Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Asia Economist and CEO

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

<ul><li>The CFE report outlines seven broad recommendations to chart Singapore's economic strategy for the next five to 10 years. Two key questions are raised by our assessment – what specific policy changes might emerge out of the CFE report and whether the CFE’s modest goals be achieved. On both these, we have a cautious take.</li><li>The Singapore economy is facing formidable headwinds as structural challenges mount. Without a fundamental rethink of our economic model, it will be a struggle for the economy to reach the 2-3% growth target, especially with tepid productivity growth and an ageing workforce.</li><li>The CFE's recommendation to maintain a robust manufacturing base consisting of 20% of GDP is admirable but without sufficient under-girders. We have not developed a strong core of local SMEs, a la the German Mittelstand, and remain heavily dependent on MNC-led growth. One concern is that in pursuit of this 20% goal, the Singapore Government may ramp up the sweeteners - incentives, tax breaks, etc - to attract MNCs to remain in or come to Singapore, potentially skewing the cost-benefit analysis against Singapore's favour.</li><li>Finally, overarching concerns remain unaddressed. Singapore's high cost structure is inhibiting entrepreneurship and the growth of SMEs. The local bourse is lacklustre after the penny stock crash in late 2013. Without a vibrant equity market offering an exit strategy, VCs and PE firms will be reluctant to provide the smart and patient capital that the CFE report sets out to attract. Fiscal and social policies are also in need of a deep rethink as Singapore sails into a more challenging global environment.</li></ul>

The CFE report outlines seven broad recommendations to chart Singapore's economic strategy for the next five to 10 years. Two key questions are raised by our assessment – what specific policy changes might emerge out of the CFE report and whether the CFE’s modest goals be achieved. On both these, we have a cautious take.The Singapore economy is facing formidable headwinds as structural challenges mount. Without a fundamental rethink of our economic model, it will be a struggle for the economy to reach the 2-3% growth target, especially with tepid productivity growth and an ageing workforce.The CFE's recommendation to maintain a robust manufacturing base consisting of 20% of GDP is admirable but without sufficient under-girders. We have not developed a strong core of local SMEs, a la the German Mittelstand, and remain heavily dependent on MNC-led growth. One concern is that in pursuit of this 20% goal, the Singapore Government may ramp up the sweeteners - incentives, tax breaks, etc - to attract MNCs to remain in or come to Singapore, potentially skewing the cost-benefit analysis against Singapore's favour.Finally, overarching concerns remain unaddressed. Singapore's high cost structure is inhibiting entrepreneurship and the growth of SMEs. The local bourse is lacklustre after the penny stock crash in late 2013. Without a vibrant equity market offering an exit strategy, VCs and PE firms will be reluctant to provide the smart and patient capital that the CFE report sets out to attract. Fiscal and social policies are also in need of a deep rethink as Singapore sails into a more challenging global environment.

Singapore's Committee for the Future Economy Report Abjures Bold Moves

Investing in high growth Asian frontier economies., Asia Frontier Capital

Scott Osheroff

Investing in high growth Asian frontier economies.

Asia Frontier Capital

Asia Frontier Capital Ltd. is a pioneering fund management company based in Hong Kong that specializes in investing in high growth Asian frontier economies by managing the AFC Asia Frontier Fund , AFC Iraq Fund and the AFC Vietnam Fund.

The AFC Asia Frontier Fund invests in public equities of Asian frontier countries that are seeing increasing consumption due to favorable demographic trends, rising incomes and high GDP growth. The fund invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka and Vietnam. The AFC Asia Frontier Fund is positioned to take advantage of the continuing economic shifts in these countries and offers high returns combined with significant diversification opportunities. This fund is directed by the founder and CEO of Asia Frontier Capital, Thomas Hugger, who has been investing in frontier markets across Asia and Africa for more than 20 years.

The AFC Iraq Fund was launched on the 26th June 2015 and aims to achieve long-term capital appreciation for investors by capturing value and growth potential in the post conflict high-growth & resource rich Iraq market. The fund emphasises long term investment horizon to truly capture the opportunity in Iraq. The fund's investable universe consists of locally listed companies that have their principal business activities in Iraq as well as foreign listed companies that have the majority of the business in Iraq as a whole including the prosperous Kurdish Region of Iraq (KRI). The AFC Iraq Fund offers access to investments in post conflict recovery potential of Iraq, including the KRI, and/or stability in its territory. The AFC Iraq Fund is managed by Asia Frontier Capital (Iraq) Limited, Cayman Islands under the executive leadership team of Thomas Hugger (CEO & Fund Manager) and Ahmed Tabaqchali (CIO) who have more than 47 years of investment experience as well as an extensive background covering global, emerging, frontier and MENA markets.

The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invests in a diversified portfolio of 70-90 attractively valued companies to carefully control concentration risk.  This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger and Andreas Vogelsanger who have more than 50 years combined experience managing investments in frontier markets, Asia and around the world.

For more information about the fund, management team and investment strategy please contact us at info@asiafrontiercapital.com.

Thematic (Sector/Industry)

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, travelled to Myanmar and conducted meetings with portfolio companies and other companies on our shortlist. The photos in this article are all by AFC.

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, travelled to Myanmar and conducted meetings with portfolio companies and other companies on our shortlist. The photos in this article are all by AFC.

Economist, Centennial Asia Advisors

Jason Tan

Economist

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<li>
Bank lending gaining traction, increasing 2.9% y/y in Dec 16 from 1.1% in Nov 16, after the persistent contractions of late-2015 through 3Q16. Business loans reversed a 15-month declining streak to turn in an expansion of 2.8% y/y in Dec 16 while consumer loans stayed robust, increasing 3.1% y/y in Dec 16, ticking up from 3.0% in Nov 16.</li>
<li>
Overall, tentative expectations... The EDB survey of business expectations saw three-quarters of manufacturing firms expecting the business outlook for 1Q17 to…</li>
</ul>



Bank lending gaining traction, increasing 2.9% y/y in Dec 16 from 1.1% in Nov 16, after the persistent contractions of late-2015 through 3Q16. Business loans reversed a 15-month declining streak to turn in an expansion of 2.8% y/y in Dec 16 while consumer loans stayed robust, increasing 3.1% y/y in Dec 16, ticking up from 3.0% in Nov 16.

Overall, tentative expectations... The EDB survey of business expectations saw three-quarters of manufacturing firms expecting the business outlook for 1Q17 to…


Singapore: The Gloom Is Clearing, but Slowly

<ul><li>US President Donald Trump has officially withdrawn US from the TPP agreement. This wave of American isolationism is in stark contrast to the openness projected by China in recent weeks; China is poised to become increasingly influential in Asia.</li><li>While existing TPP members can forge ahead and implement some sort of a TPP-lite deal without the US, countries may not be willing to open up politically sensitive sectors without commensurate economic returns that is access to the large US market.</li><li>Export-oriented Asian economies could find it pragmatic and beneficial to establish closer economic ties with China and accept closer geostrategic relations too. Already, talks of accelerating the RCEP and even inviting China to participate in the TPP have begun.</li></ul>

US President Donald Trump has officially withdrawn US from the TPP agreement. This wave of American isolationism is in stark contrast to the openness projected by China in recent weeks; China is poised to become increasingly influential in Asia.While existing TPP members can forge ahead and implement some sort of a TPP-lite deal without the US, countries may not be willing to open up politically sensitive sectors without commensurate economic returns that is access to the large US market.Export-oriented Asian economies could find it pragmatic and beneficial to establish closer economic ties with China and accept closer geostrategic relations too. Already, talks of accelerating the RCEP and even inviting China to participate in the TPP have begun.

Asian Economic Integration Headed in a New Direction

<ul><li>A recovery in global demand led by the G3 advanced economies have fed into export upturns in trade-focused East Asian economies. Japan, South Korea, Taiwan and Hong Kong have seen the renewed vigour in global trade leading to more robust growth.</li><li>Furthermore, other Asian countries, such as those in Southeast Asia, will also see economic expansion being underpinned by an export upswing, chiefly in electronics and other tech components.</li></ul>

A recovery in global demand led by the G3 advanced economies have fed into export upturns in trade-focused East Asian economies. Japan, South Korea, Taiwan and Hong Kong have seen the renewed vigour in global trade leading to more robust growth.Furthermore, other Asian countries, such as those in Southeast Asia, will also see economic expansion being underpinned by an export upswing, chiefly in electronics and other tech components.

Trade Intensity Leading to Asian Expansion

United States

iShares MSCI Singapore ETF is an exchange-traded fund incorporated in the USA. The ETF's objective seeks to provide investment results that correspond to the performance of the Singaporean market, as measured by the MSCI Singapore 25/50 Index. The ETF invests in a representative sample of index stocks using a "portfolio sampling" technique. SGX Trading Name: IS MSCI SIN 100US$

iShares MSCI Singapore ETF (EWS US)

Singapore's Committee for the Future Economy Report Abjures Bold Moves

The CFE report outlines seven broad recommendations to chart Singapore's economic strategy for the next five to 10 years. Two key questions are...

Manu Bhaskaran

Myanmar Travel Report

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, travelled to...

Asia Frontier Capital

Singapore: The Gloom Is Clearing, but Slowly

Bank lending gaining traction, increasing 2.9% y/y in Dec 16 from 1.1% in Nov 16, after the persistent contractions of late-2015 through 3Q16....

Jason Tan

Asian Economic Integration Headed in a New Direction

US President Donald Trump has officially withdrawn US from the TPP agreement. This wave of American isolationism is in stark contrast to the...

Jason Tan

Trade Intensity Leading to Asian Expansion

A recovery in global demand led by the G3 advanced economies have fed into export upturns in trade-focused East Asian economies. Japan, South...

Jason Tan