ADB pledges continued support for region amid growing uncertainty
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CNA
6 hours ago
- CNA
Thailand-Cambodia tensions: US, China send representatives to join border talks in Malaysia
Defence ministers from Thailand and Cambodia will meet on Aug 7 in Malaysia on the final day of ongoing talks to keep alive a tenuous truce reached late last month. This is their first face-to-face meeting after hostilities broke out two weeks ago. What started as a border conflict between two ASEAN neighbours has now also seen an active interest from both the US and China. Defence ministers from Thailand and Cambodia will meet on Aug 7 in Malaysia on the final day of ongoing talks to keep alive a tenuous truce reached late last month. This is their first face-to-face meeting after hostilities broke out two weeks ago. What started as a border conflict between two ASEAN neighbours has now also seen an active interest from both the US and China.
Business Times
9 hours ago
- Business Times
‘New Keppel' shows promise; M1 sale and green projects could stir more excitement
[SINGAPORE] Once the world's largest offshore rig builder, Keppel is doubling down on efforts to transform into an asset manager – most recently with its plans to divest a S$14.4 billion portfolio of non-core assets . The move carries the promise of a more streamlined focus and resilient earnings growth. Further catalysts that investors can look out for include the potential sale of M1's consumer mobile business, as well as Keppel's green energy projects, riding on the momentum of the Asean power grid. But whether investors will eventually re-rate Keppel to trade at the richer valuations of global asset managers – such as KKR and Blackstone – remains to be seen. In its latest earnings on Jul 31, Keppel announced that it will 'substantially' monetise a portfolio of non-core assets by 2030. The portfolio includes legacy offshore and marine assets, residential land bank, certain property developments and S$2.9 billion of embedded cash and receivables. The market is certainly upbeat. News of the divestment, coupled with a S$500 million share buyback, lifted Keppel's share price to a six-year high on Jul 31. At least 10 analysts now have 'buy' calls on Keppel, of whom seven have upgraded target prices in the past week. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up DBS Group Research analyst Ho Pei Hwa said that Keppel offers a 'unique and unrivalled proposition as a global asset manager', and upgraded her target price to S$10, from S$9 previously. She projects an 8 per cent compound annual growth rate for core earnings over the next two years, while noting that the company looks set to hit its target of S$100 billion in funds under management ahead of the 2026 deadline. Phillip Capital's research head Paul Chew expects an 'earnings spurt' over the next two to three years. He sees growth in 2026 being driven by three projects: real estate development Keppel South Central, the Keppel Sakra Cogen power plant and the Bifrost Cable System, with subsea cables that connect Singapore directly to North America. Potential M1 sale In the near term, there are other catalysts that investors can look out for. One is the potential sale of telco M1's consumer business, which Keppel chief executive Loh Chin Hua indicated the company remains open to, during an earnings briefing on Jul 31. Such a sale is likely to cheer the market. CGS International analysts estimate M1's consumer business to be worth between S$700 million and S$900 million, and see its divestment as a potential re-rating catalyst. Chatter about the sale of M1 has been long ongoing, with fresh talk about a potential merger with StarHub surfacing last year. The telco market is 'overcrowded', with four operators and about seven mobile virtual network operators, noted Manjot Singh Mann, the CEO of Keppel's connectivity segment, at the briefing. Many SIM-only plans are replacing contract plans, diluting average revenue per user across the industry. Consolidation may then be only a matter of time, and a fruition of long-held expectations would certainly be a positive. At the same time, Keppel stands to benefit from retaining M1's enterprise business, which complements its data centres. '(We) do see a lot of organisations digitalising their businesses and looking for either hybrid cloud or multi-cloud solutions. So, that is where we do see synergy between our enterprise business and our data centre business,' said Mann. Asean grid opportunities Another catalyst that investors can look out for is Keppel's efforts to import renewable energy and contribute to the building of an Asean power grid, even amid the US-led backlash on green projects and the threat of tariffs. A significant tailwind is Singapore's plans to import 6 gigawatts (GW) of low-carbon electricity by 2035. Keppel already has two projects contributing to this effort. In 2023, its unit Keppel Energy secured conditional approval from Singapore's energy authority to import 1 GW of clean energy from Cambodia. Last year, Keppel Energy also secured a conditional licence to import 300 megawatts (MW) of solar power from Indonesia. A conditional approval and conditional licence are the first and second steps, respectively, towards obtaining a full licence for energy import projects. With the two projects, Keppel has unlocked 'very large-scale' opportunities, said Cindy Lim, CEO of the infrastructure business, on Jul 31. For instance, the 300 MW Indonesia project translates to an upstream generation capacity of about 2 to 2.5 GW of photovoltaic systems, as well as 5 gigawatt-hours of battery energy storage. 'The opportunities for an Asean power grid are very promising... We see Keppel as a front runner in this regard, and we will be playing our part to work with regulatory authorities across Asean, as well as with agencies in Singapore, to make this happen,' noted Lim. Keppel is also building Singapore's first hydrogen-compatible power plant: the 600 MW Keppel Sakra Cogen Plant on Jurong Island, which is set to commence operations in the first half of 2026. Lim disclosed that Keppel may 'give a positive surprise' by bringing the Sakra plant onstream earlier. The plant will expand the company's generation capacity by nearly 50 per cent, from 1.3 GW to 1.9 GW. These projects could lift Keppel's infrastructure division, which saw a 12 per cent fall in revenue to S$2 billion for the first half of 2025, due to lower net generation in the integrated power business. The segment's net profit was down 4.9 per cent, at S$346.6 million. CGS International sees infrastructure as the 'clear driver' for 'New Keppel'. To be sure, Keppel's green power efforts come in the face of significant headwinds. Global sentiment on renewable energy has cooled, with the US doubling down on oil and gas. Tariffs remain another big wild card in this business. That said, South-east Asia's march towards renewable energy has been undeniable, with the improving economics of solar energy and the clear need for energy security. Keppel's ability to ride this trend could prove to be a long-term growth catalyst. Valuation boost? At the earnings briefing on Jul 31, Loh suggested that Keppel could be compared to global asset managers KKR, Brookfield, BlackRock and Blackstone. He also expressed hope for a re-rating of the stock. 'As we accelerate the growth of 'New Keppel', we expect that the market will re-rate our stock price and accord us a growth multiple,' he said. It will be worth observing if the current market bullishness translates to richer valuations over time. Keppel now trades at 17.2 times earnings – still some way behind BlackRock, which trades at 27 times earnings, Blackstone at 44.9 times and KKR at 65.1 times. Whether investors will value Keppel at the levels of these asset management giants could depend on the pace and execution of the non-core asset divestments.
Business Times
10 hours ago
- Business Times
Vietnam's robust domestic activity in July buoys growth amid trade strains
[HO CHI MINH CITY] Vietnam's domestic economic activity was buoyant in July, supported by robust spending and investment, while exports braced for a potential slowdown in the coming months as higher US tariffs kick in on Aug 7 . Estimates from the Vietnamese government's statistics agency (NSO) on Wednesday (Aug 6) pointed to retail sales having grown by 9.2 per cent in July, accelerating from the eight-month low of 8.3 per cent in June. In the first seven months of 2025, retail activity expanded by 9.3 per cent year on year, stronger than the year-ago period's 8.9 per cent. This underscores 'resilient private spending, driven in part by strong real wages', noted Adam Ahmad Samdin, economist at Oxford Economics. Credit growth also hit a 10-year high – 9.64 per cent – in the year to Jul 28, indicating robust economic activity, he added. Vietnam's central bank on Tuesday (Aug 5) even urged lenders to further slash interest rates and keep deposit rates stable to boost lending and support the country's growth target. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The Vietnamese government is targeting economic growth of 8.3 to 8.5 per cent in 2025, up from 7.09 per cent in 2024. On the production front, soft data from S&P Global's latest purchasing managers' survey for July showed that strengthening domestic demand drove new orders, which expanded for the first time in four months, growing at the fastest pace since November 2024. While new export orders remained in contraction for the ninth consecutive month due to the US tariff hikes, manufacturers secured sufficient domestic business to return total new orders to growth. Foreign and government investments have also accelerated, supporting the country's growth outlook this year. In a recent note, Maybank analysts, citing the improved business landscape resulting from reduced red tape and a more predictable legal environment, wrote: 'The steady rollout of private-sector reforms will cushion the headwinds to external trade from the US tariffs by promoting domestic investment and enhancing competitiveness for foreign direct investment (FDI).' Public investment disbursement in the first seven months came in at 388 trillion dong (S$19 billion), almost 40 per cent of the sum for the full-year plan. This is a marked increase from the 27.8 per cent for the corresponding period in 2024. Disbursed FDI from January to July also hit the highest level for a seven-month period in at least nine years, rising by 8.4 per cent from the year before, to US$13.6 billion. FDI pledges, which indicate future inflows, grew 27.3 per cent year on year to hit US$24.09 billion. Given that the 20 per cent US tariff on Vietnam is now broadly on par with the 19 per cent imposed on other key Asean exporters, 'Vietnam's comparative advantage as a favoured investment destination remains', said Yun Liu, Asean economist at HSBC. Export growth likely to ease Exports in July continued to grow strongly, at 16 per cent year on year, bringing the year-to-July turnover to US$42.27 billion. This was driven largely by shipments in two sectors – that for computers and electronics, and for machinery and equipment. In the first seven months, Vietnam recorded a trade surplus of US$10.2 billion, with exports and imports expanding by 14.8 per cent and 17.9 per cent, respectively. In line with the robust export performance, industrial production rose by 8.5 per cent from the same period last year. 'We expect export momentum to slow, given that the tariff-pause is slated to end on Aug 7,' said Oxford Economics' Samdin. He pointed out that front-loaded orders had temporarily boosted exports ahead of the tariff deadline, so he is expecting a payback effect in the coming period. Uncertainties also persist, largely due to the lack of clarity on the definition of 'transhipment' – such goods will be subject to a higher 40 per cent tariff imposed by the US – as well as upcoming sector-specific levies. HSBC's Liu added: 'Downside risks to (Vietnam's) growth have not faded in this challenging trade environment, as the situation remains fluid.'
