10/09/2025

BIZ & FINANCE WEDNESDAY | SEPT 10, 2025

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Indonesia finance minister change unnerves investors

An executive from Tata NYK Shipping said regardless of geo political volatility, decarbonisation needs to be a priority. “Decarbonisation as a necessity and a strategy for shipowners will be there despite whatever we are hearing from the White House,” said Amitabh Panda, managing director at Tata NYK Shipping, a joint venture between India’s Tata Steel and Japan’s NYK Line. But he acknowledged that the shifting geopolitical landscape complicates corporate decision making. – Reuters TOKYO: US tariffs on Japanese goods including cars and auto parts are set to be lowered by Sept 16, Japan’s tariff negotiator Ryosei Akazawa said yesterday. Citing a US Federal Register document dated yesterday that formalised President Donald Trump’s executive order on the US-Japan trade deal, Akazawa said in a press conference the revised tariff rates on Japanese goods will take effect within seven days from its publication. Washington struck a trade deal with Tokyo in July, agreeing to reduce tariffs to 15% on Japanese goods, including auto motives, in exchange for a US$550 billion package of US bound investments and loans. Akazawa reiterated yesterday that the trade talks have not been “settled”, saying that the most-favoured-nation status for pharmaceuticals and semicon ductors has not been included in the executive order. – Reuters impact of its US$550 billion investment in the US, he said. Since the deal was announced in late July, there have been growing expectations among market parti cipants that the US$350 billion investment will add to downward pressure on the won in the long term. The US$350 billion compares with the maximum amount of US$20-30 billion state-run policy banks can procure in a year, Kim said. – Reuters AUSTRALIA SOVEREIGN WEALTH FUND TOPS A$252 BILLION SYDNEY: Australia’s sovereign wealth fund, the Future Fund, said yesterday its valuation had reached A$252 billion (RM701.2 billion) as it pared back its US market exposure to boost invest ments in Germany and Japan. The fund delivered a 12.2% return in the year ended June 30, which the Future Fund said was double its government-man dated target of 6.1%. The port folio update for the June quarter published yesterday showed the Future Fund now had A$65.13 billion invested in developed markets, accounting for a quarter of the fund’s total invest ments. It was up from A$46.83 billion at the same time in 2024. The Future Fund’s Australian equity investments stood at A$27.2 billion, up from A$23.1 billion. – Reuters JAPAN SAYS LOWER US TARIFFS TO TAKE EFFECT BY SEPT 16

BR I E F S

SINGAPORE: The abrupt removal of Indonesia’s influential finance minister Sri Mulyani Indrawati has stunned markets, as investors fear the hard-fought fiscal credibility could be eroded by the populist and costly spending plans under President Prabowo Subianto. The news of the finance minister’s removal sent the rupiah tumbling over 1% yesterday, prompting Bank Indonesia (BI) to intervene in a bid to stabilise the currency. The rupiah was last 0.9% weaker at 16,440 per US dollar. Jakarta stocks also sank 1%, with banking stocks the biggest drag. Indonesia’s central bank was also active in the bond market, buying longer-dated government bonds in an attempt to stabilise the market, two traders told Reuters. Global investors have viewed Sri Mulyani, one of Indonesia’s longest-serving finance ministers in three different stints, as crucial to their bets in Southeast Asia’s biggest economy and her previous departures sent markets tumbling. “Mulyani was the safeguard of prudent fiscal policy,” said Hasnain Malik, EM equity and geopolitics strategist at Tellimer. “Her de parture will stir up fears of o Rupiah sinks over 1%, prompting central bank intervention, and stocks drop 1.6%, led by banking shares SINGAPORE: The use of alternative fuels in shipping will accelerate after 2030 as tighter emissions standards come into effect, in contrast to the stop-start transition for now, shipping executives told the Appec conference here yesterday. The take-off in this decade is expected to be gradual as shipping companies grapple with factors such as trade volatility and geopolitical uncertainty, but gains are expected in the following 10 years. “Between 2030 and 2040, I think this is where we’re going to see the SEOUL: South Korea’s negotiations to finalise a trade deal with the United States are being held up due to foreign exchange issues and Seoul has asked Washington to help find a way to cap any market impact from a US$350 billion (RM1.47 trillion) investment package, a senior presidential official said yesterday. The delay in striking a final deal comes after US. President Donald Trump last week signed an executive

Sri Mulyani (right) and Purbaya at a handover ceremony at the Finance Ministry in Jakarta yesterday. – REUTERSPIC That fiscal prudence though has been at odds with Prabowo’s spending plans and the challenge now lies with the new finance minister to find room in the budget to accommodate the president’s wishes and tackle growing eco nomic worries.

“IDR may have to bear the brunt ... until greater confidence about what the Cabinet reshuffle entails for any prospective shifts in budgetary outlays and funding sources,” said Aninda Mitra, head of Asia macro strategy at BNY Invest ment Institute. “Market participants will want certainty about policy settings and a steady hand at the fiscal till.” Sri Mulyani has won plaudits for reforming the taxation system and is widely considered the lynchpin behind improving Indonesia’s fiscal performance in the past decade and winning investor approval.

widening deficits under an uncon strained and, after the protests, under-pressure Prabowo.” The move to replace Sri Mulyani with Purbaya Yudhi Sadewa, an economist who has promised acce lerated growth, comes at a delicate time for Indonesia as it grapples with widespread protests and unrest that have raged for two weeks. Calls for a fairer taxation system have erupted as Prabowo faces the biggest challenge of his presidency so far while his flagship free meals programme that seeks to provide meals to over 80 million Indonesians has struggled in its first year. real kind of volume shift to low carbon fuels,” said Emma Mazhari, CEO at Maersk Oil Trading. Regulations including the European emissions trading scheme and maritime fuel standards are driving the shift, Mazhari said. “We can already see now when we bunker in Europe, there is increased supply of low carbon fuel ... so there’s definitely a lot of change coming,” she said. Because of the expected shift, Maersk is no longer investing in single-fuel ships. order to implement Japan’s trade deal, which includes a US$550 billion investment package. South Korea is yet to reach a written agreement on its deal, which was struck in July and includes a US$350 billion package to be invested in the United States. Presidential Policy Secretary Kim Yong-beom said that Japan and South Korea were in a different situation, echoing earlier comments by the

Beyond the rupiah market, investors were also keeping tabs on Indonesia’s international bonds which fell on Monday. The focus is on whether Sri Mulyani’s departure could force an exodus of global investors, although their exposure has drastically reduced in the past decade. – Reuters

Alternative marine fuels uptake will speed up after 2030: Executives

propulsion systems, he said. Hashimoto added that shipping decarbonisation has been going through a “stop and go” currently, though the development of low carbon marine fuels like green ammonia, green methanol and biomethane will be an imperative for the industry over the longer term. The shipping industry has been exploring lower-carbon alternative fuels to reduce its reliance on oil as it tries to meet carbon emission reduction targets set out by the United Nations’ International Maritime Organization. that needed to be addressed in order for South Korea to sign any agreement on the investment package was the impact it would have on the domestic dollar-won exchange market. South Korea was in a different position to Japan because the yen is an international currency, while Japan also has a currency swap programme and foreign exchange reserves that are three times larger than South Korea’s that would help cap the

“If we invest in new assets now, they have to be dual-fuel, so that we have the optionality also to make sure that we can recoup the investments on a long-term scale,” Mazhari said. Takeshi Hashimoto, CEO of Japan’s second-largest shipping company Mitsui OSK Lines (MOL) told the conference that over the next five to 10 years, shipping companies will focus first on reducing emissions through “proven products” like LNG and methanol. MOL is also aggressively exploring the use of wind power to assist ship industry minister and the foreign minister on Monday that Seoul could not agree to similar terms outlined in Japan’s agreement on the investment package. “While there is not much difference in trade surpluses, the size of the economy, more importantly foreign exchange market conditions are very different,” Kim told a live discussion forum. He said the most important matter

South Korea trade talks with US deadlocked over forex, says Seoul