MARKET UPDATE FOR ASEAN+3 May 2013
MARKET UPDATE FOR ASEAN+3 2 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian stocks fell after reports showed a slowdown in growth in U.S. payrolls and manufacturing. The MSCI Asia Pacific Index fell 0.4 percent to 140.85 as of 3:25 p.m. in Tokyo, with about three shares falling for every two that rose. Six of the 10 industry groups on the gauge retreated. Markets in China reopened after a holiday. The regional MSCI Asia Pacific gauge climbed 9.3 percent this year through yesterday amid optimism Japan will deploy more measures to beat deflation and that policy makers in the U.S. and China remain on standby to buoy growth.
The euro weakened for the first time in four days against the yen amid speculation the European Central Bank (ECB) will cut interest rates at a meeting today. The 17-nation currency snapped a four-day gain versus the dollar as a euro-area report showed the region’s manufacturing industry contracted at a faster pace last month. The euro declined 0.3 percent to 128.02 yen at 9:08 a.m. London time after rising 0.5 percent during the previous three days. Europe’s currency fell 0.1 percent to $1.3168. Meanwhile, the yen strengthened against all of its 16 major counterparts as China’s factory output slowed, spurring demand for the relative safety of Japan’s currency. The yen gained 0.2 percent to 97.22 per dollar after appreciating to 97.01 on April 30, the strongest since April 16.
Palm oil fell to the lowest level in more than a week as crude oil declined, reducing the appeal of vegetable oils as feedstock for biofuels. The contract for July delivery fell as much as 1.2 percent to 2,258 ringgit ($740) a metric ton on the Bursa Malaysia Derivatives, the lowest price for most-active futures since April 23, and ended the morning session at 2,268 ringgit. Futures declined 3.9 percent in April. In the meantime, West Texas Intermediate crude traded near the lowest level in more than a week after government data showed U.S. stockpiles climbed to the highest in 82 years.
BREAKING NEWS GLOBAL
The Federal Reserve said it will keep buying bonds at a monthly pace of $85 billion while standing ready to raise or lower purchases as economic conditions evolve. The statement at the conclusion of a two-day meeting in Washington yesterday highlights the option to boost purchases in response to data showing economic growth is slowing, in contrast with discussion of the timing of a reduction in the pace of buying at the Fed’s March meeting. The Fed repeated that bond buying will continue “until the outlook for the labor market has improved substantially.” It also left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent. The central bank said that it expects “economic growth will proceed at a moderate pace, and the unemployment rate will gradually decline.”
Euro-area manufacturing output contracted for a 21st straight month in April. This adds to pressure on the European Central Bank to cut interest rates to spur lending and
growth. A gauge of manufacturing in the 17-nation euro area declined to 46.7 last month from 46.8 in March, London-based Markit Economics said today. That’s above an initial estimate of 46.5 on April 23. A reading below 50 indicates contraction. The euroarea economic gloom contrasted with the U.K., where an April factory index released yesterday by Markit and the Chartered Institute of Purchasing and Supply rose more than economists forecast, adding to signs the economy may be starting to recover. The gauge rose to 49.8 from 48.6 in March.
U.K. steps up tax crackdown with Caribbean Accord. The U.K. signed agreements with territories including Anguilla, Bermuda and the British Virgin Islands in the latest effort to fight tax evasion as the government struggles to contain its borrowing. All the British overseas territories with financial centers signed up to the government’s effort, “marking a turning point in the fight against tax evasion and illicit finance,” the Treasury said in a statement in London yesterday. Last month, the U.K. government gave individuals evading tax through the Isle of Man, Guernsey and Jersey three years to pay up or face prosecution. Under today’s agreement, the territories will share the information with France, Germany, Italy and Spain as well as the U.K.
REGIONAL
China’s manufacturing expanded at a weaker pace in April. The Purchasing Managers’ Index was at 50.6, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. That compared with a March reading of 50.9. A gauge of new orders in China manufacturing fell to 51.7 from 52.3 in March, while an index of new export orders dropped to 48.6 from 50.9 and the reading on inventories of finished goods declined to 47.7 from 50.2, according to today’s data, based on a survey of businesses.
The Indonesian government is trimming down the tax obligations of petroleum companies in a bid to bolster oil production at a time of dwindling reserves. Oil and gas contractors would be exempt from import duties, value-added tax (PPN) and luxurygoods sales tax as of April this year under the new Finance Ministry’s regulation PMK 70/2013. Upstream regulatory task force SKK Migas’ risk management and tax chief Bambang Yuwono said that the new regulation would be applied to companies actively exploring new sites as well as contractors at the exploitation stage.
The Philippines wins investment grade from Standard & Poor’s (S&P). The rating on the nation’s long-term foreign currency-denominated debt was raised one level to BBBfrom BB+, S&P said in a statement today. The outlook on the rating is stable. The Philippines won a credit rating upgrade with S&P becoming the second assessor this year to award the nation an investment rank as President Benigno Aquino leads a growth resurgence. Fitch Ratings was the first to upgrade the Philippines to investment grade in March. Meanwhile, Moody’s Investors Service rates the nation one step below.
Thai inflation slowed for a fourth straight month in April as government measures and subsidies continued to hold down prices and continued baht gains eased energy costs. Commerce Ministry figures showed consumer prices rising by 2.4% year-on-year last month against 2.7% in March, 3.2% in February, 3.4% in January and 3.6% in December, when the rate was the highest since November 2011. The ministry has begun using 2011 instead of 2007 as the base year for calculating inflation, with the number of consumer Page 2 of 7
items monitored rising to 450 from 417. The new items include fresh food, cooked food, natural gas for vehicles, interprovincial vans, security guard payments and nursery costs.
Vietnam and Laos expect to increase two-way trade turnover to US$2 billion by 2015 and $5 billion by 2020. According to Tran Bao Giam, Trade Counsellor at the Vietnamese Embassy in Laos, Vietnamese products currently account for 16.4 per cent of Laos' imports – particularly steel and iron, petrol, vehicles, machines and spare parts, coal and textiles. Giam said that the biggest difficulties Vietnamese enterprises faced when entering the market were the small size of the Lao economy, poor transport infrastructure and an incomplete legal framework or policy foundation. In addition, Vietnamese companies must do everything by themselves, from purchasing goods to transporting, delivering and marketing, due to the lack of supporting services and weak transport connections.
IFIs NEWS (compiled from their websites) ADB – Press Release: ASEAN Infrastructure Fund Readies $1 Billion Pipeline for Lending Operations
The ASEAN Infrastructure Fund Limited (AIF) is set to begin its lending operations in the second half of 2013, with a pipeline of around $1 billion in projects for the next three years. At the meeting of the AIF Board of Directors, which took place on the sidelines of the 46th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB), the AIF Board reconfirmed the full operationalization, and also discussed progress on infrastructure projects identified for the pipeline, the development of financial-policy and risk-management frameworks, and efforts to support public-private partnerships (PPP) in infrastructure development. http://www.adb.org/news/asean-infrastructure-fund-readies-1-billion-pipeline-lendingoperations
ADB – Press Release: Participants Gather for ADB's 46th Annual Meetings
Delegates have begun arriving on May 1st at the India Expo Centre and Mart in Greater Noida, Delhi National Capital Region, to register for the Asian Development Bank’s (ADB) 46th Annual Meeting of its Board of Governors, which begins May 2nd. This year’s Governors’ Seminar, Beyond Factory Asia: Fueling Growth in a Changing World, will look at ways the region can transform its economic model, moving from factory-driven manufacturing up the production value chain to alternative growth sources while avoiding the middle income trap. http://www.adb.org/news/speeches/opening-press-conference-statement-46thannual-meeting-adb-board-governors?ref=annual-meeting/2013/speeches(Opening Press Conference Statement by ADB President Takehiko Nakao on May 2nd) http://www.adb.org/news/participants-gather-adbs-46th-annual-meeting(Press Release) http://www.adb.org/annual-meeting/2013/kspe/governors-seminar(Governors’ Seminar: Beyond Factory Asia: Fueling Growth in a Changing World)
IMF – Policy Paper: “Update on the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries” Page 3 of 7
The IMF has publicised the above-stated policy paper. http://www.imf.org/external/np/pp/eng/2013/040313.pdf
IMF – Press Release: World Experts Share Experiences to Better Implement Macroprudential Policies
An international workshop jointly organized by the Bank of Thailand and the International Monetary Fund (IMF) was held on April 27-28 in Bangkok to facilitate the discussion and sharing of experiences by the participants with regards to their respective countries’ use and progress of macroprudential tools to tackle systemic risks and, in general, to strengthen surveillance of financial stability. On a final note, the participants addressed some of the challenges that have arisen with the implementation of policies, including the interaction between macroprudential policies and monetary policy and how to use the macroprudential toolkit to cope with volatile international capital flows. http://www.imf.org/external/np/sec/pr/2013/pr13148.htm
IMF – Working Paper: “The Impact of Debt Sustainability and the Level of Debt on Emerging Markets Spreads”
The IMF has publicised the above-stated working paper. http://www.imf.org/external/pubs/ft/wp/2013/wp1393.pdf
World Bank – Press Release: China Receives US$95 Million Grant to End Production of Ozone-Depleting Global-Warming Gases to help Meet its Targets under the Montreal Protocol
China, the world's largest producer of hydrochlorofluorocarbons (HCFC), received a US $95 million grant on April 23, 2013 to help reduce its production of HCFCs. The grant is from the Multilateral Fund for the Implementation of the Montreal Protocol on Substances that Deplete the Ozone Layer, which provides the funds in exchange for verified annual reductions of HCFC production levels. The new grant will enable China to reduce its production of HCFCs by 10 percent, or 47,000 metric tons from 2010 levels by 2015, thereby meeting its initial HCFC reduction targets under the Protocol. http://www.worldbank.org/en/news/press-release/2013/05/02/china-receives-us-95million-grant-to-end-production-of-ozone-depleting-global-warming-gases
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 1-May 2-May close China 6.23 6.17 6.17 6.16 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,722.00 9,724.00 9,738.00 Japan 86.75 98.05 97.39 97.21 Korea 1,064.40 1,112.01 1,101.18 1,101.60 Malaysia 3.06 3.03 3.04 3.05 Philippines 41.01 41.27 41.13 40.94 Singapore 1.22 1.24 1.23 1.23 Thailand 30.59 29.24 29.34 29.40 Vietnam 20,840.00 20,930.00 20,930.00 20,935.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.17 0.01 -0.14 0.19 -0.04 -0.27 0.48 -0.04 -0.20 -0.02
2013 YTD (%chg) 1.3 -0.1 -0.9 -10.2 -3.5 -0.5 -0.2 -1.0 3.2 -0.5
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STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,177.9 22,547.7 4,978.5 13,884.1 1,944.6 1,711.3 7,025.4 3,348.9 1,582.9 474.5
OVERNIGHT LENDING RATE (%) 1-May 2-May 2.810 2.800 0.078 0.079 4.174 4.174 0.068 0.093 2.750 2.750 3.000 3.000 2.656 2.350 0.101 0.101 2.750 2.750 2.388 2.550
1-May 2,177.9 22,737.0 5,060.9 13,799.4 1,964.0 1,717.7 7,071.0 3,368.2 1,597.9 474.5
bps change -1.00 0.07 0.00 2.50 0.00 0.00 -30.60 0.00 0.00 16.20
2-May
% change
2,174.1 22,668.3 4,994.0 13,694.0 1,957.2 1,713.5 7,093.4 3,401.2 1,595.0 473.0
-0.17 -0.30 -1.32 -0.76 -0.34 -0.24 0.32 0.98 -0.18 -0.31
2013 YTD (%chg) -4.2 -2.8 14.9 31.7 -3.6 2.3 21.0 6.2 13.3 13.1
3-MONTH INTERBANK LENDING RATE (%) 1-May 2-May bps change 3.882 3.883 0.09 0.377 0.377 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.760 2.760 0.00 3.210 3.210 0.00 1.428 1.451 2.30 0.371 0.371 0.00 2.852 2.851 -0.08 5.688 6.000 31.20
CREDIT DEFAULT SWAP (IN BPS) 30-Apr 1-May bps change China 70.55 70.55 0.00 Hong Kong SAR 43.82 43.82 0.00 Indonesia 127.54 127.54 0.00 Japan 64.48 64.82 0.34 Korea 70.80 70.80 0.00 Malaysia 80.83 80.83 0.00 Philippines 87.39 87.39 0.00 Thailand 87.62 87.62 0.00 Vietnam 199.52 199.52 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 1-May 2-May Gold Spot (in US$ per 1,457.6 1,455.5 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.14
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore
S&P AAAAA BB+ AAA ABBBAAA
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 --
Fitch A+ AA+ BBBAA A+ ABBBAAA
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Thailand Vietnam
BBB+ BB-
Baa1 B1
BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a n.a n.a n.a 139.9 n.a n.a 176.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,440.0 521.2 572.8 6.6 China 303.8 149.4 752.6 2.0 Hong Kong SAR 104.8 55.5 43.9 1.9 Indonesia 1,254.4 70.4 2,371.0 17.8 Japan 327.4 156.7 126.7 2.1 Korea 139.9 56.7 30.4 2.5 Malaysia 84.0 20.1 8.5 4.2 Philippines 258.2 121.5 964.3 2.1 Singapore 176.8 68.1 60.7 2.6 Thailand 21.3 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
CHINA HONG KONG HONG KONG
HSBC Manufacturing PMI Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)%
Period
Apr Mar Mar
Last
6.0 0.4 2.4 0.5 2.6 4.6 9.9 0.3 2.9 -
Previous
50.4
51.6
10.2 9.8
21.9 22.7
SELECTED ECONOMIC RELEASES CALENDAR (15 Apr – 19 Apr 2013) Expected Release Date
4/29/2013 4/30/2013
Economies
Indicators
Period
SOUTH KOREA JAPAN PHILIPPINES SINGAPORE
Current Account in (USD mn) Job-To-Applicant Ratio Budget Deficit/Surplus (PHP bn) Unemployment Rate (sa)%
Mar Mar Mar 1Q P
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5/1/2013
5/2/2013
5/3/2013
JAPAN HONG KONG JAPAN SOUTH KOREA THAILAND THAILAND THAILAND SOUTH KOREA SOUTH KOREA SOUTH KOREA THAILAND THAILAND SOUTH KOREA SOUTH KOREA CHINA JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA THAILAND THAILAND INDONESIA CHINA INDONESIA INDONESIA HONG KONG HONG KONG THAILAND INDONESIA HONG KONG INDONESIA
Industrial Production YOY% Govt Mthly Budget Surp/Def (HKD bn) Jobless Rate % Industrial Production (YoY)% Business Sentiment Index Total Exports YOY% Total Imports YOY% Business Survey- Manufacturing Business Survey- Non-Manufacturing Industrial Production (MoM)% Current Account Balance (USD mn) Total Trade Balance (USD mn) HSBC Manufacturing PMI Consumer Price Index (YoY)% PMI Manufacturing Official Reserve Assets (USD bn) Consumer Price Index (MoM)% Foreign Exchange Reserve (USD bn) Ext Trade - Imports (YoY)% Core Consumer Price Index(YoY)% Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Core CPI (YoY)% Consumer Price Index (YoY)% Inflation (YoY)% HSBC Manufacturing PMI Consumer Confidence Index Money Supply - M2 (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Reserves (USD bn) Net Foreign Assets (IDR Tln) Purchasing Managers Index Foreign Reserves (USD bn)
Mar P Mar Mar Mar Mar Mar Mar May May Mar Mar Mar Apr Apr Apr Apr Apr Apr Apr Apr Mar Apr Mar Apr Mar Apr Apr Apr Apr Apr Mar Mar Mar Apr 26 Apr Apr Apr
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 6 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian stocks outside Japan rise on U.S. jobs growth. Asian stocks rose, led by mining companies, after faster-than-forecast U.S. employment growth bolstered optimism in the world’s largest economy, pushing a regional equities gauge toward a ten-week high. The MSCI Asia Pacific excluding Japan Index gained 0.8 percent to 484.68 as of 2:15 p.m. in Hong Kong, with almost three stocks rising for each that declined. Markets in Japan, Thailand and the U.K. are closed for a holiday.
European stocks decline before retail sales. European shares fell before data that will probably show retail sales declined. Stocks in Malaysia rose the most in four years and the currency strengthened after the ruling coalition won elections. Corn retreated. The Stoxx Europe 600 Index lost 0.1 percent at 8:48 a.m. in London, while Standard & Poor’s 500 Index futures were little changed. The FTSE Bursa Malaysia KLCI Index (FBMKLCI) jumped 3.3 percent and the ringgit rose 2.1 percent against the dollar. The yuan sank the most since October 2011 in offshore trading, while the Australian dollar weakened against all its major peers. Corn slid 1.9 percent and crude gained for a third day in New York. Retail sales in the euro area may fall 0.1 percent in March from the previous month, according to a Bloomberg survey of analysts, as French Finance Minister Pierre Moscovici declared the era of austerity over and his German counterpart Wolfgang Schaeuble offered flexibility on deficit cutting. Malaysia’s Prime Minister Najib Razak won a clear majority in the election, allowing him to continue his economic reforms.
Gold bulls split with Buffett as traders say sell. Hedge funds increased bets on a gold rally by the most in three weeks as central banks signaled no end to economic stimulus, driving prices higher just as analysts and traders turned the most bearish in three years. The funds and other large speculators raised their net-long position by 19 percent to 54,762 futures and options as of April 30, U.S. Commodity Futures Trading Commission data show. Holdings of so-called short contracts retreated 9.2 percent, the most since March 19. Net-bullish wagers across 18 U.S.-traded raw materials jumped 28 percent to 550,182, the biggest increase in seven weeks, led by gains in soybeans, cocoa and crude oil. Gold rallied 4.9 percent in the past two weeks after entering a bear market April 12. The Federal Reserve raised the prospect of increasing its monthly bond buying on May 1 and the European Central Bank cut borrowing costs to a record low the next day. Billionaire investor Warren Buffett said the metal has no appeal even after the slump, and a weekly Bloomberg survey of analysts and traders was the most bearish since February 2010.
BREAKING NEWS GLOBAL
Diminished housing wealth effect keeps pressure on Fed. The wealth effect from rising house prices may not be as effective as it once was in spurring the U.S. economy. Rather than using their properties as ATM machines to boost spending, homeowners increasingly are paying down the principal and shortening the maturities of their mortgages in a move Florida banker Rob Nunziata calls “forced savings.” Cash-in
refinancings -- in which borrowers invest more of their own money in the house -outnumbered cash-outs by more than two-to- one in the fourth quarter, according to Freddie Mac. The wealth effect “is much smaller,” said Amir Sufi, professor of finance at the University of Chicago Booth School of Business. Sufi, who participated in last year’s central-bank conference at Jackson Hole, Wyoming, reckons that each dollar increase in housing wealth may yield as little as an extra cent in spending. That compares with a 3to-5-cent estimate by economists prior to the recession.
European investor sentiment rises amid Italian government. European investor confidence rose in May after a two-month political stalemate in Italy came to an end and the European Central Bank cut interest rates to a record low, the Sentix research institute said. An index measuring sentiment in the euro area rose to minus 15.6 from minus 17.3 in April, the Limburg, Germany-based institute said in an e-mailed statement. That’s the first gain in three months. Economists had predicted an increase to minus 15.2, according to the median of 20 estimates in a Bloomberg News survey. A gauge of economic expectations jumped to 2.8 from 0.5, while a measure of current conditions rose to minus 32.2 from minus 33.5.
France declares austerity over as Germany offers wiggle room. French Finance Minister Pierre Moscovici declared the era of austerity over after his German counterpart offered flexibility on deficit cutting amid renewed bickering between Europe’s two biggest economies. “We’re witnessing the end of the dogma of austerity” as the only tool to fight the euro debt crisis, Moscovici said yesterday on Europe 1 radio. “We’ve been pleading for a growth policy for a year. Austerity on its own impedes growth.”
REGIONAL
China’s stocks rise to two-week high. China’s stocks rose to a two-week high as commodity producers jumped on U.S. jobs data and China United Network Communications Ltd. (600050) led a rally for phone companies after its controlling shareholder increased its stake. The Shanghai Composite Index (SHCOMP) advanced 1.2 percent to 2,231.17 at the close, the highest level since April 22. The measure trades at 9.6 times estimated earnings, compared with the seven-year average of 17.5, according to data compiled by Bloomberg. The CSI 300 Index climbed 1.3 percent to 2,525.98. The Hang Seng China Enterprises Index (HSCEI) added 1.5 percent.
Japan seeks to boost financial ties with ASEAN amid China row. Japan said it will boost financial cooperation with Southeast Asian nations, support their bond markets and make it easier for Japanese companies to raise funds in local currencies. Asia’s secondlargest economy will also consider reviving emergency monetary arrangements with Malaysia, Singapore and Thailand, the Japanese finance ministry said in a statement after a meeting of finance ministers and central bankers from Japan and the Association of Southeast Asian Nations, or Asean, near New Delhi on May 3. Japan is strengthening ties with countries in the region as it tries to revive growth and as tensions with China escalate over a territorial dispute. Japanese companies are increasing investment in the 10 members of the Asean group as they seek to counter the fallout from the row with China that’s damaged a $340 billion trade relationship..
South Korea bond yields climb on signs rates on hold; Won rises. The yield on South Korea’s five-year bonds rose the most in three weeks on speculation investors who were Page 2 of 7
betting interest rates would fall sold debt after central bank Governor Kim Choong Soo signaled they may stay on hold. Kim said yesterday that the 50 basis points of monetary easing last year were “very big,” Yonhap News reported. Fourteen of 18 analysts surveyed by Bloomberg forecast the benchmark seven-day repurchase rate will be left at 2.75 percent on May 9, while four predict a 25 basis-point reduction.
Malaysia government defeats Anwar to extend 55-year rule. Malaysia Prime Minister Najib Razak’s coalition extended its 55-year rule, sparking a rally in stocks and the ringgit even as Anwar Ibrahim’s opposition alliance vowed to contest some results. Barisan Nasional won 133 seats in the 222-member parliament. Najib’s United Malays Nasional Organisation now holds 109, or 82 percent of the coalition’s seats, up from 56 percent previously, according to Election Commission data, as support for ethnic- Chinese component parties dwindled. Opposition leader Anwar Ibrahim's People’s Alliance took 89 seats.
Philippines mulls property-loan curbs, rejects capital controls. The Philippines may further limit property loans to prevent a housing bubble as it uses lower interest rates rather than capital controls to deter inflows. The Philippines has cut borrowing costs, banned foreign funds from special deposit accounts and eased rules for outflows, striving to manage an investment influx lured by economic growth exceeding 6 percent and improved credit ratings. Cheaper loans stoked an 18.9 percent climb in property lending and investment to a record 561.6 billion pesos ($13.7 billion) in the first half of 2012, central bank data show.
IFIs NEWS (compiled from their websites) ADB – Press Releases
The ADB has publicised the following news:
“Asia Prosperity Requires More Innovation, Inclusion, Integration - ADB President” http://www.adb.org/news/asia-prosperity-requires-more-innovation-inclusionintegration-adb-president
“Healthy Bond Market Crucial to Funding Asia's Infrastructure Needs - ADB Seminar” http://www.adb.org/news/healthy-bond-market-crucial-funding-asiasinfrastructure-needs-adb-seminar
ADB – Publications
The ADB has publicised the following reports:
“Development Effectiveness Review 2012” http://www.adb.org/news/adb-improves-performance-2012-meets-majority-itstargets (Press Release) http://www.adb.org/documents/development-effectiveness-review-2012-report (Overview of Report) http://www.adb.org/sites/default/files/defr-2012.pdf (Report)
“Empowerment and Public Service Delivery in Developing Asia and the Pacific – Policy Report”
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http://www.adb.org/news/asias-public-services-failing-needy-new-approachesrequired-study (Press Release) http://www.adb.org/publications/empowerment-and-public-service-deliverydeveloping-asia-and-pacific (Overview of Report) http://www.adb.org/sites/default/files/pub/2013/empowerment-public-servicedelivery-asia.pdf (Policy Report) ADB and ADBI – Publication: “Connecting South Asia and Southeast Asia: Interim Report”
The ADB and ADBI have co-published an interim report which analyzes how closer regional connectivity and economic integration between South Asia and Southeast Asia can benefit both subregions, with a focus on the role played by infrastructure and public policies in facilitating this process. “This report examines major developments in South Asia–Southeast Asia trade and investment, economic cooperation, the role of economic corridors, and regional cooperation initiatives. In particular, it identifies significant opportunities for strengthening these integration efforts as a result of the recent opening up of Myanmar in political, economic, and financial terms.” http://www.adb.org/news/improved-south-southeast-asia-connectivity-key-boostingtrade-rebalancing-economy-0 (Press Release by ADB) http://www.adbi.org/files/2013.05.05.book.connecting.south.asia.southeast.asia.interi m.report.pdf (Publication)
IMF – Conference: “European, Monetary and Capital Markets, and Research Department Conference: Financial Structure: The Issues”
Recent financial reform debates have focused on three structural issues: altering the permissible activities of financial institutions; adapting the balance of banks, capital markets and shadow banks in the financial system; and changing the systems for supervisory oversight and intervention across borders. The IMF will be holding the above-stated conference on Friday, May 17, 2013 which will take stock of latest analysis and policy proposals on these issues. The conference is by registration only and the deadline for registration is by Wednesday, May 15, 2013. http://www.imf.org/external/np/seminars/eng/2013/financial/index.htm (Press Release) http://www.imf.org/external/np/seminars/eng/2013/financial/pdf/poster.pdf (Meeting’s Agenda) http://www.imf.org/external/FSIRegistration/Register.aspx (Registration Page)
IMF – Working Paper: “Monetary Policy in Emerging Markets: Taming the Cycle”
The IMF has publicised the above-stated working paper. http://www.imf.org/external/pubs/ft/wp/2013/wp1396.pdf
OECD– Publication: ‘OECD Trade Facilitation Indicators”
Multilateral agreement to cut red tape in international trade would dramatically reduce trading costs and add a substantial boost to the global economy, according to a new OECD research. “Trade facilitation is about easing access to the global marketplace,” OECD Secretary-General Angel Gurría said. “Complicated border processes and excess red tape raise costs, which ultimately fall on businesses, consumers and our economies. The trade facilitation negotiations offer countries a golden opportunity to reduce or Page 4 of 7
eliminate these bottlenecks, cut the cost of trading, boost the flow of goods and reap greater benefits from international trade,” Mr Gurría said. http://www.oecd.org/newsroom/trade-facilitation-agreement-would-add-billions-toglobal-economy-says-oecd.htm (Press Release) http://www.oecd.org/trade/facilitation/indicators.htm (Trade Facilitation Indicators)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 3-May 6-May close China 6.23 6.16 6.16 6.17 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,735.00 9,735.00 9,736.00 Japan 86.75 98.99 98.99 99.36 Korea 1,064.40 1,097.20 1,097.20 1,094.48 Malaysia 3.06 3.03 3.03 2.98 Philippines 41.01 40.85 40.85 40.93 Singapore 1.22 1.23 1.23 1.23 Thailand 30.59 29.70 29.70 29.61 Vietnam 20,840.00 20,940.00 20,940.00 20,936.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.17 -0.01 -0.01 -0.37 0.25 1.82 -0.18 0.14 0.30 0.02
2013 YTD (%chg) 1.1 -0.1 -0.9 -12.1 -2.8 1.9 -0.2 -1.0 2.4 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,205.5 22,690.0 4,925.5 13,694.0 1,965.7 1,694.8 7,215.4 3,369.9 1,579.0 475.2
OVERNIGHT LENDING RATE (%) 3-May 6-May 2.100 2.790 0.077 0.078 4.174 4.173 0.095 0.095 2.750 2.750 3.000 3.000 2.200 1.764 0.088 0.088 2.750 2.750 2.500 2.500
CREDIT DEFAULT SWAP (IN BPS) 2-May China 71.82 Hong Kong SAR 43.85 Indonesia 129.08 Japan 65.33 Korea 71.33 Malaysia 81.86
3-May 71.82 43.85 129.08 65.33 71.33 81.86
3-May 2,205.5 22,690.0 4,925.5 13,694.0 1,965.7 1,694.8 7,215.4 3,369.9 1,579.0 475.2
bps change 69.00 0.07 -0.07 0.00 0.00 0.00 -43.60 0.00 0.00 0.00
6-May 2,231.2 22,915.1 4,991.9 13,694.0 1,961.5 1,752.0 7,170.7 3,382.6 1,579.0 488.3
% change 1.16 0.99 1.35 0.00 -0.22 3.38 -0.62 0.38 0.00 2.75
2013 YTD (%chg) -1.7 -1.7 14.8 31.7 -3.4 4.6 22.3 5.7 12.2 16.7
3-MONTH INTERBANK LENDING RATE (%) 3-May 6-May bps change 3.881 3.881 -0.04 0.376 0.378 0.14 4.900 4.900 0.00 0.230 0.230 0.00 2.750 2.750 0.00 3.210 3.210 0.00 1.009 1.046 3.70 0.371 0.372 0.08 2.848 2.848 0.00 5.550 5.550 0.00
bps change 0.00 0.00 0.00 0.00 0.00 0.00
Page 5 of 7
Philippines 87.51 87.51 0.00 Thailand 88.16 88.16 0.00 Vietnam 199.61 199.61 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 3-May 6-May Gold Spot (in US$ per 1,470.8 1,473.5 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change 0.18
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a n.a n.a n.a 139.9 n.a n.a 177.8 n.a
EXTERNAL LIQUIDITY RATIOS
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
3,440.0 303.8 104.8 1,254.4 327.4 139.9 84.0 258.2 177.8 21.4
521.2 149.4 55.5 70.4 156.7 56.7 20.1 121.5 68.1 30.9
572.8 752.6 43.9 2,371.0 126.7 30.4 8.5 964.3 60.7 10.0
Reserves over short-term debt
6.6 2.0 1.9 17.8 2.1 2.5 4.2 2.1 2.6 -
6.0 0.4 2.4 0.5 2.6 4.6 9.9 0.3 2.9 -
Page 6 of 7
Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
SOUTH KOREA CHINA INDONESIA INDONESIA
Foreign Exchange Reserve (USD bn) China HSBC Services PMI GDP Constant Price (YoY)% GDP Constant Price (QoQ)%
Period
Apr Apr 1Q 1Q
Last
Previous
328.8 51.1 6.02 1.41
327.4 54.3 6.11 -1.45
SELECTED ECONOMIC RELEASES CALENDAR (15 Apr – 19 Apr 2013) Expected Release Date
5/6/2013
5/7/2013
5/8/2013
5/9/2013
5/10/2013
Economies
Indicators
Period
SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG PHILIPPINES PHILIPPINES SINGAPORE MALAYSIA SOUTH KOREA CHINA MALAYSIA MALAYSIA CHINA CHINA JAPAN SOUTH KOREA CHINA MALAYSIA CHINA JAPAN HONG KONG HONG KONG CHINA PHILIPPINES JAPAN
Foreign Exchange Reserve (USD bn) China HSBC Services PMI GDP Constant Price (YoY)% GDP Constant Price (QoQ)% Foreign Currency Reserves (USD bn) Consumer Price Index (YoY)% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Reserves (USD bn) Bank Lending to HH (KRW Tln) Trade Balance (USD bn) Exports YoY% Imports YoY% Exports YoY% Imports YoY% Official Reserve Assets (USD bn) South Korea 7-Day Repo Rate % Consumer Price Index (YoY)% Overnight Rate % Producer Price Index (YoY)% Current Account Balance YOY% GDP sa (QoQ)% GDP (YoY)% New Yuan Loans (RMB bn) Total Exports (YoY)% Current Account Total (JPY bn)
Apr Apr 1Q 1Q Apr Apr Apr Apr Apr 30 Apr Apr Mar Mar Apr Apr Apr May 9 Apr May 9 Apr Mar 1Q 1Q Apr Mar Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 7 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Europe shares advance with Asian stocks on rate cuts. European stocks climbed toward a five- year high and Asian shares jumped as the Reserve Bank of Australia joined the European Central Bank in cutting interest rates to record lows to sustain economic growth. Australia’s dollar slid against all its 16 major peers and crude oil fell. The Stoxx Europe 600 Index (AS51) added 0.1 percent to 301.22 as of 8:05 a.m. in London, set for its highest close since June 2008. Standard & Poor’s 500 Index futures slipped 0.1 percent as the MSCI Asia Pacific Index added 1.3 percent, led by the Topix (TPX) Index’s 3.1 percent gain as trading resumed after Japanese holidays. The yen rose 0.3 percent, while the so-called Aussie slid as much as 0.7 percent to $1.0178, the lowest since March 4. Crude declined 0.8 percent..
•
Asian stocks rise second day as RBA cuts interest rates. Asian stocks rose for a second day as the Reserve Bank of Australia cut its benchmark interest rate and the European Central Bank said it’s ready to lower borrowing costs. Japan’s Topix Index erased losses from the 2008 collapse of Lehman Brothers Holdings Inc. The MSCI Asia Pacific Index climbed 1.3 percent to 142.10 as of 5:09 p.m. in Tokyo, with more than two shares rising for each that fell. The gauge climbed 8.5 percent this year through yesterday amid optimism the Bank of Japan will deploy more measures to beat deflation and policy makers in the U.S. and Europe remain on standby to buoy growth.
•
Gold’s peak seen over by Coutts on dollar, inflation outlook. Coutts & Co. scaled back gold holdings as prices fell through $1,600 an ounce, saying that a return to the peak isn’t likely unless there’s a crisis in the Middle East, a weaker dollar or a jump in inflation. Gold fell into a bear market in April as investors sold the metal in favor of riskier assets, spurred by expectations that the global economy was recovering and stimulus programs would be reduced. Holdings in exchange-traded products slumped by the biggest amount ever last month as the Standard & Poor’s 500 Index reached an all-time high. Dugan said in August that gold would extend its rally as weaker currencies boosted demand, with his comments preceding an advance to an 11-month high in October.
BREAKING NEWS GLOBAL •
EU’s Rehn says too soon to say if Slovenia to need bailout. European Union Economic and Monetary Affairs Commissioner Olli Rehn praised Slovenia for taking steps to bolster the economy while saying it’s too early to know whether the nation can avoid becoming the sixth euro-area member to need a financial rescue. “We first want to analyze the programs before commenting,” Rehn said in an interview today in Brussels. “Slovenia is intensively preparing a stability and reform program that will tackle the problems they are facing and reverse the negative trend in the economy.” Slovenia plans to increase taxes to make up for a swelling budget shortfall as the country works to recapitalize its banks. The Adriatic nation’s overhaul program and bankrecapitalization plan, which will be presented to the European Commission, are meant to show Slovenia can avoid requesting outside assistance.
•
Portugal notes rise before first sale of 10-year debt since 2011. Portugal’s two- and five-year notes advanced after the nation hired banks for its first issue of 10- year securities since the country asked for a bailout from the European Union two years ago. The nation’s 10-year bonds were little changed after yields dropped to the lowest level since August 2010. Investors have indicated interest in excess of 4 billion euros ($5.23 billion) for the debt maturing in February 2024 though the offer size of 3 billion euros will not be increased, according to a person with knowledge of the deal, who didn’t want to be identified..
•
RBA Cuts Key Rate to Record-Low 2.75% to Combat Aussie. The Reserve Bank of Australia cut its benchmark interest rate to a record low, driving down a currency that has damaged manufacturing and boosted unemployment. Governor Glenn Stevens reduced the overnight cash-rate target by a quarter percentage point to 2.75 percent, saying in a statement that the Aussie’s record strength “is unusual given the decline in export prices and interest rates.” Eight of 29 economists predicted the seventh cut in the past 19 months, while money markets had seen about a 50-50 chance.
REGIONAL •
China names Yuan convertibility plan as goal this year. China signaled it will propose plans this year to allow freer flows of its currency in and out of the nation as part of measures to loosen control over the yuan and interest rates. The plan on yuan capitalaccount convertibility will also include a way to let individuals make overseas investments, the State Council said in a statement yesterday after a meeting led by Premier Li Keqiang on the focus of economic reforms in 2013. Other measures include improving controls on risks from local- government debt, expanding trials of valueadded taxes on companies and pushing forward changes to the country’s householdregistration system.
•
China said to tighten approvals for local government bond sales. China has ordered greater scrutiny of bond sales by local government finance vehicles with higher levels of debt, three people with knowledge of the matter said. The National Development and Reform Commission, which approves bond sales by companies that local governments set up to finance projects, will more strictly review applications for debt with credit ratings below AA+ sold by issuers with debt-to- asset ratios exceeding 65 percent, said the people, who asked not to be identified as they weren’t authorized to speak publicly about the order. China’s central government has sought to rein in borrowing by local governments on concerns that slowing economic growth could result in some financing vehicles being unable to repay debt, saddling banks with bad loans. The ruling Communist Party’s Politburo Standing Committee, the nation’s top decision- making body, said last month the country must guard against financial risks as growth moderates.
•
Yen gains as traders bet recent selling overdone. The yen strengthened for the first time in four days versus the dollar as investors bet losses that brought it to within 0.6 percent of 100 against the U.S. currency were overdone. The yen gained 0.2 percent to 99.10 per dollar as of 9:10 a.m. London time, after depreciating 2 percent in the past three sessions. It reached 99.95 on April 11, the weakest level since April 2009. The Japanese currency appreciated 0.2 percent to 129.65 per euro.
Page 2 of 6
•
Ringgit jumps most since 2010, stocks reach record post election. Malaysia’s ringgit rallied the most since 2010 and stocks rose to a record after Prime Minister Najib Razak won a clear majority in the election, giving him a mandate to continue his economic reforms. The currency appreciated 1.8 percent to 2.9793 per dollar in Kuala Lumpur, the biggest advance since June 2010, data compiled by Bloomberg show. It reached 2.9625, the strongest level since Sept. 2, 2011. The FTSE Bursa Malaysia KLCI Index (FBMKLCI) climbed 3.4 percent to an all-time high of 1,752.02 at the close, the best performance since November 2008. It rose as much as 7.8 percent earlier. Barisan Nasional, also known as the National Front, won 133 of the 222 parliamentary seats, according to the Election Commission, while the opposition People’s Alliance led by Anwar Ibrahim had 89. Najib has embarked on a $444 billion development program to build railways, power plants and roads to help the country achieve developed-nation status by 2020.
•
Slow reforms cloud Vietnam’s economic growth outlook, IMF says. Slow restructuring of Vietnam’s banks and state companies contributed to the International Monetary Fund’s decision last week to cut the nation’s growth forecasts. The IMF lowered its projection for Vietnam’s growth to 5.2 percent this year from 5.8 percent previously, and to 5.2 percent in 2014 from 6.4 percent in its report on April 29. The reduction of this year’s forecast is the biggest cut among Southeast Asian countries after Singapore, while the 2014 cut is the biggest downward move for any Asian country, the data showed.
IFIs NEWS (compiled from their websites) IMF – Press Release: Greece – 2013 Article IV Consultation Concluding Statement of the IMF Mission •
The IMF has publicised the 2013 Article IV Consultation Concluding Statement pertaining to its’ Mission to Greece. http://www.imf.org/external/np/ms/2013/050313.htm
IMF – Working Paper: “Productivity or Employment: Is It a Choice?” •
The IMF has publicised the captioned working paper. “Traditionally, shocks to total factor productivity (TFP) are considered exogenous and the employment response depends on their effect on aggregate demand. We present robust cross-country evidence of a strong negative correlation between growth in TFP and labor inputs over the medium to long run. In addition, when using instruments to capture changes in hours worked that are independent of TFP shocks, we find that cross-country increases in labor input cause reductions in TFP growth. These results have important policy implications, including that low productivity growth in some countries may partly be a side effect of strong labor market performance.” http://www.imf.org/external/pubs/ft/wp/2013/wp1397.pdf
UNCTAD – Press Release: Viet Nam to establish Empretec centre, bringing global total of entrepreneurship sites to 34 •
Viet Nam has signed a Memorandum of Understanding with UNCTAD officials to set up an Empretec centre in the country. It will be the first such centre in Asia and the 34th national centre to be established for an UNCTAD-administered programme that has proved to be highly successful in training and supporting entrepreneurs in developing Page 3 of 6
countries. The intention is to expand Empretec training to all provinces of the country, to have at least five domestic Empretec trainers certified by 2015, and to establish the country as a hub for Empretec activities in the region, including by holding at least three networking events, one of them international in scope. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=487&Sitemap_x0020_ Taxonomy=Investment%20and%20Enterprise;#1480;#EMPRETEC Programme;#20;#UNCTAD Home FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 6-May 7-May close China 6.23 6.16 6.17 6.15 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,735.00 9,736.00 9,730.00 Japan 86.75 98.99 99.33 99.14 Korea 1,064.40 1,097.20 1,094.48 1,091.45 Malaysia 3.06 3.03 2.98 2.98 Philippines 41.01 40.85 40.93 40.90 Singapore 1.22 1.23 1.23 1.23 Thailand 30.59 29.70 29.62 29.58 Vietnam 20,840.00 20,940.00 20,935.00 20,936.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.21 -0.02 0.06 0.19 0.28 -0.01 0.07 -0.13 0.14 0.00
2013 YTD (%chg) 1.3 -0.1 -0.8 -11.9 -2.6 1.9 -0.1 -1.0 2.5 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,205.5 22,690.0 4,925.5 13,694.0 1,965.7 1,694.8 7,215.4 3,369.9 1,579.0 475.2
OVERNIGHT LENDING RATE (%) 6-May 7-May 2.790 2.362 0.078 0.077 4.173 4.173 0.095 0.098 2.750 2.750 3.000 3.000 1.764 1.309 0.077 0.077 2.750 2.750 2.500 3.000
CREDIT DEFAULT SWAP (IN BPS) 3-May China 71.09 Hong Kong SAR 43.85 Indonesia 127.16 Japan 65.24
6-May 71.09 43.85 127.16 65.24
6-May 2,231.2 22,915.1 4,991.9 13,694.0 1,961.5 1,752.0 7,170.7 3,382.3 1,579.0 488.3
bps change -42.80 -0.07 0.00 0.25 0.00 0.00 -45.50 0.00 0.00 50.00
7-May 2,235.6 23,047.1 5,042.8 14,180.2 1,954.4 1,776.7 7,146.1 3,383.2 1,597.0 485.6
% change 0.20 0.58 1.02 3.55 -0.36 1.41 -0.34 0.03 1.14 -0.56
2013 YTD (%chg) -1.5 -1.1 16.0 36.4 -3.8 6.1 21.9 5.7 13.5 16.1
3-MONTH INTERBANK LENDING RATE (%) 6-May 7-May bps change 3.881 3.881 -0.02 0.378 0.378 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.760 2.760 0.00 3.210 3.210 0.00 1.046 1.289 24.30 0.372 0.372 0.00 2.848 2.845 -0.31 5.550 5.800 25.00
bps change 0.00 0.00 0.00 0.00
Page 4 of 6
Korea 70.85 70.85 0.00 Malaysia 81.88 81.88 0.00 Philippines 83.97 83.97 0.00 Thailand 88.18 88.18 0.00 Vietnam 198.69 198.69 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 6-May 7-May Gold Spot (in US$ per 1,469.5 1,464.3 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.35
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a n.a n.a n.a 139.9 n.a n.a 177.8 n.a
EXTERNAL LIQUIDITY RATIOS
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore
Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
3,440.0 303.8 104.8 1,254.4 327.4 139.9 84.0 258.2
521.2 149.4 55.5 70.4 156.7 56.7 20.1 121.5
572.8 752.6 43.9 2,371.0 126.7 30.4 8.5 964.3
Reserves over short-term debt
6.6 2.0 1.9 17.8 2.1 2.5 4.2 2.1
6.0 0.4 2.4 0.5 2.6 4.6 9.9 0.3
Page 5 of 6
177.8 68.1 60.7 2.6 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
HONG KONG PHILIPPINES PHILIPPINES SINGAPORE
Foreign Currency Reserves (USD bn) Consumer Price Index (YoY)% Foreign Reserves (USD mn) Foreign Reserves (USD mn)
Period
Apr Apr Apr Apr
Last
Previous
306.5 2.6 83.38 261.7
303.8 3.2 84.1 258.2
SELECTED ECONOMIC RELEASES CALENDAR (15 Apr – 19 Apr 2013) Expected Release Date
5/6/2013
5/7/2013
5/8/2013
5/9/2013
5/10/2013
2.9 -
Economies
Indicators
Period
SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG PHILIPPINES PHILIPPINES SINGAPORE MALAYSIA SOUTH KOREA CHINA MALAYSIA MALAYSIA CHINA CHINA JAPAN SOUTH KOREA CHINA MALAYSIA CHINA JAPAN HONG KONG HONG KONG CHINA PHILIPPINES JAPAN
Foreign Exchange Reserve (USD bn) China HSBC Services PMI GDP Constant Price (YoY)% GDP Constant Price (QoQ)% Foreign Currency Reserves (USD bn) Consumer Price Index (YoY)% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Reserves (USD bn) Bank Lending to HH (KRW Tln) Trade Balance (USD bn) Exports YoY% Imports YoY% Exports YoY% Imports YoY% Official Reserve Assets (USD bn) South Korea 7-Day Repo Rate % Consumer Price Index (YoY)% Overnight Rate % Producer Price Index (YoY)% Current Account Balance YOY% GDP sa (QoQ)% GDP (YoY)% New Yuan Loans (RMB bn) Total Exports (YoY)% Current Account Total (JPY bn)
Apr Apr 1Q 1Q Apr Apr Apr Apr Apr 30 Apr Apr Mar Mar Apr Apr Apr May 9 Apr May 9 Apr Mar 1Q 1Q Apr Mar Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 8 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Most European stocks rise as ING earnings beat estimates. Most European stocks climbed, after the Stoxx Europe 600 Index rose yesterday to its highest since June 2008, as companies from ING Groep NV (INGA) to Deutsche Telekom AG (DTE) posted quarterly earnings that beat estimates. U.S. index futures were little changed, while Asian shares gained. ING jumped 3.4 percent and Deutsche Telekom added 2.1 percent. Delhaize Group SA advanced 3 percent after saying its chief executive officer will step down by the end of this year. Telefonica SA lost 1.8 percent after Spain’s largest phone company posted earnings that missed analysts’ estimates. The Stoxx 600 climbed 0.2 percent to 302.36 at 8:29 a.m. in London as five stocks advanced for every two that retreated. The equity benchmark rallied yesterday to its highest level since June 2008 amid better-than-expected corporate earnings, while the Dow Jones Industrial Average (INDU) closed above 15,000 for the first time. Futures on the Standard & Poor’s 500 Index slipped less than 0.1 percent, while the MSCI Asia Pacific Index surged 0.9 percent.
Asia stocks advance on China data as Euro gains with commodities. Asian stocks climbed for a third day, with the benchmark index heading toward a five-year high, after China’s trade grew more than economists estimated. The euro and commodities gained, while European shares were little changed. The MSCI Asia Pacific Index added 0.9 percent as of 8:04 a.m. in London, heading for its highest close since June 2008. The euro rose 0.3 percent against the dollar and the Standard & Poor’s GSCI gauge of 24 commodities was up 0.2 percent, led by metals. The Stoxx Europe 600 Index was little changed and S&P 500 Index futures slid 0.1 percent. The Korean won strengthened to a two-month high. China’s export and import growth unexpectedly accelerated in April even as economists expressed skepticism over the data and shipments to the U.S. and Europe fell. A report today may show German industrial production shrank 0.1 percent in March after expanding 0.5 percent in February. European Central Bank President Mario Draghi said May 6 that policy makers are ready to lower borrowing costs again if needed after reducing them to a record last week.
Gold fluctuates after SPDR assets shrink to lowest in four years. Gold swung between gains and losses as investors weighed a drop in assets in the SPDR Gold Trust to the lowest level in four years with rising physical demand in India and China, the world’s biggest buyers. Gold for immediate delivery was little changed at $1,454.30 an ounce at 2:25 p.m. in Singapore. Earlier, prices slumped 0.3 percent to $1,447.75 before gaining as much as 0.4 percent to $1,458.85. Gold for June delivery advanced 0.3 percent $1,453.50 on the Comex in New York. Gold tumbled 13 percent this year as equities rallied and some investors lost faith in the metal as a store of value. The Standard & Poor’s (SPX) 500 Index closed at a record for a fourth straight day yesterday, while the Dow Jones Industrial Average closed above 15,000 for the first time. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, fell 0.4 percent to 1,057.79 metric tons yesterday, the lowest level since March 2009, according to data compiled by Bloomberg.
BREAKING NEWS GLOBAL
Borg warns krona strength becoming issue Riksbank must consider. Swedish Finance Minister Anders Borg warned that the krona’s strength is becoming a concern for the export-oriented economy and called on the central bank to take the currency’s appreciation into consideration.“The krona could become an issue, particularly from the central bank perspective; there are some good arguments for them to consider how to look at the krona,” Borg said yesterday in an interview in Abuja, Nigeria. “It should be based on fundamentals and obviously priced on the market, but there are also some risks you’ll see too much of an appreciation. That’s obviously one of the worries we have.” The krona has soared 28 percent against the euro since the end of 2008, sparking calls from exporters to stem its ascent. Though Swedish policy makers started the year declaring near- indifference to the exchange rate, its persistent strength has led them to adjust their stance. Riksbank Governor Stefan Ingves acknowledged last month the strong krona had undermined the bank’s efforts to achieve its inflation target.
Wheeler sold Kiwi to weaken world’s best-performing currency. The New Zealand dollar plunged after Reserve Bank Governor Graeme Wheeler said the central bank sold the kiwi and can do so again to protect economic growth. “There has been some intervention,” Wheeler told parliament’s finance and expenditure select committee in Wellington today, driving the New Zealand currency down as much as 1.1 percent to 83.60 U.S. cents, the lowest level since April 1. The central bank last confirmed a currency intervention in June 2007, when it sold New Zealand dollars. Policy makers from Zurich to Tel Aviv and Tokyo have sought to limit currency gains even as the Group of 20 last month affirmed pledges to avoid deliberately weakening exchange rates. Wheeler’s action contrasts with Australian counterpart Glenn Stevens, who has said he’d need to be convinced the Aussie dollar is “seriously overvalued” before intervening to weaken it and is using interest rate reductions instead.
Egypt investment collapsing as citizens turn into vigilantes. More than two years after the fall of President Hosni Mubarak, the proliferation of weapons and a spate of vigilante killings, violence and sexual attacks are eclipsing the hope born from the revolt. Fueled by political deadlock and economic stagnation, the security breakdown threatens to put solutions beyond the reach of President Mohamed Mursi. A growing number of Egyptians think that “you can actually achieve your goals using violence,” said Ezzedine Choukri Fishere, a political scientist at the American University in Cairo. Beneath that lies the “dashed expectation and hope of the youth,” he said.
REGIONAL
China export gains spur renewed skepticism of figures. China’s export growth unexpectedly accelerated in April even as shipments to the U.S. and Europe fell, spurring Bank of America Corp. and Mizuho Securities Co. analysts to say the figures were inflated by fake reports. The 14.7 percent increase, reported by the General Administration of Customs in Beijing today, was led by a 57.2 percent jump in shipments to Hong Kong that highlighted suspicions of false transactions used to mask capital flows into China. A customs spokesman said last month that the agency would investigate the “extraordinary” gain in trade with Hong Kong. The report deepens skepticism on the reliability of trade data from the world’s largest exporting nation, with Royal Bank of Scotland Group Plc saying export gains may be overstated by 9 percentage points. Page 2 of 7
Regulators announced a crackdown this week on companies using trade reports to disguise speculative money inflows chasing a yuan that’s already exceeded last year’s gains against the dollar.
Kuroda stimulus backfires as mortgage costs rise. Bank of Japan Governor Haruhiko Kuroda’s stimulus policies are backfiring in the housing market, where mortgage rates are rising even as the central bank floods the financial system with cash. While 35-year home-loan costs rose one basis point to 1.81 percent this month from an all-time low of 1.8 percent in April, any increase will be undesirable for the BOJ, according to Mizuho Securities Co. Federal Reserve Chairman Ben S. Bernanke’s monetary easing almost halved 30-year U.S. mortgage rates since 2008 to 3.35 percent on May 2. The BOJ’s April 4 announcement that it would double bond buying to generate 2 percent inflation unleashed the highest government-debt volatility in a decade and pushed 10-year yields up by 4 1/2 basis points. The benchmark lending rate for large corporations, known as the prime rate, increased five basis points from its record low to 1.2 percent on April 10, despite the BOJ’s aim of stoking the economy through cheaper funding.
Najib win masks biggest test after Malaysian Chinese exodus. Malaysian Prime Minister Najib Razak’s election win without the bulk of ethnic Chinese voters is set to pose the biggest test yet for the pro-Malay affirmative action policies instituted by his father more than three decades ago. The May 5 ballot left Najib’s United Malays Nasional Organisation with 109 parliamentary seats, almost enough to govern without any of its 12 allies in the Barisan Nasional coalition, Election Commission data showed. At the same time, the alliance as a whole took just 47 percent of the popular vote, the lowest since 1969, when Sino-Malay race riots flared. With opposition chief Anwar Ibrahim -- ally of the mainly ethnic-Chinese Democratic Action Party that expanded its seats - - planning protests tonight over electoral fraud concerns, Najib, 59, is calling for national reconciliation. To get that, he may need to temper the same preferentialcontract and job rules that helped secure his victory among rural Malays.
Philippine unemployment rising undermines Aquino’s growth. With 2.89 million unemployed Filipinos, jobless rate climbed to 7.1 percent in January from 6.8 percent the previous month. About 660,000 positions have been lost since October 2011, even as the economy expanded 6.6 percent last year. The nation is struggling to reconcile a lack of jobs for people who have little training, with a shortage of skilled workers in industries such as information technology and shipbuilding. While the economy is being boosted by call centers and remittances from workers who moved abroad, the country’s poverty level hasn’t decreased since 2006. “What we’re seeing is a two-tier economy with booming sectors favoring skilled workers,” said Frederic Neumann, co- head of Asian economics research at HSBC Holdings Plc in Hong Kong. “The government must boost labor-intensive sectors such as manufacturing, agriculture, or else rising inequality will create pressure for increased social spending.”
Green Earth plans $275 Million solar power project in Myanmar. Green Earth Power (Thailand) Co. Ltd., a privately-held company in Thailand, plans to invest about $275 million on a new solar power project in Myanmar. The facility, located in Minbu city, 500 kilometers (311 miles) north of Yangon, will have generating capacity of 210 megawatts, Supasit Skontanarak, Green Earth’s managing director, said by phone from Bangkok today. The project will be completed within two years, he said. President Thein Sein, who took office two years ago, is clearing the way for overseas investment in Myanmar
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to help speed modernization of its financial system and infrastructure ahead of elections in 2015. U.S. and European companies including Ford Motor Co. (F), Coca-Cola Co. and Unilever NV (UNA) are scouting for opportunities in Myanmar after the Southeast Asian nation began enhancing economic and political ties with Western nations. IFIs NEWS (compiled from their websites) IFC – Press Release: IFC Helps the Philippines Make Shipping Cheaper and More Accessible to Small Farmers
IFC is helping the Philippines streamline its shipping services, which is expected to generate an annual increase in private sector investment of approximately $17million. Philippines’s Department of Transportation and Communications and IFC signed a cooperation agreement to make the shipment of agricultural goods and supplies faster and easier. This move will help reduce shipping costs for agribusinesses and small farmers, improve their market access, and make the shipping industry more competitive. “The department is committed to making transportation efficient, accessible, and affordable to local players, especially to domestic commercial smallholders in agriculture,” Mr Joseph Emilio Abaya, Secretary of the Department said. “We welcome the opportunity to work with IFC in laying the foundation for economic growth that benefits small market players and the Filipino consumers.” http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/3B1C5ED501FBEC9185257B6 50013ECA1
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 7-May 8-May close China 6.23 6.16 6.15 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,735.00 9,730.00 9,727.00 Japan 86.75 98.99 99.00 98.84 Korea 1,064.40 1,097.20 1,091.45 1,086.55 Malaysia 3.06 3.03 2.98 2.96 Philippines 41.01 40.85 40.90 40.79 Singapore 1.22 1.23 1.23 1.23 Thailand 30.59 29.70 29.59 29.38 Vietnam 20,840.00 20,940.00 20,935.00 20,935.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.20 0.00 0.03 0.16 0.45 0.58 0.27 0.15 0.71 0.00
2013 YTD (%chg) 1.5 -0.1 -0.8 -11.6 -2.1 2.5 0.2 -0.8 3.2 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,205.5 22,690.0 4,925.5 13,694.0 1,965.7 1,694.8 7,215.4 3,369.9 1,579.0 475.2
7-May 2,235.6 23,047.1 5,042.8 14,180.2 1,954.4 1,776.7 7,146.1 3,383.2 1,601.2 485.6
8-May 2,246.3 23,244.4 5,089.3 14,285.7 1,956.5 1,774.0 7,181.3 3,413.4 1,619.5 485.1
% change 0.48 0.86 0.92 0.74 0.11 -0.15 0.49 0.90 1.14 -0.11
2013 YTD (%chg) -1.0 -0.3 17.1 37.4 -3.7 5.9 22.5 6.6 15.1 15.9
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China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (%) 7-May 8-May 2.362 2.110 0.077 0.076 4.173 4.173 0.098 0.093 2.750 2.750 3.000 3.000 1.309 1.583 0.036 0.036 2.750 2.750 3.000 2.500
bps change -25.20 -0.14 0.00 -0.50 0.00 0.00 27.40 0.00 0.00 -50.00
3-MONTH INTERBANK LENDING RATE (%) 7-May 8-May bps change 3.881 3.880 -0.04 0.378 0.378 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.770 2.770 0.00 3.210 3.210 0.00 1.289 0.906 -38.30 0.372 0.372 0.00 2.845 2.841 -0.38 5.800 5.550 -25.00
CREDIT DEFAULT SWAP (IN BPS) 6-May 7-May bps change China 69.69 69.69 0.00 Hong Kong SAR 43.92 43.89 -0.03 Indonesia 125.31 123.47 -1.84 Japan 65.02 62.87 -2.15 Korea 68.07 68.71 0.64 Malaysia 75.07 75.07 0.00 Philippines 82.18 81.25 -0.93 Thailand 83.84 82.38 -1.46 Vietnam 194.94 194.10 -0.84 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 7-May 8-May Gold Spot (in US$ per 1,452.7 1,454.2 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change 0.11
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2
30-Apr n.a n.a n.a n.a n.a 139.9 n.a n.a
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179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
181.6 23.2
181.6 n.a
181.6 n.a
179.2 n.a
177.8 n.a
177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,440.0 521.2 572.8 6.6 China 303.8 149.4 752.6 2.0 Hong Kong SAR 104.8 55.5 43.9 1.9 Indonesia 1,254.4 70.4 2,371.0 17.8 Japan 327.4 156.7 126.7 2.1 Korea 139.9 56.7 30.4 2.5 Malaysia 84.0 20.1 8.5 4.2 Philippines 258.2 121.5 964.3 2.1 Singapore 177.8 68.1 60.7 2.6 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
MALAYSIA SOUTH KOREA CHINA MALAYSIA MALAYSIA CHINA CHINA
Foreign Reserves (USD bn) Bank Lending to HH (KRW Tln) Trade Balance (USD bn) Exports YoY% Imports YoY% Exports YoY% Imports YoY%
Period
Apr 30 Apr Apr Mar Mar Apr Apr
Last
Previous
140.3 462.5 18.16 -2.9 7.0 14.7 16.8
139.9 461.6 -0.88 -7.7 -4.4 10.0 14.1
SELECTED ECONOMIC RELEASES CALENDAR (15 Apr – 19 Apr 2013) Expected Release Date
5/6/2013
5/7/2013
5/8/2013
5/9/2013
6.0 0.4 2.4 0.5 2.6 4.6 9.9 0.3 2.9 -
Economies
Indicators
Period
SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG PHILIPPINES PHILIPPINES SINGAPORE MALAYSIA SOUTH KOREA CHINA MALAYSIA MALAYSIA CHINA CHINA JAPAN
Foreign Exchange Reserve (USD bn) China HSBC Services PMI GDP Constant Price (YoY)% GDP Constant Price (QoQ)% Foreign Currency Reserves (USD bn) Consumer Price Index (YoY)% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Reserves (USD bn) Bank Lending to HH (KRW Tln) Trade Balance (USD bn) Exports YoY% Imports YoY% Exports YoY% Imports YoY% Official Reserve Assets (USD bn)
Apr Apr 1Q 1Q Apr Apr Apr Apr Apr 30 Apr Apr Mar Mar Apr Apr Apr
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5/10/2013
SOUTH KOREA CHINA MALAYSIA CHINA JAPAN HONG KONG HONG KONG CHINA PHILIPPINES JAPAN
South Korea 7-Day Repo Rate % Consumer Price Index (YoY)% Overnight Rate % Producer Price Index (YoY)% Current Account Balance YOY% GDP sa (QoQ)% GDP (YoY)% New Yuan Loans (RMB bn) Total Exports (YoY)% Current Account Total (JPY bn)
May 9 Apr May 9 Apr Mar 1Q 1Q Apr Mar Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 9 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
European stocks drop before Bank of England's decision. European stocks fell from their highest level since June 2008 as investors awaited the Bank of England’s decision on continuing economic stimulus. U.S. index futures were little changed, while Asian shares slid. The Stoxx Europe 600 Index lost 0.2 percent to 303.07 at 9:15 a.m. in London. The benchmark gauge rallied yesterday to its highest level since June 2008 amid betterthan-expected corporate earnings. The measure has gained 8.4 percent so far in 2013, its best start to a year since 2006. Contracts on the Standard & Poor’s 500 Index retreated 0.1 percent, while the MSCI Asia Pacific Index dropped 0.3 percent.
Asian stocks erase gain as Topix drops on strong Yen. Asian stocks dropped, with the regional benchmark index retreating from a five-year high. Japan’s Topix Index (TPX) erased gains as the yen strengthened, dimming the outlook for the nation’s exporters. The MSCI Asia Pacific Index slipped 0.3 percent to 143.02 as of 3:57 p.m. in Tokyo, with seven shares falling for every six that rose. The gauge increased 11 percent this year through yesterday amid speculation the Bank of Japan will deploy more measures to beat deflation as policy makers in the U.S. and Europe remain on standby to buoy growth. Shares on the gauge traded at 14.3 times estimated earnings yesterday compared with 20.7 times for the Nikkei 225 (NKY) Stock Average, 14.8 for the Standard & Poor’s 500 Index and 13.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Base metals decline as China Producer Price drop deepen. Copper fell by the most in a week as a larger-than-expected retreat in China’s producer prices indicated weaker demand from the largest user. Aluminum, lead, zinc, nickel and tin also declined. Copper for delivery in three months lost as much as 1.2 percent, the most since May 1, to $7,330 a metric ton on the London Metal Exchange and was at $7,345.25 at 1:14 p.m. in Shanghai. The metal climbed as much as 3 percent yesterday to $7,480 a ton, the highest since April 12. China’s producer prices fell 2.6 percent in April from a year ago, data from the National Bureau of Statistics showed today. That compared with a 2.3 percent drop in a Bloomberg News survey and a 1.9 percent decline in March.
BREAKING NEWS GLOBAL
ECB seen desisting from further rate cut until 2015. The European Central Bank will refrain from cutting its interest rate again until at least 2015, according to economists surveyed since President Mario Draghi’s pledge last week to deliver another reduction if needed. The Frankfurt-based central bank will leave its main refinancing rate at a record-low 0.5 percent until the end of 2014, according to the median of 18 forecasts in the monthly Bloomberg survey of economists. The same survey shows that 27 of 32 economists predict no cut in the benchmark by the end of 2013, while five see a reduction to 0.25 percent. Draghi said on May 2 that the ECB remains ready to act again after it lowered its key rate by a quarter-point the same day. While economists in today’s survey reduced forecasts for euro-region gross domestic product this year, data
suggest the 17-nation zone may return to growth after industrial production and factory orders in Germany both jumped more than forecast.
U.K. industrial output rises more than forecast on energy. U.K. industrial production rose more than economists forecast in March as cold weather boosted demand for electricity and gas. Output increased 0.7 percent from February, when it gained 0.9 percent, the Office for National Statistics said today in London. The median forecast of 31 economists in a Bloomberg News survey was for a gain of 0.2 percent. Electricity and gas surged 2.4 percent, the most since October. The data also showed that production increased 0.2 percent in the first quarter, matching an estimate in last month’s gross domestic product report. Britain’s economy grew 0.3 percent in the three months through March and surveys suggest that the recovery may have continued into this quarter. Bank of England policy makers meeting today will probably maintain their target for asset purchases at 375 billion pounds ($583 billion) as they weigh risks to the rebound from the contraction in the fourth quarter.
Australia-New Zealand job gain deepens dilemma on currencies. Australian and New Zealand jobs growth surged, sending the currencies soaring and undermining central bank efforts to relieve pressure on manufacturers and exporters. The number of people employed in Australia rose by 50,100 in April from a month earlier, more than four times economists’ estimates, and the jobless rate unexpectedly fell to 5.5 percent, government data showed today. New Zealand employers added a record 38,000 jobs last quarter and its unemployment plunged to a three-year low of 6.2 percent. Economists expected 6.8 percent. Both currencies surged to levels that preceded the Reserve Bank of Australia’s decision two days ago to cut the benchmark interest rate to a record low and New Zealand Governor Graeme Wheeler’s announcement a day later that he has intervened to weaken the kiwi. South Korea also cut rates today to ease pressure on exporters. The surge in Australian jobs may undermine the case for RBA Governor Glenn Stevens to add to 2 percentage points of reductions in the past 19 months.
REGIONAL
China subdued inflation gives room to raise utility prices. China’s consumer inflation stayed subdued in April while the decline in factory-gate price declines deepened, adding to evidence of softer demand and giving the government room to raise utility fees. The consumer price index (SHCOMP) rose 2.4 percent in April, the National Bureau of Statistics said today in Beijing, compared with a median forecast of 2.3 percent in a Bloomberg News survey. The producer price index fell 2.6 percent, after March’s 1.9 percent drop. Inflation running below the government’s annual goal of 3.5 percent gives new Premier Li Keqiang leeway to loosen resource-fee controls that the World Bank says encourage pollution and limit incentives for new technologies. The producer-price deflation may reflect lower commodity prices and factory overcapacity.
Yen to help Japan steelmakers reclaim share from Chinese rivals. Nippon Steel & Sumitomo Metal Corp. (5401) and JFE Holdings Inc. (5411), Japan’s top steelmakers, will reclaim marketshare lost to faster-growing Asian rivals, including Chinese suppliers, helped by a weaker yen and Prime Minister Shinzo Abe’s currency policies, analysts said. “The continued weakening yen will reshape the landscape of the Asia steel sector, making Japan potentially the most competitive producer, particularly in the Asia export Page 2 of 7
market,” Credit Suisse Group AG analysts including Trina Chen and Shinya Yanada said in a report dated yesterday. “We believe Chinese exports are the most vulnerable.” The yen’s 20 percent decline against the dollar in the past six months under the Abe administration is alleviating cost pressure at Japanese steel suppliers and giving them a competitive edge over China’s Baoshan Iron & Steel (600019) Co. and South Korea’s Posco. The weaker yen will increase Japanese steel exports to Southeast Asia and Europe, which traditionally consume high-grade steel used in cars, said Shi Shengwu, an export manager at Wuhan Iron & Steel Co. (600005)
South Korea joins India-to-Europe rate cuts for growth. The Bank of Korea cut interest rates, following the lead of policy makers in Australia, Europe and India this month, as strength in the won and weakness in the yen dim the outlook for the nation’s exports. Governor Kim Choong Soo and his board lowered the benchmark seven-day repurchase rate to 2.5 percent from 2.75 percent, the central bank said in a statement in Seoul today. Six of 20 economists surveyed by Bloomberg News predicted the move while the remainder forecast no change. Kim supported a cut after opposing one last month. As central banks around the world move to counter currency appreciation, the won’s 24 percent jump against the yen in six months is hampering South Korean exporters of autos and electronics and aiding their Japanese rivals. In Seoul, ruling New Frontier Party floor leader Lee Hahn Koo yesterday urged a “more active role” for the BOK, adding to political pressure that the central bank resisted last month.
Baht falls on mounting government pressure for interest-rate cut. Thailand’s baht fell for the first time this week as speculation mounts that the central bank will cut borrowing costs to stem inflows. Finance Minister Kittiratt Na-Ranong told reporters in Bangkok today that he and representatives from other government agencies will meet with the Bank of Thailand’s rate-setting committee on May 13. He said the nation’s central bank should focus on the exchange rate and inflation. The baht reached a 16year high against the dollar in April as monetary easing in developed countries boosts demand for higher-yielding assets. “The minister meeting with the monetary policy committee spurred speculation the central bank is under more pressure to cut rates,” said Kozo Hasegawa, a Bangkok-based foreign-exchange trader at Sumitomo Mitsui Banking Corp. “Regardless of if they really do so or not, the baht tends to move on comments from officials lately.” The baht dropped 0.2 percent to 29.43 per dollar as of 10:45 a.m. in Bangkok, the first decline since May 3, according to data compiled by Bloomberg. It advanced 3.9 percent this year, the best performance in Asia, and reached 28.56 on April 22 and April 19, the strongest level since July 1997.
IFIs NEWS (compiled from their websites) IMF – Working Papers
Balance Sheet Strength and Bank Lending During the Global Financial Crisis – “We examine the role of bank balance sheet strength in the transmission of financial sector shocks to the real economy. We find that banks with strong balance sheets were better able to maintain lending during the crisis. In addition, our results suggest that strong bank balance sheets are key for the recovery of credit following crises, and provide support for regulatory proposals under the Basel III framework.” http://www.imf.org/external/pubs/ft/wp/2013/wp13102.pdf
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Measuring Competitiveness: Trade in Goods or Tasks? – “With global supply chains, any value added or production task can be traded as part of goods. We show that when measuring competitiveness in goods, the formula used in computing the real effective exchange rates at the IMF (Bayoumi, Lee, and Jayanthi, 2005) needs to be expressed in terms of the price of value added and needs an additional term, which captures a gain or loss in competitiveness of goods due to outsourcing.” http://www.imf.org/external/pubs/ft/wp/2013/wp13100.pdf
Survey of Reserve Managers: Lessons from the Crisis- “This paper reports in detail on a survey that was circulated to reserve managing central banks of IMF member countries in April 2012. The survey aims to gain further insight into how reserve managers have reacted to the crisis to date, how they arrive at their strategic asset allocation and how they operate their risk management frameworks in practice.” http://www.imf.org/external/pubs/ft/wp/2013/wp1399.pdf
The Impact of Foreign Bank Deleveraging on Korea – “Korea was hit hard by the 2008 global financial crisis, with the foreign bank deleveraging channel coming prominently into play. The analysis finds that a sharp decline in external funding led to relatively modest decline in domestic credit by Korean banks, due to concerted policy efforts by the government in 2008. Impulse responses from a Dynamic Stochastic General Equilibrium (DSGE) model calibrated to Korea shows that it appears better prepared to handle such shocks relative to 2008. Indeed, Korea is much more resilient to such shocks due to the efforts by the authorities, which has led to the strengthening of external buffers, such as higher foreign exchange reserves and bilateral and multilateral currency swap arrangements.” http://www.imf.org/external/pubs/ft/wp/2013/wp13101.pdf
Understanding DSGE Filters in Forecasting and Policy Analysis- “This paper introduces methods that allow analysts to (i) decompose the estimates of unobserved quantities into observed data, (ii) to better understand revision properties of the model, and (iii) to impose subjective prior constraints on path estimates of unobserved shocks in structural economic models. The intuitive nature and analytical clarity of the suggested procedures are appealing for policy-related and forecasting models.” http://www.imf.org/external/pubs/ft/wp/2013/wp1398.pdf
World Bank – Press Release: World Bank will deepen partnership with Vietnam to achieve further poverty reduction, says World Bank Vice President
On his first visit to Vietnam as World Bank East Asia and Pacific Regional Vice President, Axel van Trotsenburg congratulated Vietnam’s Prime Minister Nguyen Tan Dung on the country’s impressive success in reducing poverty. “Vietnam has been a global leader in reducing poverty over the last two decades, making effective use of concessional official development assistance including from IDA. We are glad that our partnership with Vietnam has contributed to this success,” said Mr. Van Trotsenburg. “We’d like to support Vietnam’s efforts to further reduce poverty with special focus on ethnic minorities.” http://www.worldbank.org/en/news/press-release/2013/05/08/world-bank-willdeepen-partnership-with-vietnam-to-achieve-further-poverty-reduction-says-worldbank-vice-president (Press Release)
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http://www.worldbank.org/en/results/2013/04/11/vietnam-ho-chi-minh-cityenvironmental-sanitation-project (Ho Chi Minh City Environmental Sanitation Project) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 8-May 9-May close China 6.23 6.16 6.14 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,735.00 9,727.00 9,718.00 Japan 86.75 98.99 99.01 98.71 Korea 1,064.40 1,097.20 1,086.55 1,091.40 Malaysia 3.06 3.03 2.96 2.97 Philippines 41.01 40.85 40.79 40.83 Singapore 1.22 1.23 1.23 1.23 Thailand 30.59 29.70 29.32 29.48 Vietnam 20,840.00 20,940.00 20,935.00 20,945.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.17 -0.01 0.09 0.30 -0.44 -0.40 -0.10 -0.11 -0.54 -0.05
2013 YTD (%chg) 1.7 -0.1 -0.7 -11.5 -2.5 2.0 0.1 -0.7 2.9 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,205.5 22,690.0 4,925.5 13,694.0 1,965.7 1,694.8 7,215.4 3,369.9 1,579.0 475.2
OVERNIGHT LENDING RATE (%) 8-May 9-May 2.110 2.110 0.076 0.076 4.173 4.173 0.093 0.095 2.750 2.500 3.000 3.000 1.583 1.533 0.039 0.039 2.750 2.750 2.500 2.500
8-May 2,246.3 23,244.4 5,089.3 14,285.7 1,956.5 1,774.0 7,181.3 3,413.0 1,614.2 485.1
bps change 0.00 0.07 0.00 0.25 -25.00 0.00 -5.00 0.00 0.00 0.00
9-May
% change
2,233.0 23,211.5 5,089.3 14,191.5 1,979.5 1,765.3 7,194.4 3,431.1 1,619.8 486.2
-0.59 -0.14 0.00 -0.66 1.18 -0.49 0.18 0.53 0.35 0.24
2013 YTD (%chg) -1.6 -0.4 17.1 36.5 -2.5 5.4 22.8 7.2 15.1 16.2
3-MONTH INTERBANK LENDING RATE (%) 8-May 9-May bps change 3.880 3.880 -0.01 0.378 0.377 -0.07 4.900 4.900 0.00 0.230 0.230 0.00 2.770 2.770 0.00 3.210 3.210 0.00 0.906 0.908 0.20 0.372 0.372 0.00 2.841 2.841 0.00 5.550 5.300 -25.00
CREDIT DEFAULT SWAP (IN BPS) 7-May 8-May bps change China 69.69 68.23 -1.46 Hong Kong SAR 43.89 43.41 -0.48 Indonesia 123.47 123.01 -0.46 Japan 62.87 60.43 -2.44 Korea 68.71 67.49 -1.21 Malaysia 75.07 74.58 -0.49 Philippines 81.25 80.32 -0.92 Thailand 82.38 82.40 0.02 Vietnam 194.10 191.26 -2.84 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag.
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8-May 9-May Gold Spot (in US$ per 1,473.9 1,470.7 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.22
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a n.a n.a n.a 139.9 n.a n.a 177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,440.0 521.2 572.8 6.6 China 303.8 149.4 752.6 2.0 Hong Kong SAR 104.8 55.5 43.9 1.9 Indonesia 1,254.4 70.4 2,371.0 17.8 Japan 327.4 156.7 126.7 2.1 Korea 139.9 56.7 30.4 2.5 Malaysia 84.0 20.1 8.5 4.2 Philippines 258.2 121.5 964.3 2.1 Singapore 177.8 68.1 60.7 2.6 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY
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6.0 0.4 2.4 0.5 2.6 4.6 9.9 0.3 2.9 -
Economies
JAPAN SOUTH KOREA CHINA CHINA
Indicators
Official Reserve Assets (USD bn) South Korea 7-Day Repo Rate % Consumer Price Index (YoY)% Producer Price Index (YoY)%
Period
Apr May 9 Apr Apr
Last
Previous
1258.0 2.5 2.4 -2.6
1254.4 2.75 2.1 -1.9
SELECTED ECONOMIC RELEASES CALENDAR (15 Apr – 19 Apr 2013) Expected Release Date
5/6/2013
5/7/2013
5/8/2013
5/9/2013
5/10/2013
Economies
Indicators
Period
SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG PHILIPPINES PHILIPPINES SINGAPORE MALAYSIA SOUTH KOREA CHINA MALAYSIA MALAYSIA CHINA CHINA JAPAN SOUTH KOREA CHINA MALAYSIA CHINA JAPAN HONG KONG HONG KONG CHINA PHILIPPINES JAPAN
Foreign Exchange Reserve (USD bn) China HSBC Services PMI GDP Constant Price (YoY)% GDP Constant Price (QoQ)% Foreign Currency Reserves (USD bn) Consumer Price Index (YoY)% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Reserves (USD bn) Bank Lending to HH (KRW Tln) Trade Balance (USD bn) Exports YoY% Imports YoY% Exports YoY% Imports YoY% Official Reserve Assets (USD bn) South Korea 7-Day Repo Rate % Consumer Price Index (YoY)% Overnight Rate % Producer Price Index (YoY)% Current Account Balance YOY% GDP sa (QoQ)% GDP (YoY)% New Yuan Loans (RMB bn) Total Exports (YoY)% Current Account Total (JPY bn)
Apr Apr 1Q 1Q Apr Apr Apr Apr Apr 30 Apr Apr Mar Mar Apr Apr Apr May 9 Apr May 9 Apr Mar 1Q 1Q Apr Mar Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 13 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stock Index Rises as Japan Exporters Rally on Yen. Asia’s regional benchmark stock index headed for its first advance in three days, driven by a rally in Japanese exporters after the yen weakened past 102 versus the dollar. Hyundai Merchant Marine Co., South Korea’s No. 1 shipping line, dropped 5.7 percent after reporting a loss. The gauge increased 9.7 percent this year through last week amid speculation the Bank of Japan will take more steps to beat deflation as policy makers in the U.S. and Europe remain on standby to buoy growth. Group of Seven officials indicated they will tolerate a sliding yen for now. Japan’s Nikkei 225 Stock Average (NKY) gained 1.2 percent to its highest close since December 2007, while the broader Topix Index advanced 1.8 percent. South Korea’s Kospi Index increased 0.2 percent. The Shanghai Composite Index (SHCOMP) slipped 0.2 percent. Hong Kong’s Hang Seng Index fell 1 percent.
Won Falls to Two-Week Low as G-7 Accepts Weak Yen; Bonds Decline. South Korea’s won fell to a two-week low on concern the yen’s slide will hurt the nation’s exports after the Group of Seven finance chiefs indicated they will tolerate a weak Japanese currency. G-7 policy makers on May 11 signaled acceptance of the yen’s decline through 100 per dollar for the first time since 2009, saying they examined Japan’s strategy and will monitor its impact on currencies. The won fell 0.5 percent to 1,111.78 per dollar in Seoul. The yen declined as low as 102.15 per dollar, the lowest level since October 2008. The currency has fallen 15 percent against the dollar this year and 13 percent versus the won as the Bank of Japan stepped up monetary stimulus. The baht strengthened, snapping a two-day slide, as the governor of Thailand’s central bank said steps to slow the currency’s gains were not discussed at a meeting with government officials. The baht reached a 16-year high last month as monetary easing in developed nations increased the flow of funds to emerging markets. The currency climbed 0.3 percent to 29.68 per dollar as of 1:54 p.m. in Bangkok, after slipping 1.4 percent in the two days through May 10. It touched a two-month low of 29.85 earlier.
Gold Bears Pull $20.8 Billion as BlackRock Says Buy: Commodities. Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc. (BLK), the world’s biggest money manager, said it’s still bullish. Speculators held 67,374 so-called short contracts on May 7, 6.4 percent more than a week earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 10 percent to 49,260 futures and options. Gold is having its worst start to a year since 1982 after dropping 14 percent and sliding into a bear market in April. Gold futures fell 1.9 percent to $1,436.60 an ounce on the Comex in New York last week. The Standard & Poor’s GSCI Spot Index of 24 commodities slid 0.3 percent, and the MSCI All-Country World of equities added 0.9 percent. Gold for June delivery was little changed at $1,434.70 an ounce at 1:29 p.m. Singapore time.
BREAKING NEWS GLOBAL
Cameron to Push EU Trade With Obama as Tories Dream of Exit. U.K. Prime Minister David Cameron starts a visit to the U.S. overshadowed by his Tory lawmakers planning a rebellion over Britain’s membership in the European Union and a call from a Cabinet minister to exit the bloc. Cameron will meet with President Barack Obama at the White House today to encourage talks on a trade deal between the EU and U.S. as part of preparations for the Group of Eight nations summit the U.K. hosts next month. At home, Britain’s membership in the bloc is being increasingly questioned. Education Secretary Michael Gove and Defense Secretary Philip Hammond both said yesterday the U.K. should consider quitting the EU. While the premier has pledged to renegotiate the terms of Britain’s EU membership if he wins the 2015 election and then hold a referendum on the result by the end of 2017, that commitment has not proved to be enough for some of his own party.
U.S., Japan, Australia Bonds Tumble on Stimulus Efforts. Treasury 10-year yields reached the highest level in almost seven weeks on speculation central bank efforts to spur economic growth will curb demand for the relative safety of government debt. Benchmark 10-year securities held last week’s decline after European policy makers expressed a willingness to consider new ways to spur growth after a Group of Seven meeting. Federal Reserve Bank of Kansas City President Esther George said the U.S. economy may expand 2 percent this year, spurred by stimulus that threatens to push up inflation expectations. The U.S. 10-year yield was little changed at 1.91 percent at 9:20 a.m. in London after climbing to 1.94 percent, the highest level since March 26. The 1.75 percent note due in May 2023 was at 98 21/32. Yields increased 16 basis points last week. Euro-area finance ministers and central bankers left weekend talks of the G-7 at Aylesbury, near London, signaling they’re poised to scale back austerity and are open to increased monetary aid. European officials will meet in Brussels today to discuss the economy and review aid payments for crisis-struck nations such as Greece and Spain.
Europe Tries to Boost Economy After Pressure From U.S. European policy makers expressed a willingness to consider new ways to revive their ailing economy as they confronted fresh U.S. pressure to take action. The bloc’s finance ministers and central bankers left weekend talks of the Group of Seven signaling that they’re poised to scale back austerity, are open to increased monetary aid and looking to unfreeze bank lending. European officials will meet in Brussels today to discuss the economy and review aid payments for crisis-struck nations from Greece to Spain. Europe’s governments are in the midst of a policy rethink after three years of slimming budgets as they face up to a deepening recession in the euro area and a record unemployment rate that’s exceeded 12 percent. Still in doubt for economists is what kind of stimulus will actually be delivered and what effect it could have in the crisis-torn 17-member currency bloc. Yields on sovereign debt that soared during the crisis have eased with the European Central Bank’s pledge to do whatever it takes to defend the euro. The single currency was little changed at $1.2986 as of 9:03 a.m. today.
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REGIONAL
Yen at Four-Year Low Prompts Fujitsu to Raise PC Prices. Fujitsu Ltd., a Japanese maker of personal computers, plans to raise domestic prices as the yen’s drop to a four-year low boosts the cost of importing components. The price increases will take effect by July and apply to models released in the summer, Chief Financial Officer Kazuhiko Kato said in an interview at Fujitsu’s Tokyo headquarters. The company may also curb discounts on existing lines, he said. Fujitsu’s FMV PC’s rely on imported components and software, including chips from Intel Corp. and the Windows operating system from Microsoft Corp. The yen weakened beyond 101 per dollar last week, the first time at that level since April 2009, as Prime Minister Shinzo Abe spearheads measures to drive down the currency to revive the economy and end deflation. “It’s impossible to change our suppliers as we’ve been taking measures to combat a strong yen,” Kato said. The PC maker plans to increase the use of materials common to multiple models to lower costs and reduce the number of products it sells, he said. The slide in the currency is making Japanese products more competitive in overseas markets, boosting exporters including Sony Corp. and Mazda Motor Corp. who get the majority of revenue from outside Japan.
China’s Investment Slows as Production Trails Estimates: Economy. China’s fixed-asset investment unexpectedly decelerated last month while industrial output trailed estimates, adding to concerns that the economy will fail to show much of a recovery this quarter. Fixed-asset investment excluding rural households in the first four months of the year increased 20.6 percent, the National Bureau of Statistics said today in Beijing, compared with 20.9 percent in the first quarter. Production grew 9.3 percent in April from a year earlier and retail sales climbed 12.8 percent, according to the agency. The data may test the new leadership’s tolerance for slower economic expansion as President Xi Jinping and Premier Li Keqiang implement policy changes to improve the quality and efficiency of growth. The central bank warned last week that while the foundation for stable growth isn’t yet solid, stimulus policies could trigger inflation.
Indonesia Moves to End Finance Minister-to-Fuel Price Ambiguity. President Susilo Bambang Yudhoyono is poised to swear in a new finance chief as early as tomorrow while his government prepares to set higher subsidized-fuel prices, moving to end policy ambiguity that has hurt investor confidence and the currency. Acting Finance Minister Hatta Rajasa said today that the inauguration of his replacement, whom he declined to identify, would take place this week. He also said he signed a revised state budget that will be presented to Parliament tomorrow. The government has said the new budget will contain details of a compensation plan to offset the impact of higher fuel prices on the poor. Delays in curbing fuel subsidies have already cost the country a positive outlook on its sovereign credit rating at Standard & Poor’s, and Yudhoyono has said he will only increase prices after Parliament approves compensation for the poor. The government intends to raise subsidized gasoline prices to 6,500 rupiah ($0.67) a liter, and subsidized diesel to 5,500 rupiah per liter, Planning Minister Armida Alisjahbana told reporters today.
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IFIs NEWS (compiled from their websites) IMF – Policy Paper: “Mid-Term Evaluation Report on the Enhanced Data Dissemination Initiative Project”
The IMF has publicised the above-stated policy paper. http://www.imf.org/external/np/pp/eng/2013/032013.pdf
IMF – Press Release: Kingdom of the Netherlands - Netherlands: 2013 Article IV Consultation
The IMF has concluded the Article IV consultation with the Kingdom of the Netherlands on May 1, 2013. Executive Directors commended the Netherlands’s track record of robust public finances and status as a safe haven. Directors noted that notwithstanding these strong fundamentals, the economy faces challenges from a highly indebted household sector, significant financial system stresses, still declining real estate prices, and weak domestic demand. Adverse external developments, especially in the euro area, could also pose risks. Directors agreed that policy priorities ahead should focus on restoring growth and managing downside risks while allowing for an orderly adjustment of private sector balance sheets. http://www.imf.org/external/np/sec/pn/2013/pn1348.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13115.pdf (Staff Report)
IMF – Working Papers
Credit Growth in Latin America: Financial Development or Credit Boom?- “Banking credit to the private sector in Latin America has on average increased by 7 percent of GDP from primo 2004 to ultimo 2011, with real credit in some countries growing by up to 20 percent per year. This paper documents and analyzes the patterns of credit growth in 18 countries in Latin America and uses econometric methods to determine whether it is indicative of financial deepening or poses risks of credit booms. Comparing the actual levels of credit with the ones predicted by the model we find that some countries in Latin America show significant and positive deviations. These results indicate the existence of a certain level of risk in the recent credit developments.” http://www.imf.org/external/pubs/ft/wp/2013/wp13106.pdf
Four Decades of Terms-of-Trade Booms: Saving-Investment Patterns and a New Metric of Income Windfall – “We study the history of terms-of-trade booms (during 1970– 2012), with a focus on Latin America, through the prisms of a simple metric that quantifies the associated income windfall. We also document saving patterns during these episodes and propose a measure of how much of the income windfall was saved. We find that Latin America‘s terms-of-trade shocks of the last decade have not differed much in magnitude from those observed during the 1970s, but that the associated windfall have been substantially larger. While aggregate saving increased more than in past episodes, the share of the windfall saved (the marginal saving rate) seems to be lower, suggesting that greater aggregate saving reflects mainly the sheer size of the windfall rather than a greater 'effort' to save it.” http://www.imf.org/external/pubs/ft/wp/2013/wp13103.pdf
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The Pacific Speed of Growth: How Fast Can It Be and What Determines It? – “This study aims to test within a relatively homogeneous group of small states what differentiates the growth performance of Pacific island countries (PICs) from their peers. We find that PICs are disadvantaged by distance and hampered by lower investment and exports compared with other small island states, but greater political stability, catch-up effects from lower initial incomes, and slower population growth has helped offset some of these disadvantages.” http://www.imf.org/external/pubs/ft/wp/2013/wp13104.pdf
What Is in Your Output Gap? Unified Framework & Decomposition into Observables – “This paper discusses several popular methods to estimate the ‘output gap’. It provides a unified, natural concept for the analysis, and demonstrates how to decompose the output gap into contributions of observed data on output, inflation, unemployment, and other variables. In addition, it also demonstrates how to interpret effects of data revisions and new data releases for output gap estimates (news effects) and how to obtain more insight into real-time properties of estimators.” http://www.imf.org/external/pubs/ft/wp/2013/wp13105.pdf
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 10-May 13-May close China 6.23 6.14 6.14 6.15 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,737.00 9,737.00 9,741.00 Japan 86.75 101.62 101.62 101.65 Korea 1,064.40 1,106.39 1,106.39 1,111.78 Malaysia 3.06 2.99 2.99 3.00 Philippines 41.01 41.12 41.12 41.16 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.78 29.78 29.70 Vietnam 20,840.00 20,940.00 20,940.00 20,939.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.07 -0.01 -0.04 -0.03 -0.48 -0.14 -0.09 -0.15 0.27 0.00
2013 YTD (%chg) 1.4 -0.1 -0.9 -14.1 -4.3 1.3 -0.7 -1.6 2.1 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,246.8 23,321.2 5,105.9 14,607.5 1,944.8 1,772.4 7,262.4 3,443.8 1,622.5 486.1
OVERNIGHT LENDING RATE (%) 10-May 13-May 2.140 2.160 0.077 0.077 4.170 4.172 0.095 0.090 2.500 2.500 3.000 3.000 1.684 1.684 0.224 0.224 2.750 2.750
10-May 2,246.8 23,321.2 5,105.9 14,607.5 1,944.8 1,772.4 7,262.4 3,443.8 1,622.5 486.1
bps change 2.00 0.00 0.21 -0.50 0.00 0.00 0.00 0.00 0.00
13-May 2,241.9 22,989.8 5,054.6 14,782.2 1,948.7 1,787.9 7,262.4 3,429.0 1,617.7 488.9
% change -0.22 -1.42 -1.00 1.20 0.20 0.88 0.00 -0.43 -0.29 0.58
2013 YTD (%chg) -1.2 -1.4 16.3 42.2 -4.1 6.8 23.9 7.1 14.9 16.9
3-MONTH INTERBANK LENDING RATE (%) 10-May 13-May bps change 3.880 3.880 -0.02 0.377 0.378 0.07 4.900 4.900 0.00 0.230 0.230 0.00 2.640 2.640 0.00 3.210 3.210 0.00 1.089 1.089 0.00 0.372 0.372 0.00 2.839 2.839 0.00
Page 5 of 7
Vietnam
2.450
2.000
-45.00
5.350
5.000
-35.00
CREDIT DEFAULT SWAP (IN BPS) 9-May 10-May bps change China 69.24 69.75 0.51 Hong Kong SAR 43.43 43.44 0.01 Indonesia 124.00 125.99 1.99 Japan 59.46 57.00 -2.46 Korea 67.76 68.03 0.27 Malaysia 74.58 74.60 0.02 Philippines 80.46 80.51 0.05 Thailand 82.43 81.96 -0.47 Vietnam 190.81 190.86 0.05 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 10-May 13-May Gold Spot (in US$ per 1,448.6 1,428.7 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -1.37
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 30-Nov 31-Dec 3,272.9 3,285.1 3,287.4 3,297.7 3,311.6 China 298.2 301.2 301.7 305.2 317.3 Hong Kong SAR 109.0 110.2 110.3 111.3 112.8 Indonesia 1,273.2 1,277.0 1,274.2 1,270.9 1,268.1 Japan 316.9 322.0 323.5 326.1 327.0 Korea 134.9 137.5 138.3 139.1 139.7 Malaysia 80.7 82.0 81.7 83.9 83.8 Philippines 246.2 252.1 254.2 255.8 259.3 Singapore 179.2 183.6 181.5 181.6 181.6 Thailand 20.8 21.3 21.4 23.2 n.a Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS 3 months imports Latest Int'l Short-term of goods & Reserves external debt services (US$bn) China Hong Kong SAR
3,440.0 303.8
(US$bn) 521.2 149.4
(US$bn) 572.8 752.6
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
Import cover (Qtrs of imports covered by reserves)
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a n.a n.a n.a 139.9 n.a n.a 177.8 n.a
Reserves over short-term debt
6.6 2.0
6.0 0.4
Page 6 of 7
104.8 55.5 43.9 1.9 Indonesia 1,254.4 70.4 2,371.0 17.8 Japan 327.4 156.7 126.7 2.1 Korea 139.9 56.7 30.4 2.5 Malaysia 84.0 20.1 8.5 4.2 Philippines 258.2 121.5 964.3 2.1 Singapore 177.8 68.1 60.7 2.6 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
CHINA
Industrial Production (YoY)% Retail Sales (YoY)%
Period
Apr Apr
Last
2.4 0.5 2.6 4.6 9.9 0.3 2.9 -
Previous
9.3 12.8
8.9 12.6
SELECTED ECONOMIC RELEASES CALENDAR (13 – 17 May 2013) Expected Release Date
5/13/2013
5/14/2013
5/15/2013
5/16/2013
5/17/2013
Economies
Indicators
Period
CHINA CHINA INDONESIA CHINA INDONESIA SINGAPORE PHILIPPINES JAPAN MALAYSIA SOUTH KOREA MALAYSIA MALAYSIA JAPAN JAPAN SOUTH KOREA JAPAN JAPAN JAPAN SINGAPORE SINGAPORE JAPAN
Industrial Production (YoY)% Retail Sales (YoY)% Consumer Confidence Index Actual FDI (YoY)% Bank Indonesia Reference Rate% Retail Sales (YoY)% Overseas Remittances (YoY)% Consumer Confidence GDP YoY% Unemployment Rate (SA)% Current Account Balance (MYR mn) Current Account Balance (MYR mn) Industrial Production YOY% Capacity Utilization (MoM)% Producer Price Index (YoY)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% Machine Orders YOY%
Apr Apr Apr Apr May 14 Mar Mar Apr 1Q Apr 1Q 1Q Mar F Mar F Apr 1Q P 1Q P 1Q P Apr Apr Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 14 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Won Rises Most in Two Weeks on Demand for Shares; Bonds Gain. The won rose the most in two weeks as global funds bought South Korean shares after an unexpected increase in U.S. retail sales bolstered investor appetite for emerging-market assets. Foreign funds bought more South Korean shares than they sold, halting two days of net sales. The currency rose 0.5 percent to 1,106.44 per dollar in Seoul, the biggest advance since April 30. Malaysia’s ringgit climbed for the first time in four days. The ringgit gained 0.25 percent to 2.99 per dollar after dropping 1.2 percent in the past three days. The currency touched 2.9803 today, near a 21-month high of 2.9570 reached last week. The yen strengthened 0.43 percent to 101.4 per dollar from yesterday, when it touched 102.15, the weakest since October 2008.
Asian Stocks Rise 2nd Day, Led by Utilities; Tepco Surges. Asian stocks rose, with the regional benchmark index heading for a second day of gains, as increases in Japanese utilities countered a slide in Chinese stocks. The MSCI Asia Pacific Index added 0.2 percent to 142.49 as of 3:53 p.m. in Tokyo, with seven of the 10 industry groups on the measure advancing. The gauge increased 10 percent this year through yesterday amid speculation the Bank of Japan will take more steps to beat deflation as policy makers in the U.S. and Europe remain on standby to buoy growth. The Philippine Stock Exchange Index rose 0.70 percent, extending gains toward a record close. South Korea’s Kospi Index (KOSPI) climbed 1.03 percent. Singapore’s Straits Times Index increased 0.04 percent. Hong Kong’s Hang Seng Index lost 0.26 percent. China’s Shanghai Composite Index (SHCOMP) dropped 1.11 percent. Japan’s Nikkei 225 (NKY) Stock Average fell 0.16 percent, retreating from the highest since December 2007. While Indonesia stock index rose by 0.54 percent and Vietnam stock price slid by 1.04 percent.
Gold Rush Seen Lifting Profit at Biggest Jewelry Maker. A surge in demand for gold ornaments and coins after the biggest slump in prices in three decades is poised to boost profit at Rajesh Exports Ltd. (RJEX), India’s largest manufacturer and exporter of jewelry. Gold plummeted 14 percent in two sessions through April 15 in the worst slide since 1983, boosting demand from India to Australia. Imports by India, the world’s biggest bullion consumer, may soar 47 percent this quarter to 225 metric tons from a year earlier as the drop in prices and festivals spurs demand, Haresh Soni, chairman of the All India Gems & Jewellery Trade Federation, said yesterday. The gold spot price rose by 0.44 percent, from USD1,403.6 to USD1,436.9 per ounce.
BREAKING NEWS GLOBAL
Fed’s Plosser Says Slowing Inflation Not a Concern for Policy. Federal Reserve Bank of Philadelphia President Charles Plosser said a slowing in U.S. inflation to the lowest rate in more than three years doesn’t warrant a Fed policy response. Central bank officials including St. Louis Fed President James Bullard said last month persistent disinflation
may require the Fed to provide stimulus beyond $85 billion in monthly bond purchases. Consumer prices rose 1 percent in March from a year earlier, the lowest level since October 2009, according to the Fed’s preferred gauge of inflation. The Federal Open Market Committee said on May 1 it will keep buying bonds at the current level and would be prepared to increase or reduce the pace in response to changes in the outlook for inflation and the labor market. Plosser reiterated that he believes the Fed should begin to curtail its purchases as early as its next gathering, scheduled for June 18-19. “Labor market conditions warrant scaling back the pace of purchases as soon as our next meeting,” Plosser said. The Philadelphia Fed leader said he expects the U.S. economy to grow 3 percent this year and in 2014. Consumer spending has made a “solid contribution,” while a deadlock over fiscal policy has inhibited business spending, he said.
European Stocks Decline Before German Investor Confidence. European stocks declined as investors awaited reports on German investor confidence and euro-area industrial production. U.S. futures and Asian shares were little changed. The Stoxx Europe 600 Index lost 0.2 percent to 303.8 at 8:32 a.m. in London. The benchmark gauge rose last week to its highest level since June 2008 amid better-than-expected corporate earnings. Contracts on the Standard & Poor’s 500 Index dropped 0.1 percent, while the MSCI Asia Pacific Index added 0.1 percent. The ZEW Center for European Economic Research’s index of investor and analyst expectations rose to 40 from 36.3 in April. A separate report at the same time may show euro-area industrial production advanced 0.5 percent in March, following a 0.4 percent gain a month earlier.
Airbus A350’s Paint Job Points to Paris-Show Blow for Boeing. Airbus SAS (EAD) engineers are working 13-hour days to get the company’s latest A350 plane off the ground in time to scoop the headlines at next month’s Paris air show. A flight around the year’s biggest aviation expo, starting June 17, would let Airbus steal the limelight from Boeing Co., which aims to use the event to spur orders for an updated 777 and revitalize the 787 program hit by a months-long grounding. Getting the wide-body A350 aloft would repeat Airbus’s splash at the last Paris show in 2011, which the European manufacturer dominated with $44 billion worth of orders for the A320 neo. While Boeing hit back at the 2012 Farnborough jamboree in England with a welter of deals for the 737 Max, the 787 troubles has taken the gloss off its French prospects. The longrange A350 is designed to take on both Boeing models, with the 300-seat A350-900 -the first to fly -- and the smaller A350-800 competing with the 787 and 777-200, and the A350-1000, seating 350, challenging the 777-300ER and new 777X. The mid-sized version costs $287.7 million at list price.
REGIONAL
China Stocks Fall Amid Economy, Property Concerns. China’s stocks fell the most in three weeks after JPMorgan Chase & Co. cut its growth outlook for the nation’s economy and concern grew the government is introducing more property restrictions to limit gains in housing prices. China Vanke Co. led declines for developers after the 21st Century Business Herald reported Beijing tightened rules for the pre-sale of homes. Air China Ltd. slid 2.6 percent after Credit Suisse Group AG said Chinese airline traffic growth slowed last month. ZTE Corp. slumped 4.8 percent after the Wall Street Journal Page 2 of 6
reported the European Union will seek to start a probe into alleged unfair trade practices by the telecom company. The Bloomberg China-US Equity Index lost 1.4 percent yesterday after data showed April industrial output growth trailed estimates and retail sales slowed. The Shanghai Composite has dropped 8.9 percent from this year’s high on Feb. 6 amid concern a slowing economy will curb profit growth. China’s industrial output in April rose 9.3 percent from a year earlier.
Palm Reserves in Indonesia May Drop to Lowest Since October. Palm oil inventories in Indonesia, the world’s largest producer, probably tumbled in April to the lowest level in six months as domestic consumption increased for food and biofuel. Prices advanced. Stockpiles fell 5.1 percent from March to 2.8 million metric tons. That’s the lowest level since an estimated 2.6 million tons in October and represents a 20 percent plunge from a record 3.5 million tons in January. Production increased 10.5 percent to 2.1 million tons, while exports rose 0.6 percent to 1.71 million tons. Prices climbed as much as 0.7 percent to 2,327 ringgit ($780) a ton on the Bursa Malaysia Derivatives before trading at 2,313 ringgit by 11:10 a.m. Kuala Lumpur time. Futures had their best performance in seven weeks in the five days ended May 10 after the Palm Oil Board in Malaysia said reserves fell 11 percent to 1.93 million tons in April, the lowest since June.
Malaysia Growth Seen Over 5% for Longest Run Since 2008: Economy. Malaysia’s growth probably exceeded 5 percent for a seventh straight quarter, the longest stretch since the depth of the global financial crisis in 2008, with a pick-up in investment poised to add further momentum. GDP probably rose 5.5 percent in the first three months of 2013 from a year before. A slide in exports meant the pace probably slowed from a 6.4 percent rate in October-to-December. The government will release the figures tomorrow. Cash hand-outs to lower-income Malaysians promised in the run-up to the vote is also helping domestic consumption offset limited demand for exports. Najib held on to power with his governing coalition’s smallest share of the popular vote since 1969 after giving hand-outs to the poor, higher wages for civil servants and energy subsidies.
IFIs NEWS (compiled from their websites) World Bank – Press Release: China: World Bank to Help Develop Green Airport to Improve Connectivity in Jiangxi Province
The World Bank’s Board has approved on May 13, 2013, a loan of US$50 million to the People’s Republic of China to help improve airline connectivity in northeastern Jiangxi Province and demonstrate the environmental sustainability of the development and operation of the Shangrao Sanqingshan Airport. “Aside from improving air transport connectivity, this project is intended to enhance operations by setting up a proper business model, improving the identification of targeted passenger groups, designing proper air routes, incorporating environmental sustainability to reduce carbon emissions as well as energy saving,” said Binyam Reja, World Bank Lead Transport Specialist in China. “If successful, it can become a demonstration project for the development of future feeder airport projects in China.”
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http://www.worldbank.org/en/news/press-release/2013/05/13/china-world-bank-to-helpdevelop-green-airport-to-improve-connectivity-in-jiangxi-province (Press Release) http://www.worldbank.org/projects/P123729/china-jiangxi-shangrao-sanqingshan-airportdevelopment?lang=en (Project’s Information: China: Jiangxi Shangrao Sanqingshan Airport Project) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 13-May 14-May close China 6.23 6.14 6.15 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,737.00 9,741.00 9,757.00 Japan 86.75 101.62 101.82 101.38 Korea 1,064.40 1,106.39 1,111.78 1,106.44 Malaysia 3.06 2.99 3.00 2.99 Philippines 41.01 41.12 41.16 41.12 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.78 29.68 29.60 Vietnam 20,840.00 20,940.00 20,939.00 20,940.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.06 0.00 -0.16 0.43 0.48 0.25 0.10 0.31 0.27 0.00
2013 YTD (%chg) 1.5 -0.1 -1.1 -13.8 -3.9 1.5 -0.6 -1.4 2.5 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,246.8 23,321.2 5,105.9 14,607.5 1,944.8 1,772.4 7,262.4 3,443.8 1,622.5 486.1
OVERNIGHT LENDING RATE (%) 13-May 14-May 2.160 2.240 0.077 0.076 4.172 4.168 0.090 0.090 2.500 2.500 3.000 3.000 1.684 1.904 0.027 0.027 2.750 2.750 2.000 1.722
13-May 2,241.9 22,989.8 5,054.6 14,782.2 1,948.7 1,787.9 7,262.4 3,429.0 1,617.7 488.9
bps change 8.00 -0.07 -0.43 0.00 0.00 0.00 22.00 0.00 0.00 -27.80
14-May
% change
2,217.0 22,930.3 5,081.9 14,758.4 1,968.8 1,788.4 7,313.5 3,430.2 1,624.6 483.9
-1.11 -0.26 0.54 -0.16 1.03 0.03 0.70 0.04 0.43 -1.04
2013 YTD (%chg) -2.3 -1.6 16.9 42.0 -3.1 6.8 24.8 7.1 15.4 15.7
3-MONTH INTERBANK LENDING RATE (%) 13-May 14-May bps change 3.880 3.880 0.03 0.378 0.378 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.650 2.650 0.00 3.210 3.210 0.00 1.089 1.058 -3.10 0.372 0.372 0.00 2.839 2.839 0.00 5.000 4.900 -10.00
CREDIT DEFAULT SWAP (IN BPS) 10-May 13-May bps change China 69.75 70.78 1.02 Hong Kong SAR 43.44 43.47 0.03 Indonesia 125.99 127.06 1.07 Japan 57.00 56.29 -0.72 Korea 68.03 68.06 0.04 Malaysia 74.60 75.66 1.07 Philippines 80.51 81.63 1.12 Thailand 81.96 82.52 0.56 Vietnam 190.86 191.96 1.10 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag.
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13-May 14-May Gold Spot (in US$ per 1,430.6 1,436.9 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change 0.44
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 30-Nov 31-Dec 3,272.9 3,285.1 3,287.4 3,297.7 3,311.6 China 298.2 301.2 301.7 305.2 317.3 Hong Kong SAR 109.0 110.2 110.3 111.3 112.8 Indonesia 1,273.2 1,277.0 1,274.2 1,270.9 1,268.1 Japan 316.9 322.0 323.5 326.1 327.0 Korea 134.9 137.5 138.3 139.1 139.7 Malaysia 80.7 82.0 81.7 83.9 83.8 Philippines 246.2 252.1 254.2 255.8 259.3 Singapore 179.2 183.6 181.5 181.6 181.6 Thailand 20.8 21.3 21.4 23.2 n.a Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS 3 months imports Latest Int'l Short-term of goods & Reserves external debt services (US$bn)
(US$bn)
(US$bn)
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
Import cover (Qtrs of imports covered by reserves)
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 China 303.8 149.4 752.6 2.0 Hong Kong SAR 107.3 55.5 43.9 1.9 Indonesia 1,254.4 70.4 2,371.0 17.8 Japan 327.4 156.7 126.7 2.1 Korea 140.3 56.7 30.4 2.5 Malaysia 84.0 20.1 8.5 4.2 Philippines 258.2 121.5 964.3 2.1 Singapore 177.8 68.1 60.7 2.6 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
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6.0 0.4 2.4 0.5 2.6 4.6 9.9 0.3 2.9 -
DATA RELEASES FOR THE DAY Indicators
Economies
INDONESIA
Bank Indonesia Reference Rate (%)
Period
May 14
Last
Previous
5.75
5.75
SELECTED ECONOMIC RELEASES CALENDAR (13 – 17 May 2013) Expected Release Date
5/13/2013
5/14/2013
5/15/2013
5/16/2013
5/17/2013
Economies
Indicators
Period
CHINA CHINA INDONESIA CHINA INDONESIA SINGAPORE PHILIPPINES JAPAN MALAYSIA SOUTH KOREA MALAYSIA JAPAN JAPAN SOUTH KOREA JAPAN JAPAN JAPAN SINGAPORE SINGAPORE JAPAN
Industrial Production (YoY)% Retail Sales (YoY)% Consumer Confidence Index Actual FDI (YoY)% Bank Indonesia Reference Rate (%) Retail Sales (YoY)% Overseas Remittances (YoY)% Consumer Confidence GDP YoY% Unemployment Rate (SA)% Current Account Balance (MYR mn) Industrial Production YOY% Capacity Utilization (MoM)% Producer Price Index (YoY)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% Machine Orders YOY%
Apr Apr Apr Apr May 14 Mar Mar Apr 1Q Apr 1Q Mar F Mar F Apr 1Q P 1Q P 1Q P Apr Apr Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 15 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Won Falls to Three-Week Low on Intervention Concern; Bonds Drop. The won fell to a three-week low on speculation South Korean policy makers will weaken the currency to protect exports after the yen slumped to the lowest level since October 2008. Japan’s aggressive monetary easing has a “big impact” on South Korea’s economy, Bank of Korea Governor Kim Choong Soo said last week after the central bank unexpectedly cut its benchmark seven-day repurchase rate by a quarter percentage point to 2.5 percent. The won dropped 0.75 percent to 1,114.76 per dollar in Seoul. It touched 1,115.23 earlier, the weakest level since April 25. The yen touched 102.39 per dollar today. The won strengthened 13 percent against the yen this year and fell 5 percent versus the dollar. That makes it harder for exporters such as Samsung Electronics Co. and Hyundai Motor Co. to compete against Japanese rivals overseas. Foreign funds sold more local shares than they bought today.
•
Asian Shares Climb With Japan Stocks, Bond Yields as Won Slides. Asian shares rose as stocks in Japan climbed to their highest level since December 2007 and yields on the nation’s 10-year bond advanced to the most in more than a year. The MSCI Asia Pacific Index added 0.8 percent at 1:12 p.m. in Tokyo as Japan’s Nikkei 225 Stock Average jumped 2.29 percent, breaching 15,000 for the first time since January 2008. Hong Kong’s Hang Seng Index advanced 0.5 percent, rebounding from its biggest two-day drop in a month. China’s Shanghai Composite (SHCOMP) rose 0.35 percent. Chinese Premier Li Keqiang signaled policy makers are reluctant to use stimulus to counter an economic slowdown. Singapore Straits Times index increased 0.27 percent and Indonesia stock index advanced 0.16 percent. Meanwhile, South Korea’s Kospi Index and the Philippines Stock Exchange index added 0.16 percent and 1.08 percent, respectively.
•
Gold Heads for Worst Run Since February on ETPs, Dollar’s Gain. Gold declined for a fifth day in the worst run since February on further outflows from exchange-traded products and as the dollar’s strength hurt commodities. Gold for immediate delivery fell as much as 1.1 percent to $1,409.92 an ounce, the lowest price since April 23, and traded at $1,410.7 at 5:16 p.m. in Singapore. Gold has retreated 16 percent this year, tumbling into a bear market last month, as some investors lost faith in the metal as a store of value and equities rallied. Gold for June delivery lost as much as 1.1 percent to $1,408.40 an ounce on the Comex, and was at $1409.80. Silver dropped 1.8 percent to $22.995 an ounce, while platinum declined 0.5 percent to $1,493.20 an ounce. Palladium decreased 1.6 percent to $718.81 an ounce.
BREAKING NEWS GLOBAL •
German Economy Barely Expands While France Contracts. The German economy expanded less than forecast in the first quarter and France’s slipped into recession, increasing pressure on the European Central Bank to do more to stimulate growth. German GDP rose 0.1 percent from the fourth quarter, when it fell a downwardly revised 0.7 percent, the Federal Statistics Office in Wiesbaden said today. The French economy
contracted 0.2 percent in the three months through March after shrinking the same amount in the final quarter of last year. The weaker-than-forecast GDP results in Europe’s two biggest economies highlight the risks to the outlook and indicate that the 17-nation euro region is almost certainly still stuck in recession. The ECB cut its benchmark interest rate to a record low of 0.5 percent this month and President Mario Draghi said the bank is ready to act again if needed. The euro dropped more than a quarter of a cent after the German report and traded at $1.2904 at 8:47 a.m. in Frankfurt. Germany’s first-quarter growth was driven “almost exclusively” by household spending, the statistics office said. Investment declined and net trade barely contributed, it said. •
Bank of France Touts Securitization Plan as Template for ECB. The Bank of France wants to help banks package loans to businesses into tradable securities with the creation of a special-purpose vehicles, in what could become a template for the euro area. As the ECB looks for ways to improve the flow of credit to small and medium-sized enterprises (SMEs), the project started by the French central bank in July last year could provide one possible solution, the head of its markets division, Alexandre Gautier said. While banks can currently securitize SME loans and use them as collateral at the ECB, the process is complicated and not centralized. The Bank of France project involves the creation of a private company to pool existing loans to SMEs and then issue new securities that can be traded. Current plans are for the participating banks to own equal shares in the company and for the first such entity to issue five-year bonds. The aim is to make it easier for banks to re-finance existing loans and incentivize them to extend credit to small businesses.
REGIONAL •
Li Signals Reluctance on Stimulus to Boost China Growth. Chinese Premier Li Keqiang signaled policy makers are reluctant to use stimulus to counter a slowdown in the world’s second-largest economy because the risks outweigh the benefits. “To achieve this year’s targets, the room to rely on stimulus policies or government direct investment is not big -we must rely on market mechanisms,” Li said in a May 13 speech. Relying on governmentled investment for growth “is not only difficult to sustain but also creates new problems and risks,” he said. Li’s most extensive economic comments in almost two months indicate China may be unlikely to boost government spending or follow central banks across Asia in cutting interest rates as he tries to pare the state’s role in the economy.
•
Singapore April Residential Sales Decline 51% From Record. Singapore’s April home sales dropped 51 percent from a record in March as developers marketed fewer projects as residential prices posted the smallest gain in three quarters. Home sales fell to 1,375 units in April, according to data from the Urban Redevelopment Authority released today. Sales in March rose to a record 2,793 units. Singapore will offer five residential sites in May which can yield about 2,725 homes, according to a government statement today. Singapore also plans to raise taxes for luxury homeowners and residential properties that are rented out. The higher tax will apply to the top 1 percent of homeowners who live in their own residences, or 12,000 properties, Singapore Finance Minister Tharman Shanmugaratnam said in his budget speech on Feb. 25. The government tightened loan-to-value (LTV) limits for buyers seeking a second mortgage, referring to the amount they are allowed to borrow relative to the value of their properties. The cash down-payment will rise to 25 percent from 10 percent starting from the second loan, it said. Page 2 of 6
•
Hong Kong Home Prices at Record Gap to Sales. The gap between Hong Kong home prices and sales is the widest on record as new taxes, rising supply and the prospect of higher mortgage costs deter buyers in the world’s most expensive housing market. Prices have fallen 4.2 percent from a record reached in mid-March, compared with a 77 percent contraction in sales from their post-global financial crisis peak in 2010. The city’s housing market got an additional boost in January 2012 when the U.S. Federal Reserve pledged to keep interest rates low through at least late-2014. Since 2010, Hong Kong has charged an extra tax of up to 20 percent of the value of homes on buyers who resell them within three years and raised the minimum down-payment on mortgages for homes costing more than HK$7 million ($902,000). In October, Chief Executive Leung Chun-ying imposed an extra 15 percent tax on all home purchases by companies and non-residents, and promised to raise land supply. Macquarie’s Ng, who has an underweight rating on Hong Kong property stocks, said he expects home prices to drop 10 percent this year.
IFIs NEWS (compiled from their websites) IMF - Publication: “Creating a Safer Financial System: Will the Volcker, Vickers, and Liikanen Structural Measures Help?” •
The IMF has publicised the captioned staff discussion note. “The U.S., the U.K., and more recently, the E.U., have proposed policy measures directly targeting complexity and business structures of banks. This paper provides an analysis of the potential implications of implementing different structural policy measures. It proposes a pragmatic and coordinated approach to development of these policies to reduce risk of regulatory arbitrage and minimize unintended consequences. In doing so, it also aims to identify a set of common policy measures that countries could adopt to re-scope bank business models and corporate structures.” http://www.imf.org/external/pubs/ft/sdn/2013/sdn1304.pdf
World Bank – Press Release: WB, Vietnam Sign Credit Agreements worth US$ 400 million to improve the country’s competitiveness and education •
The State Bank of Vietnam and the World Bank in Vietnam have signed three credit agreements on May 14, 2013, worth a total of US$ 400 million, to help Vietnam with economic management reforms for higher productivity and competitiveness, to support the implementation of the Higher Education Reform Agenda, and to raise school readiness for 5 year old children. “I want to congratulate the Government on its stabilization efforts over the past 18 months,” said Victoria Kwakwa, World Bank Country Director for Vietnam. ”It is necessary to continue these efforts, and at the same time accelerate the pace of implementation of structural reforms. The Economic Management and Competitiveness Credit (EMCC) is designed to enhance our partnership with the government to facilitate the restructuring of state-owned enterprises, public investment and banking sector.” http://www.worldbank.org/en/news/press-release/2013/05/14/wb-vietnam-sign-creditagreement-worth-400-million-to-improve-country-competitiveness-and-education(Press Release) http://www.worldbank.org/projects/P117393/vietnam-school-readiness-promotionproject?lang=en (Project’s Information: Vietnam School Readiness Promotion Project)
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WTO – Press Release: General Council appoints Azevêdo as next Director-General, Lamy pledges smooth transition •
At a special meeting on 14 May 2013, the General Council approved the appointment of Ambassador Roberto Carvalho de Azevêdo (Brazil) as the next Director-General of the WTO. He begins his term of office on 1 September 2013. Director-General Pascal Lamy pledged to work closely with Ambassador Azevêdo in ensuring a smooth transition. http://www.wto.org/english/news_e/news13_e/gc_14may13_e.htm (Press Release and Statements made by the Chairman, Director-General Lamy and Ambassodor Azevedo)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 14-May 15-May close China 6.23 6.14 6.14 6.15 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,737.00 9,757.00 9,748.00 Japan 86.75 101.62 102.42 102.39 Korea 1,064.40 1,106.39 1,106.44 1,114.76 Malaysia 3.06 2.99 2.99 3.00 Philippines 41.01 41.12 41.12 41.23 Singapore 1.22 1.24 1.24 1.25 Thailand 30.59 29.78 29.66 29.73 Vietnam 20,840.00 20,940.00 20,940.00 20,940.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.05 0.00 0.09 0.03 -0.75 -0.42 -0.27 -0.16 -0.24 0.00
2013 YTD (%chg) 1.4 -0.1 -1.0 -14.7 -4.6 1.1 -0.9 -2.0 2.0 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,246.8 23,321.2 5,105.9 14,607.5 1,944.8 1,772.4 7,262.4 3,443.8 1,622.5 486.1
OVERNIGHT LENDING RATE (%) 14-May 15-May 2.240 2.250 0.076 0.076 4.168 4.169 0.090 0.073 2.500 2.500 3.000 3.000 1.904 1.588 0.026 0.026 2.750 2.750 1.722 1.700
CREDIT DEFAULT SWAP (IN BPS) 13-May China 70.78 Hong Kong SAR 43.47 Indonesia 127.06 Japan 56.29 Korea 68.06 Malaysia 75.66
14-May 72.76 43.95 128.57 55.38 69.08 76.66
14-May 2,217.0 22,930.3 5,081.9 14,758.4 1,968.8 1,788.4 7,313.5 3,432.8 1,623.5 483.9 bps change 1.00 0.00 0.07 -1.75 0.00 0.00 -31.60 0.00 0.00 -2.20
15-May 2,224.8 23,044.2 5,089.9 15,096.0 1,971.3 1,783.0 7,392.2 3,442.1 1,631.2 486.0
% change 0.35 0.50 0.16 2.29 0.12 -0.30 1.08 0.27 0.48 0.44
2013 YTD (%chg) -2.0 -1.1 17.1 45.2 -2.9 6.5 26.1 7.5 15.9 16.2
3-MONTH INTERBANK LENDING RATE (%) 14-May 15-May bps change 3.880 3.880 0.00 0.378 0.378 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.660 2.660 0.00 3.210 3.210 0.00 1.058 1.135 7.70 0.372 0.373 0.08 2.839 2.839 0.00 4.900 5.107 20.70
bps change 1.98 0.48 1.51 -0.91 1.01 1.00
Page 4 of 6
Philippines 81.63 82.66 1.03 Thailand 82.52 83.02 0.51 Vietnam 191.96 192.05 0.09 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 14-May 15-May Gold Spot (in US$ per 1,425.5 1,410.7 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -1.03
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 30-Nov 31-Dec 3,272.9 3,285.1 3,287.4 3,297.7 3,311.6 China 298.2 301.2 301.7 305.2 317.3 Hong Kong SAR 109.0 110.2 110.3 111.3 112.8 Indonesia 1,273.2 1,277.0 1,274.2 1,270.9 1,268.1 Japan 316.9 322.0 323.5 326.1 327.0 Korea 134.9 137.5 138.3 139.1 139.7 Malaysia 80.7 82.0 81.7 83.9 83.8 Philippines 246.2 252.1 254.2 255.8 259.3 Singapore 179.2 183.6 181.5 181.6 181.6 Thailand 20.8 21.3 21.4 23.2 n.a Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS 3 months imports Latest Int'l Short-term of goods & Reserves external debt services (US$bn) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,442.7 303.8 107.3 1,254.4 327.4 140.3 84.0 258.2 177.8 21.4
(US$bn) 521.2 149.4 55.5 70.4 156.7 56.7 20.1 121.5 68.1 30.9
(US$bn) 572.8 752.6 43.9 2,371.0 126.7 30.4 8.5 964.3 60.7 10.0
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 17.8 2.1 2.5 4.2 2.1 2.6 -
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
Reserves over short-term debt 6.0 0.4 2.4 0.5 2.6 4.6 9.9 0.3 2.9 -
Page 5 of 6
Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
SINGAPORE PHILIPPINES JAPAN SOUTH KOREA Expected Release Date
5/13/2013
5/14/2013
5/15/2013
5/16/2013
5/17/2013
Retail Sales (YoY)% Overseas Remittances (YoY)% Consumer Confidence Unemployment Rate (SA)%
Period
Mar Mar Apr Apr
Last
Previous
-7.4 3.0 44.5 3.1
-3.0 6.0 44.8 3.2
SELECTED ECONOMIC RELEASES CALENDAR (13 – 17 May 2013) Economies
Indicators
Period
CHINA CHINA INDONESIA CHINA INDONESIA SINGAPORE PHILIPPINES JAPAN MALAYSIA SOUTH KOREA MALAYSIA JAPAN JAPAN SOUTH KOREA JAPAN JAPAN JAPAN SINGAPORE SINGAPORE JAPAN
Industrial Production (YoY)% Retail Sales (YoY)% Consumer Confidence Index Actual FDI (YoY)% Bank Indonesia Reference Rate (%) Retail Sales (YoY)% Overseas Remittances (YoY)% Consumer Confidence GDP YoY% Unemployment Rate (SA)% Current Account Balance (MYR mn) Industrial Production YOY% Capacity Utilization (MoM)% Producer Price Index (YoY)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% Machine Orders YOY%
Apr Apr Apr Apr May 14 Mar Mar Apr 1Q Apr 1Q Mar F Mar F Apr 1Q P 1Q P 1Q P Apr Apr Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 16 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Korea Won Completes Weekly Loss on Intervention Risk; Bonds Drop. South Korea’s won completed the worst week in more than a month on speculation authorities will weaken the currency to safeguard exports after the yen slumped to a four-year low. The won fell 0.9 percent this week to 1,116.6 per dollar in Seoul, the biggest weekly drop since the period ended April 5. The yen reached 102.25 per dollar yesterday, and was trading at 102.58 today. The won rallied 13 percent against the yen this year and fell 4.7 percent versus the dollar. Indonesia’s rupiah fell to a four-month low and government bonds declined on speculation uncertainty about the nation’s next finance minister and a plan to cut fuel subsidies is shaking investor confidence. The rupiah fell 0.04 percent to 9,752.00 per dollar, Singapore dollar and Malaysian ringgit dropped 0.50 percent and 0.39 percent, respectively against the US dollar.
Asian Stocks Retreat as Japanese Banks Fall on Earnings. Asian stocks fell, with the regional gauge retreating from a five-year high, as a drop in Japanese banks after forecasting lower earnings offset a report that Japan’s economy expanded faster than analysts estimated. The MSCI Asia Pacific Index slid 0.2 percent to 142.63 as of 5:12 p.m. in Tokyo. Japan’s Nikkei 255 Stock Average dropped 0.39 percent, after yesterday closing at the highest level since December 2007. South Korea’s Kospi index advanced 0.79 percent. Hong Kong’s Hang Seng Index added 0.17 percent and China’s Shanghai Composite Index climbed 1.21 percent. The Philippines stock index and Thailand stock index dropped respectively 1.10 percent and 0.77 percent, while Malaysian index decreased by 0.91 percent.
Gold Near One-Month Low as Soros, Blackrock Reduce ETP Holdings. Gold traded near a one-month low as filings showed that George Soros and Blackrock Inc. cut holdings of bullion-backed exchange-traded products, adding to signs that investment demand is waning as U.S. equities rally to records. Gold for immediate delivery dropped by 1.20 percent to $1,376.3 an ounce at 5:15 p.m. in Singapore. Bullion for June delivery lost 0.4 percent to $1,390.10 on the Comex, set for a sixth day of declines that’s the worst since December 2011. Gold has dropped 17 percent this year, tumbling into a bear market last month, as some investors lost faith in the metal as a store of value.
BREAKING NEWS GLOBAL
Slovenia Premier Bratusek Defies Markets With No-Aid Vow. Time may be running out for Alenka Bratusek, the Slovenian prime minister who is resisting a bailout as global bond markets put her on the front lines of Europe’s debt crisis. Less than 18 months ago, she was a novice lawmaker whose government experience was as a civil servant in the former Yugoslav republic’s Finance Ministry. Now Bratusek, 43, stands between Slovenia’s crisisscarred banks and the euro area’s sixth bailout as investors and international officials ask whether her plan will be enough to avoid outside aid. Bratusek says time is what she needs to fix the banks -- by deploying a rescue package she opposed before she came to office --
and that her nation won’t need an international rescue. By next month, she promises, her coalition government will begin swapping as much as 4 billion euros ($5.2 billion) in bad bank loans for government-guaranteed debt.
Housing Starts in U.S. Probably Fell From Almost Five-Year High. Housing starts in the U.S. probably fell in April from an almost five-year high, indicating a pause in the industry’s progress as builders slowed work on apartment buildings, economists said before a report today. Beginning construction of new homes dropped to a 970,000 annual rate after jumping in March to a 1.04 million pace, the fastest since June 2008. Other figures today may show cheaper gasoline helped keep the cost of living in check. Near record-low mortgage rates and improving job opportunities are drawing buyers into a market that remains a bright spot for the expansion. The increase in demand is stretching beyond builders and giving a boost to lenders, brokers and suppliers of construction materials. The Commerce Department will release the housing starts data at 8:30 a.m. in Washington.
REGIONAL
Japan GDP Jumps Most in Year as Consumers Open Wallets: Economy. Japan’s economy expanded the most in a year last quarter as consumer spending and export gains outweighed the weakest business investment since the wake of the March 2011 earthquake and tsunami. GDP rose an annualized 3.5 percent, a Cabinet Office release showed in Tokyo. Private consumption, making up 60 percent of GDP, contributed 2.3 percentage points to the jump. Nominal GDP, which is unadjusted for changes in prices, rose 1.5 percent, also the most in a year. Abe plans next month to unveil his so-called third arrow of structural reform, following the first two arrows of monetary and fiscal stimulus. Nominal GDP rose 0.4 percent last quarter from the previous three months, less than the median forecast for a 0.5 percent advance.
China Said to Prepare Import Duties on Polysilicon. China, the world’s biggest maker of solar panels, is preparing to set anti-dumping duties on imports of the raw material used to make the equipment after determining it was sold below cost, said two people with direct knowledge of the matter. The Ministry of Commerce has completed probes that determined the U.S. and European Union are subsidizing producers of polysilicon and that imports of the commodity harmed domestic companies. The ministry is holding off on setting duties until the EU issues its ruling on anti-dumping tariffs against Chinese-made solar equipment, which will be a factor in China’s decision, the people said. The EU plans to levy tariffs of as much as 67.9 percent on solar panels from China, with the measures to be announced by June 6, a commerce official from the bloc, who asked not to be identified, said this month. The U.S. began a probe against Chinese manufacturers in 2011 and the EU in September 2012 after falling solar equipment prices led to the collapse of companies including Fremont, California-based Solyndra LLC.
Chinese Province Starts $2.4 Billion Fund to Invest in SE Asia. Highland Capital Management, a company formed by the government of China’s Yunnan province, will raise as much as 15 billion yuan ($2.4 billion) to invest in real estate and natural resources in Southeast Asia. The fund, launched jointly with the Financial Supervisory Board of Yunnan, is raising capital from financial institutions and state-owned enterprises. Daniel Zhou, a former director of the investment-banking division at UBS Investment Bank AG, will lead Page 2 of 6
the fund. Yunnan is in southwestern China, “This focus builds on Yunnan Province’s geographical proximity and its strong business ties to” Southeast Asia, the investment firm said in the statement. Highland Capital will manage China’s second offshore yuan fund. Sailing Capital International Co.’s investment arm was launched in February 2012 and is managing 50 billion yuan of assets, according to the company’s website. IFIs NEWS (compiled from their websites) ADBI – Working Paper: “How Low-Carbon Green Growth Can Reduce Inequalities”
The ADBI has publicised the captioned working paper. “Half of the world's population—3 billion people—lives below the poverty line, and Asia has the largest share. In pursuit of sustainable economic development and poverty alleviation, there is great potential among low-income households for green consumption, production, innovation, and entrepreneurial activity. This paper shows how an inclusive green growth model can uplift the poor through entrepreneurship and fiscal policy reforms.” http://www.adbi.org/files/2013.05.15.wp420.low.carbon.green.growth.reduce.inequalities.
pdf G20– Press Release: The Third G20 Sherpas’ Meeting held in St.Petersburg
On May 11-12, 2013, the Third Sherpas' Meeting within the framework of Russia's G20 Presidency was held in St.Petersburg. The most pressing issues of the G20 agenda, as well as the outcomes of the G20 Finance Ministers and Central Bank Governors' Meeting held recently in Washington D.C., and results of a series of the outreach-events devoted to the issues of sovereign debt management, financial inclusion and literacy and other issues of the global development agenda were discussed at the meeting. Other than heated debates on which particular strategy - growth and demand support or fiscal consolidation - should be reflected upon as the most important one, the G20 Sherpas also discussed the issues of the financial sector, such as fragmentation of the financial markets and risks of financial market bubbles. http://www.g20.org/news/20130512/781340272.html (Press Release) http://www.g20.org/events_sherpas_track/20130511/780961140.html (Program for G20 Sherpas’ Meeting)
IFC – Press Release: IFC Invests in Concord Medical to Improve Access to Quality Radiotherapy Treatment in China
IFC is providing a $50 million financing package to Concord Medical Services Holdings Ltd. to expand the company’s network of radiotherapy centers in China so that more cancer patients can gain access to such medical treatments. “IFC is partnering with leading private sector players like Concord Medical to make health care services more accessible and affordable in China and other developing countries,” said Karin Finkelston, IFC’s vice president for Asia Pacific. “Delivering quality health care increases life expectancy and decreases the loss of labor, thereby supporting economic growth and improving people’s lives.” http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/AB4A95F418BFBC7F85257B6C0 037A972
Page 3 of 6
IMF – Press Release: IMF Executive Board Approves €1 Billion Arrangement Under Extended Fund Facility for Cyprus
On May 15, 2013, the IMF approved a three-year SDR 891 million (about €1 billion, or US$1.33 billion; 563 percent of the country’s quota) arrangement under the Extended Fund Facility (EFF) for Cyprus in support of the authorities’ economic adjustment program. The approval allows for the immediate disbursement of SDR 74.25 million (about €86 million, or US$110.7 million). The EFF arrangement is part of a combined financing package with the European Stability Mechanism (ESM) amounting to €10 billion. It is intended to stabilize the country’s financial system, achieve fiscal sustainability, and support the recovery of economic activity to preserve the welfare of the population. http://www.imf.org/external/np/sec/pr/2013/pr13175.htm
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 15-May 16-May close China 6.23 6.14 6.15 6.15 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,737.00 9,748.00 9,752.00 Japan 86.75 101.62 102.25 102.58 Korea 1,064.40 1,106.39 1,114.76 1,116.60 Malaysia 3.06 2.99 3.00 3.01 Philippines 41.01 41.12 41.23 41.29 Singapore 1.22 1.24 1.25 1.25 Thailand 30.59 29.78 29.75 29.70 Vietnam 20,840.00 20,940.00 20,940.00 20,940.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.05 -0.02 -0.04 -0.32 -0.16 -0.39 -0.15 -0.50 0.17 0.00
2013 YTD (%chg) 1.4 -0.2 -1.0 -14.9 -4.7 0.7 -1.0 -2.5 2.1 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,246.8 23,321.2 5,105.9 14,607.5 1,944.8 1,772.4 7,262.4 3,443.8 1,622.5 486.1
OVERNIGHT LENDING RATE (%) 15-May 16-May 2.250 2.720 0.076 0.074 4.169 4.168 0.073 0.093 2.500 2.500 3.000 3.000 1.588 1.438 0.027 0.027 2.750 2.750 1.700 1.500
CREDIT DEFAULT SWAP (IN BPS) 14-May China 72.76 Hong Kong SAR 43.95
15-May 73.28 43.98
15-May 2,224.8 23,044.2 5,089.9 15,096.0 1,971.3 1,783.0 7,392.2 3,441.5 1,630.1 486.0
bps change 47.00 -0.21 -0.07 2.00 0.00 0.00 -15.00 0.00 0.00 -20.00
16-May 2,251.8 23,082.7 5,078.7 15,037.2 1,986.8 1,766.7 7,310.9 3,452.3 1,617.6 490.3
% change 1.21 0.17 -0.22 -0.39 0.79 -0.91 -1.10 0.31 -0.77 0.90
2013 YTD (%chg) -0.8 -1.0 16.8 44.7 -2.2 5.5 24.7 7.8 14.9 17.2
3-MONTH INTERBANK LENDING RATE (%) 15-May 16-May bps change 3.880 3.881 0.02 0.378 0.378 -0.04 4.900 4.900 0.00 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.135 1.186 5.10 0.373 0.373 0.00 2.839 2.835 -0.46 5.107 4.650 -45.70
bps change 0.53 0.03
Page 4 of 6
Indonesia 128.57 134.40 5.83 Japan 55.38 55.60 0.22 Korea 69.08 69.60 0.52 Malaysia 76.66 76.69 0.03 Philippines 82.66 84.67 2.01 Thailand 83.02 83.05 0.03 Vietnam 192.05 193.48 1.43 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 15-May 16-May Gold Spot (in US$ per 1,393.0 1,376.3 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -1.20
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 30-Nov 31-Dec 3,272.9 3,285.1 3,287.4 3,297.7 3,311.6 China 298.2 301.2 301.7 305.2 317.3 Hong Kong SAR 109.0 110.2 110.3 111.3 112.8 Indonesia 1,273.2 1,277.0 1,274.2 1,270.9 1,268.1 Japan 316.9 322.0 323.5 326.1 327.0 Korea 134.9 137.5 138.3 139.1 139.7 Malaysia 80.7 82.0 81.7 83.9 83.8 Philippines 246.2 252.1 254.2 255.8 259.3 Singapore 179.2 183.6 181.5 181.6 181.6 Thailand 20.8 21.3 21.4 23.2 n.a Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS 3 months imports Latest Int'l Short-term of goods & Reserves external debt services (US$bn) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
3,442.7 303.8 107.3 1,254.4 327.4 140.3 84.0
(US$bn) 521.2 149.4 55.5 70.4 156.7 56.7 20.1
(US$bn) 572.8 752.6 43.9 2,371.0 126.7 30.4 8.5
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 17.8 2.1 2.5 4.2
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
Reserves over short-term debt 6.0 0.4 2.4 0.5 2.6 4.6 9.9
Page 5 of 6
258.2 121.5 964.3 2.1 0.3 Singapore 177.8 68.1 60.7 2.6 2.9 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
JAPAN
SOUTH KOREA
Industrial Production YOY% Capacity Utilization (MoM)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % Producer Price Index (YoY)%
Period
Mar F Mar F 1Q P 1Q P 1Q P Apr
Last
Previous
-6.7 -0.8 0.9 0.4 3.5 -2.8
-7.3 0.7 0.3 0.1 1.0 -2.4
SELECTED ECONOMIC RELEASES CALENDAR (13 – 17 May 2013) Expected Release Date
5/13/2013
5/14/2013
5/15/2013
5/16/2013
5/17/2013
Economies
Indicators
Period
CHINA CHINA INDONESIA CHINA INDONESIA SINGAPORE PHILIPPINES JAPAN MALAYSIA SOUTH KOREA MALAYSIA JAPAN JAPAN SOUTH KOREA JAPAN JAPAN JAPAN SINGAPORE SINGAPORE JAPAN
Industrial Production (YoY)% Retail Sales (YoY)% Consumer Confidence Index Actual FDI (YoY)% Bank Indonesia Reference Rate (%) Retail Sales (YoY)% Overseas Remittances (YoY)% Consumer Confidence GDP YoY% Unemployment Rate (SA)% Current Account Balance (MYR mn) Industrial Production YOY% Capacity Utilization (MoM)% Producer Price Index (YoY)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% Machine Orders YOY%
Apr Apr Apr Apr May 14 Mar Mar Apr 1Q Apr 1Q Mar F Mar F Apr 1Q P 1Q P 1Q P Apr Apr Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 17 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Currencies Drop as Yen Weakness Spurs Intervention Concern. Asian currencies declined for a second week on speculation regional central banks will allow their exchangerates to depreciate to keep exports competitive with Japan, as the yen fell to a four-year low. South Korea’s won is more sensitive to yen weakness because companies such as Samsung Electronics Co. and Sony Corp. compete for global market share. The won dropped 0.04 percent to 1,117.10; the ringgit weakened 0.27 percent to 3.02. Japan’s currency reached 102.76 per dollar on May 15, the lowest level since October 2008. It traded at 102.60 yens per dollar at 5 PM, Singapore time and has lost 15.9 percent this year, the most in Asia. Indonesia’s rupiah dropped 0.05 percent to 9,757 per dollar, the Philippine peso lost 0.22 percent to 41.20 and Vietnam’s dong declined 0.18 percent to 20,978. The Thai baht dropped 0.44 percent to 29.84, while Singapore dollar declined by 0.29 percent to 1.26.
Asia Stock Index Poised for Weekly Gain as Topix Climbs. Asia’s benchmark stock index is poised for a second weekly advance after Japan’s Topix Index closed at the highest level since 2008 as leasing companies rallied on a report Prime Minister Shinzo Abe will encourage the practice to revive capital spending. The MSCI Asia Pacific Index dropped 0.2 percent to 142.72 as of 3:40 p.m. Tokyo time, with seven shares rising for every six that fell. The gauge increased 11 percent this year through yesterday as the Bank of Japan took steps to counter deflation and policy makers in the U.S. and Europe remained on standby to buoy growth. Japan’s Nikkei 225 Stock Average rose 0.67 percent to its highest close since December 2007, while the broader Topix Index added 0.6 percent to the highest since August 2008. China’s Shanghai Composite Index advanced 1.38 percent. The Philippine Stock Exchange Index dropped 0.42 percent, while Thailand stock index rose by 0.56 percent. Markets in South Korea and Hong Kong are closed for holidays.
Gold Bears Revived as Rout Resumes After Coin Rush: Commodities. Gold bears are dominant again after prices resumed their slump and billionaire George Soros joined investors selling holdings in exchange-traded products that have retreated to a two-year low. ETP holdings slid 16 percent to 2,207.1 metric tons this year, the lowest since July 2011. Gold for immediate delivery drop 0.58 percent at $1,377.9 an ounce at 5:10 p.m. in Singapore.
BREAKING NEWS GLOBAL
Denmark Shelves Euro Goal Indefinitely as Crisis Scars Too Deep. Denmark is shelving indefinitely its euro adoption goal as Prime Minister Helle Thorning-Schmidt says an exchange rate peg without full European monetary membership is proving the best currency regime for the Nordic nation. A euro referendum “in this election term is unrealistic,” Thorning-Schmidt said yesterday in an interview in Stockholm. “I don’t think it makes any sense to discuss the option of a euro referendum in the next term” set to run from 2015 to 2019, she said. Thorning-Schmidt, half-way through her first four-year term, said Denmark’s chosen model of an opt-out from the euro has shielded the economy from
the worst of the crisis further south. The nation, which together with the rest of Scandinavia emerged as a haven from Europe’s fiscal turmoil, will continue to debate the question of whether Denmark should join the euro at some point, she said. Central bank Governor Lars Rohde said a month later it probably won’t be feasible to hold a euro referendum for the “foreseeable future.”
Turkey Raised to Investment Grade by Moody’s on Debt Cuts. Turkey’s first investmentgrade rating from Moody’s Investors Service in two decades sent bond yields to record lows as stocks rallied. Moody’s said in a statement yesterday that it lifted Turkey’s government bond ratings by one step to Baa3, the lowest investment grade, from Ba1. The move puts Turkey’s credit rating at the same level as Spain, Colombia and India. The outlook was set at stable. The ratings boost reflects “recent and expected future improvements in key economic and public finance metrics,” Moody’s analysts wrote in the statement. Turkey’s “progress on structural and institutional reforms that Moody’s expects will reduce existing vulnerabilities to shocks to international capital flows over time” was also cited. Yields on two-year benchmark bonds fell 12 basis points to a record low of 4.68 percent at 10:11 a.m. in Istanbul. Ten-year lira bond yields dropped below 6 percent for the first time and were last at 6.01 percent. The main Istanbul stock exchange index jumped as much as 1.3 percent to 93,116.29, its highest since at least 1988, extending its advance this year to 18 percent. The lira weakened for a seventh day, dropping 0.3 percent to 1.8287 per dollar in its longest streak of losses since June 2011.
Central Bankers Prisoner of Policy Guidance: Cutting Research. Central banks should be careful what they say about the future if they want flexibility to set monetary policy. Policy makers can become “constrained” when they inform investors about the likely direction of interest rates, according to economists Nikola Mirkov of the University of St. Gallen and Norges Bank’s Gisle James Natvik. The topic is a hot issue at the moment as central bankers, including Federal Reserve Chairman Ben S. Bernanke, embrace so-called forward guidance to enhance the power of interest rates in providing stimulus. In an effort to gauge the policy’s success, the economists studied the practices of the Norwegian and New Zealand central banks, the two with the longest history of forward guidance. They found that both were reluctant to deviate from previous forecasts of bank policy, especially those made a quarter ahead. The behavior of the central banks was better explained by the guidance previously given than by what policy rules suggested were the best path. The finding may help shape the debate in the U.K., given that incoming Bank of England Governor Mark Carney has spoken warmly of forward guidance. U.K. officials, including outgoing Governor Mervyn King, have warned of the risk of becoming a prisoner to past commitments.
REGIONAL
Japan Most Favored Nation in Poll Showing Abe Optimism. Investors are more confident in a Japanese leader than any time since at least September 2010, with optimism about Prime Minister Shinzo Abe’s policies exceeding that for counterparts in the U.S., Europe and China. The number of respondents who are more optimistic than pessimistic on the impact of Abe’s plans on Japan’s investment climate rose to 66 percent this month from 54 percent in January, a worldwide poll of investors, analysts and traders. Japan offers one of the top two opportunities globally in the next year, according to 33 percent of respondents, up from 21 percent and beating China for the first time in surveys dating back to 2009. Most in the survey see an end to the deflation entrenched in Japan for more than a decade, as Abe Page 2 of 7
and central bank chief Haruhiko Kuroda apply monetary and fiscal stimulus. At the same time, a minority of 34 percent saw Abenomics delivering both inflation and faster domestic growth, heightening focus on the government’s structural-reform agenda to be unveiled next month. The optimism rating for Abe’s policies is higher than any leader ever tested, even Germany’s Angela Merkel, who has long been at the top on this question.
China Encourages Foreign Auto Investment in Policy Reversal. China said it will encourage foreign investment in vehicle manufacturing in its western region, reversing a policy to remove auto making from a list of industries qualifying for government incentives. Starting June 10, foreign auto investment will be given preferential treatment, the National Development and Reform Commission and Ministry of Commerce said in a joint statement today. The policy was among measures taken to encourage labor-intensive projects in the central and western regions, which attracted $19.2 billion in overseas investment last year, according to the statement. The announcement follows official figures this week that showed FDI growth slowed in April, highlighting concern at the outlook for the world’s second-biggest economy. Giving foreign automakers preferential treatment in building plants may allow companies like Volkswagen AG (VOW) and General Motors Co. (GM) to accelerate expansion in China, increasing competition for local companies.
Yudhoyono Calls on Freeport to Intensify Mine Rescue Effort. Indonesia’s President Susilo Bambang Yudhoyono called on Freeport-McMoRan Copper & Gold Inc. (FCX) to step up rescue efforts at the world’s second-largest copper mine, where 23 people are trapped after a tunnel collapsed three days ago, killing five workers. Mining has been halted for at least two days since the collapse at the Grasberg complex in Indonesia, according to a statement from local unit PT Freeport Indonesia. Grasberg in Mimika, Papua province, about 3,120 kilometers (1,940 miles) east of Jakarta, includes underground and open-pit operations and is the world’s second-biggest by output, Freeport said in a March 14 presentation. The complex generated $3.92 billion of revenue for Freeport last year, or 16 percent of the Phoenix-based company’s sales. Freeport owns 91 percent of the mine, which also produces gold, and Indonesia’s government holds the rest.
IFIs NEWS (compiled from their websites) ADBI – Working Paper: “The Middle-Income Trap: Issues for Members of the Association of Southeast Asian Nations”
The ADBI has publicised the captioned working paper. “The problem faced by many of the economies making up the Association of Southeast Asian Nations (ASEAN) is whether they can avoid the middle-income trap and advance to the high-income level. What is needed for them to avoid the middle-income trap? This paper attempts to answer this question by building an analytical framework based on the factors that determine each development stage of an economy, and by comparing the current situation of four ASEAN middle-income countries with the experience of the Republic of Korea, a country that managed to overcome the middle-income trap and reach the high-income level in the late 1990s.” http://www.adbi.org/files/2013.05.16.wp421.middle.income.trap.issues.asean.pdf
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IMF – Policy Papers
Summary of Informal Discussions with Central Bankers and Other Officials on Unconventional Monetary Policies – “A series of conference calls was held in March 2013 with selected representatives of central banks and other official agencies in advanced and emerging market economies to seek views on unconventional monetary policies (UMP). The key points raised during the discussions are summarized below. No views have been attributed to individual participants, and Fund staff is ultimately responsible for the contents of this summary.” http://www.imf.org/external/np/pp/eng/2013/042913.pdf
Unconventional Monetary Policies - Recent Experiences and Prospects- “This paper addresses three questions about unconventional monetary policies. First, what policies were tried, and with what objectives? Second, were policies effective? And third, what role might these policies continue to play in the future?” http://www.imf.org/external/np/pp/eng/2013/041813a.pdf
Unconventional Monetary Policies - Recent Experiences and Prospects - Background Paper – “This paper provides background information to the main Board paper, “The Role and Limits of Unconventional Monetary Policy.” This paper is divided in five distinct sections, each focused on a different topic covered in the main paper, though most relate to bond purchase programs. As a result, this paper centers on the experience of the United States Federal Reserve (Fed), the Bank of England (BOE) and the Bank of Japan (BOJ), mostly leaving the European Central Bank (ECB) aside given its focus on restoring the functioning of financial markets and intermediation.” http://www.imf.org/external/np/pp/eng/2013/041813.pdf
IMF – Working Paper: “The Anatomy of the VAT”
The IMF has publicised the captioned working paper. “This paper sets out some tools for understanding the performance of the value added tax (VAT). Through the decomposition of VAT revenues to the universe of VATs over the last twenty years, it emerges that developments have been driven much less by changes in standard rates than by changes in ‘C-efficiency’. In addition, the decomposition of C-efficiency into a ‘policy gap’ and a ‘compliance gap’ suggest that the former are in almost all cases far larger than the latter, with rate differentiation and exemptions playing roles that differ quite widely across countries.” http://www.imf.org/external/pubs/ft/wp/2013/wp13111.pdf
UNCTAD– Press Release: Mukhisa Kituyi of Kenya nominated to be new head of UNCTAD
United Nations Secretary-General Ban Ki-moon has nominated Mukhisa Kituyi of Kenya, who is a former member of the Kenyan Parliament and a former Minister of Commerce and Industry of Kenya, to serve as Secretary-General of UNCTAD for a term of four years beginning 1 September 2013. The nomination will go to the UN General Assembly for confirmation. If confirmed, Mr. Kituyi will succeed Supachai Panitchpakdi of Thailand, who assumed the post on 1 September 2005 and was reappointed in 2009. Mr. Supachai will conclude his second four-year term of office on 31 August 2013. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=499&Sitemap_x0020_Tax onomy=UNCTAD%20Home Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 16-May 17-May close China 6.23 6.14 6.15 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,737.00 9,752.00 9,757.00 Japan 86.75 101.62 102.26 102.60 Korea 1,064.40 1,106.39 1,116.60 1,117.10 Malaysia 3.06 2.99 3.01 3.02 Philippines 41.01 41.12 41.29 41.20 Singapore 1.22 1.24 1.25 1.26 Thailand 30.59 29.78 29.71 29.84 Vietnam 20,840.00 20,940.00 20,940.00 20,978.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.13 -0.01 -0.05 -0.33 -0.04 -0.27 0.22 -0.29 -0.44 -0.18
2013 YTD (%chg) 1.5 -0.2 -1.1 -14.9 -4.8 0.4 -0.8 -2.8 1.6 -0.7
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,246.8 23,321.2 5,105.9 14,607.5 1,944.8 1,772.4 7,262.4 3,443.8 1,621.2 486.1
OVERNIGHT LENDING RATE (%) 16-May 17-May 2.720 2.880 0.074 0.074 4.168 4.167 0.093 0.073 2.500 2.500 3.000 3.000 1.438 1.646 0.034 0.034 2.750 2.750 1.500 1.000
16-May 2,251.8 23,082.7 5,078.7 15,037.2 1,986.8 1,766.7 7,310.9 3,452.3 1,617.9 490.3
bps change 16.00 0.00 -0.07 -2.00 0.00 0.00 20.80 0.00 0.00 -50.00
17-May
% change
2,282.9 23,082.7 5,157.0 15,138.1 1,986.8 1,766.9 7,279.9 3,446.8 1,627.0 487.6
1.38 0.00 1.54 0.67 0.00 0.01 -0.42 -0.16 0.56 -0.56
2013 YTD (%chg) 0.6 -1.0 18.6 45.6 -2.2 5.5 24.2 7.7 15.6 16.6
3-MONTH INTERBANK LENDING RATE (%) 16-May 17-May bps change 3.881 3.882 0.18 0.378 0.378 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.186 1.294 10.80 0.373 0.373 0.00 2.835 2.832 -0.23 4.650 4.540 -11.00
CREDIT DEFAULT SWAP (IN BPS) 15-May 16-May bps change China 73.28 72.80 -0.48 Hong Kong SAR 43.98 43.99 0.02 Indonesia 134.40 134.93 0.54 Japan 55.60 62.00 6.40 Korea 69.60 68.87 -0.73 Malaysia 76.69 75.73 -0.96 Philippines 84.67 83.74 -0.93 Thailand 83.05 83.07 0.02 Vietnam 193.48 194.98 1.50 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 16-May 17-May Gold Spot (in US$ per 1,386.0 1,377.9 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.58
Page 5 of 7
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 30-Nov 31-Dec 3,272.9 3,285.1 3,287.4 3,297.7 3,311.6 China 298.2 301.2 301.7 305.2 317.3 Hong Kong SAR 109.0 110.2 110.3 111.3 112.8 Indonesia 1,273.2 1,277.0 1,274.2 1,270.9 1,268.1 Japan 316.9 322.0 323.5 326.1 327.0 Korea 134.9 137.5 138.3 139.1 139.7 Malaysia 80.7 82.0 81.7 83.9 83.8 Philippines 246.2 252.1 254.2 255.8 259.3 Singapore 179.2 183.6 181.5 181.6 181.6 Thailand 20.8 21.3 21.4 23.2 n.a Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS 3 months imports Latest Int'l Short-term of goods & Reserves external debt services (US$bn)
(US$bn)
(US$bn)
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
Import cover (Qtrs of imports covered by reserves)
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 303.8 149.4 752.6 2.0 0.4 Hong Kong SAR 107.3 55.5 43.9 1.9 2.4 Indonesia 1,254.4 70.4 2,371.0 17.8 0.5 Japan 327.4 156.7 126.7 2.1 2.6 Korea 140.3 56.7 30.4 2.5 4.6 Malaysia 84.0 20.1 8.5 4.2 9.9 Philippines 258.2 121.5 964.3 2.1 0.3 Singapore 177.8 68.1 60.7 2.6 2.9 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
Economies
SINGAPORE JAPAN
DATA RELEASES FOR THE DAY Indicators
Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% Machine Orders (YOY)%
Period
Apr Apr Mar
Last
Previous
-9.0 -1.0 2.4
-17.9 -4.8 -11.3
Page 6 of 7
SELECTED ECONOMIC RELEASES CALENDAR (13 – 17 May 2013) Expected Release Date
5/13/2013
5/14/2013
5/15/2013
5/16/2013
5/17/2013
Economies
Indicators
Period
CHINA CHINA INDONESIA CHINA INDONESIA SINGAPORE PHILIPPINES JAPAN MALAYSIA SOUTH KOREA MALAYSIA JAPAN JAPAN SOUTH KOREA JAPAN JAPAN JAPAN SINGAPORE SINGAPORE JAPAN
Industrial Production (YoY)% Retail Sales (YoY)% Consumer Confidence Index Actual FDI (YoY)% Bank Indonesia Reference Rate (%) Retail Sales (YoY)% Overseas Remittances (YoY)% Consumer Confidence GDP YoY% Unemployment Rate (SA)% Current Account Balance (MYR mn) Industrial Production YOY% Capacity Utilization (MoM)% Producer Price Index (YoY)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% Machine Orders YOY%
Apr Apr Apr Apr May 14 Mar Mar Apr 1Q Apr 1Q Mar F Mar F Apr 1Q P 1Q P 1Q P Apr Apr Mar
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 20 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asia stocks head for highest close in nearly five years. Asian stocks rose the first time in three days after U.S. consumer sentiment beat estimates and Tokyo Electric Power Co. led Japanese utilities higher. The MSCI Asia Pacific Index of shares gained 1.2 percent, reaching levels last seen in June 2008. The Nikkei 225 Stock Average added 1.5 percent to the highest level since December 2007. Hong Kong SAR’s Hang Seng Index rallied 1.8 percent, while the Shanghai Composite Index increased 0.8 percent.
•
The yen rose the most in three weeks against the dollar after Japan’s Economy Minister Akira Amari said further losses in the currency would negatively affect people and the government’s job is to minimize that. The yen strengthened against all except one of its 16 major counterparts after Amari said yesterday there’s speculation the currency’s past strength has “been corrected a lot.” The yen has slumped 20 percent in the past six months, the worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, as Prime Minister Shinzo Abe pledged to beat deflation and the Bank of Japan doubled monthly bond purchases.
•
Silver plunges to lowest since 2010 as gold drops for eighth day. Silver plunged to the lowest level since September 2010, while bullion extended the longest slump in four years. Silver for immediate delivery tumbled as much as 7 percent to $20.6985 an ounce, and was at $21.438 at 2:30 p.m. in Singapore. Silver has slumped 30 percent in 2013, making it the worst-performing precious metal, on concern that industrial use isn’t strong enough at a time when demand is waning for a protection of wealth. Silver held in exchange-traded products dropped to a four-month low on May 17, while hedge funds and other large speculators increased bets on lower prices by the most since March in the week to May 14. Silver tumbled into a bear market on concern that economic growth may be slowing in China, the biggest industrial fabricator after the U.S., and as Europe remained in recession. Last week, data showed industrial output in China trailed estimates, while Premier Li Keqiang signaled there is limited room for using stimulus to achieve development targets. The metal is used to make solar panels and electronics.
BREAKING NEWS GLOBAL •
US consumer sentiment nears six-year high. US consumer sentiment rebounded at the start of May to the highest level in almost six years as more Americans, led by those on the highest incomes, felt better about their economic situation. The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment rose to 83.7 from 76.4 in April – the highest level since July 2007. The current economic conditions gauge jumped to 97.5 from 89.9, the highest since October 2007, while the consumer expectations component jumped to 74.8 from 67.8. The measure looking at home buying expectations rose to 167 from 161 last month, their strongest level since 2003. A jump in auto purchase expectations to 145 from 131 shows the strongest auto purchase intentions since 2005. The gauge looking at buying attitudes for durable goods rose to 148 from 137 last month. The survey’s one-year inflation expectation was
unchanged at 3.1 per cent, while the survey’s five-to-10-year inflation outlook edged down to 2.8 per cent from 2.9 per cent. • European stocks gained and Asian shares headed for the highest close in almost five years on signs of an improving global economy. The Stoxx Europe 600 Index increased 0.2 percent as of 8:11 a.m. in London, as the MSCI Asia Pacific Index of shares gained 1.2 percent. Futures on the Standard & Poor’s 500 Index were little changed. The yen strengthened 0.5 percent to 102.75 per dollar. Silver plunged as much as 7 percent, while gold fell as much as 1.5 percent. The British pound strengthened 0.2 percent to $1.5195. U.K. home sellers raised asking prices by 2.1 percent in May, marking the fifth month of gains and giving the market its best start to a year since 2004. •
Ryanair boosts full-year profit 13% as routes spur sales. Ryanair Holdings Plc (RYA), Europe’s biggest discount airline, boosted full-year profit 13 percent as it added routes and planes to target short-haul markets in which full-service operators are struggling to stem losses. The Dublin-based carrier’s earnings after tax rose to 569 million euros ($731 million) in the 12 months to March 31, excluding one-time items, from 503 million euros a year earlier. Ryanair’s full-year revenue rose 13 percent to 4.33 billion euros and the carrier added 15 aircraft, taking the fleet to 305 planes as of the year’s end. It also opened 217 new routes to take the total to more than 1,600 and established seven new bases in Greece, the Netherlands, Morocco, Poland and Croatia.
REGIONAL • China home prices climb as buyers defy government curbs. China’s new home prices rose in all but two cities in April, with housing values accelerating in key centers including Beijing and Shanghai as buyers defied the government’s latest round of property measures. Prices climbed in 68 of the 70 cities the government tracked last month from a year earlier, according to the National Bureau of Statistics. The southern business city of Guangzhou recorded the biggest increase at 14 percent from a year earlier, and those in Beijing jumped 10 percent. Home prices in Shanghai climbed 8.5 percent, and all the cities that recorded gains had their biggest advances since the government changed its methodology for the data in January 2011. Thirty-five provincial-level cities have issued details of property curbs by an April 1 deadline in response to the central government’s measures imposed in March. The capital city of Beijing issued the toughest measures, raising the down payment on second homes and strictly enforcing a 20 percent capital gains tax on existing homes. While China’s home prices continued to climb from a year ago, analysts including Mizuho Securities Asia Ltd.’s Alan Jin said the increases slowed from March. Moody’s Investors Service and Standard & Poor’s both said last week that the government curbs will slow down property sales growth this year. • The Philippines’ BIR tax collection surpasses April target. Bureau of Internal Revenue (BIR) said that it was able to collect P148.99 billion in taxes, 28.19 percent higher than the P116.221 billion recorded in the same month last year. The agency was also able to surpass the month’s P142.66-billion target by P6.33 billion or 4.43 percent. This is the first time this year that the BIR has met its monthly goal. The bureau traditionally sets its highest monthly target in a year in April due to the deadline for the filing of annual income tax returns. Of the total collections for the month, P145.64 billion came from BIR operations. The remaining P3.35 billion came from non-BIR operations, or taxes due from government securities issued by the Bureau of the Treasury. The month's haul took the agency’s fourPage 2 of 7
month collection tally to P393.09 billion, 13.85 percent more than the P345.265 billion it collected from January to April last year. The bureau is mandated to collect a total of P1.253 trillion in revenues this year. • Singapore’s Changi airport seeks growth with gold, tuna. Changi Airport, Southeast Asia’s largest freight airfield, plans to attract more gold bars, tuna and vaccines to Singapore as it seeks to increase handling of high-value cargo to make up for slowing trade. The airport may process 7 percent more cargo by volume for pharmaceutical products such as vaccine and test drugs, as well as perishable goods including tuna and meat this year, James Fong, assistant vice president of cargo and logistics development at Changi Airport Group (Singapore) Pte. The airport is offering 50 percent rebates on landing fees since the start of the year to help cargo airlines struggling with lower demand amid sluggish economies in the U.S. and Europe. Changi is enticing carriers of high-yield cargo with a tax-free maximumsecurity vault to store valuable art, gold and gems, as well as Southeast Asia’s biggest refrigerated facilities for perishable goods. • Thai growth missing estimates raises pressure for rate cut. Thailand’s government lowered its full-year growth forecast after the economy expanded less than analysts’ estimate for last quarter, boosting the case for the central bank to cut interest rates. On a year-on-year basis, GDP increased 5.3 percent in the three months through March from a year earlier (4Q 2012: 19.1 percent, revised data), which is lower than the median of 13 estimates in a Bloomberg News survey of 6 percent. On a quarter-on-quarter basis, Thailand’s economy shrank a seasonally adjusted 2.2 percent last quarter from the three months through December (4Q 2012: 2.8 percent). The state agency today reduced its full-year forecast for gross domestic product to 4.2-5.2 percent year-on-year from the previous range of 4.5-5.5 percent. It also lowered its export growth target for the year to 7.6 percent from 11 percent. The growth slowdown may give the Bank of Thailand scope to join a global wave of monetary easing, after resisting pressure from the government in recent months to lower borrowing costs and curb inflows that last month drove the baht to a 16-year high. • Viet Nam Industry and Trade Joint Stock Bank complete selling stake to Japan's Bank of Tokyo-Mitsubishi UFJ (BTMU). Viet Nam Industry and Trade Joint Stock Bank (VietinBank) has finished selling nearly 20 per cent of its shares to Japan's Bank of Tokyo-Mitsubishi UFJ (BTMU). The sale involved total net revenues of more than VND15.4 trillion (US$733 million), the bank said. It said that it had totally sold 644.38 million shares at VND24, 000 (US$1.12), adding that there was a condition that they could not be transferred for five years. After the sale, BTMU Capital owns 19.73 per cent of VietinBank. The above shares have been approved by Vietinbank director board, the Vietnamese bank said. Accordingly, VietinBank now has the charter capital of VND32.66 trillion ($1.5billion) of which shareholders account for 64.46 per cent and BTMU 19.73 per cent. IFIs NEWS (compiled from their websites) IMF – Policy Papers The IMF has publicized the following policy papers: •
“FY2014–FY2016 Medium-Term Budget” http://www.imf.org/external/np/sec/pr/2013/pr13180.htm (Press Release) http://www.imf.org/external/np/pp/eng/2013/032813.pdf (Policy Paper) Page 3 of 7
•
“Review of the Fund’s Income Position for FY 2013 and FY2014” http://www.imf.org/external/np/sec/pr/2013/pr13179.htm (Press Release) http://www.imf.org/external/np/pp/eng/2013/043013a.pdf (Policy Paper)
•
“The Consolidated Medium-Term Income and Expenditure Framework” http://www.imf.org/external/np/pp/eng/2013/043013.pdf (Policy Paper)
IMF – Press Release: Belgium: 2013 Article IV Consultation •
The IMF has concluded the Article IV consultation with Belgium on May 10, 2013. Executive Directors welcomed the efforts undertaken by the government to consolidate public finances and the result in improvement in market confidence. Notwithstanding these efforts, the external environment remains unfavourable and the growth outlook continues to be weak. Directors called for sustained strong policies to mitigate vulnerabilities in the fiscal position, competitiveness, and the financial sector. http://www.imf.org/external/np/sec/pn/2013/pn1355.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13124.pdf (Financial System Stability Assessment) http://www.imf.org/external/pubs/ft/scr/2013/cr13123.pdf (Staff Report)
IMF – Publication: “Cyprus: Request for an Arrangement Under the Extended Fund Facility” •
The IMF has publicised the following reports pertaining to its’ approval for the Cypriot authorities’ request for a three year Extended Fund Facility arrangement in an amount of SDR 891 million (563 percent of quota, about €1 billion), with equally phased purchases. The European Stability Mechanism is expected to contribute about €9 billion in 2013-16. The first Fund disbursement will amount to SDR 74.25 million (about €86 million). • “Cyprus: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding” http://www.imf.org/External/NP/LOI/2013/CYP/042913.pdf • “Staff Report, Staff Supplement, Press Release and Statement by the Executive Director for Cyprus” http://www.imf.org/external/pubs/ft/scr/2013/cr13125.pdf
IMF – Working Papers •
“Inclusive Growth and the Incidence of Fiscal Policy in Mauritius — Much Progress, But More Could be Done” http://www.imf.org/external/pubs/ft/wp/2013/wp13116.pdf
•
“"Near-Coincident" Indicators of Systemic Stress” http://www.imf.org/external/pubs/ft/wp/2013/wp13115.pdf
•
“World Food Prices, the Terms of Trade-Real Exchange Rate Nexus, and Monetary Policy” http://www.imf.org/external/pubs/ft/wp/2013/wp13114.pdf
World Bank – Press Release: Lao PDR Receives US$ 8 million from the World Bank to Strengthen the National Statistical System Page 4 of 7
•
On May 17, 2013, The Vice Minister of Finance of Lao People’s Democratic Republic, H.E. Santiphab Phomvihane and the World Bank’s Country Manager for Lao PDR Keiko Miwa, signed a grant agreement in the amount of US$8 million to further support the Government’s efforts in strengthening National Statistical System and improving production, availability and use of quality statistics. The objective of the Project is to improve the capacity of the national statistical system to produce and disseminate reliable and timely macroeconomic and poverty statistics in accordance with international standards and in response to rising needs. http://www.worldbank.org/en/news/press-release/2013/05/17/lao-receives-8-million-from-wbto-strengthen-the-national-statistical-system (Press Release)
http://www.worldbank.org/projects/P129825/laostat-strengthening-nationalstatistical-system-project?lang=en (Project’s Details: Laostat- Strengthening The National Statistical System Project) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 17-May 20-May close China 6.23 6.14 6.14 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,757.00 9,757.00 9,758.00 Japan 86.75 102.60 102.60 102.53 Korea 1,064.40 1,117.10 1,117.10 1,116.63 Malaysia 3.06 3.02 3.02 3.01 Philippines 41.01 41.20 41.20 41.19 Singapore 1.22 1.26 1.26 1.25 Thailand 30.59 29.84 29.84 29.80 Vietnam 20,840.00 20,978.00 20,978.00 20,995.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.03 0.01 -0.01 0.66 0.04 0.26 0.02 0.33 0.20 -0.05
2013 YTD (%chg) 1.5 -0.1 -1.1 -14.8 -4.8 0.7 -0.8 -2.7 1.8 -0.7
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,282.9 23,082.7 5,157.0 15,138.1 1,986.8 1,766.9 7,279.9 3,446.8 1,627.0 487.6
OVERNIGHT LENDING RATE (%) 17-May 20-May 2.880 3.310 0.074 0.074 4.167 4.171 0.073 0.093 2.500 2.500 3.000 3.000 1.646 1.370 0.058 0.058 2.750 2.750 1.000 0.986
17-May 2,282.9 23,082.7 5,157.0 15,138.1 1,986.8 1,766.9 7,279.9 3,446.8 1,627.0 487.6 bps change 43.00 -0.07 0.36 2.00 0.00 0.00 -27.60 0.00 0.00 -1.40
20-May 2,300.0 23,493.0 5,215.0 15,360.8 1,982.4 1,777.2 7,275.4 3,454.1 1,643.9 492.3
% change 0.75 1.78 1.35 1.47 -0.22 0.45 -0.06 0.14 0.98 0.96
2013 YTD (%chg) 1.4 0.8 20.0 47.8 -2.4 6.1 24.1 7.9 16.8 17.7
3-MONTH INTERBANK LENDING RATE (%) 17-May 20-May bps change 3.882 3.883 0.08 0.378 0.378 0.04 4.900 4.900 0.00 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.294 1.278 -1.60 0.373 0.373 0.00 2.832 2.827 -0.54 4.540 4.250 -29.00
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CREDIT DEFAULT SWAP (IN BPS) 16-May 17-May bps change China 72.80 n.a n.a Hong Kong SAR 43.99 n.a n.a Indonesia 134.93 n.a n.a Japan 62.00 n.a n.a Korea 68.87 n.a n.a Malaysia 75.73 n.a n.a Philippines 83.74 n.a n.a Thailand 83.07 n.a n.a Vietnam 194.98 n.a n.a Note: The CDS data for 17 May 2013 are currently verified by the source. We will keep you updated upon the released of verified data. 17-May 20-May Gold Spot (in US$ per 1,359.5 1,352.7 ounce) Sources: Bloomberg & Thomson Reuters Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
% change -0.50
S&P
Moody's
Fitch
AAAAA BB+ AAA ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
China Hong Kong SAR Indonesia Japan Korea Malaysia
(US$bn) 3,442.7 303.8 107.3 1,254.4 327.4 140.3
3 months imports of goods & services (US$bn) 521.2 149.4 55.5 70.4 156.7 56.7
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
covered by )
572.8 752.6 43.9 2,371.0 126.7 30.4
6.6 2.0 1.9 17.8 2.1 2.5
Reserves over short-term debt 6.0 0.4 2.4 0.5 2.6 4.6
Page 6 of 7
84.0 20.1 8.5 4.2 9.9 Philippines 258.2 121.5 964.3 2.1 0.3 Singapore 177.8 68.1 60.7 2.6 2.9 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
THAILAND HONG KONG SAR Expected Release Date
5/20/2013
5/21/2013
5/22/2013
5/23/2013
5/25/2013
Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% Unemployment Rate SA%
Period
1Q 1Q Apr
Last
Previous
-2.2 5.3 3.5
2.8 19.1 3.5
SELECTED ECONOMIC RELEASES CALENDAR (20 – 25 May 2013) Economies
HONG KONG SAR THAILAND THAILAND PHILIPPINES HONG KONG JAPAN MALAYSIA JAPAN JAPAN SOUTH KOREA MALAYSIA SINGAPORE SINGAPORE CHINA SINGAPORE SINGAPORE PHILIPPINES PHILIPPINES THAILAND THAILAND VIETNAM VIETNAM VIETNAM VIETNAM VIETNAM
Indicators
Unemployment Rate SA% Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% Budget Deficit/Surplus (PHP bn) CPI - Composite Index (YoY)% All Industry Activity Index (MoM) % CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports (YoY) % External Short-Term Debt (USD bn) Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% HSBC Flash China Manufacturing PMI CPI (YoY)% Industrial Production (YoY)% Trade Balance (USD mn) Total Imports (YoY)% Customs Exports (YoY)% Customs Imports (YoY)% CPI (YOY)% Imports YTD (YoY)% Exports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index (YoY) %
Period
Apr 1Q 1Q Apr Apr Mar Apr Apr Apr 1Q May 15 1Q F 1Q F May Apr Apr Mar Mar Apr Apr May May May May May
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 21 May 2013, 17:00 local time SGT (UTC+8)
MARKET DEVELOPMENTS
Asian stocks retreated from the highest level since June 2008 as Australian banks dropped and Industrial & Commercial Bank of China Ltd. fell after Goldman Sachs Group Inc. was said to sell a $1.1 billion stake. The MSCI Asia Pacific Index slid 0.2 percent to 144.09 as of 4:10 p.m. in Hong Kong. Australia’s S&P/ASX 200 Index lost 0.6 percent as the Reserve Bank of Australia released minutes of a May 7 meeting in which it described a cut to record-low rates as “appropriate to encourage sustainable growth” and business confidence was cited as remaining weak. Japan’s Topix Index added 0.13 percent, closing at the highest level since August 2008. South Korea’s Kospi Index (KOSPI) slid 0.1 percent. Singapore’s Straits Times Index fell 0.3 percent and Taiwan’s Taiex Index advanced 0.1 percent. The Shanghai Composite added 0.2 percent and Hong Kong’s Hang Seng Index declined 0.5 percent, dragged lower by ICBC which retreated 2.1 percent to HK$5.52.
Yen fell versus peers after Amari backed away from earlier remarks; won and yuan gained against U.S. dollar. The yen weakened against its major peers after Japan’s Economy Minister Akira Amari backed away from weekend comments that prompted the currency to rally. Japan’s currency climbed yesterday after Amari said further weakness may hurt “people’s lives” and it was the government’s job to minimize that. The minister said today he wouldn’t comment on where the yen’s decline would end. The yen fell 0.4 percent to 102.67 per dollar today, after gaining as much as 1.2 percent yesterday. The won rose 0.5 percent to 1,110.74 per dollar, the biggest gain since May 14. China's yuan closed up against the dollar after hitting a record peak as the central bank fixed the official midpoint at an all-time high, signalling the government's intention to let the Chinese currency appreciate, traders said. Spot yuan closed at 6.1371 against the dollar from 6.1393 at Monday's close.
WTI crude traded near seven-week high as stockpiles were seen falling. WTI crude traded near the highest price in almost two months before U.S. government data that is forecast to show the first back-to-back decrease in stockpiles this year. U.S. crude stockpiles fell by 800,000 barrels last week, according to a Bloomberg News survey before a report tomorrow from the Energy Information Administration. Futures were little changed in New York after advancing for a fourth day yesterday. WTI for June delivery was at $96.77 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 2:51 p.m. Singapore time. The more active July future rose 11 cents to $97.04. Front-month prices increased 69 cents yesterday, or 0.7 percent, to $96.71, the highest close since April 2. Brent for July settlement slid 2 cents to $104.78 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $7.80 to WTI futures for the same month, down from $7.87 yesterday. Crude rose yesterday as Syrian government forces started an offensive against rebels, renewing concern that conflict may destabilize the Middle East.
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BREAKING NEWS GLOBAL
Fed’s Evans said US economy has been ‘improving quite a lot’. Federal Reserve Bank of Chicago President Charles Evans, an early supporter of the Fed’s third round of quantitative easing, said the U.S. economy has improved “quite a lot” as the central bank maintains record stimulus and expressed confidence policy makers have tools needed to monitor markets for excesses. The question now is “how much confidence we have that the improvements that have been made will continue and be sustained,” asked Evans, who holds a vote on the FOMC this year. Evans also said the Fed needs to be cautious about spillovers from its accommodative policy, and policy makers get regular reports on financial markets that can help spot excesses. Some Fed officials in recent months have signalled they favour scaling back the quantitative-easing program in the next few months. The Fed will publish minutes of its last policy meeting on May 22 and Bernanke will testify on the same day before the US Congress Joint Economic Committee on the economic outlook.
Hollande bonds without AAA shone brighter than gold: Euro Credit. Credit downgrades, recession and President Francois Hollande’s gaping budget shortfall have done little to prevent French bonds from outshining gold. Unprecedented stimulus from central banks including interest-rate cuts and asset-purchases are eroding yields from top-rated bonds, forcing investors to ignore credit ratings and the shortcomings of Hollande’s economic fundamentals for higher returns. Investors who bought French bonds when Standard & Poor’s stripped the country of its top credit rating on January 13 last year have chalked up a 12 percent return, about triple the gains from German debt. France’s bond market, Europe’s second biggest after Italy’s, also offers investors comfort they can exit the market without difficulty. Gold, touted by some investors as the world’s safest asset and a potential beneficiary when AAA rated governments are downgraded, lost 17 percent during the period.
Oil-fixing probe accelerated as EU asked traders for help. The investigation into possible oil-price fixing gathered pace as trading houses from Glencore Xstrata Plc, the $70 billion mining firm, to Gunvor Group Ltd. were asked to provide information to European regulators. The commission announced last week that it’s probing whether oil companies colluded to distort prices. Royal Dutch Shell Plc (RDSA), BP Plc (BP/), and Statoil ASA (STL) are targets of the latest inquiry into whether prices of crude, refined oil products and biofuels were manipulated, potentially harming consumers. Platts, a price assessor, was also questioned. The probe of potential abuse in the energy market is the third into global benchmark prices in the past year and follows investigations into the London interbank offered rate, or Libor, and ISDAFix, the benchmark for the $379 trillion swaps market.
IMF raised Egypt 2013 CPI forecast to 10.9 percent, highest since 2010. Inflation in Egypt is expected to climb to 10.9 percent this year, the highest level since 2010, the International Monetary Fund said today, more than it expected in April. The Fund had expected Egypt's inflation of 8.2 percent in 2013 in its half-yearly analysis of the world economy published last month. Egypt's urban consumer inflation accelerated to 8.1 percent in the year to April, fuelled by rising food and energy prices and a struggling pound currency. It is expected to climb further as the government pushes through tax hikes and subsidy cuts to secure a $4.8 billion loan from the IMF after two years of economic and political upheaval. The IMF did not change economic forecasts for other Middle East and North African oil importers and exporters in its new report, which closely follows the global outlook. Page 2 of 7
REGIONAL
Hong Kong’s Census and Statistics Department released today the Consumer Price Index (CPI) figures for April 2013. According to the Composite CPI, overall consumer prices rose by 4.0% in April 2013 over the same month a year earlier, larger than the corresponding increase (3.6%) in March 2013. Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite CPI (i.e. the underlying inflation rate) in April 2013 was 3.9%, larger than that in March (3.7%). A Government spokesman said that the slightly higher underlying consumer price inflation in April was due mainly to the surge in prices of fresh vegetables. The increase in prices for many components in the underlying CPI remained moderate. Looking ahead, it is expected that inflation would rise slightly in the coming months as the lagged effects of the rise in private housing rentals during 2012 feed through. Nonetheless, imported inflation stayed tame and the recent softening in housing rentals should help contain the upward pressure on inflation in the latter part of this year.
Indonesia’s BKPM chief Chatib Basri was named finance minister. President Bambang Yudhoyono has named economist Chatib Basri, who currently heads the Investment Coordinating Board (BKPM), the nation’s new finance minister. The President mentioned that Chatib, who has served as Indonesian “sherpa” for the G20 meeting and as deputy chairman of the President’s Economic National Committee (KEN), was well qualified for his new job. As finance minister, Chatib will have three main tasks: (i) maintaining and developing prudent fiscal policies; (ii) making policies that support increased investment; and (iii) encouraging investment to create more jobs, according to President Yudhoyono. In a Bloomberg TV interview today, the newly appointed Finance Minister mentioned that cutting fuel subsidies and building more infrastructures will be his two main priorities.
Japan’s economic assessment was raised as weak yen fuelled exports. Japanese government on Monday upgraded the economy for the first time in two months by deleting the word “weak” from its description to reflect the effect the “Abenomics”-weakened yen is having on exports and production. The economy “is picking up slowly,” the Cabinet Office said in its monthly economic report, which upgraded three of the 14 categories — exports, industrial output and corporate earnings. The latest report came as data showed that exports grew in the first quarter and industrial production rose for the fourth consecutive month in March. As for prices, the report said the trend “indicates that the Japanese economy is in a mild deflationary phase,” repeating the same phrase used in April, but added “while signs of change can be seen in some areas recently.” A government survey earlier this May said 82.8 percent of households predict prices to rise in the year ahead, suggesting the pledge by Prime Minister Shinzo Abe’s administration and the Bank of Japan to pull the economy out of its deflationary slump has bolstered inflation expectations.
Japan finance minister wanted BOJ to have thorough dialogue with government bond market. Japanese Finance Minister Taro Aso said on Tuesday that he wants the Bank of Japan to have a thorough dialogue with markets in the wake of volatility in the government bond market. "Governor Kuroda is communicating with the market in a thorough way and I expect the bank to continue to do this," Aso said to reporters after a cabinet meeting. The BOJ is expected to stand pat on monetary policy this week despite jitters over the recent volatility in bond markets, hoping it can prevent a renewed spike in yields by fine-tuning market operations.
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Korea’s Strategy and Finance Minister hinted at stepping in currency market. Deputy Prime Minister Hyun Oh-seok who concurrently serves as strategy and finance minister indicated the government may take measures against the weakening yen on Monday. He however refused to offer detailed information about what measures the ministry can take to stabilize the currency market. Analysts speculate the government may tighten regulations on derivatives trading and exempt taxes on purchasers of foreign bonds to protect the value of the won. Hyun’s remarks are largely viewed as an indication that the government is leaning toward defensive measures against the yen’s slide, which is taking its toll on the Korean economy. A recent survey by the Korea International Trade Association shows about 40 percent of Korean-made products that compete globally against Japanese goods posted reduced export figures for the first two months of this year compared with the same period a year earlier.
Lao PDR and Thailand have agreed on future cooperation. Laos and Thailand have agreed to boost their cooperation in various sectors with a number of agreements signed during their second Joint Cabinet Retreat (JCR) in Chiang Mai last Sunday. Lao Prime Minister Thongsing Thammavong and Thai Prime Minister Yingluck Shinawatra led their respective cabinets to attend the meeting. According to the National News Bureau of Thailand, the JCR focused on the progress of many joint projects including transport systems connecting Thailand and Laos and other sub-regional countries such as the 4th Lao-Thai Friendship Bridge (which is expected to open in mid-2013) and the linkage of a high-speed railway between the two countries. The joint cabinet meeting also touched on cooperation to strengthen border trade, border peacekeeping and anti-drug trafficking. In addition, leaders of the two countries agreed to encourage more Thai businesses to carry out operations in Laos in the near future.
IFIs NEWS (compiled from their websites) ADBI – Working Paper: “Creating an Association of Southeast Asian Nations Payment System: Policy and Regulatory Issues”
The ADBI has publicised the captioned working paper. “The Association of Southeast Asian Nations (ASEAN) is expected to benefit from the significant growth in the Asia-Pacific payments market. Growth in economic activity would increase the size, scale, and scope of payment transactions. Enabling the scale and scope of payments would in turn increase economic activity. This would also require national payment systems to be regionalized and operate with cross-border and multi-currency capabilities. As existing regional payment arrangements have illustrated how they can be successfully established, ASEAN can itself leverage on its current cooperative forums in creating a more regionalized payment system. This paper assesses the challenges ASEAN faces in doing so.” http://www.adbi.org/files/2013.05.20.wp422.asean.payment.system.policy.regulatory.issu es.pdf
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FOREIGN CURRENCY EXCHANGE RATES Previous wk's 20-May 21-May close China 6.23 6.14 6.14 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,757.00 9,758.00 9,763.00 Japan 86.75 102.60 102.27 102.67 Korea 1,064.40 1,117.10 1,116.63 1,110.74 Malaysia 3.06 3.02 3.01 3.02 Philippines 41.01 41.20 41.19 41.21 Singapore 1.22 1.26 1.25 1.26 Thailand 30.59 29.84 29.81 29.76 Vietnam 20,840.00 20,978.00 20,993.00 21,000.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.04 0.01 -0.05 -0.39 0.53 -0.14 -0.05 -0.36 0.17 -0.03
2013 YTD (%chg) 1.6 -0.1 -1.1 -14.9 -4.2 0.6 -0.9 -3.0 1.9 -0.8
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,282.9 23,082.7 5,157.0 15,138.1 1,986.8 1,766.9 7,279.9 3,446.8 1,627.0 487.6
OVERNIGHT LENDING RATE (%) 20-May 21-May 3.310 3.420 0.074 0.076 4.171 4.170 0.093 0.093 2.500 2.500 3.000 3.000 1.370 1.257 0.070 0.070 2.750 2.750 0.986 0.986
20-May 2,300.0 23,493.0 5,215.0 15,360.8 1,982.4 1,777.2 7,275.4 3,454.2 1,643.4 492.3
bps change 11.00 0.21 -0.07 0.00 0.00 0.00 -11.30 0.00 0.00 0.00
21-May
% change
2,305.1 23,366.4 5,188.8 15,381.0 1,981.1 1,787.4 7,327.6 3,443.9 1,642.1 500.2
0.22 -0.54 -0.50 0.13 -0.07 0.58 0.72 -0.30 -0.08 1.61
2013 YTD (%chg) 1.6 0.2 19.4 48.0 -2.5 6.7 25.0 7.6 16.7 19.6
3-MONTH INTERBANK LENDING RATE (%) 20-May 21-May bps change 3.883 3.883 0.03 0.378 0.378 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.278 1.170 -10.80 0.373 0.373 0.00 2.827 2.819 -0.77 4.250 4.250 0.00
CREDIT DEFAULT SWAP (IN BPS) 17-May 20-May bps change China 72.80 72.89 0.08 Hong Kong SAR 43.99 44.05 0.06 Indonesia 134.93 136.03 1.10 Japan 62.50 64.52 2.02 Korea 68.87 68.71 -0.16 Malaysia 75.73 75.82 0.09 Philippines 83.74 83.93 0.20 Thailand 83.07 83.17 0.10 Vietnam 194.98 195.13 0.15 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 20-May Gold Spot (in US$ per ounce)
1,393.9
21-May 1,379.6
% change -1.02
Sources: Bloomberg & Thomson Reuters Datastream
Page 5 of 7
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 303.8 149.4 752.6 2.0 0.4 Hong Kong SAR 107.3 55.5 43.9 1.9 2.4 Indonesia 1,254.4 70.4 2,371.0 17.8 0.5 Japan 327.4 156.7 126.7 2.1 2.6 Korea 140.3 56.7 30.4 2.5 4.6 Malaysia 84.0 20.1 8.5 4.2 9.9 Philippines 258.2 121.5 964.3 2.1 0.3 Singapore 177.8 68.1 60.7 2.6 2.9 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
Economies
HONG KONG
DATA RELEASES FOR THE DAY Indicators
CPI - Composite Index (YoY)%
Period
Apr
Last
Previous
4.0
3.6
Page 6 of 7
SELECTED ECONOMIC RELEASES CALENDAR (20 – 25 May 2013) Expected Release Date
5/20/2013
5/21/2013
5/22/2013
5/23/2013
5/25/2013
Economies
HONG KONG SAR THAILAND THAILAND PHILIPPINES HONG KONG JAPAN MALAYSIA JAPAN JAPAN SOUTH KOREA MALAYSIA SINGAPORE SINGAPORE CHINA SINGAPORE SINGAPORE PHILIPPINES PHILIPPINES THAILAND THAILAND VIETNAM VIETNAM VIETNAM VIETNAM VIETNAM
Indicators
Unemployment Rate SA% Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% Budget Deficit/Surplus (PHP bn) CPI - Composite Index (YoY)% All Industry Activity Index (MoM) % CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports (YoY) % External Short-Term Debt (USD bn) Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% HSBC Flash China Manufacturing PMI CPI (YoY)% Industrial Production (YoY)% Trade Balance (USD mn) Total Imports (YoY)% Customs Exports (YoY)% Customs Imports (YoY)% CPI (YOY)% Imports YTD (YoY)% Exports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index (YoY) %
Period
Apr 1Q 1Q Apr Apr Mar Apr Apr Apr 1Q May 15 1Q F 1Q F May Apr Apr Mar Mar Apr Apr May May May May May
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 22 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
The MSCI Asia Pacific index slid slightly with almost the same number of stocks rising and falling. The regional benchmark declined 0.1 percent to 144.03 as of 5 p.m. in Tokyo time. Japan’s Topix Index gained 1.6 percent to the highest since August 2008. Hong Kong’s Hang Seng Index sank 0.5 percent after a storm shut the city’s markets this morning and power producers declined. China’s Shanghai Composite slid 0.1 percent. Australia’s S&P/ASX 200 Index lost 0.3 percent, reversing earlier gains after consumer confidence slumped by the most in 17 months. New Zealand’s NZX 50 Index added 0.4 percent and Taiwan’s Taiex Index rose 0.2 percent. Singapore’s Straits Times Index climbed 0.4 percent and South Korea’s Kospi index increased 0.6 percent. The Stoxx Europe 600 Index lost 0.4 percent at 9:55 GMT in London, after closing at the highest level since June 2008 yesterday. Standard & Poor’s 500 Index futures meanwhile added 0.2 percent.
Yen weakened for the second day versus dollar after BOJ ended policy meeting; Aussie slide. The yen declined 0.4 percent to 102.88 per dollar after falling to 103.31 on May 17, the weakest level since October 2008. Japan’s currency slipped 0.2 percent to 132.57 per euro. The so-called Aussie dropped 0.3 percent to 97.74 U.S. cents after sliding to 97.11 cents on May 17, the lowest level since June 5.
Oil futures fell amid caution ahead of Bernanke’s testimony to Congress. Crude oil futures fell on Wednesday following an overnight slip triggered by a stronger dollar and as caution prevailed ahead of U.S. Federal Reserve Chairman Ben Bernanke’s testimony to Congress. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $95.73 a barrel at 05.53 GMT, down $0.45 in the Globex electronic session. July Brent crude on London’s ICE Futures exchange fell $0.32 to $103.59 a barrel. Traders continued to stay on the sidelines, waiting for Bernanke’s testimony due later in the day, as they look for clues on the direction of monetary policy in the U.S. It is widely expected that any sign of tapering by the Fed will trigger selling in the commodity markets, including crude oil.
Spot gold rises on lower dollar. Gold rose 1 percent to session highs on Wednesday as the dollar weakened against a basket of currencies after Federal Reserve officials allayed investor concerns that the U.S. central bank will soon exit its bullion-friendly bond purchases. Investors are waiting for Fed Chairman Ben Bernanke's testimony in Congress later for clues on the state of the U.S. economy. Spot gold rose to as much as $1,389.70 an ounce, reversing the previous session's 1.3 percent losses. It traded at $1,388.66 by 07.42 GMT, still up 1 percent. U.S. gold for June delivery was up 0.7 percent to $1,387.50.
BREAKING NEWS GLOBAL
Sales of U.S. existing homes probably rose to three-year high. Sales of existing homes probably climbed in April to the highest level in more than three years, giving a lift to the U.S. expansion, economists said before a report today. Purchases of previously owned residences rose to a 4.99 million annualized rate last month, the highest since November 2009, from 4.92 million in March, according to the median forecast of 78 economists Page 1 of 7
surveyed by Bloomberg. Housing has gained strength as borrowing costs near record lows and job gains rebuild confidence, spur demand and stabilize prices. The effects are rippling through the world’s largest economy, affecting builders including Ryland Group Inc., retailers such as Home Depot Inc. (HD), and mortgage lenders.
U.K. inflation rate fell more than forecast to 2.4 percent in April. U.K. inflation slowed more than economists forecast in April to a seven-month low and producer prices rose the least since 2009 as fuel costs fell. Consumer prices rose 2.4 percent from a year earlier, down from 2.8 percent in March, the Office for National Statistics said in London on Tuesday. The median forecast of 35 economists in a Bloomberg News survey was 2.6 percent. Core inflation also cooled, while factory-gate prices increased at the slowest annual pace in 3 1/2 years. The Bank of England lowered its forecasts for inflation last week and said price growth may hit its 2 percent target earlier than previously estimated. The central bank, which also raised its growth projections, kept its bond-purchase program at 375 billion pounds (US$569 billion) this month. Minutes of the decision to be published later today will show whether Governor Mervyn King continued his bid to boost quantitative easing.
Australian consumers turned gloomier. Australian consumer sentiment fell for the second straight month, denting hopes that households will lead a recovery as the long mining boom slows. The Westpac -Melbourne Institute index of consumer sentiment slid in May to its lowest level since August—97.6, down from 104.9 in April and 110.5 in March. The decline over the past two months undoes gains made earlier in the year. A reading below 100 indicates pessimists outnumber optimists. The weak reading comes in spite of a surprise rate cut by the central bank earlier this month, which took the nation's key interest rate to a record low 2.75 percent. It continued a string of reductions since late 2011 aimed at boosting consumer spending to help sectors such as housing and retail take up the slack as mining investment rapidly loses steam.
REGIONAL
The Bank of Japan is prepared to adjust bond purchases as needed. The Bank of Japan pledged to adjust its unprecedented stimulus program as needed after a jump in bond yields that highlighted risks linked to policy makers’ campaign to revive the world’s thirdlargest economy. BOJ Governor Haruhiko Kuroda told reporters in Tokyo that the central bank will conduct its debt purchases in a flexible manner, and that the recent volatility in government securities isn’t yet affecting the economy. He spoke after the BOJ board affirmed its plan to double the monetary base in two years as it seeks to end 15 years of entrenched deflation after its third policy meeting under the leadership of the new BOJ Kuroda.
Japan posted another trade deficit for April. Japan posted its 10th straight month of trade deficits in April, the longest run of red ink since 1980, in a sign that a rebound in exports has yet to outweigh higher imports on the back of a weaker yen. The nation's merchandise trade deficit widened to JPY879.9 billion (US$8.58 billion), compared with a JPY518.4 billion deficit in April 2012, the Ministry of Finance said today. Exports rose 3.8 percent from the year-earlier month to JPY5.78 trillion, compared with a 5-percent rise forecast by economists. Imports rose 9.4 percent to JPY6.66 trillion. The increase in imports came even though crude-oil volume fell 2.2 percent, indicating how the yen's 16-percent decline against the dollar this year has pushed up the cost of imported commodities. Page 2 of 7
Singapore’s Temasek added to ICBC stake. Singapore state investment company Temasek Holdings Pte. Ltd. added to its stock holdings in Industrial & Commercial Bank of China Ltd., buying part of a stake sold Monday by Goldman Sachs Group Inc. Temasek bought US$198 million worth of shares in ICBC at 5.5 Hong Kong dollars per share (71 U.S. cents), for a total purchase of 280 million shares. That increased the Singapore firm's stake in the Hong Konglisted shares of the bank to 7.04 percent from 6.71 percent, Temasek said in a Hong Kong filing on Tuesday. ICBC is China's biggest bank by assets and is listed in both Hong Kong and Shanghai. Temasek was also a buyer when Goldman sold ICBC shares in April 2012. At that time, it bought shares worth US$2.3 billion.
Thai central bank weighs more "relaxed" policy. The Bank of Thailand's governor is refusing to tip his hand as calls mount for a rate cut later this month, saying weaker growth could warrant a more "relaxed" monetary policy but that recent poor data represent an adjustment phase for the economy as it moves toward balanced and normal growth. Gross domestic product rose 5.3 percent in the first quarter from a year earlier, but contracted 2.2 percent from the preceding quarter in seasonally adjusted terms. Central bank Governor Prasarn Trairatvorakul on Tuesday called the data "slightly disappointing." Asked about the possibility of a rate cut at the bank's May 29 meeting, Mr. Prasarn said a "relaxed monetary policy" would be implemented if "economic momentum really slows down." Given the downbeat data, analysts increasingly expect the central bank to cut its policy interest rate by 0.25 percentage point to 2.50 percent on May 29. The bank last cut rates in October.
Vietnam outlines bad-debt plan. Vietnam edged closer Tuesday to dealing with the baddebt problem hobbling its banking sector, as the government said it will set up an assetmanagement company by the end of this quarter that will mop up bad debts. Vietnamese policy makers have been wrestling with the logistics of cleaning up banks' nonperforming loans for months, as they seek to spur an economy coming off its slowest year of growth since 1999. Bank lending slowed as the volume of nonperforming loans mounted, especially among state-owned enterprises, crimping economic growth. Tuesday's announcement suggests Vietnam is close to finalizing the structure of the asset-management company, which the government said will issue bonds and use the funds to buy up bad debt from local financial institutions.
IFIs NEWS (compiled from their websites) IFC – Press Release: IFC Conducts First Media Conference to Improve News Reporting on Corporate Governance
IFC, in cooperation with Indonesia’s official ANTARA News agency, conducted the first corporate governance media conference to help raise the standard of press reporting on governance issues. “Good corporate governance will create a more sustainable business environment and foster economic development,” said Sarvesh Suri, IFC’s country manager for Indonesia. “Journalists that understand and value corporate governance will not only produce good business reports, but will also earn respect from their peers and the companies they cover.” http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/C5058EED9C418F6885257B730 0134E75
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IMF – Policy Paper: “Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas - Status of Acceptances and Consents”
The IMF has publicised the captioned policy paper. “This status report reviews progress toward implementation of the 2010 Quota and Governance Reforms. It updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment” or “Seventh Amendment”) as set out in the Board of Governors Resolution No. 66-2.” http://www.imf.org/external/np/pp/eng/2013/051613.pdf
IMF – Press Release: Switzerland: 2013 Article IV Consultation
The IMF has concluded the Article IV consultation with Switzerland on May 8, 2013. Executive Directors noted that, notwithstanding Switzerland’s stable economy and strong policy frameworks, risks stemming mostly from the euro area crisis and vulnerabilities in the domestic financial sector clouded the near-term outlook. Accordingly, they encouraged the authorities to remain vigilant and persist in their steadfast pursuit of pragmatic and forward-looking policies. http://www.imf.org/external/np/sec/pn/2013/pn1356.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13128.pdf (Staff Report)
http://www.imf.org/external/pubs/ft/scr/2013/cr13129.pdf (Switzerland: Selected Issues Paper) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 21-May 22-May close China 6.23 6.14 6.14 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,757.00 9,763.00 9,770.00 Japan 86.75 102.60 102.50 102.88 Korea 1,064.40 1,117.10 1,110.74 1,113.78 Malaysia 3.06 3.02 3.02 3.02 Philippines 41.01 41.20 41.21 41.24 Singapore 1.22 1.26 1.26 1.26 Thailand 30.59 29.84 29.78 29.78 Vietnam 20,840.00 20,978.00 21,000.00 20,985.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.10 0.01 -0.07 -0.37 -0.27 -0.10 -0.07 -0.02 0.00 0.07
2013 YTD (%chg) 1.7 -0.1 -1.2 -15.1 -4.5 0.5 -0.9 -3.1 1.8 -0.7
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,282.9 23,082.7 5,157.0 15,138.1 1,986.8 1,766.9 7,279.9 3,446.8 1,627.0 487.6
21-May 2,305.1 23,366.4 5,188.8 15,381.0 1,981.1 1,787.4 7,327.6 3,443.9 1,643.4 500.2
22-May 2,302.4 23,261.1 5,208.0 15,627.3 1,993.8 1,783.9 7,385.1 3,456.0 1,639.2 502.2
% change -0.12 -0.45 0.37 1.60 0.64 -0.20 0.78 0.35 -0.26 0.41
2013 YTD (%chg) 1.5 -0.2 19.8 50.3 -1.8 6.5 26.0 7.9 16.5 20.1
Page 4 of 7
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (%) 21-May 22-May 3.420 3.470 0.076 0.074 4.170 4.170 0.093 0.095 2.500 2.500 3.000 3.000 1.257 1.613 0.101 0.101 2.750 2.750 0.929 0.929
bps change 5.00 -0.14 0.00 0.25 0.00 0.00 35.60 0.00 0.00 0.00
3-MONTH INTERBANK LENDING RATE (%) 21-May 22-May bps change 3.883 3.885 0.18 0.378 0.378 0.00 4.900 4.900 0.00 0.230 0.230 0.00 2.660 2.660 0.00 3.210 3.210 0.00 1.170 1.107 -6.30 0.373 0.373 0.08 2.819 2.812 -0.69 4.250 4.625 37.50
CREDIT DEFAULT SWAP (IN BPS) 20-May 21-May bps change China 72.89 72.90 0.01 Hong Kong SAR 44.05 44.03 -0.02 Indonesia 136.03 136.56 0.53 Japan 64.52 64.27 -0.25 Korea 68.71 68.72 0.01 Malaysia 75.82 76.07 0.25 Philippines 83.93 85.94 2.00 Thailand 83.17 82.20 -0.97 Vietnam 195.13 195.47 0.34 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 21-May 22-May Gold Spot (in US$ per 1,376.3 1,387.2 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change 0.79
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
Page 5 of 7
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 303.8 149.4 752.6 2.0 0.4 Hong Kong SAR 107.3 55.5 43.9 1.9 2.4 Indonesia 1,254.4 70.4 2,371.0 17.8 0.5 Japan 327.4 156.7 126.7 2.1 2.6 Korea 140.3 56.7 30.4 2.5 4.6 Malaysia 84.0 20.1 8.5 4.2 9.9 Philippines 258.2 121.5 964.3 2.1 0.3 Singapore 177.8 68.1 60.7 2.6 2.9 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
DATA RELEASES FOR THE DAY Indicators
Economies
JAPAN MALAYSIA JAPAN JAPAN KOREA
All Industry Activity Index (MoM) % CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports (YoY) % External Short-Term Debt (USD bn)
Period
Mar Apr Apr Apr 1Q
Last
Previous
-0.3 1.7 -879.9 3.8 122.2
0.6 1.6 -364.0 1.1 126.8
SELECTED ECONOMIC RELEASES CALENDAR (20 – 25 May 2013) Expected Release Date
5/20/2013
5/21/2013
5/22/2013
5/23/2013
Economies
HONG KONG SAR THAILAND THAILAND PHILIPPINES HONG KONG JAPAN MALAYSIA JAPAN JAPAN KOREA MALAYSIA SINGAPORE SINGAPORE CHINA SINGAPORE SINGAPORE PHILIPPINES PHILIPPINES
Indicators
Unemployment Rate SA% Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% Budget Deficit/Surplus (PHP bn) CPI - Composite Index (YoY)% All Industry Activity Index (MoM) % CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports (YoY) % External Short-Term Debt (USD bn) Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% HSBC Flash China Manufacturing PMI CPI (YoY)% Industrial Production (YoY)% Trade Balance (USD mn) Total Imports (YoY)%
Period
Apr 1Q 1Q Apr Apr Mar Apr Apr Apr 1Q May 15 1Q F 1Q F May Apr Apr Mar Mar
Page 6 of 7
5/23/2013 5/25/2013
THAILAND THAILAND VIETNAM VIETNAM VIETNAM VIETNAM VIETNAM
Customs Exports (YoY)% Customs Imports (YoY)% CPI (YOY)% Imports YTD (YoY)% Exports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index (YoY) %
Apr Apr May May May May May
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 23 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks sank with the regional benchmark index headed for the biggest drop since September 2011. The MSCI Asia Pacific Index dropped 3.6 percent, as Japan’s Topix Index slumped 7.3 percent, Australia’s S&P/ASX 200 Index fell at least 2 percent, Hong Kong’s Hang Seng Index 2.5 percent, Singapore’s Straits Times Index 1.7 percent, and Shanghai's Composite Index falling 1.2 percent at trading close. Moving to the European markets, the Stoxx Europe 600 Index fell 2.6 percent, its first drop in five days, as of 5:30 p.m. Singapore time. The U.S. Standard & Poor’s 500 Index futures retreated 0.8 percent.
•
The yen jumped the most in five weeks as signs China’s economy is slowing and the prospect of a reduction in U.S. monetary stimulus boosted demand for safer assets. Japan’s currency climbed at least 1.1 percent versus all 16 of its major counterparts as the nation’s stocks slid the most since the aftermath of the Fukushima disaster in March 2011. Japan’s currency rose 1.7 percent to 101.45 per dollar after depreciating to 103.16 yesterday.
•
WTI oil extended losses as stockpiles rose, China factories slowed. West Texas Intermediate oil fell for a third day, extending the biggest decline in three weeks. Futures slid as much as 1.2 percent in New York after losing 2 percent yesterday, the most since May 1. WTI for July delivery fell as much as US$1.17 to US$93.11 a barrel in electronic trading on the New York Mercantile Exchange and was at US$93.25 at 2:37 p.m. Singapore time. Brent for July settlement declined as much as US$1.06, or 1 percent, to US$101.54 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of US$8.38 to WTI futures. The spread widened for the first time in five days to US$8.32 yesterday.
•
Gold rose, snapping two days of losses, boosting haven demand as equities fell. Silver, platinum and palladium declined. Spot gold gained as much as 1.35 percent to US$1,388.8 an ounce at 5:30 p.m. in Singapore. Bullion for June delivery climbed 0.5 percent to US$1,374.50 an ounce on the Comex in New York after falling for nine of the past 10 days. Cash silver dropped 0.4 percent to US$22.205 an ounce, platinum lost 0.9 percent to US$1,455.40 an ounce, and palladium fell 1.4 percent to US$736.10 an ounce.
BREAKING NEWS GLOBAL •
Bernanke seeks sustained job gains before paring bond purchases. Federal Reserve Chairman Ben S. Bernanke and his fellow policy makers, expressing concern that federal budget cuts are blunting the recovery, signalled little appetite for reducing record stimulus without what he called “real and sustainable” progress in reducing unemployment. Bernanke’s testimony to the Joint Economic Committee of Congress and comments by Federal Reserve Bank of New York President William C. Dudley showed caution over trimming the central bank’s bond purchase program too soon. Many Fed officials said more labour market progress is needed before paring $85 billion in monthly asset purchases, minutes of their last meeting showed yesterday.
Page 1 of 7
•
Europe’s leaders say No to austerity, yet say Yes to stimulus. Austerity is out after the euro-area recession extended to a sixth quarter. Stimulus isn’t yet in. That was the something-for-everyone message from European leaders at a summit in Brussels yesterday. All touted a previously announced 6 billion-euro (US$7.7 billion), seven-year initiative to fight youth unemployment, now at 24 percent. The 17-nation euro area’s nonstop contraction since the third quarter of 2011 has left the European Central Bank to try to mitigate the damage by cutting interest rates and exploring unconventional ways of channelling money to needy companies. Several months of calm in financial markets allowed EU leaders to deal with energy policy and a clampdown on tax evasion yesterday. The next steps in handling the financial crisis were put off to June when jobs, growth and the slowing push for a centrally regulated banking system will top the agenda.
•
Germany's private sector is still contracting, albeit slightly, in May as firms lacking new orders cut jobs, a survey showed on Thursday, suggesting Europe's largest economy will stagnate in the second quarter. Markit's flash composite Purchasing Managers' Index (PMI) measuring growth in both manufacturing and services, which together make up more than two-thirds of the economy, edged up in May to 49.9 from 49.2 the previous month. But that was still below the 50 mark that separates growth from contraction and was far weaker than the survey's long-run average of 52.9. The German economy grew by just 0.1 percent in the first three months of this year as the on-going euro zone crisis and a global economic slowdown made it hard for Europe's growth engine to recover from a 0.6 percent contraction in late 2012
•
Ford will shut Australia plants after nine decades on costs. Ford Motor Co. will stop making cars in Australia after nine decades of operation as a surge in the currency undermines the local industry’s ability to compete with imports. Ford Australia faces costs double those in Europe and four times those of its Asian divisions, local President Bob Graziano told reporters today. He announced the loss of 1,200 jobs from October 2016 at two plants in Melbourne and Geelong. Australia’s three car makers have struggled as a 28 percent rise in the local dollar against the yen over the past year stoked sales of cheaper imported vehicles and cut exports. The closure of one threatens the viability of the whole industry and is a blow to Prime Minister Julia Gillard, whose Labour party is trailing in polls ahead of a September 14 election.
REGIONAL •
China’s manufacturing is contracting in May for the first time in seven months, adding to signs that economic growth is losing steam for a second quarter. The preliminary reading of 49.6 for a released today by HSBC Holdings Plc and Markit Economics compares with a final reading of 50.4 for April. Data earlier this month on fixed-asset investment and factory production missed forecasts and gauges of manufacturing and service industries declined. China’s growth unexpectedly slowed to 7.7 percent in the first quarter while remaining above the government’s full-year target of 7.5 percent. Observers are divided on the need for the government to step in and stimulate the economy. The country's new leadership has, however, signaled that it is willing to accept somewhat slower growth and won't immediately hit the stimulus button.
•
Indonesia’s government bonds dropped as ‘tightening bias’ signalled. Indonesia’s government bonds fell, driving the 10-year yield to a seven-month high, after the central bank signalled the next move in interest rates is likely to be an increase. Bank Indonesia Page 2 of 7
kept its benchmark interest rate unchanged since February last year. A planned fuel price increase threatens to boost inflation to as much as 7.7 percent this year, compared with a 5.5 percent pace should fuel rates remain unchanged, reducing the central bank’s scope to contain borrowing costs and support economic growth. The yield on the May 2023 notes rose three basis points, or 0.03 percentage point, to 5.73 percent as of 10:34 a.m. in Jakarta, the highest level since October, prices from the Inter Dealer Market Association show. •
The Philippines economy likely grew by some 6% in the first quarter, IMF Resident Representative Shanaka Jayanath Peiris told reporters on Tuesday. One of the leading drivers will be consumption that is expected to remain "firm" despite a slowdown in overseas remittances. Remittances totalled $5.112 billion as of March, a 5.58% jump from the $4.842 billion notched in the same 2012 period. Investment, meanwhile, was likely driven by public spending in the first quarter given Budget department efforts to roll out infrastructure projects early in the year to take advantage of the dry weather. A drag to growth could have come from an underperformance of exports. Outbound shipments fell by 2.7% and 15.6% in January and February, respectively, only to recover slightly in March with a 0.1% increase. First quarter gross domestic product data will be released on May 30.
•
Singapore’s data showed a much better-than-expected economic performance in the first four months of the year, helped by a surge in financial services in the first quarter as trading in stocks and foreign exchange soared. Singapore gross domestic product (GDP) expanded 1.8 percent in January-March on a quarter-on-quarter, seasonally adjusted and annualised rate, far better than the advance estimate of a 1.4 percent contraction. The expansion was due to a 50.6 percent quarterly surge in finance and insurance that more than offset a 12.3 percent contraction in manufacturing. Singapore today also reported that headline inflation eased to 1.5 percent year-on-year in April, the lowest in more than three years, as falling car prices and government rebates for service and conservancy charges kept a lid on prices. Core inflation, which excludes car prices and housing rents which are more affected by government policies, slowed to 1.4 percent from 1.7 percent in March.
•
Thailand’s April exports grew by 10.5 percent year-on-year, above expectations. Thailand's exports in April rose 10.5 percent from a year earlier, nearly double the pace economists forecast. Exports account for more than 60 percent of the Thai economy, and tepid figures for the first quarter - when they rose only 4.5 percent from the same period in 2012 - increased anxiety about the trade performance. The Commerce Ministry said the good export data in April was due to the strong industrial sector. Its exports rose 19.3 percent from a year earlier, led by a 45.2 percent jump in electronics, a 19 percent increase in autos and parts and a 15.8 percent rise in building materials. In April, exports increased to the U.S (by 8.3 percent), Japan (3.2 percent) and the European Union (0.8 percent), though shipments to China fell 6.6 percent from a year earlier.
IFIs NEWS (compiled from their websites) BIS – Working Paper: “The 2011 Federal Deposit Insurance Corporation (FDIC) assessment on banks managed liabilities: interest rate and balance-sheet responses” •
The BIS has publicised the above-stated working paper. http://www.bis.org/publ/work413.htm
Page 3 of 7
IMF – Press Release: IMF Concludes Article IV Consultation with Myanmar and the First Review of Staff-Monitored Program •
An IMF team led by Mr. Matt Davies visited Yangon and Nay Pyi Taw during May 8–22, 2013, for the 2013 Article IV Consultation and first review of the Staff- Monitored Program (SMP). At the conclusion of the mission, Mr. Davies made the following statement: “The IMF will continue to support the government to implement its ambitious economic reform agenda. This will include continued program monitoring and intensive technical assistance (TA) on monetary, fiscal, and financial sector reforms and on statistical improvement, in close coordination with other international financial institutions and bilateral donors. A resident representative office will soon be opened in Myanmar which will complement stepped up operations by the Bangkok-based TA Office for Myanmar and Lao P.D.R.” http://www.imf.org/external/np/sec/pr/2013/pr13187.htm
IMF – Press Release: United Kingdom—2013 Article IV Consultation Concluding Statement of the Mission •
The IMF has publicised the 2013 Article IV Consultation Concluding Statement pertaining to its’ Mission to United Kingdom. http://www.imf.org/external/np/ms/2013/052213.htm
IMF – Working Papers •
Emerging Economy Business Cycles: Financial Integration and Terms of Trade Shocks“This paper analyses the extent to which financial integration impacts the manner in which terms of trade affect business cycles in emerging economies. Using a small open economy model, we show that as capital account openness increases in an economy that faces trade shocks, business cycle volatility reduces. For an economy with limited financial openness, and a relatively open trade account, a model with exogenous terms of trade shocks is able to replicate the features of the business cycle.” http://www.imf.org/external/pubs/ft/wp/2013/wp13119.pdf
•
Fiscal Multipliers in the ECCU- “The multipliers of taxes, and government consumption and investment expenditure for the Eastern Caribbean Currency Union (ECCU) are estimated using vector autoregression models with panel data. The impact and long-run multipliers are below unity, suggesting that a great extent of the intended impulse ends up expanding imported demand. The long-run multipliers of taxes and consumption expenditure are nondifferent from zero statistically, while public investment has a long-run multiplier of 0.6. The results suggest that countercyclical policies to stimulate growth should focus on public investment.” http://www.imf.org/external/pubs/ft/wp/2013/wp13117.pdf
•
Heterogeneous Bank Lending Responses to Monetary Policy: New Evidence from a Realtime Identification- “We present new evidence on how heterogeneity in banks interacts with monetary policy changes to impact bank lending. Our findings suggest that studies using realized monetary policy changes confound the monetary policy’s effects with those of changes in expected macrofundamentals. We also extend Romer and Romer (2004)’s identification scheme, and expand the time and balance sheet coverage of the U.S. banking sample.” http://www.imf.org/external/pubs/ft/wp/2013/wp13118.pdf Page 4 of 7
OECD and WTO – Press Release: OECD and WTO update joint database on trade in value added •
The OECD and the WTO released on 17 May 2013 the first update of their joint database on trade in value added. This new version deepens the analytical depth of the first release of 16 January 2013 by presenting the indicators for a wider country coverage; monitoring past developments is also made possible by the inclusion of two additional reference years (1995 and 2000). http://www.wto.org/english/news_e/news13_e/miwi_17may13_e.htm (Press Release) http://stats.oecd.org/Index.aspx?DataSetCode=TIVA_OECD_WTO OECD-WTO Trade in Value Added (TiVA) - May 2013)
(OECD
StatExtracts:
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 22-May 23-May close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,757.00 9,770.00 9,783.00 Japan 86.75 102.60 103.16 101.45 Korea 1,064.40 1,117.10 1,113.78 1,128.49 Malaysia 3.06 3.02 3.02 3.03 Philippines 41.01 41.20 41.24 41.71 Singapore 1.22 1.26 1.27 1.27 Thailand 30.59 29.84 29.89 29.95 Vietnam 20,840.00 20,978.00 21,000.00 21,000.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.05 -0.02 -0.13 1.69 -1.30 -0.38 -1.15 0.11 -0.20 0.00
2013 YTD (%chg) 1.6 -0.2 -1.3 -13.9 -5.8 0.1 -2.1 -3.5 1.3 -0.8
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,282.9 23,082.7 5,157.0 15,138.1 1,986.8 1,766.9 7,279.9 3,446.8 1,627.0 487.6
OVERNIGHT LENDING RATE (%) 22-May 23-May 3.470 3.900 0.074 0.074 4.170 4.170 0.095 0.093 2.500 2.500 3.000 3.000 1.613 1.776 0.097 0.097 2.750 2.750 0.929 0.914
22-May 2,302.4 23,261.1 5,208.0 15,627.3 1,993.8 1,783.9 7,385.1 3,454.4 1,631.3 502.2 bps change 43.00 0.00 0.00 -0.20 0.00 0.00 16.30 0.00 0.00 -1.50
23-May 2,275.7 22,669.7 5,121.4 14,484.0 1,969.2 1,773.1 7,314.4 3,394.3 1,596.5 498.2
% change -1.16 -2.54 -1.66 -7.32 -1.24 -0.61 -0.96 -1.74 -2.13 -0.80
2013 YTD (%chg) 0.3 -2.8 17.8 39.3 -3.0 5.9 24.8 6.0 13.4 19.1
3-MONTH INTERBANK LENDING RATE (%) 22-May 23-May bps change 3.885 3.885 -0.05 0.378 0.379 0.07 4.900 4.900 0.00 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.107 1.436 32.90 0.373 0.373 0.00 2.812 2.808 -0.38 4.500 4.600 10.00
Page 5 of 7
CREDIT DEFAULT SWAP (IN BPS) 21-May 22-May bps change China 72.90 74.15 1.25 Hong Kong SAR 44.03 44.05 0.02 Indonesia 136.56 136.56 0.00 Japan 64.27 64.05 -0.23 Korea 68.72 68.72 0.00 Malaysia 76.07 76.58 0.51 Philippines 85.94 85.94 0.00 Thailand 82.20 82.96 0.76 Vietnam 195.47 195.47 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 22-May 23-May Gold Spot (in US$ per 1,370.3 1,388.8 ounce) Sources: Bloomberg & Thomson Reuters Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
% change 1.35
S&P
Moody's
Fitch
AAAAA BB+ AAA ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
A+ AA+ BBBAA A+ ABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012
2013
31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan n.a 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,440.0 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a n.a 107.3 n.a n.a 139.9 n.a n.a 177.8 n.a
EXTERNAL LIQUIDITY RATIOS
China Hong Kong SAR Indonesia Japan Korea Malaysia
Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
3,442.7 303.8 107.3 1,254.4 327.4 140.3
521.2 149.4 55.5 70.4 156.7 56.7
572.8 752.6 43.9 2,371.0 126.7 30.4
6.6 2.0 1.9 17.8 2.1 2.5
Reserves over short-term debt 6.0 0.4 2.4 0.5 2.6 4.6
Page 6 of 7
84.0 20.1 8.5 4.2 9.9 Philippines 258.2 121.5 964.3 2.1 0.3 Singapore 177.8 68.1 60.7 2.6 2.9 Thailand 21.4 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for China, which is 3Q 2012, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Indicators
Economies
SINGAPORE SINGAPORE CHINA SINGAPORE SINGAPORE THAILAND THAILAND Expected Release Date
5/20/2013
5/21/2013
5/22/2013
5/23/2013
5/25/2013
GDP (YoY)% GDP (QoQ)% HSBC Flash China Manufacturing PMI CPI (YoY)% Industrial Production (YoY)% Customs Exports (YoY)% Customs Imports (YoY)%
Period
1Q F 1Q F May Apr Apr Apr Apr
Last
Previous
0.2 1.8 49.6 1.5 4.7 10.52 8.91
-0.6 -1.4 50.4 3.5 -3.8 4.55 -11.52
SELECTED ECONOMIC RELEASES CALENDAR (20 – 25 May 2013) Economies
HONG KONG SAR THAILAND THAILAND PHILIPPINES HONG KONG JAPAN MALAYSIA JAPAN JAPAN SOUTH KOREA MALAYSIA SINGAPORE SINGAPORE CHINA SINGAPORE SINGAPORE PHILIPPINES PHILIPPINES THAILAND THAILAND VIETNAM VIETNAM VIETNAM VIETNAM VIETNAM
Indicators
Unemployment Rate SA% Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% Budget Deficit/Surplus (PHP bn) CPI - Composite Index (YoY)% All Industry Activity Index (MoM) % CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports (YoY) % External Short-Term Debt (USD bn) Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% HSBC Flash China Manufacturing PMI CPI (YoY)% Industrial Production (YoY)% Trade Balance (USD mn) Total Imports (YoY)% Customs Exports (YoY)% Customs Imports (YoY)% CPI (YOY)% Imports YTD (YoY)% Exports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index (YoY) %
Period
Apr 1Q 1Q Apr Apr Mar Apr Apr Apr 1Q May 15 1Q F 1Q F May Apr Apr Mar Mar Apr Apr May May May May May
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 27 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian stocks headed for their longest losing streak since November as a stronger yen weakened the profit outlook for Japanese exporters and China signaled it will tolerate slower growth. The MSCI Asia Pacific Index slid 1.3% to 136.80 as of 2:23 p.m in Hong Kong (138.60 at 5:00 p.m), the lowest since April 19, a fifth day of declines. The measure lost 2.7% last week, the most since July, as speculation grew the Federal Reserve will reduce its bond purchases as the economy improves and China manufacturing data missed estimates.
The yen strengthened for a third day against the dollar amid concern the Bank of Japan is struggling to control a rise in Japanese government bond yields. The yen rose versus most of its major peers after BOJ Governor Haruhiko Kuroda said yesterday the nation could cope with rising interest rates after yields on JGBs rose for a third week. Japan’s currency lost 17% in the past six months as Prime Minister Shinzo Abe pledged to end 15 years of deflation. The Australian dollar fell after China’s president signaled a tolerance for slower growth.
Hedge funds are the least bullish on gold in more than five years as speculation about the pace of money printing by central banks whipsawed prices, driving volatility to a 17month high. Money managers cut their net-long position by 9% to 35,686 futures and options as of May 21, the lowest since July 2007, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 6.7% to a record 79,416. Netbullish wagers across 18 U.S.-traded commodities slid 2.1%, as investors became more bearish on coffee and wheat. Gold’s 60-day historical volatility touched the highest since December 2011 last week. Bullion see-sawed as Federal Reserve Chairman Ben S. Bernanke testified before Congress on May 22. Two days later, Bank of Japan Governor Haruhiko Kuroda said he’s done enough to spur growth.
BREAKING NEWS GLOBAL
Joseph Stiglitz said it would be premature for the U.S. Federal Reserve to reduce monetary stimulus. “It’s the only stimulus,” the Columbia University professor said in an interview at the World Economic Forum in Jordan May 25. “Clearly the economy is not back to normal, and to accept this as the new normal would be really wrong.” U.S. stocks dropped and Treasuries fell for a fourth week, the longest slide since August, after Chairman Ben S. Bernanke said the Fed may cut the pace of asset purchases if policy makers see indications of sustained growth. Orders for durable goods increased more than forecast in April, signaling the economy will get a lift in the second half of the year. Speculation about the pace of U.S. recovery comes amid a slowdown in China, the world’s secondbiggest economy, as authorities seek to emphasize the quality of expansion and urbanization to boost domestic demand. Gross domestic product grew 7.8% last year compared with 9.3% in 2011.
U.K. house prices rose the most in six years this month as a shortage of properties boosted values in London, according to Hometrack Ltd. Average values in England and Page 1 of 7
Wales increased 0.4%, the biggest monthly increase since May 2007. London prices jumped 0.9%. Demand in the capital has surged 15% in the past six months, while supply has fallen 0.6%. “The impetus for rising house prices is originating almost exclusively from London and the southeast,” said Richard Donnell, director of research at Hometrack. “Elsewhere housing market conditions are improving gradually, with prices trending slowly upwards.” A credit-easing program by the Bank of England and the U.K. Treasury has helped to ease lending conditions in recent months. Property demand may be further bolstered by plans announced by Chancellor of the Exchequer George Osborne in the budget in March to aid home buyers. Osborne’s latest move, known as Help to Buy, has drawn criticism, with the International Monetary Fund saying there must also be measures to boost the supply of housing.
Abu Dhabi Investment Authority, among the world’s biggest sovereign wealth funds, is curbing reliance on outside fund managers and reducing holdings in developed-world shares in favor of emerging market investments. The fund counts on external investors to manage about 75% of assets, down from 80% in 2011, it said in its annual report for last year released today. ADIA, as the fund is known, also reported that 55% of its assets are invested in so-called index-replicating strategies, down from 60%, as it boosts investments in alternative assets. The 37-year-old fund, which has about 1,400 employees and is led by Managing Director Sheikh Hamed bin Zayed Al Nahyan, also reduced its target range for developed world equities in its portfolio to 32% to 42%, down from 35% to 45% a year earlier. ADIA also boosted its allocation to Chinese equities last year after receiving approval from the market regulator under the so-called Qualified Foreign Institutional Investor scheme. The fund boosted its holding to $500 million in the third quarter, up from an earlier limit of $200 million, it said.
REGIONAL
Gains in Chinese industrial companies’ profits quickened in April on increases in the power-production and automotive sectors, aiding growth after a survey showed a contraction in manufacturing this month. Net income rose 9.3% from a year earlier to 437 billion yuan ($71.3 billion), after a 5.3% increase in March, the National Bureau of Statistics said today in Beijing. However, profit growth in the first four months (11.4%) slowed down from a 12.1% pace in the first quarter. Stocks in China have dropped 6% since this year’s high on Feb. 6 and a survey last week showed manufacturing is contracting this month for the first time since October. “The data point to a stabilization of industrial profit growth at a lower level,” consistent with recent momentum in economic expansion, said Ding Shuang, senior China economist at Citigroup Inc. in Hong Kong. “If growth decelerates toward 7% and unemployment pressure mounts, more policy easing is likely,” including an interestrate cut, Ding said.
China is studying the possibility of investing a portion of its $3.4 trillion in foreign exchange reserves in U.S. real estate. The State Administration of Foreign Exchange began the study after seeing signs of a recovery in the U.S. property market, said two people with direct knowledge of the situation, who asked not to be identified as they weren’t authorized to speak publicly about the matter. China may acquire properties, invest in real estate funds or buy stakes in property companies, they said. The safety of the investments will be the top priority, said the people, who didn’t elaborate on a timetable or other details. China has set up an operation in New York to make alternative investments in the
Page 2 of 7
U.S., an effort by the country’s foreign-exchange reserves manager to diversify away from U.S. government debt, the Wall Street Journal reported last week, citing people it didn’t identify. HSBC Holdings Plc (HSBA) and Standard Chartered (STAN) Plc are offering yuandenominated bonds in Singapore in the city state’s first sales of Dim Sum debt. HSBC is marketing two-year fixed-rate notes through its local branch at a yield of about 2.25%, according to a person familiar with the matter, who asked not to be identified because the terms aren’t set. Standard Chartered is also offering bonds in the Chinese currency in Singapore, it said in a statement today. The bank, which generates most of its operating profit in Asia, is marketing three-year notes at a yield of about 3%, according to a separate person familiar with the matter. Singapore is set to be the third offshore hub for Dim Sum note sales after Hong Kong and Taiwan. Bank of Japan minutes show the concern of “a few” board members that inflation expectations may fail to flow through to actual price increases, leaving the BOJ short of its 2% goal through March 2016. Those policy makers say it’s “highly uncertain whether changes in inflation expectations would lead to a rise in the actual rate of inflation,” according to the record of an April 26 meeting, released today in Tokyo. According to JPMorgan Chase & Co., the BOJ uses the term “a few” to mean two. Japanese stocks tumbled today, adding to volatility that threatens to sap confidence in Prime Minister Shinzo Abe’s campaign to revive the world’s third-biggest economy. The board’s median estimate is 1.9%, excluding the effects of a planned sales tax increase.
IFIs NEWS (compiled from their websites) FSB – Press Release: Fourth Meeting of the Financial Stability Board Regional Consultative Group for Europe
The FSB Regional Consultative Group (RCG) for Europe held its fourth meeting on 23 May 2013 in Basel, Switzerland. At the meeting, members discussed the FSB’s ongoing policy development work on financial regulatory reforms as well as the recovery and resolution planning for banks, and the approaches envisaged for the G-SIFIs in Europe. Members also shared their experiences in implementing the FSB’s principles for reducing reliance on credit rating agency (CRA) ratings. On a final note, the Group discussed work underway across Europe for structural reform of banking and the potential implications for financial markets. http://www.financialstabilityboard.org/press/pr_130523.pdf
IFC and World Bank – Press Release: IFC Helps Promote Energy Efficiency in Vietnam’s Building Sector
The Investment Climate Advisory Services of the World Bank Group is joining Ministry of Construction’s efforts to improve energy efficiency in buildings to reduce energy costs and greenhouse-gas emissions. Under the cooperation agreement signed on 24 May 2013, IFC will help the ministry develop procedures and capacity to promote the Building Energy Efficiency Code. “The building sector is among the biggest energy users in Vietnam, accounting for about 36% of national energy consumption,” said Wendy Werner, IFC’s investment climate advisory services manager for East Asia and the Pacific. “Energy efficiency will help building developers reduce operating costs and contribute toward a lowcarbon economic growth path.” Page 3 of 7
http://www.ifc.org/ifcext/Pressroom/IFCPressRoom.nsf/0/8671C446C7DED31085257B750 03941C2 IMF – Publication: “Sovereign Debt Restructuring - Recent Developments and Implications for the Fund's Legal and Policy Framework”
On May 20, 2013, the Executive Board of the IMF discussed a staff paper on “Sovereign Debt Restructuring—Recent Developments and Implications for the Fund’s Legal and Policy Framework.” Executive Directors welcomed the opportunity to discuss recent developments in sovereign debt restructuring and review their implications for the Fund’s legal and policy framework in this area. They welcomed the preliminary nature of the discussion, which allowed them to express initial views on the merits of revisiting certain aspects of the Fund’s policies. Directors broadly supported staff plans to proceed on the four areas for follow-up work identified in the paper. http://www.imf.org/external/np/sec/pn/2013/pn1361.htm (Press Release) http://www.imf.org/external/pp/longres.aspx?id=4772 (Summary of the Policy Paper) http://www.imf.org/external/np/pp/eng/2013/042613.pdf (Policy Paper)
IMF - Publications
The IMF has published the following country reports pertaining to Belgium’s Banking and Insurance Sector as well as its’ Bank Resolution Framework:
Detailed Assessment of Compliance with the Basel Core Principles for Effective Banking Supervision http://www.imf.org/external/pubs/ft/scr/2013/cr13133.pdf
Detailed Assessment of Observance of Insurance Core Principles http://www.imf.org/external/pubs/ft/scr/2013/cr13134.pdf
Technical Note on Crisis Management and Bank Resolution Framework http://www.imf.org/external/pubs/ft/scr/2013/cr13135.pdf
Technical Note on Financial Conglomerate Supervision http://www.imf.org/external/pubs/ft/scr/2013/cr13138.pdf
Technical Note on Securities Markets Regulation and Supervision http://www.imf.org/external/pubs/ft/scr/2013/cr13136.pdf
Technical Note on Stress Testing the Banking and Insurance Sectors http://www.imf.org/external/pubs/ft/scr/2013/cr13137.pdf
Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 24-May 27-May close China 6.23 6.13 6.13 6.12 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,774.00 9,774.00 9,793.00 Japan 86.75 101.31 101.31 100.85 Korea 1,064.40 1,127.05 1,127.05 1,122.41 Malaysia 3.06 3.03 3.03 3.03 Philippines 41.01 41.61 41.61 41.65 Singapore 1.22 1.26 1.26 1.26 Thailand 30.59 29.97 29.97 29.86 Vietnam 20,840.00 21,000.00 21,000.00 21,000.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.19 0.00 -0.19 0.46 0.41 0.12 -0.10 0.42 0.37 0.00
2013 YTD (%chg) 1.8 -0.2 -1.4 -13.4 -5.2 0.2 -1.9 -3.1 1.6 -0.8
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,288.5 22,618.7 5,155.1 14,612.5 1,973.5 1,773.1 7,268.9 3,393.2 1,607.5 500.2
OVERNIGHT LENDING RATE (%) 24-May 27-May 3.000 3.570 0.074 0.076 4.170 4.170 0.093 0.093 2.500 2.500 3.000 3.000 1.794 1.620 0.136 0.136 2.750 2.750 0.929 0.800
24-May 2,288.5 22,618.7 5,155.1 14,612.5 1,973.5 1,773.1 7,268.9 3,393.2 1,607.5 500.2
bps change 57.00 0.21 0.00 0.00 0.00 0.00 -17.40 0.00 0.00 -12.90
27-May
% change
2,293.1 22,686.1 5,085.1 14,142.7 1,980.0 1,767.1 7,097.5 3,391.3 1,593.0 512.4
0.20 0.30 -1.36 -3.22 0.33 -0.33 -2.36 -0.06 -0.90 2.43
2013 YTD (%chg) 1.1 -2.7 17.0 36.1 -2.5 5.5 21.1 5.9 13.2 22.5
3-MONTH INTERBANK LENDING RATE (%) 24-May 27-May bps change 3.884 3.883 -0.04 0.379 0.379 -0.07 4.900 4.900 0.00 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.282 1.423 14.10 0.373 0.373 0.00 2.808 2.798 -1.00 4.300 3.833 -46.70
CREDIT DEFAULT SWAP (IN BPS) 23-May 24-May bps change China 78.39 78.88 0.48 Hong Kong SAR 44.33 44.36 0.02 Indonesia 146.11 148.55 2.44 Japan 69.91 71.39 1.48 Korea 73.94 72.94 -1.00 Malaysia 81.10 81.34 0.24 Philippines 96.11 94.16 -1.95 Thailand 85.79 85.78 -0.01 Vietnam 199.92 202.33 2.41 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 24-May Gold Spot (in US$ per ounce)
1,386.6
27-May 1,394.5
% change 0.57
Page 5 of 7
Sources: Bloomberg & Thomson Reuters Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 306.5 149.9 752.6 2.0 0.4 Hong Kong SAR 107.3 51.8 43.9 2.1 2.4 Indonesia 1,258.0 68.1 2,371.0 18.5 0.5 Japan 328.8 155.1 126.7 2.1 2.6 Korea 140.3 57.8 30.4 2.4 4.6 Malaysia 83.2 20.1 8.5 4.1 9.8 Philippines 261.7 119.0 964.3 2.2 0.3 Singapore 177.8 69.4 60.7 2.6 2.9 Thailand 23.2 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
Page 6 of 7
DATA RELEASES FOR THE DAY Indicators
Economies
HONG KONG HONG KONG HONG KONG
EXPORTS YoY% IMPORTS YoY% Trade Balance
Period
Apr Apr Apr
Last
Previous
9.0% 7.7% -42.7B
11.2% 11.3% -49.1B
SELECTED ECONOMIC RELEASES CALENDAR (27 – 31 May 2013) Expected Release Date
Economies
Indicators
Period
5/27/2013
HONG KONG HONG KONG HONG KONG
EXPORTS YoY% IMPORTS YoY% Trade Balance
Apr Apr Apr
5/28/2013 5/29/2013
JAPAN SOUTH KOREA SOUTH KOREA
Corp Service Price Index (YoY) % Current Account in US$ Million Current Account in US$ Million
Apr Apr Apr
THAILAND PHILIPPINES PHILIPPINES HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA JAPAN JAPAN JAPAN JAPAN THAILAND THAILAND
Benchmark Interest Rate GDP sa (QoQ) GDP YoY Retail Sales – Volue (YoY) Retail Sales – Volume (YoY) Japan Buying Foreign Bonds Japan Buying Foreign Stocks Foreign Buying Japan Bonds Foreign Buying Japan Stocks Industrial Production (MoM) Industrial Production (YoY) Jobless Rate Natl CPI YoY Natl CPI Ex-Fresh Food YoY Natl CPI Ex-Food, Energy YoY Total Trade Balance Current Account Balance (USD)
May 29 1Q 1Q Apr Apr May 24 May 24 May 24 May 24 Apr Apr Apr Apr Apr Apr Apr Apr
5/30/2013
5/31/2013
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 28 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian stocks rose, with the regional equities benchmark snapping a five-day losing streak, as a weakening yen boosted the earnings outlook for Japanese exporters and China Taiping Insurance Holdings Co. surged after saying it will buy its parent’s assets. The MSCI Asia Pacific Index rose 0.3% to 137.27 as of 4:03 p.m. in Hong Kong, after dropping as much as 0.6%. About two stocks gained for each that fell. The gauge retreated the past five days amid speculation the Federal Reserve will reduce its bond purchases as the U.S. economy improves and China manufacturing data missed estimates.
The yen slid as Asian stocks advanced after an adviser to Japan’s Prime Minister Shinzo Abe said the nation’s central bank can add to its unprecedented stimulus if necessary to drive an economic revival. Japan’s currency weakened at least 0.4% against all its 16 major peers after the Bank of Japan estimated a key component of funds in the nation’s economy reached a record amid unprecedented stimulus. The dollar rose versus the euro before U.S. data today that economists say will show consumer confidence improved and home prices gained. The BOJ estimates that deposits it holds in custody for financial companies will rise to a record 72.4 trillion yen today. The current-account balance is a part of the monetary base, which the central bank plans to double in two years as it buys more than 7 trillion yen of government bonds every month to end 15 years of deflation.
Gold declined as the dollar strengthened before data that’s forecast to show the U.S. economy is improving, boosting the case for reduced stimulus, and as higher prices damped physical demand. Spot gold fell as much as 0.6% to $1,386.22 an ounce and was at $1,390 at 2:55 p.m. in Singapore. Prices rose 0.6% yesterday, extending last week’s 2% gain that was the most in a month, as International Monetary Fund data showed central banks including Russia added gold to reserves in April. Gold has slumped 17% this year, while the dollar rallied 5.2% against a six-currency basket on speculation the Federal Reserve may scale back quantitative-easing measures that helped bullion cap a 12-year bull run in 2012. Data scheduled for release today is forecast to show that U.S. consumer confidence improved and regional manufacturing shrank at a slower pace, lifting the Dollar Index 0.2%.
BREAKING NEWS GLOBAL
Germany and France plan to present a joint blueprint today to address soaring youth unemployment as Europe’s two biggest economies seek to find common ground in response to the euro region’s financial crisis. The joint proposals may involve the EIB leveraging 6 billion euros ($7.8 billion) being made available from the EU through 2020 to yield as much as 60 billion euros in loans to tackle joblessness, Germany’s Rheinische Post reported May 13. The EIB is deploying 40% more funds, or almost 70 billion euros a year in the next three years to fight unemployment, Hoyer told Germany’s Bild newspaper in an interview yesterday. The euro-area economy will probably shrink for a second year while unemployment will rise to a record 12.2%, the European Commission said May 3 in a forecast. Youth unemployment -- defined as people aged under 25 years without work -rose to 24% in the region in March, according to a Eurostat report published April 30. Page 1 of 6
Britain’s four biggest banks will have eliminated about 189,000 jobs by the end of this year from their peak staffing levels, bringing employment to a nine-year low amid a dearth of revenue. More cuts may follow. Royal Bank of Scotland Group Plc, HSBC (HSBA) Holdings Plc, Lloyds Banking Group Plc (LLOY) and Barclays Plc (BARC) will employ about 606,000 people worldwide by the end of 2013, according to data compiled by Bloomberg. That’s 24% below the peak of 795,000 in 2008 and the least since 2004, when they employed 594,000 globally. The firms are under pressure from investors to reduce fixed costs as Europe’s sovereign debt crisis crimps income from investment banking as loans sour in the region. The four firms posted 108 billion pounds ($164 billion) of revenue for 2012, 13% less than in 2008. Costs as a proportion of revenue increased over the period.
REGIONAL
Chinese Premier Li Keqiang told German business leaders his country is confronted by “huge challenges” as it seeks 7% annual growth this decade, down from more than 10% in the previous 10 years. China needs growth of about 7% to double per capita gross domestic product by 2020 from the level in 2010, Li said yesterday in Berlin after meeting with Chancellor Angela Merkel. Li is signaling the limits of leaders’ tolerance for slower growth as Europe’s debt crisis curbs shipments abroad, manufacturing weakens and a government anti-extravagance campaign restrains restaurant and retail sales. The comments came days after President Xi Jinping said China won’t sacrifice the environment to ensure short-term expansion. Li said yesterday that the Chinese government will move forward with marketdriven reforms to generate stable growth after the economy unexpectedly slowed in the first quarter.
DHL, the courier and freight company of Deutsche Post AG (DPW), plans to spend $181 million in the next two years building warehouses and adding workers in Southeast Asia as economic growth spurs consumption by the middle class. DHL’s Southeast Asia warehouse capacity will surge 50% while the number of people employed in the region will increase by 65% to 25,000, Oscar de Bok, head of DHL Supply Chain for South and Southeast Asia, said in an interview with Susan Li on Bloomberg Television’s “First Up” yesterday. Economic growth in Indonesia, Vietnam and Thailand has stoked consumption in Southeast Asia, attracting investments from companies including phone maker Nokia Oyj (NOK1V) and carmaker Ford Motor Co. (F) Most of Southeast Asia’s 600 million people -the combined population of the U.S., Germany and Brazil -- will be middle class by 2020, and that will boost demand for food, beverages and other goods, according to Bain & Co.
Bank of Japan board member Ryuzo Miyao said on Tuesday it was vital to keep long- and short-term interest rates stable. The former academic said rises in Japanese stocks and U.S. long-term interest rates have contributed to the recent rise in Japanese bond yields. "What matters is to ensure that long- and short-term interest rates as a whole will follow a stable path," Miyao told a news conference in Tokyo. But in terms of what the BOJ can do, Miyao reiterated the central bank's stance that it will fine-tune market operations and enhance communication with market participants. He also voiced confidence that the central bank's aggressive monetary stimulus will help offset any rises in long-term rates that reflect expectations of an economic recovery in Japan. "Even when there is upward pressure on long-term interest rates due to expectations for economic recovery, monetary policy will continue to put downward pressure on interest rates and therefore strongly support economic recovery," said Miyao, the longest serving member of the board. Page 2 of 6
IFIs NEWS (compiled from their websites) CGFS – Publication: “Asset encumbrance, financial reform and the demand for collateral assets”
The Committee on the Global Financial System (CGFS), a central bank forum for the monitoring and examination of broad issues relating to financial markets and systems, has publicised the captioned report. “The demand for high-quality assets that can be used as collateral will increase due to a number of key regulatory reforms. This comes on top of greater demand for collateral assets through increased reliance by banks on collateralised funding, particularly in Europe. While this can lead to temporary shortages in some countries, concerns about an absolute shortage of high-quality collateral assets appear unjustified, given that the supply of collateral assets has risen significantly since end-2007. In addition, endogenous private sector responses, such as collateral transformation activities, will help to address supply-demand imbalances if and when they emerge. This report identifies implications for markets and policy that result from these developments that warrant monitoring and further analysis.” http://www.bis.org/publ/cgfs49.htm
FSB – Press Release: Fourth Meeting of the Financial Stability Board Regional Consultative Group for the Americas
The FSB Regional Consultative Group (RCG) for the Americas held its fourth meeting on 27 May 2013 in Grand Cayman, Cayman Islands. At the meeting, members were updated on the FSB’s policy priorities and work plan and they discussed effective ways of sharing information for resolution purposes. Members also shared experiences in the region in implementing the reforms to the global over-the-counter derivatives market agreed in the G20, and discussed the potential impacts of those reforms. On a final note, a discussion took place on global financial system vulnerabilities and regional financial stability. http://www.financialstabilityboard.org/press/pr_130527.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_111104cc.pdf (Key Attributes of Effective Resolution Regimes for Financial Institutions) http://www.financialstabilityboard.org/publications/r_130212.pdf (Peer Review Report: Thematic Review on Risk Governance)
MIGA – Press Release: Investment Prospects and Risk Take Center Stage at High-Level Forum
The Dubai International Financial Centre (DIFC) and MIGA hosted “Investment Prospects and Risk – MENA and Beyond,” a forum that took place in DIFC’s Conference Centre on Monday, May 20th. The event considered how uncertainty in the Middle East and North Africa (MENA) region as well as the euro zone and the sovereign debt crises continue to have an impact on businesses across the world. Besides placing a high-level focus on global and regional prospects and the latest risk trends, the forum also discussed the state of global investment and explored effective risk mitigants—including the role of development finance institutions. http://www.miga.org/news/index.cfm?stid=1837&aid=3507
Page 3 of 6
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 27-May 28-May close China 6.23 6.13 6.12 6.12 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,774.00 9,793.00 9,862.00 Japan 86.75 101.31 100.96 102.03 Korea 1,064.40 1,127.05 1,122.41 1,126.88 Malaysia 3.06 3.03 3.03 3.04 Philippines 41.01 41.61 41.65 41.94 Singapore 1.22 1.26 1.26 1.27 Thailand 30.59 29.97 29.86 30.02 Vietnam 20,840.00 21,000.00 21,000.00 20,998.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.01 0.00 -0.70 -1.05 -0.40 -0.50 -0.69 -0.36 -0.53 0.01
2013 YTD (%chg) 1.8 -0.2 -2.1 -14.4 -5.6 -0.3 -2.6 -3.6 1.0 -0.8
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,288.5 22,618.7 5,155.1 14,612.5 1,973.5 1,773.1 7,268.9 3,393.2 1,607.5 500.2
OVERNIGHT LENDING RATE (%) 27-May 28-May 3.570 3.350 0.076 0.075 4.170 4.170 0.093 0.070 2.500 2.500 3.000 3.000 1.620 0.611 0.069 0.069 2.750 2.750 0.800 0.943
27-May 2,293.1 22,686.1 5,085.1 14,142.7 1,980.0 1,767.1 7,097.5 3,391.3 1,593.1 512.4
bps change -22.00 -0.07 0.00 -2.25 0.00 0.00 -100.90 0.00 0.00 14.30
28-May
% change
2,321.3 22,924.3 5,176.2 14,312.0 1,986.2 1,776.2 7,113.2 3,407.4 1,614.3 516.3
1.23 1.05 1.79 1.20 0.32 0.51 0.22 0.47 1.33 0.77
2013 YTD (%chg) 2.3 -1.7 19.1 37.7 -2.2 6.1 21.4 6.4 14.7 23.4
3-MONTH INTERBANK LENDING RATE (%) 27-May 28-May bps change 3.883 3.885 0.14 0.379 0.377 -0.14 4.900 4.900 0.00 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.423 1.587 16.40 0.373 0.373 0.00 2.798 2.797 -0.15 3.833 3.833 0.00
CREDIT DEFAULT SWAP (IN BPS) 24-May 27-May bps change China 78.88 79.85 0.98 Hong Kong SAR 44.36 44.35 -0.01 Indonesia 148.55 150.47 1.92 Japan 71.39 71.39 0.00 Korea 72.94 73.92 0.98 Malaysia 81.34 82.32 0.98 Philippines 94.16 96.11 1.95 Thailand 85.78 86.76 0.97 Vietnam 202.33 203.26 0.93 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 27-May Gold Spot (in US$ per ounce)
1,394.8
28-May 1,380.5
% change -1.02
Page 4 of 6
Sources: Bloomberg & Thomson Reuters Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 306.5 149.9 752.6 2.0 0.4 Hong Kong SAR 107.3 51.8 43.9 2.1 2.4 Indonesia 1,258.0 68.1 2,371.0 18.5 0.5 Japan 328.8 155.1 126.7 2.1 2.6 Korea 140.3 57.8 30.4 2.4 4.6 Malaysia 83.2 20.1 8.5 4.1 9.8 Philippines 261.7 119.0 964.3 2.2 0.3 Singapore 177.8 69.4 60.7 2.6 2.9 Thailand 23.2 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
Page 5 of 6
DATA RELEASES FOR THE DAY Indicators
Economies
JAPAN
Corp Service Price Index (YoY) %
Period
Apr
Last
Previous
-0.4%
-0.2%
SELECTED ECONOMIC RELEASES CALENDAR (27 – 31 May 2013) Expected Release Date
Economies
Indicators
Period
5/27/2013
HONG KONG HONG KONG HONG KONG
EXPORTS YoY% IMPORTS YoY% Trade Balance
Apr Apr Apr
5/28/2013 5/29/2013
JAPAN SOUTH KOREA SOUTH KOREA
Corp Service Price Index (YoY) % Current Account in US$ Million Current Account in US$ Million
Apr Apr Apr
THAILAND PHILIPPINES PHILIPPINES HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA JAPAN JAPAN JAPAN JAPAN THAILAND THAILAND
Benchmark Interest Rate GDP sa (QoQ) GDP YoY Retail Sales – Volue (YoY) Retail Sales – Volume (YoY) Japan Buying Foreign Bonds Japan Buying Foreign Stocks Foreign Buying Japan Bonds Foreign Buying Japan Stocks Industrial Production (MoM) Industrial Production (YoY) Jobless Rate Natl CPI YoY Natl CPI Ex-Fresh Food YoY Natl CPI Ex-Food, Energy YoY Total Trade Balance Current Account Balance (USD)
May 29 1Q 1Q Apr Apr May 24 May 24 May 24 May 24 Apr Apr Apr Apr Apr Apr Apr Apr
5/30/2013
5/31/2013
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 29 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Philippine stocks climbed most in three weeks on growth outlook. It drove the benchmark index to its biggest gain in more than three weeks, after Finance Secretary Cesar Purisima said the government will ensure economic growth stays high. The Philippine Stock Exchange Index jumped 1.62%. The government will set the “necessary foundation” to sustain economic growth at higher levels, Purisima said. Gross domestic product data for the first quarter is scheduled to be released tomorrow.
The yen advances as Kuroda says stability important; Aussie Slides. Japan’s currency climbed against all but one of its 16 of its major peers. The Australian dollar fell to the weakest level versus its U.S. counterpart since October 2011 after the International Monetary Fund cut its growth forecast for China.
The Philippine peso weakened to a nine-month low on concern the Federal Reserve will scale back its monetary stimulus, reducing the flow of funds to emerging markets. The Dollar Index advanced for a second day after U.S. data yesterday showed consumer confidence climbed to the highest level in more than five years and home prices increased by the most in seven years. Foreign funds sold $85 million more Philippine equities than they bought in the last three days, exchange data show. The Philippine Stock Exchange Composite Index fell 3.8% since reaching a record high on May 15. It was 0.2% higher today.
WTI falls from weekly high as OPEC signals no oil-output change. It fell before data likely to show a decline in U.S. gasoline stockpiles as OPEC delegates in Vienna indicated the group will leave its output target unchanged at this week's meeting. Futures dropped as much as 0.9% in New York after gaining for the first time in a week yesterday as U.S. consumer confidence rose to the highest in five years. The Organization of Petroleum Exporting Countries will keep its production limit at 30 million barrels a day at a May 31 meeting, said two delegates who asked not to be identified because the decision isn’t final. An Energy Information Administration report tomorrow may show gasoline supplies dropped 650,000 barrels last week, according to a Bloomberg News survey.
BREAKING NEWS GLOBAL
U.S. treasury auction attracts fewest bids since 2011 amid better forecast on economic growth. Treasury’s $35 billion sale of two-year debt attracted the fewest bids for the securities since February 2011 after reports showed stronger-than-forecast economic data, damping demand for refuge assets. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 3.04, compared with an average of 3.72 for the past 10 sales. The benchmark 10-year note yield rose earlier after a report showed consumer confidence in May reached the strongest in more than five years while Federal Reserve Chairman Ben S. Bernanke said last week the central bank could cut the pace of asset purchases if officials see indications of sustained improvement in economic growth.
Page 1 of 6
Bank of France seeks Yuan liquidity Agreement for Euro area. Governor Christian Noyer said he’s seeking agreement among euro-area central banks for ways of providing liquidity support in Chinese yuan as countries compete for future business. “The essential thing is liquidity backstops, either public or private ones,” Noyer said yesterday in a Bloomberg News interview in Paris. “On the public facility, we’re looking at it. We’re talking about how we can have a public backstop with a swap accord in the euro system.” Paris is competing with London and Zurich to become the center for yuan trading in Europe as China makes its currency more widely used around the world. A swap arrangement would allow central banks to supply yuan to commercial banks whose customers may need that currency. The Bank of England said in February that it planned to sign a deal soon on a three-year currency swap arrangement.
AUD falls to lowest since 2011 as U.S. yield spread narrows after the 10-year yield spread between the two countries’ debt narrowed to the least in more than four years on signs the American economy is improving. Moreover The Aussie weakened to a more-than fouryear low against its New Zealand counterpart. Pacific Investment Management Co., which runs the world’s biggest bond fund, said it expects further interest rate cuts by the Reserve Bank of Australia as mining investment cools. “The diminishing yield differential is one argument for the Aussie’s move lower,” said Michael Turner, a debt strategist at Royal Bank of Canada in Sydney. “There certainly seems to be some downside risk to growth in Australia. The risk is skewed for more easing by the RBA.”
REGIONAL
Thailand cut rate today for the first time this year as slowing economic growth bolstered government calls for easing. The Bank of Thailand lowered its one-day bond repurchase rate by a quarter of a percentage point to 2.5%, it said in Bangkok today. The first reduction since October was a unanimous decision, it said. The Southeast Asian nation’s growth slowed more than estimated to 5.3% last quarter from 19% the previous three months, increasing scope for officials to join a global wave of monetary easing from Australia to South Korea. Governor Prasarn Trairatvorakul, who has resisted repeated calls from Finance Minister Kittiratt Na-Ranong for rate cuts to tame a currency that reached a 16-year high in April, said last week policy could be loosened if the economy loses momentum.
The International Monetary Fund lowered its forecasts for China’s growth. David Lipton, first deputy managing director of the IMF, said making “decisive” policy changes would put the economy on a more sustainable path at a press briefing. "Expansion will be about 7.75% this year and next" he said in Beijing after concluding an annual review of China. In April, the IMF forecast growth of 8% this year and 8.2% expansion in 2014. Moreover, Lipton warned of risks from a record expansion of credit, with the revised outlook following an unexpected slowdown in the first quarter. Premier Li Keqiang, who took office in March, is planning policy changes that would open up more of the economy to private investment and alter a household-registration system that impedes urbanization. “While China still has significant policy space and financial capacity to maintain stability even in the face of adverse shocks, the margins of safety are narrowing and a decisive impetus to reforms is needed to contain vulnerabilities and move the economy to a more sustainable growth path,” Lipton said.
Page 2 of 6
IFIs NEWS (compiled from their websites) ADBI – Working Paper: “What Lessons Can Asia Draw from Capital Controls in Brazil during 2008-2012?”
The ADBI has publicised the captioned working paper. “Driven by waves of foreign capital inflows and outflows, Indonesia, the Republic of Korea, and Thailand—among several other emerging markets—have resorted to capital control policy since 2006. Are capital controls effective? Controls on capital inflows have been experiencing a renaissance since 2008, with several prominent Asian and Latin American countries implementing them. This paper focuses on Brazil, which instituted five changes in its capital account regime over 2008– 2011. It concludes that the effectiveness of capital controls should be viewed on a case-bycase basis, together with the political economy considerations, and other policy tools, i.e., foreign exchange intervention.” http://www.adbi.org/files/2013.05.28.wp423.lessons.asia.draw.capital.controls.brazil.pdf
IMF – Press Release: IMF Mission Completes the 2013 Article IV Consultation Discussions with China
The IMF has publicised the 2013 Article IV Consultation Concluding Statement pertaining to its’ Mission to China. It stated, “Despite weak and uncertain global conditions, the Chinese economy is expected to grow at around 7¾% this year. Notwithstanding this relatively favorable near-term outlook, China’s economy faces important challenges. In particular, the rapid growth in total social financing—a broad measure of credit—raises concerns about the quality of investment and its impact on repayment capacity, especially since a fastgrowing share of credit is flowing through less-well supervised parts of the financial system. While good progress has been made with external rebalancing, growth has become too dependent on the continued expansion of investment, much of it by the property sector and local governments whose financial position is being affected as a result. High income inequality and environmental problems are further signs that the current growth model needs to change.” http://www.imf.org/external/np/sec/pr/2013/pr13192.htm
IMF – Working Paper: “Competition Policy for Modern Banks”
The IMF has publicised the captioned working paper. “Traditional bank competition policy seeks to balance efficiency with incentives to take risk. The main tools are rules guiding entry/exit and consolidation of banks. This paper seeks to refine this view in light of recent changes to financial services provision. We argue that bank competition policy should be reoriented to deal with the too-big-to-fail (TBTF) problem and should also focus on the permissible scope of activities rather than on market structure of banks. This paper also states that following a crisis, competition policy should facilitate resolution by temporarily allowing higher concentration and government control of banks.” http://www.imf.org/external/pubs/ft/wp/2013/wp13126.pdf
Page 3 of 6
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 28-May 29-May close China 6.23 6.13 6.12 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,774.00 9,862.00 9,805.00 Japan 86.75 101.31 102.37 101.59 Korea 1,064.40 1,127.05 1,126.88 1,132.92 Malaysia 3.06 3.03 3.04 3.08 Philippines 41.01 41.61 41.94 42.49 Singapore 1.22 1.26 1.27 1.27 Thailand 30.59 29.97 30.08 30.19 Vietnam 20,840.00 21,000.00 20,998.00 21,013.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.08 0.00 0.58 0.77 -0.53 -1.17 -1.29 0.05 -0.36 -0.07
2013 YTD (%chg) 1.7 -0.2 -1.6 -14.0 -6.1 -1.4 -3.8 -3.9 0.5 -0.8
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,288.5 22,618.7 5,155.1 14,612.5 1,973.5 1,773.1 7,268.9 3,393.2 1,607.5 500.2
OVERNIGHT LENDING RATE (%) 28-May 29-May 3.350 3.050 0.075 0.076 4.170 4.170 0.070 0.093 2.500 2.500 3.000 3.000 0.611 -2.456 0.056 0.056 2.750 2.750 0.943 1.000
28-May 2,321.3 22,924.3 5,176.2 14,312.0 1,986.2 1,776.2 7,113.2 3,406.1 1,619.6 516.3
bps change -30.00 0.07 0.00 2.25 0.00 0.00 -306.70 0.00 0.00 5.70
29-May
% change
2,324.0 22,554.9 5,200.7 14,326.5 2,001.2 1,783.4 7,228.6 3,375.2 1,616.6 515.1
0.12 -1.61 0.47 0.10 0.75 0.40 1.62 -0.91 -0.19 -0.24
2013 YTD (%chg) 2.4 -3.2 19.7 37.8 -1.5 6.5 23.3 5.4 14.9 23.1
3-MONTH INTERBANK LENDING RATE (%) 28-May 29-May bps change 3.885 3.882 -0.27 0.377 0.377 0.00 4.900 4.904 0.36 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 1.587 0.960 -62.70 0.373 0.373 0.00 2.797 2.795 -0.15 3.833 4.333 50.00
CREDIT DEFAULT SWAP (IN BPS) 27-May 28-May bps change China 79.85 79.08 -0.78 Hong Kong SAR 44.35 44.84 0.49 Indonesia 150.47 151.00 0.53 Japan 71.39 71.88 0.49 Korea 73.92 71.95 -1.97 Malaysia 82.32 82.32 0.00 Philippines 96.11 93.18 -2.93 Thailand 86.76 85.29 -1.47 Vietnam 203.26 205.04 1.78 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 28-May Gold Spot (in US$ per ounce)
1,381.1
29-May 1,386.9
% change 0.42
Page 4 of 6
Sources: Bloomberg & Thomson Reuters Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 306.5 149.9 752.6 2.0 0.4 Hong Kong SAR 107.3 51.8 43.9 2.1 2.4 Indonesia 1,258.0 68.1 2,371.0 18.5 0.5 Japan 328.8 155.1 126.7 2.1 2.6 Korea 140.3 57.8 30.4 2.4 4.6 Malaysia 83.2 20.1 8.5 4.1 9.8 Philippines 261.7 119.0 964.3 2.2 0.3 Singapore 177.8 69.4 60.7 2.6 2.9 Thailand 23.2 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
Page 5 of 6
DATA RELEASES FOR THE DAY Indicators
Economies
SOUTH KOREA SOUTH KOREA THAILAND
Current Account in US$ Million Goods Balance in US$ Million Benchmark Interest Rate
Period
Apr Apr May 29
Last
Previous
$3,972 $3,589 2.50%
$4,979 $4,210 2.75%
SELECTED ECONOMIC RELEASES CALENDAR (27 – 31 May 2013) Expected Release Date
Economies
Indicators
Period
5/27/2013
HONG KONG HONG KONG HONG KONG
EXPORTS YoY% IMPORTS YoY% Trade Balance
Apr Apr Apr
5/28/2013 5/29/2013
JAPAN SOUTH KOREA SOUTH KOREA
Corp Service Price Index (YoY) % Current Account in US$ Million Goods Balance in US$ Million
Apr Apr Apr
THAILAND PHILIPPINES PHILIPPINES HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA JAPAN JAPAN JAPAN JAPAN THAILAND THAILAND
Benchmark Interest Rate GDP sa (QoQ) GDP YoY Retail Sales – Volue (YoY) Retail Sales – Volume (YoY) Japan Buying Foreign Bonds Japan Buying Foreign Stocks Foreign Buying Japan Bonds Foreign Buying Japan Stocks Industrial Production (MoM) Industrial Production (YoY) Jobless Rate Natl CPI YoY Natl CPI Ex-Fresh Food YoY Natl CPI Ex-Food, Energy YoY Total Trade Balance Current Account Balance (USD)
May 29 1Q 1Q Apr Apr May 24 May 24 May 24 May 24 Apr Apr Apr Apr Apr Apr Apr Apr
5/30/2013
5/31/2013
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 30 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Japan’s Nikkei 225 Stock Average (NKY) plunged more than 5 percent today. All but two stocks dropped on the benchmark, which slid 5.2 percent to close at 13,589.03. The sell-off accelerated as the yen strengthened toward 100 to the dollar. Volatility on the Nikkei 225 climbed for the first time in five days to near a two-year high. The broader Topix index lost 3.8 percent, ending the day 11 percent below a five-year high reached on May 22. A correction is defined as a decline of more than 10 percent from a recent peak.
Yen Advances Amid Foreign Bond Sales. The yen rose as domestic shares plunged and data showed that Japanese investors were net sellers of foreign debt for a second week, fanning concern the nation’s unprecedented monetary stimulus has yet to gain traction. The currency gained against all but one of its 16 major peers after Bank of Japan Governor Haruhiko Kuroda said the central bank is seeking to reduce volatility in the bond market.
Gold rose to a one-week high as the dollar and stocks retreated. Spot gold gained as much as 1.3 percent to $1,411.27 an ounce, the most expensive since May 22, and was at $1,406.25 at 3:23 p.m. in Singapore, heading for the first back-to-back daily climb in more than three weeks. Prices are still down 4.8 percent this month on speculation that the U.S. Federal Reserve may reduce stimulus as the world’s largest economy recovers.
BREAKING NEWS GLOBAL
U.K. home prices rise most in 18 months on an annual basis in May as the recovery in the market for residential property gained momentum, Nationwide Building Society said. Bank of England Governor Mervyn King said this month that an economic recovery is in sight as officials raised their forecast for growth. The BOE has extended its Funding for Lending Scheme to give banks access to cheaper credit and kept interest rates at a record low to support the rebound. Central bank officials extended the FLS by a year to January 2015 last month. In their quarterly forecasts published May 15 they raised growth projections for the next three years and lowered their expectations for the peak in inflation, indicating a squeeze on consumers may be easing.
EU warns of uncertainty if CFTC won't delay swap rule. The European Union is urging the U.S. to allow time for international talks before it imposes swaps rules on EU lenders, saying that the current timetable would lead to “huge legal and operational uncertainty.” The European Commission wrote to Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, urging him to extend a temporary exemption for overseas banks, which is due to expire on July 12, according to a copy of the letter obtained by Bloomberg News. The EU wants the exemption to be maintained until “international principles on cross-border swap rules have been agreed by G20 Leaders and implemented in our respective jurisdictions,” according to the letter from Jonathan Faull, the commission’s director general for internal market and services, and Steven Maijoor, chairman of the European Securities and Markets Authority. The international reach of CFTC swap trading
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requirements has been one of the most controversial elements of the agency’s Dodd-Frank Act rules.
Australia’s dollar rallied from the lowest in more than 19 months after data showed building approvals grew more than economists estimated, reducing the case for the Reserve Bank to cut interest rates. In Australia, building approvals rose 9.1 percent in April from the previous month, when they decreased 5.5 percent, the statistics bureau said today. The median estimate of economists in a Bloomberg News survey was for a 4 percent increase.
REGIONAL
Philippine growth unexpectedly quickened to the fastest pace in almost three years, defying a regional slowdown. Gross domestic product rose 7.8 percent in the three months through March from a year earlier, compared with a revised 7.1 percent gain in the previous quarter, the National Statistical Coordination Board said in Manila today. The figure beat all estimates in a Bloomberg News survey of 22 economists, whose median was 6 percent. The peso rose from an 11-month low after the data showed Philippine resilience to a cooling in Asian economies that has prompted policy makers in India, Vietnam and Thailand to cut interest rates this month. Aquino, who won control of Congress in May elections, has cracked down on corruption, narrowed the budget deficit, and this year procured the first investment-grade rankings from Fitch Ratings and Standard & Poor’s.
Philippine stocks sank the most since September 2011 in spite of strong GDP data released today. The Philippine Stock Exchange Index tumbled 3.8 percent to 6,953.35 at the close. The gauge has fallen 1.7 percent this month, its first monthly loss since August. The index’s 30-day volatility, a measure of price swings, rose to the highest level since June 2012. Government data showed today that first-quarter gross domestic product expanded 7.8 percent, the fastest pace since the second quarter of 2010. “There’s a disconnect between the economy and the valuation of the market,” Rico Gomez, who helps manage who helps manage $2.8 billion at Rizal Commercial Banking Corp. in Manila, said by phone today. “While overseas investors say they like our economic fundamentals, they find valuations to be stretched.”
IFIs NEWS (compiled from their websites) IMF – Press Release: IMF Executive Board Completes Second Review Under the ECF Arrangement for Bangladesh and Approves US$136.6 Million Disbursement
On May 29, 2013, the Executive Board of the IMF completed the second review of Bangladesh’s economic program under a three-year arrangement supported by the Extended Credit Facility (ECF). The completion of the review enables an immediate disbursement of the third installment under the ECF arrangement for an amount equivalent to SDR 91.423 million (about US$136.6 million), bringing the total amount disbursed equivalent to SDR 274.269 million (about US$409.7 million). “Bangladesh’s program under the ECF is broadly on track. Macroeconomic pressures have eased, with reserves rising and underlying inflation moderating, supported by restrained fiscal and monetary policies. Notwithstanding the challenging global environment, exports
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have picked up and remittances remain strong. However, growth is slowing and could weaken further given downside risks. It will be important to maintain sound policy anchors and keep up the reform momentum,” indicated by Mr Naoyuki Shinohara, Deputy Managing Director and Acting Chair at a statement made at the conclusion of the Executive Board’s discussion of Bangladesh. http://www.imf.org/external/np/sec/pr/2013/pr13193.htm (Main Press Release) http://www.imf.org/external/np/sec/pr/2012/pr12129.htm (Press Release 12/129 dated April 11, 2012: IMF Executive Board Approves Three-Year ECF Arrangement for Bangladesh) IMF – Working Papers
The IMF has publicised the following working papers: “Are the Asia and Pacific Small States Different from Other Small States?” http://www.imf.org/external/pubs/ft/wp/2013/wp13123.pdf “Credit Constraints, Productivity Shocks and Consumption Volatility in Emerging Economies” http://www.imf.org/external/pubs/ft/wp/2013/wp13120.pdf “Foreign Investors Under Stress: Evidence from India” http://www.imf.org/external/pubs/ft/wp/2013/wp13122.pdf “Options and Strategies for Fiscal Consolidation in India” http://www.imf.org/external/pubs/ft/wp/2013/wp13127.pdf “Taxing Immovable Property Revenue Potential and Implementation Challenges” http://www.imf.org/external/pubs/ft/wp/2013/wp13129.pdf “That Squeezing Feeling: The Interest Burden and Public Debt Stabilization” http://www.imf.org/external/pubs/ft/wp/2013/wp13125.pdf
“The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally?” http://www.imf.org/external/pubs/ft/wp/2013/wp13130.pdf
“The Fiscal and Welfare Impacts of Reforming Fuel Subsidies in India” http://www.imf.org/external/pubs/ft/wp/2013/wp13128.pdf “The Great Recession and the Inflation Puzzle” http://www.imf.org/external/pubs/ft/wp/2013/wp13124.pdf
OECD – Publication: “May 2013 OECD Economic Outlook”
The global economy is moving forward, but divergence between countries and regions reflects the uneven progress made toward recovery from the economic crisis, according to the OECD’s latest Economic Outlook. Historically high unemployment remains the most serious challenge facing governments. “The global economy is strengthening gradually, but the upturn remains weak and uneven,” said OECD Secretary-General Angel Gurría. “Supportive monetary policies, improving financial market conditions and a gradual restoration of confidence are at the root of the recovery. Also, the fiscal adjustment of the last few years is beginning to pay off. Several countries are close to stabilising their government debt-to-GDP ratios and ensuring a gradual decline in indebtedness over the longer term,” Mr Gurría said. http://www.oecd.org/newsroom/global-economy-advancing-but-pace-of-recoveryvaries.htm (Press Release)
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http://www.oecd.org/about/secretary-general/presentation-of-the-may-2013-oecdeconomic-outlook.htm (Presentation of May 2013 OECD Economic Outlook: Speech made by Mr Angel GurrĂa, OECD Secretary-General and video of the Press Conference) http://www.oecd.org/economy/outlook/economicoutlook.htm (Report)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 29-May 30-May close China 6.23 6.13 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,774.00 9,805.00 9,808.00 Japan 86.75 101.31 101.16 100.65 Korea 1,064.40 1,127.05 1,132.92 1,127.45 Malaysia 3.06 3.03 3.08 3.07 Philippines 41.01 41.61 42.49 42.29 Singapore 1.22 1.26 1.27 1.26 Thailand 30.59 29.97 30.17 30.17 Vietnam 20,840.00 21,000.00 21,008.00 21,008.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.08 0.01 -0.03 0.51 0.49 0.25 0.47 0.20 0.00 0.00
2013 YTD (%chg) 1.7 -0.2 -1.6 -13.2 -5.7 -1.2 -3.4 -3.4 0.5 -0.8
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,288.5 22,618.7 5,155.1 14,612.5 1,973.5 1,773.1 7,268.9 3,393.2 1,607.5 500.2
OVERNIGHT LENDING RATE (%) 29-May 30-May 3.050 3.400 0.076 0.077 4.170 4.170 0.093 0.095 2.500 2.500 3.000 3.000 -2.456 0.055 0.059 0.059 2.750 2.500 1.000 0.887
CREDIT DEFAULT SWAP (IN BPS) 28-May China 79.08 Hong Kong SAR 44.84 Indonesia 151.00 Japan 71.88 Korea 71.95 Malaysia 82.32 Philippines 93.18 Thailand 85.29 Vietnam 205.04
29-May 80.85 44.80 158.65 74.11 73.20 84.29 97.08 87.26 206.51
29-May 2,324.0 22,554.9 5,200.7 14,326.5 2,001.2 1,783.5 7,228.6 3,367.5 1,601.6 515.1
bps change 35.00 0.14 0.00 0.25 0.00 0.00 251.10 0.00 -25.00 -11.30
30-May 2,317.7 22,484.3 5,129.6 13,589.0 2,000.1 1,779.5 6,953.4 3,332.2 1,592.0 521.5
% change -0.27 -0.31 -1.37 -5.15 -0.05 -0.22 -3.81 -1.05 -0.60 1.23
2013 YTD (%chg) 2.1 -3.6 18.0 30.7 -1.5 6.3 18.6 4.1 13.1 24.6
3-MONTH INTERBANK LENDING RATE (%) 29-May 30-May bps change 3.882 3.882 -0.03 0.377 0.377 0.00 4.904 4.906 0.29 0.230 0.230 0.00 2.670 2.670 0.00 3.210 3.210 0.00 0.960 0.832 -12.80 0.373 0.373 0.00 2.795 2.606 -18.92 4.333 3.667 -66.60
bps change 1.77 -0.04 7.66 2.23 1.25 1.98 3.90 1.97 1.47
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Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 29-May 30-May Gold Spot (in US$ per 1,393.0 1,407.7 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change 1.06
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 31-Aug 30-Sep 31-Oct 3,272.9 3,285.1 3,287.4 China 298.2 301.2 301.7 Hong Kong SAR 109.0 110.2 110.3 Indonesia 1,273.2 1,277.0 1,274.2 Japan 316.9 322.0 323.5 Korea 134.9 137.5 138.3 Malaysia 80.7 82.0 81.7 Philippines 246.2 252.1 254.2 Singapore 179.2 183.6 181.5 Thailand 20.8 21.3 21.4 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 306.5 149.9 752.6 2.0 0.4 Hong Kong SAR 107.3 51.8 43.9 2.1 2.4 Indonesia 1,258.0 68.1 2,371.0 18.5 0.5 Japan 328.8 155.1 126.7 2.1 2.6 Korea 140.3 57.8 30.4 2.4 4.6 Malaysia 83.2 20.1 8.5 4.1 9.8 Philippines 261.7 119.0 964.3 2.2 0.3 Singapore 177.8 69.4 60.7 2.6 2.9 Thailand 23.2 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
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DATA RELEASES FOR THE DAY Indicators
Economies
PHILIPPINES PHILIPPINES HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA
GDP sa (QoQ) GDP YoY Retail Sales – Volue (YoY) Retail Sales – Volume (YoY) Japan Buying Foreign Bonds JPY Japan Buying Foreign Stocks JPY Foreign Buying Japan Bonds JPY Foreign Buying Japan Stocks JPY Industrial Production (MoM) Industrial Production (YoY)
Period
1Q 1Q Apr Apr May 24 May 24 May 24 May 24 Apr Apr
Last
Previous
2.2% 7.8% 20.7% 19.4% -1117.3B -104.9B -457.2B 27.4B 0.8% 1.7%
1.5% 6.8% 9.8% 10.2% -804.4B -136.9B 17.7B 716.0B -2.6% -3.0%
SELECTED ECONOMIC RELEASES CALENDAR (27 – 31 May 2013) Expected Release Date
Economies
Indicators
Period
5/27/2013
HONG KONG HONG KONG HONG KONG
EXPORTS YoY% IMPORTS YoY% Trade Balance
Apr Apr Apr
5/28/2013 5/29/2013
JAPAN SOUTH KOREA SOUTH KOREA
Corp Service Price Index (YoY) % Current Account in US$ Million Goods Balance in US$ Million
Apr Apr Apr
THAILAND PHILIPPINES PHILIPPINES HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA JAPAN JAPAN JAPAN JAPAN THAILAND THAILAND
Benchmark Interest Rate GDP sa (QoQ) GDP YoY Retail Sales – Volue (YoY) Retail Sales – Volume (YoY) Japan Buying Foreign Bonds Japan Buying Foreign Stocks Foreign Buying Japan Bonds Foreign Buying Japan Stocks Industrial Production (MoM) Industrial Production (YoY) Jobless Rate Natl CPI YoY Natl CPI Ex-Fresh Food YoY Natl CPI Ex-Food, Energy YoY Total Trade Balance Current Account Balance (USD)
May 29 1Q 1Q Apr Apr May 24 May 24 May 24 May 24 Apr Apr Apr Apr Apr Apr Apr Apr
5/30/2013
5/31/2013
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 31 May 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
The Nikkei 225 Stock Average climbed 1.4% to 13,774.54, although the Topix added just 0.1% to close at 1,135.78 in Tokyo after yesterday dropping 3.8%. A rebound in the Topix was limited by falling carmakers and shipping lines as price swings continued near a twoyear high. Historical volatility was near the highest since the March 2011 disaster. Share rose as much as 2% in the morning session as weaker-than-expected U.S. data bolstered the case for continued Federal Reserve stimulus.
The yen climbed with U.S. dollars as German retail sales data dropped. It rose with the dollar as European stocks fell after data showed retail sales in Germany unexpectedly declined for a third month in April (Retail Sales MoM data in April was -0.4%, lower than market expectation of +0.2%), spurring demand for safer assets. Japan’s currency headed for weekly gains against all but one of its 16 major peers as a slide in Japanese stocks increased pressure on Prime Minister Shinzo Abe to revive the economy.
Gold traded near a two-week high, heading for the best week in a month, on speculation that the U.S. Federal Reserve will maintain record stimulus to bolster growth. Gold has dropped 16% this year as equities rallied and the dollar strengthened amid concern that the Fed may slow the pace of stimulus. Data yesterday showed that the U.S. economy grew at an annualized 2.4% pace in the first quarter, down from a preliminary reading of 2.5%, while jobless claims increased.
BREAKING NEWS GLOBAL
The U.S. GDP growth rate was slightly revised from 2.5% to 2.4%. The U.S. economy expanded slightly less than previously estimated in the first quarter as slower inventory building and cutbacks in government spending overshadowed the biggest gain in consumer purchases since the end of 2010. The median forecast in a Bloomberg survey called for no revision from the 2.5% pace initially reported. The boost to household wealth from rising home values and stock prices is allowing Americans to weather higher payroll taxes and sustain purchases, the biggest part of the economy. Resilient consumer spending, further housing market progress and job gains will help the expansion strengthen in the second half of the year as the fallout from federal budget cuts dissipates.
The British Chambers of Commerce raised U.K. economic growth forecast as confidence improved. Accordingly, the U.K. economy will grow through 2015 faster than previously forecast (Revised outlook: 0.9% in 2013, 1.9% in 2014, and 2.4% in 2015) as separate data showed consumer confidence increased to a six-month high in May. The reports follow a survey that showed companies are becoming more optimistic about the economic outlook. Bank of England Governor Mervyn King said on May 15 that an economic recovery is “in sight” as officials raised their growth projection. Even so, King and two other policy makers unsuccessfully voted to expand bond purchases this month, arguing that further stimulus was needed to absorb slack in the labor market and that the outlook for growth was “poor.” Page 1 of 7
Australian bank recorded their worst monthly performance in three years as investors cashed out of a rally that drove financial shares to a record high in April. The S&P/ASX 200 Banks index plunged 12% this month, its biggest decline since May 2010. The International Monetary Fund this week lowered its growth forecasts for China, Australia’s biggest trading partner, to 7.75% this year and next, from earlier projections of 8% for 2013 and 8.2% in 2014. Investment in commodities and energy has peaked, threatening to slow Australia’s economy, the government said this month.
REGIONAL
Economic indicators support Abenomics. Japan’s industrial production rose 1.7% in April from March, exceeding the highest estimate in a Bloomberg News survey. The pace quickened from 0.9% the previous month, a Trade Ministry report showed in Tokyo today. Although national consumer prices fell for a sixth month in April, a price gauge for the city of Tokyo rose in May for the first time in four years. The International Monetary Fund endorsed Abe’s policies and Bank of Japan easing today, saying that a slide in the yen is “not problematic,” provided the government rolls out a “complete package” of fiscal and structural reforms. Abe and BOJ Governor Haruhiko Kuroda can achieve 2% inflation in the near to medium term so long as additional measures complement BOJ easing, according to the IMF.
Office rents in Jakarta are surging at rates faster than the rest of the Asia-Pacific region, as demand from companies in Southeast Asia’s biggest economy outpaces the supply of new buildings. Rents for the highest-quality offices in the Indonesian capital jumped 36% in the first quarter from a year earlier, driving a 30% increase in rents across all buildings, according to broker Jones Lang LaSalle Inc. They will climb as much as 25% in the next two years, groups including the broker and developer PT Jakarta Land forecast. Indonesia’s economy grew more than 6% for 10 straight quarters, helped by record-low interest rates and foreign investment. Companies including DHL, the freight company of Deutsche Post AG, and Toyota Motor Corp. (7203), the world’s biggest carmaker, have boosted operations in the country, while General Motors Co., Volkswagen AG and Apple Inc. are seeking entrance to tap the wealth of the country’s growing middle class.
Indonesia’s rupiah forwards headed for the biggest monthly decline in a year. The government wants to cushion the impact of higher energy prices on the poor by providing compensation which requires consultation with parliament, Energy and Mineral Resources Minister Jero Wacik said yesterday. The authorities announced on May 22 the cost of subsidized gasoline will be increased by 2,000 rupiah ($0.20) from June. The shortfall in Indonesia’s current account, the broadest measure of trade, was $5.27 billion in the first three months of the year, the sixth consecutive quarterly deficit.
Top Finnish fund deserts Thailand for Vietnam seeking growth. PYN Elite (ELITE), Finland’s best-performing fund, is helping to drive a stock rally in Vietnam as it abandons Thailand, where the portfolio has reached annual returns of almost 25% for the past 14 years. “Vietnam’s economy will grow faster than Thailand’s economy during the next 10 years,´´ Deryng said. ‘‘As Vietnam’s stock exchange is trading below historical average valuations and Thailand above them, it’s clear that the Vietnamese market has a more attractive growth potential.” International investors are buying the most Vietnamese stocks in five years, lured by Southeast Asia’s cheapest valuations and government efforts to boost
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growth. The country’s benchmark index rose the most in Asia to a 27-month high on May 30. IFIs NEWS (compiled from their websites) ADBI - Working Papers The ADBI has publicised the following working papers:
“Development Trajectories, Emission Profile, and Policy Actions: Singapore” http://www.adbi.org/files/2013.05.30.wp424.emission.profile.policy.actions.singapore. pdf
“Governance and Economic Integration: Stakes for Asia” http://www.adbi.org/files/2013.05.31.wp425.gov.economic.integration.stakes.asia.pdf
IFC – Press Release: IFC supports plant to produce fuel tanks for compressed natural gaspowered vehicles in Thailand
IFC will lend €20 million to Chalybs Cylinders Limited of Thailand to help finance construction of a manufacturing plant that will produce seamless fuel tanks critical for the production of vehicles powered by compressed natural gas (CNG). This investment will promote employment, increase productivity through new technology, and support development of the supply chain for environmentally friendly CNG automobiles in Asia. http://www.ifc.org/ifcext/Pressroom/IFCPressRoom.nsf/0/D55218BA7942969A85257B7B0 046C0DA
IMF – Press Release: IMF Mission Concludes the 2013 Article IV Consultation with Japan
An IMF team, led by Mr. Jerald Schiff, Deputy Director for the Asia and Pacific Department, visited Tokyo during May 21 - 31 to conduct the annual Article IV discussions with Japan. The following is an excerpt of the statement issued by the Mission at the conclusion of the visit: “The economic recovery is gaining traction, driven in large part by the adoption of the new Quantitative and Qualitative Monetary Easing (QQME) framework. The success of the authorities’ new policies (“the three arrows”) depends crucially on the implementation of ambitious fiscal and growth reforms, with initial plans in these areas to be unveiled this summer. The rewards of a complete package of reforms are potentially large. Successful implementation would not only benefit Japan, but also strengthen growth and stability of the global economy.” http://www.imf.org/external/np/sec/pr/2013/pr13194.htm (Press Release) http://www.imf.org/external/np/ms/2013/053113.htm (2013 Article IV Consultation with Japan Concluding Statement of the IMF Mission)
IMF – Publication: “Fifth Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations”
On May 30, 2013, the IMF Executive Board has concluded the Fifth Periodic Monitoring Report (PMR) with regards to the implementation of recommendations made by the Independent Evaluation Office (IEO) which are endorsed by the Executive Board. The Executive Board supported the conclusions stated in Paragraph 8 of this report. http://www.imf.org/external/np/sec/pn/2013/pn1362.htm (Press Release) Page 3 of 7
http://www.imf.org/external/np/pp/eng/2012/092412.pdf (Report: Fifth Periodic Monitoring Report) World Bank – Press Release: World Bank Extends Support to Trade Facilitation in Lao PDR
On May 28, 2013, the World Bank Board of Executive Directors approved a US$6.5 million in additional grant financing for the Customs and Trade Facilitation Project in Lao PDR. The grant builds on the achievements of the original International Development Association (IDA) credit of US$6 million, which was approved in 2008. The newly approved financing compliments the Bank’s support for the program which is aimed at improving the efficiency and effectiveness of customs administration and simplifying customs processes and procedures to eliminate duplication, redundancy, reduce transaction costs and time to clear goods. The Project also aims to support government objectives in achieving high rates of economic growth that translate into meaningful poverty reduction, increased transparency and accountability. http://www.worldbank.org/en/news/press-release/2013/05/28/world-bank-extendssupport-to-trade-facilitation-in-lao-pdr (Press Release) http://www.worldbank.org/projects/P144992/lao-pdr-customs-trade-facilitation-projectadditional-financing?lang=en (Project’s Details: Lao PDR Customs and Trade Facilitation Project - Additional Financing)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 30-May 31-May close China 6.23 6.13 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,774.00 9,808.00 9,877.00 Japan 86.75 101.31 100.73 100.38 Korea 1,064.40 1,127.05 1,127.45 1,129.64 Malaysia 3.06 3.03 3.07 3.10 Philippines 41.01 41.61 42.29 42.27 Singapore 1.22 1.26 1.26 1.26 Thailand 30.59 29.97 30.13 30.26 Vietnam 20,840.00 21,000.00 21,008.00 21,013.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.05 0.00 -0.70 0.35 -0.19 -0.75 0.05 -0.51 -0.43 -0.02
2013 YTD (%chg) 1.6 -0.2 -2.3 -13.0 -5.8 -1.9 -3.3 -3.4 0.2 -0.8
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,288.5 22,618.7 5,155.1 14,612.5 1,973.5 1,773.1 7,268.9 3,393.2 1,607.5 500.2
30-May 2,317.7 22,484.3 5,129.6 13,589.0 2,000.1 1,774.9 6,953.4 3,336.0 1,581.3 521.5
31-May 2,300.6 22,392.2 5,068.6 13,774.5 2,001.1 1,769.2 7,022.0 3,320.8 1,560.5 518.4
% change -0.74 -0.41 -1.19 1.37 0.05 -0.32 0.99 -0.46 -1.32 -0.59
2013 YTD (%chg) 1.4 -3.9 16.6 32.5 -1.5 5.6 19.8 3.7 10.9 23.9
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China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (%) 30-May 31-May 3.400 4.600 0.077 0.078 4.170 4.171 0.095 0.090 2.500 2.500 3.000 3.000 0.055 1.345 0.076 0.076 2.500 2.500 0.887 0.880
bps change 120.00 0.07 0.07 -0.50 0.00 0.00 129.00 0.00 0.00 -0.70
3-MONTH INTERBANK LENDING RATE (%) 30-May 31-May bps change 3.882 3.882 0.03 0.377 0.377 0.00 4.906 4.906 0.00 0.230 0.230 0.00 2.680 2.680 0.00 3.210 3.210 0.00 0.832 1.235 40.30 0.373 0.373 0.00 2.606 2.602 -0.38 3.667 4.000 33.30
CREDIT DEFAULT SWAP (IN BPS) 29-May 30-May bps change China 80.85 81.32 0.47 Hong Kong SAR 44.80 44.80 0.00 Indonesia 158.65 164.01 5.36 Japan 74.11 76.07 1.95 Korea 73.20 73.91 0.71 Malaysia 84.29 84.76 0.47 Philippines 97.08 97.08 0.00 Thailand 87.26 88.23 0.97 Vietnam 206.51 208.95 2.44 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 30-May 31-May Gold Spot (in US$ per 1,414.0 1,415.4 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change 0.10
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
2012 China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 20.8
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 21.4
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 23.2
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
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Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
3 months imports of goods & services
Short-term external debt
Import cover (Qtrs of imports
(US$bn)
(US$bn)
(US$bn)
covered by reserves)
Reserves over short-term debt
3,442.7 521.2 572.8 6.6 6.0 China 306.5 149.9 752.6 2.0 0.4 Hong Kong SAR 107.3 51.8 43.9 2.1 2.4 Indonesia 1,258.0 68.1 2,371.0 18.5 0.5 Japan 328.8 155.1 126.7 2.1 2.6 Korea 140.3 57.8 30.4 2.4 4.6 Malaysia 83.2 20.1 8.5 4.1 9.8 Philippines 261.7 119.0 964.3 2.2 0.3 Singapore 177.8 69.4 60.7 2.6 2.9 Thailand 23.2 30.9 10.0 Vietnam Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
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DATA RELEASES FOR THE DAY Economies
JAPAN JAPAN JAPAN JAPAN THAILAND THAILAND
Indicators
Period
Jobless Rate Natl CPI YoY Natl CPI Ex-Fresh Food YoY Natl CPI Ex-Food, Energy YoY Total Trade Balance Current Account Balance (USD)
Apr Apr Apr Apr Apr Apr
Last
Previous
4.1% -0.7% -0.4% -0.6% -$1620M -$3361M
4.1% -0.9% -0.5% -0.8% $2025M $1936M
SELECTED ECONOMIC RELEASES CALENDAR (27 – 31 May 2013) Expected Release Date
Economies
Indicators
Period
5/27/2013
HONG KONG HONG KONG HONG KONG
EXPORTS YoY% IMPORTS YoY% Trade Balance
Apr Apr Apr
5/28/2013 5/29/2013
JAPAN SOUTH KOREA SOUTH KOREA
Corp Service Price Index (YoY) % Current Account in US$ Million Goods Balance in US$ Million
Apr Apr Apr
THAILAND PHILIPPINES PHILIPPINES HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA JAPAN JAPAN JAPAN JAPAN THAILAND THAILAND
Benchmark Interest Rate GDP sa (QoQ) GDP YoY Retail Sales – Volue (YoY) Retail Sales – Volume (YoY) Japan Buying Foreign Bonds Japan Buying Foreign Stocks Foreign Buying Japan Bonds Foreign Buying Japan Stocks Industrial Production (MoM) Industrial Production (YoY) Jobless Rate Natl CPI YoY Natl CPI Ex-Fresh Food YoY Natl CPI Ex-Food, Energy YoY Total Trade Balance Current Account Balance (USD)
May 29 1Q 1Q Apr Apr May 24 May 24 May 24 May 24 Apr Apr Apr Apr Apr Apr Apr Apr
5/30/2013
5/31/2013
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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