Malaysia

Malaysia’s three-way bank deal is far from done

13 Oct 2014

A $26 bln merger of CIMB with two smaller rivals will create the country’s largest bank by assets. Yet current share prices point to hurdles such as opposition from a Gulf investor or even a counterbid. A Malaysian pension fund could seal the deal, if it’s allowed to vote.

Malaysia throws airline investors a parachute

8 Aug 2014

The state investment fund is paying $436 million to buy out the remaining shares of Malaysia Airlines. The offer gives investors a price they last saw in February, before the already-troubled carrier was struck by two disasters. Taxpayers and employees may not be so fortunate.   

Asian airlines strive for return to mediocrity

22 Jul 2014

Tragedy and political upheaval provide a chance for Malaysia Airlines and Thai Airways to restructure deeper than before. State shareholders can help or hinder. Even when in good shape, running an airline in an oversupplied region is a tough business.

Malaysia Airlines plight points to riskier world

18 Jul 2014

Fatal air passenger accidents almost never happen. Malaysia Airlines has been struck by tragedy twice in four months. The aviation industry has its own challenges. Yet even more robust businesses need to consider political risk carefully.

Malaysia’s triple bank deal hints at size fetish

11 Jul 2014

Merging CIMB with two smaller rivals would create a lender with $188 billion in assets. Bulking up to cut costs at home and compete abroad could make sense. But Malaysia’s rapid loan growth will ease as rates rise. The “mega Islamic bank” may be pursuing scale for its own sake.

Edward Hadas: How can a plane vanish in a small world?

19 Mar 2014

The information vacuum around flight MH370 is as unusual as it is disturbing. In the interconnected globalised economy, things usually work well. When they don’t, the causes are identified, and changes often follow to prevent recurrence. MH370 is, so far, the distressing exception.

Asia’s fear of Fed is now infecting more economies

21 Nov 2013

The fragilities revealed by last summer’s market wobble are spreading beyond India and Indonesia. Growth has stalled in Thailand. Malaysian public finances look shaky. Debt is piling up everywhere. Asian assets will feel a jolt as the Fed starts to turn off the tap of dollars.

Asia’s inflation challenge – not enough of it

11 Nov 2013

Credit-fuelled domestic demand is not pushing up prices. Exports are weak, so producers are dumping surpluses locally at low prices. Also, rising Asian currencies have made imports cheaper. Tepid inflation increases the real cost of debt, which may slow investment.

Malaysia’s fiscal tightening is wise "taper" cover

28 Oct 2013

Prime Minister Najib Razak’s budget has paved the way for a consumption tax and lower subsidies. Fiscal prudence gives foreign holders of public debt added comfort. With the Fed likely to curb money-printing, Najib is right to buy insurance against the risk of capital outflows.

Brazil’s pushy oil nationalism five years late

20 Sep 2013

Costs, poor terms and state meddling persuaded the likes of Exxon to avoid the auction for the country’s largest field. Brasilia may have gotten away with it before the jump in global reserves from the shale revolution. Now playing hardball may mean lower output – and less lucre.

Not all Asian countries need to fear the Fed

5 Sep 2013

Plunging currencies have raised contagion concerns. But not all nations are equally vulnerable to receding tides of dollar liquidity. A Breakingviews interactive map shows that while no Asian economy is entirely immune, none is as badly exposed as India.

Asia sell-off will expose weak corporate defences

26 Aug 2013

Market turbulence invites comparisons with Asia’s last financial crisis. Though most economies are in better shape this time, corporate leverage has risen. Higher interest rates, slower growth, and falling currencies will lay bare companies that failed to learn past lessons.

New energy map underpins $20 bln Petronas gas punt

12 Jun 2013

The U.S. is buying less gas from Canada. That’s an opportunity for the Malaysian giant, which is running low on product at home, to sell its new Canadian supplies in Asia for more money. The costly plan is a sign the upheaval wrought by fracking and the like is going global.

Malaysia poll offers only short-term relief

6 May 2013

The ruling coalition managed to cling to power in the country’s general election. That reduces the risk of near-term policy reversals. But the poll also showed a widening racial divide, which doesn’t bode well for the economy. Investors will be more relieved than happy.

Unsure voters could dim lure of Malaysian assets

2 May 2013

A less than decisive win for either of the two coalitions contesting the May 5 poll could worsen racial discord and damage the economy. A government unsure of survival may also be tempted to dump fiscal prudence to buy popularity. Malaysian stocks and bonds could suffer.

Growth doesn’t justify Southeast Asia’s airline boom

2 Apr 2013

Budget carrier Lion Air is expanding its fleet again with a $24 bln order. The prospect of deregulation and the region’s expanding middle class will boost demand for cheap flights. But competition from equally bullish rivals like AirAsia may mean less profit to go around.

Southeast Asia’s growth could lead to credit curbs

21 Feb 2013

The region’s debt-fuelled expansion is reviving memories of the unsustainable mid-1990s boom. But the authorities are reluctant to tighten monetary policy as higher interest rates might attract more foreign capital. Policy makers may prefer to control credit more directly.

Petronas return may herald Canada M&A clarity

30 Oct 2012

Ottawa botched its initial veto of the Malaysian oil group’s $5.2 bln bid for gas producer Progress. Nerves over CNOOC’s bigger offer for Nexen played a part. Petronas is back, but if the government wants the benefit of the doubt next time it needs to make the rules less fuzzy.

Is everything sacred in Canada?

20 Oct 2012

At first it was a hole in the ground - then the stock exchange and a DIY chain. Now the government has blocked a $5.2 bln shale gas deal - signalling to investors that the market for corporate control is effectively shut.

Malaysia’s budget goals are unrealistic and risky

28 Sep 2012

The government says it will reward civil servants with bonuses, ply the poor with handouts and still manage to cut the fiscal deficit in 2013 - a goal that’s both unrealistic and unnecessary. If infrastructure spending is cut, the still new investment revival could suffer.