WEDNESDAY, NOVEMBER 9, 2011 WEDNESDAY, NOVEMBER 9, 2011

CORPORATE MALAYSIA CORPORATE MALAYSIA

ThE MAlAYSiAN RESERVE ThE MAlAYSiAN RESERVE
SP Setia launches exclusive
residential project in Australia
Minister of Housing and Lo-
cal government Datuk Chor
Chee Heung officially launched
SP Setia Bhd Group's multi-mil-
lion residential project, Fulton
Lane in Melbourne on Monday.
It was witnessed by about 200
guests and prominent Malay-
sian government officials, in-
cluding Consul General Dr
Mohd Rameez Yahaya.
Located between Franklin
and A'Beckett streets, the 4,300
sq m site was bought last year
and SP Setia moved quickly to
establish Fulton Lane as a pre-
mium address in the CBD (cen-
tral business district).
Designed by Fender Katsalid-
is, headed up by award-win-
ning architect and current pres-
ident of the Architects Institute
of Australia, Karl Fender, the
A$470 million (RM1.52 billion)
Fulton Lane comprises two tow-
ers made up of 700 apartments
and is expected to complete in
2014.
A short walk from iconic
Queen Victoria Market and
close to RMIT, La Trobe Univer-
sity and Melbourne University,
Fulton Lane presents an attrac-
tive location for youngsters pur-
suing tertiary education.
SP Setia president and chief
executive officer Tan Sri Liew
Kee Sin said SP Setia came to
Australia to invest as much as
to learn.
The group has close working
relations with the Lend Lease
Group of Australia through its
Setia City Mall joint-venture
project in Malaysia.
Liew said the partnership has
exposed and attracted SP Setia
to "the very professional and
highly transparent Australian
working and business culture".
Melbourne is SP Setia's third
overseas venture after Vietnam
and Singapore. Liew said it was
a logical choice as there were
close to 30,000 Malaysian-born
people living in Melbourne.
Bernama
Asian bonds are luring investors
by FARAH SAAD
in resPOnse to the worsen-
ing economic conditions in Eu-
rope and the US, investors have
become unwilling to accept the
volatility usually associated
with mutual funds, and are
turning towards Asia for a so-
lution in the form of absolute
return funds.
These investors have been
seeking alternatives to falling
markets, with absolute return
funds garnering serious assets
as a result of an increased fo-
cus on capital preservation,
said Schroder Investment
Management Ltd head of Asian
fixed income Rajeev De Mello
in his report.
Absolute return funds offer
investors steady and modest
returns over a given time peri-
od regardless of the market
conditions, and Asian bonds
are starting to receive increas-
ing levels of attention.
"For a start, if you look at the
fiscal position of countries in
Asia, it is far stronger than
those of developed markets,
with far lower debt to gross do-
mestic product (GDP) ratios. At
the same time, the GDP growth
forecast for the Asia-Pacific re-
gion far outstrips those of the
eurozone, US, Japan and even
Latin America," said De Mello.
A head of research with a lo-
cal research house agrees with
De Mello on the attraction fac-
tor of Asian absolute return
funds.
"Asia GDP remains strong
and resilient despite slowdown
in the US and EU (European
Union)," he said.
In spite of Asian markets'
notorious volatility, the Asian
bond universe is composed of
highly rated countries such as
Singapore and Hong Kong,
which are rated AAA by Stand-
ard and Poor's (S&P).
"At the same time, foreign
currency reserves held by
countries in the Asia region,
excluding Japan, are around
the US$5 trillion (RM15.3 tril-
lion) mark, providing a consid-
erable cushion to foreign inves-
tors," said De Mello.
What makes Asian bonds
even more attractive is how lit-
tle has been allocated to the
sector in relation to its in-
creased size and influence in
global markets.
"The aim is to search for
bonds that have very low cor-
relation to Europe," said Bond
Pricing Agency Malaysia Sdn
Bhd chief executive officer
Meor Amri Meor Ayob.
Asian bonds only account
for 2.4% of the main global
bond index, despite having 8%
of the world's outstanding do-
mestic debt securities, said De
Mello.
Although past performance
is not indicative of future re-
turns, data shows that Asian
local currency bonds have
shown a better risk return ratio
over 10 years than other major
asset classes, including US
treasuries, Asian US dollar
bonds and European equities.
"The Asian bond yield is
generally higher than the US
bond given our relatively high-
er interest rate. We do not have
such high bond default and re-
structuring risks. Therefore,
Asian bonds have relatively
high risk return trade off," said
the analyst.
Asian local currency bonds
also provide the additional
"kicker" of currency apprecia-
tion, said De Mello.
"For absolute return manag-
ers, this means a wealth of op-
portunities for currency trades;
playing one currency against
another and hedging various
exposures while having the
stability of bond returns un-
derneath," he said.
From a corporate angle, Asia
companies tend to not be sad-
dled with too much debt and
have decent levels of cash, fol-
lowing lessons learned in the
Asian financial crisis a decade
ago, he said.
Overall, the outlook for
Asian bonds is "promising".
"With slower growth ahead
and peaking inflation, expecta-
tions for interest hikes (which
would be negative for bonds)
in Asia have been reduced,
while currencies look under-
valued.
"Furthermore, the recent
market turbulence has seen
credit markets suffering and
has brought about some inter-
esting opportunities as value
has emerged in certain areas of
the market, such as govern-
ment-backed investment grade
credit," said De Mello.
Malaysia is now ready to
join the league of economies
that have made eco-business
survivable through govern-
ment's direct promotion of eco-
products in the country, Energy,
Green Technology and Water
Minister Datuk Seri Peter Chin
said yesterday.
He said his ministry in col-
laboration with the Finance
Ministry is developing a set of
green procurement guidelines
to serve as a reference for sup-
pliers and purchasers on envi-
ronmental-friendly products
and services.
"We will speed up the criteria
documents to increase the list
of eco-products or services," he
said when opening the Curtin
University Science and Engi-
neering International Confer-
ence.
Chi n said hi s mi ni st ry
would also provide technical
and advisory services to raise
local entrepreneurs' compli-
ance on eco-labelling criteria,
increasing programmes on ca-
pacity-building and awareness
on the importance of environ-
mentally friendly products
and services.
"Currently, we are finalising
the implementation mechanism
for the national eco-labelling
programme," he said.
Speaking to reporters later,
Chin said Standards and Indus-
trial Research Institute of Ma-
laysia Bhd would be involved in
working out the eco-labelling
criteria and standardisation of
eco-products.
While it would take some
time before eco-labelling re-
quirements could be enforced,
he said that it would be cover-
ing both the domestically-pro-
duced and imported products.
On the conference themed
"Innovative Green Technology
for Sustainable Development",
Chin said that it is relevant to
address the escalating energy
needs worldwide.
"Malaysia is no exception,
with its fast-growing industrial
and commercial sectors cater-
ing to the needs of its increasing
population and contributing to
its economic growth," he said.
Chin said the conference
augured well with the plan to
make Miri as the northern edu-
cation hub in Sarawak.
"It provides an excellent fo-
rum to share research and de-
velopment findings and initiate
further collaborative researches
(among participating research-
ers)," added Chin, who is also
Miri member of parliament.
Bernama
Malaysia all set to join league of
economies promoting eco-products
Asian absolute return
funds becoming main
attraction as investors
seek new havens
for their money
InnovatingMalaysia
Learn how the National Biomass Strategy
can turn oil palm biomass into things you know.
November 21st to 23rd @ BioMalaysia 2011
www.innovation.my
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De Mello says that the Asian bond universe is composed of highly rated countries such as Singapore and Hong Kong, which are rated AAA by S&P
Bloomberg