On Track For Steady Recovery

Japan’s economy is poised for continued moderate recovery, fueled by increasing private consumption, favorable financial conditions and the government’s economic measures. Despite global economic challenges in 2023, exports and industrial production have remained relatively stable due to a reduction in supply-side constraints. Corporate profits have remained high, reflecting an overall improvement in business sentiment. Japan’s stock market made historic gains in 2023.

The tourism sector in Japan has been a standout performer, demonstrating steady growth in 2023. The country welcomed around 22.3 million visitors from January to November 2023, according to Japan National Tourism Organization. The boost in tourist arrivals was supported by a resumption in international flights to 80% of pre-pandemic levels, as demand from Southeast Asia, North America, Europe and Australia grew.

Looking into 2024, Japan’s economy is expected to sustain growth, primarily driven by robust domestic demand. The yen, having weakened in 2023, may strengthen against the US dollar if the Bank of Japan rapidly normalizes its monetary policy, according to financial services group Nomura. Promising sectors include semiconductor production equipment exports, benefiting from the bottoming of the inventory cycle and peaking U.S. interest rates. Domestically, growth opportunities are evident in sectors such as systems and applications, real estate and food, says Nomura.

While the positive trajectory is encouraging, the Japanese economy faces headwinds from the slowdown in foreign economies, global monetary tightening and concerns about the Chinese economy. Additionally, geopolitical tensions and market volatility continue to be downside risks.

In navigating uncertainties, corporate leaders are adopting innovative strategies to sustain growth. Akihiro Teramachi, Chairman and CEO of THK, emphasizes the importance of flexibility and having the right mindset in capitalizing on business opportunities amid the ongoing wave of change. THK’s approach involves integrating hardware and digital technologies into manufacturing processes and end-products, particularly for the automotive, robotics, semiconductor and electronic component sectors. The company’s linear motion components, for example, can be incorporated into electric cars, making them energy-saving, energy-efficient, compact and powerful. Such solutions could have a substantial impact on the growth of Japan’s automotive industry.

Beyond profits, businesses are recognizing the significance of corporate social responsibility. Soy sauce maker Kikkoman, with a history spanning over 300 years, is committed to being a good corporate citizen. Honorary CEO and Chairman of the Board Yuzaburo Mogi highlights the company’s dedication to working with local communities for the long term. Kikkoman has pledged a total of US$5 million to the University of Wisconsin to advance research into sustainable crop cultivation and the environmental conditions of the Great Lakes water system.

Seiko Epson is also making headway in realizing its Environmental Vision 2050, staying true to the spirit of its founders in protecting the local environment. The company aims to become carbon negative and eliminate the use of non-renewable underground resources such as petroleum and metal ores by 2050. As a global printing leader, Epson came up with the Dry Fiber Technology, a paper recycling process that preserves water and wood resources and reduces carbon dioxide. Epson’s long-standing dedication to efficient, compact and precise innovation is ingrained in its DNA, reflecting both technological prowess and a strong commitment to reducing environmental impact.

In the face of global challenges, Japan’s economy remains resilient, fortified by the dynamism of its corporations and a sustained commitment to innovation.

Indonesia: A Wealth Of Opportunities

Indonesia’s economy continues to record growth in the third quarter of 2023, with gross domestic product expanding by 4.94%, primarily driven by strong private consumption. Investment continues to demonstrate a noteworthy performance, with a growth rate of 5.77% in the third quarter, surpassing the 4.63% recorded in the second quarter. While the growth of real exports has decelerated due to softer external demand, the services exports sector maintains its momentum, propelled by a surge in international travelers.

Given these dynamics, Indonesia’s Finance Minister Sri Mulyani Indrawati anticipates that economic growth for 2023 will hit 5.04%, with expectations of acceleration in 2024.

Promising Destination for Investors

With its abundant natural and human resources, coupled with anticipated robust economic growth and diverse potential, Indonesia emerges as a promising destination for investors. President Joko Widodo affirmed the nation’s commitment to fostering a conducive and competitive investment climate during the 2023 Asia-Pacific Economic Cooperation (APEC) Summit.

Key investment opportunities lie in priority sectors, notably the industrial downstream sector. Capitalizing on its large nickel reserves, Indonesia harbors ambitious plans for the expansion of its electric vehicle industry. In just three years, Indonesia has inked agreements worth more than US$15 billion for battery and electric vehicle production with multinational manufacturers. The country aims to produce 600,000 electric vehicles by 2030, kicking off production next year.

The energy transition sector stands as another pivotal area that requires investment, knowledge and cutting-edge technology. Indonesia currently boasts a renewable energy potential of 3,600 GW and is actively engaged in the development of a Green Industrial Park covering 30,000 hectares. Moreover, Indonesia’s new capital city, Nusantara, presents diverse investment opportunities across sectors such as infrastructure, transportation, technology, education, energy, finance, tourism, health and housing.

Against this backdrop, the president urged investors to seize opportunities more aggressively and quickly, emphasizing that the current environment presents an ideal time to invest in Indonesia.

Startup Ecosystem Has Room to Grow

In the realm of digitalization, the country has fostered a vibrant tech ecosystem, producing multi-billion-dollar tech platforms, super apps and tech startups. A leading investor in the tech startup space is Alpha JWC Ventures. The Indonesia-based venture capital firm has established a remarkable track record for grooming some of the region’s most successful tech companies. Despite a sluggish global economy that has led to declines in tech company stocks, the region, and in particular Indonesia, continues to attract heightened interest from international investors, according to the venture capital firm.

Compared to mature markets like Silicon Valley or Europe, ASEAN’s tech industry and its startup ecosystem have plenty of potential to grow. In the long term, Alpha JWC’s vision is to help place Indonesia and the wider ASEAN region firmly on the global tech scene.

Manufacturing Sector a Driving Force

In the meantime, Indonesia’s manufacturing sector continues to stand out as one of the primary contributors to the national economy. An exemplary player is Jakarta-based paint and coating manufacturer, PT Mowilex Indonesia (Mowilex), which has effectively maintained its position as one of the market leaders in the country. Niko Safavi, CEO of Mowilex, says, “What has enabled our company to remain competitive in an industry dominated by multinationals and strong domestic players is not only our environmental stance or thought leadership, but also our relentless pursuit of delivering high-quality products to the market.”

The company was the first domestic paint and coating manufacturer in Indonesia to produce water-based paints in the 1970s, back when lead-based and solvent-based paints, known for their potential long-term health risks and emissions, were widely used. More recently, Mowilex has reinforced its commitment to environmental sustainability by launching Indonesia’s first plant-based paint, reflecting its aspiration to be at the forefront of eco-friendly innovation.

Another manufacturer driven by a culture of innovation is PT Nippon Indosari Corpindo Tbk. (Indosari), the company behind Indonesia’s leading bread brand, Sari Roti. Within the manufacturing sector, the food and beverage industry stands out as one of the engines of growth in the country, and Indosari has demonstrated resilience by deliver ing profits amid challenging conditions.

The company plans to work with a leading milk producer to enter the beverage category with a new product, Sari Choco Milk. It will also expand into the spreadable space with Choco Spread, as it seeks to enrich its product portfolio and reduce its reliance on packaged bread.

Coal Exports Continue to Surge

Notably, Indonesia’s exports of thermal coal surpassed 413 metric tons over the first 10 months of 2023, cementing its position as the world’s largest coal exporter. This marked an impressive 11.5% surge compared to the same period in 2022, reflecting that coal exports remain a cornerstone of Indonesia’s economic momentum. Geo Energy Resources, a low-cost coal producer in Indonesia, has recently made strategic investments to increase its coal reserves, ensuring the sustainability of its business for the next 20 years. The low sulphur and low ash content of its coal reserves will attract strong demand from domestic and international markets, particularly Asia, and command a premium above market price, the company says.

As Indonesia strides forward, balancing innovation across sectors with traditional strengths in global trade, it solidifies its standing as a formidable force on the world economic stage.

ESG: Staying The Course

As businesses face increasing scrutiny of their impact on the world, Environmental, Social and Governance (ESG) considerations have risen to the forefront of the corporate strategy. Companies are now actively seeking ways to safeguard and grow their businesses while ensuring they are contributing to the greater good. Furthermore, against the backdrop of a deepening climate crisis, the imperative to advance ESG goals has never been more urgent, pushing organizations to navigate a course aligned with sustainability and social responsibility.

In a landscape where regulations, cultural norms and best practices vary globally, regions find themselves at different stages in contemplating and implementing ESG principles. In the Asia-Pacific region, the ESG framework is evolving and has yet to reach the maturity observed in Europe. Despite this, there’s a notable increase in shareholder engagement as a proactive approach to risk management. Larger organizations in this region are aligning their net zero commitments with government strategies. Furthermore, the focus on diversity, equity and inclusion (DE&I) is gaining ground. Organizations increasingly acknowledge the profound impact DE&I has on overall business and talent strategies, shaping their talent pipelines around these fundamental principles.

Great Strides in Aviation
Hong Kong International Airport (HKIA) has made great strides in recent years toward realizing its ESG ambitions amid the deepening climate crisis. The airport’s achievements in this space have contributed to its remarkable resilience in the face of extreme weather events in recent years. In particular, Airport Authority Hong Kong (AAHK), the statutory body that oversees HKIA, works closely with the airport community—including organizations such as the Hong Kong Observatory—to strengthen its ability to respond to such weather disruptions.

Beyond environmental concerns, HKIA is also focused on addressing social issues through various initiatives. For instance, it established the Hong Kong International Aviation Academy to offer people from all walks of life an opportunity to work in the aviation sector and provides training programs to upskill its staff, thereby building a sustainable talent pipeline for the industry. In terms of corporate governance, even though AAHK may not be a listed company, it prioritizes transparency and accountability, regularly disclosing information in compliance with the Corporate Governance Code issued by the Hong Kong Stock Exchange, as far as it is applicable.

Sustainability and Impact Investing

Within the financial services sector, investors are increasingly in pursuit of solutions that yield both financial returns and positive impacts with the rise of social and environmental challenges. UBS, one of the world’s largest managers of private and institutional wealth, is partnering with its clients to facilitate the mobilization of their capital toward a more sustainable world. The bank places a strong emphasis on the huge potential for strategic sustainable and impact investments across the APAC region.

The way UBS sets about doing this is through a multi-strand approach that integrates sustainability across its clients’ investment, corporate and philanthropic a host of green and climate tech innovations set to revolutionize the opportunities on offer to investors who want to bolster their sustainable portfolios. Among them are new renewable energy management solutions and low-carbon manufacturing materials, which are going to have particular applications within Asia and open up whole new impact investment fronts across the region, the bank says.

Leveraging Technology to Meet Net Zero Goals

In the dynamic landscape of global energy, Malaysia’s PETRONAS is harnessing cutting edge technologies to help the business accomplish its sustainability initiatives at scale. By strategically increasing its technology investment by 60% from 2021, PETRONAS has launched numerous projects, generating substantial value exceeding RM10 billion (US$2.1 billion). The company also continues to leverage its diverse arsenal of technological solutions to drive continuous value creation, enhance customer experiences and amplify purposeful impact.

“Our journey, though ambitious, is navigated with a keen awareness of global complexities. The history of our industry is marked by ever-evolving challenges and volatilities that demand adaptability and strategic agility. We also recognize that technology can address these challenges as well as be a force for good that can drive systemic change, all of which will support PETRONAS’ Net Zero Carbon Emissions 2050 Pathway,” says Aadrin Azly, Vice President for PETRONAS Group Technology & Commercialisation.

Paving the Way Toward Decarbonization

Meanwhile, decarbonization software leader Univers is tackling climate issues, particularly in the built environment, through its innovative solutions. The global technology firm helps enterprises, governments and cities to optimize energy systems and reduce carbon emissions with accurate, reliable and actionable decarbonization data through its comprehensive decarbonization software.

Univers also fosters strategic partnerships with financial institutions, offering companies access to green financing. This critical support empowers businesses to adopt sustainable practices and technologies more feasibly. “These strategic partnerships alleviate the financial challenges of adopting greener practices, accelerating businesses’ sustainable transformation,” says Michael Ding, Global Executive Director of Univers.

As industries evolve and global challenges persist, it’s clear that the journey toward a greener, more inclusive and sustainable world requires a collaborative endeavor.

The Philippines: A Nation Rising

The Philippines stands as one of the fastest-growing economies in Southeast Asia, showcasing a resilient recovery in the aftermath of the pandemic. The country achieved a remarkable gross domestic product (GDP) growth rate of 7.6% in 2022, the fastest growth rate in over four decades. While the first half of 2023 saw some moderation with a GDP of 5.3%, the economy is poised for a renewed upswing with an expected growth rate of up to 6% next year, according to the International Monetary Fund (IMF).

Bangko Sentral ng Pilipinas, the central bank of the Philippines, has acted decisively in raising interest rates in the face of inflationary pressures, which has helped maintain economic stability. Against this backdrop, IMF anticipates faster economic growth in the upcoming year, driven by increased government spending. Notably, service exports are expected to perform well, particularly in the electronics sector, further fueling economic expansion.

Since the post-pandemic reopening of the economy, trade activities and volume have exhibited steady growth, contributing to the Philippines’ economic recovery. Manila-based International Container Terminal Services, Inc. (ICTSI) had a role in this recovery as a major player in the global value chain, providing value-added services and facilitating the free flow of goods between nations and regions.

The global port operator is investing PHP15 billion (US$263 million) to expand the Manila International Container Terminal (MICT). This expansion project will increase the terminal’s cargo handling capacity, enabling it to accommodate larger container ships and the associated increase in cargo volume. Upon completion, the MICT is expected to have an annual capacity of 3.5 million TEU, solidifying its position as the largest international gateway in the Philippines.

Investment Opportunities
The Philippines remains an attractive destination for investment, offering a combination of incentives, tax breaks and well-established legal frameworks designed to protect the interests of foreign investors. President Ferdinand R. Marcos Jr. emphasizes that the Philippines is “a nation on the rise, ready to collaborate with partners who see the potential we hold.”

For instance, the recent collaboration between the Philippines’ Federal Land, Inc. and Japan’s Nomura Real Estate Development Co., Ltd. is set to redefine real estate standards, creating a dynamic new player on the global real estate scene. The synergistic alliance, dubbed Federal Land NRE Global Inc. (FNG), takes advantage of Federal Land’s legacy of innovation and ingenuity enhanced by Nomura’s celebrated history of excellence and attention to detail.

Banking on a considerable capital investment of approximately PHP48 billion (US$844 million), FNG is poised to launch its first two pioneering projects, further solidifying this alliance’s significance on the international stage. These ambitious developments are expected to lead to substantial yet sustainable economic opportunities. With the goal of generating around 6,000 jobs within its initial operational years, FNG will be contributing to the country’s growth momentum in a major way.

Another real estate player capitalizing on the heightened demand for both residential and commercial properties is Vista Land & Lifescapes, Inc., one of the leading integrated property developers in the Philippines. The company has launched a portfolio of projects throughout the country valued at PHP24.3 billion (US$427 million), more than the previous year.

Vista Land reports a consistent and robust demand for its residential developments, encompassing both horizontal and vertical segments. Notably, this demand comes from overseas Filipino buyers, constituting about 60% of the company’s total sales. Its most ambitious project to date is Villar City, a sprawling 3,500-hectare mixed-use development that spans 15 cities and towns in Metro Manila and Cavite.

Tech Advancements
Meanwhile, the country’s tech ecosystem is thriving, characterized by a vibrant startup culture and advancements in e-commerce, fintech and digital services.

The Philippines’ leading telco, Globe, has trans formed from a traditional telecommunications entity into a technology powerhouse, unveiling a broad range of innovative digital solutions aimed at elevating the quality of life for Filipinos. For instance, Globe has rolled out game-changing digital solutions such as finance app GCash, which has transformed the way Filipinos make financial transactions, from payments and savings to loans and investing.

The company is also revolutionizing healthcare with its healthtech offering, KonsultaMD. This digital health superapp allows patients to consult with a vast network of 1,000 medical professionals across 40 specializations, offering roundthe-clock access to doctor consultations, medicine delivery, at-home diagnostics and nursing care.

Sustainable Energy Future
The Philippines is also aggressively pursuing the expansion of renewable energy, aiming to achieve a 35% share in the power mix by 2030, and consequently up to 50% by 2040. To achieve these targets, the government has opened the doors to 100% foreign ownership of renewable energy projects in the country, spanning exploration, development and the utilization of solar, wind, hydro and ocean energy sources.

This forward-looking approach sets the stage for a sustainable and eco-friendly energy future, contributing to the nation’s growth and environmental well-being.

Malaysia: A Sustainable Growth Journey

Malaysia’s economy expanded by 3.3% in the third quarter of 2023, according to advance estimates by the Department of Statistics Malaysia, up from 2.9% in the second quarter. This growth is primarily driven by the services sector, notably in wholesale and retail trade, transportation and storage and business services. The construction sector saw modest growth, while agriculture rebounded slightly after a previous decline.

In the first half of 2023, Malaysia attracted a total of RM132.6 billion (US$27.8 billion) in approved investments across services, manufacturing and primary sectors, according to the Ministry of Investment, Trade and Industry. Domestic direct amounting to RM69.3 billion (US$14.5 billion). Foreign direct investments totaled RM63.3 billion (US$13.2 billion), with the largest inflows coming from Singapore, Japan, the Netherlands, China and British Virgin Islands. This is attributed to the government’s probusiness policies, strategic location in Asia, trusted ecosystem for supply chains and talent and growing innovation capabilities.

Toward a Greener, More Prosperous Future

In July, Prime Minister Anwar Ibrahim unveiled the Madani Economy Framework, a comprehensive roadmap geared to drive sustainable growth and enhance the overall well-being of the people. This initiative has come at a crucial time, serving as a strategic response to bolster Malaysia’s economy amidst a backdrop of a global economic slowdown and ongoing geopolitical uncertainties.

Central to Madani is the principle of sustainability, underscoring the importance of responsible progress in energy transition and sustainable development. Malaysia is on the path to achieving net zero emissions by 2050, as outlined in the National Energy Transition Roadmap. This transition involves shifting away from a traditional fossil fuel-based economy toward a high-value economy, aligning with the nation’s commitment to environmental stewardship and a greener, more prosperous, future.

PETRONAS, Malaysia’s national energy conglomerate, has aligned its business goals with the nation’s vision as well as global sustainability principles. In fact, carbon reduction has been its pursuit for a decade. Since 2013, PETRONAS has cumulatively reduced 18.1 million tonnes of carbon dioxide equivalent (MtCO2e) of greenhouse gas (GHG) emissions from the implementation of decarbonization activities throughout PETRONAS Group-wide operations.

Building on this momentum, the company has set its own pathway to net zero emissions by 2050 (NZCE2050 Pathway), with clear and solid short-, medium- and long-term targets. PETRONAS is racing to decarbonize to meet these targets, starting with aiming to cap GHG emissions at 49.5 MtCO2e by 2024, covering Scope 1 and Scope 2 emissions for its operations in Malaysia. Additionally, PETRONAS aims to enhance its role in energy transition by focusing on both energy security and the responsible delivery of energy solutions. “It is our commitment to deliver our ‘Amanah,’ or trust, to safeguard and manage the nation’s hydrocarbon resources responsibly for the people and the country,” says Datuk Bacho Pilong, Senior Vice President of Project Delivery and Technology, PETRONAS.

Digitalization Crucial to Economic Growth

The digital economy is another crucial pillar of economic growth under the Madani Economy Framework. It is one of the fastest growing sectors in Malaysia, representing 23.2% of the nation’s gross domestic product (GDP). Malaysia Digital Economy Corporation (MDEC), the nation’s lead digital economy agency, has been leading Malaysia toward becoming a globally competitive digital nation through the development and execution of the Malaysia Digital initiative, which aims to ensure that people, global companies and investors will conduct business in Malaysia.

“The idea of Malaysia Digital is to attract good, purposeful and contextual digital opportunities that will be strategic to Malaysia,” says Mahadhir Aziz, CEO of MDEC.

“Additionally, we aim to create local champions and drive the digitalization of Malaysian society, starting with businesses and eventually extending to individuals. This is the crux of Malaysia Digital—we are here to do business, so we invite global giants to invest in Malaysia.”

One remarkable tech champion leading the charge is Silverlake Axis, an enterprise technology, software and services company that has been intensifying its efforts toward developing innovative financial solutions to facilitate the digitalization journey of the financial services sector.

With the ongoing disruption caused by next-generation technologies, such as cloud computing, artificial intelligence, big data and machine learning, Silverlake Axis has expanded its capabilities and expertise to better serve its clients and secure a competitive advantage in the ever-evolving landscape. The company has a strong presence in Southeast Asia and serves 40% of the top 20 largest banks in the region.

Innovation Increases Global Competitiveness

Meanwhile, innovation remains a priority as Malaysia strives to compete on the global stage. The nation is committed to intensifying its efforts in nurturing local innovation and technological advancements, with the overarching goal of establishing itself as a formidable global contender.

BookDoc, a local healthtech startup, has innovation at its core. Initially established to help individuals find healthcare providers, the company has evolved into a prominent player in the area of corporate wellness programs. These programs cover physical wellness, mental wellness, nutrition and teleconsultations. What’s different about such programs is the use of smart technology to gamify healthy behavior while incentivizing individuals through personalized rewards schemes—all through its superapp.

Over the years, BookDoc’s corporate wellness program has gained significant traction, finding adoption among large multinational corporations. With the corporate wellness solutions market projected to reach US$94.6 billion by 2026, there are plenty of opportunities for BookDoc to seize.

All this bodes well for the overall economy. As Malaysia aims to become one of the world’s top 30 largest economies in the next decade, the implementation of the new economic reforms will bring it closer to achieving this goal.

Singapore Retains Competitive Edge

As one of the most competitive economies in the world, Singapore continues to build on its strong financial system, market efficiency and macroeconomic stability. The city-state has been ranked fourth out of 64 economies in the 2023 World Competitiveness Ranking by the International Institute for Management Development (IMD), based on economic performance, government and business efficiency, as well as infrastructure. Although it slipped a rank from the previous year, Singapore remains the most competitive economy in Asia, ahead of Taiwan and Hong Kong.

In the wake of a rapid economic rebound from the pandemic in 2022, Singapore’s economy registered a 0.4% year-on-year growth in the first quarter of 2023. This growth, albeit moderating from the previous quarter’s 2.1% expansion, signifies the nation’s resilience. In the second quarter of 2023, the economy expanded by 0.5% year-on-year, mainly supported by the transportation and storage, other services, and information and communications sectors, according to the Ministry of Trade and Industry (MTI).

Like many economies, Singapore is not immune to the challenges posed by the slowing global economy and geopolitical tensions, coupled with tightening financial conditions. The MTI anticipates the nation’s GDP for 2023 to fall within the range of 0.5% to 1.5% as external demand remains subdued.

Despite this muted growth forecast, bright spots remain as some sectors are showing signs of recovery. The growth outlook for aviation- and tourism-related sectors such as air transport and accommodation remains positive, given the ongoing recovery in international air travel and inbound tourism. Consumer-facing sectors such as retail trade and food and beverage services are also expected to continue to expand, bolstered by resilient labor market conditions and the resurgence of inbound tourism.

Global Expansion Through Singapore

As a leading trade center, Singapore consistently attracts foreign investment due to its global connectivity, pro-business environment, exceptional infrastructure and a highly skilled workforce. Singapore stands out as the preferred destination for multinational corporations seeking to put down roots in the region.

Among them is SHEIN, the global fashion and lifestyle juggernaut with 11,000 employees based in key centers around the world including Singapore, the U.S. and Ireland. SHEIN’s global expansion is being led out of Singapore due to its strong governance and access to key markets in the region, among others. “SHEIN’s decision to be headquartered in Singapore is a testament to our belief in its vibrant ecosystem and alignment with our global vision,” says Leonard Lin, SHEIN’s Global Head of Public Affairs and Singapore General Manager. “Our commitment to Singapore goes beyond our business operations, and is also reflected in our continuous efforts toward engaging with the community, nurturing local talent, and fostering a sustainable fashion ecosystem right here in the heart of Asia.”

A Vibrant Fintech Landscape  

Meanwhile, Singapore’s fintech sector has expanded significantly, backed by a strong regulatory environment and digital infrastructure. The Monetary Authority of Singapore has recently announced a fresh round of funding over the next three years to boost the sector. The S$150-million (US$111 million) funding program aims to accelerate fintech innovation, particularly in areas such as artificial intelligence, data analytics and regulatory technology (regtech). 

The thriving fintech sector, showcased through events such as the annual Singapore Fintech Festival, cements the city’s role as a prime hub for fintech innovation. The diverse range of fintech entities, coupled with abundant venture capital investment opportunities spanning various funding stages, further solidifies Singapore’s position as the preferred destination for foreign fintechs seeking ASEAN market expansion and global recognition.

Take for instance, Surfin Meta, a Singapore-based fintech founded in 2017 with a mission to drive financial inclusion in emerging markets. The company selected Singapore as its base to better serve the markets in the region. It made a notable entry into Indonesia in 2018 with an online personal loan platform, and rapidly expanded its operations to Vietnam, Mexico and the Philippines in the same year. Today, Surfin Meta operates in 10 markets, serving 35 million unbanked and underserved users.

Wealth Management Excellence

The growth in global wealth in recent decades has contributed to the rise of family offices around the world. Many wealthy families are turning to professionally run family offices to help them manage their wealth and secure their legacies. As a global financial hub, Singapore has benefited from this trend, with some 1,100 single-family offices established in the country at the end of 2022.

Bank of Singapore, the private banking subsidiary of OCBC, has emerged as a major player in the family office segment in Singapore, managing more than a quarter of the 700 single-family offices established in Singapore at the end of 2021.

“Singapore’s status as an international financial center is key to its allure. With excellent global connectivity, a deep pool of skilled professionals in wealth management and a supportive tax environment, it serves as the ideal gateway to regional investment opportunities,” says Robin Heng, Bank of Singapore’s Global Market Head for Philippines, Australia, Indonesia, Thailand and Indochina.

The bank has a dedicated Family Office Advisory team that focuses on understanding clients’ needs and tailoring plans accordingly. As demand continues to grow for family offices in Asia, Bank of Singapore aims to enhance its offerings and expand its footprint in the wealth management space.

Prospects in Real Estate

Singapore’s growing number of high net worth individuals (HNWIs) has spurred activity in the real estate sector. Strata-titled offices and conservation shophouses stand out as attractive investments for HNWIs and family offices.

Homegrown boutique agency Brilliance Capital has emerged as a strong player in this segment, offering tailored real estate investment services for wealthy families, institutional investors and publicly listed companies from around the region. The firm, led by Executive Director Sammi Lim, has chalked up an impressive list of transactions since its inception three years ago, including the sale of a suburban mall for S$220 million (US$162.3 million), among others. 

Despite the prevailing market uncertainties, Lim believes that Singapore’s strong fundamentals and resilience will position it favorably against its regional peers. She anticipates that well-funded institutions, family offices and HNWIs with longer-term investment horizons will remain active in the market.

Looking ahead, Singapore’s journey as a competitive economic powerhouse continues to unfold. Despite global challenges, the nation’s commitment to innovation, diversification and adaptability fuels optimism for sustained growth.

Thailand: Riding The Growth Momentum

Thailand is well on the road to economic recovery after recording a GDP growth of 2.6% in 2022. The positive momentum has carried into the first quarter of 2023, surpassing expectations. In Q1 2023, the Thai economy expanded by 2.7% year-on-year, supported by the rebound in tourism and private consumption.

Traditionally reliant on tourism, Thailand has received a much-needed boost with the return of international visitors, especially from China, following the country’s reopening. In the first quarter of 2023 alone, approximately 6.5 million tourists visited Thailand, with the Tourism Authority of Thailand aiming to attract 25 million foreign tourists by year-end.

Taking Travel to Greater Heights

The country’s flagship carrier, Thai Airways (THAI), is well positioned to support this tourism revival. With a vast network spanning 47 international destinations, including prominent European cities such as London, Paris, Frankfurt, Munich, Zurich, Stockholm and Copenhagen, THAI is further expanding its reach by reintroducing direct flights from Milan and Oslo by early 2024, after a temporary suspension due to the pandemic. With more direct flights, travelers get to enjoy uninterrupted journeys to Bangkok, avoiding time-consuming and tiring layovers and connections.

Recent investments in new wide-body aircraft such as the Airbus A350-900 and Boeing 787 guarantee a comfortable and spacious onboard experience. From its roomy business class seats and personalized services to the extensive menu of high-quality Thai cuisine and a wide range of inflight entertainment options, THAI ensures that travelers have a seamless and enjoyable journey. This combination of comfort, convenience and true hospitality has contributed to its success as the choice airline for many discerning travelers.

Another local company looking to support the growth of the tourism sector is TRAViZGO, Thailand’s pioneering travel tech startup. After more than two decades in the travel market, TRAViZGO is ready to scale new heights with its recently launched TRAViZGO Super App. To cater to the needs of the modern consumer, the app offers a wide range of travel-related services from booking and managing flights, accommodation and transportation to package tours and travel insurance—all within a single platform.

TRAViZGO has also been working closely with the Tourism Authority of Thailand to further promote the country to international visitors. Last November, the company collaborated with the Digital Economy Promotion Agency (depa) to develop a business-to-business online platform that connects tourism service providers in Thailand with travel agents worldwide. The platform opens new opportunities for local players, especially small businesses, to expand their market reach by tapping into new customer segments and geographic markets.

Staying Committed to Sustainability Goals

Amid this economic expansion, Thailand remains committed to its sustainability goals. As the second-largest economy in Southeast Asia, Thailand has made significant strides in achieving the UN Sustainable Development Goals (SDGs). Furthermore, the country’s bio-circular green (BCG) economy model, developed in 2021 and aligned with the UN SDGs, has gained greater prominence as Thailand contributes to global efforts to address environmental challenges and promote sustainability.

Thai corporations and businesses actively support Thailand’s sustainability and net zero targets. Among them is Indorama Ventures, the world’s major polyethylene terephthalate (PET) resin producer and recycler, the plastic commonly used for beverage bottles. One of the largest petrochemical companies in the world, Indorama Ventures set up its Environmental, Social and Governance (ESG) Council to explore ways the company can implement sustainability initiatives across its business segments. Through its Vision 2030 plan, the company aims to achieve a 30% reduction in Scope 1 and 2 combined greenhouse gas (GHG) intensity, a 15% reduction in energy intensity, a 20% reduction in water intensity, 25% use of renewable electricity and more.

In 2022, the company established Indorama Ventures Investments & Holdings as a startup business incubator to identify and invest in projects with advanced technologies and innovations, including bio-based materials. The company plans to invest more than US$7 billion to increase recycling capacity, decarbonization and bio-based feedstock to 2.4 million tons by 2030. These targets are aligned with Thailand’s BCG economy model and the UN SDGs.

Another industry leader, Thai Beverage Public Company Limited (ThaiBev), the largest beverage company in Thailand and one of the largest in Southeast Asia, is also leading the charge in the sustainability journey. The company’s ESG commitment is largely inspired by the late Thai King Bhumibol Adulyadej’s Sufficiency Economy Philosophy, a principles-based framework that promotes balanced development with respect to the environment, economy, community and local culture.

As clean water is the most important natural resource for the beverage manufacturing industry, ThaiBev is committed to water conservation initiatives and aims to achieve 100% water replenishment by 2040. In the area of packaging, the company ensures that its products create minimal carbon footprints. It also aims to achieve packaging circularity and has been active in reusing and recycling its bottles. These are just some of the company’s efforts that are part of its “Enabling Sustainable Growth” strategy, designed to drive resilience across its business, while protecting the environment, supporting local communities and practicing good corporate governance.

Positive Outlook

Looking ahead, the Office of the National Economic and Social Development Council (NESDC) forecasts that the Thai economy will expand between 2.7% and 3.7% in 2023, driven largely by the ongoing recovery of the tourism sector, rising private consumption and expansion in both private and public investments.

Thailand’s economic priorities for the remainder of the year include fostering the export sector, stimulating private investment, catalyzing the recovery in tourism and related service sectors, supporting agricultural production, and advancing initiatives in the Eastern Economic Corridor and other special zones, among others.

Real Estate Remains Resilient

The real estate sector in the Asia-Pacific (APAC) region is projected to stabilize in the second half of 2023, on the back of improving macroeconomic conditions. Experts predict that as inflation eases and interest rates reach their peak, investors in the region will have exceptional opportunities.

Several key themes have emerged across the real estate markets in the region. Offices will continue to be the go-to asset class although the pandemic has had a deep and lasting impact on how people work and the concept of the workplace. A joint report by PwC and Urban Land Institute reveals that the demand for modern, high-quality office buildings remains strong, even as hybrid and remote work practices continue. Additionally, multifamily build-to-rent developments are gaining traction in APAC, with investors exploring opportunities in Australia and China.

Meanwhile, although Singapore remains an attractive destination for foreign investors, emerging markets such as Indonesia, the Philippines and Vietnam are gaining momentum. These markets offer high rates of economic growth and boast emerging consumer classes, according to the report.

Sustainability Considerations Transform Real Estate

In the Philippines, the real estate sector is evolving to the next level, with one of the largest property developers in the country, Ayala Land, Inc. (ALI), leading the transformation. The group’s commitment to sustainability is evident in the projects it undertakes—from its integrated mixed-use developments to luxurious residences spearheaded by its two business units Ayala Land Estates and Ayala Land Premier.

“Our vision extends beyond real estate development,” says Robert Lao, Group Head of Ayala Land Estates. “We aim to create thriving sustainable communities that provide diverse growth opportunities and inclusive spaces to all. It’s about planning for a mix of developments and spaces that nurture the environment, social and economic growth.”

Boasting a robust portfolio spanning over 45 sustainable estates across the country, ALI is the mastermind behind the nation’s most prominent mixed-use developments, including the Makati Central Business District, Bonifacio Global City, Cebu Business Park and Nuvali.

Indeed, sustainability is a common theme across markets in Asia as investors are placing a greater emphasis on Environmental, Social and Governance (ESG) criteria and ratings of real estate. Over in Hong Kong, Sun Hung Kai Properties (SHKP) is transforming the city’s skyline with its iconic and environmentally friendly developments. Its latest project, the High-Speed Rail West Kowloon Terminus Development (XRL Development), aspires to be more than another office complex, combining work and leisure elements for the well-being of tenants. Designed by Zaha Hadid Architects, the XRL Development incorporates low-carbon design and materials, including photovoltaic panels at roof levels and portions of the facade.

The project has received numerous sustainability accolades including LEED Platinum, BREEAM Excellent rating, BEAM Plus (Platinum), WELL (Platinum), China Green Building Label (3 star) and China Healthy Building Label (3 star).

As real estate investors look ahead, many will be drawn to APAC’s resilient and dynamic market with cautious optimism.

ESG Remains Crucial To Building A Sustainable Future

Environmental, Social and Governance (ESG) has evolved from a nice-to-have to a corporate imperative over the years. Governments, businesses and investors recognize the importance of ESG in driving the world’s transition to a greener and more sustainable future and are doubling down on efforts to achieve nature-positive targets.

At the World Economic Forum’s annual meeting in Davos earlier this year, global leaders discussed how new approaches and partnerships could lead to new solutions, such as leveraging philanthropy in new ways, driving climate adaptation and spurring more ambitious, comprehensive and sustainable infrastructure investment plans that could stabilize the planet and help the world meet the 2030 emissions reduction goal.

Driving Sustainable Change

Among the businesses driving sustainable change is Apical, part of the Singapore headquartered RGE group of companies. As the world’s second largest vegetable oil processor, Apical has embarked on a journey to become a leading second-generation biofuel feedstock provider through the collection of waste and residue from mill and palm oil refineries, along with used cooking oil, to act as an alternative to other forms of feedstock.

The company has also diversified its operations into other downstream areas such as sustainable aviation fuel (SAF) used to power aircraft. Through a joint venture, Apical is now commercially using at scale the waste generated by its operations as viable feedstock to produce SAF. These efforts highlight the company’s commitment to driving sustainable change in the palm oil sector.

In the real estate sector, Hong Kong’s Sino Group is leading the way toward a climate-resilient built environment. Sino Group integrates sustainability into all aspects of its operations and aims to achieve net zero by 2050 through more energy-efficient design, green construction and procurement, renewable energy usage, reduction of waste and carbon emissions and promoting sustainable living at its properties.

As of June 30, 2022, the company recorded a reduction of greenhouse gas emissions and electricity consumption by almost 40% from its 2012 baseline, exceeding its initial target.

Capitalizing on the Green Transition

As the world transitions to a low-carbon economy, investors are ready to capitalize on opportunities presented by this global shift. HSBC Global Private Banking offers investors three main ways to embed sustainability into an investment portfolio: ESG enhanced, thematic and impact investing.

ESG enhanced investments refer to investing in companies that score well on ESG criteria, while thematic investments focus on specific sustainability themes such as renewable energy, water conservation or circular economy. On the other hand, impact investing aims to generate an intentional, direct and positive social or environmental impact alongside financial returns.

The bank believes that by adopting an ESG approach to investment and finance, investors can play a crucial role in driving the transition to a low-carbon economy, while also generating long-term financial returns.

Bridging the ESG Trust Gap

But while companies are starting to make progress on sustainability objectives, some investors feel strongly that they are not getting the quality of ESG data required to evaluate a company’s strategy and risk profile, according to the Asia-Pacific findings in the latest EY global corporate reporting and institutional investor survey. This information gap threatens to stifle access to capital for many organizations and ultimately, could hinder progress on decarbonization.

Investors believe that Asia-Pacific organizations are “highly selective” about the information they provide and unless there is a regulatory requirement to do so, most companies will provide only limited ESG disclosures useful for decision-making.

The good news is that both sides acknowledge that there are weaknesses in current reporting standards, including issues such as lack of requirements for supporting evidence, separation of ESG reporting from mainstream financial reporting and a lack of forward-looking disclosure, so more can be done. Asia-Pacific companies can bridge the ESG trust gap with investors by taking key action to ensure that sustainability is built into their reporting processes—systemically, strategically and rigorously.

Advancing Social Justice

In addition to environmental concerns, organizations are starting to give the same attention to the social component of ESG. Businesses today are faced with a growing number of social justice issues that can affect their corporate reputation—from human rights and gender equality to health and safety, and community engagement.

FGV Holdings Berhad, a global and diversified agribusiness based in Malaysia, is one of the world’s largest producers of crude palm oil. In its efforts to operate a sustainable and socially responsible business, FGV has implemented various programs to strengthen its labor practices, including aligning its policies and recruitment practices with international labor standards.

One of the main standards adopted by FGV is the no recruitment fees policy for the hiring of migrant workers. The company has taken several measures, including setting aside about US$25 million to compensate current and former FGV migrant workers who had paid recruitment fees to secure jobs.

Indeed, there is plenty that businesses can do to build on the ESG framework to drive real change. Those that lay the right foundation now are likely to succeed long into the future.

Japan: A New Way Forward

Japan is ushering in a “new form of capitalism” to reinvigorate its economy after more than two years of closed borders due to the pandemic. Japanese Prime Minister Fumio Kishida’s new economic policy, unveiled last June, aims to achieve a “virtuous cycle of growth and distribution” through public-private partnership. As part of the policy guidelines, the government aims to pave the way for wage growth to offset the impact of inflation and boost investment in technology, startups, human capital and decarbonization.

On the back of these ambitious plans, the government revised its economic growth forecast for fiscal 2023 to 1.5%, up from the previous forecast of 1.1%. The overall GDP is projected to reach 558 trillion yen (US$4.31 trillion) this year, exceeding the pre-pandemic record of 554 trillion yen (US$4.28 trillion) in 2018. Companies are projected to increase investments by 5.0%, with exports and imports set to rise by 2.4% and 2.5% respectively, despite concerns of a global recession. 

Focus on Long-Term Growth and Innovation

Central to Kishida’s economic strategy is incentivizing long-term growth and strengthening Japan’s capacity for innovation, particularly in industries such as biotech, smart cities, artificial intelligence (AI) and space technology. As part of this push to champion innovation, the government is also taking steps to cultivate a world-class startup ecosystem and help local startups succeed on the international stage.

Indeed, Japan has always been a leader in innovation and technology. Japanese companies continue to create maximum value at home while making their mark on the global stage.

Take THK, for example. The global automation giant has set the standard for innovation in factory automation technologies and processes since 1971. Today, the company is leading the way with solutions bolstered by AI and IoT applications, and more than 60% of its sales come from overseas markets.

THK’s latest digital offerings include a customer communication platform that adds value to the purchasing process and an IoT platform that can predict faults in components and automatically minimize malfunctions without human intervention.

Meanwhile, soy sauce manufacturer Kikkoman has penetrated more than 100 countries since its establishment in 1917. Kikkoman Corporation Chairman and Honorary CEO Yuzaburo Mogi attributed the company’s long-term growth and success to the foresight of its top management. He says, “Now, more than ever, it is critical for top management to have a clear grasp of the global business environment and an ability to see ahead.”

Kikkoman aims to keep expanding in Asia, South America and eventually Africa in the next decade. 

Global expansion is also on the agenda of Japanese advertising firm ADREX, founded in 2018. The company’s client-first philosophy, coupled with its business transparency, has contributed to its success. While many young enterprises are focused on immediate profits, ADREX believes in investing in long-term growth. The company celebrated a couple of milestones last year: the launch of its first in-house data analytics tool and the setup of its first overseas base in New York City.

With the domestic economy finally reopening—alongside government support—Japanese businesses are poised for further growth in the year ahead.