Malaysia On Track For Further Growth

Kuala Lumpur, Malaysia

In its latest report, Bank Negara Malaysia noted that the country saw a stronger growth of 8.9% in the second quarter of 2022 compared to 5% in the first quarter.

It attributed this strong showing to an increase in domestic demand, underpinned by the steady recovery in labor market conditions and ongoing policy support. The central bank also said the higher growth was reflective of normalizing economic activity as the country moved towards endemicity and reopened international borders.

The country’s Finance Ministry said foreign direct investment flowing into Malaysia in Q2 2022 remained positive, totaling US$3.63 billion (RM17.3 billion), buoyed by sectors such as manufacturing, financial and insurance, wholesale and retail trade primarily from the United States and Singapore.

Malaysia’s trade performance has also seen an uptrend. The Malaysian External Trade Development Corporation noted that trade surged by 56.7% to US$55.7 billion (RM265.7 billion) compared to August 2021.

Bright Outlook for Local Companies

As recovery gains momentum, Malaysian companies, such as Silverlake Axis, have also done well and experienced marked growth this year despite the impact of the pandemic. The company has a strong reputation in Southeast Asia and counts over 40% of the top 20 banks and three of the five largest financial institutions in ASEAN among its customers.

But despite its success, the Singapore-listed company has recognized the need to diversify its business and adapt to new market demands. The company is developing cloud-based and software-as-a-service solutions to compete more effectively with newer financial technology companies. It has also successfully made inroads into Thailand with these new products, with Indonesia as its next growth target.

Another company that is diversifying into new business is Gentari, a wholly-owned subsidiary of PETRONAS, which has identified the world’s need for clean energy demand within three important areas: renewable energy, hydrogen and green mobility.

The newly-formed company aspires to be a low carbon hydrogen producer that will supply its hydrogen value chain to industrial, power and transportation customers in domestic and export markets. It has plans to build an overall energy capacity of 30 to 40 gigawatt in key markets by 2030 through utility-scale projects across solar, onshore and offshore wind, and battery storage.

Open for Business

Meanwhile, Malaysia’s international financial center, the Tun Razak Exchange (TRX), has opened its doors to three financial institutions—Affin Bank, HSBC and Prudential Assurance.

The 70-acre development has been benchmarked against the most stringent international standards and offers a unique proposition to potential investors and tenants as it employs biophilic designs, which bring in natural light and better air circulation.

These innovative designs support the future of work, where workers want to be agile and mobile and have seamless connection between outdoor and indoor spaces. TRX also emphasizes sustainability, with 23% of the district dedicated to green and open spaces and where the buildings are sustainably-designed and user-oriented.

Looking forward, Malaysia’s future looks bright following the country’s transition to the endemic phase and the opening of international borders. Its economic growth is expected to be supported by more vigorous economic and social activities, as well as strong domestic and foreign demand.

“While external demand could face headwinds from slower global growth, the Malaysian economy will continue to be supported by firm domestic demand. Growth would also benefit from improving labor market conditions and higher tourist arrivals, as well as continued implementation of multi-year investment projects,” says Nor Shamsiah, Governor of Bank Negara Malaysia.

Riding A New Wave Of Digital Innovation

The world has never felt the pervasiveness of technology more than it does today. The pandemic accelerated numerous tech trends that were already evident in the days before Covid-19 made its presence felt. Whether we’re exploring virtual worlds, making payments with our smart watches or traveling in driverless vehicles, technology has embedded itself in almost everything we do.

Amid buzz over the latest digital trends, the metaverse—hailed as the next iteration of the Internet—is perhaps the one that has drawn the most attention recently. Experts envision the metaverse to encompass multiple online platforms that combine aspects of the physical and digital worlds.

Meanwhile, NFTs, or non-fungible tokens, powered by blockchain technology have captured the imaginations of digital artists and content creators around the world, giving them an avenue to monetize their creativity.

For businesses, digital transformation is an area that they can no longer afford to ignore. Companies that fail to adopt technology to increase productivity, generate new revenue streams or reach new audiences, risk being left behind in an increasingly digital world.

Digital Payments Gaining Traction
As e-commerce continues to gain pace, digital payments are also starting to become mainstream in many markets. According to a recent Mastercard survey, consumers in Asia Pacific are among the most enthusiastic adopters of digital payments globally.

The study found that 88% of consumers in this part of the world have used technologies like digital wallets, QR codes and cryptocurrencies in the past year. While the pandemic may have been the catalyst for this rapid adoption, Mastercard predicts that this shift in consumer behavior may be permanent.

Clearly, Mastercard is playing a key role in shaping the future of payments in Asia and the rest of the world. Among other initiatives, the company has been leading efforts to strengthen the digital ecosystems of its partners and customers with a host of innovative solutions.

AI Transforming Major Industries
However, it is not just multinational companies that are helping to transform the world through technology. Innovative startups are also making their mark in the dynamic tech sector. Malaysian drone technology solutions firm Aerodyne, for instance, pioneered the use of artificial intelligence (AI) for large-scale data operations, analytics and process optimization in major industries.

With a presence in 35 countries, the company, founded by Malaysian entrepreneur Kamarul A Muhamed, employs drones armed with cutting-edge AI software to help businesses in areas such as precision automation, security and intelligence, as well as logistics. The 8-year-old startup has found much success, and is ranked first in the global remote sensing category by Drone Industry Insights.

With both global leaders and startups striving to make an impact through technology, the world can expect new, innovative solutions in the coming years that will impact the way we work, live and play in unimaginable ways.

The Philippines: Ready To Soar Anew

Malls, hotels, restaurants, and construction sites light up with renewed activity in the Makati Central Business District.

Prior to the emergence of Covid-19, the Philippines was already one of Asia’s fastest-growing economies. Now, with post-pandemic recovery well underway, and the tempering of global concerns ranging from fuel to supply chain issues, the outlook for the country’s economy is bright as it looks to regain its momentum and rise to even greater heights.

Positive developments have followed the relaxation of Covid-19 restrictions, thanks to an expanded vaccination program and adherence to health precautions. This has led to a rebound in investments and household consumption.

“Strong retail growth is a bright spot in the Philippines and in the region,” says Frederic C. DyBuncio, President and CEO of SM Investments Corporation. “Despite rising inflation, SM Retail reported its revenues rising by 18% in the first half of 2022.” 

The pandemic has also spurred the adoption of digital and online transactions in the country, leading to a fintech boom. “Digital innovations have made doing business in the Philippines easier, creating a springboard for economic recovery,” explains Nestor V. Tan, President and CEO of BDO Unibank, the Philippines’ largest bank.

Speaking on the property sector, Vista Land & Lifescapes President and CEO Manuel Paolo A. Villar Jr. shared in their H1 2022 earnings report about how the company saw their income grow by 11% from last year, and will continue to upgrade and develop digital initiatives. Having recently launched VistaREIT, their company’s commercial real estate investment trust, Villar remains optimistic about the prospects of a reinvigorated economy.

Official figures show the Philippines’ GDP posted 8.3% growth in the first quarter of 2022, slowing to 7.4% in Q2 due to inflationary pressures. The government expects full-year growth to be between 6.5-7.5%, still among the highest in the region.

With growth accelerating and financial burdens easing, the new administration is confident about the country achieving upper-middle-income status within the next six years.

In its first few months, the Marcos government has highlighted its continued focus on fiscal management and reviving the underutilized agricultural sector. The current team has stated its commitment to not just sustain, but to also expand the previous administration’s ambitious Build Build Build program, keeping infrastructure spending at 5-6% of GDP. By targeting other promising sectors, such as technology, healthcare and education, the goal is to raise the country’s attractiveness as an investment destination.

The latest official statistics show all economic sectors expanding, with growth mostly driven by the services and industry sectors at 9.1% and 6.3%, respectively. Business process outsourcing remained buoyant even during the pandemic and is expected to continue to play a significant role. However, tourism is the sector predicted to rebound most dramatically over the next two years.

Having weathered great storms, both literal and figurative, the Philippines is showing that, with a bit of wind at its back, its economy is ready to again fly forward and upward.

Hong Kong: Setting New Standards

Following one of the most challenging periods in its history, Hong Kong is once again demonstrating its legendary resilience, adaptability and creativity to emerge from the pandemic stronger and more dynamic than ever.

The city, which celebrated the 25th anniversary of its return to Chinese rule in July, has been reminding the world why it is such a unique and vibrant global hub—not only for finance, but also for culture, technology, science and medicine.

The HK$3.5 billion (US$445 million) Hong Kong Palace Museum opened to widespread acclaim as part of the anniversary celebrations, hot on the heels of the hugely anticipated M+ museum of visual culture. Hong Kong Science and Technology Parks Corporation, meanwhile, is driving forward with its ambitious plans to develop the city into a world-leading I&T hub, drawing praise from Chinese President Xi Jinping on his recent visit. And the Hong Kong University of Science and Technology has succeeded in making a major breakthrough in the treatment of Alzheimer’s disease with a groundbreaking blood test for early detection.

Above all, however, the city has reaffirmed its status as both one of the world’s most important international financial centers, and an irreplaceable bridge between China and the rest of the world. Not only is the SAR creating a wealth of new opportunities for investors inside and outside of China through its various Connect schemes—and thus ideally positioning itself to take advantage of what Nicolas Aguzin, CEO of Hong Kong Exchanges and Clearing Limited (HKEX), calls “The Big Bang of Finance”—but it is also developing its financial services industry in areas such as fintech, ESG and sustainable investments.

Moreover, as pandemic restrictions and quarantine periods ease, the city has once again placed attracting the world’s best and brightest finance professionals to the city at the top of its agenda. As Christopher Hui, Secretary for Financial Services and the Treasury affirms, “Nurturing and attracting talent is always indispensable.”

Hong Kong’s can-do spirit is also exemplified by renowned healthcare insurance firm Cigna, which has been providing bespoke health insurance solutions to corporate and individual clients in the city for almost 90 years. As the company’s CEO, Jonathan Spiers, explains, Cigna views its role within Hong Kong as much more than just offering affordable and high-quality health insurance solutions: “At a very fundamental level, we see our role as being an integral part of the Hong Kong healthcare system.”

Another company working hard to make Hong Kong—and the world—a better place for everyone is leading property developer Sino Group. With a footprint in Hong Kong, mainland China, Singapore and Australia, Sino Group has placed sustainability and ESG at the top of its agenda, focusing on projects that are not only better for the environment, but which also meet communities’ cultural and humanitarian needs.

As well as striving to achieve carbon neutrality by 2050 through sustainable building practices—as evidenced by the company’s new developments including mixed-use urban oasis Grand Central and the spectacular The Fullerton Ocean Park Hotel Hong Kong—Sino Group has also collaborated with the Hong Kong Government to create Wellness Lodge, a transitional housing project supporting the short-term housing needs of underprivileged families.

With innovation meeting community spirit in companies such as these, Hong Kong’s future looks very bright indeed.

Singapore: Positioned For Long-Term Success

After navigating the turbulence of the past two years, Singapore has set its sights firmly on the future as it seeks to capitalize on the post-pandemic rebound. The government has removed almost all Covid-related restrictions and has since embarked on a strategy to sustain Singapore’s longer-term relevance while supporting businesses as they return to a growth trajectory.

Like other countries around the world, however, Singapore faces challenges on multiple fronts, including heightened inflation that threatens to push economies into recession. Rising food and energy prices worldwide are a result of persistent supply chain issues that have been exacerbated partly by China’s zero-Covid approach and the supply shock from the war in Ukraine.

However, economists are cautiously optimistic that Singapore will avoid a technical recession, which is defined by two consecutive quarters of economic contraction. After the GDP dipped slightly by 0.2% for Q2, 2022, the Ministry of Trade and Industry said that the economy appears set to return to quarter-on-quarter growth for the rest of the year.

Reaping the Benefits of Transformation

Despite the uncertain global landscape, companies based in Singapore will continue to reap the benefits of digital and business model transformation efforts undertaken in recent years. Initiatives aimed at streamlining processes, embracing digitalization and finding new avenues for growth have resulted in more sustainable businesses that are better equipped to navigate volatility and capture new opportunities.

For instance, Singapore-based pharmaceuticals group Zuellig Pharma consistently taps into innovation and technology to more effectively serve its stakeholders as part of its broader mission to make healthcare more accessible to the communities it serves.

In the education sector, Singapore Institute of Management (SIM) has also embraced innovation to help its learners acquire skills and knowledge that are relevant for the rapidly evolving future of work. In July this year, SIM rolled out a rebranded identity to reflect this commitment to an industry-focused and skills-based approach to lifelong learning.

Meanwhile, one of Singapore’s leading entrepreneurs, Sam Goi of Tee Yih Jia Food Manufacturing is leveraging a new, state-of-the-art manufacturing facility to emerge stronger from the pandemic, as he seeks to play a key role in Singapore’s bid for nutritional self-sufficiency. 

Riding the Post-pandemic Rebound

The global hospitality industry is also witnessing a welcome recovery as global travel bounces back strongly, with some Singapore-based players having returned to pre-pandemic levels of activity. 

A case in point is Radisson Hotel Group (RHG), which recently unveiled an Asia Pacific (APAC) Expansion Plan that aims to grow its portfolio from around 400 properties in the region to more than 2,000 hotels and resorts by 2025. The expansion plan focuses on five strategic growth markets—India, Thailand, Vietnam, Australia and New Zealand—and RHG’s strategy will be powered by building local development and operations teams with local language capabilities in these markets.

The healthcare sector is another beneficiary of the post-pandemic rebound. IHH Healthcare—which operates 80 hospitals in ten countries under leading brands such as Fortis, Parkway and Pantai—saw its business plummet by almost 80% during the crisis, pushing the company into a loss for the first time in many years.

Through the uncertainty, IHH, which is listed in Malaysia and Singapore, stayed true to its mission to become the world’s most trusted healthcare services provider. The group’s decision to follow its moral compass has since paid dividends, and it has come out of the pandemic stronger than ever.

Committed to Sustainability

Many of these companies are focused on incorporating sustainability into their operations, even as they chase business expansion. IHH recently introduced its “Care. For Good.” vision, which aims to create sustainable value for all its stakeholders. This involves not only taking care of patients, but also its people, the public and the planet.

Meanwhile, Zuellig Pharma has put in place a sustainability framework that outlines 22 material issues grouped under four themes: Setting the Highest Standards of Integrity, Nurturing Talent, Improving Health Outcomes, and Respecting the Environment. RHG has also developed an APAC Expansion Plan in line with the group’s sustainability targets, reinforcing its commitment to become net zero by 2050.

Other organizations are more directly engaged in promoting sustainability in an effort to address climate change. One such enterprise is Plastic Credit Exchange (PCX), a commercial operation based in Singapore that launched the world’s first non-profit, fully integrated and blockchain-protected plastic offset program. PCX offers brands a way to achieve their sustainability goals by showing them that there is an effective, achievable way to clean up their plastic waste.  

The Singapore Edge

Looking ahead, companies and entrepreneurs from around the world will undoubtedly continue to set up shop in Singapore, attracted by the city-state’s well-known strengths of global connectivity, ease of doing business and good governance. Drawn by these strengths, Sudhir Agarwal came to Singapore in 2016 to build a global business process outsourcing enterprise from scratch. In just six years, his company, Everise, has grown into an industry powerhouse that is expected to register around half a billion U.S. dollars in revenue this year.

Agarwal credits operating out of Singapore as one factor that has given him a competitive edge in the industry. “I chose Singapore because of the ease of setting up the company and doing business here. I was clear that Everise would be built on the important pillar of governance, which we all know is very strong in Singapore.”

Heat Is On For Companies To Strengthen ESG Practices

Environmental, Social and Governance (ESG) investing, once considered a trend for millennials and younger investors, is fast gaining traction as a mainstream requirement for global corporations as the climate crisis intensifies. 

The historic 2015 Paris Agreement on climate change saw 195 countries and the European Union signing up to a common goal of keeping global temperatures from increasing more than 1.5 degrees Celsius to achieve climate neutrality by 2050, thereby ensuring that carbon emissions and removals offset each other.

The World Meteorological Organization, the foremost authority on global climate, says in its latest report that the odds for the world hitting the target of a yearly average of 1.5 degrees Celsius are 50-50. There is also the likelihood that the five years from 2022 to 2026 will be the hottest on record.

The good news is that an increasing number of organizations, from financial institutions and energy companies to real estate developers and leading manufacturers, are rallying behind governments to reduce carbon footprints and strengthen ESG efforts to achieve net zero targets.

Investors, both retail and institutional, are also aligning their portfolios to ensure that their money goes to responsible companies with clear ESG metrics—ranging from carbon footprint reduction, energy efficiency improvements, employee health and safety to product sustainability, the integrity of the company’s board of directors, and diversity and inclusion efforts across the organization.

One of the financial institutions guiding clients toward ESG investing is LGT Group, the world’s largest family-owned private banking and asset management group based in the microstate of Liechtenstein, a well-known economic powerhouse in Europe. The bank—owned by the Princely Family of Liechtenstein, who, as an entrepreneurial family, has transferred wealth across 26 generations for almost 900 years—provides wealth management services to private banking clients with sustainability as a core focus.

Another banking group, HSBC Global Private Banking, has research figures that indicate more than 82% of investors in mainland China, Hong Kong, Singapore and the United Kingdom rate sustainable, environmental and ethical issues as “quite” or “very important” to their investments. The bank is helping investors to future-proof their investment portfolios by choosing companies that are ESG-focused as they tend to deliver stronger earnings. With HSBC’s guidance, investors will also be able to invest while supporting the global movement towards a more sustainable and equitable future.

Product manufacturers, on the other hand, face different challenges as they need to utilize finite raw materials for production. But that is not stopping forward-thinking manufacturers from doing their bit to mitigate global warming.

Indonesia-based Asia Pacific Resources International Limited (APRIL Group), one of the largest pulp and paper producers in the world, has in place a one-for-one sustainability goal whereby every hectare of land used for commercial plantation is matched with an equal size of land set aside for conservation. At the company’s mills, 90% of the energy requirements come from renewable sources. APRIL Group also invests a dollar for every ton of fiber that is delivered to the mill, ensuring about US$100 million for conservation and restoration over the next 10 years. The company is leading by example to demonstrate that sustainability is not a zero-sum game and the pursuit of ESG goals need not be at the expense of profitability.

State-owned oil and gas companies are also rebranding themselves as “energy” companies as they transition towards carbon neutrality. One such company is Pertamina, Indonesia’s largest integrated energy company, whose biggest challenge today is energy security—or ensuring the uninterrupted supply of energy at an affordable price across an archipelago of more than 17,000 islands with a population of over 270 million. The company has rolled out several ESG programs and initiatives, such as developing an ecosystem that supports electric vehicles; introducing the use of biogas and waste materials in rural areas; recycling cooking oil; and promoting the conservation and restoration of the coastal and marine ecosystems. Pertamina is also building more solar power plants and harnessing renewable energy from hydro, geothermal and hydrogen as it journeys toward achieving net zero targets in line with the national agenda.

Meanwhile, in the real estate industry, Hong Kong-based Sino Group has signed on to support the United Nations Global Compact in 2020, as well as Business Ambition for 1.5°C and the Task Force on Climate-related Financial Disclosures in 2021, becoming one of the first real estate developers in Asia to commit to the global calls-to-action to contribute to a more sustainable future. The Group, having established its presence in Hong Kong for more than 50 years, is also setting targets to achieve net zero carbon by 2050. Guided by its “Creating Better Lifescapes” credo, Sino Group has introduced a wide range of eco-friendly and green initiatives to bring communities closer to nature.

Malaysia’s top corporations are also faring well in sustainability performance while transitioning towards carbon neutrality.

Top Glove, the world’s largest maker of gloves, headquartered in Malaysia, has not only set clear sustainability goals to achieve by FY2025, but it is also holding its management accountable with 40% of the team’s remunerations tied to ESG performance. Today, Top Glove has more sustainable products on offer, such as biodegradable nitrile gloves that can degrade at least 10 times faster than regular gloves, while their factories are increasingly shifting toward greater reliance on solar energy.

For Malaysia’s energy company, PETRONAS, the journey towards sustainability is via the circular economy model: by eliminating waste and pollution, circulating products and materials, and regenerating nature. Moving away gradually from activities that involve the consumption of finite resources, the global company, with a presence in more than 50 countries, is now providing renewable energy such as solar technology solutions and low-carbon fuels like natural gas as part of its energy offerings. In the past three years, PETRONAS has seen a threefold increase in demand for its clean energy and it will continue to scale up in this direction, possibly adding hydrogen as an alternative energy source.

Building Cutting Edge Wealth Management Solutions

Amid ongoing geopolitical tensions and market volatility, Asia’s wealth management sector continues to leverage on the region’s growing ranks of ultra-rich. Despite the headwinds brought on by the Covid-19 pandemic in the past two years, the Asia-Pacific will see the biggest growth in the number of ultra-high net worth (UHNW) and high net worth individuals between 2021 and 2026, according to the 2022 edition of Knight Frank’s The Wealth Report.

Over the next five years, Knight Frank forecasts that the global UHNW population will grow by a further 28%, led by Asia and Australasia (+33%), followed by North America (+28%) and Latin America (+26%).

The new generation of wealthy individuals will have different demands compared to their parents when it comes to managing money. For instance, many will likely communicate with their wealth managers through digital platforms, which will facilitate remote transactions seamlessly at their own convenience. At the same time, environmental, social and governance (ESG) concerns will also be a key priority in the portfolios of the younger generation seeking to make the world a better place.

To this end, financial institutions such as HSBC and Citigroup are showing their ultra-rich clients unambiguous commitments to achieve their sustainability ambitions. Both banks are targeting to achieve net zero emissions by 2030 for their operations, while helping corporate clients across various industries to transition to a low carbon economy.

As part of a global group with corporate, investment and retail banking capabilities across an international network, HSBC’s Global Private Bank has a wealth of knowledge and expertise at its disposal to support its clients’ sustainability journey.

For Citi Private Bank (CPB) and its clients, committing to sustainable investments is a perpetual priority. In the coming years, CPB will bring their best thinking, research, analytics and fresh actionable investment ideas to help clients meet both their financial and sustainability objectives.

Besides sustainability, wealth and family governance planning has become more important due to the unprecedented intergenerational transfer of wealth expected to happen across Asia in the next few years. Institutions such as Liechtenstein-based LGT could help many of the region’s successful businesses prepare to pass on the reins to their second and third generation members amid an uncertain economic environment.

Founded over 100 years ago, LGT has established an enviable track record for helping clients with their family governance planning by putting in place governance frameworks built around common values, business goals and investment principles. The bank was founded by the Princely House of Liechtenstein, a 900-year-old business-owning family that has passed on their values and wealth across 26 generations.

As the wealth landscape evolves at a rapid pace, private banks that embrace innovation, sustainability and the evolving needs of their clients will continue to be at the leading edge of wealth management for decades to come.

Asia-Pacific’s Luxury Property Sector Set To Soar

Pent-up demand is expected to convert into supercharged activity throughout the Asia-Pacific real estate market this year, with the luxury end of the sector set to do especially well. While a general uptick is anticipated, industry sources have identified a number of individual country markets that are likely to particularly benefit from this improved sentiment.

In the case of Singapore, according to the latest Asia-Pacific Market Snapshot by global real estate brokerage Colliers, demand for bigger and better-quality spaces is expected to be particularly robust, with homeowners willing to pay a premium to secure such properties. The market is expected to be further bolstered by a growing influx of high-liquidity overseas buyers. Throughout the region, it is also expected that greener, more environmentally friendly spaces will be at a premium.

One development that is keen to burnish its green credentials is the Marina One Residences, one of Singapore’s most sought-after upscale living complexes. With its award-winning blend of luxury, spectacle, convenience and unmatched natural harmony, the Residences continue to be the preferred choice for both high-end family living and as a high-return real estate investment opportunity.

Of late, working from home and changed consumer preferences have seen the development’s three- and four-bedroom apartments emerge as its most in-demand spaces, while its penthouses also continue to attract particular attention. Its status as one of the city’s most award-winning green buildings has also proven a huge draw.

Over in the Philippines, according to Colliers, the completion of a number of major infrastructure projects is likely to spur demand. Inevitably, this will hugely reassure investors throughout the sector, while also acting to buoy rental values and reduce vacancy rates.

Benefitting from this renewed market confidence is the portfolio of new properties on offer from Ayala Land, one of the Philippines’ largest developers. Having built its reputation through the provision of superior sustainable developments, this year the company is focusing on a raft of new projects set far from the Metro Manila area.

Among its current flagship projects is Solinea, which offers city resort-style living at the heart of Cebu Business Park. Those in the know are also eyeing The Residences at Azuela Cove, a luxurious planned space enjoying panoramic views out over the Davao Gulf.

With its GDP expected to surge over the coming years, the Philippines is also set for a boom on the luxury residential front. Spearheading this is a canny example of brand extension on the part of Grand Hyatt, which has seen the 50-story Grand Hyatt Manila Residences (GHMR) South Residences acclaimed for its eclectic mix of upscale lifestyle, dining and shopping options, not to mention its 188 designer residential suites.

Set adjacent to the landmark Grand Hyatt Manila and developed by Federal Land, GHMR maintains the level of premium living the five-star hotel is renowned for, while allowing its affluent residents to enjoy it in an ongoing, uninterrupted fashion.

These and other landmark projects signal an exciting year ahead for the Asia-Pacific real estate sector.

Japan’s Economy To Gain Traction In 2022

Like most countries, Japan struggled to find its economic footing in 2021, as it continued to deal with pandemic-related restrictions and prevailing supply chain disruptions around the world.

Despite the challenges brought on by the Covid-19 pandemic, the world’s third-biggest economy is poised to recover, supported by the 56 trillion yen (US$493 billion) economic stimulus unveiled by newly-elected Japa­nese Prime Minister Fumio Kishida in Novem­ber. The package will offer cash handouts to families with children under 18, support small businesses and implement measures to off­set rising fuel prices. The country’s largest spending reflects the government’s resolve to boost growth and redistribute wealth to households.

“Growth is on course to regain momen­tum, supported by macroeconomic policies and progress in vaccination,” the Organisa­tion of Economic Cooperation and Develop­ment said in a report in December. “Signifi­cant progress in vaccination and falling rates of infection are now supporting the resump­tion of stronger consumption growth and lifting investment, as supply chain disrup­tions are resolved. A new economic policy package will boost activity.”

While the Japanese economy is expected to accelerate its expansion in fiscal 2022 to 3.4%, corporate leaders must remain vigi­lant amid the lingering impact of Covid-19. The nation’s corporate CEOs will have to remain steadfast and be prepared for the unexpected, Yuzaburo Mogi, Chairman and Honorary CEO of Kikkoman Corporation, says. CEOs need to be forward-looking and be able to anticipate what lies ahead and act decisively, he adds.

Guided by this philosophy, Mogi has spearheaded Kikkoman’s overseas expan­sion since the 1970s. Today, the company’s main soy sauce product is enjoyed in over 100 countries, with around 75% of the group’s profits coming from its international business.

As supply chains normalize, Japanese firms are also looking to tap the growing demand for electronics devices and components. One company that’s emerging stronger from the pandemic-induced slump is THK Co., Ltd.—a supplier of industrial machinery, robotics and automation solutions.

THK is benefitting from robust electronics demand driven by advances in automation and robotics, and a boom in the automo­tive industry as the switch towards electric vehicles gains pace. The firm aims to leverage digital technologies, such as artificial intelligence, Internet of Things and robotics, to boost the efficiency of its manufacturing processes over the next three years.

The strong rebound in the electronics and automotive sectors also bodes well for Alps Alpine Co., a Japanese manufacturer of sen­sors, touchpads and switches. With a mission to “perfect the art of electronics,” the group’s global network of 100 companies supply components and devices to the automotive, infotainment, and related logistics services industries.

Japan’s economic resurgence in the com­ing years will be underpinned by its inherent strengths and the resilience and innovation of its dynamic companies. The long-term outlook for the Land of the Rising Sun is look­ing brighter than ever.

Indonesia: Emerging Stronger

Investors are keen to ride on Indonesia’s rebound.

As Indonesia emerges from the pandemic, businesses and investors are looking to ride on the country’s rebound from an unprecedented crisis. According to the Asian Development Bank (ADB) in a report released late September, the Indonesian economy is expected to grow by 3.5% in 2021, and by 4.8% in 2022, underpinned by robust exports and government spending. Supportive fiscal policy and accommodative monetary policy will also help boost growth.

Meanwhile, private consumption is projected to recover modestly before rising by 5% next year, ADB said. Investment should also strengthen in 2022 as conditions stabilize and the business climate improves.

Indonesia’s economy had a relatively mild downturn in 2020, thanks to the government’s bold, timely policies to provide fiscal stimulus and social assistance to the vulnerable to prevent long-term economic scarring. It continued to recover in the first half of 2021 due to those same policies and strong exports,” said Jiro Tominaga, ADB Country Director for Indonesia.

Keen Investor Interest

The confidence in Southeast Asia’s largest economy is reflected in rising investment in the country’s dynamic tech sector. Indonesia’s digital economy is projected to grow by almost 50% this year on the back of rapid development in the e-commerce segment, a trend that is expected to continue until at least 2025 according to the “e-Conomy SEA 2021” report by Google, Temasek and Bain & Company. The report estimates that Indonesia’s internet economy—measured in gross merchandise value—will grow to US$70 billion this year, up 49% from US$47 billion last year.

Venture capital (VC) firm Alpha JWC Ventures has capitalized on keen investor interest in tech start-ups to continue its winning streak in Indonesia over the past year. With three Indonesia-based unicorns already in its portfolio, the firm’s portfolio of companies managed to raise over a billion dollars so far in 2021 amid the pandemic.

Going forward, Alpha JWC Ventures plans to double down on Indonesia’s tech sector. With the recent close of its latest, and largest fund, the firm will be able to increase its investment ticket size significantly, and partner with its portfolio companies for longer periods. The VC’s Indonesia-focused investment approach has been validated by global organizations such as the World Bank’s International Finance Corporation and Morgan Stanley Alternative Investment Partners, who have invested in the latest fund.

Domestic Leaders Continue to Dominate

Meanwhile, Indonesian companies in more traditional sectors have also prospered during this challenging time. As the largest and most successful bread company in Indonesia, PT Nippon Indosari Corpindo Tbk continued its domestic dominance, commanding a 90% share of the country’s mass-produced bread market.

Indonesian SMEs are leveraging digitalization to find new avenues of growth.

The company’s strategy to focus on developing Indonesia’s bread market has yielded positive results, and the company’s quarterly sales are already returning to pre-pandemic levels, boosted by wider distribution coverage and higher penetration. Profitability margins are also set to expand, underpinned by improved productivity and efficient cost management.

PT Arwana Citramulia Tbk, Indonesia’s ceramic tile industry leader, is another case in point. The company’s early decision to spread out its manufacturing to five locations around the country has kept costs low and its operations efficient, helping it to navigate the turbulence and maintain its leadership position. The company is also expanding into new market segments. Its latest plant, for instance, was set up to produce a new product, glazed porcelain tiles, called ARNA.

Transforming to Fuel Growth

Other companies have also pivoted their businesses to adjust to changing customer and market needs. Indonesian conglomerate Emtek Group, for instance, has managed to stay ahead of the competition by transforming from a conventional free-to-air television broadcaster into a multi-channel, multi-platform digital media company.

Today, the group owns three free-to-air television stations, one direct-to-home satellite television operator, a leading over-the-top streaming platform, an ecosystem of digital publishers, and a series of content and production companies, among other assets.

While Emtek has helped Indonesian businesses by providing them multiple platforms to showcase their products, its associate company Bukalapak is helping small businesses in the country grow. Enterprises that sign up to the Bukalapak app have access to buying millions of different products at the best wholesale prices for resale into their local community, as well as the ability to offer digital services to their customers; including paying utility bills, moving remittance money, buying travel tickets and even investing in digital gold.

Access to innovative financial solutions will play a key role in driving Indonesia’s long term economic expansion. In this regard, Bank Mandiri, the largest financial institution in Indonesia, is committed to delivering relevant financial products and services to its customers around the country. This is part of the bank’s broader mission to seamlessly integrate its financial solutions into its customers’ lives by delivering fast and simple digital banking solutions.

Pertamina is utilising solar panels at its refinery in Central Java.

In the energy sector, Indonesia’s Pertamina is also committed to transforming its operations to contribute to a low-carbon economy as it works towards building a sustainable business by transitioning to greater use of clean energy. In particular, the country’s national energy provider has set its sights on the development of geothermal, hydro- and solar-based power generation. As part of this transition, it has announced plans to support the nation’s effort to decarbonize, starting with reducing its greenhouse gas emissions, mainly carbon dioxide, by 30% before 2030.

These progressive companies have leveraged technology and innovation to grow sustainable businesses, and will lead Indonesia’s recovery as it shakes off the effects of the pandemic in the coming years.