MARKET UPDATE FOR ASEAN+3 March 2013
MARKET UPDATE FOR ASEAN+3 1 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks rose with the regional benchmark index heading for its biggest weekly advance in two months. Japanese shares rallied after a drop in consumer prices stoked speculation the Bank of Japan will add to monetary easing to beat deflation. The MSCI Asia Pacific Index added 0.1 percent to 135.24 as of 5:08 p.m. in Tokyo, reversing losses of as much as as 0.4 percent. About four shares fell for every three that rose on the gauge. The measure yesterday capped a fourth month of advance, the longest winning streak since September 2009, amid signs of economic recovery in the U.S. and Chinese and on bets Japanese Prime Minister Shinzo Abe will step up efforts to boost the world’s third-largest economy.
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Dollar outperforms in best month since May on budget cut. The dollar led gains in world markets last month, beating global measures of bonds, stocks and commodities, as the threat of U.S. budget cuts proved no barrier to investors snapping up American assets. Intercontinental Exchange Inc.’s Dollar Index, which tracks the currency against those of six major U.S. trading partners, climbed 3.5 percent in February, ending a twomonth decline. The dollar’s advance underscores how investors are backing the world’s biggest economy to weather the effects of the spending reductions, known as sequestration, that take effect today. While the non-partisan Congressional Budget Office said the cuts will wipe 0.6 percent off U.S. growth this year, home sales, consumer confidence and employment are improving at the same time that the Federal Reserve vows to continue its unprecedented support.
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WTI oil dropped to the lowest price this year and headed for a second weekly decline as OPEC production rose for the first time in six months. Futures slid as much as 0.7 percent to $91.43 a barrel in New York, the lowest intraday price since Dec. 31. Output in the Organization of Petroleum Exporting Countries gained 97,000 barrels to an average of 30.7 million a day last month, a Bloomberg survey survey of oil companies, producers and analysts showed. WTI for April delivery was down 29 cents at $91.76 a barrel in electronic trading on the New York Mercantile Exchange at 3:45 p.m. Singapore time. Meanwhile, Brent for April settlement dropped 30 cents to $111.08 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL •
Americans’ confidence advanced last week to the highest level this year and jobless claims dropped more than forecast. The Bloomberg Consumer Comfort Index rose to minus 32.8 in the week ended February 24 from minus 33.4 as the share of Americans with a positive view of the world’s largest economy matched the highest since March 2008. Applications for jobless benefits fell 22,000 last week to 344,000, Labor Department figures showed. Improving job prospects may be brightening consumers’ moods. Employers hired a net 157,000 workers last month following revised gains of 196,000 and 247,000 in December and November that were bigger than initially estimated. Today’s Labor Department report showed the number of people collecting
unemployment insurance dropped to 3.07 million in the week ended February 16, the lowest level since June 2008. •
India seeks to curb deficit as spending on poor climbs. The country targets a shortfall of 4.8 percent of gross domestic product in the 12 months starting April 1, and achieved 5.2 percent in 2012-2013, Finance Minister Palaniappan Chidambaram said in his budget speech in New Delhi yesterday. Finance Minister allocated 330 billion rupees ($6.1 billion) for the ruling coalition’s flagship rural jobs program and 100 billion rupees for a plan to give the poor cheap food grains, ahead of a general election due by 2014. Total expenditure will climb to 16.7 trillion rupees in 2013-2014 from an estimated 14.3 trillion rupees this financial year, budget documents showed. Gross market borrowing was set at a record 6.29 trillion rupees for 2013-2014, an increase of almost 13 percent. Net borrowing will be 4.84 trillion rupees.
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The Netherlands is considering even tougher measures amid a public backlash against the industry. After paring bonuses for top banking executives to 100 percent of annual salaries in 2010, the Dutch government plans to limit bonuses to 20 percent of wages across the industry. At the center of the campaign is Dutch Finance Minister Jeroen Dijsselbloem, who was appointed head of the eurogroup of finance ministers in January. Dijsselbloem, like peers elsewhere on the continent, and his Labor Party are concerned they’re losing the support of voters as taxpayers foot the bill for hundreds of billions of euros in bank bailouts.
REGIONAL •
Two Chinese manufacturing indexes showed a slower-than-estimated pace of expansion. The official Purchasing Managers’ Index was 50.1 in February, the weakest in five months and down from 50.4 in January, a report from the National Bureau of Statistics and China Federation of Logistics and Purchasing showed today in Beijing. A separate gauge from HSBC Holdings Plc and Markit Economics dropped to a four-month low of 50.4 from 52.3. Readings above 50 indicate expansion. The official index compares with the 50.5 median estimate in a Bloomberg News survey of 31 analysts. The median forecast of 14 economists for the HSBC gauge was 50.6, after a preliminary reading of 50.4 issued February 25. A measure of new orders in the government survey fell to 50.1, a five-month low, while export orders showed a second month of contraction.
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Indonesia’s inflation accelerated to a 20-month high in February on higher food prices and power tariffs. Consumer prices climbed 5.31 percent from a year earlier, after a previously reported 4.57 percent gain in January, the Statistics Bureau said in Jakarta today. Consumer prices rose 0.75 percent last month from January, today’s report showed. Core inflation was 4.29 percent, compared with a previously reported 4.32 percent pace the month before. Higher power tariffs and minimum wages may increase price pressures in coming months, with food prices also still elevated after floods in January.
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Japan’s consumer prices fell for the eighth time in nine months. Consumer prices excluding fresh food fell 0.2 percent in January from a year earlier, the third-straight decline, the statistics bureau said in Tokyo today. While a weaker yen improves the outlook for exporters and pushes up the prices of imported energy and commodities, Page 2 of 10
continued price falls show the scale of the Bank of Japan’s challenge in achieving 2 percent inflation. •
Singapore avoids stimulus as minister acts to curb bubble risk. Singapore Finance Minister Tharman Shanmugaratnam said there’s no need for monetary stimulus in a country with full employment, leaving policy makers reliant on unorthodox tools to prevent asset bubbles. The minister said property prices need to stabilize further even as measures implemented earlier this year begin to take effect. A search for higheryielding assets amid monetary easing in developed economies has fuelled record property prices in Singapore, sparking inflationary pressures and social tensions.
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Thailand’s inflation slowed for a second straight month in February, helped by state subsidies and a stronger baht, and as food prices fell. Prime Minister Yingluck Shinawatra said last month the price of cooking gas for household users will remain fixed till end-March, and also extended a tax cut on diesel. Consumer prices rose 3.23 percent from a year earlier, the Ministry of Commerce said in Nonthaburi province outside Bangkok today, from a previously reported 3.39 percent increase in January. Prices gained 0.21 percent in February from a month earlier, today’s report showed. Core inflation, which excludes fresh food and fuel costs, was 1.57 percent last month. The central bank uses the measure to guide policy and expects price gains will stay below its target of 3 percent this year.
IFIs NEWS (compiled from their websites) ADB – Press Release: $1 Million ADB Project Launched to Support Davao's Sustainable Transport •
The ADB, Department of Transportation and Communications, and City of Davao, together with the Embassy of Japan, have launched a $1 million technical assistance (TA) project funded by the Japan Fund for Poverty Reduction that will support the city in developing a sustainable urban public transport system. This project will help create an enabling environment for a modern, efficient, and affordable public transport system in Davao that can then be replicated across the Philippines. The TA will prepare plans and franchising mechanisms to improve the integration of the public transport system, widen the coverage area, and deliver more transport services to passengers. http://www.adb.org/news/philippines/1-million-adb-project-launched-supportdavaos-sustainable-transport
ADBI – Working Paper: Understanding Innovation in Production Networks in East Asia •
The ADBI publicised the captioned working paper. “This paper explores the "black box" of innovation in the electronics production network in East Asia through a mapping exercise of technological capabilities and an econometric analysis of exporting in the People's Republic of China (PRC), Thailand, and the Philippines. The econometric results confirm the importance of foreign ownership and innovation in increasing the probability of exporting in electronics.” http://www.adbi.org/files/2013.03.01.wp410.understanding.innovation.prod.networ ks.east.asia.pdf
BIS – Speech: Charles Bean: Nominal income targets - an old wine in a new bottle Page 3 of 10
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The BIS has publicised the speech made by Mr Charles Bean, Deputy Governor for Monetary Policy of the Bank of England, at the Institute for Economic Affairs Conference on the State of the Economy, London, 27 February 2013. http://www.bis.org/review/r130228c.pdf?ql=1
BIS – Speech: Mario Draghi: The policy and the role of the European Central Bank during the crisis in the euro area •
The BIS has publicised the speech made by Mr Mario Draghi, President of the European Central Bank, at the Katholische Akademie in Bayern, Munich, 27 February 2013 http://www.bis.org/review/r130228a.pdf?ql=1
BIS – Speech: Paul Fisher: Current issues in monetary policy •
The BIS has publicised the speech made by Mr Paul Fisher, Executive Director for Markets of the Bank of England, at the University of Bristol – London Alumni Event, Bristol, 26 February 2013 http://www.bis.org/review/r130228d.pdf?ql=1
BIS – Speech: Peter Praet: Economic adjustment in the euro area •
The BIS has publicised the speech made by Mr Peter Praet, Member of the Executive Board of the European Bank, at the Institutional Money Congress 2013, Frankurt am Main, 27 February 2013. http://www.bis.org/review/r130228b.pdf?ql=1
G20 – Press Release: World Bank presents umbrella report on financing investments •
During the first G20 Finance Ministers and Central Bank Governors' meeting which was held on February 15-16 in Moscow (Russia), World Bank presented the Umbrella Report on the topic of "Long-Term Investment Financing for Growth and Development". The report was prepared on the basis of analysis made by the WB, IMF, FSB, OECD, UN and other IOs. The G20 Finance Ministers and Central Bank Governors supported this report and decided to create a Study Group for further work in this area. http://www.g20.org/news/20130228/781245645.html (Press Release) http://www.g20.org/load/781245667 (Umbrella Report)
IMF – Press Release: 2012 Article IV Consultation with Malaysia •
The IMF has concluded the Article IV consultation with Malaysia on 11 February 2013. Executive Directors commended the authorities for their skillful policies, which have underpinned Malaysia’s strong macroeconomic performance despite a weak external environment. Directors noted that the external rebalancing of Malaysia’s economy has gained momentum, and that domestic demand is increasingly driving economic growth. Looking ahead, Directors considered that Malaysia’s medium term prospects are favorable, as the authorities continue to focus on safeguarding financial stability, strengthening fiscal sustainability, and securing high and inclusive growth. http://www.imf.org/external/np/sec/pn/2013/pn1324.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr1351.pdf (Staff Report) Page 4 of 10
http://www.imf.org/external/pubs/ft/scr/2013/cr1352.pdf (Financial Sector Stability Assessment) http://www.imf.org/external/pubs/ft/scr/2013/cr1353.pdf Observance of Standards and Codes)
(Report
on
the
IMF – Working Papers •
A Framework for Efficient Government Investment – “Welfare economics, scope and performance of government, externalities, public goods, cost-benefit analysis, subsidies economize on spending without losing effectiveness by modifying the conceptual framework guiding state expenditures. The familiar framework says that state intervention is justified when the spending provides public goods or when the intervention addresses externalities, provided the social return is above a threshold. This paper argues that another consideration needs to be brought into the mix whether, in spite of the externalities, the private sector has an incentive to undertake the activity.” www.imf.org/external/pubs/ft/wp/2013/wp1358.pdf
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Targeting, Cascading, and Indirect Tax Design - “This paper addresses two fundamental issues in indirect tax design. It first revisits the case for reduced rates on items especially important to the poor, establishing conditions under which even very crudely targeted spending measures better serve their interests. It then explores the welfare costs from cascading taxes, showing that these may actually be lower the wider the set of inputs that are taxed but, more to the point—and contrary to the common notion that “a low rate on a broad base” is always good tax policy—may plausibly be large even at a low nominal tax rate and with few stages of production.” http://www.imf.org/external/pubs/ft/wp/2013/wp1357.pdf
World Bank – Press Release: China: World Bank to help improve capacity and management of Meizhou Bay Harbor •
Today the World Bank Board of Directors approved a loan of US$50 million to the People’s Republic of China to improve the capacity of the main navigation channel and enhance the operational management capacity of the Meizhou Bay Harbor. The project will contribute to the achievement of China’s Regional Development Plan for the Strait West Economic Zone and boost the economic and social development of inland areas in Fujian, Jiangxi and Hunan provinces. It will also contribute to the country’s objective of creating a less energy-intensive transport system by reducing the average length of haul between inland traffic generating activities and seaports. The total estimated cost of the Project is US$138.16 million, to be financed by the World Bank loan and funding from the central and local governments as well as Meizhou Bay Harbor Administration Bureau. http://www.worldbank.org/en/news/press-release/2013/02/28/china-world-bank-helpimprove-capacity-management-meizhou-bay-harbor
World Bank – Press Release: World Bank Group President to visit Brazil: Jim Yong Kim and President Dilma Rousseff to Broaden Strategic Partnership •
World Bank Group (WBG) President Jim Yong Kim will visit Brazil from March 4 to 6 aiming to broaden the Group’s strategic partnership with Brazil in the context of the country’s growing role in global development. President Kim is scheduled to meet with President Dilma Rousseff, Finance Minister Guido Mantega, BNDES (Brazil’s Page 5 of 10
Development Bank) President Luciano Coutinho and to visit projects in Rio de Janeiro and Bahia, where he’s also scheduled to meet with local authorities. This will be the first official meeting between the Bank's leader, who took office in July 2012, and President Rousseff. In the last decade, Brazil has raised more than 20 million people out of poverty and laid strong economic foundations for growth and crisis resilience. The WBG has contributed in these efforts and Brazil is a key strategic partner. http://www.worldbank.org/en/news/press-release/2013/02/28/world-bank-grouppresident-visit-brazil-jim-yong-kim-president-dilma-rousseff-broaden-strategicpartnership World Bank – Press Release: World Bank to support higher education reform in Vietnam, and improve school readiness for 5-year olds •
The World Bank Board of Directors today approved a total of US$150 million in two credits to help Vietnam to support and sustain the implementation of the Higher Education Reforms Agenda, and to improve school readiness for 5 year old children. “Improving education outcomes for the population is an important part of Vietnam’s economic and social development agenda, and has been defined as one of the three breakthrough areas in its Socio-Economic Development Strategy for 2011-2020.” Said Victoria Kwakwa, the World Bank Country Director for Vietnam. “The World Bank is pleased to support the strengthening of Vietnam’s education sector to help raise Vietnam’s economic competitiveness.” http://www.worldbank.org/en/news/press-release/2013/02/28/world-banksupport-higher-education-reform-vietnam-improve-school-readiness-5-year-olds
WTO – Press Release: Panel established on Viet Nam’s complaint against US shrimp measure •
The Dispute Settlement Body, on 27 February 2013, established a panel to examine the dispute “US — Anti-Dumping Measures on Certain Shrimp from Viet Nam”. It elected Ambassador Jonathan Fried of Canada as its new chairman. http://www.wto.org/english/news_e/news13_e/dsb_18feb13_e.htm
WTO – Press Release: WTO issues panel report on China’s anti-dumping duties on EU Xray scanners •
On 26 February 2013, the WTO issued the dispute panel report in the case “China – Definitive Anti-Dumping Duties on X-Ray Security Inspection Equipment from the European Union” (WT/DS425/R). http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds425_e.htm#bkmk425r
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FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 28-Feb 1-Mar close China 6.23 6.24 6.22 6.22 Hong Kong 7.75 7.76 7.76 7.76 SAR Indonesia 9,793.00 9,657.00 9,669.00 9,682.00 Japan 86.75 92.68 92.56 92.65 Korea 1,064.40 1,095.80 1,082.90 1,084.56 Malaysia 3.06 3.10 3.09 3.10 Philippines 41.01 40.70 40.66 40.69 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.78 29.75 Vietnam 20,840.00 20,845.00 20,955.00 20,924.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.02
2013 YTD (%chg)
0.2
0.00
-0.1
-0.13 -0.10 -0.15 -0.20 -0.06 0.10 0.10 0.15
-0.3 -5.7 -1.9 -2.0 0.4 -1.4 1.9 -0.4
STOCK MARKET INDEX
2,269.1
Previous wk's close 2,432.4
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
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
2,365.6
2,359.5
-0.26
2013 YTD (%chg) 4.0
23,215.2
23,020.3
22,880.2
-0.61
-1.9
4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0
4,795.8 11,559.4 2,026.5 1,637.6 6,721.5 3,270.0 1,541.6 474.6
4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,271.6 1,547.9 477.2
0.33 0.41 0.00 -0.01 -1.18 0.05 0.41 0.55
10.7 11.7 -0.2 -2.2 13.3 2.2 10.0 14.1
28-Feb
1-Mar
OVERNIGHT LENDING RATE (%) 28-Feb 1-Mar bps change 4.000 4.150 15.00
% change
3-MONTH INTERBANK LENDING RATE (%) 28-Feb 1-Mar bps change 3.895 3.895 0.00
0.091
0.091
0.00
0.383
0.383
0.00
4.179 0.100 2.750 3.000 1.977 0.066 2.750 1.500
4.180 0.078 2.750 3.000 1.725 0.066 2.750 1.922
0.07 -2.25 0.00 0.00 -25.20 0.00 0.00 42.20
4.900 0.270 2.770 3.210 0.290 0.375 2.864 6.167
4.900 0.268 2.770 3.210 0.441 0.375 2.866 6.167
0.00 -0.17 0.00 0.00 15.10 0.00 0.23 0.00
CREDIT DEFAULT SWAP (IN BPS) 27-Feb 28-Feb bps change China 65.20 63.74 -1.47 Hong Kong 45.35 44.35 -1.00 SAR Indonesia 137.69 136.76 -0.94 Japan 72.03 70.60 -1.43 Korea 67.17 66.20 -0.97 Malaysia 78.48 76.53 -1.95 Philippines 99.80 98.89 -0.91 Thailand 90.69 89.74 -0.95 Vietnam 211.74 209.46 -2.28 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.
Page 7 of 10
28-Feb Gold Spot (in US$ per ounce)
1-Mar
1,579.6
% change
1,577.0
-0.17
Sources: Bloomberg & Datastream
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 31-May 3,206.1
30-Jun 3,240.0
31-Jul 3,240.0
2012 31-Aug 30-Sep 3,272.9 3,285.1
31-Oct 3,287.4
30-Nov 3,297.7
31-Dec 3,311.6
2013 31-Jan n.a
301.2
301.7
305.2
317.3
321.0
110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
China Hong Kong 291.9 295.0 296.3 298.2 SAR Indonesia 111.5 106.5 106.6 109.0 Japan 1,277.7 1,270.5 1,272.8 1,273.2 310.9 312.4 314.4 316.9 Korea Malaysia 136.0 134.2 134.5 134.9 Philippines 76.1 76.1 79.8 80.7 Singapore 237.7 243.4 244.1 246.2 Thailand 172.6 174.7 175.3 179.2 19.9 19.7 20.0 20.8 Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Reserves - latest
3 months imports of goods/serv (US$bn) 504.3
Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6
Reserves over short-term debt
(US$bn) China 3,311.6 Hong Kong 321.0 144.7 711.2 2.2 SAR Indonesia 108.8 50.3 43.9 2.2 Japan 1,267.3 70.4 2,255.1 18.0 Korea 327.0 150.9 126.7 2.2 Malaysia 139.7 59.2 32.4 2.4 Philippines 83.8 19.3 8.0 4.4 Singapore 259.3 118.6 924.3 2.2 Thailand 181.6 68.0 57.2 2.7 Vietnam n.a 25.4 10.0 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.
Page 8 of 10
5.8 0.5 2.5 0.6 2.6 4.3 10.5 0.3 3.2 -
Country
JAPAN JAPAN THAILAND THAILAND JAPAN JAPAN CHINA KOREA KOREA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA
Expected Release Date 2/25/2013
2/26/2013
2/27/2013
2/28/2013
DATA RELEASES FOR THE DAY Indicators Period
National CPI YoY % National CPI Ex Food, Energy YoY % Consumer Price Index (YoY)% Core CPI (YoY)% Jobless Rate % Job-To-Applicant Ratio PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% HSBC Manufacturing PMI Total Imports (YoY)% Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn)
Jan Jan Feb Feb Jan Jan Feb Feb Feb Feb Jan Feb Jan Feb Feb Jan
Last
-0.3 -0.7 3.23 1.57 4.2 0.85 50.1 -10.7 -8.6 50.4 6.8 4.29 -1.2 5.31 0.75 -171
Previous
-0.1 -0.6 3.39 1.59 4.3 0.83 50.4 3.9 10.9 52.3 -5.4 4.32 -9.9 4.57 1.03 -188
SELECTED ECONOMIC RELEASES CALENDAR (25 Feb – 1 Mar 2013)
Country CHINA SINGAPORE HONG KONG HONG KONG HONG KONG VIETNAM VIETNAM VIETNAM VIETNAM PHILIPPINES PHILIPPINES SINGAPORE THAILAND THAILAND KOREA KOREA HONG KONG HONG KONG JAPAN KOREA KOREA KOREA KOREA MALAYSIA HONG KONG
Indicators HSBC Flash China Manufacturing PMI CPI (YoY)% Imports YoY% Exports YoY% Trade Balance (HKD bn) Imports YTD (YoY)% Exports YTD (YoY)% Industrial Production Index YoY % Retail Sales YTD (YoY)% Total Imports (YoY)% Trade Balance (USD mn) Industrial Production YoY% Customs Imports (YoY)% Customs Exports (YoY)% SK Consumer Confidence Current Account in (USD mn) GDP (YoY)% GDP sa (QoQ)% Industrial Production YOY% Business Survey- Non-Manufacturing Business Survey- Manufacturing Industrial Production (YoY)% Industrial Production (MoM)% Unemployment Rate % Govt Mthly Budget Surp/Def (HKD bn)
Period Feb Jan Jan Jan Jan Feb Feb Feb Feb Dec Dec Jan Jan Jan Feb Jan 4Q 4Q Jan P Mar Mar Jan Jan 4Q Jan
Page 9 of 10
3/1/2013
THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND INDONESIA JAPAN INDONESIA JAPAN JAPAN THAILAND THAILAND JAPAN JAPAN CHINA KOREA KOREA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA
Total Trade Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index Foreign Reserves (USD bn) Consumer Confidence Index Official Reserve Assets (USD bn) Money Supply - M2 (YoY)% National CPI YoY % National CPI Ex Food, Energy YoY % Consumer Price Index (YoY)% Core CPI (YoY)% Jobless Rate % Job-To-Applicant Ratio PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% HSBC Manufacturing PMI Total Imports (YoY)% Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn)
Jan Jan Jan Jan Jan Feb 22 Feb Feb Jan Jan Jan Feb Feb Jan Jan Feb Feb Feb Feb Jan Feb Jan Feb Feb Jan
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 04 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks drop as China tights property mortgage rules. Asian stocks dropped, with the regional benchmark index heading for its second day of decline, after China tightened mortgage rules to cool the property market. The MSCI Asia Pacific Index fell 0.9 percent to 133.53 as of 3:39 p.m. in Tokyo. Hong Kong’s Hang Seng Index slipped 1.5 percent. South Korea’s Kospi Index fell 0.7 percent and China’s Shanghai Composite Index dropped 3.6 percent, heading for its lowest close since Jan. 11. Japan’s Nikkei 225 Stock Average added 0.4 percent. European stock futures declined, indicating the Stoxx Europe 600 Index will fall for a second day, following Asian shares lower. U.S. index futures also dropped.
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Crude-oil futures edged lower in Asian trade after Nymex tumbled 1.5% Friday on concerns about the $85 billion in U.S. automatic budget cuts started on Friday. On the New York Mercantile Exchange light, sweet crude futures for delivery in April traded at $90.44 a barrel at 0628 GMT–down $0.24 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange fell $0.04 to $110.36 a barrel. The Brent-Nymex spread is up from around US$16/bbl in mid January to more than $19/bbl currently.
BREAKING NEWS GLOBAL •
Euro leaders demand austerity as Italy nears new vote. European leaders demanded that euro members press on with budget cuts to end the debt crisis as Italy edged closer to a new election after an anti-austerity vote last week resulted in political deadlock. Finance ministers from the 17-member single-currency bloc meet in Brussels today to discuss issues including a bailout for Cyprus. Italian political instability, after last week’s election ended in a four-way split, threatens to reignite concern about the deepening of the debt crisis. Voters in the bloc’s third-largest economy revolted against Germaninspired austerity measures, handing the party of comedian-turned-politician Beppe Grillo more than 25 percent of the vote with its anti-spending cut message and a call for a referendum on euro membership.
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London luxury-home prices rise most in 10 months on pound. Central London luxuryhome prices unexpectedly rose at the fastest pace in 10 months in February as the British pound’s depreciation helped attract international investors. The average price of a house or apartment in the city’s most expensive neighborhoods climbed 0.9 percent from January, according to an index compiled by the broker. On March 1, an industry report showed U.K. manufacturing unexpectedly shrank in February and the pound fell to less than $1.50 for the first time since July 2010.
REGIONAL •
South Korean inflation slows in February. South Korea's inflation rate slowed slightly to 1.4 percent in February, well below the central bank's target band and offering more
room for monetary easing, government data showed. The figure, which compares with a rate of 1.5 per cent in January, is below the Bank of Korea's inflation target band of 2.5 to 3.5 percent, and offers the central bank the option of a further interest rate cut to help spur growth. The central bank kept the key rate unchanged at 2.75 percent in February for a fourth straight month. Core inflation, which excludes volatile energy and food prices, was at 1.3 per cent, compared with 1.2 per cent the previous month. The central bank recently slashed its forecast for economic growth for this year to 2.8 per cent from 3.2 per cent estimated last October. •
Kuroda pledges bolder action as Bank of Japan governor. Haruhiko Kuroda said that the Bank of Japan will do whatever is needed to end 15 years of deflation should he be confirmed as governor and indicated that open-ended asset purchases could start sooner than next year. Prime Minister Shinzo Abe’s nomination of Kuroda has spurred forecasts for more aggressive easing after Masaaki Shirakawa exits the job on March 19, with the yield on 5-year government bonds hitting a record low today. The “scale and scope” of the assets purchased by the central bank so far are not enough to achieve a 2 percent inflation target, Kuroda said. The central bank currently buys government debt maturing up to three years, as well as exchange- traded funds and other risk assets. Kuroda said he would consider bringing forward open-ended purchases, due to start next year.
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Inflation is controllable, People's Bank of China deputy Yi Gang says. The mainland's inflation rate will rise "slightly" this year, partly due to lagging effects, but Beijing is confident that it can keep price pressures under control, a senior central banker says, suggesting any dramatic tightening of monetary policy is unlikely. Speaking on the sidelines of the opening session of the Chinese People's Political Consultative Conference, deputy central bank governor Yi Gang said the consumer price index might rise to about 3 per cent, compared with 2.6 per cent last year. He declined to comment on whether monetary policy should be used to curb a rise in housing prices. The State Council rolled out new directives on Friday, urging authorities to curb speculative activities through steps including strict implementation of a 20 per cent tax on earnings from property reselling.
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Indonesian Palm Reserves Seen Declining by Bangun on Demand. Palm oil inventories in Indonesia, the world’s largest producer, may drop 8 percent this year as a significant increase in demand outstrips record supplies, according to Derom Bangun, chairman of the nation’s palm board. Prices rallied, snapping eight days of losses. Stockpiles of the oil used in food and fuels may contract to 2.3 million metric tons from the 2.5 million tons estimated at the end of 2012, said Bangun. Production may reach an all-time high of about 30 million tons, Bangun said in a phone interview from Jakarta, reiterating a forecast made on Feb. 18. The world’s most-used cooking oil is mired in a bear market as supply and stockpiles have surged to records.
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Direct trade in RMB increases in Thailand. The Bank of England recently announced it has reached an agreement with the People's Bank of China to establish a currency swap arrangement. That could make London the European hub of Renminbi trade, which has increased rapidly since currency restrictions were liberalized in 2010. In Asia, direct trade in Renminbi has been underway for some years, and Thailand has seen a sharp rise in usage of China’s currency. In Thailand, research by one of the Kingdom's leading
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banks has shown Renminbi direct trade has increased five times in the past year. The growth area is between SME’s. •
Cambodia’s Exports to Malaysia rise. Cambodia’s exports of agricultural products to Malaysia rose sharply last year compared to a year earlier, according to a press release from the Malaysian embassy to Cambodia, with milled rice and crude rubber accounting for most of the total. Agricultural goods from Cambodia formed 79 per cent of total imports, which reached $101 million compared to $55.5 million the previous year. Crude rubber was the major component, with a value of $69 million. The release says that since Cambodia launched its Policy on the Promotion of Paddy Rice Production and Export of Milled Rice in 2010, Malaysia has taken a keen interest in diversifying rice import sources. Milled-rice imports from Cambodia have consistently increased from $400,000 in 2010 to $9.5 million in 2011 and $24.3 million in 2012. According to data from the single-window secretariat for facilitating milled rice exports, Malaysia ranked top of the listed importers of Cambodian milled rice with nearly 7,000 tonnes of a total 25,726 tonnes shipped in January.
IFIs NEWS (compiled from their websites) ADB – Press Release: ADB Toughens Anti-corruption Drive
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The ADB toughened measures to battle fraud and corruption in 2012, as complaints reached a new annual high. For 2013, ADB’s Office of Anticorruption and Integrity (OAI) will continue to channel its work to ADB’s front line, to maximize opportunities for ensuring ADB’s development funds are used with regard to value for money, for their intended purposes, and not usurped through fraudulent or corrupt practices. It will adopt and continue measures such as increased support for Resident Mission staff, customized project procurement related reviews, and enhanced capacity for due diligence advice. http://www.adb.org/news/adb-toughens-anti-corruption-drive
ADB & World Bank – Press Release: ADB, World Bank Launch Country Gender Assessment for Lao PDR
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Lao PDR could reap greater benefits from the country’s rapid economic growth by reducing gender inequality and vulnerability in remote rural areas while enhancing women’s ability to take full advantage of expanding economic opportunities, particularly in urban and lowland areas, according to a new ADB and World Bank report. The report suggests that although strong government commitment to achieving gender equity has progressed, persistent imbalances remain in human development endowments such as in health, education, and clean water and sanitation, particularly in remote areas. Geographic, socio-cultural and linguistic challenges remain. http://www.adb.org/news/lao-peoples-democratic-republic/adb-world-bank-launchcountry-gender-assessment-lao-pdr (Press Release) http://www.adb.org/documents/country-gender-assessment-lao-peoples-democraticrepublic (Report)
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ADB – Press Release: Statement by ADB Chair of Board of Governors on President's Resignation
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The Chairperson of the Board of Governors of the ADB and Finance Minister of India, Palaniappan Chidambaram, has issued the statement in response to President Haruhiko Kuroda’s submission of his resignation, effective March 18. http://www.adb.org/news/statement-adb-chair-board-governors-presidents-resignation
ADBI – Publication: “Patterns of Free Trade Areas in Asia”
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East and West Center in Honolulu has published a monograph which addresses Asia's rise in global free trade agreement (FTA) activity. “The study identifies for policymakers how best to minimize the costs of FTAs while maximizing their benefits. It reexamines key trends and challenges in Asian FTAs and offers new information from analysis of FTAs, economic models, and firm surveys.” http://www.eastwestcenter.org/sites/default/files/private/ps065.pdf
G20 – Press Release: Monetary policy issues are discussed on the sidelines of the G20 meetings
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A proposal for monetary authorities to adopt nominal GDP target was discussed on the sidelines of the G20 meetings, Chief of the Presidential Experts' Directorate and the Russian G20 Sherpa Ksenia Yudaeva reported in her interview to Bloomberg agency. "There's a very strong process of reconsideration of what appropriate monetary policy means for central banks," - Yudaeva said. - "Proposed measures of targeting nominal GDP maybe an appropriate instrument for the advanced economies with reserve currencies, but with respect to the developing and small economies, it will by no means respond to their problems." http://www.g20.org/news/20130301/781246986.html
IFC – Press Release: IFC, Infrastructure Journal Announce Top Public-Private Partnerships in Emerging Markets
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IFC and Infrastructure Journal have highlighted the achievements of 40 public-private partnerships in emerging markets that demonstrate best practices for governments that collaborate with the private sector to provide a wide range of public services and spur economic development. “Infrastructure development is critical for growth and poverty reduction in developing countries, and well-structured public-private partnerships can pave the way forward,” said Laurence Carter, Director of IFC Advisory Services in PublicPrivate Partnerships. “The PPPs featured in Emerging Partnerships offer proven models that ensure emerging markets benefit from private sector expertise and innovation to increase access, enhance quality, and improve efficiency in infrastructure and public services.” http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/B751607612F85A0985257B23 00815070
OECD – Press Release: Recovering from disaster can be an opportunity for change, says OECD
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Through the example of Abruzzo, whose capital L’Aquila was destroyed by an earthquake four years ago, a new OECD report recommends policies that can speed the recovery of regions hit by natural disasters, making them more attractive to residents, tourists and investors. The report says that Abruzzo should draw upon its own resources to build a long-term development strategy and renovate L’Aquila to attract Page 4 of 8
entrepreneurs and investors. Strengthening cultural and economic networks through private and public participation will be critical to future growth, as will transparency, accountability and community engagement. The recommendations found in the report can guide regions in all countries to more resilient growth and help them monitor good practices and improve the well-being of local communities after natural disasters: http://www.oecd.org/newsroom/recovering-from-disaster-opportunity-for-change-saysoecd.htm World Bank – Press Release: China - Fujian Meizhou Bay Navigation Improvement Project
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The World Bank's Board has approved the captioned project. The objective of the project is to improve the capacity of the main navigation channel in Meizhou Bay and enhance the management capacity of Meizhou Bay Harbor Administration Bureau. http://www.worldbank.org/en/news/loans-credits/2013/02/28/china-fujian-meizhou-baynavigation-improvement-project
World Bank – Press Release: Coastal Wetlands Highly Vulnerable to Sea-Level Rise
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A rise in sea levels by a meter from climate change could destroy more than 60 percent of the developing world’s coastal wetlands currently found at one meter or less elevation, according to a World Bank study. That would lead to economic losses of around $630 million per year. The resulting economic losses from coastal wetland destruction will be in addition to other coastal impacts such as the forced relocation of people and infrastructure. An earlier study co-authored by Dasgupta predicted that 60 million people in developing countries would be forced out of their homes if sea levels rise by one meter. The wetlands study comes as World Bank President Jim Yong Kim is urging the global community to take action on climate change. http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23365190~pagePK:34370 ~piPK:34424~theSitePK:4607,00.html
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FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 1-Mar 4-Mar close China 6.23 6.22 6.22 6.23 Hong Kong SAR 7.75 7.75 7.75 7.76 Indonesia 9,793.00 9,682.00 9,682.00 9,714.00 Japan 86.75 93.59 93.59 93.62 Korea 1,064.40 1,084.56 1,084.56 1,093.24 Malaysia 3.06 3.10 3.10 3.11 Philippines 41.01 40.69 40.69 40.80 Singapore 1.22 1.24 1.24 1.25 Thailand 30.59 29.76 29.76 29.83 Vietnam 20,840.00 20,925.00 20,925.00 20,965.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.03 -0.02 -0.33 -0.03 -0.79 -0.33 -0.28 -0.52 -0.23 -0.19
2013 YTD (%chg) 0.1 -0.1 -0.6 -6.7 -2.7 -2.3 0.1 -2.1 1.7 -0.6
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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,270.3 1,497.3 494.0
1-Mar 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,270.0 1,541.6 474.6
OVERNIGHT LENDING RATE (%) 1-Mar 4-Mar bps change 4.150 3.290 -86.00 0.091 0.091 0.00 4.180 4.180 0.00 0.078 0.093 1.50 2.750 2.750 0.00 3.000 3.000 0.00 1.725 0.966 -75.90 0.066 0.066 0.00 2.750 2.750 0.00 1.922 1.800 -12.20
4-Mar
% change
2,273.4 22,537.8 4,761.5 11,652.3 2,013.2 1,636.0 6,637.6 3,271.6 1,547.9 477.2
-3.65 -1.50 -1.04 0.40 -0.66 -0.09 -0.07 0.05 0.41 0.55
2013 YTD (%chg) 0.2 -3.3 9.5 12.1 -0.9 -2.3 13.2 2.2 10.0 14.1
3-MONTH INTERBANK LENDING RATE (%) 1-Mar 4-Mar bps change 3.895 3.892 -0.26 0.383 0.383 0.00 4.900 4.901 0.07 0.268 0.266 -0.25 2.770 2.770 0.00 3.210 3.210 0.00 0.441 0.405 -3.60 0.375 0.375 0.00 2.866 2.862 -0.38 6.167 6.000 -16.70
CREDIT DEFAULT SWAP (IN BPS) 28-Feb 1-Mar bps change China 63.74 64.24 0.50 Hong Kong SAR 44.35 44.33 -0.01 Indonesia 136.76 136.31 -0.45 Japan 70.60 70.62 0.01 Korea 66.20 66.58 0.38 Malaysia 76.53 76.54 0.01 Philippines 98.89 98.99 0.10 Thailand 89.74 90.25 0.51 Vietnam 209.46 209.51 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. 1-Mar Gold Spot (in US$ per ounce)
1,576.2
4-Mar 1,579.4
% change 0.20
Sources: Bloomberg & Datastream
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CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 31-May 30-Jun 31-Jul China 3,206.1 3,240.0 3,240.0 Hong Kong SAR 291.9 295.0 296.3 Indonesia 111.5 106.5 106.6 Japan 1,277.7 1,270.5 1,272.8 310.9 312.4 314.4 Korea Malaysia 136.0 134.2 134.5 Philippines 76.1 76.1 79.8 Singapore 237.7 243.4 244.1 Thailand 172.6 174.7 175.3 19.9 19.7 20.0 Vietnam Note: Data for China and Vietnam refer to FX reserves
2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 20.8 21.3
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest
3 months imports Short-term external Import cover (Qtrs of Reserves over of goods/serv debt imports covered short-term debt (US$bn) (US$bn) (US$bn) by reserves) China 3,311.6 504.3 572.8 6.6 5.8 Hong Kong SAR 321.0 144.7 711.2 2.2 0.5 Indonesia 108.8 50.3 43.9 2.2 2.5 Japan 1,267.3 70.4 2,255.1 18.0 0.6 Korea 327.0 150.9 126.7 2.2 2.6 Malaysia 139.7 59.2 32.4 2.4 4.3 Philippines 83.8 19.3 8.0 4.4 10.5 Singapore 259.3 118.6 924.3 2.2 0.3 Thailand 181.6 68.0 57.2 2.7 3.2 Vietnam n.a 25.4 10.0 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.
DATA RELEASES FOR THE DAY Country
SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG
Indicators
Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)%
Period
Feb Feb Feb Feb Jan Jan
Last
1.3 1.4 0.3 50.9 10.4 10.5
Previous
1.2 1.5 0.6 49.9 8.1 8.8
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Expected Release Date 3/4/2013
3/5/2013
3/6/2013 3/7/2013
3/8/2013
SELECTED ECONOMIC RELEASES CALENDAR (04 Mar – 08 Mar 2013)
Country INDONESIA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG INDONESIA INDONESIA HONG KONG CHINA PHILIPPINES PHILIPPINES SOUTH KOREA SINGAPORE JAPAN MALAYSIA HONG KONG MALAYSIA INDONESIA THAILAND PHILIPPINES THAILAND CHINA CHINA CHINA JAPAN JAPAN JAPAN JAPAN JAPAN
Indicators Consumer Confidence Index Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index China HSBC Services PMI Consumer Price Index (YoY)% Budget Deficit/Surplus (PHP bn) Foreign Exchange Reserve (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Foreign Reserves (USD bn) Foreign Currency Reserves (USD bn) Overnight Rate % Bank Indonesia Reference Rate% Consumer Confidence Economic Foreign Reserves (USD mn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Current Account Balance YOY% Current Account Total (JPY bn) Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)%
Period Feb Feb Feb Feb Feb Jan Jan Feb Feb Feb Feb Feb Dec Feb Feb Feb Feb 28 Feb Mar 7 Mar 7 Feb Feb Mar 1 Feb Feb Feb Jan Jan 4Q F 4Q F 4Q F
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 05 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks advance after two-day loss on stimulus bets. Asian markets were higher amid speculation central bankers will continue stimulus measures and as China maintained its economic-growth target for 2013. The Shanghai Composite Index rose 2.3 percent, after suffering its worst day of trading on Monday since August 2011. Stocks were also recovering in Hong Kong, where the Hang Seng Index added 0.1 percent. In Japan, the Nikkei Stock Average rose 0.3 percent and South Korea's Kospi Composite rose 0.2 percent. European stocks climbed to a 4 1/2-year high while futures on the S&P 500 were little changed.
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Yen rises as buying by Japanese investors outweighs speculative selling. The yen strengthened against many other major currencies in Asia as buying by Japanese institutional investors outweighed speculative selling amid expectations for more aggressive monetary easing by the Bank of Japan. The dollar was at ¥93.10 as of 0450 GMT from ¥93.49 late Monday in New York. The euro was at ¥121.39 from ¥121.76, and $1.3034 from $1.3027. The pound was at $1.5127 from $1.5105. At 0435 GMT spot gold in Asian trading was at $1,579.80 a troy ounce--up $5.20 from its previous close.
BREAKING NEWS GLOBAL •
EU opens way for easier budgets after austerity backlash. European finance ministers opened the way for looser budget policies after a backlash against austerity thrust Italy into political limbo and shattered months of relative stability in European markets. Italy’s deadlocked election, France’s refusal to make deeper budget cuts and protests against the shrinking of the welfare state across southern Europe escalated the rebellion against the German-led prescription for fighting the debt crisis. Economic strains “may also justify in a certain number of cases reviewing deadlines for the correction of excessive deficits,” European Union Economic and Monetary Commissioner Olli Rehn told reporters late yesterday after a meeting of euro-area finance ministers in Brussels. The euro-zone economy will shrink 0.3 percent in 2013, making for the first annual backto-back contraction since the currency’s birth in 1999, the European Commission forecast last month.
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US budget crisis eases as Republicans seek to avoid shutdown. Tension over the U.S. fiscal crisis eased as President Barack Obama called more opposition lawmakers to find a way to stop $85 billion in damaging budget cuts and congressional Republicans announced a plan to prevent a government shutdown. Eager to resolve fiscal fights overshadowing his second term, the Democratic president called Maine Republican Senator Susan Collins and Oklahoma Republican Senator Tom Coburn after speaking to other Republican senators over the weekend. An aide to Collins said that the pair discussed the need for a bipartisan agreement on critical issues such as reining in the $16.7 trillion federal debt and dealing with the cuts, also known as sequestration.
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Australia's Central Bank holds rates. Australia's central bank left interest rates unchanged for the second month in a row, indicating growing satisfaction that steep rate cuts over more than a year are beginning to spur the nation's economy. The Reserve Bank of Australia kept the benchmark cash-rate target at 3 percent, a low previously reached in the aftermath of the global financial crisis. Most economists had expected no change. Gov. Glenn Stevens cited a modest improvement in non-mining parts of Australia's resource-rich economy and increasing ease about conditions in Europe and China. The Australian dollar soared after the announcement.
REGIONAL •
China puts focus on consumers to drive growth. China put its fast-growing consumer class at centre-stage as outgoing Premier Wen Jiabao set out a reform plan to spread the fruits of economic growth more evenly in the country of 1.3 billion. Premier Wen said unleashing the power of China's consumers was vital to the future of the world's second biggest economy and called for accelerated reform of the rigid hukou household registration system to drive an urbanisation effort that he said underpinned the country's programme of economic development. Wen made consumers the cornerstone of an economic strategy designed to deliver an overall growth target of 7.5 percent in 2013. Rebalancing growth away from the investment-driven, export-oriented model that has delivered three decades of double digit growth, lifted hundreds of millions of people from rural poverty and turned China into the world's biggest trading economy, has been a policy priority for much of Wen's decade in office.
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South Korea to meet emitters before start of carbon trading in 2015. South Korea’s government plans to meet in May with the nation’s biggest emitters to provide information about the start of cap and trade in 2015. The government plans to select an exchange for greenhouse-gas emissions in the second half of this year and decide how to allocate free allowances to an estimated 480 emitters by June 2014. Trials for carbon trading are set to start in June 2014, Lee Hyung Sup, a deputy-director at the Ministry of Environment said. South Korea last month inaugurated President Park Geun Hye and has pledged a 30 percent cut in emissions by 2020 from forecast levels.
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Economic restructuring and wage credit to dominate Budget debate in Singapore. Two issues look set to dominate the Budget debate that starts today: The restructuring of the economy and the new Wage Credit Scheme to help raise the income of Singaporean workers. While some Members of Parliament will call for a less hurried pace of restructuring and more help for small businesses, others worry about the effectiveness of the Wage Credit Scheme. Mr Ong Teng Koon is convinced the emphasis on productivity for restructuring is the only way to maintain high-quality and sustainable growth. He is among 60 MPs expected to speak during the three-day debate.
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Myanmar vows new openness for oil and gas industry. Myanmar pledged a new era of transparency in its oil and gas industry. Speaking at a conference attended by several major foreign oil firms in Yangon, energy ministry officials said international standards would be upheld in auctions for the rights to lucrative energy reserves. "Transparency is the most important word," said the ministry's assistant director Aung Kyaw Htoo. "That's why the government initiated the EITI process," he added, referring to the Extractive Industries Transparency Initiative, an international scheme to ensure ordinary people share the rewards of a country's natural bounty. Page 2 of 8
•
Philippines CPI rises less-than-expected. Consumer price inflation in the Philippines rose less-than-expected in the last quarter, official data showed. In a report, Bangko Sentral ng Pilipinas said that Philippines CPI rose to a seasonally adjusted annual rate of 0.3 percent, from 0.5 percent in the preceding quarter.
IFIs NEWS (compiled from their websites) ADB – Press Release: New Index Shows Asia Is Closer But Future Cooperation Will Be Hard Won
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Asia has become increasingly integrated over the past decade, led by growing trade and tourism and, most recently, as the region faced down the global financial crisis and subsequent eurozone crisis, according to a new integration index published in the Asian Development Bank’s (ADB) latest Asian Economic Integration Monitor. The report warns that the struggles of the eurozone and the fear of the contagion that accompanies greater integration could give Asia’s policymakers pause as they assess the way forward for their region. More multilateralized agreements like the ASEAN Free Trade Area, which involves a growing number of countries in and outside of Asia, would increase global trade, and thus income gains, in the absence of a global trade deal, the report says.
http://www.adb.org/news/new-index-shows-asia-closer-future-cooperation-will-be-hardwon BIS – Speech: Benoit Coeure: Revisiting the European social contract
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The BIS has publicised the speech made by Mr Benoit Coeure, Member of the Executive Board of the European Central Bank, at the European Conference at Harvard “Europe 2.0 – taking the next step”, Cambridge MA, 2 March 2013.
http://www.bis.org/review/r130304b.pdf BIS – Speech: Janet L Yellen: Challenges confronting monetary policy
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The BIS has publicised the speech made by Ms Janet L Yellen, Vice Chair of the Board of Governors of the Federal Reserve System, at the 2013 National Association for Business Economics Policy Conference, Washington DC, 4 March 2013.
http://www.bis.org/review/r130304a.pdf BIS – Speech: Yves Mersch: The European banking union - first steps on a long march
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The BIS has publicised the speech made by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Finanzplatztag, Frankfurt am Main, 27 February 2013.
http://www.bis.org/review/r130304c.pdf G20 – Press Release: G20 Sherpas’ Meeting was held in Moscow
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During the meeting Sherpas discussed the main outcomes of the first Finance Ministers and Central Bank Governors' Meeting, which had been held on February 15-16, 2013. Sherpas considered such issues as implementation of the Framework for Strong, Sustainable and Balanced Growth; financing for investment; reform of international financial architecture; financial regulation; and impact of structural reforms on growth. In the course of the meeting reports were also presented on the results of the working groups' meetings held recently - Energy Sustainability Working Group (ESWG), Task
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Force on Employment (ETF), Anti-Corruption Working Group (ACWG) and Development Working Group (DWG). http://www.g20.org/news/20130304/781253478.html
IFC – Press Release: IFC Helps Odisha Boost Private Investments, Enhance Economic Opportunities for India’s Development •
IFC is working in India’s state of Odisha to promote private sector-led growth in the strategic sectors of agribusiness and tourism, catalyzing investments and creating jobs. Through a three-year partnership, IFC will work with the state government to streamline regulation for investment, identify areas for improvement, and tap into opportunities in the private sector. IFC’s strategy in India is to work in priority states like Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh, and West Bengal, and also in the Northeastern states, including Sikkim. IFC is working on a tax simplification project in Bihar, and is supporting Rajasthan in promoting private investments in sectors such as automotive, information technology, solar, and tourism. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/D0AE521A99E6BE4685257B2400 41AD38
OECD – Press Release: South Africa: Progress made but step up economic reforms to achieve full potential •
South Africa must step up efforts to foster strong, inclusive economic growth that creates jobs, according to the OECD’s latest Economic Survey of South Africa. Priorities include a growth-enhancing macroeconomic policy-mix, and better implementation of structural reforms, notably to improve education. “South Africa has recorded tremendous success in a number of economic and social policies” OECD SecretaryGeneral Angel Gurría said. “Per capita income is rising, public services are expanding, health indicators are improving and public finances are in better shape than in many OECD countries. However, the country is growing at a slower pace than other leading emerging economies, according to the Survey. “Income inequality remains high, educational outcomes should be improved and access to education needs to be inclusive. Environmental challenges like climate change and water scarcity need to be tackled to make economic growth green and sustainable. There is unfinished business that will require additional reform efforts.” Mr Gurria said. http://www.oecd.org/newsroom/progressinsouthafricabutstepupeconomicreformstoachievefullpotential.htm (Press Release)
http://www.oecd.org/about/secretary-general/launch-of-the-2013-economic-survey-ofsouth-africa.htm (Full Speech) http://www.oecd.org/eco/surveys/southafrica2013.htm (Economic Survey of South Africa
2013)
UNCTAD – Press Release: UNCTAD and Eurasian Economic Commission to enhance cooperation •
UNCTAD and the Eurasian Economic Commission (EAEC) have agreed to sign a memorandum of cooperation to carry out joint work in a number of fields. The UNCTAD Secretary-General has met with EAEC Trade Minister Andrey Slepnev to discuss future cooperation with the new regional body, which began its activities in 2012. The meeting outlined prospective areas of collaboration between the two organizations, including regional integration, trade and competition policy, Page 4 of 8
facilitation of customs procedures, entrepreneurship development, transport and statistics. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=407&Sitemap_x0020_Taxo nomy=Technical%20Cooperation;#20;#UNCTAD Home
WB – Press Release: Africa’s Food Markets Could Create One Trillion Dollar Opportunity by 2030 •
Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 if they can expand their access to more capital, electricity, better technology and irrigated land to grow high-value nutritious foods, and if African governments can work more closely with agribusinesses to feed the region’s fast-growing urban population, according to a new World Bank report launched today. The report says agriculture and agribusiness should be at the top of the development and business agenda in Sub-Saharan Africa. Concluding on an upbeat note, the report says Africa can draw on many local successes to guide governments and investors toward positive economic, social and environmental outcomes. http://www.worldbank.org/en/news/press-release/2013/03/04/africas-food-markets-couldcreate-one-trillion-dollar-opportunity-2030 (Press Release) http://www.worldbank.org/en/news/feature/2013/03/04/africa-agribusiness-report
(Feature Story)
WB – Press Release: Brazil: President Kim praises Bahia Hospital for giving Poor better access to Healthcare •
Hospital do Suburbio, the first state hospital built in Salvador’s metropolitan area is a public-private partnership assisted by the IFC. It has created 1,200 local jobs in a successful business model that six other Brazilian states have begun to adopt. “This is an example of what we can do by working with the state and bringing the expertise of the private sector to provide high quality health services to those without access”, said World Bank Group President Jim Kim after touring the facilities. Salvador was Kim’s first stop in a three-day official visit to Brazil. He said he’d made the northeastern state his first port of call because the Bank’s partnership with the state of Bahia “reflects well the vision and results that we can achieve together, with one shared goal: helping reduce poverty, while creating opportunities for all citizens.” http://www.worldbank.org/en/news/feature/2013/03/04/brazil-hospital-bahia-healthinnovative
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 4-Mar 5-Mar close China 6.23 6.22 6.23 6.22 Hong Kong SAR 7.75 7.75 7.76 7.76 Indonesia 9,793.00 9,682.00 9,714.00 9,696.00 Japan 86.75 93.59 93.48 93.05 Korea 1,064.40 1,084.56 1,093.24 1,087.04 Malaysia 3.06 3.10 3.11 3.10 Philippines 41.01 40.69 40.80 40.72 Singapore 1.22 1.24 1.25 1.25 Thailand 30.59 29.76 29.82 29.79 Vietnam 20,840.00 20,925.00 20,965.00 20,993.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.06 -0.01 0.19 0.46 0.57 0.20 0.20 0.00 0.10 -0.13
2013 YTD (%chg) 0.2 -0.1 -0.4 -6.1 -2.2 -2.1 0.3 -2.0 1.8 -0.7
Page 5 of 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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,269.5 1,539.6 477.2
4-Mar 2,273.4 22,537.8 4,761.5 11,652.3 2,013.2 1,636.0 6,637.6 3,240.0 1,540.7 468.7
OVERNIGHT LENDING RATE (%) 4-Mar 5-Mar bps change 3.290 3.010 -28.00 0.091 0.091 0.00 4.180 4.180 0.00 0.100 0.095 -0.50 2.750 2.750 0.00 3.000 3.000 0.00 0.966 1.058 9.20 0.050 0.050 0.00 2.750 2.750 0.00 1.800 1.930 13.00
5-Mar
% change
2,326.3 22,560.5 4,751.7 11,683.5 2,016.6 1,642.1 6,711.7 3,248.3 1,551.8 462.1
2.33 0.10 -0.20 0.27 0.17 0.37 1.12 0.26 0.72 -1.41
2013 YTD (%chg) 2.5 -3.2 9.3 12.4 -0.7 -1.9 14.5 1.5 10.3 10.5
3-MONTH INTERBANK LENDING RATE (%) 4-Mar 5-Mar bps change 3.892 3.892 -0.02 0.383 0.383 0.00 4.901 4.901 0.00 0.266 0.261 -0.50 2.760 2.760 0.00 3.210 3.210 0.00 0.405 0.563 15.80 0.375 0.375 0.00 2.862 2.862 0.00 6.000 6.000 0.00
CREDIT DEFAULT SWAP (IN BPS) 1-Mar 4-Mar bps change China 64.24 66.27 2.03 Hong Kong SAR 44.33 44.32 -0.01 Indonesia 136.31 137.88 1.57 Japan 70.62 68.21 -2.41 Korea 66.58 68.24 1.66 Malaysia 76.54 78.08 1.54 Philippines 98.99 101.10 2.11 Thailand 90.25 91.30 1.06 Vietnam 209.51 212.46 2.96 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. 4-Mar Gold Spot (in US$ per ounce)
1,573.8
5-Mar
% change
1,579.6
0.37
Sources: Bloomberg & Datastream
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+
Page 6 of 8
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 31-May 30-Jun 31-Jul China 3,206.1 3,240.0 3,240.0 Hong Kong SAR 291.9 295.0 296.3 Indonesia 111.5 106.5 106.6 Japan 1,277.7 1,270.5 1,272.8 310.9 312.4 314.4 Korea Malaysia 136.0 134.2 134.5 Philippines 76.1 76.1 79.8 Singapore 237.7 243.4 244.1 Thailand 172.6 174.7 175.3 19.9 19.7 20.0 Vietnam Note: Data for China and Vietnam refer to FX reserves
2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 20.8 21.3
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest
3 months imports Short-term external Import cover (Qtrs of Reserves over of goods/serv debt imports covered short-term debt (US$bn) (US$bn) (US$bn) by reserves) China 3,311.6 504.3 572.8 6.6 5.8 Hong Kong SAR 321.0 144.7 711.2 2.2 0.5 Indonesia 108.8 50.3 43.9 2.2 2.5 Japan 1,267.3 70.4 2,255.1 18.0 0.6 Korea 327.0 150.9 126.7 2.2 2.6 Malaysia 139.7 59.2 32.4 2.4 4.3 Philippines 83.8 19.3 8.0 4.4 10.5 Singapore 259.3 118.6 924.3 2.2 0.3 Thailand 181.6 68.0 57.2 2.7 3.2 Vietnam n.a 25.4 10.0 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.
DATA RELEASES FOR THE DAY Country
HONG KONG CHINA PHILIPPINES PHILIPPINES Expected Release Date 3/4/2013
3/5/2013
Indicators
Purchasing Managers Index China HSBC Services PMI Consumer Price Index (YoY)% Budget Deficit/Surplus (PHP bn)
Period
Feb Feb Feb Dec
Last
51.2 52.1 3.4 -115.74
Previous
52.5 54.0 3.0 -11.6
SELECTED ECONOMIC RELEASES CALENDAR (04 Mar – 08 Mar 2013)
Country INDONESIA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG INDONESIA INDONESIA HONG KONG CHINA PHILIPPINES
Indicators Consumer Confidence Index Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index China HSBC Services PMI Consumer Price Index (YoY)%
Period Feb Feb Feb Feb Feb Jan Jan Feb Feb Feb Feb Feb
Page 7 of 8
3/6/2013 3/7/2013
3/8/2013
PHILIPPINES SOUTH KOREA SINGAPORE JAPAN MALAYSIA HONG KONG MALAYSIA INDONESIA THAILAND PHILIPPINES THAILAND CHINA CHINA CHINA JAPAN JAPAN JAPAN JAPAN JAPAN
Budget Deficit/Surplus (PHP bn) Foreign Exchange Reserve (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Foreign Reserves (USD bn) Foreign Currency Reserves (USD bn) Overnight Rate % Bank Indonesia Reference Rate% Consumer Confidence Economic Foreign Reserves (USD mn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Current Account Balance YOY% Current Account Total (JPY bn) Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)%
Dec Feb Feb Feb Feb 28 Feb Mar 7 Mar 7 Feb Feb Mar 1 Feb Feb Feb Jan Jan 4Q F 4Q F 4Q F
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 8 of 8
MARKET UPDATE FOR ASEAN+3 06 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks track the Dow's rise. Asian markets were higher with stocks in Japan and Australia reaching fresh multiyear highs, after the Dow Jones Industrial Average marked an all-time high Tuesday. The MSCI Asia Pacific Index gained 1.2 percent to 135.94 as of 5:57 p.m. in Tokyo. Japan’s Nikkei 225 Stock Average climbed 2.1 percent. Hong Kong’s Hang Seng Index rose 1 percent, while China’s Shanghai Composite Index increased 0.9 percent. South Korea’s Kospi Index added 0.2 percent and Singapore’s Straits Times Index advanced 1.2 percent.
•
The dollar fell for a second day against most of its major counterparts before a private jobs report in the U.S. forecast to show companies added positions. The dollar lost 0.1 percent to $1.3062 per euro as of 7:28 a.m. in London after falling 0.2 percent to $1.3052 in New York. It was little changed at 93.34 yen from yesterday when it slid 0.2 percent. The euro traded at 121.93 yen from 121.76.
BREAKING NEWS GLOBAL •
Service industries in U.S. grow at fastest pace in a year. Service industries in the U.S. expanded in February at the fastest pace in a year as a recovery in housing rippled through the economy. The Institute for Supply Management’s non-manufacturing index unexpectedly increased to 56 last month from 55.2 in January. Readings above 50 signal expansion in the industries comprising 90 percent of the economy. The fastest pace of new-home sales since 2008 is benefiting builders. Accelerating service orders, along with a pickup in manufacturing reported last week, show the economy is withstanding budget battles in Washington.
•
Merkel looks east for austerity allies in talks with Hollande. German Chancellor Angela Merkel is turning east as she pushes plans for a more competitive Europe, seeking to bring on board the leaders of Poland and other eastern countries as allies elsewhere prove hard to find. Merkel and French President Francois Hollande, the key players in the euro-area debt crisis, travel to Warsaw today for talks on closer European Union integration with Polish Prime Minister Donald Tusk and his peers from the Czech Republic, Slovakia and Hungary. The six leaders are due to hold a joint news conference at about 4 p.m. Warsaw time. As southern Europeans vilify Merkel for her austerity-led solution to the debt crisis, the head of Europe’s biggest economy is looking for support to the countries of the east she knows from childhood growing up in communist East Germany. It’s the first time that French and German leaders are jointly attending the four-country forum.
•
Australia expands at fastest pace since 2007 on exports. Australia’s economy expanded in 2012 at the fastest pace in five years as resource investment and exports outweighed subdued manufacturing and construction. Gross domestic product grew 3.6 percent last year, the best performance since a 4.7 percent expansion in 2007, data from the Australian Bureau of Statistics showed. The economy grew 0.6 percent in the fourth
quarter from the previous three months, when it rose a revised 0.7 percent that was higher than initially reported. REGIONAL •
Korea joins Russia, Kazakhstan in boosting gold holdings. The Bank of Korea joined Russia and Kazakhstan in boosting gold holdings, even as the metal had its worst start to a year since 1991. The BOK added 20 metric tons in February, raising its gold reserves by 24 percent to 104.4 tons, it said in a statement today. Holdings rose about $1.03 billion by value to $4.79 billion at the end of last month, equivalent to 1.5 percent of total foreign exchange holdings, according to the statement. Russia and Kazakhstan expanded bullion reserves for a fourth straight month in January and the World Gold Council expects central banks to remain strong buyers this year after increasing purchases in 2012 by the most in almost five decades.
•
Trans-Pacific Partnership talk: Countries seek to protect favored industries from lifting of tariffs. The United States and 10 other countries will discuss which items can be excluded from the planned abolition of tariffs under the framework of the Trans-Pacific Partnership multinational free trade agreement during their latest session of talks being held in Singapore. The 16th session, which kicked off Monday to be held for 10 days, is the first TPP meeting since Prime Minister Shinzo Abe made it known that he intended to announce the nation's participation in the negotiations. Japan will gather information during the session but is not expected to be informed of certain key points of the discussions, a situation that highlights the need for Japan to make its official announcement as soon as possible so it can get involved in establishing TPP rules. Aiming to conclude negotiations by the end of this year, the 11 countries not only will discuss exceptions from tariff abolition--the core of the TPP framework--but also are expected to talk about how to deal with intellectual property and establishing rules regarding public works projects ordered by governments.
•
Malaysian Plantation Industries and Commodities Minister said palm climbing as economies recover, aging trees cut. Palm oil will probably advance as the global economy recovers and the government provides incentives for farmers to cut down old trees, said Malaysian Plantation Industries and Commodities Minister Bernard Dompok. “I’m bullish on prices,” he said in an interview. Malaysia, the second-largest producer, has announced plans to encourage growers to remove 25-year-old trees that yield less oil on 300,000 hectares, and replant them. Trees on 100,000 hectares may be cut and replaced this year, lowering output by 400,000 metric tons and helping cap inventories, he said. It takes at least three to four years for palms to reach maturity. The country has 5 million hectares. Palm, which dropped 23 percent last year, is trading in a bear market after global supplies of the world’s most consumed oil expanded to the biggest ever.
•
Vietnam's export hits $18.97 bln in two months. Vietnam recorded an impressive export turnover of 18.97 billion USD in the first two months of 2013, which reflected a year-on-year increase of 23.9 percent. Of the figure, the export of foreign-invested businesses (excluding crude oil) was 11 billion USD, up 27.5 percent, according to the Import-Export Department under the Ministry of Industry and Trade (MoIT). In February, the country’s export reached 7.5 billion USD, down 34.6 percent from the previous month and 9.2 percent year-on-year due to the nine-day long Lunar New Year festival. Mobile phones and bags were the largest foreign currency earners during the period. Page 2 of 8
The MoIT’s statistics also showed that Vietnam enjoyed a two-month trade surplus of over 1.67 billion USD, equivalent to 8.8 percent of the total export turnover. •
Cambodia launches arbitration body to deal with commercial disputes. Cambodia officially launched the long-awaited National Arbitration Center (NAC) on Monday, aiming at enhancing business environment and attracting more local and foreign investors. Speaking at the launching ceremony, Minister of Commerce Cham Prasidh said the government is committed to improving and enhancing Cambodia's business environment and investment climate for both domestic and foreign investors. He said one of the measures taken by the government to achieve this goal is the enactment of various commercial laws including the law on commercial arbitration that was adopted in 2006.
IFIs NEWS (compiled from their websites) ADBI – Newsletter: 2012 – Volume 6 Number 4 •
The ADBI has publicised the Fourth Quarter 2012 edition of its quarterly newsletter. http://www.adbi.org/files/2013.03.newsletter.pdf
BIS – Interview: Christian Noyer: "Noyer heralds new era for eurozone and for France" - Interview in Euroweek •
The BIS has publicised the Interview made with Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, in Euroweek “France in the Capital Markets”, 25 February 2013. http://www.bis.org/review/r130305e.pdf
BIS – Remarks: Duvvuri Subbarao: Financial literacy and financial inclusion are integral to each other •
The BIS has publicised the Inaugural remarks made by Dr Duvvuri Subbarao, Governor of the Reserve Bank of India, at the India-OECD-World Bank Regional Conference on “Financial education”, New Delhi, 4 March 2013 http://www.bis.org/review/r130305j.pdf
BIS – Remarks: Pentti Hakkarainen: Debate on "Re-evaluating the universal banking model: Can the Volcker, Vickers or Liikanen rules make banks safer?" •
The BIS has publicised the remarks made by Mr Pentti Hakkarainen, Deputy Governor of the Bank of Finland, at the 4th Future of Banking Summit, organised by Economist Conferences, Paris, 26 February 2013 http://www.bis.org/review/r130305h.pdf
BIS – Speech: George A Provopoulos: Overview of recent developments in the Greek economy •
The BIS has publicised the Speech made by Mr George A Provopoulos, Governor of the Bank of Greece, at the 80th AnnualMeeting of Shareholders, Athens, 25 February 2013. http://www.bis.org/review/r130305f.pdf
BIS – Speech: Jerome H Powell: Ending “too big to fail” •
The BIS has publicised the Speech made by Mr Jerome H Powell, Member of the Board of Governors of the Federal Reserve System, at the Institute of International Bankers 2013 Washington Conference, Washington DC, 4 March 2013. http://www.bis.org/review/r130305b.pdf
Page 3 of 8
BIS – Speech: Lars Rohde: The European crisis and the development of the European Union •
The BIS has publicised the speech made by Mr Lars Rohde, Governor of the National Bank of Denmark, at the European Affairs Committee’s consultation: “The European crisis and the development of the European Union”, former Upper Chamber of the Danish Parliament, Copenhagen, 26 February 2013. http://www.bis.org/review/r130305i.pdf
BIS – Speech: Yves Mersch: Financial stability policies in central banks •
The BIS has publicised the speech made by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the seminar: “Financial stability policies in a post-crisis world”, Czech National Bank, Prague, 4 March 2013. http://www.bis.org/review/r130305c.pdf
BIS – Publication: International Journal of Central Banking (IJCB) •
The BIS has publicised the Mar 2013 edition of its quarterly magazine. This is a Special Issue: Financial Crises: Causes, Consequences and Policy Options. http://www.ijcb.org/journal/ijcb13q1a0.pdf
BIS – Welcome Address: K C Chakrabarty: India-OECD-World Bank regional conference on "Financial education" •
The BIS has publicised the welcome address made by Dr K C Chakrabarty, Deputy Governor of the Reserve Bank of India, at the India-OECD-World Bank Regional Conference on “Financial education”, New Delhi, 4 March 2013 http://www.bis.org/review/r130305k.pdf
G20 – Press Release: Business 20 presented to the G20 Sherpas its recommendations on trade •
On the second day of the meeting, the delegates were addressed by Co-Chair of the Business 20 Trade Taskforce Alexey Mordashov. "Promoting international trade and ensuring that supply chains can continue to evolve efficiently are of the issues of greatest importance and should remain one of the core items of the G20 agenda," - Alexey Mordashov emphasized. Trade is one of the tools that allow facilitating growth of the global economy in general, as well as growth in particular countries, through measures that are budget neutral. "Growing trade and expanding supply chains offer a 'win-win' potential. Let's make sure it does not become a missed opportunity," - Mr. Mordashov concluded. http://www.g20.org/news/20130304/781254163.html
IFC – Press Release: IFC Study Finds Indian Small and Medium Enterprises have Huge Unmet Financing Demand •
IFC has released a new study that finds financial institutions meet only one-fourth of the financing demand of micro, small and medium enterprises in India, noting that a sizeable part of this unfulfilled opportunity is viable. The study estimates the overall finance shortfall for micro, small and medium enterprises to be over $ 400 billion. Formal sources are able to channel only $ 140 billion. Banks can address the sector’s debt and equity financing requirement of over $ 70 billion, it estimates. Micro, small and medium enterprises are an essential focus of IFC's work in South Asia. In addition to making investments in private sector projects, IFC works with governments to improve investment climate, builds skills of local entrepreneurs, and promotes access to finance and markets for small businesses. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/65484B384D843F2F85257B2600117 6BB
Page 4 of 8
IMF – Country Report: Spain: Financial Sector Reform—Second Progress Report •
The IMF has publicised the captioned country report. This report provides information and analysis on the status of Spain’s financial sector reform program. It touches on two main sections namely the Macro-financial context and Progress on financial sector reforms. http://www.imf.org/external/pubs/ft/scr/2013/cr1354.pdf
IMF – Working Paper: “External Linkages and Policy Constraints in Saudi Arabia” •
The IMF has publicised the captioned working paper. “The constraints that external linkages impose on domestic policy choices in Saudi Arabia have continuously evolved over the past four decades. This paper argues that two major ongoing developments in particular have affected and will continue to affect policy trade-offs. First, growing oil needs of emerging market economies (EMEs), and specifically those of developing Asia, have strengthened economic links between the Far East and Saudi Arabia. Second, financial sector development in Saudi Arabia has gradually strengthened the monetary transmission mechanism. As a result, divergence between the growth cycles in developing Asia and the United States has the potential to increasingly generate tension between policy objectives in Saudi Arabia.” http://www.imf.org/external/pubs/ft/wp/2013/wp1359.pdf
UNCTAD – Press Release: Mission to Myanmar by United Nations Inter-Agency Cluster on Trade and Productive Capacity •
UNCTAD, as coordinator of the United Nations Inter-Agency Cluster on Trade and Productive Capacity, has set up and participated in a five-day mission to Myanmar in cooperation with four other United Nations organizations. Among other results, cooperation involving streamlined work by United Nations agencies was envisaged in order to help the country to prepare a Diagnostic Trade Integration Study (DTIS) and to develop a joint action plan to link Myanmar more fully into the world trade system. Based on the results of the consultations held during the February mission, the Cluster will, by the end of March, propose to the Government of Myanmar a joint action plan that will include the Enhanced Integrated Framework process as well as preparation of the DTIS. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=413&Sitemap_x0020_Taxono my=UNCTAD%20Home;#1792;#UN-CEB Inter-agency Cluster
World Bank – Speech: Statement by President Jim Yong Kim - Memorandum of Understanding Signing on Knowledge and Innovation Initiative in Brazil •
The World Bank has publicised the statement made by World Bank President Jim Yong Kim in Brazil. http://www.worldbank.org/en/news/speech/2013/03/05/memorandum-understandingsigning-knowledge-innovation-initiative-brazil-statement-world-bank-group-president-jim-yongkim
World Bank – Speech: Transcript of Media Roundtable with President Jim Yong Kim in Brasilia, Brazil •
The World Bank has publicised the statement made by World Bank President Jim Yong Kim in Brasilia, Brazil. http://www.worldbank.org/en/news/speech/2013/03/05/media-roundtable-world-bank-grouppresident-jim-yong-kim-brasilia-brazil
Page 5 of 8
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 5-Mar 6-Mar close China 6.23 6.22 6.22 6.22 Hong Kong SAR 7.75 7.75 7.76 7.76 Indonesia 9,793.00 9,682.00 9,696.00 9,693.00 Japan 86.75 93.59 93.29 93.43 Korea 1,064.40 1,084.56 1,087.04 1,082.60 Malaysia 3.06 3.10 3.10 3.10 Philippines 41.01 40.69 40.72 40.73 Singapore 1.22 1.24 1.25 1.25 Thailand 30.59 29.76 29.76 29.73 Vietnam 20,840.00 20,925.00 20,993.00 20,950.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.05 -0.01 0.03 -0.15 0.41 -0.13 -0.01 0.05 0.10 0.21
2013 YTD (%chg) 0.2 -0.1 -0.4 -6.5 -1.8 -2.2 0.3 -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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,269.5 1,539.6 477.2
5-Mar 2,326.3 22,560.5 4,751.7 11,683.5 2,016.6 1,642.1 6,711.7 3,248.3 1,549.3 462.1
OVERNIGHT LENDING RATE (%) 5-Mar 6-Mar bps change 3.010 2.850 -16.00 0.091 0.091 0.00 4.180 4.180 0.00 0.095 0.095 0.00 2.750 2.750 0.00 3.000 3.000 0.00 1.058 0.814 -24.40 0.041 0.041 0.00 2.750 2.750 0.00 1.930 1.900 -3.00
6-Mar
% change
2,347.2 22,777.8 4,824.7 11,932.3 2,020.7 1,651.8 6,835.2 3,288.2 1,559.3 471.1
0.90 0.96 1.54 2.13 0.20 0.59 1.84 1.23 0.64 1.94
2013 YTD (%chg) 3.4 -2.3 11.0 14.8 -0.5 -1.4 16.6 2.7 10.8 12.6
3-MONTH INTERBANK LENDING RATE (%) 5-Mar 6-Mar bps change 3.892 3.887 -0.52 0.383 0.383 0.00 4.901 4.900 -0.07 0.261 0.257 -0.42 2.760 2.760 0.00 3.210 3.210 0.00 0.563 0.327 -23.60 0.375 0.375 0.00 2.862 2.862 0.00 6.000 6.100 10.00
CREDIT DEFAULT SWAP (IN BPS) 4-Mar 5-Mar bps change China 66.27 62.83 -3.44 Hong Kong SAR 44.32 43.35 -0.97 Indonesia 137.88 136.96 -0.92 Japan 68.21 66.25 -1.96 Korea 68.24 65.29 -2.95 Malaysia 78.08 76.13 -1.95 Philippines 101.10 98.24 -2.86 Thailand 91.30 89.37 -1.94 Vietnam 212.46 207.88 -4.58 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. 5-Mar Gold Spot (in US$ per ounce)
1,575.5
6-Mar 1,574.7
% change -0.05
Sources: Bloomberg & Datastream
Page 6 of 8
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 31-May 30-Jun 31-Jul China 3,206.1 3,240.0 3,240.0 Hong Kong SAR 291.9 295.0 296.3 Indonesia 111.5 106.5 106.6 Japan 1,277.7 1,270.5 1,272.8 310.9 312.4 314.4 Korea Malaysia 136.0 134.2 134.5 Philippines 76.1 76.1 79.8 Singapore 237.7 243.4 244.1 Thailand 172.6 174.7 175.3 19.9 19.7 20.0 Vietnam Note: Data for China and Vietnam refer to FX reserves
2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 20.8 21.3
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest
3 months imports Short-term external Import cover (Qtrs Reserves over of goods/serv debt of imports covered short-term debt (US$bn) (US$bn) (US$bn) by reserves) China 3,311.6 504.3 572.8 6.6 5.8 Hong Kong SAR 321.0 144.7 711.2 2.2 0.5 Indonesia 108.8 50.3 43.9 2.2 2.5 Japan 1,267.3 70.4 2,255.1 18.0 0.6 Korea 327.0 150.9 126.7 2.2 2.6 Malaysia 139.7 59.2 32.4 2.4 4.3 Philippines 83.8 19.3 8.0 4.4 10.5 Singapore 259.3 118.6 924.3 2.2 0.3 Thailand 181.6 68.0 57.2 2.7 3.2 Vietnam n.a 25.4 10.0 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.
DATA RELEASES FOR THE DAY Country
SOUTH KOREA
Indicators
Foreign Exchange Reserve (USD bn)
Period
Feb
Last
327.4
Previous
328.9
Page 7 of 8
Expected Release Date 3/4/2013
3/5/2013
3/6/2013 3/7/2013
3/8/2013
SELECTED ECONOMIC RELEASES CALENDAR (04 Mar – 08 Mar 2013)
Country INDONESIA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG INDONESIA INDONESIA HONG KONG CHINA PHILIPPINES PHILIPPINES SOUTH KOREA SINGAPORE JAPAN MALAYSIA HONG KONG MALAYSIA INDONESIA THAILAND PHILIPPINES THAILAND CHINA CHINA CHINA JAPAN JAPAN JAPAN JAPAN JAPAN
Indicators Consumer Confidence Index Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index China HSBC Services PMI Consumer Price Index (YoY)% Budget Deficit/Surplus (PHP bn) Foreign Exchange Reserve (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Foreign Reserves (USD bn) Foreign Currency Reserves (USD bn) Overnight Rate % Bank Indonesia Reference Rate% Consumer Confidence Economic Foreign Reserves (USD mn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Current Account Balance YOY% Current Account Total (JPY bn) Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)%
Period Feb Feb Feb Feb Feb Jan Jan Feb Feb Feb Feb Feb Dec Feb Feb Feb Feb 28 Feb Mar 7 Mar 7 Feb Feb Mar 1 Feb Feb Feb Jan Jan 4Q F 4Q F 4Q F
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 8 of 8
MARKET UPDATE FOR ASEAN+3 08 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Shares rise, dollar at new peak vs yen before jobs data. World shares hit their highest level since June 2008 and the dollar touched a fresh 3-1/2-year high against the yen ahead of U.S. jobs data expected to point to a continuing pick up in the world's biggest economy. In Asian trading Japan's Nikkei had hit a 4-1/2 year high. The MSCI Asia Pacific Index advanced 0.6 percent to 136.02 as of 5:06 p.m. in Tokyo. Hong Kong’s Hang Seng Index advanced 1.4 percent, while South Korea’s Kospi Index added 0.1 percent. Emerging stocks head for biggest weekly increase in two months. The dollar rose to the strongest since August 2009 against the yen on speculation an improving U.S. job market will prompt the Federal Reserve to slow stimulus even as Japan pledges to extend so-called quantitative easing. WTI oil headed for the first weekly gain in three weeks. Brent crude’s premium to New York futures narrowed as a North Sea pipeline network resumed five days after it was shut because of a leak.
BREAKING NEWS GLOBAL •
Draghi signals economy must worsen for ECB to cut rates. Mario Draghi signalled that Europe’s stuttering economy will have to get worse before he’ll consider cutting interest rates. Even as the European Central Bank President admitted that recent economic data in the euro area has been “disappointing,” he insisted that a recovery will appear later this year. While Draghi acknowledged the Governing Council considered a rate cut, yesterday marks the third time in a row the Frankfurt-based ECB has revised its growth outlook downward without adjusting policy. The ECB helped arrest a downward spiral in the European debt crisis last year when it announced it would buy as many bonds as needed of countries that sign up to economic reforms. At the same time, lending conditions for businesses in crisis-hit nations such as Spain and Italy haven’t improved, and the turmoil unleashed by last month’s Italian election illustrates that the route out of recession could be bumpy.
•
Italian banks’ bad loans seen rising as gridlock hampers growth. UniCredit SpA and Intesa Sanpaolo SpA, Italy’s biggest banks, may struggle to boost profit as political gridlock threatens to increase borrowing costs, worsen an economic contraction and drive up bad loans. The Italian benchmark 10-year bond yield climbed as much as 0.44 percentage point and an index of the country’s financial shares dropped as much as 11 percent after last week’s general election left Italy’s largest political parties groping to form a government amid a four-way parliamentary split. The disarray may impede economic growth as the longest recession in 20 years and tougher rules from regulators, including the Bank of Italy, are already forcing banks to set aside more money against doubtful loans.
•
Major U.S. banks pass Fed's health test. The biggest U.S. banks have enough capital to withstand a severe economic downturn, the Federal Reserve said with all but one passing the annual health check of the financial sector. Banks' efforts to boost their capital since the 2007-2009 U.S. financial crisis helped all 18 participating lenders except
Ally Financial meet the minimum hurdle of a 5 percent capital buffer in the Fed's "stress test." The tests give regulators a view into how the banking sector would respond to a severe recession. The firms in the test represent more than 70 percent of total bank holding company assets in the United States, a senior Fed official said. Of the four largest U.S. banks, Bank of America , Wells Fargo and Citigroup saw improvements in their minimum Tier 1 common capital ratios, compared to last year's similar test. JPMorgan Chase held steady at 6.3 percent. REGIONAL •
China export surge helps new leaders sustain rebound. China’s exports exceeded forecasts in February, an indication that improving global demand may help to sustain the rebound in the world’s second-biggest economy. Overseas shipments increased 21.8 percent from a year earlier, the customs administration said on its website today. Imports fell a more-than-estimated 15.2 percent, leaving a trade surplus of $15.25 billion. Import growth lagged behind exports in the year’s first two months, adding to concern that domestic demand is failing to pick up. The new leadership set to take the helm at the National People’s Congress meeting ending March 17 is trying to sustain a recovery from the slowest expansion in 13 years while limiting shadow-banking risks and reining in property speculation.
•
Japan to retain strong-yen loan facility even as currency slides. The Japanese government will make permanent a dollar-loan program set up in 2011 to help companies take advantage of a strong yen, as it aims to maintain a record wave of overseas mergers and acquisitions. The Finance Ministry will abolish the facility’s 10 trillion yen ($105 billion) limit on lending, it said in a statement today. The program was established by the ministry in August 2011 for one year and extended last year. After hitting a record high in October 2011, the yen has weakened more than 16 percent against the dollar since mid-November as Prime Minister Shinzo Abe pushes for aggressive monetary policies to end deflation.
•
Japan returned to growth in fourth quarter. Japan returned to growth in the fourth quarter, bolstering Prime Minister Shinzo Abe’s campaign to end 15 years of deflation and revive the world’s third-biggest economy. Gross domestic product rose an annualized 0.2 percent in the three months through December, the Cabinet Office said compared with a preliminary calculation of a 0.4 percent contraction. The current account deficit in January was 364.8 billion yen ($3.8 billion), the finance ministry said in a separate release.
•
Singapore in 'critical period of transition'. Economic restructuring will be painful but it cannot be put off any longer, said Deputy Prime Minister Tharman Shanmugaratnam, as he presented the choice confronting Singapore. Noting that Singapore is at a critical period of transition, or an "inflection point in our history", he said the push for an economic metamorphosis is not just an economic issue but also a "key social pillar". Raising productivity would benefit both firms and workers, through higher incomes. At the heart of the efforts are the local small and medium-sized enterprises (SMEs), he added, because without their success, Singapore cannot achieve the quality growth it is aiming for.
•
Indonesia sees exports improving in H2 on China growth. Indonesian exports are expected to improve in the second half of this year due to positive economic growth in Page 2 of 7
China and Singapore, the country's deputy governor said. "We expect exports will improve in the second half... there are several indicators that we are watching, like China, our main trading partner that are improving. The economic indicators in Singapore have also improved," said Halim Alamsyah, the central bank deputy governor. •
Cambodia’s investment law to be revised. The government of Cambodia is planning to revise the Kingdom’s investment laws this year to draw more foreign direct investment as the country adjusts to the fast-changing regional and global landscapes, according to Secretary General of the Council for the Development of Cambodia (CDC) Sok Chenda Sophea. Sok Chenda told more than 100 private-sector attendees that the investment law revision requires their participation and input in order to boost economic activities. “The success of the economy depends on its flexibility to meet the needs of regional and global change.” Sok Chenda said. Cambodian investment law was initially written in 1994. It was then revised in 2003, but has remained unchanged until now. The revision is aimed at encouraging more investors to develop priority sectors to make the Kingdom more competitive.
IFIs NEWS (compiled from their websites) ADBI – Working Paper: “Inadequate Regional Financial Safety Nets Reflect Complacency” •
The ADBI has publicised the captioned working paper. “To the extent that financial contagion from the United States and the euro area crisis has occurred in Asia, this paper focuses on the importance of strengthening the regional financial safety nets. Even with improved financial conditions and stronger regulations in ASEAN+3 member countries, contagion can and will strike. Making the Chiang Mai Initiative Multilateralization more effective is therefore urgent and critical.” http://www.adbi.org/files/2013.03.07.wp411.inadequate.regional.financial.safety.nets.pdf
BIS Working Paper: “Information Flows in Dark Markets: Dissecting Customer Currency Trades” •
The BIS has publicised the captioned working paper. “We study the information in order flows of different customer segments in the world's largest over-the-counter market, the foreign exchange market. The analysis draws on a unique dataset covering a broad cross-section of currency pairs and distinguishing trades by key types of foreign exchange end-users. We find that order flows are highly informative about future exchange rates and provide significant economic value for the few large dealers who have access to these flows. Moreover, customer groups systematically engage in risk sharing with each other and differ markedly in their predictive ability, trading styles, and risk exposure.” http://www.bis.org/publ/work405.htm
IMF: Working Papers •
Export Performance in Europe: What Do We Know from Supply Links? http://www.imf.org/external/pubs/ft/wp/2013/wp1362.pdf
•
Quarterly GDP Revisions in G-20 Countries: Evidence from the 2008 Financial Crisis http://www.imf.org/external/pubs/ft/wp/2013/wp1360.pdf
World Bank: Press Release: World Bank President Jim Kim to visit India Page 3 of 7
•
World Bank Group President Jim Yong Kim will visit India on March 11-13 to see firsthand some of the development challenges India faces, as well as the opportunities it could exploit to achieve faster economic growth and a quicker reduction in poverty. http://www.worldbank.org/en/news/press-release/2013/03/08/world-bank-president-jim-kimto-visit-india
WTO -Press Release: “A prominent place for growth in the post-2015 development agenda” — Lamy •
Director-General Pascal Lamy, in a speech at the Conference on International Cooperation in 2020 in the Hague on 7 March 2013, said that “economic growth and trade — as a driver of growth — deserve a prominent place in the post 2015 development agenda. We need an agenda that integrates economic growth with social inclusion and with environmental protection.” http://www.wto.org/english/news_e/sppl_e/sppl268_e.htm (Full Speech)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 7-Mar 8-Mar close China 6.23 6.22 6.22 6.22 Hong Kong SAR 7.75 7.75 7.76 7.76 Indonesia 9,793.00 9,682.00 9,695.00 9,685.00 Japan 86.75 93.59 94.82 95.56 Korea 1,064.40 1,084.56 1,087.05 1,090.46 Malaysia 3.06 3.10 3.11 3.11 Philippines 41.01 40.69 40.76 40.68 Singapore 1.22 1.24 1.24 1.25 Thailand 30.59 29.76 29.73 29.75 Vietnam 20,840.00 20,925.00 20,935.00 20,935.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.06 -0.01 0.10 -0.77 -0.31 0.06 0.21 -0.09 -0.07 0.00
2013 YTD (%chg) 0.3 -0.1 -0.3 -8.6 -2.5 -2.3 0.4 -2.0 1.9 -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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,269.5 1,539.6 477.2
7-Mar 2,324.3 22,771.4 4,848.3 11,968.1 2,004.4 1,650.9 6,725.1 3,298.5 1,561.0 466.6
OVERNIGHT LENDING RATE (%) 7-Mar 8-Mar bps change 2.100 2.100 0.00 0.091 0.090 -0.07 4.180 4.180 0.00 0.095 0.090 -0.50 2.750 2.750 0.00 3.000 3.000 0.00 0.918 1.172 25.40 0.024 0.024 0.00 2.750 2.750 0.00 2.433 2.433 0.00
8-Mar 2,318.6 23,092.0 4,874.5 12,283.6 2,006.0 1,654.0 6,833.8 3,291.3 1,566.2 470.7
% change -0.24 1.41 0.54 2.64 0.08 0.18 1.62 -0.22 0.34 0.87
2013 YTD (%chg) 2.2 -0.9 12.1 18.2 -1.2 -1.2 16.6 2.8 11.3 12.5
3-MONTH INTERBANK LENDING RATE (%) 7-Mar 8-Mar bps change 3.884 3.881 -0.25 0.382 0.383 0.07 4.900 4.901 0.07 0.253 0.250 -0.25 2.760 2.760 0.00 3.210 3.210 0.00 0.469 0.292 -17.70 0.375 0.375 0.00 2.861 2.861 0.00 6.000 6.000 0.00
Page 4 of 7
CREDIT DEFAULT SWAP (IN BPS) 6-Mar 7-Mar bps change China 61.37 61.38 0.02 Hong Kong 42.36 40.36 -1.99 SAR Indonesia 133.58 133.14 -0.44 Japan 63.31 59.86 -3.45 Korea 63.34 63.36 0.02 Malaysia 74.18 74.20 0.02 Philippines 96.36 96.41 0.06 Thailand 87.92 86.97 -0.95 Vietnam 205.00 204.97 -0.02 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-Mar Gold Spot (in US$ per ounce)
8-Mar
1,579.0
% change
1,581.6
0.16
Sources: Bloomberg & Datastream
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 30-Jun 31-Jul 31-Aug 3,240.0 3,240.0 3,272.9 China 295.0 296.3 298.2 Hong Kong SAR 106.5 106.6 109.0 Indonesia 1,270.5 1,272.8 1,273.2 Japan 312.4 314.4 316.9 Korea 134.2 134.5 134.9 Malaysia 76.1 79.8 80.7 Philippines 243.4 244.1 246.2 Singapore 174.7 175.3 179.2 Thailand 19.7 20.0 20.8 Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
3,311.6 304.8 105.2 1,258.8 327.4 140.3 83.8
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
2013 31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn) 504.3 144.7 50.3 70.4 150.9 59.2 19.3
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
572.8 711.2 43.9 2,255.1 126.7 32.4 8.0
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
Import cover (Qtrs of imports covered by reserves) 6.6 2.1 2.1 17.9 2.2 2.4 4.4
31-Jan n.a 321.0 108.8 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 83.8 259.1 179.2 n.a
Reserves over short-term debt 5.8 0.4 2.4 0.6 2.6 4.3 10.5
Page 5 of 7
259.1 118.6 924.3 2.2 Singapore 179.2 68.0 57.2 2.6 Thailand n.a 25.4 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.
Country
THAILAND CHINA CHINA CHINA JAPAN JAPAN JAPAN JAPAN JAPAN
Expected Release Date 3/4/2013
3/5/2013
3/6/2013 3/7/2013
3/8/2013
DATA RELEASES FOR THE DAY Indicators Period
Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Current Account Balance YOY% Current Account Total (JPY bn) Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)%
Mar 1 Feb Feb Feb Jan Jan 4Q F 4Q F 4Q F
Last
179.1 -15.2 21.8 15.25 -19.9 -364.8 0 0.2 -0.3
Previous
179.2 28.8 25.0 29.1 -199.4 -264.1 -0.1 -0.4 -0.4
SELECTED ECONOMIC RELEASES CALENDAR (04 Mar – 08 Mar 2013)
Country INDONESIA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG INDONESIA INDONESIA HONG KONG CHINA PHILIPPINES SOUTH KOREA SINGAPORE JAPAN MALAYSIA HONG KONG MALAYSIA INDONESIA THAILAND PHILIPPINES THAILAND CHINA CHINA CHINA JAPAN JAPAN
Indicators Consumer Confidence Index Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index China HSBC Services PMI Consumer Price Index (YoY)% Foreign Exchange Reserve (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Foreign Reserves (USD bn) Foreign Currency Reserves (USD bn) Overnight Rate % Bank Indonesia Reference Rate% Consumer Confidence Economic Foreign Reserves (USD mn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Current Account Balance YOY% Current Account Total (JPY bn)
Period Feb Feb Feb Feb Feb Jan Jan Feb Feb Feb Feb Feb Feb Feb Feb Feb 28 Feb Mar 7 Mar 7 Feb Feb Mar 1 Feb Feb Feb Jan Jan
Page 6 of 7
0.3 3.1 -
JAPAN JAPAN JAPAN
Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)%
4Q F 4Q F 4Q F
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 11 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Head for 19-Month High on U.S. Jobs, Yen. Asian stocks rose, with the regional benchmark index heading for the highest close since August 2011, after U.S. jobs data beat estimates and Japanese exporters gained on a weaker yen. The MSCI Asia Pacific Index rose 0.8 percent to 136.65 as of 3:36 p.m. in Tokyo, set for the highest close since Aug. 1, 2011. About three stocks gained for every two that fell. The MSCI Asia Pacific Excluding Japan Index added 0.1 percent to 483.35. Japan’s Nikkei 225 Stock Average rose 0.5 percent, gaining for an eighth day, as the yen traded near a 3 1/2 year low against the dollar. South Korea’s Kospi Index dropped 0.1 after North Korea threatened to target South Korea’s incoming defense minister. Australia’s S&P/ASX 200 Index advanced 0.5 percent. Hong Kong’s Hang Seng Index rose 0.3 percent and the Shanghai Composite Index lost 0.4 percent.
•
West Texas Intermediate oil dropped from the highest price in more than a week as Saudi Arabia boosted output and industrial production slowed in China, the world’s second-biggest consumer of crude. Futures slid as much as 0.4 percent after gaining 1.4 percent last week, the most in a month. Saudi Arabia’s crude production rose in February from a 20-month low, according to an official with knowledge of the country’s oil policy. WTI for April delivery fell as much as 35 cents to $91.60 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.85 at 3:15 p.m. Singapore time.Brent for April settlement on the London-based ICE Futures Europe exchange declined as much as 46 cents, or 0.4 percent, to $110.39 a barrel.
BREAKING NEWS GLOBAL •
Italy's Credit Ratings Downgraded by Fitch. Fitch Ratings downgraded Italy's credit ratings by a notch, citing inconclusive elections results and a deeper recession. The firm lowered Italy's issuer-default ratings to triple-B-plus, or three steps above junk territory, from A-minus. The outlook is negative. Fitch also affirmed the common eurozone country ceiling for Italy at triple-A, the highest credit quality. According to the firm, the inconclusive results of the recent Italian parliamentary elections make it unlikely that a stable new government can be formed in the next few weeks. Fitch also noted that the latest data showed the continuing recession in Italy is one of the deepest in Europe, while the unexpected fall in employment and persistently weak sentiment indicators increase the risk of a more protracted and deeper recession than previously expected. Italy's gross general government debt will peak in 2013, according to Fitch, and a weak government could be slower and less able to respond to domestic or external economic shocks.
• US Unemployment Falls to 4-Year Low, but Headwinds Persist. Employers stepped on the accelerator last month, hiring briskly enough to bolster the recovery but likely not enough to prompt the Federal Reserve to turn off its easy-money spigot. The U.S. added 236,000 jobs in February, notching gains in almost every corner of the private sector. February's gains were well above the 195,000-job-a-month average of the previous three months and pushed the jobless rate to a four-year-low of 7.7%. Although February showed promising momentum, the Fed isn't expected to put the brakes on its easy-money programs until it sees further, sustained gains. Recent benchmarks, including measures of gross domestic product and manufacturing, reflect a recovery that is moving forward but at risk of losing pace as its main engine—consumer spending—is strained by higher taxes and gas prices. • EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus. European leaders grappling with political deadlock in Italy and spiraling unemployment in France will turn to a financial rescue for Cyprus in an effort to stave off a return of market turmoil over the debt crisis. European Union leaders will meet for a March 14-15 summit in Brussels to discuss terms for Cyprus, including the island nation’s debt sustainability and possibly imposing losses on depositors. A bailout for Cyprus, which would be the fifth rescue for a euro nation since the crisis began in 2009, may involve a debt target of 100 percent of gross domestic product in 2020, according to three EU officials who spoke on condition of anonymity. Cyprus said in January that a rescue could push its debt-to-GDP ratio to a peak of just under 140 percent in 2014. REGIONAL • Japan Machinery Orders Drop Sharply Amid Slow Recovery. Japanese core machinery orders fell 13.1% in January from the previous month, the government said Monday, the first decline in four months, as Japan's economic recovery has yet to gain momentum amid a recession in Europe and slower growth in China. The fall was much larger than a median forecast of a 1.4% decline in a survey of economists conducted by the Nikkei and Dow Jones Newswires. The government predicted last month that capital investment activity would chalk up slight growth in January-March, but officials now say that would be difficult. The government maintained its assessment of core machinery orders—that there is a gradual pickup observed in some sectors, despite the sharp decline in January. Machinery orders are widely regarded as a leading indicator of corporate capital investment. Core orders exclude those from electric power companies and those for ships, which are often a source of volatility in the overall data because of their large sizes. • China’s Economic Data Show Weakest Start Since 2009. China’s industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed, toughening challenges for a new leadership that wants to narrow the gap between rich and poor. Production increased 9.9 percent in the first two months and retail sales rose Page 2 of 7
12.3 percent, government data showed March 9, trailing economists’ estimates. New local-currency loans in February fell to 620 billion yuan ($99.6 billion), the People’s Bank of China said yesterday, lower than the estimates of 27 out of 28 analysts in a Bloomberg News survey. The growth in January-February retail sales was below the lowest economist projection of 13.8 percent and was the smallest for that period since 2004. The increase in factory output compared with the 10.6 percent median estimate in a Bloomberg survey. The statistics bureau doesn’t break out figures for January and February retail sales and industrial output in an attempt to smooth distortions caused by the timing of the Lunar New Year holiday. • China Unveils Government Agency Shake-Up Proposal. China plans to shake up government agencies including the organizations that oversee its contentious one-child policy and its food and drug safety, in a nod by authorities to flash points in China's rapid growth and development. The proposals outlined Sunday include a widely expected revamp of its troubled Ministry of Railways. China also plans to combine agencies that oversee energy policy, and regulation and censorship of print and film. It will also consolidate fishing and maritime regulation at a time when China's fishing industry has come under scrutiny for its growth and its role in international disputes. The proposals were outlined in a report to be delivered Sunday by State Councilor Ma Kai before the National People's Congress, which is holding its annual two-week session in Beijing. The proposals include merging the commission that oversees the one-child policy with the Ministry of Health and shifting development of China's population strategy to the National Development and Reform Commission, China's top economic planning body. • Thailand Raised by Fitch on Yingluck Stability. Thailand’s credit rating was restored to BBB+ by Fitch Ratings four years after political turmoil prompted a cut, signaling confidence in Prime Minister Yingluck Shinawatra’s ability to maintain social stability. The long-term foreign currency-denominated debt was raised one step by Fitch to three levels above junk on March 8, bringing the rating back in line with rankings by Standard & Poor’s and Moody’s Investors Service. Economic growth surged last quarter after a slump in the corresponding period in 2011, when the worst floods in almost 70 years disrupted production for manufacturers. “Thailand has sustained consumer price inflation in the low single digits for more than a decade and the record of price stability compares favorably with ’BBB’ peers, enhancing the capacity of the economy to absorb shocks,” Fitch said. Fitch said it expects the budget to remain consistent with the broader public debt to gross domestic product ratio remaining below 50 percent even with the government’s planned increase in infrastructure spending. “Fitch has revised its assessment of the risks to policy predictability and the investment environment from political and social tensions,” the ratings company said.
Page 3 of 7
• Myanmar Opposition Picks Leaders Amid Party Discord. Opposition leader Aung San Suu Kyi’s National League for Democracy announced a senior team dominated by longserving members to lead it into Myanmar's 2015 national elections, while she appealed for an end to party infighting that has raised questions about its capacity to govern. Ms. Suu Kyi won some praise for allowing elections for the executive committee rather than appointing members, as had been the practice when the party was unable to hold a congress. The committee was expanded to 15 members—five new faces, the rest veterans of the party's top ranks—from seven. Of the 120 members of the central committee, about 35% are new. The new crop of leaders include Zaw Myint Maung, a doctor imprisoned for 19 years after winning a parliamentary seat in 1990 elections the military never honored, and Nan Khin Htwe Myint, head of the party in ethnic minority Karen state. Most other senior roles remained with the party's old guard, including Ms. Suu Kyi, re-elected as party leader. IFIs NEWS (compiled from their websites) BIS: Working Paper - “Financial crises and bank funding: recent experience in the euro area •
The BIS has publicised the captioned working paper. “This paper provides an overview of bank funding trends in the euro area following the 2007-09 global financial crisis and the euro area crisis. It shows that funding has become segmented along national borders and that secured instruments are much more prevalent than previously. Rising debt retention by euro area banks has accompanied greater dependence on liquidity provided by the ECB.” http://www.bis.org/publ/work406.htm
IMF: Press Release •
The IMF has published the following country reports pertaining to Malaysia’s Financial Sector Assessment Program: • • • •
Detailed Assessment of Basel Core Principles for Effective Banking Supervision http://www.imf.org/external/pubs/ft/scr/2013/cr1356.pdf Detailed Assessment of Observance of the CPSS-IOSCO Principles for Financial Market Infrastructure http://www.imf.org/external/pubs/ft/scr/2013/cr1358.pdf Detailed Assessment of Implementation of IOSCO Objectives and Principles of Securities Regulation http://www.imf.org/external/pubs/ft/scr/2013/cr1359.pdf Detailed Assessment of Observance of Core Principles for Effective Deposit Insurance Systems http://www.imf.org/external/pubs/ft/scr/2013/cr1360.pdf
IMF: Working Papers •
The IMF has publicised the following working papers: •
“Rating Through-the-Cycle: What does the Concept Imply for Rating Stability and Accuracy?” http://www.imf.org/external/pubs/ft/wp/2013/wp1364.pdf
•
“Rules, Discretion, and Macro-Prudential Policy” http://www.imf.org/external/pubs/ft/wp/2013/wp1365.pdf
•
“The Impact of Uncertainty Shocks on the UK Economy”
Page 4 of 7
http://www.imf.org/external/pubs/ft/wp/2013/wp1366.pdf •
“The Challenge of Debt Reduction during Fiscal Consolidation” http://www.imf.org/external/pubs/ft/wp/2013/wp1367.pdf
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 8-Mar 11-Mar close China 6.23 6.22 6.22 6.22 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,685.00 9,685.00 9,700.00 Japan 86.75 96.00 96.00 96.08 Korea 1,064.40 1,090.46 1,090.46 1,095.00 Malaysia 3.06 3.11 3.11 3.11 Philippines 41.01 40.68 40.68 40.67 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.73 29.73 29.73 Vietnam 20,840.00 20,935.00 20,935.00 20,935.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.04 0.00 -0.15 -0.08 -0.41 -0.14 0.01 -0.06 0.00 0.00
2013 YTD (%chg) 0.2 -0.1 -0.5 -9.1 -2.9 -2.4 0.4 -2.2 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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,269.5 1,539.6 477.2
8-Mar 2,318.6 23,092.0 4,874.5 12,283.6 2,006.0 1,654.0 6,833.8 3,289.5 1,566.9 470.7
OVERNIGHT LENDING RATE (%) 8-Mar 11-Mar bps change 2.100 2.250 15.00 0.090 0.092 0.21 4.180 4.180 0.00 0.090 0.098 0.75 2.750 2.750 0.00 3.000 3.000 0.00 1.172 1.325 15.30 0.028 0.028 0.00 2.750 2.750 0.00 2.433 2.567 13.40
11-Mar 2,310.6 23,090.8 4,854.3 12,349.1 2,003.4 1,658.0 6,814.0 3,294.9 1,576.9 476.5
% change -0.35 0.00 -0.41 0.53 -0.13 0.24 -0.29 0.16 0.64 1.24
2013 YTD (%chg) 1.8 -0.9 11.7 18.8 -1.4 -1.0 16.3 2.9 12.0 13.9
3-MONTH INTERBANK LENDING RATE (%) 8-Mar 11-Mar bps change 3.881 3.882 0.04 0.383 0.382 -0.07 4.901 4.900 -0.07 0.250 0.250 0.00 2.760 2.760 0.00 3.210 3.210 0.00 0.292 0.425 13.30 0.375 0.375 0.00 2.861 2.861 0.00 6.000 6.000 0.00
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
7-Mar 61.38
8-Mar 61.89
bps change 0.50
40.36
39.41
-0.95
133.14 59.86 63.36 74.20 96.41 86.97 204.97
131.66 58.89 63.86 73.72 96.41 85.00 201.07
-1.48 -0.98 0.50 -0.48 0.00 -1.97 -3.90
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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. 8-Mar 11-Mar Gold Spot (in US$ per 1,579.0 1,580.0 ounce) Sources: Bloomberg & Datastream
% change 0.06
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 30-Jun 31-Jul 31-Aug China 3,240.0 3,240.0 3,272.9 Hong Kong SAR 295.0 296.3 298.2 Indonesia 106.5 106.6 109.0 Japan 1,270.5 1,272.8 1,273.2 Korea 312.4 314.4 316.9 Malaysia 134.2 134.5 134.9 Philippines 76.1 79.8 80.7 Singapore 243.4 244.1 246.2 Thailand 174.7 175.3 179.2 Vietnam 19.7 20.0 20.8 Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
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 321.0 108.8 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 83.8 259.1 179.2 n.a
3,311.6
517.8
572.8
Import cover (Qtrs of imports covered by reserves) 6.4
304.8
144.7
711.2
2.1
0.4
105.2 1,258.8 327.4 140.3 83.8 259.1 179.2 n.a
50.3 70.4 156.8 56.7 19.3 121.5 54.6 25.4
43.9 2,371.0 126.7 30.4 8.0 924.3 57.2 10.0
2.1 17.9 2.1 2.5 4.4 2.1 3.3 -
2.4 0.5 2.6 4.6 10.5 0.3 3.1 -
(US$bn) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
2013
Reserves over short-term debt 5.8
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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Country MALAYSIA MALAYSIA JAPAN
Indicators Imports YoY% Exports YoY% Machine Orders YOY%
Period Jan Jan Jan
Last 16 3.49 -9.7
Previous -6.5 -5.8 -3.4
SELECTED ECONOMIC RELEASES CALENDAR (04 Mar – 08 Mar 2013) Expected Release Date
Country
Indicators
Period
3/11/2013
MALAYSIA
Imports YoY%
Jan
MALAYSIA
Exports YoY%
Jan
3/12/2013 3/13/2013
3/14/2013
3/15/2013
JAPAN
Machine Orders YOY%
Jan
PHILIPPINES
Total Exports (YoY)%
Jan
JAPAN
Consumer Confidence
Feb
SOUTH KOREA
Unemployment Rate (SA)%
Feb
SOUTH KOREA
Bank Lending to HH (KRW Tln)
Feb
PHILIPPINES
Unemployment Rate%
Jan
SOUTH KOREA
South Korea 7-Day Repo Rate %
Mar 14
CHINA
Actual FDI (YoY)%
Feb
JAPAN
Industrial Production YOY%
Jan F
JAPAN
Capacity Utilization (MoM)%
Jan F
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Jan
HONG KONG
Producer Price (YoY)%
4Q
HONG KONG
Industrial Production (YoY)%
4Q
THAILAND
Foreign Reserves (USD bn)
Mar 8
SINGAPORE
Retail Sales (YoY)%
Jan
PHILIPPINES
Overseas Remittances (YoY)%
Jan
SINGAPORE
Unemployment Rate (sa)%
4Q F
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 12 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Retreat From 19-Month High. The MSCI Asia Pacific Index slid 0.5 percent to 135.95 as of 2:59 p.m. in Tokyo after rising as much as 0.3 percent. About three stocks fell for each that gained on the measure, which closed yesterday at the highest level since August 2011. Japan’s Nikkei 225 Stock Average (NKY) retreated 0.3 percent, reversing a gain of as much as 0.9 percent. BOJ deputy-governor nominee Kikuo Iwata said in parliament that decisive monetary easing was needed to pull the country out of deflation. Hong Kong’s Hang Seng Index slipped 0.4 percent, while China’s Shanghai Composite Index fell 1 percent, reversing an earlier gain of 1 percent, with trading volume 5.9 percent below its 30-day average for the time of day. South Korea’s Kospi Index dropped 0.5 percent while Singapore’s Straits Times Index gained 0.5 percent.
•
West Texas Intermediate oil fell from the highest price in almost two weeks before a report that may show U.S. crude stockpiles rose to an eight-month high. Refining in China dropped to the lowest level in four months. WTI for April delivery declined as much as 37 cents to $91.69 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.71 at 2:52 p.m. Singapore time. Brent for April settlement was down 47 cents, or 0.4 percent, at $109.75 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL •
Euro Zone Shows Signs of Pickup. The euro-zone economy appeared to pick up steam in January, a gauge of activity from the Organization of Economic Cooperation and Development showed, with official data from Germany showing a modest rebound in exports from the region's biggest economy. The figures contrast with earlier, more downbeat measures of economic activity, and belie a sharp divergence in the strength of individual euro-zone nations. The OECD said its composite leading indicators for the 17 euro-zone countries in January rose to 99.7 from 99.6, having also increased in December. "In the euro area as a whole, and in particular Germany, the CLIs point to a pickup in growth," the OECD said. "The CLIs for Italy and France point to no further declines in growth." Most economists expect the currency bloc's economy to contract again this year, but the OECD's leading indicator suggest growth may return to the currency area later this year. A reading above 100.00 for a leading indicator means economic growth is set to be above the trend rate, which itself varies widely among large economies.
•
Britain Loses to Germany as CDS Rise Most in World. Confidence in U.K. credit is declining the most in the global sovereign-debt market on concern the economy will fall into its third recession in five years and force the government to increase borrowing. Credit-default swaps insuring gilts rose 76 percent from a more than four-year low of 26 basis points on Nov. 1, the most among 67 governments tracked by Bloomberg. The swaps cost 10 basis points more than contracts on German bunds, the 17-nation euroarea’s benchmark debt securities, compared with 34.5 basis points less in June. Just last year, Britain’s debt was considered safest among the biggest European borrowers amid concern the euro area would splinter and the cost to Germany of supporting weaker members would surge. A contraction in the first quarter would mark the third U.K. recession since early 2008. Moody’s downgraded the U.K. one step to Aa1 from Aaa on Feb. 22, citing continued weakness in the economy and its potential effect on the government’s fiscal program. Standard & Poor’s and Fitch Ratings said they may cut the nation’s top ranking.
REGIONAL •
Iwata Says BOJ Can Beat Deflation by Buying Longer-Term Bonds. Bank of Japan deputy governor nominee Kikuo Iwata said the central bank can end deflation solely through buying government debt and doesn’t need to purchase riskier assets to meet its inflation target. “If we buy long-term bonds, we can achieve 2 percent inflation within two years,” Iwata, said at an upper house parliamentary confirmation hearing today. “We need decisive easing.” Iwata’s comments come after Prime Minister Shinzo Abe’s nominee for governor, Haruhiko Kuroda, said yesterday that the bank would consider buying derivatives and signaled a readiness for a quick expansion in monetary stimulus. The yen dropped to a 3 1/2-year low today as Iwata’s comments fanned speculation the central bank will boost cash infusions in coming months.
•
China's Steel Production Rises to Record High. China produced a record amount of steel for a second-consecutive month in February even as its economy cooled, reflecting the difficulty many mills face in cutting output despite longstanding overcapacity in the industry. China's steel producers in February shattered the record set in January, raising output by 9.8% on year to 2.21 million metric tons a day, the National Bureau of Statistics said Tuesday. Daily production averaged only 1.86 million tons in December. February's record output was all the more notable because it came during a short month that included the weeklong Lunar New Year holiday. But China's economy showed signs of weakness in the first two months of the year, leaving analysts divided about the outlook for this year. Recent data indicated that inflation is rising and growth in manufacturing activity and industrial production is slowing. In addition, the Chinese government this month announced tough new measures intended to cool the property sector, which is key to the steel industry. The record steel production in January and February came as Chinese mills are under pressure from the government to cut capacity and relocate polluting operations. Page 2 of 7
•
Malaysia's Trade Surplus Narrows. Malaysia's trade surplus shrank to its narrowest level in more than a decade in January, suggesting the country will have to rely on domestic demand to power growth until demand from Western markets improves. Malaysia's January trade surplus stood at 3.27 billion ringgit ($1.05 billion), according to figures released Monday by the Ministry of International Trade and Industry. That was the lowest level since April 2002 and a sharp decline from December's 8.24 billion ringgit surplus. Exports grew 3.5% on-year in January, just less than the 3.6% rise predicted by private-sector economists but better than December's 5.8% contraction. January imports, meanwhile, increased 16%, accelerating from December's 6.5% fall and outstripping the 4.7% gain forecast by economists. Some signs of an uptick in demand are showing. Exports of electrical and electronics products, which account for about one-third of Malaysia's total exports, grew 4.7% in January, driven by higher demand from China and the U.S., the ministry said. Meanwhile, Malaysia's industrial output rose 4.6% in January from the same month a year earlier, driven by the manufacturing, electricity and mining sectors, official data released Monday showed.
IFIs NEWS (compiled from their websites) ADB: Press Release - $425 Billion Gap in Trade Finance Hits at Growth and Jobs in Asia •
Companies operating in developing Asia lost out on nearly $425 billion in trade finance in 2011 alone, according to a new survey by the ADB. “Dramatic shortfalls in meeting financing needs of importing and exporting companies are exacting a huge toll on job creation and economic growth in the region,” said Steven Beck, Head of Trade Finance at ADB. “These trade finance gaps need to be addressed to give developing Asia a boost to create jobs and alleviate poverty.” http://www.adb.org/news/425-billion-gap-trade-finance-hits-growth-and-jobs-asia
ADBI: Speech - Opening Remarks by Masahiro Kawai at ADBI-JFSA Joint Conference on Strengthening the Asian Financial Sector toward Sustainable and Inclusive Growth •
The ADBI has published the opening remarks made by Mr Masahiro Kawai, Dean and CEO of ADBI, at the ADBI-JFSA Joint Conference on Strengthening the Asian Financial Sector toward Sustainable and Inclusive Growth held in ADBI, Tokyo on 8 March 2013. http://www.adbi.org/files/speech.2013.03.08.opening.remarks.kawai.strengthening.asian.finan cial.sector.pdf
ADBI: Speech - Opening Remarks by Masahiro Kawai at ADBI/Graduate Institute/WTO Conference on The Future of the World Trading System: Asian Perspectives •
The ADBI has published the opening remarks made by Mr Masahiro Kawai, Dean and CEO of ADBI at the ADBI/Graduate Institute/WTO Conference on The Future of the World Trading System: Asian Perspectives held in Geneva, Switzerland on 11-12 March 2013. http://www.adbi.org/files/speech.2013.03.11.opening.remarks.kawai.future.world.trading.syste m.pdf
G20: Press Release - Kirill Dmitriev: Investment in the developing economies are to become the locomotive of the global economic growth •
On March 6, the third session of the Business 20 investment and infrastructure working group was held in Berlin. "Global economic growth may be stimulated through a number of measures, such as cross-border projects and government support. Investment into the emerging
Page 3 of 7
economies will become the locomotive of the global economic growth," Mr Dmitriev noted, summing up the results of the meeting http://www.g20.org/news/20130306/781257533.html IMF: Press Release: Country Reports on Bangladesh about First Review under the Extended Credit Facility and Poverty Reduction Strategy •
Staff Report, Staff Statements and Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Bangladesh http://www.imf.org/external/pubs/ft/scr/2013/cr1361.pdf
•
Joint Staff Advisory Note on the Poverty Reduction Strategy Paper http://www.imf.org/external/pubs/ft/scr/2013/cr1362.pdf
•
Poverty Reduction Strategy Paper http://www.imf.org/external/pubs/ft/scr/2013/cr1363.pdf
WTO: Press Release - ‘Asian Century’ means shared prosperity, responsibility and multilateral agreements, Lamy tells conference •
Asia has enjoyed a surge in trade in proportion to its economic size, is increasingly involved in global supply chains and has turned to free trade agreements to pursue its trade agenda. The time has come to “multilateralize” those agreements, WTO Director-General Pascal Lamy told a conference on “The Future of the World Trading System: Asian perspectives” on 11 March 2013 http://www.wto.org/english/news_e/sppl_e/sppl269_e.htm (Full Speech)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 11-Mar 12-Mar close China 6.23 6.22 6.22 6.22 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,685.00 9,700.00 9,693.00 Japan 86.75 96.00 96.28 96.20 Korea 1,064.40 1,090.46 1,095.00 1,095.26 Malaysia 3.06 3.11 3.11 3.11 Philippines 41.01 40.68 40.67 40.63 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.73 29.72 29.63 Vietnam 20,840.00 20,935.00 20,935.00 20,945.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.04 0.00 0.07 0.08 -0.02 0.04 0.11 0.02 0.30 -0.05
2013 YTD (%chg) 0.3 -0.1 -0.4 -9.2 -2.9 -2.4 0.6 -2.2 2.4 -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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,269.5 1,539.6 477.2
11-Mar 2,310.6 23,090.8 4,854.3 12,349.1 2,003.4 1,658.0 6,814.0 3,293.0 1,577.7 476.5
OVERNIGHT LENDING RATE (%) 11-Mar 12-Mar bps change
12-Mar 2,286.6 22,890.6 4,854.3 12,314.8 1,993.3 1,653.1 6,786.4 3,301.5 1,579.9 475.3
% change -1.04 -0.87 0.00 -0.28 -0.50 -0.29 -0.40 0.26 0.14 -0.24
2013 YTD (%chg) 0.8 -1.8 11.7 18.5 -1.9 -1.3 15.8 3.1 12.3 13.6
3-MONTH INTERBANK LENDING RATE (%) 11-Mar 12-Mar bps change
Page 4 of 7
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2.250 0.092 4.180 0.098 2.750 3.000 1.325 0.036 2.750 2.567
2.090 0.089 4.180 0.085 2.750 3.000 1.717 0.036 2.750 2.833
-16.00 -0.36 0.00 -1.25 0.00 0.00 39.20 0.00 0.00 26.60
3.882 0.382 4.900 0.250 2.770 3.210 0.425 0.375 2.861 6.000
3.882 0.381 4.900 0.250 2.770 3.210 0.360 0.375 2.861 6.133
0.06 -0.07 0.00 0.00 0.00 0.00 -6.50 0.00 0.00 13.30
CREDIT DEFAULT SWAP (IN BPS) 8-Mar 11-Mar bps change China 61.89 61.94 0.06 Hong Kong 39.41 38.41 -1.01 SAR Indonesia 131.66 129.38 -2.28 Japan 58.89 57.94 -0.94 Korea 63.86 64.41 0.55 Malaysia 73.72 74.29 0.57 Philippines 96.41 94.69 -1.72 Thailand 85.00 85.10 0.09 Vietnam 201.07 199.83 -1.24 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. 11-Mar 12-Mar Gold Spot (in US$ per 1,581.6 1,582.6 ounce) Sources: Bloomberg & Datastream
% change 0.07
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0
2013 31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8
31-Jan n.a 321.0 108.8 1,267.3 328.9 140.2 85.3
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.8
Page 5 of 7
Singapore 243.4 244.1 246.2 Thailand 174.7 175.3 179.2 Vietnam 19.7 20.0 20.8 Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves
252.1 183.6 21.3
254.2 181.5 n.a
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
255.8 181.6 n.a
259.3 181.6 n.a
Import cover (Qtrs of imports covered by reserves) 6.4
258.8 181.6 n.a
259.1 179.2 n.a
Reserves over short-term debt
3,311.6 517.8 572.8 China Hong Kong 304.8 144.7 711.2 2.1 SAR 50.3 43.9 2.1 Indonesia 105.2 1,258.8 70.4 2,371.0 17.9 Japan 156.8 126.7 2.1 Korea 327.4 140.3 56.7 30.4 2.5 Malaysia 19.3 8.0 4.4 Philippines 83.8 259.1 121.5 924.3 2.1 Singapore 54.6 57.2 3.3 Thailand 179.2 n.a 25.4 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Country PHILIPPINES JAPAN
Indicators Total Exports (YoY)% Consumer Confidence
Period Jan Feb
Last -2.7 44.3
Previous 16.5 43.3
SELECTED ECONOMIC RELEASES CALENDAR (04 Mar – 08 Mar 2013) Expected Release Date
Country
Indicators
Period
3/11/2013
MALAYSIA
Imports YoY%
Jan
MALAYSIA
Exports YoY%
Jan
JAPAN
Machine Orders YOY%
Jan
PHILIPPINES
Total Exports (YoY)%
Jan
JAPAN
Consumer Confidence
Feb
SOUTH KOREA
Unemployment Rate (SA)%
Feb
SOUTH KOREA
Bank Lending to HH (KRW Tln)
Feb
PHILIPPINES
Unemployment Rate%
Jan
SOUTH KOREA
South Korea 7-Day Repo Rate %
Mar 14
3/12/2013 3/13/2013
3/14/2013
3/15/2013
CHINA
Actual FDI (YoY)%
Feb
JAPAN
Industrial Production YOY%
Jan F
JAPAN
Capacity Utilization (MoM)%
Jan F
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Jan
HONG KONG
Producer Price (YoY)%
4Q
HONG KONG
Industrial Production (YoY)%
4Q
THAILAND
Foreign Reserves (USD bn)
Mar 8
SINGAPORE
Retail Sales (YoY)%
Jan
PHILIPPINES
Overseas Remittances (YoY)%
Jan
SINGAPORE
Unemployment Rate (sa)%
4Q F
Page 6 of 7
5.8 0.4 2.4 0.5 2.6 4.6 10.5 0.3 3.1 -
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 13 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Shares Decline With European Equities as Yen, Oil Advance. Asian stocks fell as Chinese shares tumbled to a two-month low and European equities declined. The MSCI Asia Pacific Index slid 0.4 percent as the Shanghai Composite Index lost as much as 1.5 percent, declining for a fifth day. Chinese stocks fell, dragging the benchmark index to a two-month low, as real estate and construction companies tumbled on concern policy makers will step up property curbs. Hong Kong’s Hang Seng Index lost 1.5 percent while Japan’s Nikkei 225 Stock Average dropped 0.6 percent, retreating from a four-year high.
BREAKING NEWS GLOBAL •
IMF’s Lipton Urges Officials to Redouble Bank Oversight Reform. The International Monetary Fund’s No. 2 official urged policy makers to clean up banks and strengthen oversight of their financial systems or risk stalling a recent rally in global markets. With the world economy still subdued, further repair of banks’ balance sheets is necessary, which may require more capital for some lenders and closure for others, David Liption, the fund’s first deputy managing director, said in a speech in Washington today. He also called for unwinding of excessive public and private debt. “He criticized “delays and dilutions” in a reform agenda agreed upon by the Group of 20 economies, calling “a particular worry” the delay in implementation of Basel III international capital standards in the European Union and the U.S. Lipton said less progress has been made in the derivatives market. Another area Lipton called “particularly troubling to many global stakeholders” is a lack of movement to a single set of financial reporting standards that the G-20 called for.
•
Hollande: Deficit to Be Higher Than Pledge. French President François Hollande said Tuesday the country's budget deficit will be well above what he pledged when he came to power 10 months ago. The 58-year-old socialist president came to power in May last year saying he would steer France on a path to growth while also bringing the budget deficit down to 3% of annual output in 2013 from 5.2% in 2011. The final deficit figure for 2012 hasn't yet been published, but the government says it will be around 4.5% of GDP. After the economy posted its deepest contraction at the end of 2012 since the recession in 2008-2009, Mr. Hollande's government now refuses to take extra austerity measures this year to bring down the deficit, arguing this would hurt the already weakened economy. The French government is trying to convince the European Commission to give it an extra year to reach the 3% target written into treaties, arguing it is already making unprecedented efforts. The Commission has indicated it may be willing to grant France the extra time if the country shows
evidence of reforming its economy and making sufficient effort to reduce its so-called structural deficit, a measure of deficit that strips out the impact of the economic cycle. •
U.K. Industrial Output Unexpectedly Falls on Oil, Gas. U.K industrial production unexpectedly fell in January as factory output slumped, fueling concerns that Britain may slip into a triple-dip recession. Production dropped 1.2 percent from December, when it jumped 1.1 percent, the Office for National Statistics said today in London. Manufacturing declined 1.5 percent. The National Institute of Economic and Social Research estimated that the economy shrank 0.1 percent in the three months through February. The pound dropped to as low as $1.4832 against the dollar, the weakest since June 2010, and was trading at $1.4868 as of 2:40 p.m. in London, down 0.3 percent on the day. Government bonds rose, pushing the 10-year gilt yield down five basis points to 1.96 percent.
REGIONAL •
BOJ Critic Iwata Gains Traction as Minor Japan Parties Back Him. Two opposition parties said they will support Kikuo Iwata for Bank of Japan deputy governor, reducing the risk that Prime Minister Shinzo Abe will fail to win confirmation for all three of his central bank nominees. The endorsements put Iwata above the threshold needed to win confirmation in the upper house of parliament, provided lawmakers follow their party’s recommendations. The main opposition Democratic Party of Japan yesterday said it would vote against Iwata while supporting Haruhiko Kuroda as central bank governor and Hiroshi Nakaso for the other deputy post. Abe needs opposition lawmakers to secure the new central bank leadership team, as the ruling coalition lacks an upper house majority. A rejection of Iwata, 70, who has advocated greater monetary stimulus since the 1990s, may reduce the number of BOJ board votes in favor of greater asset purchases as Kuroda presses for more easing.
•
Japan's Consumer Sentiment Rises. Consumer sentiment in Japan in February was at its highest level in more than 5 1/2 years, the government said Tuesday, as expectations of an economic upturn sparked by Prime Minister Shinzo Abe's government continue to mount. The index for the Cabinet Office's monthly consumer sentiment improved to 44.3 from January's 43.3, its highest level since June 2007 during the latter part of an export-led economic recovery that ended later that year. Indices for living circumstances, pay increases, the labor market and the purchase outlook for durable goods all rose for the second consecutive month since Mr. Abe's pro-business Liberal Democratic Party took office in December, after months of declines throughout 2012. Earlier Tuesday, a joint survey by the finance ministry and the Cabinet Office showed that large corporations' economic outlook index for the coming April-June quarter was at 3.8, up from minus-5.5 in the October to December quarter. Additionally, the government-affiliated Nippon Research Institute reported
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Tuesday that the consumer economic outlook for the coming 12 months compared with the previous year, was the highest since the institute began polling in 1977 •
PBOC Chief Says China Should Be on ‘High Alert’ on Inflation. China should be on “high alert” over inflation after February’s price gains exceeded forecasts, central bank Governor Zhou Xiaochuan said. Monetary-policy is “no longer relaxed” and is “neutral” as demonstrated by a 13 percent target for money-supply growth that’s tighter than recent years, Zhou, head of the People’s Bank of China, said at a press conference today during the annual gathering of China’s National People’s Congress. Zhou’s comments add to signs that officials are tightening policies even as the recovery in the world’s second-biggest economy shows signs of weakness. While the central bank has left interest rates and lenders’ reserve requirements unchanged since July last year, the government this month intensified a campaign to control home prices. February inflation, distorted by the weeklong Lunar New Year holiday, accelerated to a 10month-high of 3.2 percent.
•
Philippines Maps Policy Shift to Avert 1997 Risk. The Philippines is stepping up its battle against surging capital inflows with a plan to shift to a multiple interest-rate policy regime, as stocks at a record and the peso near a five-year high heighten assetbubble risks. Bangko Sentral ng Pilipinas will probably use the rate on special deposit accounts and the overnight lending rate to supplement its benchmark as tools to guide policy, according to Australia & New Zealand Banking Group Ltd., Citigroup Inc. and Nomura Holdings Inc. All 16 economists in a Bloomberg survey predict the key borrowing rate will stay at 3.5 percent tomorrow. Governor Amando Tetangco, who has imposed limits on lenders’ currency forward positions and expanded monitoring of real estate loans to fight inflows, said yesterday the central bank is moving to an interest-rate corridor approach. Bangko Sentral has intervened to manage the peso, Tetangco said on Jan. 15, as the currency approached its strongest levels since 2008. A liquidity surge drove the interbank overnight rate to negative this year, while money supply increased 10.84 percent in January, the fastest pace in 19 months. Net portfolio inflows were almost six times higher in January compared to December.
IFIs NEWS (compiled from their websites) ADB: Publication - 3 in 4 Asia-Pacific Nations Facing Water Security Threat • More than 75% of the countries in Asia and the Pacific are experiencing a serious lack of water security, with many of them facing an imminent water crisis unless immediate steps are taken to improve management of water resources, says a new study prepared jointly by the ADB and Asia-Pacific Water Forum (APWF). The study highlights two stark realities ― sharply rising inequality in access to water and sanitation, and the increasingly precarious state of rivers. It presents options for measures that can be adopted to improve water security to mitigate the growing pressure from booming populations, urbanization, pollution, over-extraction of groundwater, climate change and other factors. http://www.adb.org/news/3-4-asia-pacific-nations-facing-water-security-threat-study Page 3 of 6
(Press Release) http://www.adb.org/publications/asian-water-development-outlook-2013 (Publication) UNCTAD: Publication - Latest UNCTAD “Investment Policy Monitor” released • A surge in new restrictions and regulations in national investment policy was observed in the four months to February 2013. At the international level, the trend to negotiate regional investment agreements gathered pace. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=421&Sitemap_x0020_T axonomy=UNCTAD%20Home;#6;#Investment and Enterprise (Press Release) http://unctad.org/en/PublicationsLibrary/webdiaepcb2013d2_en.pdf (Investment Policy Monitor No. 9) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 12-Mar 13-Mar close China 6.23 6.22 6.22 6.21 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,685.00 9,693.00 9,689.00 Japan 86.75 96.00 96.08 95.86 Korea 1,064.40 1,090.46 1,095.26 1,097.45 Malaysia 3.06 3.11 3.11 3.11 Philippines 41.01 40.68 40.63 40.56 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.73 29.58 29.61 Vietnam 20,840.00 20,935.00 20,945.00 20,950.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.03 -0.01 0.04 0.23 -0.20 0.03 0.17 -0.12 -0.10 -0.02
2013 YTD (%chg) 0.3 -0.1 -0.4 -8.9 -3.1 -2.3 0.7 -2.2 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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,269.5 1,539.6 477.2
12-Mar 2,286.6 22,890.6 4,854.3 12,314.8 1,993.3 1,656.5 6,786.4 3,303.0 1,576.7 475.3
OVERNIGHT LENDING RATE (%) 12-Mar 13-Mar bps change 2.090 2.060 -3.00 0.089 0.086 -0.29 4.180 4.180 0.00 0.085 0.095 1.00 2.750 2.750 0.00 3.000 3.000 0.00 1.717 1.681 -3.60 0.035 0.035 0.00 2.750 2.750 0.00 2.833 2.567 -26.60
13-Mar 2,264.0 22,556.7 4,835.4 12,239.7 1,999.7 1,646.2 6,776.6 3,283.9 1,575.2 473.2
% change -0.99 -1.46 -0.39 -0.61 0.32 -0.62 -0.15 -0.58 -0.09 -0.45
2013 YTD (%chg) -0.2 -3.2 11.2 17.7 -1.5 -1.7 15.6 2.6 11.9 13.1
3-MONTH INTERBANK LENDING RATE (%) 12-Mar 13-Mar bps change 3.882 3.883 0.11 0.381 0.381 -0.07 4.900 4.900 0.00 0.250 0.250 0.00 2.770 2.770 0.00 3.210 3.210 0.00 0.360 0.234 -12.60 0.375 0.375 0.00 2.861 2.862 0.08 6.133 5.750 -38.30
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CREDIT DEFAULT SWAP (IN BPS) 11-Mar 12-Mar bps change China 61.94 61.96 0.02 Hong Kong 38.41 40.55 2.14 SAR Indonesia 129.38 129.42 0.05 Japan 57.94 57.95 0.00 Korea 64.41 65.91 1.50 Malaysia 74.29 74.80 0.50 Philippines 94.69 95.72 1.03 Thailand 85.10 85.12 0.02 Vietnam 199.83 199.67 -0.16 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. 12-Mar 13-Mar Gold Spot (in US$ per 1,592.8 1,590.0 ounce) Sources: Bloomberg & Datastream
% change -0.18
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 30-Jun 31-Jul 31-Aug China 3,240.0 3,240.0 3,272.9 Hong Kong SAR 295.0 296.3 298.2 Indonesia 106.5 106.6 109.0 Japan 1,270.5 1,272.8 1,273.2 Korea 312.4 314.4 316.9 Malaysia 134.2 134.5 134.9 Philippines 76.1 79.8 80.7 Singapore 243.4 244.1 246.2 Thailand 174.7 175.3 179.2 Vietnam 19.7 20.0 20.8 Note: Data for China and Vietnam refer to FX reserves
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
2013 31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
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 321.0 108.8 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 83.8 259.1 179.2 n.a
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EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn)
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
Import cover (Qtrs of imports covered by reserves) 6.4
Reserves over short-term debt
3,311.6 517.8 572.8 China Hong Kong 304.8 144.7 711.2 2.1 SAR 50.3 43.9 2.1 Indonesia 105.2 1,258.8 70.4 2,371.0 17.9 Japan 156.8 126.7 2.1 Korea 327.4 140.3 56.7 30.4 2.5 Malaysia 19.3 8.0 4.4 Philippines 83.8 259.1 121.5 924.3 2.1 Singapore 54.6 57.2 3.3 Thailand 179.2 n.a 25.4 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Country SOUTH KOREA SOUTH KOREA
Indicators Unemployment Rate (SA)% Bank Lending to HH (KRW Tln)
Period Feb Feb
Last 3.5 461.5
Previous 3.2 463.1
SELECTED ECONOMIC RELEASES CALENDAR (04 Mar – 08 Mar 2013) Expected Release Date
Country
Indicators
Period
3/11/2013
MALAYSIA
Imports YoY%
Jan
MALAYSIA
Exports YoY%
Jan
JAPAN
Machine Orders YOY%
Jan
PHILIPPINES
Total Exports (YoY)%
Jan
JAPAN
Consumer Confidence
Feb
SOUTH KOREA
Unemployment Rate (SA)%
Feb
SOUTH KOREA
Bank Lending to HH (KRW Tln)
Feb
PHILIPPINES
Unemployment Rate%
Jan
SOUTH KOREA
South Korea 7-Day Repo Rate %
Mar 14
CHINA
Actual FDI (YoY)%
Feb
JAPAN
Industrial Production YOY%
Jan F
JAPAN
Capacity Utilization (MoM)%
Jan F
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Jan
HONG KONG
Producer Price (YoY)%
4Q
HONG KONG
Industrial Production (YoY)%
4Q
THAILAND
Foreign Reserves (USD bn)
Mar 8
SINGAPORE
Retail Sales (YoY)%
Jan
PHILIPPINES
Overseas Remittances (YoY)%
Jan
SINGAPORE
Unemployment Rate (sa)%
4Q F
3/12/2013 3/13/2013
3/14/2013
3/15/2013
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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5.8 0.4 2.4 0.5 2.6 4.6 10.5 0.3 3.1 -
MARKET UPDATE FOR ASEAN+3 14 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Outside Japan Fall on China Policy Concern. Asian stocks outside Japan declined, led by material producers and developers, on concern policy makers in China will step up efforts to cool the property market and as Hong Kong banks raised mortgage rates. The MSCI Asia Pacific Excluding Japan Index (MXAP) dropped 0.5 percent to 475.24 as of 3:04 p.m. Hong Kong time, with about two shares falling for each that rose. Hong Kong’s Hang Seng Index (HSI) fell 0.4 percent after HSBC Holdings Plc and Standard Chartered Plc raised mortgage rates in the city. The Shanghai Composite Index added 0.3 percent, erasing losses of 0.5 percent. Japan’s Nikkei 255 Stock Average, the best performing developed-market benchmark gauge this year, rose after the lower house endorsed Prime Minister Shinzo Abe’s nominees for the Bank of Japan’s leadership.
BREAKING NEWS GLOBAL •
EU Summit Set to Loosen Deficit Shackles. European leaders are loosening the economic shackles once demanded by Germany as the recession and mounting unemployment in southern Europe shove aside the debt crisis as the euro area’s biggest headache. A two-day Brussels summit starting today will endorse plans for “structural” assessments of national budgets, according to a draft statement, using code for granting countries such as France, Spain and Portugal extra time to bring down deficits. “Substantial progress is being made toward structurally balanced budgets and that progress must continue,” reads the statement, obtained by Bloomberg News. The focus is on “growth- friendly fiscal consolidation.”
•
Falling Demand Hits Euro-Zone Factories. Factory output fell in the 17 countries that use the euro in January, confirming recent survey evidence that the sector made a poor start to the first quarter of the year. The figures are the latest to show that the euro-zone economy is likely to shrink again in the first three months of 2013, extending a 15-month downturn that has exacerbated its fiscal crisis and pushed unemployment to record levels. Eurostat, the European Union's official statistics agency, said industrial production in the euro zone fell 0.4% in January from December, reversing part of the prior month's 0.9% increase. Economists in a Dow Jones poll had predicted a smaller, 0.1% decline in January. In annual terms industrial production fell 1.3%, a less significant drop than the 2.0% fall predicted by economists.
•
Sales at U.S. Retailers Advance by Most in Five Months. Sales at U.S. retailers climbed twice as much as forecast in February, showing improving job prospects are helping
consumers and the economy overcome higher taxes and gasoline prices. Purchases jumped 1.1 percent, exceeding all projections in a Bloomberg survey of economists and the biggest gain in five months, according to Commerce Department figures issued today in Washington. Another report showed companies boosted inventories in January to gear up for the pickup in demand. Sales excluding autos, gasoline and building materials -- the figures used to calculate gross domestic product -- climbed 0.4 percent after a 0.3 percent increase in the previous month, today’s report showed. Economists at JPMorgan in New York raised their forecast for first-quarter growth to a 2.5 percent annualized pace from a previous estimate of 1.5 percent while economists at Deutsche Bank Securities raised their forecast for first-quarter GDP to a 3 percent pace from a 1.5 percent prior estimate. REGIONAL •
China's Legislature Selects Xi as President. China formally selected Communist Party chief Xi Jinping as the nation's president on Thursday, marking the beginning of the end of China's once-a-decade leadership change. China's National People's Congress, approved Mr. Xi in a near-unanimous vote. The move was a formality—Mr. Xi in November was named general-secretary of the Communist Party, making him the top official in the organization. China on Friday is expected to name its new premier, a move widely expected to result in the elevation of Vice Premier Li Keqiang. Mr. Xi has raised public expectations of overhauls through a series of strong statements on corruption and waste since his November appointment.
•
Japan’s Lower House Approves Kuroda for BOJ Governor. Haruhiko Kuroda was endorsed by the lower house of parliament to become Bank of Japan governor, clearing the first hurdle in Prime Minister Shinzo Abe’s plan to install a central bank leadership in favor of more easing. Lawmakers in the chamber, which is dominated by the ruling coalition, today also approved Kikuo Iwata and Hiroshi Nakaso for two deputy governor posts. Abe now needs to get his nominations through an upper house vote tomorrow, where his Liberal Democratic Party lacks a majority. The largest opposition party’s pledge to reject Iwata, who has advocated greater monetary stimulus since the 1990s, while backing Kuroda, adds to the risk of a BOJ board where there is less support for boosting asset purchases. While supporting Kuroda this time, the opposition Democratic Party of Japan reserves the right to vote against him once he is re-nominated next month after completing the term of outgoing Governor Masaaki Shirakawa. Shirakawa steps down March 19, before his term was due to end on April 8. Kuroda must be confirmed again to serve for the regular five-year period beginning April 9, according to the BOJ.
•
Bank of Korea Holds Steady; Flags Growth Risks. South Korea's central bank kept its benchmark interest rate unchanged for a fifth consecutive month Thursday but noted risks to future growth, fueling expectations for a rate cut in the near future. The Bank Page 2 of 7
of Korea left the base rate at 2.75%, as expected. BOK Governor Kim Choong-soo said he expects the domestic economy to have improved in the first quarter from the previous three months, but cautioned that fiscal troubles in advanced economies and the Japanese yen's recent weakness could continue to pose a challenge to Asia's fourth-largest economy. A falling yen helps the competitiveness of Japanese exporters, many of which compete against Korean firms. Mr. Kim said, "The output gap remains negative, which raises the need for economic stimulus to the extent that it doesn't hurt price stability." The South Korean economy has been gradually picking up since the third quarter of last year, but slowing manufacturing activity in recent months suggests weak underlying conditions. Inflation remains subdued, staying well below the BOK's target range of 2.5%-3.5% for several months. •
Hong Kong Banks Boost Rates as Government Cools House Market. HSBC Holdings Plc (5) and Standard Chartered Plc (2888) raised Hong Kong mortgage rates for the first time since 2011, after the banking regulator tightened risk rules on concern a property bubble may undermine financial stability.Shares in the city’s real estate developers fell, heading for their biggest drop in four months. The banks will raise home loan charges priced at the best lending rate by 25 basis points, starting today, they said in e-mailed statements yesterday. The Hong Kong Monetary Authority last month told banks to set the risk weighting for new residential loans at 15 percent or more, seeking to strengthen buffers after prices doubled to a record in the past four years. Since taking office in July, Hong Kong Chief Executive Leung Chun-ying has added property taxes, favored local permanent residents over foreigners, tightened mortgage rules and increased the supply of buildable land.
•
Indonesia Is Open to Raising Fuel Prices. The Indonesian government is open to raising the price of subsidized fuel, but it would first try other ways to curb rapidly rising consumption, a senior official said Wednesday. Past proposals to raise subsidized fuel prices have led to riots. The Indonesian government is worried about the impact of the subsidies on the budget, and it is trying to juggle the cost of bridging high global oil prices and domestic price caps while at the same time keeping the electorate on its side ahead of coming elections. "We are pushing for volume management. We're in intense discussions to limit consumption levels," said Vice Finance Minister Mahendra Siregar on the sidelines of a business conference in Jakarta. The "option to raise fuel prices remains open," he added. Various government officials have previously raised the idea of promoting the wider use of gas-based fuels, instead of oil-based ones. The price of subsidized gasoline and diesel fuel is pegged at 4,500 rupiah ($0.46) a liter, about half the non-subsidized price.
•
Philippines Lowers Special Deposit Account Rate, Holds Benchmark. The Philippines refrained from cutting its benchmark interest rate, and instead cut the rate on special deposit accounts for a second time this year as it steps up efforts to curb inflows and restrain currency gains. Bangko Sentral ng Pilipinas kept the rate it pays Page 3 of 7
lenders for overnight deposits at a record-low 3.5 percent, according to a statement in Manila today. Policy makers cut the rate on all SDAs to 2.5 percent effective immediately. Governor Amando Tetangco, who has imposed limits on lenders’ currency forward positions and expanded monitoring of real estate loans to curb inflows, said this week the central bank is moving to an interest-rate corridor approach as the peso’s gains hurt exporters and erodes the value of remittances. IFIs NEWS (compiled from their websites) BIS – Working Paper: “Do economies stall? The international evidence” • The BIS has publicised the captioned working paper. “A "stalling" economy has been defined as one that experiences a discrete deterioration in economic performance following a decline in its growth rate to below some threshold level. We find that the evidence for stalling based on time-invariant thresholds is limited: only 12 of the 51 economies in our sample experience statistically significant stalls, and including a stall threshold generally results in only modest improvements to out-of sample forecast performance.” http://www.bis.org/publ/work407.htm IMF – Working Paper: “A Framework for Macroprudential Bank Solvency Stress Testing: Application to S-25 and Other G-20 Country FSAPs” • The IMF has publicised the captioned working paper. “The global financial crisis has placed the spotlight squarely on bank stress tests. This paper offers useful guidance for readers seeking to develop their own stress testing frameworks and country authorities preparing for FSAPs.” http://www.imf.org/external/pubs/ft/wp/2013/wp1368.pdf FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 13-Mar 14-Mar close China 6.23 6.22 6.21 6.22 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,685.00 9,689.00 9,700.00 Japan 86.75 96.00 96.13 96.41 Korea 1,064.40 1,090.46 1,097.45 1,109.11 Malaysia 3.06 3.11 3.11 3.11 Philippines 41.01 40.68 40.56 40.61 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.73 29.63 29.63 Vietnam 20,840.00 20,935.00 20,945.00 20,940.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.03 0.02 -0.11 -0.29 -1.05 -0.09 -0.12 -0.06 0.00 0.02
2013 YTD (%chg) 0.3 -0.1 -0.5 -9.4 -4.1 -2.4 0.6 -2.4 2.4 -0.5
STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7
Previous wk's close 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3
13-Mar 2,264.0 22,556.7 4,835.4 12,239.7 1,999.7 1,646.2 6,776.6
14-Mar 2,270.3 22,619.2 4,786.4 12,381.2 2,002.1 1,640.7 6,694.7
% change 0.28 0.28 -1.01 1.16 0.12 -0.33 -1.21
2013 YTD (%chg) 0.1 -3.0 10.1 19.1 -1.4 -2.0 14.2
Page 4 of 7
Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,167.1 1,391.9 413.7
3,269.5 1,539.6 477.2
3,288.5 1,578.7 473.2
OVERNIGHT LENDING RATE (%) 13-Mar 14-Mar bps change 2.060 2.100 4.00 0.086 0.088 0.22 4.180 4.180 0.00 0.095 0.095 0.00 2.750 2.750 0.00 3.000 3.000 0.00 1.681 1.185 -49.60 0.023 0.023 0.00 2.750 2.750 0.00 2.567 2.575 0.80
3,284.4 1,582.8 474.6
-0.13 0.26 0.30
2.6 12.5 13.4
3-MONTH INTERBANK LENDING RATE (%) 13-Mar 14-Mar bps change 3.883 3.882 -0.12 0.381 0.381 0.07 4.900 4.901 0.07 0.250 0.250 0.00 2.760 2.760 0.00 3.210 3.210 0.00 0.234 0.213 -2.10 0.375 0.375 0.00 2.862 2.862 0.00 5.750 5.683 -6.70
CREDIT DEFAULT SWAP (IN BPS) 12-Mar 13-Mar bps change China 61.96 62.47 0.51 Hong Kong 40.55 41.06 0.52 SAR Indonesia 129.42 129.94 0.52 Japan 57.95 61.42 3.48 Korea 65.91 66.91 1.00 Malaysia 74.80 75.80 1.01 Philippines 95.72 97.72 2.00 Thailand 85.12 86.13 1.01 Vietnam 199.67 202.01 2.34 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. 13-Mar 14-Mar Gold Spot (in US$ per 1,587.7 1,587.0 ounce) Sources: Bloomberg & Datastream
% change -0.04
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
Page 5 of 7
2012 30-Jun 31-Jul 31-Aug China 3,240.0 3,240.0 3,272.9 Hong Kong SAR 295.0 296.3 298.2 Indonesia 106.5 106.6 109.0 Japan 1,270.5 1,272.8 1,273.2 Korea 312.4 314.4 316.9 Malaysia 134.2 134.5 134.9 Philippines 76.1 79.8 80.7 Singapore 243.4 244.1 246.2 Thailand 174.7 175.3 179.2 Vietnam 19.7 20.0 20.8 Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn)
2013
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
Import cover (Qtrs of imports covered by reserves) 6.4
31-Jan n.a 321.0 108.8 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 83.8 259.1 179.2 n.a
Reserves over short-term debt
3,311.6 517.8 572.8 China Hong Kong 304.8 144.7 711.2 2.1 SAR 50.3 43.9 2.1 Indonesia 105.2 1,258.8 70.4 2,371.0 17.9 Japan 156.8 126.7 2.1 Korea 327.4 140.3 56.7 30.4 2.5 Malaysia 19.3 8.0 4.4 Philippines 83.8 259.1 121.5 924.3 2.1 Singapore 54.6 57.2 3.3 Thailand 179.2 n.a 25.4 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly. DATA RELEASES FOR THE DAY Country SOUTH KOREA JAPAN JAPAN HONG KONG HONG KONG
Indicators South Korea 7-Day Repo Rate % Industrial Production YOY% Capacity Utilization (MoM)% Producer Price (YoY)% Industrial Production (YoY)%
Period Mar 14 Jan F Jan F 4Q 4Q
Last 2.75 -5.8 1.7 -1.1 1.3
Previous 2.75 -5.1 2.9 -1.5 -0.1
SELECTED ECONOMIC RELEASES CALENDAR (11 Mar – 15 Mar 2013) Expected Release Date
Country
Indicators
Period
3/11/2013
MALAYSIA
Imports YoY%
Jan
MALAYSIA
Exports YoY%
Jan
JAPAN
Machine Orders YOY%
Jan
PHILIPPINES
Total Exports (YoY)%
Jan
JAPAN
Consumer Confidence
Feb
SOUTH KOREA
Unemployment Rate (SA)%
Feb
SOUTH KOREA
Bank Lending to HH (KRW Tln)
Feb
PHILIPPINES
Unemployment Rate%
Jan
3/12/2013 3/13/2013
Page 6 of 7
5.8 0.4 2.4 0.5 2.6 4.6 10.5 0.3 3.1 -
3/14/2013
3/15/2013
SOUTH KOREA
South Korea 7-Day Repo Rate %
Mar 14
CHINA
Actual FDI (YoY)%
Feb
JAPAN
Industrial Production YOY%
Jan F
JAPAN
Capacity Utilization (MoM)%
Jan F
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Jan
HONG KONG
Producer Price (YoY)%
4Q
HONG KONG
Industrial Production (YoY)%
4Q
THAILAND
Foreign Reserves (USD bn)
Mar 8
SINGAPORE
Retail Sales (YoY)%
Jan
PHILIPPINES
Overseas Remittances (YoY)%
Jan
SINGAPORE
Unemployment Rate (sa)%
4Q F
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 15 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Advance on U.S. Jobless Claims, BOJ Governor. Asian stocks rose, with the regional benchmark index poised to advance for a fourth week, after U.S. jobless claims unexpectedly dropped and Japan’s upper house confirmed Haruhiko Kuroda as central bank governor. The MSCI Asia Pacific Index climbed 0.7 percent to 136.22 as of 3:59 p.m. Tokyo time, with about three shares rising for every two that fell. Japan’s Nikkei 225 Stock Average increased 1.5 percent to the highest close since September 2008. The Shanghai Composite Index (SHCOMP) rose 0.5 percent, extending gains for a second day. Hong Kong’s Hang Seng Index fell 0.2 percent. Singapore’s Straits Times Index climbed 0.7 percent. South Korea’s Kospi Index dropped 0.8 percent, reversing an increase of 0.4 percent.
BREAKING NEWS GLOBAL •
Euro-Zone Employment Hits Low of Nearly Seven Years. The number of people in work in the euro zone fell to its lowest in nearly seven years in the final three months of 2012, official figures showed. Eurostat, the EU's official statistics agency, said on Thursday that employment in the 17 countries that use the euro fell 0.3% in the fourth quarter from the third, to 145.7 million in seasonally adjusted terms. That is the lowest number since the first quarter of 2006. In the previous quarter, employment fell 0.1%. The fourth-quarter figures compare with an employment total of 146.8 million in the corresponding period of 2011, meaning more than 1 million people in the currency bloc lost their job in 2012. "The increased drop in euro-zone employment in the fourth quarter of 2012 maintains belief that consumer spending will remain generally muted in the near term at least," he said. Consumer spending is a crucial source of growth for the economy while governments cut back on expenditure. Eurostat's figures showed employment fell sharply in the highly indebted countries most deeply affected by the crisis.
•
Prodi Says Europe Hurt by Too Much Austerity Amid Very High Euro. Former Italian Prime Minister Romano Prodi said fiscal austerity measures in Europe have been excessive and called the euro too high. “The euro has a very high rate of exchange,” Prodi, a former European Commission president, said in an interview with Sara Eisen airing on Bloomberg Television today. “I do think that it’s stronger than needed.” Prodi spoke ahead of a two-day Brussels summit of officials who may endorse plans for “structural” assessments of national budgets, according to a draft statement, using code
for granting countries such as France, Spain and Portugal extra time to bring down deficits. REGIONAL •
Li Takes Mantle as China Premier With Growth Model at Stake. Li Keqiang today became China’s first premier with an economics doctorate, expertise he may need as policy makers struggle to shift the world’s second-largest economy toward a model relying on consumption over exports. The appointment of Li, 57, by the National People’s Congress makes him head of the State Council, or cabinet, succeeding Wen Jiabao. The legislature will fill out Li’s team tomorrow with decisions on senior government posts including vice premiers, ministry heads and the central bank chief. Li’s elevation comes days after data showing China remains reliant on overseas sales and investment at home to propel its expansion, underscoring the challenges faced by an administration that puts urbanization at the forefront of its domestic initiatives. In two days he will have a chance to detail his agenda amid calls for deepening China’s shift toward free markets and away from state-directed lending.
•
Japan’s Abe Plans to Join Free-Trade talks. Prime Minister Shinzo Abe plans to announce on Friday Japan's intention to join negotiations for the ambitious transPacific free-trade pact or Trans-Pacific Partnership known as TPP. Whether to join the emerging U.S.-led pact has been a contentious issue, pitting farmers and their representatives, worried about market-opening measures, against manufacturers and city dwellers, hoping for a fresh jolt to the economy to end a decade long slump. The TPP is an important element in Mr. Abe's long-term growth strategy, which, in turn, is one of the "three arrows" that make up his policy package. Shortly after he took power in December, he successfully launched the first two arrows—aggressive monetary easing and massive stimulus spending. Joining the TPP is a chance Japan can't afford to miss, the economists say. It offers better access to the growing economies of Asia and allows Japan to compete in the U.S. market with other freetrade partners. However, many hurdles remain for Japan's TPP participation. Japan's existing trade pacts exclude hundreds of items, mostly in agriculture. Its tariffs are 778% for rice and 39% for beef. These impediments would unlikely be tolerated by TPP partners.
•
China to Transfer Railway Ministry Debt. A new state railway company will shoulder the debt of China's former Ministry of Railways but will receive various forms of state backing, as Chinese officials begin overhauling the nation's vast but troubled rail system. The State Council, China's cabinet, said Thursday that "the related assets, Page 2 of 7
debts and personnel of the Ministry of Railways will be transferred to China Railway Corp." Officials didn't offer specifics; as of the end of September, the ministry had debt totaling 2.66 trillion yuan ($428 billion). However, railway construction bonds issued by the ministry will continued to be state supported, it said. The new company also will have the same tax advantages as the former ministry, and temporarily won't pay dividends to the state, the statement said. •
Singapore’s February Home Sales Decline to 14-Month Low on Curbs. Singapore’s home sales plunged 65 percent to a 14-month low in February after the government introduced its seventh round of cooling measures to cool record home prices. Home sales dropped to 708 units in February from a revised 2,016 units in January, according to data released by the Urban Redevelopment Authority today. That’s the smallest number of residences sold since December 2011, when sales declined to a two-year low of 632 units. Singapore home prices reached a record in the fourth quarter amid low interest rates, raising concerns of a housing bubble and prompting the government to widen a four-year campaign to curb speculation prices in Asia’s second-most expensive housing market. Singapore has been attempting to rein in prices since 2009, when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built.
•
Warjiyo Approved as Bank Indonesia Deputy Governor Amid Remix. Indonesian lawmakers approved Perry Warjiyo to become the central bank’s deputy governor for monetary operations, moving closer to filling a post vacant since 2011 as the nation grapples with a falling currency. Warjiyo’s appointment will have to be confirmed at a plenary session of parliament. The same committee will also examine the credentials of Finance Minister Agus Martowardojofor the position of governor in less than two weeks. At stake is safeguarding the central bank’s leadership and curbing prolonged vacancies in an institution wrestling with elevated inflation, a trade deficit that widened to a record in October and one of the worst performing currencies in Asia in the past year. Warjiyo, 54, has a Ph.D. in monetary and international economics from Iowa State University, and was an executive director for the Southeast Asia voting group at the International Monetary Fund from 2007 through 2009.
•
Palm Oil Gains on Speculation Malaysia Exports to Rebound on Tax. Palm oil advanced for the first time in four days on speculation that exports from Malaysia may climb this month after the government left a tax on shipments unchanged, potentially reducing stockpiles. The contract for May delivery surged as Page 3 of 7
much as 1.8 percent to 2,406 ringgit ($771) a metric ton on the Malaysia Derivatives Exchange, and was at 2,404 ringgit at 4:26 p.m. in Kuala Lumpur. Futures, which closed at the lowest level in almost three months yesterday, are poised to drop 1.8 percent this week. Malaysia kept the tax at 4.5 percent for April as the reference price fell in the band for the minimum duty to be applied, according to a Customs Department statement. The government cut the levy to between 4.5 percent and 8.5 percent, from about 23 percent, starting Jan. 1, to clear record reserves. Shipments were duty-free in the first two months as the reference price was below the threshold that triggers the tax. IFIs NEWS (compiled from their websites) G20 – Press Release: Civil 20 to present recommendations on international financial architecture and financial inclusion •
On March 15, 2013, the Public Chamber the Russian Federation will hold a round table to discuss Civil 20 recommendations for the G20 on the issues of financial inclusion, financial literacy and international financial architecture. The Working Group on Financial Architecture is preparing recommendations on sovereign debt management, further development of the regulatory system for financial markets, and leveling of national conditions for funding with a view to promote economic and social progress. http://www.g20.org/news/20130314/781261261.html
IMF – Press Release: Statement by the EC, ECB and IMF on Greece •
The EC, ECB and IMF have issued a statement on Greece. “Staff teams from the European Commission, the ECB and the IMF have conducted discussions with the Greek authorities during the last two weeks regarding the review of Greece’s economic program. Significant progress has been made but a few issues remain outstanding. As additional technical work will be necessary to settle these issues, the mission will take a short break to allow this work to be completed. The mission plans to return to Athens in early April to continue its work.” http://www.imf.org/external/np/sec/pr/2013/pr1377.htm
World Bank – Press Release: Laos: Ten young entrepreneurs win business competition •
Ten young entrepreneurs received seed grants of up to $5,000 and business mentorship support in a competition co-organized by the World Bank. “We believe that investing in young people’s entrepreneurial skills and potential is smart economics,” said Keiko Miwa, Country Manager of the World Bank’s Vientiane Office. http://www.worldbank.org/en/news/feature/2013/03/14/laos-ten-youngentrepreneurs-win-business-competition
Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 14-Mar 15-Mar close China 6.23 6.22 6.22 6.22 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,685.00 9,700.00 9,706.00 Japan 86.75 96.00 96.11 96.03 Korea 1,064.40 1,090.46 1,109.11 1,110.95 Malaysia 3.06 3.11 3.11 3.12 Philippines 41.01 40.68 40.61 40.62 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.73 29.63 29.54 Vietnam 20,840.00 20,935.00 20,940.00 20,950.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.02 0.01 -0.06 0.08 -0.17 -0.40 -0.04 0.08 0.30 -0.05
2013 YTD (%chg) 0.3 -0.1 -0.5 -9.0 -4.3 -2.8 0.6 -2.3 2.7 -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 2,359.5 22,880.2 4,811.6 11,606.4 2,026.5 1,637.4 6,642.3 3,269.5 1,539.6 477.2
14-Mar 2,270.3 22,619.2 4,786.4 12,381.2 2,002.1 1,640.7 6,694.7 3,279.5 1,586.8 474.6
OVERNIGHT LENDING RATE (%) 14-Mar 15-Mar bps change 2.100 1.700 -40.00 0.088 0.091 0.29 4.180 4.180 0.00 0.095 0.090 -0.50 2.750 2.750 0.00 3.000 3.000 0.00 1.185 0.795 -39.00 0.019 0.019 0.00 2.750 2.750 0.00 2.575 2.500 -7.50
15-Mar
% change
2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,597.3 481.4
0.36 -0.38 0.69 1.45 -0.78 -0.80 -0.60 0.20 0.66 1.42
2013 YTD (%chg) 0.4 -3.3 10.9 20.8 -2.2 -2.8 13.5 2.6 13.5 15.1
3-MONTH INTERBANK LENDING RATE (%) 14-Mar 15-Mar bps change 3.882 3.884 0.15 0.381 0.381 0.00 4.901 4.901 0.00 0.250 0.250 0.00 2.760 2.760 0.00 3.210 3.210 0.00 0.213 0.090 -12.30 0.375 0.375 0.00 2.862 2.862 0.00 5.683 5.850 16.70
CREDIT DEFAULT SWAP (IN BPS) 13-Mar 14-Mar bps change China 62.47 62.99 0.51 Hong Kong 41.06 41.07 0.00 SAR Indonesia 129.94 130.96 1.02 Japan 61.42 63.41 1.99 Korea 66.91 67.91 1.00 Malaysia 75.80 77.78 1.98 Philippines 97.72 97.78 0.06 Thailand 86.13 86.65 0.52 Vietnam 202.01 203.00 0.99 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.
Page 5 of 7
14-Mar 15-Mar Gold Spot (in US$ per 1,590.2 1,592.8 ounce) Sources: Bloomberg & Datastream
% change 0.16
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 30-Jun 31-Jul 31-Aug China 3,240.0 3,240.0 3,272.9 Hong Kong SAR 295.0 296.3 298.2 Indonesia 106.5 106.6 109.0 Japan 1,270.5 1,272.8 1,273.2 Korea 312.4 314.4 316.9 Malaysia 134.2 134.5 134.9 Philippines 76.1 79.8 80.7 Singapore 243.4 244.1 246.2 Thailand 174.7 175.3 179.2 Vietnam 19.7 20.0 20.8 Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn)
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
2013 31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
Import cover (Qtrs of imports covered by reserves) 6.4
31-Jan n.a 321.0 108.8 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 83.8 259.1 179.2 n.a
Reserves over short-term debt
3,311.6 517.8 572.8 China Hong Kong 304.8 144.7 711.2 2.1 SAR 55.5 43.9 1.9 Indonesia 105.2 1,258.8 70.4 2,371.0 17.9 Japan 156.8 126.7 2.1 Korea 327.4 140.3 56.7 30.4 2.5 Malaysia 19.3 8.0 4.4 Philippines 83.8 259.1 121.5 924.3 2.1 Singapore 54.6 57.2 3.3 Thailand 179.2 n.a 25.4 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. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.
Page 6 of 7
5.8 0.4 2.4 0.5 2.6 4.6 10.5 0.3 3.1 -
DATA RELEASES FOR THE DAY Country PHILIPPINES PHILIPPINES THAILAND SINGAPORE SINGAPORE
Indicators Unemployment Rate% Overseas Remittances (YoY)% Foreign Reserves (USD bn) Retail Sales (YoY)% Unemployment Rate (sa)%
Period Jan Jan Mar 8 Jan 4Q F
Last 7.1 8.0 178.0 -2.0 1.8
Previous 6.8 9.7 179.1 -1.5 1.8
SELECTED ECONOMIC RELEASES CALENDAR (11 Mar – 15 Mar 2013) Expected Release Date
Country
Indicators
Period
3/11/2013
MALAYSIA
Imports YoY%
Jan
MALAYSIA
Exports YoY%
Jan
JAPAN
Machine Orders YOY%
Jan
PHILIPPINES
Total Exports (YoY)%
Jan
JAPAN
Consumer Confidence
Feb
SOUTH KOREA
Unemployment Rate (SA)%
Feb
SOUTH KOREA
Bank Lending to HH (KRW Tln)
Feb
PHILIPPINES
Unemployment Rate%
Jan
SOUTH KOREA
South Korea 7-Day Repo Rate %
Mar 14
CHINA
Actual FDI (YoY)%
Feb
JAPAN
Industrial Production YOY%
Jan F
JAPAN
Capacity Utilization (MoM)%
Jan F
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Jan
HONG KONG
Producer Price (YoY)%
4Q
HONG KONG
Industrial Production (YoY)%
4Q
THAILAND
Foreign Reserves (USD bn)
Mar 8
SINGAPORE
Retail Sales (YoY)%
Jan
PHILIPPINES
Overseas Remittances (YoY)%
Jan
SINGAPORE
Unemployment Rate (sa)%
4Q F
3/12/2013 3/13/2013
3/14/2013
3/15/2013
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 18 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks drop the most in 8 months on Cyprus deposit tax. Asian stocks headed for the biggest decline in eight months, led by raw-material producers, amid concern an unprecedented levy on bank deposits in Cyprus will plunge Europe back into crisis and that China will increase efforts to curb property prices. The MSCI Asia Pacific Index sank 1.8 percent to 134.2 as of 3:51 p.m. in Tokyo, headed for its biggest decline since July. Japan’s Nikkei 225 Stock Average retreated by 2.7 percent, Korea’s Kospi Index lost 0.9 percent, Hong Kong’s Hang Seng Index tumbled 2 percent (the most since 5 February), and the China’s Shanghai Composite Index fell by 1.7 percent. In ASEAN, stock markets ended up mostly in the red, with the Philippines PSE index tumbling close to 1.8 percent and the STI gave up 0.9 percent.
•
In the currencies market, the euro dropped to its lowest level this year against the dollar. The 17-nation euro declined by the most in three weeks against the yen as investors sought haven assets. The euro slid to US$1.2882, the least since 10 December, before trading at US$1.2964 as of 5.00 p.m. in Singapore, down close to 1 percent from the end of last week. Asian currencies also fell, with the won sliding to its weakest level in almost six months, closing at 1,114.70 per the USD. The Thai baht retreated from its highest level since July 1997 (earlier touching 29.45 per the USD), before dropping close to 0.1 percent to 29.53 per the USD at 5.00 p.m. Singapore time. Likewise, the Malaysian ringgit and Singapore dollar fell by 0.2 percent against the USD at the close of trading.
•
Commodities from oil to copper slump on Cyprus concerns. Standard & Poor’s GSCI Spot Index of 24 raw materials fell as much as 1.1 percent, the biggest drop since 1 March, and was at 645.86 at 3:06 p.m. Seoul time. Copper in London also dropped by the most in five months, pacing declines in industrial metals, while crude oil in New York headed for the biggest loss since 1 March. Crude oil futures for April delivery slipped by 1.1 percent to US$92.38 a barrel on the NYMEX.
BREAKING NEWS GLOBAL •
U.S. and Japan bonds climb as Cyprus turmoil spurs demand for safe haven. Government bonds of the U.S., Japan and Australia advanced as an unprecedented levy on bank deposits in Cyprus threatens to reignite the euro region’s debt crisis, boosting demand for haven assets. Treasury 10-year yields headed for their biggest drop in three weeks after euro-area finance ministers agreed to tax bank deposits in Cyprus to finance part of a 10 billion-euro (US$13 billion) bailout for the nation. The news on Cyprus is a cause for risk-off sentiment and is spurring buying of Treasuries amid flight to quality. Yield on U.S. 10-year Treasury debt slid to the lowest since 6 March and the rate is set for its biggest one-day decline since 25 February. Japan’s
benchmark 10-year bond yield fell 3.5 basis points to 0.585 percent, matching the decade low set on 5 March. •
Cyprus parliament to vote on deposit levy demanded by Euro area. Cyprus President Nicos Anastasiades will try to persuade lawmakers to back a plan to impose losses on the island nation’s depositors today as part of a 10 billion-euro ($13 billion) bailout aimed at preventing a financial collapse and a possible departure from the euro area. Anastasiades will defend his decision to accept a rescue that includes the euro area’s first move to penalize depositors before the parliament session on the legislation begins at 4 p.m. in Nicosia. The vote comes a day after originally planned as Anastasiades fended off fury from Cypriot voters and fought to secure the majority he needs.
•
Cyprus savings levy prompts Osborne to guarantee British workers’ deposits. The savings of British military personnel and civil servants in Cyprus are to be protected against a bank levy being imposed as part of the island's €10bn bailout, the U.K. government revealed today. An estimated €2bn of British deposits is held in Cyprus, including accounts for 3,000 military personnel and 250 civil servants. According to the chancellor, George Osborne, the government is going to compensate anyone who is affected by the bank tax. He added that people who are doing their duty for the country in Cyprus will be protected from this Cypriot bank tax. He said Cypriot banks based in the U.K. would be unaffected by the 9.9 percent levy on savings over €100,000. There will also be a 6.75 percent levy on savings below €100,000 as part of the fifth eurozone bailout, agreed early on Saturday by the European Union and the International Monetary Fund.
REGIONAL •
Li urges paring the role of state to fuel China’s 7.5 percent growth. Chinese Premier Li Keqiang pledged to open the economy to more market forces and strip power from the government to achieve 7.5 percent annual growth through 2020 and spread the benefits of the nation’s expansion. According to the briefing made yesterday, Li said that it is about cutting the power of the state, and talked of a “hand” mistakenly attached to the state and needs to be returned to the market. Li pledged to trim government bureaucracy, cut regulations and fight graft while reducing environmental harm and pollution, calling for equal opportunities for everyone.
•
New home prices in China’s 70 major cities rose further in February. Average new home prices in China’s 70 major cities rose by 2.1 per cent from a year earlier, according to Reuters calculations based on official data published today, marking the second straight month of year-on-year increase.
•
Korea’s producer price growth picks up in February. Korea's producer prices grew at a faster pace in February than the previous month as oil prices picked up and the local currency depreciated to the dollar, according to the central bank today. The producer price index, a barometer of future consumer inflation, grew by 0.7 percent in February from the previous month, after rising 0.2 percent on-month in January. The data marked the fastest gain since a 0.7 percent on-month gain in February 2012. On an annual basis, the producer prices contracted by 1.6 percent in February. Page 2 of 9
•
Singapore’s non-oil domestic exports (NODX) contracted by 30.6 percent year-onyear in February 2013. Singapore's NODX declined by 30.6 per cent in February 2013 on-year, compared to the 0.4 per cent increase in the previous month. Trade agency International Enterprise Singapore, said that this is due to a contraction in both electronic and non-electronic exports. Exports to all of the top 10 markets, except Taiwan, decreased in February. The top three contributors to the export contraction were the European Union, the US and Hong Kong. On a month-on-month basis, exports decreased by 2.4 per cent in February, following the previous month's 1.8 per cent decline.
•
Rising competition in the garment industry in Myanmar and Cambodia. SecretaryGeneral of the Garment Manufacturers Association in Cambodia said that the growth of Myanmar’s garment industry is already affecting Cambodia. According to the Secretary General, some investors are now planning to move to Myanmar. With a minimum wage for workers of just US$28 and a population of about 50 million people, Myanmar is positioned as an attractive marketplace for investors. Furthermore, Myanmar will begin receiving General Sales Tax benefits as early as June and eventually be granted other benefits and concessions from the US and the EU that Cambodia enjoys, raising the level of competition in the garment industry in both economies.
•
Task force to ease business in Brunei proposed. A task force has been set up by the Ministry of Industry and Primary Resources (MIPR) in order to ensure the continual improvement of Brunei's ranking in the ease of doing business index. According to the MIPR minister, the task force's overall objectives are to spur business growth by eliminating unnecessary processes, to share information among relevant stakeholders and transparency to lessen different interpretations of business regulations. The task force, led by permanent secretaries, are working on improvements and are also reviewing regulations concerned with starting and operating a business such as Chapter 39 of the Companies Act, in order to make the environment attractive to investors while adhering to international standards.
•
Vietnam’s sovereign bond market. Investors’ worry that the Vietnamese government may set limitations on the amounts of bonds to be issued has been lifted. The State Treasury has announced that it may issue VND150 trillion worth of bonds this year, which is higher than the last year. Dr. Le Xuan Nghia, a Member of the National Advisory Council for Monetary Policies, has also reassured the investors that no need to worry about the volume of shares to be issued in 2013. Economists believe that buying bonds would be a good choice for commercial banks in 2013. The current conditions and the economic scenarios do not show that banks would be able to push up lending. Therefore, government bonds remain a profitable and safe investment channel. According to VinaWealth fund management company – the first open-end fund set up in Vietnam, the limitation on the credit growth rate in 2012 has led to a higher demand for bonds as the alternative investment channel.
•
U.S. gives green light to financial services with four Myanmar banks. It was earlier reported that the United States Treasury Department has issued a general license authorizing financial services with four of Myanmar’s Banks: Myanma Economic Bank, Myanma Investment and Commercial Bank, Asia Green Development Bank and Page 3 of 9
Ayeyawady Bank. The Government of the Republic of the Union of Myanmar welcomes the action as it would enable U.S. companies, financial institutions and individuals to conduct transaction and financial services. It is also hoped that the same authorization would apply as soon as possible to other Myanmar Banks dealing with Myanmar’s international financial services. •
Foreign investors in Malaysia bought net RM710 million equities in the week ended 15 March 2013. According to MIDF Equity Research, foreign funds bought net RM710 million of Malaysian equities in the open market in the week ended 15 March, a decline from the net RM1.12 billion the week before. On a slightly disconcerting note, MIDF pointed out that foreign investors turned net seller on Friday, the first time in 17 trading days. So far this year, foreign investors have already bought RM6.4 billion net of Malaysian equity compared with net RM13.7 billion in 2012.
IFIs NEWS (compiled from their websites) ADB – Press Release: ADB President Steps Down after 8 Years •
ADB President Haruhiko Kuroda steps down today after eight years that has seen ADB transformed into a more relevant, responsive and results-oriented institution, helping developing Asia-Pacific countries reduce poverty and increase standards of living for their people. http://www.adb.org/news/adb-president-steps-down-after-8-years
ADB – Publication: “Asia Bond Monitor - March 2013” •
ADB has published the latest series of the captioned report. Emerging East Asia’s local currency bond markets continued to expand in 2012, signaling ongoing investor interest in the region’s fast-growing economies but also raising the risk of asset price bubbles, said ADB’s latest Asia Bond Monitor. “Emerging East Asia is much more resilient than it used to be but governments still need to be careful that the surge in capital inflows doesn’t fuel excessive rises in asset prices and that they are prepared for a possible reversal in the flows when the economies of the US and Europe pick up again,” said Thiam Hee Ng, Senior Economist in ADB’s Office of Regional Economic Integration. http://www.adb.org/news/flows-asia-bond-markets-raise-risk-asset-price-bubbles (Press Release) http://www.adb.org/sites/default/files/pub/2013/abm-201303.pdf (Report)
ADBI – Working Paper: “Emerging Geopolitical Trends and Security in the Association of Southeast Asian Nations, the People's Republic of China, and India (ACI) Region” •
The ADBI has publicised the captioned working paper. “This paper provides an assessment of the region's unfolding geopolitical transformation in recent years and asks if the regional structures in Asia can cope with it. The paper also explores the problems of integrating the two rising Asian powers, the PRC and India, into the structures of global governance. It concludes with a brief discussion on the strategic policy imperatives facing the ACI region.” http://www.adbi.org/files/2013.03.15.wp412.geopolitical.trends.security.asean.prc.indi a.pdf
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BIS – Statistics: “March 2013 Quarterly Review: Markets grow confident on continued support” •
The BIS has published its “Quarterly Review for March 2013”. http://www.bis.org/press/p130318.htm (Press Release) http://www.bis.org/publ/qtrpdf/r_qt1303.htm (Quarterly Review)
IMF – Press Release: IMF Statement on Cyprus at the Eurogroup Meeting •
The IMF has issued a statement on Cyprus following the Eurogroup meeting: “I welcome the agreement reached today to address Cyprus’ economic challenges. The IMF has always said that we would support a solution that is sustainable, that is fully financed, and that appropriately allocates the burden sharing. I believe that the agreed package meets these three objectives. On this basis, I intend to make a recommendation to our Executive Board for the IMF to contribute to the financing of the package.” http://www.imf.org/external/np/sec/pr/2013/pr1380.htm
IMF – Press Release: Statement by the EC, ECB, and IMF on the Seventh Review Mission to Portugal •
Staff teams from the EC, ECB, and IMF visited Lisbon during February 25-March 14 for the seventh quarterly review of Portugal’s economic adjustment program, and issued a statement. “Program implementation remains broadly on track, against the background of difficult economic conditions. This seventh review confirms that program implementation is progressing, and the process for a full return to markets is underway.” http://www.imf.org/external/np/sec/pr/2013/pr1378.htm
IMF – Press Release: 2013 Financial System Stability Assessment with the European Union •
The IMF has concluded the 2013 Financial System Assessment with the European Union on 8 March 2013. Executive Directors welcomed the first FSSA for the EU, which, with its focus on supra-national institutions, complements recent national-level assessments for EU member states. Directors noted that much has been achieved to restore financial stability. They agreed that repair of banks’ balance sheets remains a key priority. They underscored the importance of creating without undue delay a Single Resolution Mechanism. Directors urged sustained efforts to strengthen the EU framework for financial oversight, including through prompt implementation of the European Commission proposals to harmonize capital requirements, resolution, deposit guarantee schemes, and insurance supervision frameworks. Directors also welcomed the work of the European Systemic Risk Board in developing the macroprudential toolkit, noting that flexible implementation should be allowed in response to different conditions. They noted ongoing plans to separate banks’ retail activities from those deemed more risky. http://www.imf.org/external/np/sec/pn/2013/pn1329.htm (Press Release) http://www.imf.org/external/np/sec/pr/2013/pr1379.htm (Press Release on IMF’s assessment)
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http://www.imf.org/external/pubs/ft/scr/2013/cr1375.pdf (Financial Sector Stability Assessment)1 IMF: Working Paper: “Factors Influencing Emerging Market Central Banks’ Decision to Intervene in Foreign Exchange Markets” •
Using panel data for 15 economies from 2001-12, this paper identifies determinants of central bank foreign exchange intervention in emerging markets (“EMs”) with flexible to moderately managed exchange rates. Similar to other studies, this finds that central banks tend to “lean against the wind,” buying/selling more foreign exchange in response to greater short-run and medium-run appreciation/depreciation pressures. http://www.imf.org/external/pubs/ft/wp/2013/wp1370.pdf
MIGA – Press Release: MIGA Announces Representative in Seoul •
MIGA has announced that Ms. Junglim Hahm has joined the Agency as its representative in Seoul, a move that highlights Korea's significance as a strategic market for outward investment. Hahm's appointment underscores MIGA's commitment to strengthen engagement with Korean investors seeking to expand into emerging markets. http://www.miga.org/news/index.cfm?stid=1837&aid=3452
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 15-Mar 18-Mar close China 6.23 6.22 6.22 6.21 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,706.00 9,706.00 9,715.00 Japan 86.75 95.28 95.28 95.06 Korea 1,064.40 1,110.95 1,110.95 1,114.70 Malaysia 3.06 3.12 3.12 3.13 Philippines 41.01 40.62 40.62 40.67 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.55 29.55 29.53 Vietnam 20,840.00 20,950.00 20,950.00 20,945.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
1
% change 0.04 0.03 -0.09 0.23 -0.34 -0.20 -0.11 -0.22 0.07 0.02
2013 YTD (% chg) 0.3 -0.1 -0.6 -8.1 -4.6 -3.0 0.5 -2.4 2.7 -0.5
http://www.imf.org/external/pubs/ft/scr/2013/cr1365.pdf (Technical Note on Issues in Transparency and Accountability) http://www.imf.org/external/pubs/ft/scr/2013/cr1366.pdf (Technical Note on Deposit Insurance) http://www.imf.org/external/pubs/ft/scr/2013/cr1367.pdf (Technical Note on Progress with Bank Restructuring and Resolution in Europe) http://www.imf.org/external/pubs/ft/scr/2013/cr1368.pdf (Technical Note on Stress Testing of Banks) http://www.imf.org/external/pubs/ft/scr/2013/cr1369.pdf (Technical Note on European Securities and Markets Authority) http://www.imf.org/external/pubs/ft/scr/2013/cr1370.pdf (Technical Note on Macroprudential Oversight and the Role of the ESRB) http://www.imf.org/external/pubs/ft/scr/2013/cr1371.pdf (Technical Note on Financial Integration and Fragmentation in the European Union) http://www.imf.org/external/pubs/ft/scr/2013/cr1372.pdf (Technical Note on Cross-Border Issues, Central Counterparties, and Central Securities Depositories) http://www.imf.org/external/pubs/ft/scr/2013/cr1373.pdf (Technical Note on European Insurance and Occupational Pensions Authority Assessment) http://www.imf.org/external/pubs/ft/scr/2013/cr1374.pdf (Technical Note on European Banking Authority)
Page 6 of 9
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 2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
15-Mar 2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
OVERNIGHT LENDING RATE (%) 15-Mar 18-Mar bps change 1.700 2.000 30.00 0.091 0.088 -0.29 4.180 4.180 0.00 0.090 0.093 0.25 2.750 2.750 0.00 3.000 3.000 0.00 0.795 1.411 61.60 0.039 0.039 0.00 2.750 2.750 0.00 2.500 2.411 -8.90
18-Mar
% change
2,240.0 22,083.4 4,802.8 12,220.6 1,968.2 1,623.4 6,536.2 3,257.3 1,594.5 479.1
-1.68 -2.00 -0.34 -2.71 -0.92 -0.26 -1.78 -0.88 -0.23 -0.46
2013 YTD (%chg) -1.3 -5.3 10.5 17.6 -3.1 -3.1 11.5 1.7 13.3 14.5
3-MONTH INTERBANK LENDING RATE (%) 15-Mar 18-Mar bps change 3.884 3.880 -0.35 0.381 0.381 0.00 4.901 4.901 0.00 0.250 0.250 0.00 2.760 2.760 0.00 3.210 3.210 0.00 0.090 0.186 9.60 0.375 0.375 0.00 2.862 2.859 -0.23 5.850 5.933 8.30
CREDIT DEFAULT SWAP (IN BPS) 14-Mar 15-Mar bps change China 62.99 62.01 -0.97 Hong Kong SAR 41.07 41.06 -0.01 Indonesia 130.96 129.05 -1.91 Japan 63.41 63.42 0.01 Korea 67.91 66.45 -1.46 Malaysia 77.78 77.32 -0.46 Philippines 97.78 96.86 -0.92 Thailand 86.65 85.21 -1.45 Vietnam 201.57 201.64 0.08 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-Mar 18-Mar Gold Spot (in US$ per 1,592.1 1,604.5 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change 0.78
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
Page 7 of 9
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 31-Jul 31-Aug 30-Sep China 3,240.0 3,272.9 3,285.1 Hong Kong SAR 296.3 298.2 301.2 Indonesia 106.6 109.0 110.2 Japan 1,272.8 1,273.2 1,277.0 Korea 314.4 316.9 322.0 Malaysia 134.5 134.9 137.5 Philippines 79.8 80.7 82.0 Singapore 244.1 246.2 252.1 Thailand 175.3 179.2 183.6 Vietnam 20.0 20.8 21.3 Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn)
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
3 months imports of goods & services
Short-term external debt
(US$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
Import cover (Qtrs of imports covered by reserves) 6.4 2.1 1.9 17.9 2.1 2.5 4.4 2.1 2.6 -
28-Feb n.a 304.8 105.2 1,258.8 327.4 140.3 83.8 259.1 179.2 n.a
31-Mar n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a
Reserves over short-term debt
3,311.6 521.2 572.8 5.8 China 304.8 143.9 711.2 0.4 Hong Kong SAR 55.5 43.9 2.4 Indonesia 105.2 1,258.8 70.4 2,371.0 0.5 Japan 156.7 126.7 2.6 Korea 327.4 140.3 56.7 30.4 4.6 Malaysia 19.3 8.0 10.5 Philippines 83.8 259.1 121.5 924.3 0.3 Singapore 68.2 57.2 3.1 Thailand 179.2 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. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
Country CHINA HONG KONG SINGAPORE SINGAPORE KOREA
DATA RELEASES FOR THE DAY Indicators
Property Prices (% MOM) Unemployment rate, SA (%) Non-oil Domestic Exports (% YOY) Electronics Exports (% YOY) Producer Price Index (% YOY)
Period
Last
Previous
Feb Feb Feb Feb Feb
1.1 3.4 -30.6 -27.4 -1.6
0.7 3.4 0.5 -5.6 -1.6
Page 8 of 9
SELECTED ECONOMIC RELEASES CALENDAR (18 Mar – 22 Mar 2013)
Expected Release Date 3/18/2013
3/19/2013
3/20/2013 3/21/2013
3/22/2013
Country
CHINA HONG KONG SINGAPORE SINGAPORE KOREA CHINA JAPAN PHILIPPINES MALAYSIA CHINA HONG KONG HONG KONG JAPAN MALAYSIA THAILAND
Indicators
Property Prices (% MOM) Unemployment rate, SA (%) Non-oil Domestic Exports (% YOY) Electronics Exports (% YOY) Producer Price Index (% YOY) Conference Board Leading Economic Index (Pts) Composite Leading Index (Pts) Balance of Payments (USD bn) CPI Inflation (% YOY) HSBC Flash Manufacturing PMI (Pts) CPI Inflation (% YOY) Balance of Payments (USD bn) Exports & Imports (% YOY) Foreign Reserves (USD bn) Foreign Reserves (USD bn)
Period Feb Feb Feb Feb Feb Mar Jan F Feb Feb Mar Feb 4Q Feb 15 Mar 15 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 9 of 9
MARKET UPDATE FOR ASEAN+3 19 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks are largely higher after Monday’s broad sell-off of global equities. Asian stocks rebounded after a report suggested that Cyprus’ parliament would not approve a tax on bank deposits needed to secure a Eurozone bailout. Japan’s Nikkei, Shanghai Composite and the KOSPI advanced strongly, gaining by 2 percent, 0.8 percent and 0.5 percent, respectively. However, the Hang Seng bucked the trend, retreating by 0.2 percent. Other Asian bourses also saw modest gains: Malaysia (+0.3 percent) and Singapore (+0.4 percent). In Thailand and the Philippines, the SET and PSE indices lost 1.7 percent and 1.5 percent, respectively. The sell-off in global equity market yesterday was short-lived as analysts still expect a positive year for equities. In some ways, the degree in which the market has been performing year-to-date is especially encouraging, given the world was served with quite a number of event risks.
•
In the currencies market, the yen retreated as compared to most of its regional peers, the first time in four days against the USD, before a change of leadership at Bank of Japan tomorrow. The Korean won rebounds after eight day of losing streak, gaining 0.3 percent to 1,111.26 per dollar. The Thai baht also gained 0.5 percent to 29.36 per dollar. According to exchange data, global funds have raised holdings of Thai shares by US$332.2 million so far this month. The Philippines peso and Singapore dollar both gave up 0.1 percent, while the Chinese yuan, Hong Kong dollar, Indonesia rupiah and Vietnamese dong are largely unchanged.
•
In the commodities market, wheat crop is seen near record high as U.S. drought recedes. Farmers from Australia to Europe to the U.S. are poised to reap the secondlargest wheat crop on record as fields recover from drought and heat waves, boosting global stockpiles for the first time in four years. Output will climb 4.3 percent to 690 million metric tons, according to estimates. Oil prices traded near one-month high as tension eased over a bank tax in Cyprus. A separate report expected today may show that U.S. crude supplies rose the most since June last year. WTI for April delivery was at US$93.75 a barrel, up 1 percent on the NYMEX.
BREAKING NEWS GLOBAL •
Eurozone says to ditch Cyprus tax grab on smallest accounts. The eurozone told Cyprus to ditch the part of a hugely controversial 5.8 billion euro grab on savings that stung even the smallest of account holders in exchange for a 10 billion euro sovereign bailout deal. The statement came after Cyprus baulked at putting the EU bailout to a vote in parliament as the crippling terms sparked a public outcry and mounting talk of a rethink by eurozone creditors, even as the uncertainty forced a prolonged closure of the island's banks. Finance ministers continue to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below 100,000 euros. This would mean preferably removing altogether a mooted 6.75-percent levy applied to these accounts (<100,000 euros), which combined, amount to more than three fifths of all Cypriot savings.
•
European February car sales drop by 10 percent as recession deepens. Europe’s car market contraction accelerated in February as price cuts by Fiat, Citroen and Renault failed to attract drivers amid a recession in the region and a political stalemate in Italy. Registrations dropped by 10 percent to 829,359 vehicles last month from 923,553 a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said in a statement today. Two-month sales fell by 9.3 percent to 1.75 million cars (the decline in January amounted to 8.5 percent). Rising unemployment as a recession deepens in the 17 countries using the euro has deterred consumers from making large purchases.
•
U.S. Treasury 10-year yields dipped below 2 percent before the start of Federal Reserve’s 2-day meeting. U.S. Treasury 10-year yields were below 2 percent for a third day before the Federal Reserve starts a two-day meeting today amid bets that policy makers will decide to keep buying bonds to support economic growth. Fed Chairman Ben S. Bernanke said earlier this month that “premature” interest rate increases would stifle the U.S. economy. The central bank is scheduled to buy as much as US$3.5 billion of Treasuries today as part of its quantitative-easing program to spur growth through capping borrowing costs.
•
U.K. inflation seen accelerating on pressure from pound slump. U.K.’s inflation is likely to have accelerated to the fastest in nine months in February as rising commodity prices and a weaker pound stoked the cost of imported goods. According to consensus, consumer prices rose by 2.8 percent from a year earlier, compared with 2.7 percent in January. That will be the 39th month that inflation is above the Bank of England’s 2 percent target. The Office for National Statistics will publish the data at 9:30 a.m. in London today. The pound has dropped 7 percent against the dollar this year, adding to inflationary pressures as consumers brace for another austerity budget by Chancellor of the Exchequer George Osborne tomorrow. With price gains above the BOE’s goal, Osborne may also flag changes to the central bank’s mandate to give policy makers more flexibility to stimulate growth.
•
India’s central bank cuts policy interest rate. India's central bank cut its main interest rate by 25 basis points today – its second such reduction this year in an effort to jumpstart a sharply slowing economy. The central bank warned that still stubbornly entrenched inflation limited the "headroom" for further rate cuts. Business leaders have been calling for lower borrowing costs to help the economy, which is projected to grow at just five percent in the current financial year to 31 March, the lowest pace in a decade. The bank warned that with headline inflation lower, but not yet tamed, substantial future rates cuts could not be guaranteed.
REGIONAL •
China’s foreign investment rebounds as confidence returns. China’s foreign direct investment rose for the first time in nine months in February, a sign confidence in the world’s second-biggest economy is improving amid optimism growth will keep rebounding. Inbound investment gained 6.3 percent from a year earlier to US$8.21 billion, the Ministry of Commerce said in a statement today in Beijing.
Page 2 of 7
•
Challenges facing Korea’s construction industry. Analysts are cautiously predicting that Korea has reached its lowest point in the construction industry, and will begin to improve in the second half of the financial year. The local property market has stayed in the doldrums for the last few years. In order to survive, large conglomerates in the industry are offering apartments and housings at massive discounts. Analysts cautiously say that the new administration is expected to come up with measures to boost the sluggish market, which they believe will stabilize the domestic market and a recovery in demand overseas will help construction firms expect better results for this year compared to the last.
•
Thailand’s cabinet approves THB2 trillion loan bill. Thailand’s cabinet today approved the draft THB2 trillion infrastructure development loan bill. The loan bill is expected to be forwarded to the House of Representatives for consideration next week. According to Finance Minister Kittiratt Na-Ranong, the bill empowers the Ministry of Finance to gradually acquire loans to fund the government’s planned infrastructure development investment megaprojects over the next seven years. He added that the needed loans could be sought either in a foreign currency or in Thai baht.
•
Indonesia’s Lion Mentari orders 234 airbus jets to challenge AirAsia. Indonesia’s Lion Mentari Airlines ordered 234 planes from Airbus, its second order of more than 200 aircraft in two years, as Indonesia’s biggest budget carrier expands its fleet to meet rising travel demand. According to Airbus Chief Operating Officer, John Leahy, the order is the third major commitment for A320s in recent weeks. Lion Mentari Air, which serves more than 36 destinations, is establishing a low-cost carrier in Malaysia to challenge AirAsia, Airbus’s biggest A320 customer.
•
Lao PDR and Vietnam address labour and social welfare issues. Lao and Vietnamese officials met in Vientiane to discuss shared on-going issues in the area of labour and social welfare. During the four-day meeting, which runs from 18-22 March, the two sides will discuss the drafting of labour cooperation contracts, Deputy Minister of Labour and Social Welfare, Ms Khambay Kattiya, said at the start of the meeting in Vientiane yesterday. This week's meeting will discuss the improvement of cooperation between their respective Ministries of Labour and Social Welfare, and providing training courses in Laos. According to Ms Khambay Kattiya, the two sides are also preparing for a meeting between their labour and social welfare ministers in June, as well as a memorandum of understanding on cooperation in labour and social welfare.
•
Cambodia’s 2013 action plan promotes beach tourism. Cambodia’s Ministry of Tourism and the French TV channel TF1 have signed a deal on a “2013 action plan” that will promote Cambodia’s beach tourism. The agreement was inked by Tourism Minister Thong Khon and Franck Firmin Guion, the president of Adventure Line Productions (ALP). The plan aims to promote Cambodian beaches and islands not only in the French and European markets but around the world. The company produced a film on Cambodian beaches in early 2012. The latest agreement will prioritise the Kingdom's lesser-known beaches, aiming to increase the profile of these areas and strengthen the tourist zones.
Page 3 of 7
•
AsiaAsia X set for June listing. AirAsia X, the long-haul affiliate of AirAsia Bhd, is now ready for a June listing on the Main Market of Bursa Malaysia after having deferred its initial listing planned for the first quarter. According to AirAsia Group Chief Executive, Tan Sri Tony Fernandes, AirAsia X has submitted all listing-related documents, including the listing application and prospectus, to the Securities Commission for approval and was now awaiting a favourable reply. Through the proposed initial public offering, AirAsia X is expected to raise about US$250mil (RM775mil), or 97 sen per share, of which half would be utilised to repay bank borrowings and 21.5 percent for capital expenditure.
IFIs NEWS (compiled from their websites) BIS – Publication: “Towards better reference rate practices: a central bank perspective” •
A report entitled Towards better reference rate practices: a central bank perspective has been released today by a Working Group established by the Economic Consultative Committee (ECC). Chaired by Hiroshi Nakaso, Assistant Governor, Bank of Japan, the Working Group comprised officials from 13 central banks and monetary authorities. The report reviews issues in relation to the use and production of reference interest rates from the perspective of central banks. These issues reflect the possible risks for monetary policy transmission and financial stability that may arise from deficiencies in the design of reference interest rates, market abuse, or from market participants using reference interest rates which embody economic exposures other than the ones they actually want or need. http://www.bis.org/press/p130318a.htm (Press Release) http://www.bis.org/publ/othp19.htm (Executive Summary)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 18-Mar 19-Mar close China 6.23 6.22 6.21 6.22 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,706.00 9,715.00 9,720.00 Japan 86.75 95.28 95.21 95.44 Korea 1,064.40 1,110.95 1,114.70 1,111.26 Malaysia 3.06 3.12 3.13 3.12 Philippines 41.01 40.62 40.67 40.71 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.55 29.51 29.36 Vietnam 20,840.00 20,950.00 20,945.00 20,948.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.02 0.02 -0.05 -0.24 0.31 0.26 -0.11 -0.09 0.51 -0.01
2013 YTD (%chg) 0.3 -0.1 -0.7 -8.5 -4.3 -2.8 0.3 -2.4 3.3 -0.5
Page 4 of 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 2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
18-Mar 2,240.0 22,083.4 4,802.8 12,220.6 1,968.2 1,621.4 6,536.2 3,256.5 1,591.7 479.1
OVERNIGHT LENDING RATE (%) 18-Mar 19-Mar bps change 2.000 2.200 20.00 0.088 0.087 -0.07 4.180 4.180 0.00 0.093 0.078 -1.50 2.750 2.750 0.00 3.000 3.000 0.00 1.411 1.422 1.10 0.040 0.040 0.00 2.750 2.750 0.00 2.411 2.275 -13.60
19-Mar
% change
2,257.4 22,041.9 4,822.6 12,468.2 1,978.6 1,625.5 6,426.3 3,269.1 1,568.2 480.5
0.78 -0.19 0.41 2.03 0.53 0.25 -1.68 0.39 -1.47 0.28
2013 YTD (%chg) -0.5 -5.4 11.0 19.9 -2.6 -2.9 9.6 2.1 11.4 14.9
3-MONTH INTERBANK LENDING RATE (%) 18-Mar 19-Mar bps change 3.880 3.880 0.01 0.381 0.381 0.00 4.901 4.900 -0.07 0.250 0.250 0.00 2.760 2.760 0.00 3.210 3.210 0.00 0.186 0.234 4.80 0.375 0.375 0.00 2.859 2.859 0.00 5.933 5.933 0.00
CREDIT DEFAULT SWAP (IN BPS) 15-Mar 18-Mar bps change China 62.01 65.01 3.00 Hong Kong SAR 41.06 41.58 0.52 Indonesia 129.05 134.01 4.97 Japan 63.42 67.92 4.50 Korea 66.45 69.45 3.00 Malaysia 77.32 80.32 3.01 Philippines 96.86 100.92 4.06 Thailand 85.21 88.70 3.49 Vietnam 201.64 203.70 2.05 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. 18-Mar 19-Mar Gold Spot (in US$ per 1,605.5 1,602.9 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.16
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
Page 5 of 7
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 31-Jul 31-Aug 30-Sep China 3,240.0 3,272.9 3,285.1 Hong Kong SAR 296.3 298.2 301.2 Indonesia 106.6 109.0 110.2 Japan 1,272.8 1,273.2 1,277.0 Korea 314.4 316.9 322.0 Malaysia 134.5 134.9 137.5 Philippines 79.8 80.7 82.0 Singapore 244.1 246.2 252.1 Thailand 175.3 179.2 183.6 Vietnam 20.0 20.8 21.3 Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn)
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
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 83.8 259.1 179.2 n.a
Import cover (Qtrs of imports covered by reserves) 6.4 2.1 1.9 17.9 2.1 2.5 4.4 2.1 2.6 -
31-Mar n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a
Reserves over short-term debt
3,311.6 521.2 572.8 5.8 China 304.8 143.9 711.2 0.4 Hong Kong SAR 55.5 43.9 2.4 Indonesia 105.2 1,258.8 70.4 2,371.0 0.5 Japan 156.7 126.7 2.6 Korea 327.4 140.3 56.7 30.4 4.6 Malaysia 19.3 8.0 10.5 Philippines 83.8 259.1 121.5 924.3 0.3 Singapore 68.2 57.2 3.1 Thailand 179.2 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. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
Country CHINA CHINA JAPAN PHILIPPINES
DATA RELEASES FOR THE DAY Indicators
Conference Board Leading Economic Index (Pts) Foreign Direct Investment (% YOY) Composite Leading Index (Pts) Balance of Payments (USD bn)
Period Mar Feb Jan F Feb
Last
Previous
pending -6.3 -7.3 95.0 96.3 pending
Page 6 of 7
SELECTED ECONOMIC RELEASES CALENDAR (18 Mar â&#x20AC;&#x201C; 22 Mar 2013)
Expected Release Date 3/18/2013
3/19/2013
3/20/2013 3/21/2013
3/22/2013
Country
CHINA HONG KONG SINGAPORE SINGAPORE KOREA CHINA CHINA JAPAN PHILIPPINES MALAYSIA CHINA HONG KONG HONG KONG JAPAN MALAYSIA THAILAND
Indicators
Property Prices (% MOM) Unemployment rate, SA (%) Non-oil Domestic Exports (% YOY) Electronics Exports (% YOY) Producer Price Index (% YOY) Conference Board Leading Economic Index (Pts) Foreign Direct Investment (% YOY) Composite Leading Index (Pts) Balance of Payments (USD bn) CPI Inflation (% YOY) HSBC Flash Manufacturing PMI (Pts) CPI Inflation (% YOY) Balance of Payments (USD bn) Exports & Imports (% YOY) Foreign Reserves (USD bn) Foreign Reserves (USD bn)
Period Feb Feb Feb Feb Feb Mar Feb Jan F Feb Feb Mar Feb 4Q Feb 15 Mar 15 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 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Performance of Asian stocks markets were mixed amid worries over Cyprus’s rejection of a bailout plan. Thailand’s stock slumped the most on concerns that valuations are too expensive after reaching record levels this month. The SET index dropped by 1.2 percent to 1,549.1 at 5.40 p.m. Singapore time. Philippines stocks also retreated for an eight day, falling 0.1 percent. China’s Shanghai Composite and Hong Kong’s Hang Seng gained the most as a rally in mainland Chinese shares offset investor concerns about Cyprus. The Shanghai Composite was 2.7 percent higher, while the Hang Seng advanced by close to 1 percent.
•
In the currencies market, the euro strengthened for the first time in four days on speculation that the ECB will provide time for Cyprus to re-negotiate a financial rescue package. The euro gained 0.3 percent and 0.1 percent against the yen and dollar, respectively. The performance of Asian currencies were mix; the won touched the weakest level since September last year, declining by 0.5 percent to 1,116.30 per dollar after the government was reported saying that it will consider steps to curb capital flows if needed. The rupiah and the peso fell marginally, close to 0.1 percent. In contrast, the baht climbed to its strongest level since July 1997, gaining 0.5 percent to 29.12 per dollar at 5.40 p.m. Singapore time. It earlier touched the 1997 high of 29.14.
•
In the commodities market, the Brent rebounded from the lowest level in three months, widening its premium to the WTI crude for the first time in four days. Brent futures rose as much as 0.7 percent after sliding by 1.9 percent yesterday. Brent for May settlement climbed by 79 cents to US$108.24 a barrel at 9.15 a.m. London time.
BREAKING NEWS GLOBAL •
Europe weighs Cyprus’s fate after lawmakers reject deal. European policy makers must weigh how far to push Cyprus after lawmakers rejected an unprecedented levy on bank deposits, throwing into limbo a rescue package designed to keep it in the euro. Luxembourg Finance Minister Luc Frieden called for the 17 euro-area finance ministers to reconvene “as soon as possible” to cobble together a new package. The European Central Bank (ECB), whose Governing Council meets today in Frankfurt, will also have to decide whether to give Cyprus more time or consider cutting off liquidity to the country’s banks. He called the vote “very sad news,” though said the decision by its parliament must be respected. Officials from the troika are in Cyprus discussing further capital controls and the possible extension of a bank holiday to the end of the week.
•
EU reaches deal on ECB oversight powers over Euro area banks. EU lawmakers and national governments clinched a provisional deal on legislation to turn the ECB into a supervisor, a move that would pave the way for the currency bloc’s firewall fund to provide direct bailouts to banks. Members of the European Parliament and officials from Ireland, which holds the rotating presidency of the EU, brokered an accord today
after five hours of talks in Brussels. The agreement hands lawmakers a role in appointing the head of the ECB bank supervision board and equips the European Banking Authority with stronger powers to request information from national regulators. This is the largest step toward integration since the introduction of the euro. •
U.S. Senate nears passage of bill to avert a federal shutdown. Congress is pressing to avoid a government shutdown with a Senate vote this week on a stopgap funding bill for the rest of the fiscal year, as lawmakers from both parties set battle lines over the 2014 budget. Congressional leaders said that they want to prevent even a partial halt of government operations by getting the stopgap measure to President Barack Obama, before 27 March – that is when the law keeping agencies’ lights on will expire. In the House of Representatives, Budget Committee Chairman Paul Ryan, a Wisconsin Republican, said yesterday that he expects his colleagues to accept the Democrats’ measure as-is. Passage would be a rare bit of cooperation on budgetary matters even as lawmakers remain locked in a fight over tax increases and spending cuts. Approving the measure, known as a continuing resolution, also would clear the way for debate in the House and Democrat-led Senate over their 2014 budget plan.
•
Britain awaits tough new budget. Britain’s government is set to unveil plans to grow the country’s recession-threatened economy, despite insisting on greater state savings as it struggles to meet its deficit-reduction target. Finance minister George Osborne unveils his latest tax and spending plans in an annual budget likely to stick firmly to the coalition government’s austerity drive, even though the country’s economy is sailing close to another recession. Chancellor of the Exchequer Osborne, whose Conservative party heads a coalition government with the Liberal Democrats, will present this year14 budget to parliament later today. Analysts expect Osborne to stick to his so-called Plan A of driving down the record budget deficit inherited from the previous Labour administration in 2010, despite calls from both inside and outside the government to curb massive spending cuts. In other news, British 12-month inflation rose to 2.8 per cent in February from 2.7 per cent in January, official data showed earlier yesterday.
REGIONAL •
China is expected to keep interest rates unchanged. Mainland officials are expected to keep interest rates on hold in the first half of the year, a central bank adviser said today, easing concerns that Beijing may raise rates after inflation reached a 10-month high last month. According to Song Guoqing, an academic member of the People's Bank of China monetary policy committee, the central government does not have imminent pressure to rein in macroeconomic and interest rate policies. He said that rates were unlikely to change in the first half, with an expected headline inflation rate of 3 per cent for the period.
•
Bank of Thailand’s Chief not troubled by the strong baht. The Bank of Thailand has no grave concerns about the quick appreciation of the baht over the past two days, central bank governor Prasarn Trairatvorakul said today. He added that the currency rose on investors' perceptions of its value against major currencies, in a comparison with other regional currencies. Although the baht has appreciated quickly over these two days, the baht's strengthening is not the result of unusual foreign capital inflow. Mr Prasarn said that the majority of foreign capital inflow was into long term bonds. Page 2 of 7
•
Vietnam to form asset management firm this month to resolve debt. Vietnam will set up a debt asset management company this month as it steps up efforts to tackle bad debt in banks that curbed lending and dragged economic growth to its slowest pace since 1999. According to Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, the Executive Committee has already approved the notion and preparation work is almost completed. The company, which will be managed by the central bank, will issue bonds to fund its operations. Vietnam is aiming to boost the economy that expanded at the slowest pace in 13 years in 2012 as a slump in lending crimped domestic demand, adding pressure on the government to revamp the financial system. Prime Minister Nguyen Tan Dung last week set up a steering committee to restructure the nation’s banking system by 2015, and the monetary authority said that it would monitor troubled lenders. This is positive information for the market, as investors have been waiting for such news for a very long time.
•
Dry season tightens its grip on rice crop in Lao PDR. The dry season is again taking its toll on the rice crop and farmers in Lao who are having difficulties meeting production targets. The Ministry of Agriculture and Forestry had planned for farmers to plant 140,000 hectares of rice but so far they have planted only 92,300 hectares, or about 66 percent of the plan. The Irrigation Department had also hoped to supply water to 140,000 hectares of rice and 40,000 hectares of other crops this dry season, but has only been able to channel water to 92,300 hectares of rice and 37,500 hectares of other crops. Another 15,900 hectares of farmland is lying fallow. Some pumps are also not working to full capacity because many are at least 20 years old. With the market price of rice falling this year and the cost of products such as fertilisers and insecticides rising, some farmers have made the switch to other commercial crops so they can earn a higher income.
•
Malaysia’s state investment company plans more divestments. Khazanah Nasional Bhd, Malaysia’s state investment company, is planning more domestic divestments while expanding overseas. Malaysia’s IPO market grew to the world’s fifth-largest last year, up from 14th in 2011, where almost 70 per cent of the US$6.8 billion raised through IPOs were due to the government divestments of shares in companies. Khazanah, wholly owned by the Malaysian government, cut its stake in hospital operator IHH Healthcare Bhd through a US$2 billion IPO in July. It also reduced its holdings in pay-TV operator Astro Malaysia Holdings Bhd during a US$1.5 billion share sale in October, and divested national carmaker Proton Holdings Bhd. Khazanah is also seeking to expand overseas, adding that the fund is in "no hurry" to sell its assets. Investments outside Malaysia make up about a third of the investment company’s assets, compared with having all its assets within the home market eight or nine years ago.
•
Indonesia’s monorail project ready to kick-off. The long-anticipated monorail project is ready to begin as two former partners in the project consortium, PT Jakarta Monorel (PT JM) and state-owned construction firm PT Adhi Karya, have reached an agreement to settle debts between the two companies. PT JM previously said that it had planned to begin construction in April as the governor had set a deadline of early next year for the monorail’s launch. The consortium is proposing to build two lines: a green line and Page 3 of 7
a blue line. The green line, which will have 16 stations, will extend 14.27 kilometers from Komdak to Satria Mandala Museum, both in South Jakarta. The blue line will cover 9.72 kilometers, from Kampung Melayu in East Jakarta to Roxy in West Jakarta, with 11 stations. The project is estimated to cost $725.59 million. •
Cambodia adopts green growth model. While domestic interest in green growth may be shrinking under the new administration in Korea, efforts by the previous president to export Korea’s eco-friendly development model globally is gaining momentum. The Global Green Growth Institute (GGGI) started out as a non-profit body in Korea under the leadership of former President Lee Myung-bak, and is now a multistakeholder international organization. The Cambodian government has officially launched a National Council on Green Growth (NCGG), the outcome of a two-year long cooperation between Cambodia and GGGI.
IFIs NEWS (compiled from their websites) Basel Committee – Publication: “Results of the Basel III monitoring exercise as of 30 June 2012”
•
The Basel Committee on Banking Supervision has publicised its report on the Results of the Basel III monitoring exercise as of 30 June 2012. The study is based on rigorous reporting processes setup by the Committee to periodically review the implications of the Basel III standards for financial markets. A total of 210 banks participated in the current study, comprising 101 Group 1 banks (ie those that have Tier 1 capital in excess of €3 billion and are internationally active) and 109 Group 2 banks (ie all other banks). The study finds that the average Common Equity Tier 1 capital ratio (CET1) of Group 1 banks was 8.5%, as compared with the Basel III minimum requirement of 4.5%. In order for all Group 1 banks to reach the 4.5% minimum, an increase of €3.7 billion in CET1 would be required. The overall shortfall increases to €208.2 billion to achieve a CET1 target level of 7.0% (ie including the capital conservation buffer); this amount includes the surcharge for global systemically important banks where applicable. As a point of reference, the sum of profits after tax and prior to distributions across the same sample of Group 1 banks between 1 July 2011 and 30 June 2012 was €379.6 billion. http://www.bis.org/press/p130319.htm (Press Release) http://www.bis.org/publ/bcbs243.pdf (Report)
World Bank– Press Release: Philippines: World Bank approves financing for accelerating inclusive growth
•
The World Bank’s Board of Directors approved today a new financing program to support the Philippines’ critical reforms for accelerating inclusive growth or growth that creates more jobs and reduces poverty. This new development policy loan (DPL) worth US$300 million will support the government’s budget for programs to improve the country’s investment climate, strengthen governance and enhance poor families’ access to basic education and health care, as outlined in the Philippine Development Plan (PDP) 2011-2016. http://www.worldbank.org/en/news/press-release/2013/03/19/philippines-world-bankapproves-financing-accelerating-inclusive-growth
Page 4 of 7
World Bank– Press Release: World Bank to Support Vietnam’s Reforms to Gain Economic Competitiveness
•
The World Bank Board of Directors today approved the first Economic Management and Competitiveness Credit for Vietnam, EMCC 1, to help the country with economic management reforms for higher productivity and competitiveness. “The EMCC follows on from the successful Poverty Reduction Support Credit series, and aims to address new challenges that will raise the efficiency and competitiveness of the Vietnamese economy” said Victoria Kwakwa, the World Bank Country Director for Vietnam. “I hope that the EMCC series will provide a platform for deepening and coordinating dialogue between development partners and the Government of Vietnam with a view to helping Vietnam transition to a new economic growth model, which targets competitiveness and the quality of growth.” http://www.worldbank.org/en/news/press-release/2013/03/19/world-bank-support-vietnamreforms-gain-economic-competitiveness
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 19-Mar 20-Mar close China 6.23 6.22 6.22 6.21 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,706.00 9,720.00 9,724.00 Japan 86.75 95.28 95.16 95.35 Korea 1,064.40 1,110.95 1,111.26 1,116.30 Malaysia 3.06 3.12 3.12 3.12 Philippines 41.01 40.62 40.71 40.74 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.55 29.26 29.12 Vietnam 20,840.00 20,950.00 20,948.00 20,945.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.06 0.00 -0.04 -0.20 -0.45 0.00 -0.06 0.04 0.48 0.01
2013 YTD (%chg) 0.3 -0.1 -0.7 -8.4 -4.7 -2.8 0.3 -2.4 4.2 -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 2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
19-Mar 2,257.4 22,041.9 4,822.6 12,468.2 1,978.6 1,625.5 6,426.3 3,269.1 1,568.3 480.5
OVERNIGHT LENDING RATE (%) 19-Mar 20-Mar bps change 2.200 2.030 -17.00 0.087 0.086 -0.07 4.180 4.180 0.00 0.078 0.095 1.75 2.750 2.750 0.00 3.000 3.000 0.00 1.422 1.676 25.40 0.086 0.086 0.00 2.750 2.750 0.00 2.275 2.300 2.50
20-Mar 2,317.4 22,256.4 4,831.5 12,468.2 1,959.4 1,631.5 6,419.6 3,248.4 1,549.1 487.0
% change 2.66 0.97 0.18 0.00 -0.97 0.37 -0.10 -0.63 -1.22 1.37
2013 YTD (%chg) 2.1 -4.5 11.2 19.9 -3.5 -2.6 9.5 1.5 10.1 16.4
3-MONTH INTERBANK LENDING RATE (%) 19-Mar 20-Mar bps change 3.880 3.880 0.02 0.381 0.381 0.00 4.900 4.900 0.00 0.250 0.250 0.00 2.760 2.760 0.00 3.210 3.210 0.00 0.234 0.254 2.00 0.375 0.375 0.00 2.859 2.857 -0.23 5.933 5.800 -13.30
Page 5 of 7
CREDIT DEFAULT SWAP (IN BPS) 18-Mar 19-Mar bps change China 65.01 62.58 -2.43 Hong Kong SAR 41.58 41.14 -0.44 Indonesia 134.01 132.57 -1.44 Japan 67.92 66.96 -0.96 Korea 69.45 66.53 -2.92 Malaysia 80.32 79.38 -0.95 Philippines 100.92 99.03 -1.89 Thailand 88.70 87.75 -0.95 Vietnam 203.70 202.71 -0.99 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. 19-Mar 20-Mar Gold Spot (in US$ per 1,612.9 1,611.3 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.10
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 31-Jul 31-Aug 30-Sep China 3,240.0 3,272.9 3,285.1 Hong Kong SAR 296.3 298.2 301.2 Indonesia 106.6 109.0 110.2 Japan 1,272.8 1,273.2 1,277.0 Korea 314.4 316.9 322.0 Malaysia 134.5 134.9 137.5 Philippines 79.8 80.7 82.0 Singapore 244.1 246.2 252.1 Thailand 175.3 179.2 183.6 Vietnam 20.0 20.8 21.3 Note: Data for China and Vietnam refer to FX reserves
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
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 n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a
Page 6 of 7
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn)
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
Import cover (Qtrs of imports covered by reserves) 6.4 2.1 1.9 17.9 2.1 2.5 4.3 2.1 2.6 -
Reserves over short-term debt
3,311.6 521.2 572.8 5.8 China 304.8 143.9 711.2 0.4 Hong Kong SAR 55.5 43.9 2.4 Indonesia 105.2 1,258.8 70.4 2,371.0 0.5 Japan 156.7 126.7 2.6 Korea 327.4 140.3 56.7 30.4 4.6 Malaysia 19.3 8.0 10.5 Philippines 83.6 259.1 121.5 924.3 0.3 Singapore 68.2 57.2 3.1 Thailand 179.2 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. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
DATA RELEASES FOR THE DAY
Country MALAYSIA
Indicators
CPI Inflation (% YOY)
Period
Last
Previous
Feb
1.5
1.3
SELECTED ECONOMIC RELEASES CALENDAR (18 Mar â&#x20AC;&#x201C; 22 Mar 2013)
Expected Release Date 3/18/2013
3/19/2013
3/20/2013 3/21/2013
3/22/2013
Country
CHINA HONG KONG SINGAPORE SINGAPORE KOREA CHINA CHINA JAPAN PHILIPPINES MALAYSIA CHINA HONG KONG HONG KONG JAPAN MALAYSIA THAILAND
Indicators
Property Prices (% MOM) Unemployment rate, SA (%) Non-oil Domestic Exports (% YOY) Electronics Exports (% YOY) Producer Price Index (% YOY) Conference Board Leading Economic Index (Pts) Foreign Direct Investment (% YOY) Composite Leading Index (Pts) Balance of Payments (USD bn) CPI Inflation (% YOY) HSBC Flash Manufacturing PMI (Pts) CPI Inflation (% YOY) Balance of Payments (USD bn) Exports & Imports (% YOY) Foreign Reserves (USD bn) Foreign Reserves (USD bn)
Period Feb Feb Feb Feb Feb Mar Feb Jan F Feb Feb Mar Feb 4Q Feb 15 Mar 15 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 22 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks are mostly lower, headed for the largest weekly drop since October. Asian stocks fell, with the regional benchmark index heading for its biggest weekly decline since October, as scuffles on the streets of Nicosia underscored concern that Europe’s debt crisis is worsening. Japan’s Nikkei retreated by 2.4 percent, falling from its highest level since September 2008. Hong Kong’s Hang Seng declined by 0.5 percent, while Thailand’s SET index lost 3 percent. The Jakarta Composite also gave up 1.7 percent as at 5.40 p.m. Singapore time. The Shanghai Composite bucked the trend, gaining 0.2 percent.
•
In the currencies market, the Chinese yuan approaches 19 year high as the People’s Bank of China (PBOC) boosted the currency’s reference rate to the strongest level in more than two months amid optimism the economy is improving. The PBOC raised the daily fixing 0.03 percent to 6.2711 per dollar today. The yuan rose by 0.03 percent to close at 6.2122 per dollar in Shanghai. It touched 6.2113 on 20 March, the strongest level since the government unified the official and market rates at the end of 1993. The Thai Baht climbed by 0.8 percent this week, the most since the five-day period ended 18 January to 29.30 per dollar as of 3:19 p.m. in Bangkok. The currency declined by 0.4 percent as of 5.40 p.m. Singapore time, having touched 29.08 on 20 March, the strongest level since a devaluation sparked the Asian financial crisis in 1997. Similarly, the won and the peso gave up 0.3 percent. Gainers are the yen (+0.6 percent) and the ringgit (+0.3 percent).
•
Brent oil premium to WTI drops to lowest level in eight months. Brent oil’s premium to West Texas Intermediate (WTI) crude fell to an eight-month low. OPEC exports are expected to decrease through early April as maintenance at refineries in Asia peaks. According to analysts, Brent is in a weak situation there are still a lot of uncertainty over the euro zone debt situation, therefore bottoming for Brent crude could not be confirmed, possibly declining next week. Brent for May settlement was at US$107.50 a barrel, up 3 cents, on the London-based ICE Futures Europe exchange at 3:39 p.m. Singapore time. The European benchmark’s premium to WTI fell as low as US$14.63, the narrowest since July.
BREAKING NEWS GLOBAL •
Olli Rehn faced a torrent of criticism and a call to resign. EU fumbling on Cyprus makes Olli Rehn, the European Union Economic and Monetary Affairs Commissioner the frontman for spreading economic pain as debt turmoil reignites. Rehn faced a torrent of criticism and a call to resign after helping broker a rescue package from Cyprus that fell apart on 19 March over a demand to raid bank deposits. He has become the defender of German-inspired austerity that helped deepen the 17-nation euro region’s recession. Almost two years after Rehn announced the “beginning of the end” of the debt crisis, the euro area is headed for a back-to-back annual economic
contraction for the first time. Now, Rehn has become a scapegoat as Germany and the IMF let the commissioner take the rap for the Cyprus bailout that hangs in limbo. •
Cyprus launches banking overhaul as meltdown looms. Cyprus is scrambling to overhaul its banking sector to avoid financial meltdown, after the European Central Bank (ECB) threatened to pull the plug on emergency funding for the island's lenders. Cypriot politicians have until Monday to approve a "Plan B" bailout deal with the European Union and the IMF or face being choked from the ECB funds, which would likely cause teetering banks to collapse. There was also intense pressure for a deal from the EU. One source warned that Cyprus risked expulsion from the eurozone if parliament failed to approve a workable plan to restructure its outsized banking sector. But MPs adjourned an emergency session late Thursday without voting on the first two bills in a package of draft legislation the government has drawn up as part of its revised plan. They said that they needed more time to study the plans to set up a "national solidarity fund" and impose capital controls to prevent a run on the banks when they re-open next Tuesday after more than a week.
•
Russia rejects Cyprus bid for financial rescue as deadline looms. Russia rejected Cyprus’s offers of assets for a bailout as the island nation’s lawmakers debate legislation to avert a financial collapse. In an interview, Cypriot Finance Minister said “I think we are not able to get the support that we wanted to get. But we must go back home because things are getting serious”. Russia has ended talks with Cyprus and will decide on participating in restructuring debt after the so-called troika overseeing euroarea bailouts, makes its decision.
•
Euro finance heads said to weigh closing two Cyprus banks. Euro area finance chiefs, pressuring Cyprus to shrink its banking system as the condition for a bailout are reviving demands they jettisoned last week as too extreme. Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors. Cyprus Popular Bank Plc and the bank of Cyprus would be split to create a so-called bank bank, according to officials. Insured deposits below the EU ceiling of 100,000 euros would go into a so-called good bank and not sustain any losses, while uninsured deposits would go into the bad bank and be frozen until the assets could be sold.
•
Eurozone PMI shows business activity at 4-month low. Private business activity across the eurozone hit a four-month low in March as the downturn intensified. The Eurozone’s PMI fell to 46.5 points in March against 47.9 in February, the flash estimate showed today. The fall marked a quickening rate of contraction of business activity for the second consecutive month and showed the steepest fall in four months. Manufacturing output fell at the fastest rate since December while business activity in the service sector suffered the steepest fall since October. New business also fell at the sharpest rate in three months.
•
German business confidence unexpectedly drops from 10-month high. German business confidence unexpectedly fell from a 10-month high in March as Cyprus inflamed the euro region’s debt crisis. The Ifo institute in Munich said that its business climate index, based on a survey of 7,000 executives, fell to 106.7 from 107.4 in Februar – the first drop in five months. Economists have predicted a gain to 107.8. Page 2 of 8
•
U.S. jobless claims inch higher. New claims for U.S. unemployment benefits rose slightly last week but remained near their lowest level in five years. Initial jobless claims totalled 336,000 in the week ending 16 March, up a modest 2,000 from the prior week, the U.S. Labor Department reported today. The prior week's number was upwardly revised by 2,000 to 334,000. Despite the uptick last week, jobless claims, an indicator of the pace of layoffs, stayed close to the 330,000 reading hit in early January, the lowest level since February 2008 as the recession was taking hold.
REGIONAL •
New Bank of Japan (BOJ) Chief confident of achieving 2 percent inflation target. BOJ Governor Haruhiko Kuroda said that he is confident in achieving a 2 percent inflation target, rebutting doubters who predict his efforts will fail as he prepares to strengthen monetary stimulus. Kuroda said yesterday in his inaugural press conference after taking the helm of the BOJ this week that “we will do whatever we can to achieve the 2 percent price target at the earliest time possible”. Kikuo Iwata, one of two new deputies, told reporters that the bank should commit to achieving the goal for consumer-price increases within two years. Kuroda’s anti-deflation campaign came under criticism even before it began, reflecting debate over whether monetary policy is capable of lifting Japan out of economic stagnation.
•
DBS bid for Bank Danamon nears approval. DBS Group Holdings Ltd. (DBS)’s bid for PT Bank Danamon Indonesia is set to be approved as soon as this month as Singaporean and Indonesian regulators near an agreement over bank access, according to Chairul Tanjung, an economic adviser to Indonesia’s president. DBS’s proposal to buy Danamon for US$6.77 billion has been on hold for almost a year as Indonesia’s central bank weighed the deal while seeking greater access for its own lenders in Singapore. DBS has recently stepped up discussions with Bank Indonesia over the acquisition’s structure and final ownership levels.
•
Higher minimum wage for garment and footwear workers in Cambodia. Garment and footwear workers in Cmabodia will be paid a government-mandated minimum wage of US$75 per month – an increase of US$14 beginning May, the Ministry of Social Affairs announced yesterday. The increase, which ministry officials had agreed should be US$12, was boosted by US$2 after direct intervention from Prime Minister Hun Sen, but it is still not enough to appease non-government-aligned unions, which threatened to strike, saying an extra US$14 would do little to lift workers out of poverty. In a statement signed by Minister of Social Affairs, Ith Sam Heng, the minimum wage will be changed on 1 May and the workers will receive it at the end of May or in early June. The Labour Advisory Committee will hold a meeting on 29 March in order to complete this process in accordance with the labour law.
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Rising mortgage debt could hit record high in Thailand. Kasikorn Research Center (KResearch) forecasts that Thailand’s outstanding mortgages will set a new record of 21-22 percent of Thailand's gross domestic product over the next two years, a trend that could heighten pressure on rising household debt. Overall housing loans stand at 19.9 percent of GDP now, up from 16.8 percent during the 1997 financial crisis. The robust loan growth is attributed to several factors; rising purchasing power, easier accessibility to funding sources, mass transit system and real estate developments, and Page 3 of 8
low interest rates. With more residential projects in the pipeline over the next two years, it could increase the mortgage-to-GDP ratio by 0.5 to one percentage point per year. Even though a property bubble isn't a concern now, rising household debt to GDP is worrisome. The recent warning by the Bank of Thailand about rising household debt has rattled the markets. Higher household debt is largely attributed to the Yingluck Shinawatra administration's populist policies, particularly the tax rebate of up to 100,000 baht for first-time car buyers. There has not been a rise in non-performing loans (NPLs) due to the time lag between new loan extensions and the period by which loans are classified as NPLs. •
Korea’s government re-organisation bill finally passed. Rival parties passed President Park Geun-hye's government reorganization proposal during a main session of parliament today after they reached an agreement late yesterday. The bill's passage has already been postponed several times due to recurring disagreements between the ruling Saenuri Party and the main opposition Democratic United Party (DUP). The proposal calls for the creation of new government offices and a reassignment of responsibilities among others.
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Malaysia likely to liberalise services sub-sectors early next year. The Malaysian government is working on further liberalising the services sector sub-sectors and this is expected to be implemented early next year, according to Minister of International Trade and Industry Datuk Seri Mustapa Mohamed. He said that Malaysia and the other ASEAN countries would be further liberalising the services sector under the ninth Package of Commitments involving 24 sub-sectors. Overall, Mustapa said Malaysia's implementation rate was commendable at 87.7 percent, with the full implementation of 300 measures out of 342 measures specified in the ASEAN Economic Community (AEC) blueprint. Malaysia has also completed on schedule the elimination of duties for intra-ASEAN trade and liberalised 96 services sub-sectors. The 24 sub-sectors to be liberalised broadly cover transport, logistics, environmental services, healthcare and tourism.
•
State workers in the Philippines to get performance bonus. The Department of Budget and Management (DBM) has approved the release of P831.8 million for the merit-based incentives of qualified employees of state firms who were able to meet or exceed their performance targets last year. In a statement, the department said funds for the performance-based bonus (PBB) of officials and employees of several agencies, state universities and colleges (SUCs), and government-owned or -controlled corporations have been authorized for release. Of the total amount, P806.1 million will be released through the Governance Commission for GOCCs for the 26 GOCCs that were deemed eligible for the incentive. The amount will be sourced from the firms’ own corporate funds. A total of 15,415 GOCC officials and employees qualified for the PBB. Among the GOCCs that will get bonuses are the National Electrification Administration, the Power Sector Assets and Liabilities Management Corp., the Philippine Coconut Authority, and also government financial institutions such as the Philippine Deposit Insurance Corp. and the Development Bank of the Philippines.
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IFIs NEWS (compiled from their websites) Basel Committee – Consultation: “External audits of Banks” •
The Basel Committee on Banking Supervision has published supervisory guidance on External audits of banks for consultation along with a letter to the International Auditing and Assurance Standards Board (IAASB). The consultative paper aims to enhance and supersede the existing guidance that was published by the Basel Committee in 2002 on the relationship between banking supervisors and banks' external auditors and in 2008 on external audit quality and banking supervision. Comments on the proposals should be submitted by Friday 21 June 2013 by e-mail to: baselcommittee@bis.org. http://www.bis.org/press/p130321.htm (Press Release) http://www.bis.org/publ/bcbs244.htm (Report)
IMF – Press Release: Implementation Plan Following IEO Evaluation of Research at the IMF •
On November 27th, the Executive Board of the International Monetary Fund (IMF) agreed to the implementation plan in response to board-endorsed recommendations arising from the Independent Evaluation Office (IEO) evaluation of Research at the IMF. http://www.imf.org/external/np/sec/pn/2013/pn1332.htm (Press Release) http://www.ieoimf.org/ieo/pages/IEOPreview.aspx?img=i6nZpr3iSlU%3d&mappingid=tdPP0jC7Oqs%3d (Report) http://www.imf.org/external/np/pp/eng/2012/092412.pdf (Fifth Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations)
IMF – Working Paper: “Aid, Exports, and Growth: A Time-Series Perspective on the Dutch Disease Hypothesis” •
The IMF has published the following working paper. http://www.imf.org/external/pubs/ft/wp/2013/wp1373.pdf
OECD – Publication: “Economic Survey of China” •
The OECD has published the captioned report. “China has made tremendous progress toward achieving inclusive growth, notably through higher social spending that has helped reduce inequality. But major reforms are needed to ensure a fourth decade of rapidly converging living standards and a greener economy, according to the latest Economic Survey of China.” http://www.oecd.org/economy/speedingupreformswillfostermoreinclusiveandgreenerg rowthinchina.htm (Press Release)
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FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 21-Mar 22-Mar close China 6.23 6.22 6.21 6.21 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,706.00 9,755.00 9,777.00 Japan 86.75 95.28 94.90 94.38 Korea 1,064.40 1,110.95 1,115.97 1,119.28 Malaysia 3.06 3.12 3.12 3.11 Philippines 41.01 40.62 40.73 40.87 Singapore 1.22 1.25 1.25 1.25 Thailand 30.59 29.55 29.19 29.30 Vietnam 20,840.00 20,950.00 20,944.00 20,940.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.03 -0.01 -0.23 0.55 -0.30 0.29 -0.34 -0.06 -0.38 0.02
2013 YTD (%chg) 0.3 -0.2 -1.3 -7.5 -5.0 -2.5 0.0 -2.4 3.5 -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 2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
21-Mar 2,324.2 22,225.9 4,802.7 12,635.7 1,950.8 1,630.8 6,473.0 3,267.7 1,529.5 491.8
OVERNIGHT LENDING RATE (%) 21-Mar 22-Mar bps change 1.920 1.730 -19.00 0.086 0.084 -0.29 4.180 4.179 -0.07 0.073 0.078 0.50 2.750 2.750 0.00 3.000 3.000 0.00 0.970 0.546 -42.40 0.063 0.063 0.00 2.750 2.750 0.00 2.700 2.750 5.00
22-Mar
% change
2,328.3 22,115.3 4,723.2 12,338.5 1,948.7 1,626.9 6,518.7 3,258.6 1,483.4 490.0
0.17 -0.50 -1.66 -2.35 -0.11 -0.24 0.71 -0.28 -3.01 -0.37
2013 YTD (%chg) 2.6 -5.1 8.7 18.7 -4.1 -2.9 11.2 1.8 5.4 17.1
3-MONTH INTERBANK LENDING RATE (%) 21-Mar 3.879 0.383 4.900 0.250 2.760 3.210 0.235 0.375 2.857 5.800
22-Mar 3.880 0.381 4.900 0.250 2.760 3.210 0.235 0.375 2.857 5.714
bps change 0.07 -0.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -8.60
CREDIT DEFAULT SWAP (IN BPS) 20-Mar 21-Mar bps change China 65.86 65.88 0.02 Hong Kong SAR 41.68 41.70 0.02 Indonesia 138.50 138.05 -0.45 Japan 71.75 69.50 -2.25 Korea 70.30 70.81 0.52 Malaysia 81.83 80.38 -1.45 Philippines 100.47 100.53 0.06 Thailand 91.56 90.12 -1.44 Vietnam 205.27 205.31 0.04 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-Mar 22-Mar Gold Spot (in US$ per 1,614.9 1,612.8 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.13
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CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012
2013
31-Jul 31-Aug 30-Sep 31-Oct 30-Nov 31-Dec 31-Jan 28-Feb 31-Mar China 3,240.0 3,272.9 3,285.1 3,287.4 3,297.7 3,311.6 n.a n.a n.a Hong Kong SAR 296.3 298.2 301.2 301.7 305.2 317.3 304.7 304.8 n.a Indonesia 106.6 109.0 110.2 110.3 111.3 112.8 108.8 105.2 n.a Japan 1,272.8 1,273.2 1,277.0 1,274.2 1,270.9 1,268.1 1,267.3 1,258.8 n.a Korea 314.4 316.9 322.0 323.5 326.1 327.0 328.9 327.4 n.a Malaysia 134.5 134.9 137.5 138.3 139.1 139.7 140.2 140.3 n.a Philippines 79.8 80.7 82.0 81.7 83.9 83.8 85.3 83.6 n.a Singapore 244.1 246.2 252.1 254.2 255.8 259.3 258.8 259.1 n.a Thailand 175.3 179.2 183.6 181.5 181.6 181.6 181.6 179.2 n.a Vietnam 20.0 20.8 21.3 n.a n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Latest Int'l 3 months imports of Short-term Import cover Reserves over Reserves goods & services external debt (Qtrs of imports short-term debt covered by (US$bn) (US$bn) (US$bn) reserves) 3,311.6 521.2 572.8 6.4 5.8 China 304.8 143.9 711.2 2.1 0.4 Hong Kong SAR 55.5 43.9 1.9 2.4 Indonesia 105.2 1,258.8 70.4 2,371.0 17.9 0.5 Japan 156.7 126.7 2.1 2.6 Korea 327.4 140.3 56.7 30.4 2.5 4.6 Malaysia 19.3 8.0 4.3 10.5 Philippines 83.6 259.1 121.5 924.3 2.1 0.3 Singapore 68.2 57.2 2.6 3.1 Thailand 179.2 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. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
Country MALAYSIA THAILAND
DATA RELEASES FOR THE DAY Indicators
Foreign Reserves (USD bn) Foreign Reserves (USD bn)
Period
Last
Previous
15 Mar 15 Mar
140.6 178.3
140.3 178.0
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SELECTED ECONOMIC RELEASES CALENDAR (18 Mar â&#x20AC;&#x201C; 22 Mar 2013)
Expected Release Date 3/18/2013
3/19/2013
3/20/2013 3/21/2013
3/22/2013
Country
CHINA HONG KONG SINGAPORE SINGAPORE KOREA CHINA CHINA JAPAN PHILIPPINES MALAYSIA CHINA HONG KONG HONG KONG JAPAN MALAYSIA THAILAND
Indicators
Property Prices (% MOM) Unemployment rate, SA (%) Non-oil Domestic Exports (% YOY) Electronics Exports (% YOY) Producer Price Index (% YOY) Conference Board Leading Economic Index (Pts) Foreign Direct Investment (% YOY) Composite Leading Index (Pts) Balance of Payments (USD bn) CPI Inflation (% YOY) HSBC Flash Manufacturing PMI (Pts) CPI Inflation (% YOY) Balance of Payments (USD bn) Exports & Imports (% YOY) Foreign Reserves (USD bn) Foreign Reserves (USD bn)
Period Feb Feb Feb Feb Feb Mar Feb Jan F Feb Feb Mar Feb 4Q Feb 15 Mar 15 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 8 of 8
MARKET UPDATE FOR ASEAN+3 25 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Stocks climbed as Cyprus reached an accord with creditors on an international bailout. The MSCI All-Country World Index of shares rose 0.4 percent as of 8:01 a.m. in London. The Stoxx Europe 600 Index advanced 0.8 percent, while Standard & Poor’s 500 Index futures added 0.3 percent. Emerging-market stocks rose the most in two weeks and currencies strengthened after European lenders agreed to the outlines of a bailout for Cyprus. The MSCI Emerging Markets Index added 1.1 percent to 1,026.29 at 4:21 p.m. in Hong Kong, after closing at its lowest level since Dec. 4 on March 22. Cyprus reached an accord with creditors, paving the way for 10 billion euros ($13 billion) of emergency loans to stave off the threat of default. The tentative agreement between Cyprus and the so-called troika of international lenders was reached in overnight talks in Brussels and ratified by finance ministers from the 17-nation euro area.
South Korea’s won and Malaysia’s ringgit lead advance, with Bloomberg-JPMorgan Asia Dollar Index rising most in more than a month, after Euro-area finance ministers approve Cyprus bailout agreement. Singapore dollar advances most in more than two weeks. China’s yuan reaches 19-year high ahead of BRIC summit that starts in Durban tomorrow. South Korea’s won gains most since February; won’s advance against backdrop of weakening in yen is “flashing a red light for Korea’s exports,” newly appointed Finance Minister Hyun Oh Seok says over weekend. Yen snaps two-day gains against U.S. dollar and falls against euro; Japan’s 10-year yield slides lowest since July 2003; nation’s household assets rose 3.1% in fourth quarter from year earlier. Peso advances. Vietnam’s dong steady; central bank cuts refinance rate to 8% from 9%, effective March 26: statement on website; central bank to cut dong deposit-rate cap to 7.5%
West Texas Intermediate rose a second day after Cyprus agreed on an international bailout, easing concern that Europe’s debt crisis will worsen. Brent crude’s premium to WTI was near the narrowest since July. WTI futures climbed as much as 0.6 percent in New York after capping a third weekly gain on March 22.
BREAKING NEWS
Cyprus dodged a disorderly default and unprecedented exit from the euro currency by bowing to demands to shrink its banking system in exchange for a 10 billion-euro ($13 billion) bailout. Cypriot President Nicos Anastasiades agreed to shut the country’s second-largest bank under pressure from a German-led bloc of creditors in a night-time negotiation that threatened to rekindle the debt crisis and rattle markets. It was the second time in nine days that Cyprus struck a deal with creditors and the International Monetary Fund. The agreement calls for Cyprus Popular Bank Pcl to be shut down and split. The Bank of Cyprus Plc would take over the viable assets of the failed bank along with 9 billion euros in central bank-provided emergency liquidity aid, according to three EU officials who asked not to be named because talks are ongoing. Deposits below the EU deposit-guarantee ceiling of 100,000 euros will be protected, and a loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two EU officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said.
Italian government bonds extended an advance, with the nation’s 10-year securities erasing their decline since the country’s inconclusive elections last month. The price of the 5.5 percent securities maturing in November 2022 rose 0.615, or 6.15 euros per 1,000-euro face amount, to 108.61 as of 8:15 a.m. London time, above the 108.60 closing level on Feb. 22, the last trading day before the elections began. The yield fell eight basis points, or 0.08 percentage point to 4.44 percent.
U.K. house prices rose the most in three years this month, led by a surge in London, as demand outstripped supply. Average values in England and Wales increased 0.3 percent, the biggest advance since March 2010, property researcher Hometrack Ltd. said in an e-mailed statement today. In London, prices jumped 0.7 percent, the most since February 2010. The Bank of England’s Funding for Lending program has helped ease credit conditions, while plans announced by the government last week to assist prospective homebuyers will also support the market, Hometrack said. It also said the weaker pound and turmoil in the euro area will continue to lure purchasers from abroad.
The bear market in bonds is being delayed by Americans socking away money at 50 times the rate at which they take on debt to buy houses, cars and other items. The amount U.S. households have in bank deposits, savings bonds, fixed-income mutualfunds and municipal securities increased $500 billion last year, equaling the most since 2007, according to FTN Financial, based on Federal Reserve data, while net household debt increased $10 billion, the least since 2005, as the economy grows slower than historically. Consumers have kept up the trend into 2013, according to strategists at FTN, helping to prevent a selloff in Treasuries and other debt assets after average annual gains of 6.3 percent since 2008.
REGIONAL
Japanese household assets rose at the fastest pace in five years last quarter as the weaker yen fueled a stock market rally. Assets rose 3.1 percent from a year earlier to 1,547 trillion yen ($16 trillion) in the final three months of 2012, the steepest gain since 2007, a Bank of Japan quarterly report showed today. The Nikkei 225 Stock Average rose more than 17 percent over the period. Rising household wealth may boost consumer sentiment. Goldman Sachs Group Inc. on March 18 raised its growth forecast for the fiscal year starting next month to 2.3 percent from 2.1 percent.
Japanese currency chief Takehiko Nakao is the sole nominee for the presidency of the Asian Development Bank, Philippine Finance Secretary Cesar Purisima said in a mobilephone text message today, ensuring that Japan will maintain its hold on the top post at the lender. ADB member countries will vote on the next president in an election from today to April 24, the Manila-based development bank said in an e-mailed statement earlier this month. The nomination period closed yesterday. Japan has held the presidency of the ADB since the institution was founded in 1966, and is tied with the U.S. in having the largest voting power at the bank. The Japanese government nominated Nakao to replace former president Haruhiko Kuroda, who became the Bank of Japan governor last week.
Japan’s bonds rose, sending 10-year and 20-year yields to the lowest in almost a decade, amid speculation Bank of Japan Governor Haruhiko Kuroda will use parliament testimony tomorrow to outline new easing steps. The extra yield investors demand to hold 10-year bonds instead of 3-year notes narrowed to the least since June 2003 on prospects the BOJ will buy longer-dated securities. At his inaugural Page 2 of 10
press conference as BOJ chief last week, Kuroda reiterated a pledge to achieve a 2 percent price target. The 30- year yield dropped to a 2 1/2-year low.
Korea’s newly-appointed finance minister, Hyun Oh Seok, revived his nation’s concerns over weakness in the yen and said that the Group of 20 nations should revisit the issue. “Japan’s expansionary policies are having various ripple effects on many countries,” Hyun, 62, told reporters on March 23 in Bundang, on his second day as finance chief. “The yen is depreciating while the won is gaining and this is flashing a red light for Korea’s exports.” South Korea expressed concerns about the currency’s slide before and after last month’s meeting of the G-20 in Moscow, where that organization refrained from criticizing Japanese policies.
Korea will establish a fund to spend 1.5 trillion won ($1.4 billion) over five years to help low-income borrowers restructure defaulted loans as part of President Park Guen Hye’s promise to ease consumer debt burdens. About 4,000 financial institutions including banks and consumer lenders will join the “National Happiness Fund,” to purchase or reschedule the overdue loans, the Financial Services Commission said in emailed statement today. It estimates the fund will help more than 300,000 borrowers. Park pledged to boost welfare spending and increase jobs after inheriting a slowing economy saddled with a record 959.4 trillion won in household debt as of December. The country’s central bank said in January swelling consumer debt is the biggest threat to South Korea’s financial system.
China’s swap market is signalling interest-rate increases for the first time since 2011 after inflation accelerated to a 10-month high and the housing market defied government cooling efforts. Two-year contracts that exchange the People’s Bank of China’s 3 percent savings benchmark for a fixed payment rose eight basis points this month to 3.03 percent, data compiled by Bloomberg show. The swap had been lower than the one-year PBOC deposit rate for 16 months. PBOC Governor Zhou Xiaochuan said on March 13 the government should be on “high alert” after consumer prices jumped a more-than-forecast 3.2 percent in February.
Indonesian lawmakers will assess today Finance Minister Agus Martowardojo’s suitability to become the next Bank Indonesia governor, testing support for the president’s bid to reshuffle his top economic team. Commission XI, a parliamentary panel for financial affairs, will vet Martowardojo’s credentials for the job today and a decision is due tomorrow. President Susilo Bambang Yudhoyono last month nominated the finance minister, 57, as his sole candidate to succeed Governor Darmin Nasution, whose term ends May 23.
Ayala Land Inc. said it expects to expand its record profit this year as the Philippines’ largest builder takes advantage of a housing shortage and develops business districts outside the capital. “That is very possible given the very positive tailwind we’re getting from the Philippine economy,” Ayala Land President Antonino Aquino said in an interview with Bloomberg Television on March 20. The developer stands to benefit from an undersupply of housing it estimates at 4 million homes nationwide. Profit rose 27 percent to a record 9.04 billion pesos ($221 million) in 2012. The company, which developed the Makati business district in Manila, has said it targets to boost profit to 10 billion pesos by 2014.
Bangko Sentral ng Pilipinas Governor Amando Tetangco says in mobile-phone message: “Inflation continues to be low and favorable”. Average consumer price gains Page 3 of 10
for 2013, 2014 “could still settle at the lower half” of govt target range of 3%-5%, reflecting continued manageable inflation pressures and well-anchored expectations. The BSP is to continue to monitor price and demand developments to ensure sustained support to primary mandate of price stability conducive to sustainable economic growth, he says.
Consumer prices in Singapore surged more than expected last month, mainly due to a significant rise in private transport costs as COE premiums (car ownership certificates) spiked. Overall inflation rose by 4.9 per cent in February from a year ago, a sharp increase from January's 3.6 per cent rise, according to the Department of Statistics. Economists had expected a 4.1 per cent surge, according to a Reuters poll. Private road transport cost jumped by 17.4 per cent in February, up from 10.5 per cent a month earlier. The surge in private road transport costs alone accounted for more than two thirds of the 1.3 percentage points rise in overall inflation in February.
Vietnam’s central bank cut interest rates as inflation slowed, seeking to spur lending and boost consumption after a credit crunch slowed economic growth to a 13-year low. The State Bank of Vietnam lowered the refinance rate to 8 percent from 9 percent and the discount rate to 6 percent from 7 percent, according to a statement on its website. It also reduced the cap on dong deposit interest rates to 7.5 percent from 8 percent. The new rates are effective March 26.
Disbursed FDI to Vietnam in 1Q rises 7.1% vs yr-earlier period to $2.7b, according to posting on govt website yday, citing General Statistics Office. Country’s March exports estimated at $11b, imports at $11.3b, online newswire reported yday, citing unidentified statistics office. The first quarter’s surplus is seen at ~$480m, with exports at $29.7b and imports at ~$29.2b.
A plan to resolve Vietnamese banks’ bad debt may not “require significant up-front financing,” the World Bank said, as the country prepares to set up an asset management company to tackle non-performing loans. The World Bank has discussed the matter with the central bank, according to Victoria Kwakwa, the lending agency’s Vietnam country director, who said that the government is still “thinking through what it needs to do on the bad debt issue.” “They haven’t made a clear determination of what they need in financing,” Kwakwa said in a March 22 telephone interview. “There might be approaches that don’t require significant up-front financing,” she said without providing details. Vietnam will set up a debt management company overseen by the central bank before the end of this month, according to Le Xuan Nghia, a member of the country’s National Financial and Monetary Policy Advisory Council. Rising bad-debt levels led to slower credit growth and consumption, dragging the country’s economic expansion to a 13-year low last year.
IFIs NEWS (compiled from their websites) BIS – Press Release: Central bank collateral frameworks and practices: new report from the Markets Committee
The Markets Committee today released a report entitled Central bank collateral frameworks and practices. The report examines how collateral frameworks compare across central banks and the key changes they have undergone since mid-2007. The focus is more on the longer-term evolution of central bank collateral policies, including the local factors that explain the observed diversity in practices, and less on the temporary measures adopted during the height of the global financial crisis. Page 4 of 10
http://www.bis.org/press/p130325.htm (Press Release) http://www.bis.org/publ/mktc06.htm (Report) Basel Committee - Consultation: Basel Committee issues consultative document on recognising the cost of credit protection purchased
The Basel Committee on Banking Supervision has published a proposal titled “Recognising the cost of credit protection purchased” that would strengthen capital requirements when banks engage in certain high-cost credit protection transactions. While the Committee recognises that the purchase of credit protection can be an effective risk management tool, the proposed changes are intended to ensure that the costs, and not just the benefits, of purchased credit protection are appropriately recognised in regulatory capital. Comments on the proposals should be submitted by Friday 21 June 2013 by e-mail to: baselcommittee@bis.org. http://www.bis.org/press/p130322.htm (Press Release) http://www.bis.org/publ/bcbs245.pdf (Report)
IMF – Press Release: IMF Statement on Cyprus
The IMF has issued a statement on Cyprus following the Eurogroup meeting: “The agreement reached today on Cyprus provides a comprehensive and credible plan to deal with the current economic challenges in the country. This agreement provides the basis for restoring trust in the banking system, which is key to supporting growth. Based on this and final agreement of the mission in Cyprus, I expect to make a recommendation regarding potential financial support from the IMF to the Executive Board in coming weeks.” http://www.imf.org/external/np/sec/pr/2013/pr1391.htm
IMF – Press Release: IMF Membership in the Financial Stability Board
On March 15, 2013 the Executive Board of the IMF approved the IMF’s acceptance of membership in the Financial Stability Board as an association under Swiss law. http://www.imf.org/external/np/sec/pn/2013/pn1333.htm
IMF – Working Paper: “Rebalancing: Evidence from Current Account Adjustment in Europe”
The IMF has publicised the captioned working paper. http://www.imf.org/external/pubs/ft/wp/2013/wp1374.pdf
UNCTAD – Press Release: World commercial services exports grew by 3% in the fourth quarter of 2012
According to preliminary estimates by the WTO and UNCTAD, in the fourth quarter of 2012, world exports of commercial services grew by 3 %, as compared with the same quarter of the year before. The estimates point to a modest, but certain recovery of global services trade at the end of the year, after 2% decline recorded in the third quarter. Preliminary figures (balance-of-payments basis, current prices) indicate that the observed growth was led by Asia and Oceania (8%) and Northern America (5%). At the same time, Europe's services exports remained stagnant, at the level of exports recorded for the last 3 months of 2011. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=431&Sitemap_x0020_ Taxonomy=Statistics;#20;#UNCTAD Home (Press Release) Page 5 of 10
http://unctadstat.unctad.org/TableViewer/tableView.aspx?ReportId=17241 (UNCTAD Statistics) http://www.wto.org/english/res_e/statis_e/daily_update_e/qrtly_comm_serv_web_e.x ls (WTO (excel format with overview of developments))
FOREIGN CURRENCY EXCHANGE RATES Previous 2013 YTD 2012 close 22-Mar 25-Mar % change wk's close (%chg) China 6.23 6.21 6.21 6.21 0.02 0.4 Hong Kong 7.75 7.76 7.76 7.76 0.02 -0.2 SAR Indonesia 9,793.00 9,777.00 9,777.00 9,736.00 0.42 -0.9 Japan 86.75 94.46 94.46 94.78 -0.34 -7.8 Korea 1,064.40 1,119.28 1,119.28 1,110.85 0.76 -4.3 Malaysia 3.06 3.11 3.11 3.10 0.43 -2.0 Philippines 41.01 40.87 40.87 40.82 0.12 0.1 Singapore 1.22 1.25 1.25 1.24 0.39 -1.8 Thailand 30.59 29.29 29.29 29.26 0.10 3.7 Vietnam 20,840.00 20,940.00 20,940.00 20,945.00 -0.02 -0.5 Note: Negative values indicate depreciation and positive values indicate appreciation. STOCK MARKET INDEX
2,269.1
Previous wk's close 2,278.4
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
2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
22-Mar
25-Mar
2,328.3
2,326.7
22,533.1
22,115.3
22,251.2
4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
4,723.2 12,338.5 1,948.7 1,626.9 6,518.7 3,258.6 1,479.0 490.0
OVERNIGHT LENDING RATE (%) bps 22-Mar 25-Mar change 1.730 1.700 -3.00
2013 YTD (%chg) -0.07 2.5
% change
0.61
-4.6
4,777.9 1.16 9.9 12,546.5 1.69 20.7 1,977.7 1.49 -2.6 1,643.9 1.04 -1.8 6,597.6 1.21 12.6 3,269.9 0.35 2.1 1,521.6 2.88 8.1 493.6 0.73 18.0 3-MONTH INTERBANK LENDING RATE (%) 22-Mar
25-Mar
bps change
3.880
3.880
0.00
0.084
0.084
0.04
0.381
0.383
0.14
4.179 0.078 2.750 3.000 0.546
4.180 0.088 2.750 3.000 0.483
0.07 1.00 0.00 0.00 -6.30
4.900 0.250 2.760 3.210 0.235
4.900 0.250 2.760 3.210 0.249
0.00 0.00 0.00 0.00 1.40 Page 6 of 10
Singapore Thailand Vietnam
0.111 2.750 2.750
0.111 2.750 3.067
0.00 0.00 31.70
0.375 2.857 5.714
0.375 2.857 5.871
0.00 0.00 15.70
CREDIT DEFAULT SWAP (IN BPS) 21-Mar
22-Mar
bps change 0.96
China 65.88 66.85 Hong Kong 41.70 41.71 0.01 SAR Indonesia 138.05 139.53 1.48 Japan 69.50 70.02 0.51 Korea 70.81 72.32 1.51 Malaysia 80.38 81.88 1.49 Philippines 100.53 100.60 0.06 Thailand 90.12 91.61 1.49 Vietnam 205.31 205.35 0.04 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-Mar
25-Mar
% change
Gold Spot (in US$ per 1,608.6 1,606.2 -0.15 ounce) Sources: Bloomberg & Thomson Reuters Datastream
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
Page 7 of 10
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 2013 31303031283131-Jul 31-Oct 31-Jan Aug Sep Nov Dec Feb Mar 3,240. 3,272. 3,285. 3,287. 3,297. 3,311. n.a n.a n.a China 0 9 1 4 7 6 Hong Kong 296.3 298.2 301.2 301.7 305.2 317.3 304.7 304.8 n.a SAR Indonesia 106.6 109.0 110.2 110.3 111.3 112.8 108.8 105.2 n.a 1,272. 1,273. 1,277. 1,274. 1,270. 1,268. 1,267. 1,258. n.a Japan 8 2 0 2 9 1 3 8 Korea 314.4 316.9 322.0 323.5 326.1 327.0 328.9 327.4 n.a Malaysia 134.5 134.9 137.5 138.3 139.1 139.7 140.2 140.3 n.a Philippines 79.8 80.7 82.0 81.7 83.9 83.8 85.3 83.6 n.a Singapore 244.1 246.2 252.1 254.2 255.8 259.3 258.8 259.1 n.a Thailand 175.3 179.2 183.6 181.5 181.6 181.6 181.6 179.2 n.a Vietnam 20.0 20.8 21.3 n.a n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS 3 months Reserves Import cover Latest Int'l imports of Short-term over short(Qtrs of Reserves goods & external debt term debt imports services covered by (US$bn) (US$bn) (US$bn) reserves) China 3,311.6 521.2 572.8 6.4 5.8 Hong Kong 304.8 143.9 711.2 2.1 0.4 SAR Indonesia 105.2 55.5 43.9 1.9 2.4 Japan 1,258.8 70.4 2,371.0 17.9 0.5 Korea 327.4 156.7 126.7 2.1 2.6 Malaysia 140.3 56.7 30.4 2.5 4.6 Philippines 83.6 19.3 8.0 4.3 10.5 Singapore 259.1 121.5 924.3 2.1 0.3 Thailand 179.2 68.2 57.2 2.6 3.1 Vietnam 21.3 30.9 10.0 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. Shortterm debts are liabilities due in 1 year or less. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
Page 8 of 10
DATA RELEASES FOR THE DAY Country PHILIPPINES SINGAPORE
Indicators Budget Deficit/Surplus (PHP bn) CPI (YoY)%
Period
Last
Previou s
Jan Feb
-19.5 4.9
-115.7 3.6
SELECTED ECONOMIC RELEASES CALENDAR (18 Mar – 22 Mar 2013) Expected Country Indicators Release Date 3/25/2013
3/26/2013
3/27/2013 3/28/2013
3/29/2013
PHILIPPINES SINGAPORE VIETNAM VIETNAM VIETNAM VIETNAM VIETNAM HONG KONG HONG KONG HONG KONG SOUTH KOREA SOUTH KOREA PHILIPPINES PHILIPPINES SINGAPORE SOUTH KOREA THAILAND THAILAND HONG KONG SOUTH KOREA JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA THAILAND THAILAND THAILAND
Budget Deficit/Surplus (PHP bn) CPI (YoY)% Exports YTD (YoY)% GDP Constant Prices YTD (YoY)% Imports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index YoY % Trade Balance (HKD bn) Exports YoY% Imports YoY% GDP (QoQ)% GDP (YoY)% Trade Balance (USD mn) Total Imports (YoY)% Industrial Production YoY% SK Consumer Confidence Customs Exports (YoY)% Customs Imports (YoY)% Govt Mthly Budget Surp/Def (HKD bn) Current Account in (USD mn) Industrial Production YOY% Job-To-Applicant Ratio National CPI Ex Food, Energy YoY % National CPI YoY % Jobless Rate % Business Survey- Manufacturing Business Survey- Non-Manufacturing Industrial Production (MoM)% Industrial Production (YoY)% Business Sentiment Index Current Account Balance (USD mn) Total Exports YOY%
Period Jan Feb Mar 1Q Mar Mar Mar Feb Feb Feb 4Q F 4Q F Jan Jan Feb Mar Feb Feb Feb Feb Feb P Feb Feb Feb Feb Apr Apr Feb Feb Feb Feb Feb
Page 9 of 10
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 10 of 10
MARKET UPDATE FOR ASEAN+3 26 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
European stocks advanced, snapping three days of losses, before U.S. data that may show durable-goods orders increased and new-house sales held close to a four-year high last month. U.S. index futures also rose. Asian stocks fell, paring the biggest rally in two weeks yesterday, on concern Cyprus’s bank-restructuring plan will be used for other European nations, imperilling depositors and bondholders, and on a report China is stepping up property curbs. The MSCI Asia Pacific Index dropped 0.1 percent to 135.48 as of 3:57 p.m. in Tokyo. Five companies fell for every four that rose. Japanese shares pared losses earlier as new Bank of Japan Governor Haruhiko Kuroda said he’ll consider extending bond maturities.
•
Investors demanded the highest yield premium in 33 months to hold Treasuries instead of German bunds, reflecting demand for safety in Europe after Cyprus won a bailout that imposes losses on bond holders. The spread was 59 basis points yesterday in New York, the most since June 2010. Treasuries were little changed yesterday, while bund yields fell as the island nation’s rescue sets a precedent for the euro zone. Senior Cypriot bank bond holders will take losses and uninsured depositors will be largely wiped out. The U.S. is scheduled to sell $35 billion of two-year debt today in the first of three note auctions this week.
•
The yen erased its decline against the dollar and was little changed at 94.17 as of 8:14 a.m. London time, after weakening as much as 0.3 percent. Japan’s currency was at 120.94 per euro. Europe’s shared currency erased an advance versus the greenback and was little changed at $1.2846. Earlier, it strengthened as much as 0.3 percent.
•
The yuan halted a two-day advance after the central bank lowered the currency’s reference rate by the most in almost two weeks amid concern Europe’s debt crisis will hurt China’s exports. The Dollar Index climbed for a second day on concern that Cyprus’s bank-restructuring plan will be used as a template for other European nations, imperiling bondholders and depositors.
•
West Texas Intermediate oil traded near the highest level in five weeks. U.S. crude inventories probably rose as domestic output stayed near the strongest in two decades, a Bloomberg survey showed. Futures were little changed after advancing for a second day yesterday. Crude stockpiles increased by 1.4 million barrels to 384 million last week, the highest since June, according to the median of seven analyst estimates before an Energy Information Administration report tomorrow. Domestic production was 7.15 million barrels a day in the prior week, just 9,000 barrels a day less than the 21-year high reached in the seven days ended March 8.
BREAKING NEWS •
Cyprus’s rescue sets precedents for the euro zone that may stick in the memory of depositors and bondholders alike as investors debate who will next fall victim to the debt crisis. Under the terms of the agreement struck yesterday in Brussels, senior Cypriot bank bond holders will take losses and uninsured depositors will be largely wiped out. The message that stakeholders of all stripes can be coerced into helping a
cash-strapped nation may make investors more skittish they’ll be targeted if Slovenia, Italy, Spain or even Greece again is next in line to need help. The risk is that bank runs and bond market selloffs become more likely the moment a country applies for a new rescue, said economists and academics from Nicosia to New York. •
Orders for U.S. durable goods probably rose in February by the most in five months, helped by a rebound in demand for commercial aircraft, economists said before a report today. The 3.9 percent increase in bookings for goods meant to last at least three years would follow a 4.9 percent drop in January, according to the median forecast of 80 economists surveyed by Bloomberg. Other reports may show the residential real-estate market continues to improve. Gains in auto and home purchases may keep benefiting manufacturers from 3M Co. to United Technologies Corp., leading to increases in output that are giving the economy a lift. Additionally, business investment in new equipment is picking up as companies look past the budget negotiations in Washington and focus on expanding capacity as demand improves.
•
Federal Reserve Chairman Ben S. Bernanke said low interest rates in advanced nations benefit the world economy while not creating a disruptive diversion of trade through weaker currencies. “The benefits of monetary accommodation in the advanced economies are not created in any significant way by changes in exchange rates,” Bernanke said today at the London School of Economics. “They come instead from the support for domestic aggregate demand in each country or region,” he said, speaking on a panel with Bank of England Governor Mervyn King. While the U.S. economy is completing its fourth year of expansion, inflation persists below the Fed’s 2 percent target and growth hasn’t been strong enough to achieve the significant reduction in unemployment that Bernanke says is needed before he begins to withdraw stimulus.
•
International Monetary Fund Chief Economist Olivier Blanchard cautioned that independent central banks may become “too powerful” as they gain new responsibilities in the wake of the global financial crisis. While central banks’ mandates used to be confined to monetary policy with a focus on interest rates, they how have an increasing set of tools, including some concentrating on the financial sector, Blanchard said in a speech at the London School of Economics. “Do you actually want to give the independent central bank the right to choose loan-to-value ratios without any supervision from the political process?” Blanchard said on a panel that also included Federal Reserve Chairman Ben S. Bernanke. “Isn’t this going to lead to a democratic deficit in a way, in which a central bank becomes too powerful?”
•
The biggest emerging markets are uniting to tackle under-development and currency volatility with plans to set up institutions that encroach on the roles of the World Bank and International Monetary Fund. The leaders of the so-called BRICS nations -Brazil, Russia, India, China and South Africa -- are set to approve the establishment of a new development bank during an annual summit that starts today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.
•
Reserve Bank of Australia Governor Glenn Stevens said the Group of 20 should focus on implementing rule changes in the financial system rather than adding new reforms when Australia takes over the presidency next year. “To task the regulatory community and the financial industry with further wholesale changes from here would Page 2 of 8
risk overload,” Stevens said in the text of a speech today in Sydney. “By 2014 we will have reached a point in the financial regulatory sphere where the G20 should be looking for careful and sustained efforts at implementation of the regulatory reforms that have already been broadly agreed.” Stevens, who didn’t address monetary policy or the nation’s economy in the speech, said the G-20 will need to remain open to the possibility there will be changes to the rules. “As experience is gained with implementation and we grapple with the inevitable difficulties, and as we learn more about how the financial system is likely to operate in a new world, we will want to make occasional adjustments,” he said. •
New Zealand’s central bank plans to require banks to hold more capital to strengthen their balance sheets against the risk from high loan-to-value ratio lending. “The aim of the current review is to ensure that banks’ baseline capital requirements for housing loans properly reflect risk in the housing sector,” Deputy Governor Grant Spencer said in an e-mailed statement. “The bank is proposing higher capital requirements for high LVR loans.” Raising the capital adequacy requirements could prompt banks to seek more capital, which may push up interest rates and slow New Zealand’s housing market, in which prices last month rose at the fastest pace since early 2008. The central bank is reluctant to raise its benchmark rate because that may boost demand for the currency and curb the overall economy. The review of capital adequacy will precede the development of a set of prudential tools the central bank wants to deploy to counter excessive credit growth that may increase risks for the banking system.
REGIONAL •
Haruhiko Kuroda said he wants to reach 2 percent inflation in two years and pledged to buy more government bonds, underscoring the new Bank of Japan chief’s efforts to accelerate an end to falling prices. “Achieving the 2 percent inflation target in two years is something that I have in my mind,” Kuroda said today in the lower house of parliament. He said the BOJ may scrap a rule limiting the scale of asset buying and consider purchasing more bonds with longer maturities. The comments spurred investors’ expectations for more monetary easing, with the yen weakening and benchmark bond yields falling to a near 10-year low. Analysts at banks from JPMorgan Chase & Co. to Barclays Plc expect the BOJ to add stimulus as soon as the next policy meeting on April 3-4.
•
South Korea’s economy expanded less than previously estimated in the fourth quarter, boosting the case for stimulus by the new government and underscoring concern that a weaker yen will curb exports. Gross domestic product grew 0.3 percent from the third quarter, compared with January’s initial estimate of 0.4 percent expansion, the Bank of Korea said today in Seoul. GDP rose 1.5 percent from a year ago, the smallest gain since 2009. Slower growth in Asia’s fourth-largest economy strengthens the rationale for a supplementary budget that President Park Geun Hye may announce this week. Finance Minister Hyun Oh Seok said March 23 that the yen, down 19 percent against the won in the past six months, is “flashing a red light” for South Korean exports and urged the Group of 20 nations to revisit the issue.
•
Manufacturers produced fewer electronics and pharmaceuticals, Singapore’s Economic Development Board says in a statement. Industrial production fell 0.7% M/m s./adj in Feb.; the median estimate showed a 0.3% decline. Electronics output slipped Page 3 of 8
21.1% Y/y; while biomedical manufacturing fell 18% Y/y; and pharmaceuticals dropped 20.3%. •
Palm oil fell for a second day on speculation that stockpiles in Malaysia, the world’s second-biggest producer after Indonesia, may climb as exports decline. Exports from Malaysia fell 7.5 percent to 1.07 million tons in the first 25 days of this month from the same period in February, surveyor Intertek said yesterday. Shipments had been 11 percent higher during the first 20 days of the month, according to the surveyor. Inventories were 2.44 million tons in February after reaching a record 2.63 million tons in December, according to Malaysian Palm Oil Board.
•
The Philippine peso fell to its weakest level this year on speculation the central bank will implement more measures to curb capital inflows. Seven-year government bonds advanced. Bangko Sentral ng Pilipinas will soon discuss a plan to stop foreign funds from placing money in its reverse-repurchase facility, Assistant Governor Cyd Amador said March 21. The monetary authority banned overseas investors from its special deposit accounts in July and cut the rate offered on the facilities twice this year. The BSP will monitor overseas borrowings of Philippine companies as it encourages greater utilization of domestic funds, Deputy Governor Diwa Guinigundo told reporters March 22.
•
Vietnam's National Assembly Standing Committee approved March 18 a government measure to postpone the withdrawal of lower value-added tax rates, which had been proposed under a tax reform bill. The tax reform had aimed to reduce the group of goods and services taxable at the rate of 5 percent and eventually introduce a single tax rate for all goods and services. The Committee approved a measure that maintains all three VAT tax rates of 0 percent, 5 percent and 10 percent to support businesses in the current economic climate.
IFIs NEWS (compiled from their websites) BIS – Working Paper: “The liquidity consequences of the euro area sovereign debt crisis” •
The BIS has publicised the captioned working paper. “We examine the liquidity effects of the euro area sovereign debt crisis, including its effects on euro area banks as a group, on intra-euro area financial flows, on the supply of and demand for collateral, and on international liquidity. The lending capacity of the euro area banking system has been much weakened, despite the remarkable growth of the operations of the Eurosystem, including its greatly increased lending, its intermediation between national central banks in surplus and deficit countries and its collateral policy. The euro crisis has also created international liquidity stresses. We find that central bank swap lines have only had limited effectiveness in alleviating the stresses, probably owing to some stigma being attached to their use.” http://www.bis.org/publ/work390.htm
IFC – Press Release: IFC and Bank of Nanjing Champion Low-Carbon Economic Growth among Smaller Businesses • IFC and Bank of Nanjing have launched a 500 million yuan ($80 million) risk-sharing facility to support energy-efficiency and renewable-energy projects among small and medium enterprises. The risk-sharing facility helps mitigate Bank of Nanjing’s credit risk when financing energy-efficiency improvement projects and renewable-energy projects
Page 4 of 8
by small and medium enterprises. IFC will also provide the bank with advice on setting up its green financing business. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/3292B83B0D2D1EAA85257B 3A000DAD97 WTO â&#x20AC;&#x201C; Press Release: China should be more active in global economic governance, Lamy tells Beijing forum â&#x20AC;˘ With advanced economies and emerging countries divided over how to balance the gains and the costs of international issues such as the Doha Round negotiations, China is well-placed to become an agent of convergence, WTO Director-General Pascal Lamy told the China Development Forum in Beijing, 24 March 2013. http://www.wto.org/english/news_e/sppl_e/sppl274_e.htm (Full Speech) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 25-Mar 26-Mar close China 6.23 6.21 6.21 6.21 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,777.00 9,736.00 9,738.00 Japan 86.75 94.46 94.17 94.13 Korea 1,064.40 1,119.28 1,110.85 1,105.58 Malaysia 3.06 3.11 3.10 3.09 Philippines 41.01 40.87 40.82 40.93 Singapore 1.22 1.25 1.24 1.24 Thailand 30.59 29.29 29.29 29.34 Vietnam 20,840.00 20,940.00 20,945.00 20,945.00 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.02 0.04 -0.02 0.04 0.48 0.17 -0.27 0.27 -0.17 0.00
2013 YTD (%chg) 0.3 -0.1 -0.9 -7.2 -3.8 -1.9 -0.2 -1.6 3.4 -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 2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
25-Mar 2,326.7 22,251.2 4,777.9 12,546.5 1,977.7 1,643.9 6,597.6 3,267.5 1,524.0 493.6
OVERNIGHT LENDING RATE (%) 25-Mar 26-Mar bps change 1.700 1.640 -6.00 0.084 0.083 -0.07 4.180 4.180 0.00 0.088 0.078 -1.00 2.750 2.750 0.00 3.000 3.000 0.00 0.483 -4.871 -535.40 0.044 0.044 0.00 2.750 2.750 0.00 3.067 3.500 43.30
26-Mar 2,297.7 22,311.1 4,842.5 12,471.6 1,983.7 1,653.9 6,665.1 3,283.8 1,538.1 489.5
% change -1.25 0.27 1.35 -0.60 0.30 0.61 1.02 0.50 0.93 -0.83
2013 YTD (%chg) 1.3 -4.3 11.4 20.0 -2.3 -1.2 13.7 2.6 9.3 17.0
3-MONTH INTERBANK LENDING RATE (%) 25-Mar 3.880 0.383 4.900 0.250 2.760 3.210 0.249 0.375 2.857 5.871
26-Mar 3.880 0.382 4.900 0.250 2.760 3.210 -0.097 0.375 2.855 5.700
bps change 0.01 -0.07 0.00 0.00 0.00 0.00 -34.60 0.00 -0.15 -17.10
Page 5 of 8
CREDIT DEFAULT SWAP (IN BPS) 22-Mar 25-Mar bps change China 66.85 65.43 -1.41 Hong Kong SAR 41.71 41.75 0.04 Indonesia 139.53 144.50 4.97 Japan 70.02 71.50 1.48 Korea 72.32 70.91 -1.41 Malaysia 81.88 81.95 0.07 Philippines 100.60 98.84 -1.76 Thailand 91.61 90.71 -0.90 Vietnam 205.35 205.47 0.12 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. 25-Mar 26-Mar Gold Spot (in US$ per 1,605.3 1,600.0 ounce) Sources: Bloomberg & Thomson Reuters Datastream
% change -0.33
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 31-Jul 31-Aug 30-Sep China 3,240.0 3,272.9 3,285.1 Hong Kong SAR 296.3 298.2 301.2 Indonesia 106.6 109.0 110.2 Japan 1,272.8 1,273.2 1,277.0 Korea 314.4 316.9 322.0 Malaysia 134.5 134.9 137.5 Philippines 79.8 80.7 82.0 Singapore 244.1 246.2 252.1 Thailand 175.3 179.2 183.6 Vietnam 20.0 20.8 21.3 Note: Data for China and Vietnam refer to FX reserves
31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
2013 30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
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 n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a
Page 6 of 8
EXTERNAL LIQUIDITY RATIOS Latest Int'l Reserves (US$bn)
3 months imports of goods & services
Short-term external debt
(US$bn)
(US$bn)
Import cover (Qtrs of imports covered by reserves) 6.4 2.1 1.9 17.9 2.1 2.5 4.3 2.1 2.6 -
Reserves over short-term debt
3,311.6 521.2 572.8 5.8 China 304.8 143.9 711.2 0.4 Hong Kong SAR 55.5 43.9 2.4 Indonesia 105.2 1,258.8 70.4 2,371.0 0.5 Japan 156.7 126.7 2.6 Korea 327.4 140.3 56.7 30.4 4.6 Malaysia 19.3 8.0 10.5 Philippines 83.6 259.1 121.5 924.3 0.3 Singapore 68.2 57.2 3.1 Thailand 179.2 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. For Vietnam, the figure refers to Private Creditor and not short-term debt, and are released quarterly.
Country
HONG KONG HONG KONG HONG KONG KOREA KOREA PHILIPPINES PHILIPPINES SINGAPORE
DATA RELEASES FOR THE DAY Indicators
Trade Balance (HKD bn) Exports YoY% Imports YoY% GDP (QoQ)% GDP (YoY)% Trade Balance (USD mn) Total Imports (YoY)% Industrial Production YoY%
Period
Last
Previous
Feb Feb Feb 4Q F 4Q F Jan Jan Feb
-34.0 -16.9 -18.3 0.3 1.5 -714 -8.0 -16.6
-27.5 17.6 23.9 0.4 1.5 1,275 13.2 -0.4
Page 7 of 8
SELECTED ECONOMIC RELEASES CALENDAR (18 Mar â&#x20AC;&#x201C; 22 Mar 2013)
Expected Release Date
3/26/2013
3/27/2013 3/28/2013
3/29/2013
Country
HONG KONG HONG KONG HONG KONG SOUTH KOREA SOUTH KOREA PHILIPPINES PHILIPPINES SINGAPORE SOUTH KOREA THAILAND THAILAND HONG KONG SOUTH KOREA JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA THAILAND THAILAND THAILAND
Indicators
Trade Balance (HKD bn) Exports YoY% Imports YoY% GDP (QoQ)% GDP (YoY)% Trade Balance (USD mn) Total Imports (YoY)% Industrial Production YoY% SK Consumer Confidence Customs Exports (YoY)% Customs Imports (YoY)% Govt Mthly Budget Surp/Def (HKD bn) Current Account in (USD mn) Industrial Production YOY% Job-To-Applicant Ratio National CPI Ex Food, Energy YoY % National CPI YoY % Jobless Rate % Business Survey- Manufacturing Business Survey- Non-Manufacturing Industrial Production (MoM)% Industrial Production (YoY)% Business Sentiment Index Current Account Balance (USD mn) Total Exports YOY%
Period
Feb Feb Feb 4Q F 4Q F Jan Jan Feb Mar Feb Feb Feb Feb Feb P Feb Feb Feb Feb Apr Apr Feb Feb Feb Feb Feb
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 8 of 8
MARKET UPDATE FOR ASEAN+3 28 March 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks fell on concern Europe’s debt crisis is deepening and after pending U.S. home sales fell, damping earnings prospects for Asian exporters. Japanese shares fell, paring the Topix Index’s best quarter since 1988, after the yen strengthened on concern Europe’s debt crisis will intensify and as pending U.S. home sales slid. Fewer Americans signed contracts to purchase previously owned homes in February as limited inventory and access to credit held back a more robust recovery in housing.
•
The MSCI Asia Pacific Index dropped 0.6 percent to 135.26 as of 3:55 p.m. in Tokyo. About two stocks fell for each that gained on the measure, which has risen 0.7 percent this week and 4.6 percent this quarter. The gauge closed at 135.06 on Feb. 28.
•
The yen strengthened against all 16 of its major peers after Bank of Japan Governor Haruhiko Kuroda reiterated policy-easing options, damping expectations for novel measures to be unveiled as early as next week. South Korea’s won rose, after the biggest loss in almost two weeks yesterday, as data showed the current-account surplus widened in February. Government bonds gained, pushing the three-year yield to a record low.
•
The pound rose to a two-month high against the euro as a funding crisis in Cyprus and political deadlock in Italy spurred demand for U.K. assets as a haven. The leader of Italy’s Democratic Party ruled out the possibility of a broad coalition government, while banks in Cyprus planned to open for six hours tomorrow with capital restrictions in place after shutting for almost two weeks as the nation faced financial collapse.
BREAKING NEWS GLOBAL NEWS •
Cyprus’s banks will open their doors to customers today for the first time in almost two weeks, with new rules curbing access to cash. The Central Bank of Cyprus’s capital controls will include a 300-euro ($383) daily limit on withdrawals and restrictions on transfers to accounts outside the country. Banks will open at midday and close at 6 p.m. local time, Yiangos Dimitriou, head of the central bank’s audit department, said yesterday in comments broadcast on state-run CyBC television. The controls will be in force for seven days, according to a statement from the Finance Ministry. Dimitriou had said they would be in effect for four days. Their effectiveness will be evaluated daily, he said.
•
Americans signed fewer contracts to buy previously owned homes in February, indicating a pause in momentum for an industry that is helping power the economy. An index of pending home sales fell 0.4 percent to 104.8, the second-highest level since April 2010, after a revised 3.8 percent increase the prior month, the National Association of Realtors reported today in Washington. Contract signings, unadjusted for seasonal variations, increased 5 percent from February 2012. Tighter mortgage lending criteria have made it tougher for prospective homeowners to take advantage of historically low interest rates.
•
Two regional Federal Reserve presidents said they want the Fed to keep buying bonds through the end of 2013, while a third official said the central bank isn’t doing enough to spur economic growth. “We should continue our large-scale asset purchases of Treasury and mortgage-backed securities through this year -- although the amount may need to be adjusted up or down, depending on how the economic situation evolves,” Boston Fed President Eric Rosengren said today in a speech in Manchester, New Hampshire. “This is a point when we have to be patient and let our policies work,” with stimulus “firing on all cylinders,” Chicago’s Charles Evans said to reporters. The comments by Evans, Rosengren and Minneapolis’ Narayana Kocherlakota reinforce Chairman Ben S. Bernanke’s push to sustain record easing even as some policy makers voice concern the stimulus is ineffective or harmful.
•
German unemployment unexpectedly rose in March as renewed tensions in financial markets increased uncertainty about the euro region’s recovery. The number of people out of work increased a seasonally adjusted 13,000 to 2.94 million, the Nuremberg-based Federal Labor Agency said today. The adjusted jobless rate held at 6.9 percent, slightly above a two-decade low of 6.8 percent. Sentiment among entrepreneurs fell from a 10-month high in March and manufacturing output unexpectedly dropped. Still, the Bundesbank expects the German economy will return to growth in the current quarter after shrinking 0.6 percent in the final three months of 2012.
•
German retail sales unexpectedly rose for a second month in February, adding to signs the domestic economy is returning to growth. Sales, adjusted for inflation and seasonal swings, gained 0.4 percent from January, when they surged a revised 3.0 percent, the Federal Statistics Office in Wiesbaden said today. From a year earlier, sales dropped 2.2 percent.
•
U.K. consumer confidence held steady this month as households adjusted to a “new normal” amid accelerating inflation and a sluggish economic recovery. A sentiment index by GfK NOP Ltd. stayed at minus 26, the London-based group said in a report today. Measures of the outlook for the economy and personal finances both declined. Higher energy bills and inflation that’s outpacing wage growth may restrict further gains in sentiment. Data yesterday showed Britons’ disposable income fell 0.1 percent in the fourth quarter.
•
Canadian consumer prices rose at the fastest monthly pace in more than 20 years in February on higher prices for gasoline and clothes, as the nation’s inflation rate rebounded from three-year lows. Consumer prices rose 1.2 percent in February, the biggest monthly gain since January 1991 when the country implemented a new sales tax, following a 0.1 percent increase the previous month, Statistics Canada said today. From a year earlier, prices were also up 1.2 percent, the highest since October, following a 0.5 percent gain in January. Economists and investors have been pushing back expectations for higher interest rates as stagnant inflation lessens the Bank of Canada’s impetus to tighten monetary policy. Inflation has been below the central bank’s 2 percent target for 10 straight months.
•
Leaders from Brazil, Russia, India, China and South Africa approved a $100 billion fund to combat currency crises, while failing to reach agreement on financing for a development bank. China may provide the bulk of the funding for the foreigncurrency pool, Russian Finance Minister Anton Siluanov said in an interview today in Page 2 of 9
Durban, South Africa. Negotiators are considering proposals for China to contribute $41 billion, Brazil, Russia and India to provide $18 billion each and South Africa $5 billion, he said. “The establishment of a self-managed contingent reserve arrangement would have a positive precautionary effect, help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability,” South African President Jacob Zuma said after leaders from the five nations met in Durban. •
Brazil’s real rose for the first time in seven days after the central bank announced an offering of foreign-exchange swaps to limit the currency’s decline. The real climbed 0.3 percent to 2.0110 per dollar, the most in two weeks, after dropping 0.5 percent. The central bank sold all of the 20,000 currency swap contracts it offered for $995 million in its first intervention since it auctioned reverse currency swaps on March 11 to weaken the currency. President Dilma Rousseff criticized policies that sacrifice growth at a summit in Durban, South Africa, spurring speculation policy makers will push back a projected increase in borrowing costs. The real pared its decline in March to 1.6 percent, still the biggest among major Latin America currencies.
REGIONAL •
Bank of Japan Governor Haruhiko Kuroda pledged to continue easing until a 2 percent inflation target is reached, in a sign he wants the central bank to strengthen its commitment to ending deflation. “The 2 percent price stability target has been set by the policy board, and of course, we will work to continue monetary easing until that is realized,” Kuroda said in parliament today. Investors expect Kuroda, who said this week he wants to reach the inflation target in two years, to add to monetary stimulus at his first policy-setting meeting on April 3-4. Bond yields fell to a 10-year low today as Kuroda says he wants to expand purchases of government debt. Kuroda’s wording today was stronger than that of BOJ board member Ryuzo Miyao, who has proposed at two meetings this year that the bank continue with its zero-interest rate policy until 2 percent inflation is “in sight.”
•
China signaled that it will take steps this year to loosen state control over interest rates and the yuan as new Premier Li Keqiang seeks to open up the economy to sustain growth. Authorities “will roll out new measures in promoting interest-rate and exchange-rate liberalization as well as in developing a multilevel capital market,” the State Council, or cabinet, said in a statement today following a meeting led by Li on issues for the government to focus on this year. Previously officials had been less specific on a timeframe for the changes. Potential shifts include measures that would let the yuan be more freely traded, boost returns for China’s savers and increase competition among lenders. Majorities of analysts surveyed by Bloomberg News project China this year will widen the daily trading limit for the currency and relax or remove the cap on deposit rates or the floor on lending rates.
•
Liu He was appointed as a vice chairman of China’s top economic-planning agency, a sign that President Xi Jinping’s government may be preparing to quicken marketdriven policy changes to sustain growth. The National Development and Reform Commission’s website today showed Liu, previously Communist Party secretary of the State Council’s Development Research Center, as one of 11 deputies. He was also promoted this month to director of the Office of the Central Leading Group on Financial and Economic Affairs from deputy director, his online biography shows. Liu was a “major collaborator” in a World Bank report published last year that advocates Page 3 of 9
accelerating market-driven change, and is a proponent of financial liberalization, according to Cheng Li, a China scholar at Washington’s Brookings Institution. Taking the NDRC post may indicate Liu will play a key role in government efforts to restructure the economy, according to BNP Paribas SA. •
Chinese industrial companies’ profits rose 17.2 percent in the January-February period, extending a four-month streak of gains and bolstering a rebound in the world’s second-biggest economy. Net income increased from a year earlier to 709.2 billion yuan ($114 billion), the National Bureau of Statistics said on its website today. That compares with a 5.2 percent decline in the same period last year and a 17.3 percent gain in December. The bureau doesn’t release separate data for January and February because of distortions caused by the weeklong Lunar New Year holiday.
•
South Korea announced it will unveil a stimulus package in April to spur the property market and revive the economy after cutting its growth forecast for the second time in four months. A supplementary budget and details of the measures to encourage property sales will be released over time, the Finance Ministry said in a statement in Sejong today. The economy will expand 2.3 percent this year, down from a 3 percent growth forecast made in December, it said. The new forecast is more pessimistic than the central bank’s outlook for 2.8 percent growth and compounds concern that expansion in Asia’s fourth-largest economy will stall after slowing to the weakest in three years. Facing a stagnant property market and weaker yen, the Bank of Korea may come under pressure to lower the benchmark interest rate next month.
•
Philippine officials are preparing to counter the impact of capital inflows after the nation won its first investment-grade debt rating. The central bank will probably unveil next quarter a new set of measures that will give investors easier access to foreign currencies and encourage outflows, Governor Amando Tetangco said in Bloomberg Television interview with Rishaad Salamat. The rules may be ready as early as April, he said. The monetary authority is also considering banning overseas funds in its reverse repurchase facility, Tetangco said. “We have the traditional tools such as the interest-rate policy, and on the other hand we have macrprudential tools which we have used recently in trying to minimize the adverse impact of capital inflows on domestic liquidity and therefore inflation,” Tetangco said. “We would continue to use these tools to make sure that we remain faithful to the inflation target and that we also maintain financial stability.”
•
Thailand will become a major trading center in Southeast Asian with new investments, PM Yingluck Shinawatra tells parliament. The Thai government plans to sell long-term bonds in domestic market to finance new projects, she says. The Thai parliament is debating a plan to borrow 2.2 trillion baht over about 7 years to spend on infrastructure projects. Thai investments are expected to create 500,000 jobs, she says. Thai government borrowings will have no impact on financial markets. Thai public debt is to remain below 50% of GDP with new borrowings, Yingluck says.
IFIs NEWS (compiled from their websites) IFC – Press Release: Invests in China’s Leading Biopesticide Manufacturer, Promoting Sustainable Forest and Crop Management •
IFC has agreed to buy shares worth of $8.5 million in Jiangxi Tianren Ecology Co., Ltd., helping the firm expand its biopesticide business and promoting sustainable forest and crop management in China. Tianren is located in Ji An, Jiangxi Province, one of China’s Page 4 of 9
least developed regions. With IFC’s investment, Tianren will increase its manufacturing capacity and strengthen its spray service both on land and in the air. Tianren will thus be able to supply biopesticide for over one million hectares of forest and arable land in China, enhancing the productivity. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/756D7B1FD912055B85257B3 C002B8884 IMF – Policy Paper: IMF Calls for Global Reform of Energy Subsidies: Sees Major Gains for Economic Growth and the Environment •
A new report from the IMF urged policymakers of the world to reform subsidies for products from coal to gasoline, arguing that this could translate into major gains both for economic growth and the environment. The comprehensive study, Energy Subsidy Reform – Lessons and Implications, released today, estimates that energy subsidies amount to a staggering $1.9 trillion worldwide—the equivalent of 2½ percent of global GDP, or 8 percent of government revenues. http://www.imf.org/external/np/sec/pr/2013/pr1393.htm (Press Release) http://www.imf.org/external/np/pp/eng/2013/012813.pdf (Report) http://www.imf.org/external/np/pp/eng/2013/012813a.pdf (Supplementary Report) http://www.imf.org/external/np/speeches/2013/032713.htm (Speech delivered by Mr David Lipton, First Deputy Managing Director, IMF)
IMF – Working Papers •
How Effective are Macroprudential Policies in China? – “This paper investigates macroprudential policies and their role in containing systemic risk in China. It shows that China faces systemic risk in both the time (procyclicality) and cross-sectional (contagion) dimensions. Better-targeted macroprudential policies have greater potential to contain systemic risk pertaining to the different sizes of the banks and their location in regions with different levels of economic development. Complementing macroprudential policies with further reforms, including further commercialization of large banks, would help improve the effectiveness of those policies in containing systemic risk in China.” http://www.imf.org/external/pubs/ft/wp/2013/wp1375.pdf
•
The Global Financial Crisis: An Anatomy of Global Growth – “The global finanical crisis was a stark reminder of the importance of cross-country linkages in the global economy. We find a high degree of global sychronization over 1990 to 2011, particularly across advanced economies. Examing the period around the global financial crisis, we find global shocks had large and widespread effects on growth, with more diverstity in growth experiences in the early part of the recovery.” http://www.imf.org/external/pubs/ft/wp/2013/wp1376.pdf
World Bank / MIGA – Press Release: World Bank Group Appoints Keiko Honda to Head MIGA •
World Bank Group President Jim Yong Kim today announced the appointment of Keiko Honda as Executive Vice President, Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group. Honda, a Japanese national, is joining the Agency from McKinsey and Co where she is a Director. She will take up her position on July 15, 2013. http://www.worldbank.org/en/news/press-release/2013/03/27/world-bank-groupappoints-keiko-honda-head-miga Page 5 of 9
World Bank – Publication: “Food Price Watch” •
The World Bank has published the latest edition of the captioned report. According to it, global food prices continued to fall between October 2012 and February 2013 - a trend observed since the recent all-time peak in August 2012 - but prices were only 9 percent below the August peak. Lower demand from a sharp fall in the use of wheat feed and reduced maize consumption for ethanol in the United States pushed prices down. Reported favorable weather conditions in some regions have also raised hopes of better crop supply for 2013. http://www.worldbank.org/en/news/press-release/2013/03/27/food-prices-declinestill-high-close-historical-peaks
FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.21 7.76 9,777.00 94.46 1,119.28 3.11 40.87 1.25 29.29 20,940.00
27-Mar 6.21 7.76 9,725.00 94.46 1,111.70 3.10 40.80 1.24 29.27 20,935.00
28-Mar 6.21 7.76 9,740.00 94.06 1,113.15 3.10 40.82 1.24 29.29 20,934.00
% change -0.01 0.00 -0.15 0.43 -0.13 0.07 -0.06 0.06 -0.07 0.00
2013 YTD (%chg) 0.3 -0.2 -0.9 -7.1 -4.5 -2.0 0.1 -1.7 3.6 -0.4
Note: Negative values indicate depreciation and positive values indicate appreciation. 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 2,278.4 22,533.1 4,819.3 12,561.0 1,986.5 1,627.6 6,654.6 3,286.1 1,598.1 481.4
27-Mar 2,301.3 22,464.8 4,928.1 12,493.8 1,993.4 1,667.6 6,847.5 3,313.0 1,560.9 491.3
OVERNIGHT LENDING RATE (%)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
27-Mar 1.730 0.083 4.180 0.070 2.750 3.000 -7.807 0.019 2.750 3.250
28-Mar 1.750 0.084 4.181 0.083 2.750 3.000 -7.807 0.019 2.750 2.700
bps change 2.00 0.04 0.07 1.25 0.00 0.00 0.00 0.00 0.00 -55.00
28-Mar 2,236.3 22,299.6 4,913.5 12,336.0 1,993.5 1,672.8 6,847.5 3,315.2 1,552.8 490.7
% change -2.82 -0.74 -0.30 -1.26 0.00 0.31 0.00 0.07 -0.52 -0.12
2013 YTD (%chg) -1.4 -4.3 13.0 18.7 -1.9 -0.1 16.8 3.5 10.3 17.3
3-MONTH INTERBANK LENDING RATE (%) 27-Mar 3.881 0.382 4.900 0.250 2.760 3.210 -0.202 0.375 2.855 5.900
28-Mar 3.881 0.382 4.900 0.250 2.760 3.210 -0.202 0.375 2.855 5.533
bps change 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -36.70
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CREDIT DEFAULT SWAP (IN BPS) 26-Mar 67.37 42.23 152.78 72.49 72.79 83.44 101.82 93.18 207.00
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
27-Mar 67.39 42.24 153.29 72.01 72.33 82.49 99.94 92.72 206.08
bps change 0.02 0.01 0.51 -0.48 -0.46 -0.95 -1.88 -0.46 -0.92
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-Mar Gold Spot (in US$ per ounce)
28-Mar
1,605.3
% change
1,604.7
-0.04
Sources: Bloomberg & Thomson Reuters Datastream CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P AAAAA BB+ AAA ABB+ AAA 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 Thailand Vietnam
2013
31-Jul 3,240.0
31-Aug 3,272.9
30-Sep 3,285.1
31-Oct 3,287.4
30-Nov 3,297.7
31-Dec 3,311.6
31-Jan n.a
28-Feb n.a
31-Mar n.a
296.3
298.2
301.2
301.7
305.2
317.3
304.7
304.8
n.a
106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 20.8
110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3
110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a
111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a
112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a
108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a
105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a
n.a n.a n.a n.a n.a n.a n.a n.a
Note: Data for China and Vietnam refer to FX reserves
Page 7 of 9
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
(US$bn)
(US$bn)
(US$bn)
Import cover (Qtrs of imports
Reserves over short-term debt
3,311.6
521.2
572.8
covered by reserves) 6.4
304.8
143.9
752.6
2.1
0.4
105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 21.3
55.5 70.4 156.7 56.7 20.1 121.5 68.2 30.9
43.9 2,371.0 126.7 30.4 8.5 964.3 60.7 10.0
1.9 17.9 2.1 2.5 4.2 2.1 2.6 -
2.4 0.5 2.6 4.6 9.9 0.3 3.0 -
5.8
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. Shortterm 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 Country THAILAND THAILAND THAILAND THAILAND KOREA JAPAN
Indicators Customs Exports (YoY)% Customs Imports (YoY)% Customs Trade Balance USD mn Total Capacity Utilization ISIC Current Account in (USD mn) Retail Trade YoY
Period
Last
Previous
Feb Feb Feb Feb Feb Feb
-5.83 5.27 -1577 62.9 2712.9 -2.3
16.09 40.87 -5490 67.0 2253.6 -1.1
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SELECTED ECONOMIC RELEASES CALENDAR (18 Mar â&#x20AC;&#x201C; 22 Mar 2013)
Expected Release Date
3/25/2013
3/26/2013
3/27/2013 3/28/2013
3/29/2013
Country
PHILIPPINES SINGAPORE VIETNAM VIETNAM VIETNAM VIETNAM VIETNAM HONG KONG HONG KONG HONG KONG SOUTH KOREA SOUTH KOREA PHILIPPINES PHILIPPINES SINGAPORE SOUTH KOREA THAILAND THAILAND HONG KONG SOUTH KOREA JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA THAILAND THAILAND THAILAND
Indicators
Budget Deficit/Surplus (PHP bn) CPI (YoY)% Exports YTD (YoY)% GDP Constant Prices YTD (YoY)% Imports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index YoY % Trade Balance (HKD bn) Exports YoY% Imports YoY% GDP (QoQ)% GDP (YoY)% Trade Balance (USD mn) Total Imports (YoY)% Industrial Production YoY% SK Consumer Confidence Customs Exports (YoY)% Customs Imports (YoY)% Govt Mthly Budget Surp/Def (HKD bn) Current Account in (USD mn) Industrial Production YOY% Job-To-Applicant Ratio National CPI Ex Food, Energy YoY % National CPI YoY % Jobless Rate % Business Survey- Manufacturing Business Survey- Non-Manufacturing Industrial Production (MoM)% Industrial Production (YoY)% Business Sentiment Index Current Account Balance (USD mn) Total Exports YOY%
Period
Jan Feb Mar 1Q Mar Mar Mar Feb Feb Feb 4Q F 4Q F Jan Jan Feb Mar Feb Feb Feb Feb Feb P Feb Feb Feb Feb Apr Apr Feb Feb Feb Feb Feb
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 9 of 9