France to Help Urbanise Mandalay

France will help in the urbanisation process of Myanmar’s second largest city Mandalay through infrastructural development assistance.
Under an agreement signed between Mandalay City Development Committee (MCDC) and France’s will provide assistance in the city’s urban development projects such as garbage disposal, transportation services and water supply at a cost of $1.3 million.
The Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA) have also been providing financial assistance and technical skills for the same projects.
Currently, a central business district project called Mingala-Mandalay is being jointly implemented in the city by MCDC, New Star Light and CAD Construction since September 2012.
The project includes building underground sewage system up to international standard.

Source from Myanmar Business Today,24-30July,2014

KHG’s Launches Luxury Condominium in Myanmar

KHG Development broke ground of its residential luxury condominium following the opening of its sales gallery last month, the Singapore-based conglomerate said.
The development, INFINITY, is located on the edge of Golden Valley in Kabar Aye Pagoda road in Yangon.
According to KHG, INFINITY Sky Terrace which is an entire floor dedicated to resident leisure facilities. Complete with these pools, a well equipped gym,childre’s play area, an outdoor exercise area, barbecue area and function room – this floor has 360-degree views of the cityscape. KHG says every floor offers panoramas of Shwedagon Pagoda, Kandawgyi Lake and Inya Lake.
This is the first in a series of real estate offerings that KHG Development is rooling out. Later in the year three will be the launch of a low-rise, luxury boutique-style,development is rolling out.Later in the year there will be the launch of a low-rise, luxury boutique-style, development in another prime location, KHG said.
KHG Holdings’ chairman Kyi Soe said, “I have always held firm to the philosophy of mutually rewarding experiences for all parties, a fact applicable to all KHG’s business ventures. Real estate development of the highest standards is an exciting new chapter in our company’s history.
Mary Thein, KHG Development’s executive director of sales and marketing, outlined the company’s strategy, saying, “Creating and communicating value to all our stakeholders through our quality products, services and brand ambassadors is vital to building longterm customer relationships. KHG is investing heavily in this.”
The firm also gaves a presentation of its property website –
infinity-khg.com – at the launch event.

KBZ Bank to Launch Online Banking Services

Myanmar’s largest private bank, Kanbawza Bank, will launch online and mobile banking services soon, the bank said.
US-based information security company, RSA, will provide protection to its  customers from online fraud and cyber threats, it sdid. RSA is the security division of EMC, which is an American multinational corporation.
The bank started with an initial capital of K477 milion(about $500,000) in 1999 and has expanded its capital to K113 billion($117 million) in 2014, according to the bank’s finnacial statement.
Early this year, another private bank, the Cooperatives Bank (CB), has introduced mobile banking system services in the country on a trial basis.
There are more than 20 private banks and three state-owned banks
in Myanmar.
The Central Bank of Myanmar recently announced that it would grant foreign banks to operate banking business in the country by September and at least five to 10 foreign banks will be given permission.

Source from Myanmar Business Today,24-30July,2014

Myanmar’s Legal Framework and Immigation

In this week’s case study, our client,XYZ B.V., asked us if it is possible to send an executive employee to Yangon to conduct market research before their new company has been approved and registered for operation. In our case study last week, we already advised them to set up a MIC company. MIC approval will take approximately 3 months; however, the company wants to start research activities right away. In this particular case we do not recommend sending staff or an executive researcher to Yangon on a tourist visit visa.
A tourist visa is only valid for a single entry, which is granted for a period of 28 days, and does not allow the holder to engage in any sort of commercial activities in Myanmar. Because leasing an apartment is prohibited to individuals holding a tourist visa, staff from XYZ B.V. is only allowed to stay at a hotel that has been pre-approved by the Ministry of Tourism. Therefore, staff wishing to conduct market research should enter Myanmar with a valid business visa, issued upon arrival at either Yangon or Mandalay International Airports or by a Myanmar consulate abroad. To obtain a business visa, the staff member needs an invitation letter from a Myanmar company as well as a copy of the company’s official registration certificate. But, is it possible to obtain these official documents? Yes.
XYZ B.V. wants to promptly begin field research especially given their competitors are also attempting to enter the market. Therefore, it is vital to send an executive employee immediately to Myanmar with a valid business visa. In this case, one of our clients, a 100 percent Myanmar company, is ready to assist by issuing the required documents for a small fee. However, it is important for the business activity to stand firm on legal ground. Our Myanmar client company is also able to officially employ XYZ B.V.’s market research staff and pay their salaries after reimbursement. Personnel leasing and recruitment services are legal in Myanmar and also provide full payroll services and employment-related tax advice.
Given this situation, we advised XYZ B.V. to send details about their staff to the local company so it can issue official visa documents that enable its employees to obtain their business visa, make arrangements for employment, payment of salaries and other legal requirements. During this process, the foreign staff will remain under the control and supervision of XYZ B.V.
Later, after MIC has granted XYZ B.V. its company registration, it can apply for a work permit at the Directorate of Labour under the Ministry of Labour, and a stay permit and visa to the Immigration and National Registration Department from the Ministry of Immigration and   Population. Once these permits are approved, XYZ B.V. can issue invitation letters and other required documents needed for their staff to obtain a business visa.
In the nest case study we will advise the XYZ B.V. about renting
real estate.
Strohal Legal Group (SLG), founded by Dr Theodar Strohal in 1979, is a law firm offering highly personalized services specializing in international and cross border business. SLG enjoys a well-established reputation across Europe, Southeast Asia and the Middle East. In Myanmar, SLG provides services under the name U Min Sein & Strohal Associates Law Firm.
The views and opinions expressed here are the author’s own and
don’t necessarily reflect Myanmar Bussiness Today’s editorial opinion.

Source from Myanmar Business Today,24-30July,2014

Scotch Whisky Gets Special Legal Protection in Myanmar

Scotch Whisky has been granted better protection by Myanmar
authorities as a collective trademark in a move that is expected to help protect Scotland’s national drink against fakes in the growing Southeast Asian market.
Scotch Whisky exports to Myanmar jumped 65 percent to £2 million
last year from £888,734 in 2012, according to the Scotch Whisky Association.
The move will provide added protection to both consumers and the industry, the association said.
Alan Park, Scotch Whisky Association legal adviser, said: “This will allow us to protect Scotch Whisky against products illegally being sold or passed off as Scotch.
“Products suspected of misleading consumers and damaging the legitimate trade are already under investigation and may become the subject of legal action using the protection now given to Scotch Whisky in Burma.”
The changes mirror those introduced in Australia earlier this year,a country which was said to have a “serious problem” with fakes.The trademark gives similar protection to Scotch in Burma already enjoyed by products such as Parma ham and Champagne which are subject to a geographic indicator (GI) — a protection offered to a range of geographically unique products.
British Ambassador to Myanmar Andrew Patrick said: “Scotch Whisky is recognised worldwide as a distinctive and high quality British product and I am delighted that the Burmese authorities have taken steps to recognise and protect this.
“A robust legal framework is of great importance to foreign investors in any market and the British Embassy is supportive of the Burmese Government’s efforts to develop this.”
In 2012, Chelsea FC agreed a two-year sponsorship deal with local whisky Grand Royal — Myanmar’s best-selling brand — which boasts an unnamed Scottish master blender on its label, but, in accordance with Scotch whisky rules, does not claim to be Scotch.
Earlier this month, a German scientist living in Scotland announced a new technique to tackle counterfeit Scotch whisky by determining whether the water used to make it comes from Scotland.
The Spirit Drinks Verification Scheme, launched earlier this year, ensures that every part of the Scotch whisky supply chain is mapped by the industry, registered with the UK government and inspected to ensure it complies fully with all the rules on the production of Scotch.
All firms involved in the production of Scotch whisky must register with Her Majesty’s Revenue & Customs by listing their sites within and outside Scotland, including distilleries, maturation facilities, blending and bottling plants. Foreign bottlers will also be subject to controls.
In addition, the spirit is already protected through the European Union GI scheme, meaning it can only be produced in Scotland according to UK rules.

Source from Myanmar Business Today,24-30July,2014

Microeconomic Objectives Surpass Target; Trade Deficit $2.08 Billion in 2013-14 H2

Myanmar recorded a trade deficit of K2.08 trillion ($2.08 billion) in the second half of 2013-14 fiscal year, Daw Le Le Thein, deputy minister for national planning and economic development, told a recent parliament session.
Exports earned K5.93 trillion ($5.93 billion) and import volume reached K8.01 trillion ($8.01 billion) during this period, she said while presenting a report on National Economic Plan, released by the Ministry of National Planning and Economic Development.
The report outlined the government’s progress in the second half of the 2013-14FY.
Fulfillment of micro-economic objectives surpassed the target and reached 125 percent of the planned goals, an improvement in performance of 7.5 percent compared to the same period last year, the report said.
According to the report, agriculture accounted for 31.9 percent of the total economy,compared with the previous estimation of 29.9 percent. The industrial sector accounted for 32.7 percent, which is lower than the sector’s estimation of 33.8 percent. The service sector accounted for 35.4 percent which was also lower that its estimated 36.3 percent.
The period coincided with the harvest season, which produced over K9.17 trillion ($9.17billion) in the agriculture sector.
A total of 35 local enterprises were approved under the Myanmar National Investment Law,which amounted to an investment volume of almost K1 trillion ($1 billion), while 68 foreign companies were approved under the 2012 Foreign Investment Law accounting for K2.37 trillion ($2.37 billion) in investment, according to the report.
The financial services sector during the second half of the 2013-14 fiscal year saw the expanding of bank branches, which increased by 210 to 695, while 470 private money exchange counters have been approved during the period.
The report said 82.5 percent of the planned objectives have been completed in the energy sector,while 99.5 percent were completed in the mining and mineral sector during the period.
The government has increased electricity supply in many states and regions thus reducing the private usage of diesel to run generators for household or commercial purposes.

Source from Myanmar Business Today,24-30 July,2014

Banking Conference Focuses on Local Banks’ HR, Capacity Dearth

The 2nd annual Myanmar Banking and Business Development Conference, hosted by Sphere Conferences and Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry, was held on July 15 – 17 in Yangon at the Sule Shangri-La Hotel.
Day one of the conference focused on the strategic aspects and the future of the banking and finance sector in Myanmar as it moves towards increased global integration, while day two emphasised the use of technology.
Dr Aung Thura, CEO of Thura Swiss, moderated a panel discussing the impact of impending foreign bank licences. During the panel discussion, Dr Sein Maung, chairman of First Private Bank, shared his surprise that the government was so quickly willing to allow foreign banks to operate in Myanmar saying that while the government has good intentions, the decision is a bit “premature.”
“Why rush? The legal base is not ready yet. Additionally, there is a big gap between capitalisation, skills and technology.
“We are in the process of building a house, in the process of building institutions. We should not rush this process.
“My advice to move step-by-step in a pragmatic fashion,” Dr Sein Maung told the panel.
Kittiya Todhanakasem, a senior executive vice president and managing director at Krung Thai Bank, acknowledged Dr Sein Maung’s concerns and added that in an overseas market the market leader must be domestic.
She further emphasised that Thai banks will focus on financing and promoting trade of Thai corporations, which is a likely scenario for any foreign bank granted one of the coveted foreign banking licences.
Kim Chawsu Gyi, deputy managing director and head of transformation at KBZ Bank, added that foreign banks are vital to financing huge infrastructure projects, which local banks cannot currently accommodate with their limited capitalisation.
Also discussed at the conference is the reality of the immense challenges Myanmar’s financial system faces in terms of the lack of skilled workers and technological improvements.
Kim Chawsu Gyi, who is responsible for the development of human resource capacity for Myanmar’s largest bank KBZ, said, “We must recruit individuals with the right skills and talent, but it is equally important for these individuals to learn soft skills such as teamwork, how to provide excellent customer service, and how to work in a professional office environment.”
Dr Sein Maung acknowledged the critical need to upgrade the technology of Myanmar’s banks.
However, upgrading technology is not as easy of a task as many might think.
“Upgrading technology is very expensive. On top of that, lots of vendors come to sell software without the proper sales support and local support staff,” Dr Sein Maung said.
He confirmed the need for intensive and quick action in addressing human resources deficiencies, suggesting advancements in basic education, university and certificate courses should be emphasised.
U Set Aung, deputy governor of the Central Bank, spoke about the country’s commercial and business climate and touted Myanmar’s potential for business development and trade saying, “The Ministry of Commerce has focused on four main areas that include trade promotion, facilitation, liberalisation, and education.
“As a result, Myanmar’s trade volume significantly increased during the last three years.”
According to data presented at the conference, Myanmar’s trade volume has increased from $15.27 billion in the 2010-11 fiscal year, to an expected $24.87 million in the 2013-14 fiscal year.
U Set Aung said Myanmar’s current prospects for growth lie in the country’s many “untapped
natural and human resources, its strategic location and ability to become a major regional trading hub, and increasing south-south and global trading opportunities.”

Source from Myanmar Business Today,24-30July,2014

Myanma Railways to Invite Tender to Build Dry Ports

State-run Myanma Railways will invite local and international businesses in August for an open tender to construct dry ports for the development of the local logistics sector.
The project is expected to be finished in the current 2014-15 fiscal year, which will ensure access to dry ports and containerisation for rail transport, boosting connectivity for industries engaged in import-export.
“We plan to invite tenders from local and international business in August with construction set to start in September,” told U Aung Myo Myint, deputy general manager of cargo for Myanma Railways.
Construction for dry ports are expected to be completed by May 2015, which will be followed by a planned upgrade to the railroad infrastructure in June of next year that will help accommodate container trains that run from inland depots to seaports, as well as other industrial zones.
The short-term schemes aim to develop dry ports in Yangon and Mandalay, Myanmar’s major commercial cities.
The project is drafted to include six sites that include Kwae Ma, Ywarthargyi, Tanyingone,Myohaung, Myitnge, Palate stations. The potential project sites will be assessed before implementation with only two sites so far being confirmed, Ywarthargyi in Yangon and Myitnge in Mandalay.

Source from Myanmar Business Today,24-30July,2014

Labour Requirements Growing Throughout Myanmar

Experts have released a report confirming Myanmar is facing a shortage of trained and capable labour in a range of industrial sectors that could threaten the nation’s development prospects.
The country’s demand for skilled workers is expected to reach a level equal to almost half the population by 2015.
Myanmar Arts and Science Academics Association Vice President Dr Thet Lwin and Yangon University of Economics Vice Rector Dr Tun Aung prepared the report forecasting Myanmar’s future employment needs.
The document estimated Myanmar will need 32 million more workers in job areas including agriculture, forestry, energy, mining, industry, electrical, construction, social, management and trading by next year.
Yangon University of Economics Rector Dr Tin Win said the report used mathematical calculations to determine where the skilled worker shortages were most prominent throughout Myanmar.
If Myanmar is unable to increase education and training to help citizens improve their employability then the country’s labour needs could reach over 34.6 million by 2020, while demand for skilled workers stood at 29.7 million people in 2010, according to the report.
The report said the country’s agriculture sector will have the highest labour requirement while the industrial and trading sectors will also have employment demands of over 3 million labourers.
Dr Thet Lwin and Dr Tun Aung, the report’s authors, said the agriculture, industrial engineering and information and media industries should be prioritised for local employment expansion.
Last month the IMF forecast it expects Myanmar’s economic growth to rise to a rate of 8.5 percent by March 2015. The report suggests increased shortages in skilled labour could stall the country’s economic progress.
Myanmar is facing skills shortages in many sectors central to the country’s infrastructure development. The civil administration and service sectors are expected to require 2 million further skilled workers by next year.
Estimates also forecast ,S employment demands for the tourism industry to reach 930,000 workers in 2015. Myanmar’s tourism industry is expected to contribute over $1 billion in 2014, increased from $926 million in 2013 and $534 million in 2012.
However, a lack of trained and capable labour could undercut further revenue increases in the tourism industry.
The experts said skill shortages in Myanmar’s foreign language and medical and healthcare services were also likely to become prominent.

Source from Myanmar Business Today, 24-30 July,2014

Insurers Struggle to Get Grip on Burgeoning Cyber Risk Market

Insurers are eagerly eyeing exponential growth in the tiny cyber coverage market but their lack of experience and skills handling hackers and data breaches may keep their ambitions in check.
High profile cases of hackers seizing sensitive customer data from companies, such U.S. retailer Target Corp or e-commerce company eBay Inc, have executives checking their insurance policies.
Increasingly, coporate risk managers are seeing insurance against cyber crime as necessary budget spending rather than just nice to have.
The insurance broking arm of Marsh & McLennan Companies estimates the U.S cyber insurance market was worth $1 billion last year in gross written premiums and could reach as much as $2 billion this year. The European market is currently a fraction of that, at around $150 million, but is growing by 50 to 100 percent annually, according to Marsh.
Those numbers represent a silver of the overall insurance market, which is growing at a far more sluggish rate. Premiums are set to grow only 2.8 percent this year in inflation-adjusted terms, according to Munich Re, the world’s biggest reinsurer.
The European cyber coverage market could get a big boost from draft EU data protection rules in the works that would force companies to disclose breaches of customer data to them.
“Companies have become aware that the risk of being hacked is unavoidable,” said Andreas Schlayer, responsible for cyber risk insurance at Munich Re. “People are now more aware that hackers can attack and do great damage to central infrastructure, for example in the energy sector.”
Insurers, which have more experience handling risks like hurricanes and fires, are now rushing to gain expertise in cyber technology.
“It is a difficult risk to price by traditional insurance methods as there currently is not statistically significant actuarial data available,” said Robert Parisi, head of cyber products at insurance brokers Marsh.
Andrew Braunbergon, research director at U.S. cybersecurity advisory company NSS labs, said that some energy companies have trouble persuading insurers to provide them with cyber coverage as the industry is vulnerable to hacking attacks that could trigger disasters like an explosion in a worst-case scenario.
Pricing on policies for retailers has climbed in the wake of recent high-profile breaches at Target,Neiman Marcus, and other merchants, he added.
A Necessary Cost
Though still very much in its infancy, the market’s potential is vast with cyber crime costing the global economy about $445 billion every year, according to an estimate last month from the Washington-based Center for Strategic and International Studies.
While many companies have in the past counted on their general commercial liability policies for coverage, they are increasingly taking out standalone contracts.
One reason for the change in attitude is a New York state court ruling in February against Sony Corp. The company which has appealed the decision, had sought to force providers of its general commercial liability insurance to foot the bill for class action lawsuits following a major 2011 cyber attack on Sony Play Station Network.
“This issue with Sony is that it did not have a standalone cyber product,” said Peter Beshar, general counsel at the Marsh & McLennan Companies.
Target was better protected when some 40 million payment card numbers were stolen last year. It had $100 million in cyber insurance, according to the trade publication Business Insurance.
With low interest rates limiting revenues from insurer’s vast bond portfolios, the extra underwriting income from the fast growing new market is all the more welcome.
The cost of cyber insurance varies depending, but on average $1 million in protection ranges from about $20,000 to $25,000 according to Beshar.
German insurance giant Allianz says its premiums for 10-50 million euros in protection run about 50,000-90,000 euros in annual premiums. For protection of over 50 million euros, companies can get coverage up to 300 million euros through coinsurance policies involving multiple underwriters.
Whether insurers are offering coverage at prices commensurate with the risks is anyone’s guess as long as underwriters have scant experience with hackers.
Growing Pains
AXA, Europe’s second biggest insurer, is making a big push into the cyber insurance market, but has so far not paid out a single business claim.
“I would like to see a successful claim, because that would be an experiences,” said Philippe Derieux, deputy CEO of AXA’s global property and causality business.
AXA is hiring computer experts and engineers to build up a centralized cyber team, but Derieux said there is a shortage of qualified talent.
“It is hard for insurers and brokers to find people able to handle the product,” Munich Re’s Schlayer said.

Airbus Jet Relaunch Heralds Busy Aerospace Show

Airbus will kick off the Farnborough Airshow with up to 100 commitments for its revamped A330neo wide-body jet, industry source said, deepening a contest with Boeing for up to $250 billion of orders at the core of the long-haul jet market.
After months of speculation, the European plane maker will unveil an upgrade of its popular but ageing A330, powered by Rolls-Royce engines and offering 14 percent in fuel savings. Airbus group declined to comment.
The upgraded A330 is Airbus’s attempt to prolong the life of its profitable twin-aisle jet, as the European company tries to preserve market share against Boeing’s much newer 787 Dreamliner.
The A330 has enjoyed a resurgence of sales because of delays in deliveries of Boeing’s technically ambitious but temperamental carbon-fibre jet, but it is in need of a refresh to keep selling.
Analysts say it also plugs a potential future gap in the Airbus wide-body jet portfolio after poor sales of its A350-800 – the minnow of the next-generation A350 family whose development looks set to be halted or suspended as a result.
The commercial debut of two models called A330-800neo and A330-900neo, first reported by Reuters, heads a busy schedule of announcements on day one of the show, at which Boeing could hit back promptly with new sales of its 787 Dreamliner.
Analysts have until now generally predicted a low-key show, because of steadily growing fears of airline overcapacity.
But industry sources gathering for the July 14-20 event said evidence pointed to well over 500 orders or commitments ranging from a 100-plane lessor deal to a single plane for Fiji. It may not be immediately apparent, however, how many orders are new.
Malaysia’s Air AsiaX has campaigned for anA330neo to save on fuel bills but is seen likely to exchange any new order against at least part of its 38 outstanding current-generation A330s.
Boeing begins the week with a clear advantage after gaining 703 gross orders up to July 8, or 649 after cancellations, against Airbus’s end-June total of 515 gross orders and 290 net.

Source from Myanmar Business Today, 24-30 July,2014

BRICS Fight Waning Clout With $150B Deal in Brazil Summit

The leader of five of the world’s largest emerging markets will showcase a new currency reserve fund and development bank. Critics say neither is enough to revive the group’s waning clout.
Brazil, Russia, India, China and South Africa, known as the BRICS, will approve the creation for the $100 billion reserve fund and $50 billion bank at a July 15-16 summit in Brazil’s coastal city of Fortaleza and the capital Brasilia.
The initiatives are born out of frustration with a lack of participation in global governmance, particularly in the World Bank and International Monetary Fund, said Arvind Subramanian, senior fellow at the Peterson Institute for International Economics. The measures aren’t big enough to boost growth or cohesion in the group as foreign investor sentiment sours and member states focus on issues close to home, such as Brazil’s elections, the conflict in Ukraine and new economic policy plans in India.
“It’s hard to see a lot of impetus at this stage for the BRICS in general and for these initiatives in particular,” Subramanian said by telephone from Washington. “There’s going to be a lot of attention on domestic issues.”
Economic growth in the five countries is projected to average 5.37 percent this year, half the pace seen seven years ago, according to the median estimate of economists surveyed by Bloomberg. Brazil and Russia will grow 1.3 percent and 0.5 percent, respectively.
Common Policy
Yuri Ushakov, Russian presidential aide on foreign policy, said in an interview that the group’s growth rate is still above that of the global average and that its economic and political weight is increasing.
The BRICS have evolved from the original term coined in 2001 by then Glodman Sachs Group Inc. economist Jim O’Neill to describe the growing weight of the largest emerging markets in the global economy. In 2011, South Africa joined to give the BRICS a broader geographic representation. The group’s track record in pursuing a common agenda on the world stage has been mixed.
“It’s easier to say what the BRICS aren’t than what they are,” said Jose Alfredo Graca Lima, under-secretary for political affairs at the Brazilian Foreign Ministry.
The five countries failed to agree on a candidate to head the World Bank in 2012 and the International Monetary Fund in 2011, two posts at the heart of their demands for more say in global economic matters.
Trade Policy
The summit is unlikely to provide a common front to push ahead global trade talks either, even though the World Trade Organization is headed by Brazilian Roberto Azevedo. Brazil itself has increased protectionist measures under President Dilma Rousseff.
“I wouldn’t say that there will be a common outcome in that sense, but certainly there will be discussion on WTO matter,” said Sujata Mehta, secretary for economic relations at the Indian Foreign Ministry.
India and South Africa have signaled they may backtrack on a trade facilitation agreement reached at the WTO talks in Bali in December 2013, wrote Carlos Braga and Jean-Pierre Lehmann, professors at Lausanne, Switzerland-based IMD business school.
Still, Indian Prime Minister Narendra Modi is unlikely to rock the boat at the Brazil summit, said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a government-backed research institute in New Delhi.
“Domestic issues are dominating his agenda, especially growth and inflation.” Bhanumurthy said.

Source from Myanmar Business Today, 24-30 July,2014

Sugar Deficit Seen by Rabobank as Low Prices Reduce Production

The sugar market will swing to a deficit as sustained low prices curb supply for a second year, according to Rabobank International, which joined Czarnikow Group Ltd. and Kingsman SA in forecasting an end to surpluses.
Global output of raw sugar will fall short of demand by about 900,000 metric tons in the 12 months from October, Rabobank said. That compares with glut of 1.4million tons in 2013-2014, the bank said in an e-mailed quarterly report.
Raw-sugar prices dropped more than 50 percent from a 30-year high in 2011 as world supplies consistently surpassed demand. Global output will lag behind consumption by 500,000 tons in 2014-2015 as production stabilizes, London-based Czarnikow forecast last week. The degree of supply tightening depends on how a forecast EI Nino develops, Rabobank said.
“It is a little early to be certain that the market is passing an inflection point,” the bank said. “If the question is whether we are cycling towards higher prices, our current belief is that we are indeed heading in that direction, slowly, with may be a bump or two on the road still to come.”
An El Nino, which can bring drought to the Asia-Pacific region and heavier-than-usual rains to South American, likely to develop by Australia’s spring, which starts in September, the country’s Bureau of Meteorology said on July 1. There’s at least a 70 percent chance of the event developing this year, it said.
Raw sugar for October delivery closed at 17.07 cents a pound on ICE Futures U.S. in New York on July 11, 4 percent higher this year. The commodity lost 16 percent in 2013, retreating for a third year in the longest run of annual declines since 1992.
Global sugar demand will exceed production by 239,000 tons in the crop year from October 2014 to September 2015, Lausanne, Switzerland Kingsman SA estimated in May.

Source from Myanmar Business Today, 24-30 July,2014

Malaysian Air Drops as Ukraine Attack Follows Flight 370

Malaysian Airline System Bhd. (MAS) shares tumbled the most in nine weeks after the disappearance of Flight 370 contributed to the carrier’s biggest loss since 2011.
The stock lost 13 percent to 19.5 sen as of 9:59 a.m. on July 18 in Kuala Lumpur, extending this year’s drop to 37 percent, while Malaysia Airports Holdings Bhd. (MAHB) fell 4.2 percent. The FTSE Bursa Malaysia KLCI Index retreated 0.4 percent and Malaysia’s ringgit weakened 0.4 percent versus the dollar. The Bloomberg World Airlines Index slipped 0.2 percent, following a 2 percent tumble on July 17 amid speculation the crash will deter fliers.
Malaysian Air’s Flight 17, carrying 298 passengers and crew, was shot down last Thursday over eastern Ukraine in an attack that the government in Kiev blamed on pro-Russian rebels. The carrier, which has lost 4.57 billion ringgit ($1.4 billion) since the start of 2011, had been speeding up an overhaul of its business after the disappearance of Flight 370 spurred the longest search for a missing plane in modern aviation history.
“This is shocking,” Geoffrey Ng, an adviser for strategic investments at Fortress Capital Asset Management Sdn., which oversees about 1 billion ringgit, said in Kuala Lumpur. “Investors will want to sell first and get more information later. This will raise concerns about the safety culture of airlines in general.”
Ukraine Battle-ground
Cathay Pacific Airways Ltd. (293), the biggest international carrier in Asia, dropped 1.4 percent in Hong Kong trading while Air China Ltd declined 1.3 percent. Delta Air Lines Inc., American Airlines Group Inc. (AAL) and United Continental Holdings all retreated more than 3.4 percent in U.S. trading last Thursday.
Ukraine’s state security service said it intercepted phone conversations among militants discussing the missile strike,which knocked Flight 17 from the sky about 30 kilometers (18 miles) from the Russian border. The separatists denied the accusation.
U.S. officials said the weapon probably was a Russian-made model used widely in Eastern Europe. The Boeing Co. (BA) 777 crashed en route to Kuala Lumpur from Amsterdam in the main battleground of Ukraine’s civil war.
The jet didn’t make distress call, Malaysian Prime Minister Najib Razak told reporters at the Kuala Lumpur International Airport today. The aircraft’s flight route was declared safe by the International Civil Aviation Organisation, and the International Air Transportation Association has said the airspace the plane was in was not subject to restrictions, Najib said.
Turnaround Struggle
The escalation of Ukraine’s crisis, combined with Israel’s movement of ground forces into the Gaza Strip, fuelled a selloff in global equities yesterday. The MSCI All-Country World Index dropped 0.9 percent, and lost another 0.1 percent today.
Malaysian Air’s major shareholder and sovereign wealth fund, Khazanah Nasional Bhd., said last month it had time to come up with a restructuring plan as the carrier has funds to last about a year.
Asuki Abas, a spokesman for Khazanah, said the fund will “focus its energy on supporting Malaysian Air in emergency efforts.” He declined to comment further.
The Suband Jaya, Malaysia-based carrier last reported an annual profit in 2012. Malaysian Air missed its target to be profitable last year as rising prices for fuel, maintenance and financing wiped out revenue gains. Analysts project losses through 2016 for the airline, according to data compiled by Bloomberg.
Though Road
“Malaysian Air will have a though road ahead to rebuild its image,” Hong Leong Investment Bank Bhd. analysts wrote in a report last Friday. “Consumer sentiment on its safety record will be deeply affected, which has further hampered its hope to turnaround by 2015.”
The vanishing of MH370 which carried mostly Chinese passengers, put the carrier under global scrutiny, jeopardizing its reputation and prompting boycotts in China. It has also hurt the country as a travel destination, with Chinese tourists canceling their visits to the Southeast Asian nation, according to Malaysia’s tourism promotion agency.
“This is beyond unlucky,” Mohshin Aziz, an analyst at Malayan Banking Bhd. in Kuala Lumpur, said in a note to clients. “It will take a very long time to overturn this.”

Source from Myanmar Business Today, 24-30 July,2014

Modi’s Farm Export Curbs may Ease India’s June Inflation

India’s inflation probably eased marginally in June after the new government curbed farm exports, but a growing risk that drought will shrivel summer crops could encourage the central bank to keep interest rates on hold.
Prime Minister Narendra Modi, elected in May amid anger over rising prices, has ordered a crackdown on hoarding to hold down food prices and set limits on the export of staples, such as onions and potatoes.
Presenting his first budget on Thursday, Finance Minister Arun Jaitley vowed to keep the fiscal deficit at 4.1 percent of gross domestic product in this fiscal year, while allocating more funds to ease inflationary pressures.
“The monsoon this year appears more inpredictable,” he told lawmakers, adding that the government would take all steps necessary.
Consumer price inflation INCPIY=ECI probably eased to 7.95 percent last month, down from 8.28 percent in May,while wholesale price in flation INWPI=ECI eased to 5.80 percent, the Reuters poll of economists found.
The government will lease the data on whold sale prices on Monday around 0230 EST. Consumer price data is due at 0800 EST.
Modi faces his first challenge as soaring prices for basic food items, such as milk and potatoes, lifted retail food inflation to 9.4 percent in May, driving wholesale inflation to a five-month high of 6.01 percent.
The government is banking on stocks of food such as rice, wheat and sugar from recent bumper harvests, but has few ways to cap prices of fruits and vegetables that drive food inflation.
“The measures may prove to be inadequate in light of the supply-demand dynamics associated with perishable products, absence of adequate cold storages and inefficiencies in the domestic supply chain,” said Aditi Nayar, an economist at ICRA, the Indian arm of rating agency Moody’s.
Retail inflation has eased to about 8 percent, after staying in near double-digit figures for the past two years, the highest among the BRICS group of emerging economies – Brazil,Russia,India,China and South Africa.
Economic growth has been stuck below 5 percent for two years – the longest slowdown in more than a quarter of a century. The economy is expected to grow slightly above 5 percent in this fiscal year to March 2015.
In 2009 benchmark New York futures swept to a 30-year high after the worst drought in nearly four decades forced India, the world’s top sugar consumer, to buy large quantities of the sweetener from top producer Brazil.
The farm sector accounts for around 14 percent of India’s nearly $2 trillion economy, and two-thirds of its population of 1.2 billion live in rural areas.
Weak investments and industrial performance have hurt economic growth, but figures on Friday showing that industrial output grew 4.7 percent in May on the year bettered expectations for a rise of 3.8 percent.
Output gained just 0.1 percent in the fiscal year that ended in March
Source from Myanmar Business Today, 24-30 July,2014

China Urges Local Governments to Buy More New-Energy Cars

China has told government officials to use more electric and plug-in hybrid cars as part of its drive to cut pollution by putting 5 million such vehicles on the road by 2012.
The measure is the latest in a series of steps that could help Chinese automakers including BYD and SAIC Motor Corp with President Xi Jinping urging government agencies to buy domestic brands.
So-called new-energy vehicles must account for at least 30 percent of all cars or vans purchased annually by central government agencies and some city governments over the three year through 2016, with the proportion set to rise after that, said the National Government Office Administration.
Government agencies will be offered subsidied to buy new-energy vehicles, which the government defines as all-electric vehicles, plug-in electric hybrids and hydrogen electric fuel-cell cars.
Under the new step, those government offices are also required to build charging stations and improve other infrastructure for green vehicles.
The new rules came days after China scrapped a purchase tax for new-energy vehicles, fearing that it had fallen far behind in meeting a target of putting 500,000 new-energy vehicles on the road by next year.
Earlier this year, major Chinese cities including Beijing, Shandhai and Tianjin opened up their markets to electric car makers based in other cities as China moves to reduce intra-country protectionism.
Source from Myanmar Business Today, 24-30 July,2014

Samsung Halts Business with Chinese Supplier Over Child Labour Fears

Samaung Electronics Co Ltda said last Monday it had suspended business with a Chinese supplier it  suspected of employing child labour, less than a week after a U.S watchdog report accused the supplier of using under-aged workers.
The South Korean smartphone maker said it found an “illegal hiring process” at Donguan Shinyang Electronics Co Ltd, which supplies mobile phone covers and parts.
Dongguan Shinyang Electronics could not immediately be reached for comment. South Korean firm Shinyaung Engineering Co Ltd.,which owns all of Dongguan Shinyaung, also could not be immediately reached for comment.
Samsaung added that it had previously found no child worders at the Chinese company in  three audits since 2013. The latest audit ended no June 25.
“The Chinese authorities are also looking into the case,” Samsaung said in a statement on Monday, adding that it would cut all ties with the supplier if the allegations were true.
“If the investigations conclude that the supplier indeed hired children illegally, Samsaung will permanently halt business with the supplier in accordance with its zero-tolerance policy on child labour,” it said.
U.S-based China Labour Watch released a report on Thursday alleging that the Chinese firm used child labour. The U.S watchdog said it had found “at least five child workers” without contracts at the supplier.
Samsaung demands suppliers adopt a hiring process that includes face-to-face interviews and the use of scanners to detect fake IDs, to ensure no child labourers are employed.
But China Labour Watch said that Samsung’s monitoring system was ineffective.
The watchdog accused one of Samsung’s suppliers of using child labour in 2012. Samsung subsequende workers at the facility.
Source from Myanmar Business Today, 24-30 July,2014