Indonesia’s Coordinating Maritime Affairs Minister Luhut Pandjaitan said President Joko “Jokowi” Widodo intended to privatise several airports.

According to a Antara report, Luhut said the airports that could be privatised included the newly inaugurated Silangit International Airport in North Sumatra, the HAS Hanandjoeddin International Airport in Bangka Belitung and the one in Jakarta.

“Those airports, Pak Luhut, just give [to the private sector]. Airports like Silangit, the ones in Jakarta and Bangka Belitung, just privatize [them] as long as the calculation is clear,” Luhut quoted from his discussion with President Jokowi.

Jokowi also informed him that Pakistan had just received a US$60 billion investment from China through the One Belt and One Road initiative, Luhut added.

Luhut said that the president also spoke of an airport in Islamabad, Pakistan, that was developed by China and would be named after Chinese President Xi Jinping. – The Jakarta Post

Noble’s planned sale of vessels falls through

Noble Group said yesterday that a proposed divestment of four dry bulk carrier vessels to further pare debt has fallen through as the buyers failed to obtain approval from their boards before Febuary 1, 2018, making the deal void.

The disposal of the freight vessels for gross proceeds of about US$95 million had been approved by Noble shareholders at a special general meeting on Jan 25.

If the proposed sale had been completed, the net proceeds, after taking into account the repayment of the relevant mortgages attached to the vessels and deducting estimated transaction costs, would have amounted to approximately US$30 million, Noble said in a filing with the Singapore Exchange yesterday.

Noble noted that since the announcement of its deal for the vessels, the market value of the Kamsarmax dry bulk carrier vessels has increased, with the group having comissioned updated valuations of these assets on February 1.

The updated valuation now stands at an aggregate of US$95 million, higher than the prior average aggregate valuation of the vessels – conducted in October 2017 of US$92.25 million.

The vessels are, in the current market, profit generating and cash flow positive and remain available for sale and Noble has commenced discussions with interested third parties, Noble said. – The Straits Times

US mart chain Circle K launches Cambodia stores

US-based convenience mart Circle K officially launched in Cambodia on Thursday, with three outlets already operating in Phnom Penh and plans to open 40 more by the end of the year.

Norm Tong, president of TH CVS Co, the company that has exclusive rights to operate Circle K in the Kingdom, said at a launch event yesterday that two more stores would be opening next week.

The company plans to open 300 Circle K outlets in Cambodia over the next 10 years, at a price tag of about $20 million, according to Tong. – Phnom Penh Post

In a message to reporters, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr said studies were being conducted on the broader impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law before any decision would be made on interest rate adjustments.

“The first round price effects of TRAIN and other factors such as oil prices are evolving more or less as expected,” he said, reiterating his view that the higher inflation caused by the tax program would be “transitory.”

“However, we are carefully assessing next round effects and how inflation expectations could be affected,” Espenilla said. “These considerations will be at the center of the coming policy discussions.”

The tax reform programme —which raised excise taxes on so-called sin products and petroleum, but made the country’s lowest earning workers tax exempt—was meant to help fund the Duterte administration’s 9-trillion peso infrastructure buildup programme, to address the country’s creaky transportation networks, among others.

The central bank’s policy making monetary board is set to meet later this month to decide whether to raise interest rates to stave off inflation preemptively, or to keep them at current levels and help the economy grow faster through lower borrowing costs.

Espenilla said “significant developments” that occurred since the monetary board’s last policy review in December 2017 would be reexamined carefully this month.

“We have been updating the data and evaluating various price surveys to gain insight on the overall impact on the inflation outlook. This is an intensely data-driven exercise,” he said, adding that the “ability to meet the inflation target comfortably and mitigating the upside risks is very important to the BSP.”

Meanwhile, central bank economists yesterday predicted that the inflation rate for the first month of 2018 would be within the 3.5-4.0 percent range. “The increase in the prices of domestic petroleum product on account of higher global crude oil prices along with higher food prices due to weather-related disturbances could contribute to the rise in inflation for January,” the BSP’s Department of Economic Research said.

“In addition, higher excise taxes on fuel, sugar-sweetened beverages with the implementation of the TRAIN this month would lead to additional upward price pressures,” the group added in a statement.

“The increase in prices could be partly offset by lower electricity rates in Meralco-serviced areas for the month.”

Parkson Holdings Bhd, which has around 50 stores in the country, announced recently that the company was shutting down the store in the Maju Junction Mall located along Jalan Tuanku Abdul Rahman.

“Sogo is the most successful department store in the country, with an annual total sales turnover exceeding 800 million ringgit. Most retailers there do very well, with some having their best performing outlet in Sogo,” said a property consultant.

“Rents can exceed 25 ringgit per sq ft in Sogo and along Jalan Tuanku Abdul Rahman, it is also above 15 ringgit per sq ft.”

Despite being located just down the road from Sogo, he said rental rates at Maju Junction Mall were “comparatively lower.”

“As a retail model, I think Maju Junction Mall is irrelevant and having Parkson there didn’t help. The reason is that Sogo is in the heart of the Jalan Tuanku Abdul Rahman shopping precinct, which is Malay dominant and many are from outstation, especially during the weekends.

“Maju Junction Mall doesn’t excite with its merchandise either. Sogo is relatively mass market in pricing and merchandising with lots of regular sales – and that captures the market well.”

When contacted, a spokesperson from Parkson confirmed that the Maju Junction Mall outlet has been underperforming.

“The decision to move out was made as the sales in Parkson Maju Junction was not sustainable. Due to the dynamics of the retail business, the opening, closing and/or relocation of stores were part and parcel of doing business.”

Another property consultant who requested anonymity, claimed that Parkson’s sudden departure from the Maju Junction Mall had resulted in a lawsuit between the two parties.

“It is understood that when Parkson signed on as a tenant at Maju Junction Mall, the landlord had to tear down walls to accommodate Parkson. This cost them (the landlord) a lot of money.”

He said despite the ideal location, the Maju Junction Mall could be “better designed” to be more appealing to shoppers. “Personally, I believe Parkson made a mistake and should not have expanded to Maju Junction Mall,” he said.

Parkson’s spokesperson denied that a lawsuit was pending.

Parkson announced last week soon after closing down the Maju Junction Mall outlet that it was setting up an outlet at M Square Shopping Mall in Puchong.

“Parkson has just opened a new store in M Square, Puchong as well as in Paradigm Mall in Johor Baru and Kuantan City Mall in November last year. Upcoming stores will be opened soon in Bangi and Bintulu,” said the Parkson spokesperson.

Based on reports, the new store spans 78,000 sq ft of retail across four floors, carrying more than 350 local and international brands that cater to the diverse styles and preferences of shoppers.

At the 11th Malaysian Property Summit 2018 (11MPS), Savills Malaysia Sdn Bhd deputy executive chairman Allan Soo said the medium term outlook for the local retail property sector “remained challenging.”

Parkson Holdings Bhd, which has around 50 stores in the country, announced recently that the company was shutting down the store in the Maju Junction Mall located along Jalan Tuanku Abdul Rahman.

“Sogo is the most successful department store in the country, with an annual total sales turnover exceeding 800 million ringgit. Most retailers there do very well, with some having their best performing outlet in Sogo,” said a property consultant.

“Rents can exceed 25 ringgit per sq ft in Sogo and along Jalan Tuanku Abdul Rahman, it is also above 15 ringgit per sq ft.”

Despite being located just down the road from Sogo, he said rental rates at Maju Junction Mall were “comparatively lower.”

“As a retail model, I think Maju Junction Mall is irrelevant and having Parkson there didn’t help. The reason is that Sogo is in the heart of the Jalan Tuanku Abdul Rahman shopping precinct, which is Malay dominant and many are from outstation, especially during the weekends.

“Maju Junction Mall doesn’t excite with its merchandise either. Sogo is relatively mass market in pricing and merchandising with lots of regular sales – and that captures the market well.”

When contacted, a spokesperson from Parkson confirmed that the Maju Junction Mall outlet has been underperforming.

“The decision to move out was made as the sales in Parkson Maju Junction was not sustainable. Due to the dynamics of the retail business, the opening, closing and/or relocation of stores were part and parcel of doing business.”

Another property consultant who requested anonymity, claimed that Parkson’s sudden departure from the Maju Junction Mall had resulted in a lawsuit between the two parties.

“It is understood that when Parkson signed on as a tenant at Maju Junction Mall, the landlord had to tear down walls to accommodate Parkson. This cost them (the landlord) a lot of money.”

He said despite the ideal location, the Maju Junction Mall could be “better designed” to be more appealing to shoppers. “Personally, I believe Parkson made a mistake and should not have expanded to Maju Junction Mall,” he said.

Parkson’s spokesperson denied that a lawsuit was pending.

Parkson announced last week soon after closing down the Maju Junction Mall outlet that it was setting up an outlet at M Square Shopping Mall in Puchong.

“Parkson has just opened a new store in M Square, Puchong as well as in Paradigm Mall in Johor Baru and Kuantan City Mall in November last year. Upcoming stores will be opened soon in Bangi and Bintulu,” said the Parkson spokesperson.

Based on reports, the new store spans 78,000 sq ft of retail across four floors, carrying more than 350 local and international brands that cater to the diverse styles and preferences of shoppers.

At the 11th Malaysian Property Summit 2018 (11MPS), Savills Malaysia Sdn Bhd deputy executive chairman Allan Soo said the medium term outlook for the local retail property sector “remained challenging.”

The Straits Times understands that they include Tay Kim Hock, former president and chief executive of Keppel Fels Brasil, a wholly owned unit of Keppel O&M. He was arrested by the Corrupt Practices Investigation Bureau (CPIB) and is currently out on bail.

It is understood that more than five others connected with the case are also out on bail.

Tay was president and chief executive of Keppel Fels Brasil from June 2000 to October 2007.

The Straits Times understands that the former executives had been called in by the Singapore authorities to assist with investigations into the scandal, which saw the government-linked company paying US$422.2 million (S$554 million) in fines to the United States, Brazil and Singapore.

Some of the individuals had given statements to the CPIB as recently as last week and have appointed lawyers to represent them. The lawyers are from firms including WongPartnership and Withers KhattarWong.

The matter will be referred to the Attorney-General’s Chambers (AGC) to decide if charges are to be filed.

When asked if several individuals had been arrested, both the AGC and the CPIB declined comment.

A CPIB spokesman said he was “unable to comment as investigations against the individuals involved are still ongoing”.

A Keppel O&M spokesman said yesterday: “We are unable to comment on any investigations by the authorities.”

In December last year, Keppel O&M reached a global resolution with law enforcement agencies in the US, Brazil and Singapore in relation to corrupt payments made by a former agent in Brazil.

From 2001 to 2014, Keppel O&M paid US$55 million in bribes to secure contracts with Brazilian oil giant Petrobras.

Keppel Fels Brasil also reached a leniency agreement with the Public Prosecutor’s Office in Brazil.

In Singapore, Keppel O&M accepted a conditional warning from the CPIB. This was issued in lieu of prosecution for corruption offences punishable under the Prevention of Corruption Act, and part of the global resolution, said the AGC and the CPIB.

But the authorities also said then that “investigations in respect of the individuals involved are ongoing”.

After news broke about the global resolution, some observers raised public concern over what was perceived to be lenient treatment given to Keppel O&M despite the large sums of money involved and the blow to Singapore’s reputation.

When the matter was raised in Parliament on Jan 8, Senior Minister of State for Finance and Law Indranee Rajah refuted this perception, noting that aside from the penalties levied on the company, certain individuals were being investigated.

“That outcome has not been determined… Nobody has got off – or not got off, as the case may be,” she said at the time.

“We expect the government can lower the price of coal allocated for the domestic market obligation [DMO],” PLN president director Sofyan Basir said on Thursday after meeting with Jokowi at the Presidential Palace in Jakarta.

Sofyan claimed that Energy and Mineral Resources Minister Ignasius Jonan had promised to lower the DMO coal price by February.

“The president has thrown his support behind PLN to maintain electricity rates. But if the price of coal keeps increasing, it will be difficult for PLN [to maintain rates],” Sofyan said.

As of 2017, Indonesia operated various power plants with a total capacity of 60,491 megawatts, of which 57.22 per cent were coal-fired facilities. Therefore, any increase in global coal prices will be a major blow for PLN.Indonesia’s coal reference price climbed by 9.05 per cent to US$94.04 per tonne throughout 2017.

The Energy and Mineral Resources Ministry has limited the country’s coal production in 2018 at a maximum of 485 million tonnes, 25 per cent of which will be allocated for the domestic market under the DMO.

“It will be troublesome for PLN if the country exports all of its coal,” Sofyan said. PLN has previously projected that coal demand for electricity generation will soar by 18.4 per cent year-on-year to 90 million tonnes in 2018.

Data from the General Department of Vietnam Customs states that in 2017, the country’s trade turnover with Laos was above US$890 million, while the turnover with Cambodia was $3.7 billion, and with China, a staggering $71.9 billion.

With the Decree No 14 coming into effect on January 23, trading activities performed by border residents and licensed traders are expected to be significantly improved. Most importantly, the decree stipulates that goods traded and exchanged by border residents for direct consumption are not subject to medical quarantine, such as animals, plants and aquatic products, unless the competent state body warns of an epidemic or contagious disease.

Therefore, goods consumed by border residents are not subject to inspection and control in terms of food quality and safety, except |for emergencies requiring immediate quarantine, when they |must comply with international treaties.

The decree stipulates that Vietnamese traders, including enterprises, co-operatives, business households and individuals with Vietnamese business registrations are allowed to buy, sell and trade goods along the border and via border checkpoints.

Businesses with foreign-direct-investment capital, companies and branches of foreign companies in Vietnam are also allowed to purchase and exchange goods across the border in accordance with national Law on Foreign Investment Management and any international treaties to which Vietnam is a member.

Border residents, defined as Vietnamese citizens with permanent residence in border areas, are now exempt from customs duties on goods valued at not more than million dongs (US$89) per person per day, and on no more than four days a month.

The value of duty-free quotas in excess of the above limits is subject to import tax and other taxes and charges (if any) in accordance with Vietnamese law.

In addition, Decree 14 also contains new administrative reforms, including the abolition of the Border Trade Steering Committee.

Traders engaged in the purchase, sale or exchange of goods across borders shall have to fully pay taxes, charges and fees according to the provisions of law.

The decree also states that goods traded or exchanged across borders are entitled to preferential value-added tax refunds, according to the provisions of law.

Multilateral ties

The director of the Vietnam Trade Promotion Agency and head of the 2017 National Trade Promotion Programme, said at a conference early this week that the Ministry of Industry and Trade considered goods produced by border residents and bordering countries (Laos, Cambodia and China) as serving multilateral trade ties.

Vietnamese trade associations and trade promotion organisations encourage border traders to access and expand markets in bordering countries, he said.

By bringing domestically produced goods to rural, mountainous and border areas, the ministry could boost trade and create distribution channels for essential products, he added.

In 2017, the ministry co-ordinated with other ministries and localities to organise trade-promotion programmes in border and mountain areas, including the Vietnam-China International Trade Fair.

Late last year, the World Bank published its global Doing Business 2018 report. Accordingly, Vietnam’s time and cost of cross-border trade were classed as having changed positively.

As a result, the country now ranks fourth in Southeast Asia behind Singapore, Thailand, and Malaysia in terms of cross-border trading.