This is the blog section of the Crown Asia Investments site, here you can expect to find updates on buildings we have purchased, buildings we have sold and little things we encounter along the way.
The Main site has much more on our business models, in general though we have people throughout Asia that we use to buy land or existing buildings, obtain permissions and perform improvements to the properties.
Though we deal in land throughout Asia we continually find that Bangladesh is a key component of our business and have one of out biggest bases of operations there. China is experiencing a wage growth and where many assume that means India will fill the gap it is not always the case and Bangladesh has seen companies transfer businesses there too; Bloomberg mentions the American giant Walmart and the UK owners of Primark have bases of operation there and tradingeconomics.com provides a nice overview of Bangladesh exports. Even though this move is in response to China’s increasing wages it often also comes with a call to improve conditions there which our mix of international building planners and survey people can and do assist in. Also in many ways Bangladesh is something like China in the late 1990′s in that international business is quite capable of being done but you really want someone versed in how things are done and that is where our mix of international buyers and handlers with locals on the ground wherever we might be trading has proven very lucrative.
The spectre that now looms over this all is the both the recent building collapse and a slightly longer term issue with conditions. Though we lend our voice to the chorus concerning conditions it is the land and buildings where we deal best. In most places we do business our main model is repurposing existing properties or seeking land to construct new ones on with commercial/industrial making up a large component of that and what remains is often still occupied with big construction projects.Part of any of this is getting permissions and part of that, as well as general due diligence, is to undertake a survey of the structures and/or the land for defects, contaminations and similar concerns. Obviously local requirements are met as part of this but where local requirements might not be as stringent as they could be we go further; we have friends and family that have to live with the consequences both physically and in business and as memories in Bangladesh and in those hailing from there are very long where such things are concerned it is only the foolhardy that would chance things here; anti wal mart sentiments are already on the rise in Bangladesh and they will have to make serious efforts to win back the trust of everybody concerned.
The Chinese property market experienced what might be said to be the start of a property bubble but the Chinese government looks to be averting it by means of continued investment.
The Chinese property market is presently a key part of our investment strategy and we are cautiously investing in the region for although we remain skeptical about the long term prospects the short term ones, which comprise a considerable portion of our business, have a far sunnier outlook.
Looking to the long term the Chinese government have tried many tactics to control the price hikes with higher deposits, land development taxes and sale restrictions. The danger is of course if the fall is so deep in properties that the default raises, should that happen then governments could be in trouble as they have borrowed so much money from the banks this could lead to bank defaults and from there it spirals out of control. This is of course a worse case scenario which will probably never come to fruition.
Islamic SUKUK bonds are expected to explode as demand for Shar’ iah compliant products increase worldwide. The U.K. is expected to benefit as much as 46 billion pounds as a result of the issuance from this growth as it already has many financial institutions and law firms advising on these products
Shar’iah product are seen to be the future as western economies struggle with the debts crisis of Europe.The western world countries with derivatives and leveraged products, which some believe lead to this financial meltdown in Europe and US housing markets. Throughout this the Asia and Middle Eastern economies had very little impact from these crisis as there are no derivatives available thus minimising risk of default.
An article published in the Guardian last week states that Bangladesh economy could well be stronger than Europe by 2050, though the previously discussed political instability really does want to be quashed else it risks hampering progress.
Anyway this comes as no surprise to us for we see growth picking up year on year. By way of example Bangladesh has just passed the metro rail plan which will be super fast and expected to be completed by 2024. This investment will help reduce traffic jams, which help businesses, individual’s and make international trade faster. This is far from the only investment in infrastructure (both physical and in terms of people) which in all likelihood will result in the kinds of growth we have previously seen in China and India (though Bangladesh has certainly not been left completely behind here).
That said Bangladesh needs investment to grow, indeed remittances still form a large chunk of money entering the country, as it has ample resources to offer but to realise their value will still take investment. Quick growth has happened several times to countries in similar positions but it is noted that this takes investment to pull off. Helping matters here is that Bangladesh has built good relationships throughout Asia and has strong ties to major players likes Japan, China and India; huge volumes of Chinese goods are imported to the country, Japan is major provider of cars (the import of top tier cars is often as telling as any large volume of statistics) and finance and India has goods coming on daily basis from garments to jewellery and fresh produce. All this this will help the trading position as the country grows year on year. To match this the banking and finance sectors are stepping up their game with a lot of financing options and a modern, competitive financial infrastructure, much of this was not readily available a few years back. This all serves to help make Bangladesh and similar such countries that we also deal in increasingly solid investment prospects.
Bloomberg reports that the Bank of Japan (BOJ) has followed the new Japanese government’s stimulus by adding to their asset purchase fund. You can see more on the Nikkei’s website.
The article above also points out that Chinese economic growth has spurred given the gauge of 14.6 compared to the S&P 500′s of 13.8 and 12.8 for European 600 index.
The Shanghai stock exchange also saw growth and an economic rebound in the third quarter.
All this as the UK markets are lagging somewhat compared to the Asian markets with 2013 not looking to improve things following the release of the UK’s 2012 GDP results.
Being involved in land development in Asia we have a considerable presence in Bangladesh. However, as many news sites will attest, Bangladesh is not as stable as it might be right now. In response to this Bangladeshi political parties have put into effect these so called curfews which happen on an almost daily basis which makes justifying new investment rather hard.
How they do not realise that they are damaging the economy by starving the country of any outside investments we are not sure. Speaking to our contacts there the business community is in a dire financial condition and the general public are just fed up with these frequent political disturbances and the resulting actions the political parties are taking. As such we would like to add out voices to chorus of people saying that the parties need to come to a common ground to fight political battles and not try to fight them by disabling the whole economy of the country.