Global demand jumps for emerging Asia bonds on rate-cut bets, FX
[HONG KONG] Global investors are extending their purchases of sovereign bonds in emerging Asia on rate-cut wagers and stronger local currencies.
Foreign funds bought US$2.9 billion in Malaysia conventional government bonds in May, according to Bank Negara Malaysia's latest data, the largest monthly inflow since October 2013. Their purchase of a net US$652 million of listed bonds in South Korea on Jun 5, marked the longest buying streak in more than two years, according to Financial Supervisory Service data.
The inflows came as most emerging-Asian currencies strengthened this quarter, buoyed by an extended decline in the US dollar due to waning US exceptionalism and de-US dollarisation concerns. Growing expectations of lower borrowing costs in the region are also aiding bond sales, with issuers racing to secure financing ahead of any further wobbles in global markets.
Traders are increasingly betting that Malaysia, South-east Asia's last holdout against interest rate cuts, will finally pivot to boost its economic growth amid trade uncertainties. The Bank of Korea cut benchmark rates by 25 basis points at May-end, while signalling more policy easing as US trade tariffs hit growth.
Global investors have also poured US$1.7 billion and US$2.1 billion, respectively, into Thailand and Indonesian bonds since April, putting them on track for their largest inflows in at least three quarters. The demand has driven sovereign yields lower, with Thailand's 10-year benchmark falling to the lowest in nearly four years, while the similar Indonesia note is hovering close to a low in November.
In South Korea, clarity over the political landscape is also lifting the prospect for the country's assets after months of leadership vacuum. This, in tandem with the forthcoming addition into FTSE Russell's World government Bond Index are buoying demand despite lingering concerns over additional debt supply to fund President Lee Jae-myung's fiscal spending plans.
The benchmark Kospi Index climbed almost 2 per cent on Monday (Jun 9), leading gains in Asia, while Malaysia's main stock index rose by as much as 0.3 per cent. Global trade optimism was buoyed on Monday as top trade officials from US and China are set to hold fresh talks in London. BLOOMBERG
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Business Times
2 hours ago
- Business Times
Indonesia revokes licences of four nickel miners in tourism hot spot Raja Ampat amid environmental backlash
[JAKARTA] The Indonesian government has revoked the mining licences of four nickel producers operating in the ecotourism hot spot of Raja Ampat, Papua, in response to public protests over environmental concerns. The nickel companies – Nurham, Kawei Sejahtera Mining, Anugerah Surya Pratama and Mulia Raymond Perkasa – have been operating on multiple islands within and around the ecologically sensitive Raja Ampat region in Indonesia's eastern archipelago. Public pressure Their activities have sparked significant concern among local communities and environmental groups, due to the area's rich biodiversity and status as a renowned ecotourism destination. Mining activities have sparked significant concern among local communities and environmental groups, due to the Raja Ampat's rich biodiversity and status as a renowned ecotourism destination. PHOTO: AFP On Tuesday (Jun 10), Energy and Mineral Resources Minister Bahlil Lahadalia stated that the revocation was due to the four companies' failure to comply with administrative regulations and submit their work plan proposals, particularly for operations within the geopark conservation area. 'We have to protect our marine life and conservation areas,' he said, adding that the government withheld production quotas from these companies due to their non-compliance, effectively halting their operations. However, the permit of Gag Nikel – a nickel miner and subsidiary of state-owned Aneka Tambang (Antam) – will be temporarily suspended but not revoked, as the company operates outside the designated geopark, Bahlil explained. He added that the government will maintain close and thorough oversight of Gag Nikel's activities, ensuring strict compliance with regulatory standards. 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 Gag Nikel holds a quota to mine up to 3 million tonnes of nickel ore annually. The government's statement comes amid growing public scrutiny and pressure from environmental organisations such as Greenpeace, which recently released an analysis revealing that mining activities on Gag island, Kawe, and Manuran have led to the clearing of over 500 hectares (ha) of forest. Raja Ampat is renowned for its coral reefs, which play a crucial role in sustaining its global reputation as a premier destination for divers. PHOTO: AFP Greenpeace further pointed out that soil run-off from these mining activities resulted in sedimentation, posing a serious risk to the fragile coastal ecosystems. This includes the region's renowned coral reefs, which play a crucial role in sustaining Raja Ampat's global reputation as a premier destination for divers. The hashtag #SaveRajaAmpat has been trending on social media, with the Indonesian public calling on the government to re-evaluate mining activities in the region. Government documents reveal that the four companies obtained mining permits for areas ranging between roughly 1,000 and 3,000 ha in Raja Ampat, with their licences issued before 2017 – prior to the official designation of the region as a geopark. Maintaining a balance This timing raises complex questions about the balance between existing mining rights and evolving environmental protections. A view of Gag Nikel's mining operations in Gag island. Indonesia, which produces 1.8 million tonnes of nickel annually – nearly half of the world's supply – has made bold investment moves since implementing a 2019 ban on raw nickel exports. PHOTO: REUTERS Meidy Katrin Lengkey, secretary-general of the Indonesian Nickel Miners Association, said the revocation should serve as an opportunity to improve coordination among government agencies. 'We hope the government can create a regulatory ecosystem that is well-coordinated across institutions and ensures business certainty, while still prioritising environmental, social and governance considerations,' she said. Indonesia, which produces 1.8 million tonnes of nickel annually – nearly half of the world's supply – has made bold investment moves since implementing a 2019 ban on raw nickel exports. The policy, introduced under then president Joko Widodo's administration, is designed to boost domestic processing and ensure more value is retained from the country's vast mineral wealth. The strategy has drawn billions of dollars in foreign investment, particularly from China, positioning Indonesia as a critical player in the global electric vehicle (EV) supply chain. However, Indonesia's rapidly expanding nickel mining industry – driven by surging global demand for EV batteries and green technologies – has also sparked serious environmental and labour concerns, particularly in resource-rich yet ecologically sensitive regions such as Sulawesi, Maluku and Halmahera.
Straits Times
2 hours ago
- Straits Times
Indonesia expels 4 miners from Raja Ampat, lets one company stay
PT Gag Nikel is the fifth firm implicated and was allowed to continue operations. Its mining site is on the 6,000 ha Gag island. PHOTO: REUTERS Indonesia revokes licences of four nickel miners in Raja Ampat, allows one to continue - The Indonesian government has revoked the business licences of four nickel mining companies operating on the small islands within Raja Ampat, a Unesco site, for breaches related to a permit regulating forest use – it is the latest response to the discovery of illegal works in the country. However, calls from the international environmental community for a full ban on mining activities in the world-renowned marine biodiversity site still persist. On June 10, energy and mineral resources minister Bahlil Lahadalia told reporters after a meeting with President Prabowo Subianto that the four firms in question were all in the first steps of operations, namely the exploration stage that involves identifying potential areas of nickel deposits. Meanwhile, a fifth company, which is being looked into, has started production – this process involves concentrating, smelting and refining the nickel. It has been allowed to continue but is subject to strict monitoring from the government, said Mr Bahlil. Waste water management systems and air pollution are monitored, among other things. Apart from these five companies, there are other existing mining companies operating in Raja Ampat. Indonesia's 2014 coastal areas and small islands management law prohibits mining activities in islands of 2,000 sq km or smaller, like those in Raja Ampat. However, firms that meet certain austere requirements, including being able to give strong assurance that they will not affect the sea ecosystem, mangroves, reefs or any conservation areas, can be issued licences to carry out mining activities. The four companies whose licences were revoked are PT Anugerah Surya Pratama, PT Kawei Sejahtera Mining, PT Mulia Raymond Perkasa, and PT Nurham, said Mr Bahlil. The investigations and breaches were related to the Forest Area Utilisation Approvals, also known as PPKH permits. During the June 10 press conference, Mr Bahlil did not address questions related to why these firms were granted permits to operate in Raja Ampat. Besides a mining business permit, firms need a PPKH permit, which, among its terms, allows miners to use allocated areas of forest and also requires that they must later replant the forest area they operate in. China investor-owned PT Anugerah Surya Pratama, whose site is in the 746 ha Manuran island, allegedly operated without the required environmental management and waste water management systems. PT Kawei Sejahtera Mining, allegedly operated in a forest area beyond the area it was allowed to operate in under its PPKH permit. PT Mulia Raymond Perkasa did not possess a PPKH permit. PT Gag Nikel is the fifth firm implicated and was allowed to continue operations. Its mining site is on the 6,000 ha Gag island. The firm, a subsidiary of state-controlled mining company Aneka Tambang, was told on June 5 to halt mining temporarily amid public pressure. After the press conference, it can restart operations immediately. The decision to allow PT Gag Nikel to continue operations was made based on consultation with all stakeholders including the local community leaders, said Mr Bahlil on June 10, adding: 'President Prabowo has paid special attention to Raja Ampat and exerts serious efforts to keep Raja Ampat a world tourism spot.' Papuans holding placards, reading 'mining must fall', 'stop destroying our beloved homeland', and 'resist all forms of state policies that exploit Papua's natural resources and people', during a protest march in Sorong on June 10. PHOTO: AFP Environmental experts told The Straits Times that a total ban on mining activities on the Raja Ampat islets is the only way forward to protect the popular diving and ecotourism spot located in West Papua. Should any extractive activities continue, it could result in the extinction of the area's flora and fauna. Raja Ampat , a Unesco Global Geopark site consisting of over 1,500 islets, is one of Indonesia's top destinations for diving and ecotourism . It is internationally recognised as part of the Coral Triangle that home to more than 500 species of coral and more than 1,400 species of fish . As a Unesco Global Geopark, it has to abide by certain regulations including conserving nature and maintaining sustainable tourism. The Coral Triangle is a global epicentre for marine biodiversity and encompasses the tropical waters around Indonesia, Malaysia, the Philippines, Timor-Leste, Papua New Guinea and Solomon Islands. 'We appreciate President Prabowo Subianto's firm act to shut those companies' operations, but more should be done,' Dr Fahmy Radhi, an energy economist at the University of Gadjah Mada and a former adviser to a minister, told The Straits Times. All mining should be banned in Raja Ampat, with no exceptions, he added, saying: 'Any mining anywhere produces environmental pollution. In Raja Ampat, there is so much at stake – natural forest, very rare flora and fauna.' Raja Ampat, a Unesco Global Geopark site consisting of over 1,500 islets, is one of Indonesia's top destinations for diving and ecotourism. PHOTO: AFP Greenpeace had earlier sounded the alarm on these illegal nickel mining activities when it released a June 3 report and videos highlighting the alleged violations against environmental regulations in the islets within Raja Ampat district including the Gag, Kawe and Manuran islands. Citing the report , Greenpeace forest campaigner Iqbal Damanik said the nickel exploitation in these islands has destroyed more than 500 ha of forest and vegetation. The exploitation has also caused sediment accumulation along the coastline of the small islands, which could potentially hurt coral reef and the Raja Ampat sea ecosystem. Maritime affairs expert Marcellus Hakeng Jayawibawa warned that if this issue is not addressed promptly, Raja Ampat could lose its Unesco Global Geopark status. The islets where these mining activities occurred are between 30km to 40km away from the Karst of Piaynemo, one of the most popular geological heritage spots within Raja Ampat. Raja Ampat is internationally recognised as part of the Coral Triangle that home to more than 500 species of coral and more than 1,400 species of fish. PHOTO: AFP During a June 5 visit to some of the affected islands, Mr Bahlil had said that the mining activities were 'quite a distance away'. He also said that there were no visible impacts and that locals there wanted to keep the mining operations going, for the sake of jobs. But environmental pollution as a result of mining activities can easily spread beyond that 30km to 40 km radius, said University of Gadjah Mada's Dr Fahmy. He also noted that exploration and exploitation mining works would have already begun shortly after some of these firms received their mining permits as far back as 2013 . While the matter is only receiving attention now, he expects that mining works and pollution would have already caused significant impacts, such as air pollution and sedimentation of the coastal areas . The Raja Ampat mining violations have also sparked a wave of outcry on social media, with netizens posting content and videos on social media criticising the lack of oversight or calling for government action. It has also resulted in the trending hashtag #saverajaampat. The Raja Ampat mining violations have sparked a wave of outcry on social media, with one video featuring young boys making impassioned pleas to the government. PHOTO: EMELDAPUTRI22/INSTAGRAM A video that has made the rounds features several young boys , against the backdrop of Raja Ampat, making impassioned pleas to the government. One of them says: '(When) I was little, I swam in crystal-clear seawater and listened to the cheerful chirping of birds. 'Now, the earth is scarred, the sea has turned murky brown, and the birds' songs are slowly fading. All of this is sacrificed for mining and money.' Wahyudi Soeriaatmadja has been Indonesia correspondent at The Straits Times since 2008, and is based in Jakarta. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
2 hours ago
- Business Times
Tencent Music to buy Chinese audio platform Ximalaya for US$2.4 billion
[BEIJING] Chinese music platform Tencent Music Entertainment Group said on Tuesday (Jun 10) it would buy long-form audio platform Ximalaya for about US$2.4 billion in cash and stock, expanding its library of content to attract more paying users. US-listed shares of Tencent rose 7 per cent in premarket trading. The company will offer US$1.26 billion in cash and Class A shares representing up to 5.20 per cent of its total outstanding stock. It will also issue shares to Ximalaya's founder investors not exceeding 0.37 per cent of its total share count. The stock component of the deal totals about US$1.15 billion based on Tencent Music's last closing price on April 24. Closely held Ximalaya counts Tencent, Baidu and Sony Group's music entertainment unit as backers. The company filed for a Hong Kong initial public offering in 2021, but pushed back the plan. The app-based online audio platform had 303 million monthly active users as of 2023, according to a separate listing application it filed last year. Tencent Music is one of the biggest online music entertainment platforms in China, with apps such as QQ Music, Kugou, Kuwo and WeSing, according to its website. REUTERS, BLOOMBERG
