ASEAN Market Watch: slowing confidence in Singapore, Indonesian e-commerce, and declining investment in Thailand

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asean market watch

Singapore: Investor Confidence Dips sharply

Retail investor confidence for the coming six months has dipped sharply. The JP Morgan Investor Confidence Index fell by 15 points to 101 in December, reaching its lowest level since June 2012. The index, which is compiled based on a survey of investors, categorizes investor confidence as follows: 

  • 100 – Neutral
  • 200 – Extremely optimistic
  • 0 – Extremely pessimistic

Local analysts believe that despite the dip, investment patterns in the country will not change significantly. In fact, 85 percent of respondents stated plans to remain invested in Singapore and only a small number indicated a roll back of investments. 

Although only 28 percent of the respondents believe that the economic conditions are set to improve, investor outlook has remained fairly stable and over 50 percent of investors are investing to grow their capital. Dezan Shira & Associates believes that the dip will not prompt a tumultuous change in investment patterns, and the economic outlook for Singapore in the coming months seems stable.

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Indonesia: E-Commerce Forecast to Grow Two-fold in 2016

The Indonesian E-commerce Association (idEA) recently said that the country’s e-commerce industry would grow nearly two-fold in 2016. The forecast – based on a survey by idEA – believes that revenue generated from e-commerce in 2016 will be US $1.46 million compared to US$ 0.74 million in 2015. 

Local analysts believe that a burgeoning middle class forms a part a part of the expanding target group that e-commerce companies will target in 2016; there could be nearly 10 million online shoppers in Indonesia in 2016. The consumer dependence on internet and smartphones will be a key driver for the growth of e-commerce in the country.

Rudianatara, Minister of Communications and Informatics recently indicated that the government will finalize a roadmap to aid the development of e-commerce in the country. This roadmap, will address FDI restrictions, taxes and numerous other issues related to e-commerce. E-commerce  is forecast to grow to US $130 billion by 2020. The government’s plan aims to ensure accelerated growth of the e-commerce sector and bodes well for corporations that are already invested or are planning to invest in the industry.

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Thailand: Total foreign Investment Shows Sharp Decline in 2015

Official data indicates that total foreign investment in Thailand registered a sharp decline in 2015. The state-run Board of Investment (BoI) said that investments applied for by foreign companies fell by 78 percent in 2015 from 2014. The total foreign investment between January and November 2015 was US $ 2.62 billion.

Investment from Japan fell by 81 percent. Japan, is traditionally one of the largest sources of investment for Thailand. Meanwhile, investment from the EU fell by 97 percent and investment from US was also reduced significantly. Dezan Shira & Associates believe multiple factors are responsible for the fall in foreign investment. These include high personal debt, low consumer confidence and increasing competition from other ASEAN members states such as Cambodia and Myanmar. In addition, the military junta’s rule has also contributed to reducing the investor confidence.

The economic outlook for Thailand in 2016 also seems bleak. The World Bank speculates that the GDP growth rate in 2016 would dip further. The market trends in 2015 and the economic forecast for 2016 highlight the need to remain cautious for investors planning to invest in Thailand. 



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