2013 Feb 28
February 28, 2013

Asean struggles to keep high savings

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Countries in the Association of South-East Asian Nations (Asean) are still struggling to keep their high savings and surpluses within their borders, according to a rating agency official.

Standard & Poor’s (S&P) Rating Services managing director (MD) for Asean, Surinder Kathpalia said global market volatility and investor preference for liquid assets have lured many into perceived “safe haven” investments elsewhere, including low-yielding government bonds in the US, Germany, Japan and Switzerland.

“This outflow of Asian savings and reserves comes at a time when Asean is struggling to keep up with the massive and escalating needs in infrastructure and development for the region’s surging population,” he said.

Citing Asian Development Bank figures, he said crossborder debt investments across Asia in 2010 formed just 7.2% of the region’s total debt holdings, up from 4.2% in 2001. Savings exceed investments in aggregate across Asean by 5%-10% of gross domestic product.

The need for regional saving to finance the investment needs of Asean nations will be the key topic of discussion at a half-day S&P seminar in Kuala Lumpur tomorrow.

The Asean Capital Markets Seminar will also look at the credit trends at Asean’s corporates, financial institutions and sovereigns.

The seminar keynote speaker is Minister in the Prime Minister’s Department Datuk Seri Idris Jala.

Among the presenters are Nikko AM Asia Ltd portfolio manager for fixed income Ken Hirose, CIMB Principal Asset Management deputy chief execut ive officer Muni rah Khairuddin, PricewaterhouseCoopers associate director for capital projects and infrastructure Helmi Abdul Jabar and S&P MD for Asia-Pacific affiliate network Michael Petit
Habhajan Singh, http://themalaysianreserve.com/main/news/corporate-malaysia/3159-asean-struggles-to-keep-high-savings