Sai Gon Securities Inn (SSI) was the first to open itself completely to foreign investment in 2015. Everpia Vietnam JSC (EVE) did the same on February 3. EVE then quickly raised its foreign ownership to 58 per cent from 49 per cent. On February 19, EVE shares ended at VND 34,400(US$1.5), an increase of 32 per cent compared with when it had a room limit.

On Monday, after VHC announced foreigner investors could own 100 per cent of the company, shares in the fisheries company grew 0.9 per cent to reach VND34,200 in the HCM Stock Exchange.

At the same time, Vietnam Dairy Products Joint Stock Company or Vinamilk (VNM) consulted with shareholders about closing seven businesses. According to experts from HCM Securities Company (HSC), it was expected to open up to foreign investors.

Allowing 100 per cent foreign investment would be a hot trend in 2016 and help attract more investors, according to a report by HSC .

The company said shares of companies expanding foreign ownership such as EVE, VHC, BIC and MBB increased sharply after their decision to open up.

Vu Bang, chairman of the State Securities Commission (SSC), said the SSC would release a draft circular that removed all obstacles in decree No. 60 and the investment law.

Since the decree took effect in September, local companies have had difficulties identifying as Vietnamese, because if foreigners make up 51 per cent or more of their investors, they must under law be listed as foreign businesses.

Level up the market status

Bang said the SSC would meet in March with Morgan Stanley Capital International (MSCI), a US-based company that analyses equity and hedge fund stock market indexes, to ask it to improve the Vietnamese market’s listing from Frontier Market to Emerging Market.

In 2013, Vietnam did not have a better status, as index publisher refused to give the country the new status unless it eased up on foreign ownership limits.

According to Bloomberg data, the Qatar Exchange Index and the UAE’s Abu Dhabi Securities Market General Index increased 38 per cent in the following 12 months after they were named Emerging Markets in June 2013.

The ADX General Index of Abu Dhabi reached its peak of 5,253.4 points on May 29, 2015, an increase of 115.3 per cent from May 31, 2013 when MSCI decided to boost its status to Emerging Market.

Qatar’s stock market recorded foreign investment of $2.3 billion. Dubai’s stock market received about $1.35 billion in foreign investment in 2014 after leveling its status.

In the first nine months of 2014, Indonesia’s and the Philippines’ stock markets gained $4.2 billion and $1.3 billion respectively from foreign investors after becoming Emerging Markets.

In 2014, the Vietnamese stock market recorded a foreign net buy of $175 million.

SSC planned a series of actions earlier this year to improve the local stock market.

“Our security personnel have been on the ball, especially since the Jakarta bombing recently, so we think there is no reason for investors to fear,” said Minister of International Trade and Industry Datuk Seri Mustapa Mohamed.

“Also, seeing as there are at least 40 foreign investors gathered in this place today, I think they are wise enough not to unnecessarily worry either,” he told reporters during the MIDA – Spirit Aerospace Suppliers Symposium here yesterday.

Malaysia has been on high alert since a bomb and gun attack in Jakarta last month, which was claimed by the Islamic State militant group.

Malaysia had also arrested a suspected militant who confessed to be planning an attack in the country.

An Australian travel advisory over the weekend warned that terrorists may be planing “indiscriminate” attacks in and around Kuala Lumpur, which may target Western interests or locations frequented by Westerners.

It also recommended Australians avoid travelling to the coastal region of eastern Sabah, where the beaches and islands are popular with foreign tourists and diving enthusiasts.

In an immediate reaction, City police chief Comm Datuk Tajuddin Md Isa assured the public that the city is secure despite the terror alert issued by the Australian government.

“We have not received any intelligence to indicate a terror threat.

“We are on constant vigilance and security has been increased over the past few months. The city is safe from any terror threat so far,” he had said.

On another matter, Mustapa said the Malaysian Investment Deve­lopment Authority (MIDA) had approved RM8.7bil in investments in Malaysia’s aerospace sector since 2011.

“Of this amount, half came from last year alone because 2015 was an exceptionally good year for the aerospace industry,” he said.

In 2015, the life insurance industry recorded a growth of 6.2per cent to RM1.24 trillion from RM1.17 trillion in 2014 in sum assured for all policies combined in 2015.

President Toi See Jong said the healthy performance of the life insurance industry reflected the continued increase in awareness among Malaysians on the importance of insurance protection.

The increase in the number of lives covered by life insurance and higher sum assured protection show there is an increase in awareness among Malaysians on the importance of life insurance protection.

However, LIAM said the per capita sum assured of RM39,929 was still “way below the amount needed” to support one family member in the event of the death or disability of the breadwinner.

Based on the 2012 Underinsurance Study in Malaysia undertaken by University Kebangsaan Malaysia and LIAM in 2013, the average mortality gap for each member of a family is about RM100,000 to RM150,000.

“Recognising this, the industry together with LIAM, will continue to step up efforts and intensify the various consumer awareness campaigns and promotional activities to further increase the awareness level among all Malaysians and reduce the insurance protection gap,” Toi said.

Based on preliminary figures, the life insurance industry in Malaysia grew by 4.3per cent in 2015, as measured by new business APE (Annual Premium Equivalent = 10per cent Single Premium + 100per cent Annualised Premium). The new business total APE in 2015 was RM4.91bil, as compared with RM4.71bil in 2014.

Group insurance business achieved a strong growth rate of 15.8per cent in 2015.

In terms of individual business, traditional policies regained its popularity, outpacing investment-linked business by growing at 5.2per cent as compared with a growth rate of 2.3per cent achieved by the latter.

On new business total premium basis, the industry grew 1.8per cent in 2015 with total premium volume recording RM9.12bil.

The total premium for in-force policies grew moderately at 6.6per cent in 2015 for individual and group policies combined.

The life insurance industry also registered an increase of 9.0per cent in claims payouts amounting to RM9.2bil contributed mainly by higher medical claims. The industry as a whole registered slightly lower disability claims payouts in 2015 while death claims increased moderately at 8.9per cent in line with the increase in in-force sum assured.

LIAM remained optimistic that the life insurance industry was resilient to economic pressure as there was still a big gap in life insurance coverage in Malaysia.

In addition, the strong focus by Bank Negara Malaysia and the industry to increase the insurance penetration rate as well as the Life Insurance and Family Takaful Framework (LIFE Framework), which came into force on Nov 23, 2015 will drive growth and change the landscape of the insurance industry in the near future.

“We believe that the various initiatives within the three pillars in LIFE Framework will have significant impact on the life insurance industry. The encouragement of alternative distribution channels will have a huge impact in expanding the reach and penetration of insurance in Malaysia.

“The opportunities in the digital and direct channels, will not only improve transparency and enable easier product comparisons, but also increase the reach and penetration of insurance among the new generation of consumers who are more educated and IT savvy,” Toi added.

“The introduction of the balanced score card is expected to improve the productivity and professionalism of insurance agents, and in turn will also further enhanced the brand image and the attractiveness of the insurance industry, which augurs well for the industry to meet the Government’s vision of achieving 75per cent penetration rate by 2020 and reduce the protection gap among Malaysians.”

“However, we believe that these concerns are overblown. Filipino workers in the Middle East who are most prone to layoffs are the semi/low-skilled workers with relatively low per-capita remittances. In addition, the terms-of-trade benefits help to offset the potential impact of lower oil prices on remittances,” Nomura said.

“A number of other structural factors mitigate the risks to remittances from workers in the Middle East and the energy sector: we have observed increased geographical diversification of remittances in recent years, an increased proportion of the contribution from more skilled workers in service sectors with strong demand and higher per-capita remittances reflecting a higher proportion of higher income workers,” it added.

Nomura said it expects OFW remittances to expand by 5.2 per cent this year.

Data released by the Bangko Sentral ng Pilipinas last week showed that cash sent home by Filipinos abroad hit a record $2.47 billion last December—the biggest monthly amount to date—to bring the 2015 total to $25.767 billion, also the highest annual figure.

End-2015 cash remittances grew 4.6 per cent from $24.628 billion in the previous year, hence exceeding the 4-per cent growth target, albeit slower than the 7.2-per cent year-on-year growth posted in 2014.

For 2016, the growth in cash remittances is also projected at 4 per cent.

At the same time, Nomura noted risks to the country’s balance-of-payments position and the peso due to external developments.

These include increased financial market volatility and continued concerns over China’s economic slowdown, the impact of policy normalization from the Fed and worries over the impact of lower oil prices, Nomura said.

In general, external risks “resulted in material capital outflows from foreign and domestic investors and a flight-to-safety into US dollar bonds,” Nomura noted.

According to Nomura, “Philippine equity markets have similarly experienced outflows, possibly exacerbated by valuation concerns amid global risk-aversion.”

BSP data released last Friday showed that the Philippines started the year with more money leaving the country, posting a BOP deficit of $813 million in January mainly as the government settled maturing foreign exchange obligations that month.

The deficit recorded last month was the widest since January 2014’s $4.48 billion. It was also a reversal of the surpluses of $481 million last December and $136 million a year ago.

The BOP is a summary of all the businesses the country does with the rest of the world.

BOP data are tracked closely to ensure that the supply of dollars in the economy remains ample to allow the government and businesses to transact with the rest of the world.

Last year, the BOP swung to a surplus of $2.6 billion, a turnaround from the $2.9-billion deficit in 2014—the first annual deficit in a decade as well as the biggest on record, largely attributed to the normalization of monetary policy in the US during that time.

The BSP had projected the BOP surplus to reach $2.2 billion this year and result into an increase in the gross international reserves to $82.7 billion, equivalent to nine months of import cover.

“With our forecast of two more interest rate hikes from the Fed in 2016 and our below-consensus forecast for China’s growth, the risk is that subdued risk appetite may continue to pressure the Philippines’ BOP via capital outflows,” Nomura said.

“Domestically, the Philippines appears to be a victim of its own success: strong investment spending has kept capital goods imports elevated while higher tourism imports (Filipinos travelling overseas) have increased, possibly due to higher per-capita incomes. Although strong domestic growth prospects have indeed led to FDI [foreign direct investment] inflows, FDI outflows have picked up amid global risk aversion,” it added.

On Monday, the federal police in Brazil carried out a fresh wave of searches and arrests in the ongoing Operations Car Wash corruption investigation begun nearly two years ago. The authorities in Brazil are investigating allegations that Petrobras contractors, which include many of the country’s largest construction groups as well as foreign companies, paid bribes to the oil company’s executives and politicians from the ruling coalition led by President Dilma Rousseff’s Workers’ Party in exchange for tens of billions of dollars in contracts.

Brazil’s prosecutor’s office said on Monday it was investigating “possible crimes of corruption, foreign currency evasion and money-laundering resulting from a diversion of funds from Petrobras”. It alleged that the funds were diverted from Petrobras to a prominent political consultant Joao Santana by a financial operator, Zwi Skornicki, and by offshore firms controlled by the Odebrecht Group, a Brazilian construction giant.

In its filing on Tuesday, Keppel referred to its earlier announcement on Feb 9, 2015, “in relation to allegations made by Pedro Jose Barusco in Brazil that illegal payments were made by Zwi Skornicki in connection with contracts entered into between certain Keppel entities with Petrobras and/or Sete Brasil”.

Keppel said it had since put the agency relationship with Skornicki on hold pending determination by the relevant authorities into the allegations made on the matter.

“We are unable to comment further in view of the ongoing investigations in Brazil,” Keppel said.

Barusco is a former Petrobras executive who has agreed to provide testimony to Brazil’s federal police in exchange for leniency.

Investments in agriculture remain modest, although the sector involved nearly 70 per cent of the country’s population, while contributing some 18-22 per cent of gross domestic product and 23-35 per cent of the value of all exports.

Yet, investments in agriculture were estimated to account for only 6 per cent of the economy’s total investments.

According to Nguyen Do Anh Tuan, deputy director of the Institute of Policy and Strategy for Agriculture and Rural Development, complicated administrative procedures controlling agro-fishery and forestry companies were discouraging investments.

A survey by the think tank in 2014 found that nearly 80 per cent of surveyed companies operating in the agricultural, fishery and forestry sectors wanted greater efforts in administrative reforms to create favourable conditions for businesses.

Tuan said that slow tax reforms must be hastened, together with incentives to be created to encourage firms to invest.

Tran Dinh Thien, director of the Vietnam Economics Institute, stressed that it is time to change the view about the role of businesses in agriculture. Businesses should be viewed as the “leader” to drive the farming sector ahead, amid rapid international integration.

Nguyen Manh Hung, chairman of Nafood Group, said that open policies were important to encouraging firms to invest in agriculture to develop a modern sector with high quality output and greater productivity.

Further, the farming sector should raise planning and strategy in line with the development of firms, Hung said.

Additionally, Minister of Agriculture and Rural Development Cao Duc Phat, at the meeting, said the ministry would create measures to tackle problems faced by firms.

Phat noted that it was important for the agriculture sector to renew its production methods, in which firms played a role in the restructuring process. Supporting firms would mean supporting farmers, Phat said, adding that, without the participation of firms, it would be difficult for farmers.

“The ministry will create favourable conditions for businesses to invest and operate efficiently in the agriculture sector. This is a key in promoting the development of the farming sector,” Phat said.

The Indonesia Cold Storage Association (ARPI) said as most cold-storage components were imported, the government should follow up on the regulation up by obliging investors to open component manufacturing plants in the country.

“I agree with the policy, but suggest the government require investors to use more local components and workers,” Indonesia Cold Storage Association (ARPI) chairman Hasanuddin Yasni said over the weekend.

“Currently, there are only five manufacturers operating, with low-capacity machines. The government needs to grant tax incentives to attract others,” Hasanuddin said.

Maritime Affairs and Fisheries Minister Susi Pudjiastuti was reported by local media as saying that 12 investors from several countries in Europe, including Denmark and Norway, had expressed interest in entering the cold-storage business.

The presence of private investors, especially foreigners, is considered crucial, since the government last year allocated only 235 billion rupiahto build 58 cold storage facilities and 38 ice factories countrywide last year.

Hasanuddin added that cold storage required investment of between US$500 and $600 per million cubic meters, with a minimum average retail storage capacity of 1.1 billion cubic meters CBM and wholesale storage of 3 billion cubic meters.

“Foreign investors need to build their own electricity sources using alternative energy to support the cold storage industry,” he said, adding that the government also needed to direct investors to develop plants in remote areas where cold storage facilities remained rare.

Remote areas of the archipelago nation face numerous difficulties, ranging from lack of electricity and fuel supply to poor transportation infrastructure and connectivity. Under the administration of President Joko “Jokowi” Widodo, remote areas, especially in the eastern part of Indonesia, are seeing a renewed chance for coastal and maritime development thanks to the reinstatement of the “maritime axis” doctrine. The development of mega infrastructure, such as seaports, power plants and maritime highways, is the government’s priority program to address problems in the long-neglected and underdeveloped regions.

Voicing similar support for the new policy, the Indonesian Employers Association (Apindo) noted that the government needed to ensure sufficient supply of fish for exports to benefit from the newly expanded cold storage facilities.

Apindo head of fisheries Thomas Darmawan said the latest ban by the Maritime Affairs and Fisheries Ministry on the operation of large vessels to catch fish in Indonesian waters could threaten the supply of fish for export.

Thomas estimated that fish exports fell to $4 million in 2015 from $4.64 million in 2014.

In a tenth economic stimulus package announced on Feb. 11, the government revised the country’s negative investment list (DNI), covering sectors in which restrictions on foreign investment apply.

Under the revision, cold storage is among the 35 business sectors opened up completely for foreign investors. In the previous DNI regulation, foreign ownership of cold storages was limited to 33 percent in Sumatra, Java and Bali and 67 percent outside those regions.

Both parties will draw on each other’s capabilities, resources, brands and sales network to expand in China.

Dongfu Investment’s parent company, CSCEC, is ranked 37 amongst Fortune’s global 500 companies with massive projects from Singapore to United Arab Emirates and South America, said Ascott.

Said Mr Lee Chee Koon, Ascott’s chief executive officer: “These partnerships will allow Ascott to deepen our presence and build scale in key cities; expand our network to new gateway cities; broaden our reach to even more travellers as well as create new seamless O2O (Offline-to-Online and Online-to-Offline) experiences for our guests.”

Ascott and Dongfu Investment kicked off its alliance with a management contract for the 148-unit Citadines Guoxitai Xi’an which is slated to open in 2018.

Said Mr Kevin Goh, Ascott’s managing director for North Asia: “China is Ascott’s largest market with the most number of properties. We have recorded three consecutive years of expansive growth in the country with more than 2,000 units added year on year. In 2015, we secured over 2,500 units across 14 new properties in China. We are positive that demand for quality serviced residences will continue to grow in China, riding on the increasing domestic travel especially in the first and second tier cities.”

Mr Goh added: “Through our alliance with Dongfu Investment, we will be looking at expanding in cities such as Shanghai and Jinan, tapping on our partner’s major commercial building projects across these cities. Our latest partnership with Dongfu Investment will widen Ascott’s lead as we advance towards our target of 20,000 units in China by 2020.¡¨

Citadines Guoxitai Xi’an is close to Xi’an’s Hi-Tech Industries Development Zone where 1,000 multinational corporations including 40 Fortune 500 companies such as Samsung, Micron, Infineon and NEC are based. The serviced residence is a 10-minute drive to the city centre.