Malaysia firmly believes that the Association of Southeast Asian Nations (ASEAN) continues to play a critical role in addressing challenges brought by the pandemic through the implementation of the many initiatives discussed through the various ASEAN-led mechanisms.

Prime Minister Tan Sri Muhyiddin Yassin, in his intervention at the 37th ASEAN Summit plenary session today, said what is required now is ensuring these initiatives serve as the platform for ASEAN to work collectively, with external partners and other interested parties in alleviating and countering the impacts of Covid-19 in the region.

“This is especially true when it comes to the development and access to Covid-19 vaccine. ASEAN must work hand-in-hand with relevant international organisations such as the World Health Organisation and countries to ensure the vaccine, once it has been approved, is affordable, accessible and equitably shared by all,“ he said.

The Prime Minister is leading the Malaysian delegation at the biannual summit virtually from here (Kuala Lumpur) which run till Sunday.

The summit is chaired by Vietnam Prime Minister Nguyen Xuan Phuc in his capacity as ASEAN Chair 2020 under the theme “Cohesive and Responsive ASEAN.”

Muhyiddin added that Malaysia welcomes any external partners that are willing to share their discovery and expertise on this matter.

Meanwhile, Muhyiddin said that as a regional bloc comprising mainly of developing states, it is imperative to focus on the ASEAN Comprehensive Recovery Framework.

“I am happy to see that my initial proposal earlier this year has become a reality which we will endorse today,“ he said.

The ASEAN Comprehensive Recovery Framework is one of the three official documents that will be released at this summit. Other official documents are the Mid-term Review of ASEAN Community Vision 2025 and the ASEAN Regional Reserve of Medical Supplies for Public Health Emergencies.

The prime minister said ASEAN should strategise its approach in reviving the economy, trade and investment by embracing the new norm of conducting its economic engagement including through technology such as digital platforms.

Muhyiddin said, to this end, the movement of goods and services including critical infrastructure such as ports and airports, including logistical networks, remain accessible and tailored to suit the new norm in order to maintain and sustain economic growth in these challenging times.

The prime minister said that essential movement through Travel Corridors must be given priority, such as a coordinated set of procedures and requirements between the Member States, as the enabling movement of people in the region will also help drive economic growth.

“It is crucial for ASEAN’s economic recovery plan to encompass not only financial considerations but also address the need to forge an integrated, robust and sturdy regional partnership to preserve the rich social fabric which underpins the ASEAN Community,“ he said.

Muhyiddin said as a region blessed with rich natural resources, it is time to look into possible ways to strengthen food security in the region.

ASEAN, he said, should seize this opportunity to fortify the agro-foundation that the region has with the global supply chain greatly disrupted.

Also part of the Malaysian delegation to the 37th ASEAN Summit is Foreign Minister Datuk Seri Hishammuddin Tun Hussein as well as Senior Minister and International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali.

ASEAN, established in 1967, comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Source: Bernama 

Malaysia firmly believes ASEAN continues to play critical role addressing Covid-19 Challenges — Muhyiddin

The Regional Comprehensive Economic Partnership (RCEP) agreement, expected to be signed on November 15 within the framework of the 37th Asean Summit in Hanoi, will be the world’s largest free trade agreement (FTA) and is a significant boost for Asean businesses, including those in Vietnam, reported Vietnam News Agency (VNA) according to insiders.

Initiated by the Association of South-east Asian Nations (Asean), the deal is between ten member states of Asean — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, and the six Asean partners — China, Japan, South Korea, Australia, New Zealand, and India.

Once it comes into effect, the RCEP will create a market covering nearly half of the world’s population, or about 3.5 billion people.

Asean — a market of potential

Compared to developed markets such as the United States, the European Union, or East Asia, Asean is not overly demanding but a good market nonetheless for a wide range of products where Vietnamese companies hold competitive advantages.

Home to about 650 million people and with gross domestic product (GDP) of around US$3.11 trillion (RM12.8 trillion), Asean is a key market for Vietnam and where “Made-in-Vietnam” products initially test their strength before reaching out to the world.

Vietnamese companies will also benefit a great deal from tariff reductions under the Asean Trade in Goods Agreement (Atiga).

Most enterprises, however, have failed to take full advantage and boost exports to the market.

According to the Ministry of Industry and Trade, Vietnam has run a trade deficit with Asean over recent years, with import revenue accounting for 55 per cent of total trade, but the country has been working to close the gap in the near future.

Vietnam shipped nearly US$25 billion worth of products to Asean last year, up 1.3 per cent against 2018 and 30 per cent against 2016.

In October alone, the country earned US$18.9 billion from exports to Asean, but outlaid US$24.4 billion on imports from regional countries, down 11.4 per cent and 8.5 per cent, respectively, year-on-year.

Key export staples included telephones and parts, computers, electronic products and parts, and garments and textiles. Imported goods were mostly equipment, petroleum, computers, and electronic products and parts, among others.

Thailand and Indonesia have surpassed traditional markets like the US, Germany, Japan, and South Korea to become the largest import market of Vietnamese automobiles.

Asean is Vietnam’s fourth-largest trade partner, following China, the US, and South Korea. Work needs to be done to boost exports to the market, which boast substantial potential.

RCEP brings new hope to original firms

According to Director of the Ministry of Industry and Trade’s Multilateral Trade Policy Department Luong Hoang Thai, with provisions to reduce or remove tariffs on industrial and agricultural products, the RCEP will help firms in Asean member states boost exports, particularly to major trade partners.

He suggested Vietnamese companies improve their competitive edge by paying due regard to trade policies, renewing technologies, and landing large investments in services.

Meanwhile, Deputy Director of the ministry’s Asia-Africa Market Department Nguyen Phuc Nam recommended local companies ensure rules of origin on goods and certificates of origin procedures, so as to gain full access to tariff preferences.

“Enterprises must understand regulations on standards and quality, upgrade production, and invest in packaging,” he said.

They should also handle any issues that arise and inform relevant authorities of such, to receive timely consultation and support.

He urged them to remain abreast of consumer trends, engage more in trade promotion activities, and seek prestigious distributors.

Minister of Industry and Trade Tran Tuan Anh said that once the RCEP takes effect, Vietnamese companies will have more opportunities to expand markets, join regional value chains, and attract more foreign investment.

Telecommunications, IT, garments and textiles, footwear, and agriculture can take huge advantage of import tariff reductions under the agreement, he stressed.

Source: Bernama 

RCEP — a new boost for Asean regional enterprises

Southeast Asia’s internet economy will hit $105 billion this year, as the coronavirus crisis prompted stuck-at-home consumers to go online to shop, get food delivered at home and for entertainment purposes, an industry report said on Tuesday.

The report, which covers Indonesia, Malaysia, Vietnam, Singapore and the Philippines, said the region added 40 million new internet users this year, taking the total to 400 million. That implies 70% of the region’s population is now online, the report added.

“The coronavirus has brought about a permanent and massive digital adoption spurt,” stated the report by Google, Singapore state investor Temasek Holdings and business consultants Bain & Co.

Southeast Asia’s internet economy expanded 5% from 2019.

Online retailers have emerged as winners from coronavirus lockdowns as people prefer to shop from their homes instead of making a trip to stores amid worries over a resurgence in infections. E-commerce grew 63% to reach $62 billion in 2020, to become the largest vertical this year, while the travel sector contracted 58% to $14 billion.

Singapore’s internet economy contracted 24% to $9 billion as the pandemic choked the travel sector, while Vietnam and Indonesia continued to grow at double-digit rates.

The region’s online industry is poised to triple to $309 billion in gross merchandise value by 2025, nearly in line with the $300 billion forecast made last year.

With an 11% increase in online users, Southeast Asia is one of the world’s fastest growing internet markets. That compares with around 4.7 billion internet users worldwide, up 7.4% from a year ago, according to wearesocial.com, a digital monitoring service.

Continued growth in internet usage has helped create unicorns such as Grab and Go-Jek, with the region’s startups attracting billions in capital from global technology companies and investment firms.

Deal value has declined since 2018, primarily driven by a slowdown in big-ticket unicorn investments, the Google-Temeasek-Bain report said. Still, $6.3 billion worth of deals were struck in the first half of 2020 versus $7.7 billion a year ago.

Investors still have sufficient capital to deploy but are focusing more on companies’ path to profitability.

Source: Reuters

Southeast Asia’s Internet economy to cross US$100b this year — industry report

Record levels of new renewable energy capacity are set to come on stream this year and next, while fossil fuel capacity will fall due to an economic slump and the Covid-19 crisis, the International Energy Agency (IEA) said in a report.

In its annual renewables outlook, the IEA said new additions of renewables capacity worldwide would increase by 4% from last year to a record 198 gigawatts (GW) this year.

This means renewables will account for almost 90% of the increase in total power capacity worldwide this year.

Supply chain disruptions and construction delays slowed the progress of renewable energy projects in the first six months of this year due to the coronavirus pandemic.

However, the construction of plants and manufacturing activity has ramped up again, and logistical challenges have been mostly resolved, the IEA said.

Electricity generated by renewables will increase by 7% globally this year, despite a 5% annual drop in global energy demand, the largest since World War Two.

Next year, renewable capacity additions are on track for a rise of almost 10%, which would be the fastest growth since 2015.

“Renewable power is defying the difficulties caused by the pandemic, showing robust growth while others fuels struggle,” said Dr Fatih Birol, the IEA’s executive director.

Policymakers need to support the strong momentum behind renewables growth and if policy uncertainties are addressed, renewable energy capacity additions could reach 271 GW in 2022, the IEA said.

In 2025, renewables are set to become the largest source of electricity generation worldwide, supplying one third of the world’s electricity, and ending coal’s five decades as the top global power source, the report said.

Source: Reuters 

Record new renewable energy capacity this year and next — IEA

The signing of the Regional Comprehensive Economic Partnership (RCEP) agreement will be the central outcome of the 37th ASEAN Summit and related meetings, to be held virtually from Nov 9 to 15. The ASEAN Summit will be hosted by Vietnam, who is the ASEAN chair for 2020.

The RCEP agreement would make this grouping the largest free-trade agreement in the world, covering nearly half of the world’s population while contributing to one-third of the world’s gross domestic product.

The agreement, which has been in negotiation since 2013, would enhance regional economic integration, promote the flow of investments and strengthen global supply chains, the Ministry of International Trade and Industry (MITI) noted in a statement, today.

According to the ministry, leaders are all set to convene at the summit, and Prime Minister Tan Sri Muhyiddin Yassin will lead the country’s delegation accompanied by Senior Minister cum International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali alongside Foreign Minister Datuk Seri Hishammuddin Tun Hussein.

With ASEAN member states still battling the Covid-19 pandemic, MITI said the summit will be an ideal platform to discuss ways and means to deal with the health and economic challenges.

Under the theme “Cohesive and Responsive”, member states will also focus on how best to enhance unity, cooperation, and solidarity towards regional economic integration.

Prior to the leaders’ summit, the economic ministers will convene at the ASEAN Economic Community Council Meeting to discuss tangible solutions and the way forward to support the recovery of the regional economy by keeping markets open for trade and investment.

In this regard, the proposed ASEAN Comprehensive 2 Recovery Framework (ACRF) and its implementation plan, will be submitted for the ASEAN leaders’ endorsement at the summit.

“Our expectation is for the ACRF to be implemented so as to provide sustainable solutions to economic recovery made all the more imperative because of Covid-19,” Mohamed Azmin said.

The meetings will also feature customary summits with ASEAN dialogue partners, namely the 23rd ASEAN-China Summit, the 23rd ASEAN-Japan Summit, the 21st ASEAN-South Korea Summit, the 8th ASEAN-United States Summit, and the ASEAN-New Zealand Leaders’ Summit.

Others are the second ASEAN-Australia Leaders’ Summit, the 23rd ASEAN Plus Three Summit, the 15th East Asia Summit, the 11th ASEAN-United Nations Summit and the 17th ASEAN-India Summit.

MITI said these summits with dialogue partners are expected to advance further cooperation in multiple areas, with emphasis on stretching trade relations, especially amidst the Covid-19 pandemic.

The 2020 ASEAN Business Investment Summit (BIS) is also scheduled to take place in conjunction with the 37th ASEAN Summit, with the theme “Digital ASEAN: Sustainable and Inclusive”.

The 2020 ASEAN BIS is expected to host not only the ASEAN leaders and dialogue partners, but also ASEAN and global chief executive officers, prominent decision-makers, think tanks, as well as thought leaders, MITI said.

The 2020 ASEAN BIS will culminate with the ASEAN Business Award event which honours excellent businesses across the region, in particular, enterprises that have shown the spirit to overcome challenges in these trying times.

Source: Bernama 

RCEP trade pact signing to be key outcome of 37th ASEAN Summit — MITI

The global economy is forecast to record a solid rebound in 2021, buoyed by robust domestic demand and exports in the advanced economies and the emerging markets and developing economies (EMDEs).

However, the Finance Ministry said that risks to the global economy persist, as growth may be hampered by the re-intensification of trade tensions between the United States and China, uncertainties surrounding the Brexit outcomes and widespread geopolitical tensions.

In its Economic Outlook 2021 report released today, the ministry said the continued low oil prices and deepening climate crisis may also derail the recovery.

“In addition, limited fiscal space and a further spike in government debts may also impede growth,“ it said.

The global economy, however, is envisaged to remain on a positive growth trajectory, with the implementation of fiscal and monetary measures to boost consumer and investor confidence.

The ministry added that the successful development of an effective and accessible COVID-19 vaccine, coupled with the containment of the spread of the pandemic in the near term, may further stimulate global growth.

“While the pandemic poses multifaceted challenges to countries, especially in amplifying existing socioeconomic gaps, the COVID-19 pandemic also presents opportunities for economies to institute reforms, towards accelerating digitalisation and pursuing sustainable growth,“ it said.

According to the report, the global economy is projected to contract by 4.4 per cent this year compared to 2.8 per cent growth in 2019, due to unfavourable performance in both advanced economies and the EMDEs, mainly resulting from the adverse impact of the pandemic.

However, it said, robust growth in the advanced economies and the EMDEs is expected to spearhead global growth by 5.2 per cent in 2021.

“In 2021, the advanced economies are forecast to rebound by 3.9 per cent, spurred by improved domestic demand and increased trade activities. Growth in the US is expected to improve by 3.1 per cent, backed by a recovery in private consumption and favourable investment,“ it said.

Meanwhile, the Gross Domestic Product (GDP) of the EMDEs in 2021 is expected to bounce back by 6.0 per cent, buoyed by solid domestic demand and higher export, the report said.

“China is envisaged to lead the recovery in the region, with a sturdy growth of 8.2 per cent. Likewise, the economy of India is projected to rebound by 8.8 per cent on the back of strong consumer demand,“ it said.

The GDP of ASEAN-5 (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) is anticipated to turn around by 6.2 per cent, on account of robust domestic consumption, higher investment and a favourable trade environment.

Source: The Sun Daily 

Global economy heading for a solid rebound

Global 300mm fab investments in 2020 will grow by 13% year-on-year (y-o-y) to eclipse the previous record high set in 2018 and log another banner year for the semiconductor industry in 2023, according to the US-based Semiconductor Equipment and Materials International (SEMI).

In its “300mm Fab Outlook to 2024” released yesterday, SEMI said the Covid-19 pandemic had sparked a surge in fab spending this year by accelerating digital transformations worldwide, and the increase is expected to stretch into 2021.

It said powering the growth is rising demand for cloud services, servers, laptops, gaming and healthcare technology.

SEMI said besides fast-evolving technologies such as 5G, the Internet of things (IoT), automotive, artificial intelligence (AI) and machine learning that continue to fuel demand for greater connectivity, large data centres and big data are also behind the increase.

SEMI president and chief executive officer (CEO) Ajit Manocha said the Covid-19 pandemic is accelerating a digital transformation sweeping across nearly every industry imaginable to reshape the way we work and live.

“The projected record spending and 38 new fabs reinforce the role of semiconductors as the bedrock of leading-edge technologies that are driving this transformation and promise to help solve some of the world’s greatest challenges,” he said.

SEMI said the growth in semiconductor fab investments will continue in 2021 but at a slower rate of 4% y-o-y.

Mirroring previous industry cycles, the report also predicted a mild slowdown in 2022 and another slight downturn in 2024 following a US$70 billion record high in 2023.

Source: The Edge Markets 

Global 300mm fab spending to boom through 2023, says SEMI

Although global semiconductor sales rose 5.8% in the third quarter of 2020 to US$113.60 billion, significant market uncertainty remain, according to the US-based Semiconductor Industry Association (SIA).

In a statement on its website Oct 30, SIA said sales rose 11% quarter-on-quarter.

It said global sales for the month of September 2020 were US$37.9 billion, an increase of 4.5% over the August total and 5.8% more than sales from September 2019.

All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. SIA represents 95% of the US semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.

SIA president and CEO John Neuffer said the global semiconductor industry posted solid sales in the third quarter of 2020, reflecting normal seasonal trends and increased demand for semiconductor-enabled products, but significant market uncertainty remains due to the pandemic and other macroeconomic factors.

“Sales into the Americas remained strong in September, increasing by more than 20% year-to-year, and sales increased on a month-on-month basis across all major regional markets.”

SIA said that regionally, sales increased on a month-to-month basis in China (7.9%), Asia-Pacific/all others (3.3%), Europe (3.3%), the Americas (2.2%), and Japan (1.5%).

It said on a year-on-year basis, sales increased in the Americas (20.1%), China (6.5%), and Asia-Pacific/all others (2.9%), but decreased in Japan (-1.8%) and Europe (-9.8%).

Source: The Edge Markets 

Global semicon sales up 5.8% in 2Q20 to US$113.6b, market uncertainty remains, says SIA

Although the COVID-19 pandemic has caused a devastating impact on the economy, it also provides an opportunity for the Asia-Pacific Economic Cooperation (APEC) economies to leverage the present narrative in doing business and investment on a renewed trajectory.

The Ministry of International Trade and Industry (MITI) deputy secretary general (investment) Datuk Bahria Mohd Tamil said the pandemic has challenged all stakeholders to think more deeply about the role the business and investment communities play in society, environment and the future design of policy-making that takes into account the needs for responsible and inclusive business model.

“Malaysia is of the view that there is already an enormous public policy opportunity for the APEC to put forward bold Inclusive and Responsible Business and Investment (IRBI) strategies at the heart of their post-2020 and post-coronavirus plans,” she said.

In her opening remarks at the APEC Public-Private Dialogue on Inclusive and Responsible Business and Investment here, today, Bahria said the past few decades had shown more businesses and investment institutions taking progressive steps in venturing into new business model that embraces the principles of IRBI.

“Likewise, there is a growing interest among businesses and investment institutions in embracing the Sustainable Development Goals (SDGs) (and include them) in their business’ DNA,” she said.

In fact, the SDGs had created US$12 trillion (US$1=RM4.15) in market opportunities in many economic sectors, including food and agriculture, cities, energy, and health and well-being, she said, quoting the Business and Sustainable Development Commission’s data in 2017.

Today’s dialogue, she said, discussed the nexus between the global commitment in realising SDGs and the growing interest among the APEC economies and businesses on the importance of the environmental protection, promoting good social values and corporate governance – or commonly known as the ESG pillars.

“These ESGs, SDGs or our own vernacular IRBI factors have proven to contribute an important role in predicting financial returns, hence they should not be ignored when considering an investment decision,” Bahria said.

Source: Bernama 

Pandemic forces APEC economies to change narrative in doing business, investment

Asia’s factories pushed ahead in October as managers remained upbeat about recovery prospects and local virus outbreaks become less severe, manufacturing gauges show.

India’s purchasing managers index rose to 58.9 last month, its highest since May 2010, from 56.8 in September, while South Korea advanced to 51.2 from 49.8, and Taiwan stayed particularly strong at 55.1 in October after the previous month’s 55.2, according to IHS Markit figures released Monday. Thailand also moved above 50, the dividing line between expansion and contraction, while Japan improved to 48.7 from 47.7.

Vietnam and Malaysia retreated, though the former stayed in expansionary territory. Malaysia’s reading of 48.5 was the lowest since May.

The regional figures are getting a lift from China’s ongoing recovery, which a separate report Saturday showed remains on track. The manufacturing PMI eased slightly in October to 51.4 from 51.5, according to data released by the National Bureau of Statistics. The non-manufacturing index jumped to 56.2 after 55.9 in September.

That was followed on Monday by the Caixin Media PMI, which rose to 53.6, its highest reading since January 2011, spurred by another increase in new orders.

Still, an uncertain outlook in key trading partners including Europe and the US could drag on China’s performance over coming months, Wang Zhe, senior economist at Caixin Insight Group, said in a release.

“There are still many uncertainties outside of China, so policy makers need to be cautious about normalising post-coronavirus monetary and fiscal policies,” Wang said.

For now, goods trade has been a growth engine for the global economy in recent months while services remain hampered by restrictions on mobility and the threat of further virus outbreaks. All 10 gauges on the Bloomberg Trade Tracker have settled into “normal” status since early September — an unprecedented feat since the dashboard debuted in 2018 — and electronics production has remained particularly strong amid 5G demand and as businesses invest in pandemic-era equipment.

Source: Bloomberg 

Asia’s factories recover in October with India leading gains

Taiwan’s manufacturing industry has been actively strengthening its technology, investing in high-value hardware, building materials and fasteners.

In 2019, Taiwan’s hand tools export value achieved US$3.8 billion (RM16 billion) which ranked third in the world. Within the fastener industry, Taiwan is ranked among the top four globally with an export value of more than US$4 billion.

“Supported by Taiwan’s cutting edge ICT industry, building materials and fasterners could produce a whole bunch of data through sensors by which the functions of the components can be optimised,“ said Taiwan External Trade Development Council executive vice president Simon Wang at the Taiwan Excellence Building Material and Fastener Webinar yesterday.

Taiwan Excellence, representing the highest achievement awarded for Taiwanese products, held the online event which featured the latest hardware products from four award-winning Taiwanese companies King Slide Works Co Ltd, Sheh Kai Precision Co Ltd, Tronco Electric Machinery Inc and Sheh Fung Screws Co Ltd.

King Slide Works is the leading furniture hardware manufacturer in Taiwan engaged in the research, design, manufacture and sales of guide rails for servers and peripheral components. Its Simlead metal drawer system with push-open, silent soft closing and VSD comprises the metallic side walls and full extension runners, offering the world’s first drawer safety and friendly design.

Sheh Kai Precision is a manufacturer of high-end construction fastener: bi-metal screw, ultimate performance bi-metal and carbon steel screw anchor in Taiwan. Its concrete screw anchor is to create a fastener product with high ductility within the load bearing area of the fastener. The increase in ductility and hardness would in turn lower the sensitivity it will have to the damages caused by embrittlement by way of hydrogen as well as corrosion. Compared with traditional expansion anchor, concrete screw anchor can save 30% of time with no expansion forces as the installation is close to the edge.

Tronco Electric Machinery is one of the top suppliers of intelligent automatic door system, DC brushless motor, electronic access control system, wireless system and related accessories. Its automatic swing door system incorporates microprocessor servo controllers that bring the benefit of precision door position control and smooth noise-free operation. As a green electric system, it features high-efficiency power supply units with stand-by power consumption at just <0.5W, offering a superior energy, cost-effective automatic door solution.

Sheh Fung Screws is a specialist brand in manufacturing and distributing screws. It offers various screws, including self-drilling, timber construction, drywall, chipboard, self-tapping, decking, self-piercing screws, and other screws. Its timber construction screws come in four different types: wafer head, double flat head sharp point, cheese head, and double flat head drill point. It asymmetric thread design for better pullout, milling thread design reduce the risk of splitting the wood and easy no stress-free drill, reduce screw torque and fully threaded for maximising a joints load bearing capacity and pullout.

Source: The Sun Daily

Taiwan’s smart hardware for the global market

Green power is set to draw around US$11 trillion of investment in the coming decades as the cost of renewables plummets and more of the world’s energy comes from electricity.

That’s the latest analysis from BloombergNEF in its annual New Energy Outlook report. It’s further evidence of how cheap renewable power sources will continue to push aside fossil fuels in the energy mix.

Despite the massive sum, BNEF said the pace of building out new renewables will need to increase further to limit global warming to less than 2 degrees Celsius by the end of the century.

The projected increases in renewable energy and battery technology — wind and solar will grow to 56% of global electricity in 2050 — are set to cause emissions to peak in 2027 and then fall 0.7% annually until 2050, BNEF said.

That would lead to a warming of 3.3 degrees Celsius by 2100, well short of the 6% annual emissions reduction needed to keep warming below 2 degrees and the 10% reduction required to achieve 1.5 degrees of warming.

“The next ten years will be crucial for the energy transition,” Jon Moore, BNEF’s chief executive officer, said citing accelerated deployment of wind and solar and faster consumer uptake in electric vehicles as some of the crucial areas over that period.

Below are four key takeaways from this year’s report:

The only fossil fuel to increase its share of demand over the coming years will be gas. That’s largely driven by its use in heavy industry and to heat buildings. A key reason for the growth of gas to warm buildings is the weak economic argument for using heat pumps. BNEF doesn’t see cost parity with gas boilers until 2040. In the US, an abundance of cheap gas will delay the energy transition, but renewable power will still overtake the fuel by 2041.

Driving Oil

The future of oil demand will be shaped by the uptake of electric vehicles. BNEF sees primary oil consumption peaking in 2035 and then gradually declining.

Meanwhile, the thirst for oil in road transport tops out in 2031, according to BNEF. The fall will be sped up by EVs reaching price parity with traditional engines before 2025, at which point people will start buying plug-in cars at a faster rate, offsetting oil’s growth from aviation, shipping and petrochemicals.

Gas Growth

By 2050, some 65% of all passenger-vehicle kilometers will be made in electric vehicles. The current fleet of EVs is displacing 1 million barrels of oil a day.

Hydrogen Scale

Governments, energy companies and lobbyists have been touting hydrogen as a way to decarbonise vast swathes of the world’s economy.

If that is realised with hydrogen made by machines powered by renewable energy, the world will need a lot more of it. For so-called green hydrogen to provide just under a quarter of energy in 2050, it would require 38% more power than is currently produced globally. Making all that hydrogen with wind and solar farms would require a land area the size of India.

Turbulence Ahead

Air travel will continue to be one of the most difficult sectors to decarbonize. Aviation emissions are up 80% since 1990 and they’ll double again by 2050. It’s one of the few sectors, along with shipping, that struggles to electrify. Heavy planes and ships that need to travel long distances would require batteries to significantly improve in order to make them commercially viable for the sector. Sustainable fuel alternatives and ammonia would need more government support than currently expected to make them cost competitive with fossil fuels in the coming decades.

Source: Bloomberg 

Green power to draw US$11 tril investment by 2050: BNEF

Microsoft Corp’s cloud computing business slightly re-accelerated and its Teams messaging and collaboration software won new users, as a pandemic-driven shift to working from home and online learning drove quarterly results ahead of investor targets.

COVID-19 has speeded up a move toward cloud-based computing, helping companies such as Microsoft, Amazon.com Inc’s cloud unit and Alphabet Inc’s Google Cloud. For Microsoft, it has also boosted demand for its Windows operating systems for laptops and its Xbox gaming services as families work, learn and play from home, leading to profit that was about 30% above expectations.

Daily users of its Teams messaging and collaboration software have risen to 115 million from 75 million in April, the company said.

“It was another healthy quarter, with continued demand for remote offerings continuing to power results,” Microsoft Chief Financial Officer Amy Hood told Reuters in an interview.

Revenue growth for Azure, the company’s flagship cloud computing business, was 48%, up 1 percentage point from the previous quarter and ahead of Wall Street estimates of 43.45%, according to consensus data from Visible Alpha. Hood said the rise in the fiscal first quarter ending in September was driven by “an increase in larger, long-term Azure contracts.”

On an investor call she forecast “continued strong growth” for Azure.

Microsoft has shifted to selling many of its products via recurring subscriptions, which investors like because it generates stable revenue flows. The value of Microsoft’s future recurring revenue contracts with big business customers was flat from the previous quarter and its proportion of one-time deals rose slightly after two quarters of growth.

Microsoft bundles several sets of software and services such as Office and Azure into a “commercial cloud” metric that investors watch closely to gauge the company’s progress in selling to large businesses. Microsoft’s commercial cloud gross margins – a measure of the profitability of its sales to large businesses – was 71%, compared with 66% a year earlier.

Hood said some of the rise was explained by a change in accounting rules for Microsoft’s servers, but the better margins were also driven by sales of lucrative software such as Dynamics 365, which competes with Salesforce.com.

“That Dynamics 365 revenue growth of 38% was better than we thought and quite good,” Hood told Reuters.

Microsoft said 93% of commercial cloud products were sold as subscriptions, compared with 94% the quarter before. The company’s remaining performance obligations – a measure of how much revenue has been booked for the future in sales contracts but not yet formally recognized as revenue – stayed flat at $107 billion (82 billion pounds) in the fiscal first quarter but was up from $86 billion a year prior.

Microsoft said revenue in its “Intelligent Cloud” segment rose 20% to $13 billion in the most recent quarter. Analysts had expected revenue of $12.7 billion, according to IBES data from Refinitiv.

Revenue from its personal computing division, which includes Windows software and Xbox gaming consoles, rose 6% to $11.8 billion.

The company’s revenue rose 12% to $37.2 billion in the quarter ended Sept. 30, beating analysts’ estimates of $35.72 billion.

“Microsoft’s strong earnings beat shows its market share in cloud computing is expanding while its legacy software products such as Windows and Office are in great demand during the pandemic,” said Haris Anwar, senior analyst at Investing.com.

Net income rose to $13.89 billion, or $1.82 per share, from $10.68 billion, or $1.38 per share, a year earlier. Analysts had expected a profit of $1.54 per share.

Microsoft shares were down 1.8% in after-hours trading, following a rise of 1.5% during the day.

Source: Reuters 

Microsoft cloud business gathers steam as pandemic boosts growth

Semiconductor equipment billings for North America-based manufacturers jumped 40.3% year-on-year (y-o-y) in September 2020 to US$2.75 billion from US$1.96 billion previously, according to the US-based Semiconductor Equipment and Materials International (SEMI).

In a statement on its website last Thursday, SEMI said the billing figure was 3.6% higher than the final August 2020 level of US$2.65 billion.

SEMI president and chief executive officer (CEO) Ajit Manocha said September billings for North America-based semiconductor equipment manufacturers marked another month of growth.

“The semiconductor industry remained resilient despite challenges posed by the [Covid-19] pandemic and geopolitical tensions,” he said.

The SEMI billings report uses three-month moving averages of worldwide billings for North American-based semiconductor equipment manufacturers.

SEMI publishes a monthly North American billings report and issues the Worldwide Semiconductor Equipment Market Statistics (WWSEMS) report in collaboration with the Semiconductor Equipment Association of Japan (SEAJ).

The WWSEMS report currently reports billings for 24 equipment segments and seven end-market regions.

SEMI also has a long history of tracking semiconductor industry fab investments in detail on company-by-company and fab-by-fab bases in its World Fab Forecast and SEMI FabView databases.

Source: Bloomberg 

Semicon equipment billings for North American manufacturers jumped 40.3% y-o-y to US$2.75b in September

Airbus SE is preparing to ramp up output next year of its most important jet, the A320neo, in a sign of growing confidence on the part of the European planemaker that jetliner demand is poised to recover.

While no decision has been made, suppliers have been told to be ready to support a monthly rate of 47 A320neo-family planes in the second half of 2021, Airbus said late Thursday. The company slashed the target rate of its popular single-aisle workhorse by a third in April, when demand evaporated as the coronavirus crisis gutted travel demand.

“We plan to maintain the rate 40 up till summer next year and we have asked the supply chain to protect up to rate 47 to be prepared for when the market recovers,” Airbus said.

The optimistic plan is taking shape despite recent setbacks in the air-travel recovery and order deferrals by major airlines. Analysts have been warning that the production outlook for the European manufacturer and U.S. rival Boeing Co. may not be sustainable. Airbus didn’t say exactly when it expected to gear up, and said it may yet make minor adjustments.

“We have done a re-evaluation of the situation after the summer period,” Airbus said. “We have refined the plan for the A320 family programs based on our current view of the market.”

Shares in Toulouse, France-based Airbus gained 4.8% to 67.54 euros as of 9:49 a.m. in Paris Friday, trimming the year-to-date decline to 48%.

Customer talks

Airbus and Boeing have been negotiating intensely with lessors and with airlines, who found themselves in sudden distress this year when the coronavirus crisis flattened revenue. Last week Delta Air Lines Inc., a major customer, delayed $5 billion of deliveries until after 2022. AirAsia X Bhd, the biggest customer for the A330neo wide-body, has asked to toss out its entire order book as it seeks to restructure its debts.

Boeing too is battling with customer setbacks as it prepares to return its grounded 737 Max, the main competitor to the A320neo, back into service after two crashes forced its grounding in March 2019. American Airlines Group Inc. said Thursday it had deferred delivery of 18 Max jets that were due in the next two years. Southwest Airlines Co., the biggest single customer for the Max, said it is looking to rework its deal starting with four dozen planes scheduled to arrive through 2021.

Airbus has largely managed to avoid order cancellations while Boeing has logged hundreds for the Max, as airlines leverage delays tied to the grounding to get out of contracts now that they don’t want the planes. Even so, Airbus’ optimism is surprising given airlines’ recent gloom over near-term prospects, said Bloomberg Intelligence analyst George Ferguson.

“One of the most successful airlines on the globe, Southwest, just told us they have 20% too many employees and too many airplanes,” Ferguson said. Airbus could be attempting to time the market’s recovery while ensuring suppliers are prepared to ramp up, he added.

Supplier woes

Setting production rates is a delicate balancing act for Airbus as it attempts to steady its struggling network of suppliers while protecting its own cash flow.

The European manufacturer jolted its supply chain by abruptly moving from record production in 2019 to a 40% drop in output. As the virus spread, Airbus also said it would slash 15,000 jobs worldwide, including 5,100 in Germany and about 5,000 in France. Smaller companies in aerospace centers such as Toulouse, Hamburg in Germany and the Midlands in the U.K. lost up to half of their order books overnight.

Airbus, which is poised to report results next week, stressed that no final decision had been taken on the A320.

For now, it will keep output rates of the A330 wide-body and its outgoing A380 super-jumbo steady. Airbus didn’t mention the A350, its most popular long-haul plane, or it smallest single-aisle, the A220.

The planemaker, which assembles the A320 in France, Germany, China and Mobile, Alabama, reached an agreement with French unions last week which will see it avoid compulsory redundancies until at least March 2021.

Source: Bloomberg 

Airbus sets plan to gear up production in show of confidence

Strong international cooperation on Covid-19 vaccines could speed up the world economic recovery and add US$9 trillion (RM37.4 trillion) to global income by 2025, International Monetary Fund Managing Director Kristalina Georgieva said yesterday.

Speaking at a news conference after a meeting of the IMF’s steering committee, Georgieva also called on the United States and China to keep up strong economic stimulus that could help boost a global recovery.

She emphasised the need for vaccines to be distributed evenly across the world in both developing countries and wealthy nations, to boost confidence in travel, investment, trade and other activities.

“If we may make fast progress everywhere, we could speed up the recovery. And we can add almost US$9 trillion to global income by 2025, and that in turn could help narrow the income gap between richer and poorer nations,” Georgieva said.

“We need strong international cooperation and this is most urgent today for vaccine development and distribution,” she said.

Equitable and affordable access to Covid-19 therapeutics and vaccines globally will be key to avoiding long lasting scars on the world economy, the IMF’s International Monetary and Financial Committee said in its statement.

Georgieva also said she had “no doubt” that the US Congress and the White House would ultimately agree on another spending package but was uncertain about the timing. Some US$3 trillion in US stimulus spending earlier this year “has been an important positive impulse and we would like to see how it would be continued again,” she said.

More participants

The committee said private creditors’ and official bilateral creditors’ participation in debt relief for poor countries is essential, with Georgieva adding that “further private sector participation is still needed, and it remains an outstanding issue.”

The G20 on Wednesday approved a six-month extension to mid-2021 of the Debt Service Suspension Initiative (DSSI) that freezes official bilateral debt payments, and said they would consider a further six-month extension in April. But private creditors and lenders outside the Paris Club are not fully participating.

“We are disappointed by the absence of progress of private creditors’ participation in the DSSI, and strongly encourage them to participate on comparable terms when requested by eligible countries,” the steering committee said, while encouraging “the full participation of official bilateral creditors.”

Source: Reuters 

IMF chief: Vaccine cooperation, recovery could boost global income US$9t by 2025

ASEAN needs to speed up digitisation and modernisation of its supply chain, according to RS Components, the world’s largest electronics and maintenance products distributor.

It said the urgency was necessary to improve regional supply chain and prevent delays in the supply of goods particularly during a pandemic like COVID-19.

The pandemic had tested the global supply chain which was seamlessly interwoven pre-COVID-19, and due to the health risks, factories in Asia were temporarily shut down and production pace scaled down to keep workers safe.

RS Components general manager (Singapore and Malaysia) Eileen Yap said many businesses experienced delays from suppliers for items such as electronics.

She said 70 per cent of global electronics manufacturers and suppliers experienced between a two to four weeks delay by their own suppliers due to the pandemic.

“As you know, delays aren’t just one-off – they caused domino effects, and impacted international shipping and logistics, for instance,” she told Bernama.

RS Components has been serving Malaysian manufacturers since 1996. It is a trading brand of UK-based Electrocomponents Plc, a global omnichannel solutions partner for industrial customers and suppliers involved in designing, building, or maintaining industrial equipment and facilities.

Operating in 32 countries, RS Components trade through multiple channels and ship over 50,000 parcels a day.

Yap said COVID-19 had amplified the underlying issues of the traditional global value chain (GVC) as manual labour is still perceived as cheaper than investing in technology and automation.

“By accelerating innovation in the supply chain, it would address bottlenecks as businesses need at least 70 per cent to 80 per cent of visibility across the chain.

“As for manual labour, businesses must adopt technology to improve efficiency and productivity, protect employees and factory equipment, and reduce costs in the long run,” she said.

To prevent delays in the supply chain ecosystems, RS Components’ eCommerce platform offers a personalised experience to help customers quickly find products. At the same time, its eProcurement system allows businesses to manage their spending by maintaining full visibility of costs.

“The system allows businesses to source from our catalogue, support vendor consolidation, and improve contract compliance – that they can also access and use whenever and wherever they are working from, without having to wait for a sales visit or a call from distributors.

“These would help accelerate processing and makes reporting easier for the clients,” Yap said.

She said customers with complex industrial requirements can also save time searching and negotiating with multiple suppliers and simplify their procurement process by working with RS Components team specialising in sourcing products yet to be published on the website.

According to Yap, Southeast Asia has emerged as a contender and is ready for opportunities presented by the restructuring of the global supply chain, even if the implementation of trade cooperation at the national level is still pending.

“ASEAN governments are discussing the next step towards regulatory alignment and some of the ASEAN member states have adopted various trade and transport facilitation agreements at a regional level, but their implementation at the national level is still pending.

“We will need to see more far-reaching agreements across the region to increase efficiency and propel the growth potential in cross-border transactions,” she said.

Source: Bernama 

ASEAN must accelerate digitisation, modernisation of supply chain – RS Components

ASEAN businesses, especially small and medium enterprises (SMEs), should focus on intra-regional e-commerce trade to ensure sustainable growth during the COVID-19 pandemic period.

FedEx Express Asia Pacific, Middle-East and Africa president Kawal Preet said ASEAN companies should build their e-commerce platform at a faster pace and diversify their businesses towards innovation and automation, especially in the current volatile business environment.

“ASEAN has an overwhelming opportunity in the booming e-commerce market to fill leadership and innovation.

“Singapore is already using digital technology to simplify trade and finance. ASEAN is also pushing for the ASEAN Single Window (regional trade facilitation) and people-less trade to facilitate e-commerce,” she said during a CIMB ASEAN Research Institute (CARI) briefing here today.

“However, these must continue at a faster pace. Such innovations are vital to support SMEs,” she added.

Kawal was one of the speakers in the session titled “COVID-19 Economic Recovery Plan Series, How Can ASEAN Bounce Back: A US Perspective”.

She said the pandemic has been a major disruptor for the world, not just economically; it also changed the way companies manage supply change and move people and goods around the world and across the region.

“The blueprint of ‘what next’ must include a focus on intra-Asia trade, going all-in on cross-border e-commerce, and ensuring SMEs recover and become more competitive post-COVID.

“Underpinning all of that, we must have the right business capabilities to easily handle increased in-trade flows and e-commerce,” she added.

Source: Bernama 

ASEAN companies urged to leverage on intra-regional e-commerce trade

As demands increase on their limited resources, governments will need to raise taxes on wealthier families and firms and target spending away from protecting “old jobs,” the Internatuonal Monetary Fund (IMF) said today.

As countries continue to struggle with the economic damage inflicted by the Covid-19 pandemic, the IMF’s Fiscal Monitor report also urges policymakers to invest in job-creating projects like infrastructure and green energy.

Governments have injected a stunning US$12 trillion (RM49.8 trillion) into the global economy since the start of the pandemic, but now “many countries will need to do more with less, given increasingly tight budget constraints,” Vitor Gaspar, head of the IMF’s Fiscal Affairs Department, said in a blog post about the report.

As the recovery continues, policymakers “should become more selective and avoid standing in the way of necessary sectoral reallocations as activity resumes,” he and his coauthors said.

“Support should shift gradually from protecting old jobs to getting people back to work,” by reducing measures like wage subsidies in favor of training to give people skills to find new employment.

With low interest rates making borrowing easier, boosting public investment – beginning with maintenance and ramping up projects – can create jobs and spur economic growth.

Steps like a broad tax cut are “unlikely to be cost-effective” and would have limited impact on promoting growth and jobs, the report said.

A better alternative would be “to accelerate job-intensive public investments such as maintenance or public works.”

With public debt in many cases approaching 100% of gross domestic product, including in the United States, governments also may need “revenue-enhancing measures, including both increasing tax compliance and the progressivity of taxes on more affluent” firms that may have profited from the pandemic, the IMF said.

“The design of corporate income taxes to appropriately capture very high profits of firms in a rapidly changing economy, including those that made windfall profits during the crisis, can help finance priority areas.”

Source: AFP 

IMF tells governments to target scarce resources at creating jobs

Solar output is expected to lead a surge in renewable power supply in the next decade, the International Energy Agency said, with renewables seen accounting for 80% of growth in global electricity generation under current conditions.

In its annual World Energy Outlook on Tuesday, the IEA said in its central scenario — which reflects policy intentions and targets already announced — renewables are expected to overtake coal as the primary means of producing electricity by 2025.

The combined share of solar photovoltaic (PV) and wind in global generation will rise to almost 30% in 2030 from 8% in 2019, it said, with solar PV capacity growing by an average 12% a year.

“I see solar becoming the new king of the world’s electricity markets,” IEA Executive Director Fatih Birol said. “Based on today’s policy settings, it is on track to set new records for deployment every year after 2022.”

Maturing technology and support mechanisms have cut financing costs for major solar PV projects, the IEA said, helping to bring down output costs overall. Solar PV is now cheaper than new coal- or gas-fired power plants in most countries, it said.

Power generation from renewables is the only major source of energy that continued to grow in 2020, the Paris-based agency added.

A more ambitious scenario, including for instance the adoption of net-zero emissions targets by 2050, would see PV electricity generation perform more strongly still, the report said.

Despite the increase in solar and wind power, carbon emissions are projected to pick up in 2021 after a 2.4 gigatonne (Gt) drop in 2020, and to exceed 2019 levels in 2027 before growing to 36 Gt in 2030, it added.

The IEA said gaps remain in many cases between long-term ambitions and specific near-term plans to curb emissions.

Integrating new wind and solar power will depend on adequate investment in all parts of the system, including distribution networks, the report added.

But revenue shortfalls — potentially arising from lower-than-expected demand, non-payment of bills, or the deteriorating finances of utilities in developing economies — could make power grids a weak link.

Source: Reuters 

Solar the new ‘king of electricity’ as renewables make up bigger slice of supply — IEA

The global economy could be entering a new growth cycle, which may last another seven to 10 years as we move into 2021, analysts at RHB Research Sdn Bhd (RHB Research) forecast in a recent report.

“It is, however, not without any downside risks, as any unexpected event such as another black swan could end the cycle early.

“One of the downside risks has been the building up of debt in emerging markets and developing economies due to the low borrowing cost burden. Since 2010, total debt in these economies has risen by 54 percentage points of GDP, to a historic peak of about 170 per cent of GDP in 2018, according to research by the World Bank.

“The study shows that simultaneous buildups in public and private debt have historically been associated with financial crises that resulted in particularly prolonged declines in per capita income and investment.

“In our view, as long as borrowing costs continue to stay low, the rising debt issue remains manageable,” the research team said.

It also pointed out that a financial asset bubble continue to balloon, and an unexpected sharp rise in inflation that forces central banks to hike rates more than expected could poke the bubble, resulting in a devastating impact on the global economy.

On the growth performance in the Asean region, along with a pick-up in global economic growth, it believed Asean’s exports are likely to recover in 2021, after a hard hit in 2020.

“This, together with policy measures to stimulate domestic demand, suggests that economic growth in Asean-5 countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) is likely to bounce back in 2021.

“As a result, we expect Asean-5’s real GDP to record a growth of 6.3 per cent in 2021, a recovery from a contraction of 4.1 per cent estimated for 2020 (3.8 per cent in 2019),” it said.

RHB Research also upgraded Malaysia’s economic growth projection to seven per cent y-o-y for 2021 (from four per cent y-o-y earlier), while keeping the 2020 forecast unchanged at four per cent decling.

“The timing of the vaccine deployment plays a pivotal role in shifting our outlook for next year. This would likely be aided by the earlier monetary policy easing and continued government support, especially towards the earlier part of 2021,” it explained.

“Indeed, the government budget deficit in 2021 is likely to remain large to accommodate the ongoing restrictions until a vaccine is widely available.

“We expect the fiscal deficit to stay high at five per cent of GDP in 2021, albeit smaller than the 6.5 per cent deficit projected for this year,” it added.

Meanwhile, it noted that private consumption is set to record a strong growth next year, a rebound from a contraction in 2020, aided by a low base effect as well as better economic sentiment as the public expects restrictive measures to end.

“Investment growth next year is also set to rebound as well in 2021, after a sharp drop in 2020.

“Support would come in the form of a higher base effect and contribution from more resilient sectors, although overall growth is expected to still be less than ideal. For private investment, we expect the utilisation rate to improve and investment activity to pick up towards the latter half of 2021 as the economy gains traction.

“Meanwhile, growth of public investment is expected to remain flattish,” it said.

It also expect Malaysia to record an inflation in 2021, alongside the rise in global oil prices as well as stronger demand-pull factors.

“The inflation rate is forecast at two per cent, a reversal from the negative one per cent projected this year,” it said,

“On account of a recovery in economic growth and rising price pressure, we expect the central bank to start normalising its monetary policy as well next year. As a result, we priced in a hike of 25bps in the OPR to two per cent towards the latter part of 2021.

“For the rest of this year, we think BNM is likely to stay pat, keeping the interest rate at 1.75 per cent, considering the significant support that has already been provided,” RHB Research opined.

Source: The Borneo Post 

‘Global economy could be entering a new growth cycle’

ASEAN governments need to adopt new measures to support intra-regional trade and investments and foster digital adoption in order to counter emerging external and internal growth risks, Standard Chartered bank said.

In a report titled “ASEAN – A Region Facing Disruption: Positioning Mid-Corporates for Growth in Southeast Asia” published recently, the bank said growth expectations could be realised through specific opportunities across three sectors, namely manufacturing, infrastructure as well as retail and consumer.

“In addition to regulatory shifts, it will also be essential for mid-corporate companies to develop the right capabilities to effectively regionalise and digitalise their operations,” it said.

It said mid-corporate business is defined as those with annual revenues between US$10 million and US$500 million.

“Acting as a value-adding link between multinationals targeting entry or expansion in the region, numerous small-scale suppliers and fast-growing consumer base mid-corporate businesses will be key to strengthening ASEAN’s presence in a rapidly changing global economy,” it said.

Standard Chartered said successful deployment of the growth strategies would depend heavily on a strong capability foundation within the firms, supported by four key elements — talent development, organisational culture, technology infrastructure and capital management.

“Mid-corporate firms will need to deploy new technologies along their production lines to meet multinational company expectations of achieving higher productivity at lower costs. The impact of technology adoption could be significant,” it said.

It said according to PriceWaterhouseCoopers’s Global Industry 4.0 Survey, manufacturers worldwide are expected to reduce operational costs by 3.6%, while increasing efficiency by 4.1% annually through the adoption of next-generation industrial technologies.

Standard Chartered said ASEAN’s mid-corporate manufacturers would need to devise more competitive value-propositions to strengthen their market position or risk losing business to global competitors.

The bank said the deployment of technologies such as the industrial Internet of Things and collaborative robots would need to be prioritised in the short term, while advancements in three dimensional (3D) printing and digital contracts offered long-term solutions to mid-corporate issues.

It said digital contracts based on the blockchain technology is emerging as a potential solution for cross-border trade.

“While these are still in the nascent phase, with pilot projects being tested by market players and common standards being developed by industry consortiums, digital contracts are expected to gain significant adoption over the next few years, giving a boost to regional trade and manufacturing profits,” it said.

It added that smaller local businesses should also be strengthened to achieve more equitable and sustainable development across the region.

Source: Bernama 

ASEAN govts should adopt new measures to counter growth risks

The Asia-Pacific (APAC) region is leading the world in terms of economic recovery, however, the pace of recovery is by no means uniform due to several factors, said Moody’s Analytics.

This includes the particular country’s COVID-19 caseload, the extent of economic lockdown in response to the virus, and the length of time taken to contain the virus.

In a research note today, Moody’s said globally, the number of new cases appeared to have levelled off in September, although the count is rising again in the United States (US) and ascending to new heights in the United Kingdom, France, Spain, and other parts of Europe.

Although new clusters have emerged in the APAC region, Moody’s said most have been contained since August, and the number of new cases is now well below past peaks.

Meanwhile, in Southeast Asia, the research house noted that Malaysia, the Philippines and Indonesia have continued to struggle with the epidemic.

“Cases remain high in the Philippines but are below its early August peak, while Indonesia has yet to reach a peak and is the only remaining Asian nation where COVID-19 is not contained.

“As for Malaysia, the count is well below that of Indonesia and the Philippines, but its count has risen recently, nearly back to its earlier peak,” it said.

Moody’s noted that having control over the COVID-19 spread and the easing of movement restrictions have been key to the initial improvement of economic conditions in Asia.

However, the longer-term recovery will depend upon the region’s re-engagement with the global economy, through trade in global goods and services, including travel and tourism.

While travel will likely be one of the last components of the global economy to rebound, global trade has already turned the corner, it said.

“Although not back to pre-COVID levels, global trade and industrial production have clearly improved.

“This has happened much more quickly than during the 2009 global financial crisis because of the nature of the current business cycle, in which production was not initially hit by a demand shock,” Moody’s said.

Once economies began to reopen, it said, demand for certain goods improved quickly, including electronic components for the production of laptop computers, mobile phones and IT systems, medical equipment, pharmaceuticals, personal protection products, and, beginning first in China, auto parts, automobiles and other consumer durables.

This pattern is evident in the official China Purchasing Managers Index, it said.

“Sentiment among manufacturers also rebounded quickly, partly due to generous government policy measures that provided ample credit to large and essential industries, bolstered further by funding for infrastructure projects that create demand for construction equipment, steel, cement, and other basic commodities, ” Moody’s said.

It said Taiwan, Malaysia, Vietnam, New Zealand and Singapore were the first to improve with linkages to China and the rest of the world through tech-producing industries, medical supplies, food products and other commodities.

It added that continued economic recovery in the region, however, now depends more critically on improving global demand, which is far from certain.

Source: Bernama 

Asia-Pacific region leading in economic recovery — Moody’s

Asian Development Bank (ADB) urges policymakers in Southeast Asia to use green and innovative financing approaches to help catalyse the estimated US$3.1 trillion (US$1=RM4.15) investments required for climate-adjusted infrastructure in the region by 2030.

In its newly-launched book titled Green Finance Strategies for Post-COVID-19 Economic Recovery in Southeast Asia, ADB said the investments from both public and private sources will be critical to the region’s economic recovery from the COVID-19 pandemic.

“Green finance refers to all financing instruments, investments and mechanisms that contribute to climate and environmental sustainability goals. It aims to reduce greenhouse gas emissions, boost climate resilience and improve environmental protection such as air and water quality, ecosystems and biodiversity,” it explained in a statement.

The book explores innovative, environmentally sustainable and climate-resilient financing instruments such as green and transitions bonds for COVID-19 recovery, blue credits for oceans financing, and green securitisation, while also providing examples of ADB-supported green initiatives.

“While some countries have embarked on green projects and bonds, much more needs to be done to help Southeast Asia’s economies meet their large financing needs and accelerate economic recoveries in a sustainable manner,” ADB said.

Its book recommends governments to use green finance catalytic approaches to build upon national green targets and programmes and steer away from fossil fuel or carbon-intensive investments.

With a growing green finance market in developing Asia, the bank committed US$6.5 billion in climate finance from its own resources in 2019

It aims to reach a cumulative US$80 billion from 2019 to 2030 in climate financing under its Strategy 2030 with a commitment to make 75% of all ADB projects climate relevant by 2030.

Meanwhile, vice-president Ahmed M Saeed said a green recovery for Southeast Asia was needed to encourage long-term, sustainable job creation in the region with more than 650 million people.

“It will boost equitable growth, protect the environment, and help governments meet the Paris climate agreement targets. This timely book shows how green finance can spur growth in the region and overcome the challenges of climate change and a global pandemic,” he said in a statement today.

Source: Bernama 

ADB recommends green finance for Southeast Asia’s economic recovery

The global economy is looking “less dire” than it did in June and the International Monetary Fund will make a “small” upward revision to its 2020 global output forecast, IMF Managing Director Kristalina Georgieva said today.

Georgieva, in remarks to a London School of Economics event, said: “My key message is this: The global economy is coming back from the depths of this crisis.”

“But this calamity is far from over. All countries are now facing what I would call ‘the long ascent’ — a difficult climb that will be long, uneven, and uncertain. And prone to setbacks,” she added in a speech billed as her “curtainraiser” for next week’s IMF and World Bank Annual meetings.

The Fund in June forecast that coronavirus shutdowns would shrink global GDP by 4.9 per cent, marking the sharpest contraction since the 1930s Great Depression and called for more policy support from governments and central banks.

The IMF will publish its revised forecasts next week as member countries participate in annual meetings held largely in an online format.

Georgieva said the IMF was continuing to project a “partial and uneven” recovery in 2021. In June, the Fund forecast 2021 global growth at 5.4 per cent.

But US$12 trillion (RM50 trillion) in fiscal support, coupled with unprecedented monetary easing has allowed many advanced economies, including the United States and the euro zone, to escape the worst damage and start to recover Georgieva said. China also has recovered faster than expected.

Emerging markets and low-income countries face a precarious situation with weak health systems, high external debt and dependency on sectors most exposed to the pandemic such as tourism and commodities as well as high external debt, she said.

“In low-income countries, the shocks are so profound that we face the risk of a ‘lost generation,’” Georgieva said, signaling that the IMF and World Bank will press hard for more debt relief for low income countries next week.

She called for more debt help quickly for low income countries beyond a moratorium on official bilateral debt payment until the end of 2020. She said development gains could be reversed without access to more grants, concessional credit and debt relief.

“In some cases, global coordination to restructure sovereign debt will be necessary, with full participation of public and private creditors,” Georgieva added.

Source: Reuters 

IMF chief says global economy ‘less dire’ but long climb ahead