06/05/2025

BIZ & FINANCE TUESDAY | MAY 6, 2025

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Indonesia Q1 GDP growth slowest in three years

Ant Group plans to list overseas unit in Hong Kong, says report HONG KONG: Ant Group, an affiliate of China’s e-commerce giant Alibaba Group plans to list its overseas arm, Ant International, on the Hong Kong stock exchange, Chinese media reported, citing unnamed sources. Caixin, citing people close to the company, reported that Ant was communicating with regulators about the potential listing. The report did not say whether the discussions were taking place with regulators in China or elsewhere. Ant International is registered in Singapore. Ant was founded by billionaire Jack Ma and is 33% controlled by Alibaba. It operates China’s ubiquitous mobile payments app Alipay. Chinese authorities pulled the plug on Ant’s US$37 billion IPO in Shanghai and Hong Kong in 2020 and cracked down on Ma’s business empire soon after his speech in Shanghai in October that year accusing financial watchdogs of stifling innovation. That subsequently led to a forced restructuring of Ant and a nearly US$1 billion fine by Chinese regulators. Ant is in the process of securing a financial holding company licence, which, once obtained, could facilitate the revival of its IPO goal. – Reuters Number of Australia job ads rises in April SYDNEY: Australian job advertisements rose for a second month in April, suggesting the labour market remained healthy although the outlook is clouded by mounting global trade risks. Data from Australia and New Zealand Banking Group and employment website Indeed showed the number of job ads increased by 0.5% in April from March, when they rose 0.4%. Job ads in April were down 5.1% from a year earlier, although they remained 16.2% higher than pre-pandemic levels. The Reserve Bank of Australia skipped a chance to adjust interest rates in April but is widely expected to cut rates by a quarter point to 3.85% this month due to the hefty US tariffs on China that have fuelled fears of a global recession. “Global trade uncertainty is expected to impact domestic consumer and business sentiment,” said Aaron Luk, an economist at ANZ. “Lower economic activity will likely lead to less demand for labour.” Luk added that the bank now expects the jobless rate will peak at 4.4%, rather than 4.2% previously, due to the trade uncertainties. – Reuters

o Headwinds expected from global trade turmoil and declining household spending JAKARTA: Indonesia’s economy grew at its weakest pace in more than three years in the first quarter, with headwinds expected in the rest of the year stemming from global trade turmoil and declining household spending. Southeast Asia’s largest economy grew 4.87% in the first quarter from a year earlier, its slowest rate since the third quarter of 2021 and down from 5.02% in the previous quarter. Growth was roughly in line with analysts’ forecasts in a Reuters poll at 4.91%. President Prabowo Subianto, who took office last year, has pledged to lift GDP growth to 8% during his five-year term, but is facing challenges from slowing global growth amid a trade war, as well as weakening domestic demand and a tighter budget position. US-bound exports could also be hit by hefty tariffs in coming months, which Jakarta is looking to avert in talks with Washington. “Various challenges are already in sight, such as the negative impact of trade war tensions between the US and its trading partner countries, including Indonesia,” said Myrdal Gunarto, Maybank Indonesia economist. Global market uncertainties may also limit the central bank’s room to ease monetary policy, he said. Bank Indonesia has cut interest rates twice since September and has said it has room to cut further, though its priority was maintaining market stability. Hosianna Situmorang, Bank Danamon’s economist, said further growth deceleration to 4.79% is expected in the current quarter on slowing household spending and the impact of trade tensions. However, she kept Danamon’s 4.8% full-year forecast, expecting improvements in the second half of 2025. “We see indications of improvement coming from easing trade tensions, since

A crane loading a container onto a truck at Tanjung Priok Port in Jakarta. – REUTERSPIC

Spending on eating out, transportation and communication remained strong, but other spending, such as footwear purchases, was sluggish, Statistics Indonesia said. While the GDP data suggested stable purchasing power, other indicators suggested spending by urban middle class households was weakening, said Barra Kukuh Mamia, Bank Central Asia’s economist. First-quarter investment growth slipped to 2.12%, its lowest in two years. Government spending contracted, but there was an increase in the net export contribution to GDP due to slowing imports. The mining sector shrank about 1%, affected by a drop in coal prices. The agriculture sector provided one bright spot, with 10.5% growth, boosted by stronger rice and corn harvests. – Reuters

investors are predicting China would negotiate (with the US). The government should also begin to accelerate spending,” she said. Chief economic minister Airlangga Hartarto told reporters Indonesia’s growth remained higher than peers in the Group of 20 major economies, and that government spending would provide growth momentum going forward. On a non-seasonally adjusted, quarter-on-quarter basis, GDP contracted 0.98%, Statistics Indonesia data showed. In the first three months of 2025, household spending, which makes up over half of the country’s GDP, grew 4.89% annually, down just slightly from the previous three months, but marking the slowest pace in five quarters. That was despite higher spending during Ramadan, which fell in March this year. Both the MSCI and FTSE indices currently classify Vietnam as a frontier market, which prevents many funds, family offices, and others from investing in companies listed there. FTSE will hold its next regular review in September. Vietnam has been on FTSE’s watchlist for a possible upgrade since 2018. Vietnam’s benchmark stock index rose slightly yesterday morning, reaching 1,232 as of 0243 GMT (10.43am in Malaysia). Last November, Vietnam removed a requirement for overseas investors to fully

Vietnam stock exchange launches new trading system HANOI: Vietnam’s Ho Chi Minh Stock Exchange officially launched its new trading system yesterday, as the country pushes to unlock emerging market status and boost foreign investment. prefund equity trades, one of the longstanding barriers to its potential upgrade. The KRX had faced multiple delays due to regulatory and technical roadblocks.

“KRX can enhance market liquidity and pave the way for the launch of other new financial products including day trading, short-selling and derivatives, which will better benefit investors,“ Nguyen said. According to Nguyen, the system has been functioning properly so far, but it may take investors some time to get accustomed to it. – Reuters

The new system, known as KRX from Korea Exchange, is expected to shorten the settlement cycle and increase trading capacity, according to an earlier statement from the State Securities Commission. “The new system will establish the foundation for a central clearing counterparty system,” said Nguyen The Minh, head of research at Yuanta Securities Vietnam.

NZ central bank sees AI adoption posing risk to financial stability WELLINGTON: The rapid acceleration of artificial intelligence adoption in financial services presents a risk to financial stability, the Reserve Bank of New Zealand said in a report yesterday. “Errors in AI systems, data privacy concerns and market distortions could amplify existing risks,” the report said. “The growing reliance on a small number of third-party AI providers may also contribute to market concentration, creating new channels for contagion and increasing the potential impact of cyber-attacks.” However, it added that artificial intelligence tools and models were also providing benefits, including improved productivity, greater modelling accuracy, The report was released ahead of the twice-annual Financial Stability Report, due tomorrow. Kerry Watt, director of financial stability assessment and strategy at the central bank, added in a statement that there is considerable enhanced risk assessment capabilities, and strengthened cyber resilience.

uncertainty around how AI will shape the financial system. “We will continue to closely monitor developments in AI technology, adoption trends, and the evolving regulatory landscape, to ensure that the financial system remains well-positioned to manage emerging risks,”Watt said. – Reuters