The Jakarta Globe RSS: Business http://www.thejakartaglobe.com 2013 The Jakarta Globe Your City, Your World Sat, 19 Apr 2014 17:30:25 +0000 en-US hourly 1 http://www.thejakartaglobe.com/images/jakarta-globe.gif http://www.thejakartaglobe.com Fiat-Chrysler to Produce Iconic Jeep in China From 2015 http://www.thejakartaglobe.com/?p=283175 Sat, 19 Apr 2014 16:26:48 +0700 Shanghai. Automaker Fiat-Chrysler said on Saturday that it would begin producing the iconic American brand Jeep in China from 2015 to meet demand in the world's largest car market. Fiat-Chrysler — created by Italy's Fiat acquiring Chrysler of the United States — will produce three Jeep sport utility vehicle (SUV) models in China, including one specifically designed for the Chinese market, the company said in a statement. The announcement came ahead of the Beijing auto show, which opens to the public on Monday, as global automakers flock to China to show off their latest models. Jeeps are currently available to Chinese consumers as imports, the statement said, adding nearly 60,000 Jeeps were sold in China last year, making the country the largest market for the brand outside of the United States. Fiat-Chrysler will produce Jeep vehicles through its existing joint venture with Guangzhou Automobile Group (GAC) but at a new manufacturing branch in the southern city of Guangzhou, it said. Plans to produce Jeeps in China set off a political storm during the 2012 US presidential election campaign, after Republican candidate Mitt Romney ran an attack ad implying that it would export American jobs. But Fiat has previously said plans to build Jeep vehicles in China were an expansion, not a transfer, of operations. Fiat-Chrysler and GAC already produce other vehicles, including the Viaggio sedan, at a factory in the central city of Changsha. GAC was China's sixth largest domestic automaker by sales in 2013, according to an industry group. China has become critical to foreign automakers as the world's biggest auto market, but Fiat was conspicuous by its absence with local production until it began selling domestically-produced cars in 2012. Last year, China's auto sales surged 13.9 percent to 21.98 million vehicles, according to a Chinese industry group, as a recovery in Japanese brands previously hurt by a diplomatic row offset the impact of slowing economic growth. Agence France-Presse]]> Shanghai. Automaker Fiat-Chrysler said on Saturday that it would begin producing the iconic American brand Jeep in China from 2015 to meet demand in the world's largest car market. Fiat-Chrysler — created by Italy's Fiat acquiring Chrysler of the United States — will produce three Jeep sport utility vehicle (SUV) models in China, including one specifically designed for the Chinese market, the company said in a statement. The announcement came ahead of the Beijing auto show, which opens to the public on Monday, as global automakers flock to China to show off their latest models. Jeeps are currently available to Chinese consumers as imports, the statement said, adding nearly 60,000 Jeeps were sold in China last year, making the country the largest market for the brand outside of the United States. Fiat-Chrysler will produce Jeep vehicles through its existing joint venture with Guangzhou Automobile Group (GAC) but at a new manufacturing branch in the southern city of Guangzhou, it said. Plans to produce Jeeps in China set off a political storm during the 2012 US presidential election campaign, after Republican candidate Mitt Romney ran an attack ad implying that it would export American jobs. But Fiat has previously said plans to build Jeep vehicles in China were an expansion, not a transfer, of operations. Fiat-Chrysler and GAC already produce other vehicles, including the Viaggio sedan, at a factory in the central city of Changsha. GAC was China's sixth largest domestic automaker by sales in 2013, according to an industry group. China has become critical to foreign automakers as the world's biggest auto market, but Fiat was conspicuous by its absence with local production until it began selling domestically-produced cars in 2012. Last year, China's auto sales surged 13.9 percent to 21.98 million vehicles, according to a Chinese industry group, as a recovery in Japanese brands previously hurt by a diplomatic row offset the impact of slowing economic growth. Agence France-Presse]]> http://www.thejakartaglobe.com/?p=283175 Asus Eyeing Mass Market in Indonesia for Its Smartphones http://www.thejakartaglobe.com/?p=283045 Fri, 18 Apr 2014 20:02:06 +0700 Jakarta. Taipei-based ASUSTeK Computer, one of the biggest producers of notebooks and motherboards, has released its Intel-based ZenFone smartphones to Indonesia, betting that consumers will seek alternatives to popular brands such as Samsung and Sony. “We are pleased to bring this device into Southeast Asia. We believe the best technology is the one used by the masses. When we began our journey ‘in search of incredible’ [products] we came up with this handset with the hopes it can be enjoyed by many,” company chairman Jonney Shih said in a press gathering on Tuesday. Shih was accompanied by Asus chief executive Jerry Shen as he explained the company’s plan to focus more on smartphones over laptops and desktops starting this year. Shih said the Indonesian market is full of potential for products aimed at targeting the mass market segment. “Indonesia is a great market. The population is huge. Our products have performed quite well,” said Shih, who is often dubbed as one of the most influential people in technology. ZenFone, powered by the Intel Atom processor, comes in three series for Indonesian consumers: the 10-centimeter, ZenFone 4 tagged at Rp 1 million ($87); the 12.7-centimeter ZenFone 5 for Rp 2 million; and the 15-centimeter ZenFone 6 for Rp 3 million. The company, commonly referred to its computer brand Asus, experienced a financial downturn in its third-quarter 2013 financial results when profit dropped 26 percent to NT$4.94 billion ($164 million) from the year before. Meanwhile, revenue declined by 4 percent to NT$107.1 billion. The profit slump was mainly attributed to taxes, of which Asus was required to pay NT$1.52 billion. Despite its staggering tax bill the company, which was also responsible for the hardware behind Google’s Nexus 7 tablet, is keen to roll out a line of smartphone products into markets worldwide and boost its smartphone shipments. Based on third-quarter financial results, notebooks and laptops represented 57 percent of Asus’s product portfolio, with tablets making up 20 percent, while 13 percent was made up by motherboards and cards (including video and sound cards). “We introduced the Eee PC for the mainstream US market, which was a success. We aim to achieve the same for ZenFone,” Shih said. Shih was the executive behind the Eee PC’s positive reception. Asus was the first PC maker to bring the lightweight netbook, the Eee PC, into the United States in 2007. Asia-Pacific region made up 43 percent of Asus’s business, with 30 percent in Europe and 20 percent in the United States. According to data from the International Data Corporation, a total of 11 million smartphones were shipped to Indonesia last year, a bulk of which used the Android operating system. In its latest venture into the smartphone sector, Asus will face a slew of Android-based competitors, including Samsung, Sony and Lenovo.]]> Jakarta. Taipei-based ASUSTeK Computer, one of the biggest producers of notebooks and motherboards, has released its Intel-based ZenFone smartphones to Indonesia, betting that consumers will seek alternatives to popular brands such as Samsung and Sony. “We are pleased to bring this device into Southeast Asia. We believe the best technology is the one used by the masses. When we began our journey ‘in search of incredible’ [products] we came up with this handset with the hopes it can be enjoyed by many,” company chairman Jonney Shih said in a press gathering on Tuesday. Shih was accompanied by Asus chief executive Jerry Shen as he explained the company’s plan to focus more on smartphones over laptops and desktops starting this year. Shih said the Indonesian market is full of potential for products aimed at targeting the mass market segment. “Indonesia is a great market. The population is huge. Our products have performed quite well,” said Shih, who is often dubbed as one of the most influential people in technology. ZenFone, powered by the Intel Atom processor, comes in three series for Indonesian consumers: the 10-centimeter, ZenFone 4 tagged at Rp 1 million ($87); the 12.7-centimeter ZenFone 5 for Rp 2 million; and the 15-centimeter ZenFone 6 for Rp 3 million. The company, commonly referred to its computer brand Asus, experienced a financial downturn in its third-quarter 2013 financial results when profit dropped 26 percent to NT$4.94 billion ($164 million) from the year before. Meanwhile, revenue declined by 4 percent to NT$107.1 billion. The profit slump was mainly attributed to taxes, of which Asus was required to pay NT$1.52 billion. Despite its staggering tax bill the company, which was also responsible for the hardware behind Google’s Nexus 7 tablet, is keen to roll out a line of smartphone products into markets worldwide and boost its smartphone shipments. Based on third-quarter financial results, notebooks and laptops represented 57 percent of Asus’s product portfolio, with tablets making up 20 percent, while 13 percent was made up by motherboards and cards (including video and sound cards). “We introduced the Eee PC for the mainstream US market, which was a success. We aim to achieve the same for ZenFone,” Shih said. Shih was the executive behind the Eee PC’s positive reception. Asus was the first PC maker to bring the lightweight netbook, the Eee PC, into the United States in 2007. Asia-Pacific region made up 43 percent of Asus’s business, with 30 percent in Europe and 20 percent in the United States. According to data from the International Data Corporation, a total of 11 million smartphones were shipped to Indonesia last year, a bulk of which used the Android operating system. In its latest venture into the smartphone sector, Asus will face a slew of Android-based competitors, including Samsung, Sony and Lenovo.]]> http://www.thejakartaglobe.com/?p=283045 Panin Asset Management Sees Handling Rp 20t This Year on More Clients http://www.thejakartaglobe.com/business/panin-asset-management-sees-handling-rp-20t-year-clients/ Fri, 18 Apr 2014 21:33:11 +0700 Jakarta. Panin Asset Management, an investment unit of brokerage Panin Sekuritas, targets its assets under management to reach Rp 20 trillion ($1.8 billion) this year as the fund manager seeks to attract more clients. “We aim for 50,000 clients this year, increasing from around 34,000 of the current total clients that we have,” said Ridwan Soetedja, a director at Panin Asset Management. Panin Asset Management managed Rp 15.1 trillion in assets as of March 31, according to its website. Assets last year totaled Rp 15.7 trillion, BeritaSatu.com reported in February. Ridwan said that the bullish stock market in the first quarter has encouraged profit taking action by investors recently. “Our AUM was increasing, but then there was a profit taking [action] of about Rp 1 trillion,” he said. He said the Jakarta-based company also plans to introduce two new products this year to attract new investors. The first one is an equity mutual fund called Reksadana Panin Dana Ultima, which will hold at least 80 percent in stocks. Another mutual fund would be part of its Smart Investment Protection Plan (SIPP), which will be linked with life insurance products. Panin Asset Management launched a SIPP with life insurer Avrist Assurance in 2013. This year the company will partner with its affiliate life insurer Panin Life, Ridwan said. “We plan to introduce the SIPP on May 7,” said Ridwan without providing more details on the product. Ridwan said that the company remains optimistic about the country’s capital market prospects, including the mutual fund industry. He said investors have anticipated that the 2014 elections spending in Indonesia will boost the economy. While investors in general weren’t happy with the quick-count results from the legislative elections, smooth leadership transition in the country is likely to leave Indonesia with political stability. Foreign investors have put in more than Rp 31.8 trillion in the stock market so far this year. Panin is upbeat and expects the Jakarta Composite Index to gain 13 percent to 15 percent this year, Ridwan said. The index has risen 14.6 percent so far this year.]]> Jakarta. Panin Asset Management, an investment unit of brokerage Panin Sekuritas, targets its assets under management to reach Rp 20 trillion ($1.8 billion) this year as the fund manager seeks to attract more clients. “We aim for 50,000 clients this year, increasing from around 34,000 of the current total clients that we have,” said Ridwan Soetedja, a director at Panin Asset Management. Panin Asset Management managed Rp 15.1 trillion in assets as of March 31, according to its website. Assets last year totaled Rp 15.7 trillion, BeritaSatu.com reported in February. Ridwan said that the bullish stock market in the first quarter has encouraged profit taking action by investors recently. “Our AUM was increasing, but then there was a profit taking [action] of about Rp 1 trillion,” he said. He said the Jakarta-based company also plans to introduce two new products this year to attract new investors. The first one is an equity mutual fund called Reksadana Panin Dana Ultima, which will hold at least 80 percent in stocks. Another mutual fund would be part of its Smart Investment Protection Plan (SIPP), which will be linked with life insurance products. Panin Asset Management launched a SIPP with life insurer Avrist Assurance in 2013. This year the company will partner with its affiliate life insurer Panin Life, Ridwan said. “We plan to introduce the SIPP on May 7,” said Ridwan without providing more details on the product. Ridwan said that the company remains optimistic about the country’s capital market prospects, including the mutual fund industry. He said investors have anticipated that the 2014 elections spending in Indonesia will boost the economy. While investors in general weren’t happy with the quick-count results from the legislative elections, smooth leadership transition in the country is likely to leave Indonesia with political stability. Foreign investors have put in more than Rp 31.8 trillion in the stock market so far this year. Panin is upbeat and expects the Jakarta Composite Index to gain 13 percent to 15 percent this year, Ridwan said. The index has risen 14.6 percent so far this year.]]> http://www.thejakartaglobe.com/business/panin-asset-management-sees-handling-rp-20t-year-clients/ Inti Bangun to Raise $57m in Rights Offering This Month http://www.thejakartaglobe.com/?p=283060 Fri, 18 Apr 2014 20:11:19 +0700 Jakarta. Inti Bangun Sejahtera, a telecommunication tower provider, is set to raise Rp 660 billion ($57 million) from selling shares in a rights offering later this month. The company plans to offer 207.8 million shares to existing shareholders at Rp 3,176 a piece, according to a prospectus in Investor Daily on Wednesday. Inti has appointed Sinarmas Sekuritas to manage the sale. Its shares will be listed on the Indonesia Stock Exchange on May 6, and the sale will conclude on May 13. About 60 percent of the funds from the rights offering will go towards Inti’s capital expenditure, which includes constructing new towers, the company said in the prospectus. The remaining 40 percent will be used as working capital, for land rent to tower maintenance. The tower provider raked in Rp 448 billion in revenue last year, up 10.2 percent from the year before. Net income grew to Rp 794.1 million last year due to a Rp 525 million injection from Inti’s side businesses. “The positive revenue growth was accounted to the increasing number of collocations and towers last year,” the company said in the prospectus. Jakarta-based Inti was operating 2,104 telecommunication towers across the nation as of the end of last year. The company has secured over 3,000 contracts which are on average of longer terms than those held by most telecommunication firms. It raised Rp 154 billion from its first-time public share sale two years ago.    ]]> Jakarta. Inti Bangun Sejahtera, a telecommunication tower provider, is set to raise Rp 660 billion ($57 million) from selling shares in a rights offering later this month. The company plans to offer 207.8 million shares to existing shareholders at Rp 3,176 a piece, according to a prospectus in Investor Daily on Wednesday. Inti has appointed Sinarmas Sekuritas to manage the sale. Its shares will be listed on the Indonesia Stock Exchange on May 6, and the sale will conclude on May 13. About 60 percent of the funds from the rights offering will go towards Inti’s capital expenditure, which includes constructing new towers, the company said in the prospectus. The remaining 40 percent will be used as working capital, for land rent to tower maintenance. The tower provider raked in Rp 448 billion in revenue last year, up 10.2 percent from the year before. Net income grew to Rp 794.1 million last year due to a Rp 525 million injection from Inti’s side businesses. “The positive revenue growth was accounted to the increasing number of collocations and towers last year,” the company said in the prospectus. Jakarta-based Inti was operating 2,104 telecommunication towers across the nation as of the end of last year. The company has secured over 3,000 contracts which are on average of longer terms than those held by most telecommunication firms. It raised Rp 154 billion from its first-time public share sale two years ago.    ]]> http://www.thejakartaglobe.com/?p=283060 Japanese Investment in Indonesia, Other SE Asian Nations Surges Amid China Slump http://www.thejakartaglobe.com/?p=282996 Fri, 18 Apr 2014 16:59:49 +0700 Tokyo. Japanese companies’ investments in Southeast Asia surged last year to almost three times the amount invested in China, after relations between Beijing and Tokyo soured in 2012 and Chinese labor costs rose, a government agency of Japan said on Friday. Japanese companies invested 2.33 trillion yen ($22.8 billion) in Singapore, Thailand, Indonesia, Malaysia, the Philippines and Vietnam last year, compared with 887 billion yen in China, Japan’s largest trading partner, the Japan External Trade Organization (Jetro), said. Investments doubled in Southeast Asia and fell 18 percent in China over 2012 and China’s waning attraction is likely to continue as the ratio of companies planning expansion there fell to a record low of below 55 percent, Jetro said, citing a survey of Japanese companies. “Viewed from the Japanese companies’ headquarters, China’s economy and China’s political situation present a considerable amount of risk,” Jetro chairman Hiroyuki Ishige told reporters at a briefing. Sino-Japanese ties have been strained by a territorial row over tiny disputed isles in the East China Sea and perceptions in Beijing that Japanese Prime Minister Shinzo Abe wants to rewrite Japan’s wartime history and tone down past apologies. The fall-off in Chinese investment follows the outbreak of riots against Japanese interests in 2012 when the territorial dispute escalated after the Japanese government bought the uninhabited islands in the East China Sea. Rising wages in China are also having an impact on companies trying to keep costs down and maximize profits. China’s average salaries now exceed those of Thailand, according to a Jetro survey carried out between October and November last year. The Philippines and Indonesian labor costs are about one third lower than China’s, while those in Vietnam are less than half, the survey showed.]]> Tokyo. Japanese companies’ investments in Southeast Asia surged last year to almost three times the amount invested in China, after relations between Beijing and Tokyo soured in 2012 and Chinese labor costs rose, a government agency of Japan said on Friday. Japanese companies invested 2.33 trillion yen ($22.8 billion) in Singapore, Thailand, Indonesia, Malaysia, the Philippines and Vietnam last year, compared with 887 billion yen in China, Japan’s largest trading partner, the Japan External Trade Organization (Jetro), said. Investments doubled in Southeast Asia and fell 18 percent in China over 2012 and China’s waning attraction is likely to continue as the ratio of companies planning expansion there fell to a record low of below 55 percent, Jetro said, citing a survey of Japanese companies. “Viewed from the Japanese companies’ headquarters, China’s economy and China’s political situation present a considerable amount of risk,” Jetro chairman Hiroyuki Ishige told reporters at a briefing. Sino-Japanese ties have been strained by a territorial row over tiny disputed isles in the East China Sea and perceptions in Beijing that Japanese Prime Minister Shinzo Abe wants to rewrite Japan’s wartime history and tone down past apologies. The fall-off in Chinese investment follows the outbreak of riots against Japanese interests in 2012 when the territorial dispute escalated after the Japanese government bought the uninhabited islands in the East China Sea. Rising wages in China are also having an impact on companies trying to keep costs down and maximize profits. China’s average salaries now exceed those of Thailand, according to a Jetro survey carried out between October and November last year. The Philippines and Indonesian labor costs are about one third lower than China’s, while those in Vietnam are less than half, the survey showed.]]> http://www.thejakartaglobe.com/?p=282996 Singapore No Home for Luxury Developers as Cooling Measures Bite http://www.thejakartaglobe.com/?p=282915 Fri, 18 Apr 2014 12:18:13 +0700 Singapore. Luxury property developers in Singapore are facing their worst sales outlook in six years as a raft of government measures to cool one of the world’s most expensive real estate markets bite. Sales of private homes, which account for just under one fifth of the total property market, fell to their lowest in more than four years in January to March, official data showed this week. If the decline continues at the same pace for the rest of this year, analysts expect sales to halve from the 15,000 units sold in 2013. Prices of private residential properties are also expected to fall this year and the next by between 10 and 20 percent, analysts say. The drop began at end of last year, due to the government measures, reducing prices that had increased by around two-thirds since end-2009. The weakness in the market is likely to weigh on the sales outlook of smaller listed developers of premium properties such as Wheelock Properties (Singapore), Ho Bee Land and Wing Tai Holdings. Larger developers are less affected due to their more diversified portfolios, but they are also cutting prices. CapitaLand, Southeast Asia’s largest listed property developer, is selling units at its Sky Habitat condominium for S$1,370 ($1,100) per square foot compared to as high as S$1,900 when it was launched two years ago, agents say. “It feels like we’re back in 2008,” said Christine Li, head of research at real estate firm OrangeTee, referring to the property slump that affected Singapore during the global financial crisis. “There’s quite a difference between the number of people who express interest in a development compared to those who are able to commit,” she added. Few loans for homes Singapore is the world’s fourth most expensive market for luxury property according to Knight Frank, with prices propelled by a scarcity of land and its popularity as an investment destination for wealthy Asians. Most of the country’s 5.4 million people, however, live in cheaper, government-built apartments. Private houses and condominium apartments account for about 18 percent of the market, but the value of contracts awarded each year to build these properties usually outstrips that for public housing. Last year, contracts worth nearly S$10 billion were awarded for private residential construction, a figure the building regulator estimates will fall by as much as a third in 2014 as developers avoid new longer-term projects in an unfavorable environment. Wary of a property bubble, the government of this island-state has initiated seven rounds of cooling measures since 2009. These had failed to put a major brake on price rises until a new rule last June took effect, limiting buyers total loan obligations to 60 percent of their monthly income. This has made obtaining mortgages harder, reducing the overall number of property buyers, and especially those looking for larger, expensive homes. Cheaper, smaller apartments are not as badly affected, as they remain relatively affordable. “Definitely at the high-end, the luxury end, the market is a bit slower because these are the people who are most affected by the policy measures,” said Lim Ming Yan, chief executive of CapitaLand. Samuel Tsien, chief executive of Oversea-Chinese Banking Corporation, told Reuters last month the bank was extending 40 percent fewer new mortgages in the first quarter of 2014 versus the same year-ago period. Adding to developers’ conundrum, and the pressure on prices, is the threat of government charges on companies unable to sell all units within two years of completion. Penalties are based on a percentage of the unit price, and rise each year the home is left unoccupied. Developers generally start selling properties up to four years ahead of completion, and in the past, many sell out within a few weeks of their sales launch. Now things are slowing. Wheelock Properties is taking a write-down of S$110 million on its Panorama complex of 698 flats due to be completed in 2017. Of the 120 flats put up for sale so far, only 57 were sold by the end of March. Tuan Sing Holdings is also seeing slow sales at its ultra-luxury Cluny Park Residence, where a four-bedroom ground floor unit, complete with private pool, costs S$8.5 million. “Due to the various restrictive cooling measures, investors may feel no great urgency to buy as they wait for a more attractive entry point,” said Mohamed Ismail, chief executive of estate agents PropNex Realty. The dearth of buyers has created a supply glut which is only likely to worsen within the next four years. Government data shows 82,575 new, private residential units are expected to be built between 2014 and 2018. That means an annual rise in the supply of property of around 20,000 units, around twice the average of the last 10 years. “Either the population will need to increase tremendously in the next few years or else there will be a lot of vacant units,” said Nicholas Mak, executive director at SLP International Property Consultants. Reuters]]> Singapore. Luxury property developers in Singapore are facing their worst sales outlook in six years as a raft of government measures to cool one of the world’s most expensive real estate markets bite. Sales of private homes, which account for just under one fifth of the total property market, fell to their lowest in more than four years in January to March, official data showed this week. If the decline continues at the same pace for the rest of this year, analysts expect sales to halve from the 15,000 units sold in 2013. Prices of private residential properties are also expected to fall this year and the next by between 10 and 20 percent, analysts say. The drop began at end of last year, due to the government measures, reducing prices that had increased by around two-thirds since end-2009. The weakness in the market is likely to weigh on the sales outlook of smaller listed developers of premium properties such as Wheelock Properties (Singapore), Ho Bee Land and Wing Tai Holdings. Larger developers are less affected due to their more diversified portfolios, but they are also cutting prices. CapitaLand, Southeast Asia’s largest listed property developer, is selling units at its Sky Habitat condominium for S$1,370 ($1,100) per square foot compared to as high as S$1,900 when it was launched two years ago, agents say. “It feels like we’re back in 2008,” said Christine Li, head of research at real estate firm OrangeTee, referring to the property slump that affected Singapore during the global financial crisis. “There’s quite a difference between the number of people who express interest in a development compared to those who are able to commit,” she added. Few loans for homes Singapore is the world’s fourth most expensive market for luxury property according to Knight Frank, with prices propelled by a scarcity of land and its popularity as an investment destination for wealthy Asians. Most of the country’s 5.4 million people, however, live in cheaper, government-built apartments. Private houses and condominium apartments account for about 18 percent of the market, but the value of contracts awarded each year to build these properties usually outstrips that for public housing. Last year, contracts worth nearly S$10 billion were awarded for private residential construction, a figure the building regulator estimates will fall by as much as a third in 2014 as developers avoid new longer-term projects in an unfavorable environment. Wary of a property bubble, the government of this island-state has initiated seven rounds of cooling measures since 2009. These had failed to put a major brake on price rises until a new rule last June took effect, limiting buyers total loan obligations to 60 percent of their monthly income. This has made obtaining mortgages harder, reducing the overall number of property buyers, and especially those looking for larger, expensive homes. Cheaper, smaller apartments are not as badly affected, as they remain relatively affordable. “Definitely at the high-end, the luxury end, the market is a bit slower because these are the people who are most affected by the policy measures,” said Lim Ming Yan, chief executive of CapitaLand. Samuel Tsien, chief executive of Oversea-Chinese Banking Corporation, told Reuters last month the bank was extending 40 percent fewer new mortgages in the first quarter of 2014 versus the same year-ago period. Adding to developers’ conundrum, and the pressure on prices, is the threat of government charges on companies unable to sell all units within two years of completion. Penalties are based on a percentage of the unit price, and rise each year the home is left unoccupied. Developers generally start selling properties up to four years ahead of completion, and in the past, many sell out within a few weeks of their sales launch. Now things are slowing. Wheelock Properties is taking a write-down of S$110 million on its Panorama complex of 698 flats due to be completed in 2017. Of the 120 flats put up for sale so far, only 57 were sold by the end of March. Tuan Sing Holdings is also seeing slow sales at its ultra-luxury Cluny Park Residence, where a four-bedroom ground floor unit, complete with private pool, costs S$8.5 million. “Due to the various restrictive cooling measures, investors may feel no great urgency to buy as they wait for a more attractive entry point,” said Mohamed Ismail, chief executive of estate agents PropNex Realty. The dearth of buyers has created a supply glut which is only likely to worsen within the next four years. Government data shows 82,575 new, private residential units are expected to be built between 2014 and 2018. That means an annual rise in the supply of property of around 20,000 units, around twice the average of the last 10 years. “Either the population will need to increase tremendously in the next few years or else there will be a lot of vacant units,” said Nicholas Mak, executive director at SLP International Property Consultants. Reuters]]> http://www.thejakartaglobe.com/?p=282915 Chocolate Egg Easter Surprise Is Sticker Shock After Cocoa Surge http://www.thejakartaglobe.com/?p=282901 Fri, 18 Apr 2014 12:59:58 +0700 Ingredient costs The US price of cocoa butter, the byproduct of crushed beans that accounts for 20 percent of the weight of a chocolate bar, rose 86 percent in the 12 months through April 11 and is the highest on average for any year since at least 1997, data from the Cocoa Merchants Association of America show. The cost of other ingredients also are rising, after milk reached records this year in the US and Europe and sugar futures rallied 20 percent from a 43-month low in January. While global bean production will rise for the first time in three years, reaching 4.104 million tons in the 12 months that end Sept. 31, that will be less than demand for a second straight year, with processors set to use 4.178 million tons, the International Cocoa Organization in London said. Supply concerns are being compounded by increasing prospects of an El Nino weather pattern, which can bring dry winds to West Africa, including top growers Ivory Coast and Ghana. Long-term output deficits are fueling “bullish momentum” for prices, according to an April 3 earnings statement from Zurich-based Barry Callebaut, the world’s top processor and biggest maker of bulk chocolate. The “significant” increases in cocoa and milk-powder costs were passed on to customers, so profitability wasn’t affected, chief executive Juergen Steinemann said on a conference call the same day. Seasonal sales Even with higher prices, global demand is growing, especially in developing markets including Asia. Seasonal sales of chocolate on holidays including Easter and Christmas will jump 5 percent this year to $12.7 billion, Euromonitor said. “The underlying concern is that there will not be enough cocoa available to satisfy the appetite of consumers,” said Andreas Christiansen, managing director of Hamburg Cocoa & Commodity Office GmbH, a consultant to the confection industry. “The growing appetite for cocoa or cocoa-based products in emerging markets is what is driving expectations that consumption will outpace production.” More bunnies In Germany, where per-capita chocolate consumption is the highest in the world at 9 kilograms a year, confectioners will produce 206 million bunnies for Easter this year, 8.4 percent more than a year earlier, according to the Association of the German Confectionery Industry, or BDSI. Pre-Easter sales of confectionery products as of April 14 at British grocery chain Waitrose rose 14 percent this year from a year earlier, said Meg Ogilvie, a spokeswoman in London. The value of chocolate confectionery consumption in emerging markets including Asia, Latin America, the Middle East and Africa will grow more than 5 percent annually in the five years through 2018, more than double the rate of the world average, according to Euromonitor. Consumers in the Asia Pacific region will eat 1.096 million tons by 2018, a 27 percent increase from 2013, compared with a 5 percent gain over that period in western Europe, the biggest buyer, Euromonitor forecasts. By 2018, eastern Europe will become the world’s number two consumer, displacing North America, where demand will be unchanged, the researcher said. Ivory Coast Cocoa’s gains may be limited as supply prospects improve in West Africa. Ivory Coast, which supplies about 40 percent of the world’s output, may see a 14 percent jump in its mid-crop, the smaller of two annual harvests, to at least 417,000 tons, according to a Bloomberg News survey of five traders and analysts. Farmers started collecting beans this month. Ivory Coast’s total output may be about 1.55 million tons, 7 percent more than the previous year, according to the ICCO. “We’re looking at a strong mid-crop in West Africa, after a good main harvest,” said Sterling Smith, a futures specialist at Citigroup in Chicago. “Assuming we have no weather problems, prices could ease amid increased supplies.” European demand was weaker than expected during the first quarter, which may indicate higher prices encouraged grinders to use inventories and delay buying, said Edward George, the head of soft commodities research at Ecobank Group in London. Processors used 340,753 tons in the quarter, up 0.4 percent from a year earlier, the European Cocoa Association said April 10. Analysts surveyed by Bloomberg expected a 3.5 percent gain. Asia demand While farmers are harvesting larger crops now, production in the season that starts in October may be threatened if El Nino develops, Ecobank’s George said. The meteorological phenomenon characterized by warming equatorial waters in the Pacific Ocean can bring drying so-called Harmattan winds to West Africa, parching cocoa crops. The US Climate Prediction Center says the odds are now 65 percent that El Nino will develop. Increasing chances of an El Nino raises the risk of higher prices for commodities, including cocoa, Goldman Sachs Group said in a report dated April 13. Demand continues to grow in Asia, spurring expanded grinding capacity in Indonesia. Cocoa processing in the region rose 3.7 percent during the first quarter from a year earlier to 159,617 tons, the Singapore-based Cocoa Association of Asia said on Thursday. The figures are for Malaysia and members in Singapore and Indonesia, according to its website. In North America, processing rose 1 percent in the quarter to 129,007 tons, the National Confectioners Association said on Thursday. Analysts surveyed by Bloomberg expected 128,138, on average. The industry surveyed processors including Hershey, Mars and Nestle. Bullish bets Money managers are betting the cocoa rally isn’t over. With prices already up 30 percent from a year ago, hedge funds and other large speculators held a net-long position of 67,994 futures and options contracts as of April 8, up from 11,061 a year earlier, US Commodity Futures Trading Commission data show. Holdings have been bullish since July 2012. “In the long term, if we do see more and more cocoa beans sucked into the Asian market, and they become scarcer, then inevitably prices will go up,” Ecobank’s George said. “It could be that cocoa becomes again a real luxury product, like champagne.” Bloomberg]]> Ingredient costs The US price of cocoa butter, the byproduct of crushed beans that accounts for 20 percent of the weight of a chocolate bar, rose 86 percent in the 12 months through April 11 and is the highest on average for any year since at least 1997, data from the Cocoa Merchants Association of America show. The cost of other ingredients also are rising, after milk reached records this year in the US and Europe and sugar futures rallied 20 percent from a 43-month low in January. While global bean production will rise for the first time in three years, reaching 4.104 million tons in the 12 months that end Sept. 31, that will be less than demand for a second straight year, with processors set to use 4.178 million tons, the International Cocoa Organization in London said. Supply concerns are being compounded by increasing prospects of an El Nino weather pattern, which can bring dry winds to West Africa, including top growers Ivory Coast and Ghana. Long-term output deficits are fueling “bullish momentum” for prices, according to an April 3 earnings statement from Zurich-based Barry Callebaut, the world’s top processor and biggest maker of bulk chocolate. The “significant” increases in cocoa and milk-powder costs were passed on to customers, so profitability wasn’t affected, chief executive Juergen Steinemann said on a conference call the same day. Seasonal sales Even with higher prices, global demand is growing, especially in developing markets including Asia. Seasonal sales of chocolate on holidays including Easter and Christmas will jump 5 percent this year to $12.7 billion, Euromonitor said. “The underlying concern is that there will not be enough cocoa available to satisfy the appetite of consumers,” said Andreas Christiansen, managing director of Hamburg Cocoa & Commodity Office GmbH, a consultant to the confection industry. “The growing appetite for cocoa or cocoa-based products in emerging markets is what is driving expectations that consumption will outpace production.” More bunnies In Germany, where per-capita chocolate consumption is the highest in the world at 9 kilograms a year, confectioners will produce 206 million bunnies for Easter this year, 8.4 percent more than a year earlier, according to the Association of the German Confectionery Industry, or BDSI. Pre-Easter sales of confectionery products as of April 14 at British grocery chain Waitrose rose 14 percent this year from a year earlier, said Meg Ogilvie, a spokeswoman in London. The value of chocolate confectionery consumption in emerging markets including Asia, Latin America, the Middle East and Africa will grow more than 5 percent annually in the five years through 2018, more than double the rate of the world average, according to Euromonitor. Consumers in the Asia Pacific region will eat 1.096 million tons by 2018, a 27 percent increase from 2013, compared with a 5 percent gain over that period in western Europe, the biggest buyer, Euromonitor forecasts. By 2018, eastern Europe will become the world’s number two consumer, displacing North America, where demand will be unchanged, the researcher said. Ivory Coast Cocoa’s gains may be limited as supply prospects improve in West Africa. Ivory Coast, which supplies about 40 percent of the world’s output, may see a 14 percent jump in its mid-crop, the smaller of two annual harvests, to at least 417,000 tons, according to a Bloomberg News survey of five traders and analysts. Farmers started collecting beans this month. Ivory Coast’s total output may be about 1.55 million tons, 7 percent more than the previous year, according to the ICCO. “We’re looking at a strong mid-crop in West Africa, after a good main harvest,” said Sterling Smith, a futures specialist at Citigroup in Chicago. “Assuming we have no weather problems, prices could ease amid increased supplies.” European demand was weaker than expected during the first quarter, which may indicate higher prices encouraged grinders to use inventories and delay buying, said Edward George, the head of soft commodities research at Ecobank Group in London. Processors used 340,753 tons in the quarter, up 0.4 percent from a year earlier, the European Cocoa Association said April 10. Analysts surveyed by Bloomberg expected a 3.5 percent gain. Asia demand While farmers are harvesting larger crops now, production in the season that starts in October may be threatened if El Nino develops, Ecobank’s George said. The meteorological phenomenon characterized by warming equatorial waters in the Pacific Ocean can bring drying so-called Harmattan winds to West Africa, parching cocoa crops. The US Climate Prediction Center says the odds are now 65 percent that El Nino will develop. Increasing chances of an El Nino raises the risk of higher prices for commodities, including cocoa, Goldman Sachs Group said in a report dated April 13. Demand continues to grow in Asia, spurring expanded grinding capacity in Indonesia. Cocoa processing in the region rose 3.7 percent during the first quarter from a year earlier to 159,617 tons, the Singapore-based Cocoa Association of Asia said on Thursday. The figures are for Malaysia and members in Singapore and Indonesia, according to its website. In North America, processing rose 1 percent in the quarter to 129,007 tons, the National Confectioners Association said on Thursday. Analysts surveyed by Bloomberg expected 128,138, on average. The industry surveyed processors including Hershey, Mars and Nestle. Bullish bets Money managers are betting the cocoa rally isn’t over. With prices already up 30 percent from a year ago, hedge funds and other large speculators held a net-long position of 67,994 futures and options contracts as of April 8, up from 11,061 a year earlier, US Commodity Futures Trading Commission data show. Holdings have been bullish since July 2012. “In the long term, if we do see more and more cocoa beans sucked into the Asian market, and they become scarcer, then inevitably prices will go up,” Ecobank’s George said. “It could be that cocoa becomes again a real luxury product, like champagne.” Bloomberg]]> http://www.thejakartaglobe.com/?p=282901 IMF Sees S. Korea’s Won Undervalued by as Much as 8% http://www.thejakartaglobe.com/?p=282876 Fri, 18 Apr 2014 09:36:20 +0700 Seoul. The International Monetary Fund said South Korea’s won was estimated to be undervalued by as much as 8 percent, as the country has “tended to be” more active intervening against the won’s appreciation. It also said in a report dated April 17 that South Korea’s current account surplus was estimated be around 3 percent to 4 percent above average. It added that a further appreciation of the won would help support the rebalancing of the country’s economy. The report was published based on the IMF’s annual policy consultations with South Korea held in late 2013 and on a staff report prepared early this year, it said in the report. It said inflation in South Korea’s economy, the fourth-largest in Asia, is expected to return to the country’s target, which is set between 2.5 percent and 3.5 percent. Inflation has stayed below the lower end of the target for months. Reuters]]> Seoul. The International Monetary Fund said South Korea’s won was estimated to be undervalued by as much as 8 percent, as the country has “tended to be” more active intervening against the won’s appreciation. It also said in a report dated April 17 that South Korea’s current account surplus was estimated be around 3 percent to 4 percent above average. It added that a further appreciation of the won would help support the rebalancing of the country’s economy. The report was published based on the IMF’s annual policy consultations with South Korea held in late 2013 and on a staff report prepared early this year, it said in the report. It said inflation in South Korea’s economy, the fourth-largest in Asia, is expected to return to the country’s target, which is set between 2.5 percent and 3.5 percent. Inflation has stayed below the lower end of the target for months. Reuters]]> http://www.thejakartaglobe.com/?p=282876 US Orange Production Hit by Asian Bug, Sending Juice Prices Higher http://www.thejakartaglobe.com/?p=282871 Fri, 18 Apr 2014 09:26:26 +0700 New York. A citrus disease spread by a tiny insect has devastated Florida’s orange crop, which is expected to be the worst in nearly 30 years, and sent juice prices soaring on New York markets. The culprit? The gnat-sized Asian citrus psyllid, which is infecting citrus trees across the Sunshine State with huanglongbing, or citrus greening disease, which causes fruit to taste bitter and fall from trees too soon. “It feels we are losing the fight,” said Ellis Hunt, the head of a family-run citrus farm spread over about 5,000 acres [2,000 hectares] in the central Florida town of Lake Wales. The deadly bacteria has slashed his annual production over the past few years from 1 million boxes of fruit to 750,000. Citrus greening disease has become such a problem this year that the US government has lowered its forecast for the upcoming harvest four times. The latest figures, published earlier this month by the US Department of Agriculture, predict production of 110 million boxes of fruit, or roughly 4.95 million tons. That is 18 percent less than last year, and the lowest since 1985, when citrus groves were hit by a deep freeze. It is also far from the record 244 million boxes collected in 1998. The outlook surprised investors, as the USDA forecast dip was “bigger than the trade had anticipated,” according to Joe Nikruto, senior market strategist for RJO Futures. Following the release of the latest USDA figures, the price of frozen concentrated orange juice rose to its highest point on the Intercontinental Exchange in New York since late March 2012. Juice for May delivery, the most traded, rose 7 percent in three trading sessions to $1.67 a pound. The price has also been driven by drought in Brazil, the world’s top producer of orange juice, but Nikruto explained: “The USDA numbers are fueling this fire.” Putting juice back on breakfast table On his Florida farm, Hunt is fighting the good fight but all the insecticide, fertilizer and extra minerals in the world don’t seem to be helping. “We spray at least every four weeks ... but we are not keeping pace with the spread,” he said. Some small growers have practically abandoned their trees, as the rise in prices will not make up for their production shortfalls. Authorities are scrambling to help the citrus industry — which generates $9 billion a year in Florida alone and employs 76,000 people — stay afloat. Millions of dollars have been poured into research on ways to battle citrus greening disease. Of course, experts are bearing in mind that spreading bacteria-fighting chemicals on 70 million trees across 530,000 acres would be no easy task. “We will witness replanting and increases in production within the next three to five years,” said Daniel Sleep, an official in the Florida Department of Agriculture and Consumer Services. “With the vast array of resources that have been committed, no other outcome seems possible.” But once the immediate crisis is averted, another problem looms: how to convince American consumers to put orange juice back on their breakfast tables. The United States remains by far the world’s top consumer of the drink, but that consumption has dropped by 30 percent since 2003. Why? Grocery store shelves are loaded with other beverage options, including diet sodas and flavored waters with lower calorie counts for weight-conscious Americans. “Juice is often associated with breakfast and as our society changes, we rush ourselves a little bit and we have a tendency to skip it,” Sleep noted. The juice-breakfast link is however helping to keep prices from going up too much, Nikruto says, as it is difficult to “charge more for a product that people are demanding less every day.” Agence France-Presse]]> New York. A citrus disease spread by a tiny insect has devastated Florida’s orange crop, which is expected to be the worst in nearly 30 years, and sent juice prices soaring on New York markets. The culprit? The gnat-sized Asian citrus psyllid, which is infecting citrus trees across the Sunshine State with huanglongbing, or citrus greening disease, which causes fruit to taste bitter and fall from trees too soon. “It feels we are losing the fight,” said Ellis Hunt, the head of a family-run citrus farm spread over about 5,000 acres [2,000 hectares] in the central Florida town of Lake Wales. The deadly bacteria has slashed his annual production over the past few years from 1 million boxes of fruit to 750,000. Citrus greening disease has become such a problem this year that the US government has lowered its forecast for the upcoming harvest four times. The latest figures, published earlier this month by the US Department of Agriculture, predict production of 110 million boxes of fruit, or roughly 4.95 million tons. That is 18 percent less than last year, and the lowest since 1985, when citrus groves were hit by a deep freeze. It is also far from the record 244 million boxes collected in 1998. The outlook surprised investors, as the USDA forecast dip was “bigger than the trade had anticipated,” according to Joe Nikruto, senior market strategist for RJO Futures. Following the release of the latest USDA figures, the price of frozen concentrated orange juice rose to its highest point on the Intercontinental Exchange in New York since late March 2012. Juice for May delivery, the most traded, rose 7 percent in three trading sessions to $1.67 a pound. The price has also been driven by drought in Brazil, the world’s top producer of orange juice, but Nikruto explained: “The USDA numbers are fueling this fire.” Putting juice back on breakfast table On his Florida farm, Hunt is fighting the good fight but all the insecticide, fertilizer and extra minerals in the world don’t seem to be helping. “We spray at least every four weeks ... but we are not keeping pace with the spread,” he said. Some small growers have practically abandoned their trees, as the rise in prices will not make up for their production shortfalls. Authorities are scrambling to help the citrus industry — which generates $9 billion a year in Florida alone and employs 76,000 people — stay afloat. Millions of dollars have been poured into research on ways to battle citrus greening disease. Of course, experts are bearing in mind that spreading bacteria-fighting chemicals on 70 million trees across 530,000 acres would be no easy task. “We will witness replanting and increases in production within the next three to five years,” said Daniel Sleep, an official in the Florida Department of Agriculture and Consumer Services. “With the vast array of resources that have been committed, no other outcome seems possible.” But once the immediate crisis is averted, another problem looms: how to convince American consumers to put orange juice back on their breakfast tables. The United States remains by far the world’s top consumer of the drink, but that consumption has dropped by 30 percent since 2003. Why? Grocery store shelves are loaded with other beverage options, including diet sodas and flavored waters with lower calorie counts for weight-conscious Americans. “Juice is often associated with breakfast and as our society changes, we rush ourselves a little bit and we have a tendency to skip it,” Sleep noted. The juice-breakfast link is however helping to keep prices from going up too much, Nikruto says, as it is difficult to “charge more for a product that people are demanding less every day.” Agence France-Presse]]> http://www.thejakartaglobe.com/?p=282871