A firm based in Shanghai has started construction on a US$1.6 billion (Dh5.87bn) property project in Vientiane, the capital city of Laos, boosting Chinese presence in the Association of South East Asian Nations' (Asean) smallest economy.
Shanghai Wanfeng Group, the closely held developer of shopping malls in China, reached agreement with the Lao government in December last year to develop 365 hectares around That Luang Lake into a commercial, residential and tourist complex.
Construction began at the weekend, according to the Chinese official news agency Xinhua and the company's website.
Chinese firms, from dam builders to mall developers, are boosting investment in Laos, a new member of the World Trade Organisation with an economy that is forecast by the IMF to grow 8.0 per cent next year.
China CAMC Engineering completed the first phase of a $100 million residential project on a 1.6 kilometre section of the Mekong river waterfront in time to accommodate leaders attending the ninth Asia-Europe Meeting last month. Yunnan Provincial Overseas Investment, a Chinese government investment arm, is developing another property project in the city valued at $40m.
China's total investment in Laos is $3.3bn this year, making China the third-largest foreign investor in the landlocked nation of 6 million people after Thailand and Vietnam, Xinhua news agency reported citing the ministry of trade.
China's investments in Asean have increased 31 per cent in the first 11 months of this year, the ministry had said, without providing a detailed breakdown by countries.
The government of Laos, one of the few remaining one-party communist states, began decentralising control and encouraging private enterprise in 1986.
The results, starting from an extremely low base, were impressive - growth averaged 6 per cent per year from 1988 to 2008 except during the short-lived drop caused by the Asian financial crisis that began in 1997.
Lao's growth exceeded 7 per cent per year from 2008 to last year.
Despite this high growth rate, Laos remains a country with an underdeveloped infrastructure, particularly in rural areas.
It has a rudimentary, but improving, road system, and limited external and internal land-line telecommunications. Electricity is available in urban areas and in many rural districts.
Subsistence agriculture, dominated by rice cultivation in lowland areas, accounts for about 30 per cent of GDP and 75 per cent of total employment.
Economic growth has reduced official poverty rates from 46 per cent in 1992 to 26 per cent in 2010. Last year, GDP per capita was estimated at $2,800, up from $2,600 in 2010 and $2,400 the year before.
* with Bloomberg News and agencies
The 12 Syrian entities delisted by UK
Ministry of Interior
Ministry of Defence
General Intelligence Directorate
Air Force Intelligence Agency
Political Security Directorate
Syrian National Security Bureau
Military Intelligence Directorate
Army Supply Bureau
General Organisation of Radio and TV
Al Watan newspaper
Cham Press TV
Sama TV
More from Neighbourhood Watch:
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Twin-turbocharged%204-litre%20V8%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E542bhp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E770Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3EEight-speed%20automatic%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C450%2C000%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
The years Ramadan fell in May
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Off-roading in the UAE: How to checklist
