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APAC Edition
6th May 2024
 
THE HOT STORY
Thailand pledges to enhance welfare benefits for workers
The Thai government is intensifying efforts to improve the welfare and working conditions of all workers, particularly focusing on the significant number of informal workers in the country. Recently, they passed new regulations to provide better protection and benefits. These include limiting the work hours for domestic workers to eight per day, with mandated breaks and a minimum of three personal leave days, along with up to 98 days of maternity leave, 45 of which are paid. The regulations also ensure that domestic workers earn at least the minimum wage, protect against termination due to pregnancy, and restrict nighttime work hours and holiday wage deductions for pregnant workers. Moreover, the government is addressing the broader needs of informal workers through the establishment of a working group led by Labour Minister Phiphat Ratchakitprakarn. This group aims to foster economic development and ensure income security at the local community level. A forthcoming bill seeks to offer more robust protections, define informal work more clearly, promote skill development, and support workers' rights to unionize. Additionally, it plans to establish a fund to provide financial aid to informal workers, among other supportive measures. This initiative underscores the government's commitment to enhancing the economic contributions and welfare of all workers in Thailand.
WORKFORCE
China's regional governments trim staff to focus on new policy priorities
China's regional governments are strategically reducing their workforce in public institutions to allocate more resources to new policy priorities. The restructuring has been discreetly carried out to avoid public scrutiny. The downsizing efforts in Henan province have resulted in a reduction of over 5,600 positions in provincial public institutions. However, more than 3,330 positions will be added to science research and tech innovation institutions. The restructuring plan focuses on fields related to people's livelihood and grass-roots stability. The job security in the public sector makes it highly sought-after, and downsizing is challenging due to the difficulty of dismissing public servants. The latest austerity measures aim to streamline noncore public functions and may not necessarily lead to a decrease in the number of civil servants. The tight government budget and economic softening also contribute to the freeze in headcounts. Local governments are finding alternative ways to manage workload without resorting to mass redundancies.
Staff crunch in Goa as migrant workers leave for elections
Goa is facing a labor shortage as migrant workers from states like Assam, Karnataka, West Bengal, Uttar Pradesh, and Bihar have left to vote in their respective elections. Restaurants, car washing centres, hotels, and small stores are among the establishments affected by the shortage. Political parties in north India have offered free train tickets and cash incentives to workers in Goa to encourage them to return home and vote. Housekeeping staff, maids, and housing society staff have also left, leaving many homeowners without help. The labor shortage is expected to worsen during the upcoming phases of the elections. While the manufacturing industries have not been significantly impacted, the service sector is struggling to cope with the lack of staff. The situation highlights Goa's dependence on migrant labor and the challenges it faces during election periods.
Voting presents problems for India's 'invisible' migrant workers
Millions of migrant workers in India are facing a dilemma as they struggle to vote in the country's general election. The costs of voting, including lost wages, travel expenses, and threats of job loss, are high for these workers. Many cannot afford to take time off work to travel back to their home towns to cast their votes. Experts estimate that internal migrants make up as much as 40% of the electorate. However, their voices are often ignored, and their rights are not prioritised. The lack of representation in elections could exacerbate their exploitation and limit their bargaining power. The Election Commission of India has considered alternative voting mechanisms, but none have yet been implemented. Remote voting solutions have been proposed, but challenges remain in ensuring the secrecy of voting. Despite the difficulties, some migrant workers say they are determined to vote for a better future for themselves and their children.
TECHNOLOGY
China's big tech firms experience employee exodus
In 2023, China's major tech companies—Baidu, Alibaba, and Tencent, collectively known as BAT—saw a reduction in their workforce, dropping by nearly 25,000 employees to a total of 364,477. This decline is part of a broader trend where the allure of tech jobs in China is diminishing as the sector's explosive growth cools. Many former employees are moving away from traditional tech roles to pursue entrepreneurial ventures, particularly in supporting online influencers. This shift is also influenced by significant business transformations within these tech giants, leading to changes in staffing needs.
HEALTH & WELLBEING
Queensland public servants to receive 10 days reproductive health leave
Queensland public servants will now have the benefit of 10 days of reproductive health leave per year, making it the first initiative of its kind in Australia. The leave will cover various reproductive health treatments, including fertility treatments, chronic reproductive health conditions, and preventative screenings for breast and prostate cancers. Workers will also be able to take leave for reproductive health procedures such as hysterectomies and vasectomies. The scheme is expected to be implemented by the end of September. The move has been praised by unions as a significant victory for workers. In addition to reproductive health leave, changes to superannuation payments for government workers were also announced. Public service workers who take unpaid maternity or paternity leave will have their super contributions paid for by the government for the entire 52-week parental leave period. This is aimed at addressing the gender pay gap and ensuring economic security for new parents, particularly women.
TALENT MANAGEMENT
Hong Kong must redefine its identity to attract diverse talent
Kavi Harilela, the business director of Payment Asia, highlights the pressing challenges facing Hong Kong's ambition to maintain its stature as an international financial hub. Hong Kong is currently grappling with a talent shortage and high operational costs, which are critical hurdles in its ability to adapt to the evolving demands of emerging markets. These markets necessitate cost-effective operations and skilled management, areas where Hong Kong is struggling, particularly in tech talent recruitment. The city's over-dependence on talent from mainland China and a lack of diversification in its workforce further diminish its attractiveness. However, initiatives like the Top Talent Pass Scheme show promise in making Hong Kong a more diverse and innovative financial center. Harilela suggests that by embracing innovation and multiculturalism, Hong Kong can rejuvenate its global appeal, attract top-tier professionals, and reaffirm its status as a leading global financial powerhouse.
LEGAL
Hong Kong hedge fund founders face criminal proceedings for insider dealing
Hong Kong's securities watchdog has started criminal proceedings against Segantii Capital Management founder Simon Sadler and former trader Daniel La Rocca over alleged insider dealing. The case involves shares of a locally listed company before a 2017 block trade. Sadler and La Rocca appeared in court and were released pending the next hearing. The founders are required to inform the regulator 24 hours before leaving Hong Kong and provide a full itinerary with contact details. They are also barred from direct or indirect contact with any prosecution witnesses. No further details have been provided on the allegations. Sadler founded the firm in Hong Kong in 2007 and built it into a regional giant. Segantii has faced previous regulatory trouble and was fined by South Korean regulators in December 2022. The fund's assets have declined in recent years. La Rocca recently joined JPMorgan Chase & Co. as the head of Asia-Pacific cash single stocks trading.
Pernod Ricard faces antitrust probe in India
The Competition Commission of India is investigating allegations that Pernod Ricard colluded with retailers in New Delhi to increase its market share. The spirits giant, known for brands such as Chivas Regal and Absolut vodka, holds a 17% share in India's liquor market. The accusations claim that Pernod asked retailers to stock more of its products in exchange for help securing loans for store licenses. Pernod denies any wrongdoing and states that it has not been notified of the new antitrust case. The company is already facing challenges in India, including license, tax, and antitrust issues, and is also contesting a fine of nearly $250m for alleged import undervaluation.
STRATEGY
Deutsche Bank plans to double assets in Southeast Asia and Middle East
Deutsche Bank plans to double its assets for rich families in Southeast Asia and the Middle East over the next five years. The bank is allocating resources to these regions due to increasing investment interest between prosperous families in Saudi Arabia, the United Arab Emirates, Southeast Asia, and Hong Kong. Deutsche Bank's private banking head, Claudio de Sanctis, stated that the bank has hired significantly more in these regions, primarily from Credit Suisse. The Middle East and Southeast Asia have become more important for private banks due to challenges in China and Hong Kong. Deutsche Bank's strategy puts it in direct competition with UBS Group. Deutsche Bank currently manages €606bn in assets, while UBS oversees almost $4trn. Despite recent cuts in Asia, the Southeast Asia, India, and Middle East markets remain strategic drivers for the bank.
Lululemon Athletica plans to enter India
Lululemon Athletica plans to enter India to cash in on surging demand for fitness and athleisure wear. A global team of Lululemon was in India recently to scout for locations where it could open stores. “They will most likely enter on their own and are not keen on partnerships with Indian companies," a source told the Economic Times. “They have spoken to a few malls in Mumbai, Delhi and Bangalore." Three years ago, the Canadian company opened a tech hub in Bengaluru, its first outside North America, to push global growth by using data science, machine learning, and full-stack cloud engineering to support merchandise planning and product and location information management.
CORPORATE GOVERNANCE
South Korea takes step to boost companies' stock market valuations
South Korea's regulators have issued guidelines to help companies increase shareholder returns and improve corporate governance, in an effort to boost the nation's stock market valuations. The "Corporate Value-up Program" allows listed firms to set targets for return on equity and other indicators. Companies ready to announce their goals and execution plans can do so later this month. The voluntary program aims to address the "Korea Discount" issue, whereby local companies have lower valuations compared to overseas peers due to family-controlled businesses. The program has already attracted foreign inflows and led to rallies in banks and automakers, and the government plans to offer tax benefits to incentivise more companies to participate.
Huawei names Yu Chengdong as chair of consumer business unit
China's Huawei Technologies has named Yu Chengdong, the chief of its consumer business, to a new role as chair of the unit. He Gang, the consumer business group's chief operating officer, taking over as chief executive. Yu, who has been the CEO of Huawei's consumer unit since 2012, will also continue as the chairman of the company's smart car solutions business. The appointment comes as Huawei faces restrictions from the US government, which accuses the company of being a security risk. Despite the challenges, Huawei saw rapid growth in its consumer segment under Yu's leadership.
INVESTMENT
Hong Kong's lack of familiarity with the Middle East may be about to change
For a place that prides itself as being Asia's World City, Hong Kong has shown a lack of familiarity with the Middle East, writes Filipe Pacheco for Bloomberg. However, this is finally changing as the Hong Kong exchange co-hosts a market forum with its Saudi Arabian counterpart for the first time. Bahrain-based Investcorp Holdings is also setting up a $1bn fund with a special emphasis on targeting Chinese companies listed in Hong Kong. Middle Eastern investors are increasingly interested in Hong Kong due to China's economic slump and the city's potential as a financial centre.
INTERNATIONAL
Brazil to increase income tax exemptions for individuals
Brazil's President Luiz Inacio Lula da Silva has announced plans to substantially increase income tax exemptions for individuals by the end of his term. The exemptions will apply to those earning up to 5,000 reais ($963) monthly and will be implemented by 2026. Lula emphasized that the tax breaks are intended to benefit those who work and depend on their salaries, rather than the wealthy. The move comes after a Brazilian Supreme Court justice extended payroll tax exemptions for 17 sectors of the economy. Lula's administration aims to provide tax relief for the poor while ensuring companies commit to creating jobs. The president has already approved a change that expands the income tax exemption cap to those earning up to two minimum wages per month. However, further increasing the exemption ceiling may pose challenges as the government strives to balance the public accounts. The Finance Ministry estimates a fiscal impact of 3 billion reais ($577.6m) for this year.
 


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