the region.

The RCEP negotiations were launched during the 21st ASEAN Summit in November 2012 in Phnom Penh.

The trade pact comprises a population of 3.4 billion with a total gross domestic product (GDP) of US$49.5 trillion, or about 39 per cent of the world’s GDP.

The deal is likely to be signed next year if the negotiations could be finalised in the meeting in November in Bangkok.

It was reported that about 80 per cent of the agreement is completed with negotiations on content in financial, telecommunication and professional services.

After seven years, the trade deal remains unsigned. India is widely viewed as the biggest barrier in concluding the RCEP as New Delhi allegedly opposed opening its markets to tariff-free goods and services.

However, New Delhi is hesitant about opting out of the RCEP pact.

Malaysia pins hope for RCEP deal success with good progress made

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Vietnam Airlines secures first license for direct US flights

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Tariffs push some US manufacturers to exit China

CHICAGO, Sept 5 — As fresh US tariffs on Chinese imports kick in, Illinois-based phone accessories manufacturer Ben Buttolph has been urgently moving production to other Asian countries despite the cost, inconvenience and deep uncertainty….