Business News - Page 66

BPOs, e-commerce driving improving office demand into Q1 for Philippines 

Leechiu Property Consultants announced that 109,000 square meters of commercial space had been leased in the first three months of the year

By: Tricia Ang | 15 April 2021

Photo by Alesia Kazantceva on Unsplash

Demand for office space has improved in the first quarter of 2021, a property consultancy group revealed on Monday (11 April).

Leechiu Property Consultants announced in a statement that 109,000 square meters of commercial space had been leased in the first three months of the year. This is up by 22% from the 89,000 sq.m. taken up in Q2 2020, and by a whopping 68% from the 65,000 sq.m. in Q3 2020.

The increase in demand for office spaces indicates firms have been “thinking long term and are preparing to go back to the office,” noted the consulting company.

With 33,000 square meters of rental space, the information technology and business process management sector continues to hold the largest amount of rentals. However, this is a slight decrease from the 34,000 sq. m. reported in the fourth quarter of 2020.

E-commerce, which LPC chief executive David Leechiu dubbed as a “sunshine industry,” is a second runner-up, with about 19,000 sq.m. of leased spaces. This is over three times the 6,000 sq.m. of office space the sector occupied from November to December in 2020.

In a presentation, LPC also stated that Philippine offshore gaming operators (POGOs) saw no demand in the fourth quarter of 2020 and the first quarter of 2021, citing the COVID-19 pandemic, Chinese authorities’ crackdown, and the industry’s high taxes as the reasons behind it.

Prior to being given the green light to resume operations during the health crisis while complying to minimum health standards, the Bureau of Internal Revenue wanted POGOs to settle their unpaid taxes starting in April of last year. In September 2020, the Palace declared that only around 20 POGOs had met the BIR’s requirements.

Despite this, according to LPC associate director Mikko Barranda, the sector accounts for 12% (31,000 square meters), of office space set to open in 2021. Although it’s too soon to say if POGOs will stay in the Philippines, he believes that having their concerns answered will help them reaffirm their commitment to the country.

All in all, active office requirements stand at 266,000 sq.m. for the year — BPO firms comprise 33% of the demand while retail firms make up 7% of it.

“Despite the hardships the retail industry has experienced we are seeing companies adapt, innovate and commit to space in anticipation of a recovery,” said Barranda, noting the fulfillment of these requirements will push 2021 demand above 2020’s.

LPC also noted that office contractions slowed in the first quarter of 2021, falling 19% from the previous quarter. This, along with an increase in office demand, was described as a sign of “improving investor trust” by the consulting firm. The POGO sector accounted for 47 percent of the 851,000 sq. m. in office contractions made during the time, or 396,000 sq. m., followed by the IT-BPM industry at 10% or 89,000 sq.m.


ASRY Modernisation Continues with Infor Cloud-Based Digital Transformation Platform


Arabian Gulf’s leading maritime repair and fabrication facility set to streamline business processes and boost transparency with Infor CloudSuite Industrial Enterprise on Amazon Web Services (AWS) cloud

By: Tricia Ang | 14 April 2021

Photo from SeaTrade Maritime

Infor today announced that ASRY, the Arabian Gulf’s leading maritime repair and fabrication facility based in Bahrain, has signed a contract with Infor to implement a new state-of-the-art facility-wide enterprise resource planning (ERP) system, Infor CloudSuite Industrial Enterprise, to spearhead its digital transformation.

ASRY (Arab Shipbuilding & Repair Yard), which was established in 1977, handles the repair and conversion of ships, rigs and naval vessels, in addition to fabrication and engineering services covering onshore and offshore industrial components. The company has more than 2,000 employees and operates large-scale facilities including a 500,000-deadweight drydock, two floating docks, 15 repair berths, and a 250,000+-square-meter fabrication area. ASRY completes around 250 projects annually.

As a pillar of the region’s maritime sector, ASRY’s directors were keen to streamline and automate processes across every department in the company and upgrade ASRY’s digital integration to industry best practices. The company selected Infor CloudSuite Industrial Enterprise, which will run on Amazon Web Services (AWS), delivering high performance, scalability and security to replace the existing ERP system.

Given the large scale of its operation and the high volume of complex projects it is working on at any one time, ASRY also opted to deploy Infor Birst, allowing it to gather, analyse and extract value from data generated across all areas of its business and operations. This will provide powerful insights from the boardroom to the shop floor, supporting sound decision making, particularly in terms of understanding which areas of the business may require improvement and where to best allocate resources.

Infor’s solutions will help ASRY improve the quality of service for its global customer base, and help it tap into a global marine port and service market that is expected to reach $97 billion by 2025, according to research from Lucintel.

“As part of ASRY’s modernisation, this project is a digital overhaul of the entire company’s processes and procedures,” commented ASRY Managing Director Mazen Matar. “It is the most wide-reaching administrative transformation in the facility’s 44-year history, and after an extensive feasibility investigation, we have chosen Infor CloudSuite Industrial Enterprise. ASRY completes over 250 projects per year across four industrial sectors, and once this cloud-based system is deployed, these operations will be simplified and digitised, bringing agility to the business, and ultimately streamlining our ability to serve customers, maximise ASRY’s contribution to the Bahrain’s Economic Vision 2030 and boost the region’s maritime sector.”

“ASRY’s use of AWS for the new ERP also creates further integration with the kingdom’s burgeoning ICT sector,” continues Matar. “We are the latest in a wave of businesses and government entities tapping into the advanced and secure technology infrastructure being developed and expanded throughout Bahrain, and we join an elite list of global firms that have also chosen Infor’s services.”

Amel Gardner, Infor vice president MEA, said: “Infor helps organisations improve productivity, efficiency, and visibility across their operations, enabling management to make better-informed choices. We’re thrilled to be working with ASRY on its digital transformation, and we look forward to helping it achieve its business goals in a dynamic industry.”

ASRY and Infor aim to complete the deployment of the first phase of Infor CloudSuite Industrial Enterprise within 11 months. The platform will incorporate all divisions of the yard, including commercial, supply chain, production, finance and general services. As well as a simplified IT architecture, streamlined and automated processes, and end-to-end visibility of key aspects of the business, there will also be modules for a new cloud-based human capital management (HCM) capability to help ASRY deliver streamlined workforce processes, and a new customer relationship management (CRM) module.

Grab to list in US through record $53.2 billion Spac merger with Altimeter

Grab’s partnership is expected to be the largest US equity offering by a Southeast Asian firm

By: Tricia Ang | 14 April 2021

Photo from The Straits Times

Grab Holdings, the Southeast Asian ride-hailing and food-delivery giant, revealed on Tuesday (April 13) that it plans to go public in the United States through a merger with US-based Altimeter Growth Corp.

Grab’s partnership is expected to be the largest US equity offering by a Southeast Asian firm, with a market value of about US$39.6 billion (S$53.2 billion) 

The merger with the special purpose acquisition company (Spac) of investment firm Altimeter Capital Management is expected to provide up to US$4.5 billion in cash proceeds to Grab, the Singapore-headquartered company added in a press statement.

In the coming months, the merged entity expects to list its securities on the tech-rich Nasdaq Composite Index.

Grab group CEO and co-founder Anthony Tan said: “It gives us immense pride to represent South-east Asia in the global public markets.

“This is a milestone in our journey to open up access for everyone to benefit from the digital economy. This is even more critical as our region recovers from Covid-19.”

Grab’s formal announcement on Tuesday follows recent media reports that it was in talks with Altimeter on a Spac merger in order to list in the United States.

Grab received over US$4 billion in cash from a fully committed private investment in public equity led by Altimeter Capital Management and including Singapore state investor Temasek and leading Indonesian family groups.

T.Rowe Price Associates, Fidelity International, and Mubadala, the sovereign wealth fund of the United Arab Emirates, are among the other PIPE participants.

Altimeter is investing a total of US$750 million in the company, accounting for roughly one-fifth of the new funds raised.

Altimeter founder and CEO Brad Gerstner said: “As one of the world’s largest and fastest-growing internet companies, Grab is paving the digital path forward for the 670 million citizens of South-east Asia. 

“We are thrilled that Grab selected Altimeter Capital Markets as their partner to go public and even more excited to become sizeable long-term owners in this innovative, mission driven company.”

Altimeter has also committed up to US$500 million to a contingent investment equal to the total dollar amount of Spac shareholder redemptions. Its sponsor shares are subject to a three-year lockup period, and it is also contributing shares to Grab’s GrabForGood fund, which seeks to implement programs with long-term social and environmental impact.

Mr Tan said that this demonstrates the aligned values which the two companies share: “They’re joining our journey for the long-run, together with an incredible day one cap table of renowned institutional investors and sovereign wealth funds. 

“This is testament to the global investment community’s belief in the long-term value proposition of Grab’s superapp strategy and the exciting growth potential of South-east Asia.”

Office space availability in Hong Kong soars to record-breaking high

14% of office spaces were untenanted in Q1.

By: Tricia Ang | 13 April 2021

Photo by @braydenlaw on Unsplash

In Q1 2021, overall office space availability in Hong Kong hit a new high of 14%, the highest since Q2 2004. According to the latest study by Cushman & Wakefield, this has been led by larger occupiers such as multinational corporations (MNCs) giving up office space during the pandemic period.

Citywide rents went down 24.4% from the last peak in Q1, 2019, and Greater Central rentals dropped by 29.1% from the last peak values recorded in the same period.

“Although we see positive sentiment in Hong Kong building up gradually with vaccination in place, occupiers remained cautious and are still in the process of shopping for more cost-effective office options with favourable lease terms,” Cushman & Wakefield executive Director & head of office services, Hong Kong Keith Hemshall said. “We expect this downsizing process will continue for a few more quarters, thus driving [the] availability rate further upward till [the] end of 2022.”

Office space being surrendered amounted to 724,000 sq. ft. in Q1 2021, and mainly came from MNCs across sectors such as consumer products, manufacturing & sourcing (34%), banking & finance (23%), and professional services & real estate (21%).

Meanwhile, negative net absorption reached a new peak of 900,000 square feet in Q1. Rental decreases were the most significant in the Greater Central submarket, according to Cushman & Wakefield, with a -21.4 percent YoY fall.

“With record high negative net absorption, any new supply coming up in the market is likely to drive further rental decline,” Cushman & Wakefield managing director, Hong Kong John Siu said.

Axiata, Telenor in advanced talks to merge operations in Malaysia

The new company would be called Celcom Digi

By: Tricia Ang | 13 April 2021

Photo from The Edge Markets

Axiata Group and Norway’s Telenor ASA, Malaysian telecoms firms, are currently in advanced talks to merge their mobile operations in Malaysia.

Both companies stated that they were discussing the merger of the telco operations of Celcom Axiata Berhad and Digi.Com, in which the parties would have equal ownership estimated at 33.1% each.

The other shares goes to Malaysian institutional investors, who would own at least 17.9% of the shares in the new company and ensuring that the overall local ownership exceeded 51 per cent, Axiata said.

The company would be called Celcom Digi.

Reuters reported earlier on Thursday that Axiata and Telenor were set to announce a deal involving the Malaysian mobile operations of both firms.

As part of the deal, Axiata is set to receive newly issued shares in Digi, a cash consideration from new debt in the merged company of about US$400 million and a further US$70 million from Telenor Group, according to Telenor.

“A transaction will realise synergies and provide value for shareholders in line with our strategy of further developing Telenor’s Asian portfolio,” Telenor said in a statement.

Telenor, the Norwegian company, is the largest shareholder in Digi, operates in other  Asian countries such as Thailand, Bangladesh, Myanmar and Pakistan.

Axiata said the merged company aimed to be “a leading telecommunications service provider in Malaysia in terms of value, revenue and profit”, and was expected to have proforma revenue of about RM12.4 billion (S$4.02 billion).

It was expected to have earnings before interest, taxes, depreciation and amortisation of about RM5.7 billion, and an estimated 19 million customers.

Trading in shares of Digi and Axiata was suspended earlier in the day pending the announcement.

In September 2019, Telenor and Axiata called off a proposed deal to create a telecoms joint venture with nearly 300 million customers across South and South-east Asia, blaming “complexities”.

And last year Telenor said it was combining its Asian operations into a single entity under new leadership to be better placed to pursue deals in the region.

Digi is Malaysia’s second largest mobile services provider by subscribers, while Axiata’s domestic unit Celcom, is the third largest.

Central bank projects Malaysian economy to grow 6-7.5% in 2021

Slow and steady path to recovery 

By: Tricia Ang | 13 April 2021

Photo by @esmonde on Unsplash

Malaysia’s economy will likely grow by 6 to 7.5 % this year, rebounding from last year’s contraction, thanks to improved external demand and increased investment and production, the central bank said on Wednesday.

According to Bank Negara Malaysia’s annual report, GDP will return to pre-Covid-19 levels by mid-year, though the ongoing pandemic poses a downside risk.

In the paper, Governor Nor Shamsiah Mohd Yunus said, “The path of recovery will be gradual and uneven across economic sectors, and it may encounter speed bumps along the way.”

The central bank had earlier projected a growth range of 6.5 per cent to 7.5 per cent.

Malaysia’s economy shrank 5.6 per cent in 2020, suffering its most acute full-year contraction since the Asian Financial Crisis in 1998.

Monetary policy will remain accommodative in 2021, according to the central bank, to support a sustained economic recovery following the pandemic.

It also stated that it intended to increase its focus on digital economy initiatives, such as digital bank licensing and online payment services.

New opportunities for Singapore, Indonesia firms to collaborate


Singapore and Indonesia stand strong together to overcome the pandemic.

By: Tricia Ang | 6 April 2021

Photo by Afif Kusuma on Unsplash

Singapore is set and ready to work closely with Indonesia to surface stronger from the global pandemic, announced Trade and Industry Minister Chan Chun Sing on Thursday, with similar sentiments from Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto.

Both ministers were at a webinar, speaking to a group of entrepreneurs and officials from Indonesia and Singapore.

The event was co-hosted by the Singapore Economic Development Board and the Indonesian embassy, in partnership with McKinsey & Co.

“I’m glad that Singapore and Indonesia continue to share strong bilateral ties, underpinned by a robust economic partnership,” said Mr Chan.

He highlighted that Singapore continues to be Indonesia’s top source of foreign investment, accounting for over US$7 billion in realised investments in the first three quarters of 2020.

“Both sides hold complementary strengths of strong manufacturing bases, centres of innovation and global connectivity,” he added.

“Together, we can capture new opportunities in Industry 4.0 adoption for the manufacturing sector, and the digital upskilling of micro, small and medium-sized enterprises (SMEs).”

Mr Chan pointed to examples of initiatives such as the Singapore-Indonesia Bilateral Investment Treaty and the Avoidance of Double Taxation Agreement as both governments have been working in partnership to boost the attractiveness of their respective economies. “We stand ready to work with you to capitalise on opportunities present in both Singapore and Indonesia,” he told participants.

Mr Airlangga expressed his excitement to collaborate with Singapore, which he called a “long-time and important partner”.

In the beginning of this month, vaccinations for Indonesia’s healthcare workers and the elderly, and mass vaccinations are starting from April. Mr Airlangga also shared that Indonesia was heading into 2021 with optimism.

“Indonesia remains an exciting prospect,” he said. “Our large market is still growing, and digitalisation and young demographics provide many opportunities to boost innovation and further strengthen resilience.”

Mr Airlangga cited two major initiatives as examples of progress made in maximising Indonesia’s economic potential. These are the “Omnibus Law” – a bill to overhaul economic laws and regulations, making Indonesia a more business-friendly destination – and the creation of Indonesia’s first sovereign wealth fund, the Indonesia Investment Authority.

In a straw poll conducted later in the event, the vast majority (95% of approximately 175) of attendees polled saw “many synergies” in business collaboration between Singapore and Indonesian companies. However, half of them said they were facing implementation challenges, while 21% said they did not know where to start.

Darius Tan, assistant chief executive of the Singapore Business Federation, said during a panel that the chamber’s GlobalConnect@SBF initiative was supporting SMEs in Singapore and Asean, by helping them land commercial deals.

He also attested to increasing interest from Singapore businesses to work with Indonesian ones, in sectors such as SME microfinancing, upskilling, technology solutions and healthcare.

Credit: The Business Times

Singapore-based Neobank Launches in the Philippines

Tonik is the first digital-only Neobank in the Philippines

By: Tricia Ang | 6 April 2021

Photo from YugaTech

The opportunity is ripe for the Tonik, the first digital-only bank in the country as Indonesia has a population of over 275 million, with 70% currently unbanked. Tonik is headquartered in Singapore, and is backed by venture capital funds including Sequoia India and Point72.

Neobank, Tonik hopes to disrupt the traditional banking sector and has launched out its long-awaited deposit, payment, and card products to consumers in the Philippines.

The digital-only bank aims to boost financial inclusion, as unbanked customers set up an account within 5 minutes through its mobile application. The app comes with a virtual MasterCard debit card. Accounts can be topped up via interbank transfer, debit card, or in cash at close to 10,000 retail agents across the country. 

Tonik said its use of technology is a game-changer as it will dramatically cut operating costs, and allows it to offer competitive interest rates and not to charge unfair fees to customers. It plans to expand its offer to include a physical debit card and to allow customers to take out an all-digital consumer loan. 

“We expect our proposition for the #NeoNormal to resonate particularly strongly with the “digital natives” in the Philippines, who constitute most of the population” Long Pineda, president of Tonik Digital Bank, said in an announcement on Friday.

CIMB Restructuring exercise sees dismissals in Singapore


Three business heads have been let go

By: Tricia Ang | 31 March 2021

Photo from Financial Times

The ASEAN universal bank is revising its strategy to emphasise sustainable growth, in line with the group’s vision to be a leading focused Asean bank.

 As part of its restructuring exercise, CIMB Singapore plans on laying off staff and will close its Orchard Road branch. This will optimise its functional set-up and leverage its group strengths through regionalization.

“These will make us more resilient, more productive and better positioned for growth going forward,” CIMB Singapore chief executive Victor Lee said in an internal memo seen by The Business Times. 

Re-focus in Singapore

CIMB Singapore will be positioned as an Asean banking hub for the group, focusing on wealth management, SME (small and medium-sized enterprises) banking, regional corporates and treasury and markets. The bank had about 1,200 staff in Singapore. After the restructuring, only its Raffles Place branch will remain.

“Singapore is a core and important market to the CIMB Group, and we will continue to invest in our key growth areas” CIMB Singapore said in a statement.

Following a review of its operations, CIMB let go of three of its business heads in Singapore in November 2020, citing poor performance brought about by the pandemic.

CPA Australia: Singapore’s small businesses more resilient compared to counterparts in Southeast Asia


Research finds Singapore’s small businesses are more optimistic on growth for 2021.

DigitalCFO Newsroom | 30 March 2021

Image by @Ivnatikk on Unsplash

Many Singapore’s small businesses had a tough time last year due to COVID-19. But according to global professional accounting body CPA Australia, local companies were less impacted than their counterparts in Southeast Asia.

Small businesses in Singapore were also most likely to report that government support or incentives had a positive influence on their businesses and that they had utilized such measures last year.

These are among the new findings from CPA Australia’s annual survey of small businesses in 11 Asia-Pacific markets, including Singapore.

The survey findings reported that 55% of Singapore’s small businesses said the pandemic had impacted them negatively. However, this figure is lower than for small businesses in Malaysia (67%), Vietnam (81%) and Indonesia (68%).

29% of Singapore’s small businesses said the government’s support measures had a positive influence on their businesses in 2020, while 27% sought out government support as a major response to COVID-19.

“The data suggests that the combination of fiscal, monetary and other measures, mounted by the Singapore government in response to COVID-19, helped small businesses navigate the worst recession that the country has faced in over 50 years and cushioned businesses from the worst of the impact,” said Mr Max Loh, CPA Australia’s Singapore Divisional President.

In 2020, the government funded approximately S$100 billion in stimulus measures to support local enterprises and the economy, while at the same time saving jobs.

More of small businesses in Singapore (53%) are optimistic about their growth prospects in 2021 compared with counterparts in developed markets like Hong Kong (21.2 %), Australia (41.4 %) and New Zealand (44 %).

Singapore’s small businesses are planning to increase their focus on innovation this year. Nearly 19% say they will introduce a new product, process or service that is unique to their market or the world in 2021, compared with 13.4% last year and 13.9% in 2019.

“Innovation is likely to result in business growth especially in an increasingly competitive and disruptive business environment. Small businesses will do well to continuously improve their product offerings, customer service or accessibility in order to thrive,” said Mr Loh.

Amist the pandemic, many small businesses digitalized their operations and worked in new ways in order to make ends meet.

More (84.6%) small businesses in Singapore used social media to promote their business last year, as compared to 71.2% in 2019. Only a quarter of businesses surveyed did not earn any revenue from online sales in 2020, a reduced number from 39% in 2019.

Singapore’s small businesses also quickly adopted new digital payment technologies. More than eight in ten (84.8%) received payment through platforms such as Grabpay, Dash, Pay Lah in 2020, up from 70.6% in 2019.

Profit is helping to drive this focus on technology. Over 38% of small businesses that invested in technology in 2020 reported these investments were already profitable, up from 35.1% in 2019.

There is a growing awareness of cyber risks among Singapore’s small businesses. Nearly four in ten (39.5%) reviewed their cybersecurity defences in the past six months and 36.5% expect the possibility of a cyber-attack on their business this year, up from 29.5% in 2020.

“The focus on technology is one factor that should support the recovery and long-term growth of Singapore’s small businesses. Contributing to this positive trend is Singapore’s excellent technology infrastructure and support for digital adoption given by the government to small businesses. Yet, with greater digitalisation, the risk of cyber-attacks increases. Managing cyber risks will help small businesses protect their operations and customers’ data, and importantly, build trust and reputation,” said Mr Loh.

The annual survey polled 4,227 small businesses in 11 Asia-Pacific markets, with 307 respondents from Singapore.

CPA Australia recommends Singapore small businesses consider the following measures:

  • Consult a trusted professional adviser to improve recovery and growth prospects.
  • Innovate to ensure business remains competitive.
  • Improve internal cashflow management to reduce reliance on external financing.
  • Incorporate technology into business operations.
  • Make cyber-security a focus.

People’s Bank of China and SWIFT join hands

The People’s Bank of China unveiled plans for a joint venture with SWIFT, the global provider of secure financial messaging services.

Tricia Ang | 29 March 2021

The PBoC’s joint venture plans to build a localized messaging network for a more stable connection between Chinese financial institutions and the main SWIFT network, according to a statement from the central bank that highlighted issues, particularly from small mainland lenders. 

A data warehouse will also be established to store, monitor and analyze cross-border messaging information for easier risk control.

The joint venture – Finance Gateway Information Services Co. – was established in Beijing earlier this year. In addition to the PBoC, other shareholders include CIPS (Cross-border Interbank Payment System), PCAC (Payment & Clearing Association of China) and CNCC (China National Clearing Centre).

SWIFT Reversal

PBoC’s decision to partner with SWIFT contrasts with a Bank of China International (BOCI) report last year. The report urged against reliance on SWIFT due to political risks in favor of CIPS, which is now a shareholder of the new joint venture.

“A good punch to the enemy will save yourself from hundreds of punches from your enemies” said the report which was co-authored by Guan Tao, BOCI chief economist and former director at State Administration of Foreign Exchange’s (SAFE) international payments department.

Australian Job Board Seek Appoints CFO

Kate Koch is Seek’s new Chief Financial Officer

Tricia Ang | 29 March 2021

Photo from Wikipedia

Australian job board, Seek, announced its appointment of Kate Koch as Chief Financial Officer in mid-march of this year.

Koch replaces predecessor Geoff Roberts, whose step down from Seek, (effective 30 June 2021) was announced in January.

Photo from RMIT University

Koch is currently the CFO of RMIT University, holding the role since 2017. Prior to the role she had vast international experience as a senior finance executive in publishing, retail, and media industries. She was previously Senior Vice President at Pearson PLC, CFO at Pearson Asia Pacific, Group Head of Finance & Performance at Tesco PLC, Senior Vice President at Pearson PLC, and Chief Financial Officer of the Financial Times Group.

Incoming Seek CEO Ian Narev said, “Kate has experience across multiple industries, geographies, and finance roles. She understands how to lead large finance teams in multinational businesses that operate in highly competitive markets.”

“Through this range of roles, she has distinguished herself as a caring and values-driven leader, who builds diverse, high-performing teams. She has been attracted by Seek’s purpose and values, and by its growth potential. We feel very fortunate that she has chosen to join Seek, to lead the committed and talented team that Geoff Roberts has developed.”

Koch will join the Seek Executive Team on 10 June 2021.