MARKET UPDATE FOR ASEAN+3 November 2012
MARKET UPDATE FOR ASEAN+3 1 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
European Stocks Advance Before Data; Yen Falls as Copper Gains. European stocks rose as investors awaited U.S. economic data and China’s manufacturing expanded for the first time in three months. The yen weakened, while copper advanced for a third day.The Stoxx Europe 600 Index added 0.2 percent at 8:25 a.m. in London, while futures on the Standard & Poor’s 500 Index retreated 0.2 percent. China’s Shanghai Composite Index (SHCOMP) surged 1.7 percent. The yen declined against 15 of its 16 major peers and copper rose 0.9 percent. Oil gained 0.3 percent in New York.
•
U.S. Stock Futures Slip Before Manufacturing Report. U.S. stock-index futures declined before reports on manufacturing, employment and consumer confidence that will help investors assess the strength of the world’s largest economy. Futures on the Standard & Poor’s 500 Index (SPX) expiring in December fell 0.3 percent to 1,402 at 9:15 a.m. in London. The S&P 500 reversed a loss in the final hour of trading yesterday as equity markets reopened following a two-day shutdown from Hurricane Sandy. Dow Jones Industrial Average futures slid 30 points, or 0.2 percent, to 13,000 today. The Institute for Supply Management’s factory index was little changed at 51 in October, compared with 51.5 the previous, according to the median economist estimate in a Bloomberg survey. A reading of 50 is the dividing line between expansion and contraction. The ISM publishes its report at 10 a.m. New York time today.
•
Most Emerging Stocks Rise After China PMI Data. Most emerging-market stocks rose as data showed China’s manufacturing industry expanded last month, boosting the outlook for the world’s second-largest economy. The MSCI Emerging Markets Index was little changed as of 4:46 p.m. in Hong Kong, with about six stocks gaining for every five that declined. A purchasing managers’ index in China signaled growth in the manufacturing industry, its first expansion in three months.
BREAKING NEWS GLOBAL •
Cameron Government Defeated in Commons Vote on EU Budget. U.K. Prime Minister David Cameron suffered a House of Commons defeat as Tory rebels demanded he push for a reduction in the European Union budget. His deputy, Nick Clegg, will say today the vote hasn’t changed the government’s position. Euro-skeptic Tories teamed up with the opposition Labour Party as lawmakers in London voted 307 to 294 last night in favor of an amendment, which isn’t binding on Cameron, urging him to go into negotiations in Brussels at the Nov. 22-23 EU summit with the aim of securing a real-terms cut in the bloc’s spending. He’d already said he’d veto any proposal to increase the budget.
•
Oil Trades Near 3-Day High as Refineries Resume. Oil traded near the highest level in three days in New York as U.S. East Coast refineries resumed operations in the aftermath of Atlantic superstorm Sandy, increasing crude demand.West Texas Intermediate futures were little changed after rising 0.7 percent yesterday. East Coast refineries accounting for 76 percent of the 1.29 million barrels a day of capacity in Sandy’s path have restored operations or are in the process of doing so. Price gains stalled before an Energy Department report today that may show U.S. crude stockpiles rose to the highest level in three months ahead of the storm. “Refineries are getting back online quickly, so clearly that is going to remove some of that concern about a temporary oversupply,” said Michael McCarthy, a chief market strategist at
CMC Markets in Sydney. “I’m expecting further pressure on prices in the next week or so from inventory builds.” •
BOE’s Bean Says Economic Doubts May Undermine Impact of QE. Bank of England Deputy Governor Charles Bean said consumers’ and businesses’ concerns about the outlook may undermine the impact of quantitative easing, in remarks one week before officials’ next decision on stimulus. “Looser monetary policy works in large part by encouraging households and businesses to bring forward future spending to the present,” Bean said late yesterday. “It is plausible, however, that such intertemporal substitution will be weaker when uncertainty is elevated and when banks and some households are concentrating on repairing their balance sheets.” Speaking at the University of Hull, England, Bean gave an overview of the measures the Bank of England has implemented to battle the recession and said the financial crisis showed that policy makers “knew less than we thought.” His comments come as the central bank prepares to publish as soon as this week independent reviews into its response to the turmoil and the Monetary Policy Committee’s forecasting capability.
REGIONAL •
China Manufacturing Gains Signal Fourth-Quarter Rebound. China’s manufacturing expanded for the first time in three months as output and new orders climbed, adding to signs growth in the world’s second-biggest economy is rebounding after a seven-quarter slowdown. The Purchasing Managers’ Index climbed to 50.2 in October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. A separate survey from HSBC Holdings Plc and Markit Economics was at an eight-month high. Shanghai’s benchmark stock index rose the most in three weeks as the reports added to evidence of a pickup in expansion this quarter after industrial production, exports and retail sales accelerated in September. The data may also reduce pressure on outgoing Premier Wen Jiabao to roll out more stimulus measures during a once-a-decade power handover that begins with a Communist Party congress next week.
•
India’s Reforms of Decade Hatched by Singh as Growth Now or Die. Sitting in the study of the prime ministerial bungalow in New Delhi, surrounded by manicured lawns and palm trees, Indian leader Manmohan Singh and his soon-to-be finance minister Palaniappan Chidambaram pored over plans late into the evening to stem a growing sense of crisis. Singh, the 80-year-old soft-spoken architect of the country’s economic opening two decades earlier, and Chidambaram, the 67-year-old Harvard University-educated lawyer who enjoyed the trust of ruling party chief Sonia Gandhi, saw the window closing to reverse a growth slump, according to people briefed on the talks. Their recipe: a combination of spending cuts and foreign-investment liberalization that amounts to the biggest policy overhaul in a decade.
•
Indonesia Inflation Quickens as Weaker Currency Boosts Costs. Indonesia’s inflation accelerated to a 13-month high in October as Asia’s worst performing currency this year boosted the cost of imports, reducing the scope for interest-rate cuts to counter falling exports. Consumer prices climbed 4.61 percent from a year earlier last month, after rising 4.31 percent in September, the statistics bureau said in Jakarta today. The median of 20 estimates in a Bloomberg News survey was for a 4.59 percent gain. Exports fell 9.4 percent in September from a year earlier, the sixth month of declines. Bank Indonesia has refrained from adding to a February rate cut to prevent further weakening the rupiah, which has dropped more than 5 percent this year in the biggest decline among 11 Asian currencies tracked by Bloomberg. Southeast Asia’s biggest economy has withstood the global slowdown amid Europe’s debt crisis, with growth forecast by analysts to hold above 6 percent for an eighth quarter in the three months through September.
Page 2 of 7
IFIs NEWS (compiled from their websites) IFC – Press Release: IFC, Citi Provide $1 Billion to Support Trade in Emerging Markets •
The IFC and Citi have announced the signing of a $1 billion risk-sharing facility to stimulate the growth of trade in emerging markets, driving job creation and economic development. The signing marks the first extension of an existing facility under the IFC Global Trade Liquidity Program. The facility extension will expand the availability of trade finance for clients in emerging markets over a three-year span through a 50-50 risk-sharing structure. Citi will use the funding to originate trade finance transactions in Africa, Asia, Central and Eastern Europe, Latin America, and the Middle East, enabling its bank clients to extend financing to local importers and exporters. The funding is expected to support emerging market trade flows of up to $6 billion through 2015. http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/05D85E194C8620C185257AA8002D 6E1A IMF – Press Release: The Democratic Republic of Timor-Leste Begins Participation in the IMF’s General Data Dissemination System •
The IMF has announced that the Democratic Republic of Timor-Leste began participating in the IMF’s General Data Dissemination System (GDDS) on October 31, 2012, marking a major step forward in the development of its statistical system. Comprehensive information on the Democratic Republic of Timor-Leste’s statistical production and dissemination practices now appears on the IMF’s Dissemination Standards Bulletin Board (http://dsbb.imf.org/Applications/web/gdds/gddscountrylist/). http://www.imf.org/external/np/sec/pr/2012/pr12406.htm OECD, WTO and UNCTAD – Publication: “8th report on G20 trade and investment measures taken between mid May and mid October 2012” •
The OECD, WTO and UNCTAD have called on G20 governments to step up efforts to resist protectionism in the face of continuing high unemployment and a weak economic recovery. In their eighth report to the G20, the organisations say that strengthened multilateral cooperation is needed and urge countries to show leadership in keeping markets open. http://www.oecd.org/newsroom/investmentg20governmentsmuststepupeffortstoresistprotect ionismsaysoecdwtounctadreport.htm (Press Release) http://unctad.org/en/PublicationsLibrary/unctad_oecd2012d8_summary_en.pdf (Summary) http://www.oecd.org/daf/internationalinvestment/8thG20report.pdf (Report) UNCTAD – Publication: “Technology and Innovation Report 2012 - Innovation, Technology and South-South Collaboration” •
UNCTAD has published the captioned report, calling for harnessing the potential of south-south technological collaboration. At the occasion of the launch in Bangkok, Thailand, UNCTAD's Secretary General, Dr. Supachai Panitchpakdi, stressed that growing economic links among the 'emerging countries' of the South holds the promise that South-South collaboration can help to bridge the technological divide, increase technological absorption and thus lead to the build up of innovative capacity in the developing world. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=342&Sitemap_x0020_Taxono my=Technology and Logistics;#1570;#Science, Technology and Innovation;#20;#UNCTAD Home (Press Release) http://unctad.org/en/PublicationsLibrary/tir2012_en.pdf (Report) UNCTAD and UNITAR – Press Release: “Offer online course on the Trade Dimension in United Nations Development Assistance Frameworks (UNDAFs)” •
UNCTAD and the United Nations Institute for Training and Research (UNITAR) offer online course on the Trade Dimension in United Nations Development Assistance Frameworks (UNDAFs). This online course aims to explain why it is important that international trade and the enhancement of productive capacities should feature strongly in development efforts. More Page 3 of 7
specifically, the course focuses on United Nations country-level assistance strategies, and on how trade and productive capacities can be incorporated effectively into these strategies. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=341&Sitemap_x0020_Taxono my=UNCTAD Home;#1493;#Technical Cooperation;#1792;#UN-CEB Inter-agency Cluster
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 31-Oct 1-Nov 2011 close close China 6.2980 6.2420 6.2373 6.2397 Hong Kong 7.7698 7.7503 7.7501 7.7501 Indonesia 9,126.0 9,617.0 9,624.0 9,622.0 Japan 76.8 80.3 79.77 80.02 Korea 1,150.8 1,098.1 1,090.7 1,092.4 Malaysia 3.1507 3.0385 3.0476 3.0518 Philippines 43.765 41.195 41.165 41.205 Singapore 1.2906 1.2216 1.2201 1.2208 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,850.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.04 0.00 0.02 -0.31 -0.16 -0.14 -0.10 -0.06 -0.07 0.00
2012 YTD (%chg) 0.9 0.3 -5.2 -4.0 5.3 3.2 6.2 5.7 2.4 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,101.6 21,810.2 4,339.2 9,055.2 1,924.5 1,671.9 5,405.2 3,057.5 1,297.4 389.9
31-Oct
1-Nov
% change
2,068.9 21,641.8 4,350.3 8,928.3 1,912.1 1,673.1 5,424.5 3,038.4 1,298.9 388.4
2,104.4 21,821.9 4,335.4 8,946.9 1,898.4 1,675.7 5,424.5 3,026.6 1,298.0 388.0
1.72 0.83 -0.34 0.21 -0.71 0.16 0.00 -0.39 -0.07 -0.12
OVERNIGHT LENDING RATE (%) 31-Oct 1-Nov bps change 2.950 3.050 10.00 0.099 0.099 0.00 4.189 4.184 -0.54 0.095 0.095 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.016 2.016 0.00 0.067 0.067 0.00 2.750 2.750 0.00 2.143 2.500 35.70
CREDIT DEFAULT SWAP (IN BPS) 31-Oct China 71.8 Hong Kong * na Indonesia 165.6 Japan 75.8 Korea 71.2 Malaysia 95.3 Philippines 131.4 Thailand 129.2 Vietnam 304.4
1-Nov 71.8 n.a 165.6 75.8 71.2 95.3 131.4 129.2 304.4
2012 YTD (%chg) -4.3 15.6 12.4 5.8 1.2 10.6 22.7 12.5 26.6 10.8
3-MONTH INTERBANK LENDING RATE (%) 31-Oct 1-Nov bps change 3.719 3.716 -0.21 0.396 0.396 0.00 4.906 4.888 -1.85 0.328 0.325 -0.33 2.820 2.820 0.00 3.210 3.210 0.00 0.599 0.599 0.00 0.379 0.379 0.00 2.881 2.882 0.08 6.750 6.969 21.90
bps change 0.00 na 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Page 4 of 7
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 31-Oct 1,720.7
Gold Spot (in US$ per ounce)
1-Nov 1,722.4
% change 0.10
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2011 31-Dec 3,181.2 285.4 110.1 1,295.8 306.4 133.6 75.3 237.7 175.1 13.1
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
EXTERNAL LIQUIDITY RATIOS
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 31-Jul 3,240.0 n.a 295.0 296.3 106.5 106.6 1,270.5 1,272.8 312.4 314.4 134.2 134.5 76.1 79.8 243.4 244.1 174.7 175.3 n.a n.a
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
3,240.0 292.8 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
498.9 134.4 55.0 258.3 158.6 58.0 18.5 124.0 68.6 29.9
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
30-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Import cover (Qtrs of imports covered by reserves) 6.5 2.2 2.0 4.9 2.0 2.3 4.4 2.0 2.6 -
Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
Reserves over short-term debt 5.5 0.4 2.7 0.5 2.2 3.8 11.5 0.3 3.0 -
DATA RELEASES FOR THE DAY Country
Indonesia
Indicators
Consumer Confidence Index Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)%
Period
Oct Oct Sep Oct
Last
n.a. 4.59 -9.4 4.61
Previous
117.7 4.12 -24.3 4.31
Page 5 of 7
Thailand Hong Kong China South Korea
Inflation NSA (MoM)% Total Trade Balance (USD mn) Total Imports (YoY)% Consumer Price Index (YoY)% Core CPI (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% PMI Manufacturing PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI
Oct Sep Sep Oct Oct Sep Sep Oct Oct Oct Oct Oct Oct Oct Oct
0.16 553 1.19 3.32 1.83 8.5 9.4
0.01 249 -8.0 3.38 1.89 3.2 4.5 49.8
50.2 49.5
47.9 -6.1
1.5 1.2 1.5 2.1 -0.1 47.4
-1.8 1.4 2.0 0.7 45.7
SELECTED ECONOMIC RELEASES CALENDAR (29 October - 2 November 2012) Expected released date
10/29/2012
10/30/2012
10/31/2012
11/1/2012
Country
VIETNAM SOUTH KOREA SOUTH KOREA JAPAN SOUTH KOREA JAPAN JAPAN SOUTH KOREA SOUTH KOREA SINGAPORE HONG KONG THAILAND THAILAND THAILAND THAILAND THAILAND INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA THAILAND THAILAND HONG KONG HONG KONG INDONESIA
Indicators
Retail Sales YTD (YoY)% Business Survey- Non-Manufacturing Business Survey- Manufacturing Industrial Production YOY% Current Account in (USD mn) Jobless Rate % Job-To-Applicant Ratio Industrial Production (YoY)% Industrial Production (MoM)% Unemployment Rate (sa)% Govt Mthly Budget Surp/Def (HKD bn) Total Trade Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index Consumer Confidence Index Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn) Consumer Price Index (YoY)% Core CPI (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Total Imports (YoY)%
Period
Oct Nov Nov Sep P Sep Sep Sep Sep Sep 3Q P Sep Sep Sep Sep Sep Sep Oct Oct Sep Oct Oct Sep Oct Oct Sep Sep Sep
Page 6 of 7
11/2/2012
CHINA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA CHINA THAILAND
PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI HSBC Manufacturing PMI Consumer Confidence Economic
Oct Oct Oct Oct Oct Oct Oct Oct Oct
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 2 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
European Stock Futures Drop Before U.S. Jobs Data. European (SXXP) stock futures declined as investors awaited the last U.S. monthly jobs report before Presidential elections next week. U.S. index futures were little changed, while Asian shares rose. HSBC Holdings Plc (HSBA) and Deutsche Bank AG (DBK) may move as they are among lenders that will be required by global regulators to increase capital. Royal Bank of Scotland Group Plc (RBS) may drop after the U.K.’s biggest government-owned lender reported third- quarter loss that exceeded analyst estimates. Alcatel-Lucent SA may move after posting a loss narrower than analyst projections. Futures on the Euro Stoxx 50 Index expiring in December fell 0.3 percent to 2,523 at 7:33 a.m. in London. Futures on the U.K.’s FTSE 100 Index (UKX) slipped 0.2 percent. The benchmark Stoxx Europe 600 Index rallied the most in two weeks yesterday after U.S. economic reports, including the payrolls data from ADP Research Institute, beat estimates. Standard & Poor’s 500 Index futures lost 0.1 percent, while the MSCI Asia Pacific Index added 0.8 percent..
•
Asian Stocks Advance on U.S. Employment, Manufacturing. Asian stocks rose after reports on U.S. employment and manufacturing topped estimates and confidence among American consumers climbed to a four-year high. A gauge of Chinese shares listed in Hong Kong rallied 20 percent from a September low. The MSCI Asia Pacific Index gained 0.8 percent to 122.79 as of 3:07 p.m. in Tokyo. The gauge climbed 7 percent this year through yesterday as central banks around the world boosted stimulus to support economic growth. The measure has risen 1 percent this week.
•
Commodities Fall Before U.S. Data; Euro, Treasuries Drop. Commodities dropped and European stock index futures were little changed before the release of U.S. unemployment data. The euro weakened and Treasuries fell. The Standard & Poor’s GSCI gauge of 24 commodities dropped 0.4 percent at 7:10 a.m. in London, heading for a third weekly loss. Futures on the Euro Stoxx 50 Index and contracts on the S&P 500 Index were little changed. The Hang Seng China Enterprises Index (HSCEI) was poised to enter a bull market. The euro fell 0.3 percent against the dollar, which climbed against 14 of its 16 major peers. Treasury 10-year note yields rose one basis point to 1.73 percent.
BREAKING NEWS GLOBAL •
Unemployment in U.S. Probably Rose as Companies Curbed Hiring. Unemployment probably rose from a three-year in low in October as U.S. employers curbed hiring on concern growth will suffer if lawmakers fail to avert tax increases and spending cuts slated to take effect next year, economists said before a report today. In the last employment report before next week’s election, the jobless rate climbed to 7.9 percent, the first increase in three months, from 7.8 percent in September, according to the median forecast of 91 economists surveyed by Bloomberg. Payrolls grew by 125,000 workers last month following a 114,000 gain, the survey showed.
•
Deutsche Bank Faces Top Surcharge as FSB Shuffles Tiers. Deutsche Bank AG (DBK) would be required to hold more capital and Bank of America Corp.’s burden stands to be reduced as global regulators shuffled the competitive balance among the world’s biggest banks. Citigroup Inc. (C), HSBC Holdings Plc (HSBA) and JPMorgan Chase & Co. (JPM) join Deutsche Bank as firms that will be targeted for a capital surcharge of 2.5 percent, according to an updated list published yesterday by the Financial Stability Board. The change means Bank of America already
exceeds requirements, while Deutsche Bank would be more than 2 percentage points below the new minimum of 9.5 percent. •
U.K. Home Prices to Rise Most Since 2009 on Midlands Gain. U.K. home prices will rise 2 percent next year as markets outside the affluent London and southeast region start to recover from four years of declines, property broker Hamptons International said. Gains in the Midlands and northern England will drive the strongest nationwide price growth since 2009, the Londonbased broker said in a report today. Values will climb another 2 percent each year through 2015 and 4 percent the following year, it said.
REGIONAL •
China Suspends Coal Mines for Congress, Boosting Prices. China, the world’s biggest producer and user of coal, is suspending operations at smaller mines in a bid to improve safety before the nation’s once-in-a-decade leadership transition this month. Ahead of the 18th Party Congress, which begins Nov. 8 in Beijing and runs for at least a week, the State Administration of Work Safety has sent inspectors to mines to “spot hazards” and accelerate shutdowns over the next month, it said in an Oct. 24 statement on its website. The congress is where China’s next generation of leaders will be formally anointed.
•
Indonesia Growth Seen Exceeding 6% Reduces Need for Rate Cut. Indonesia’s economic growth probably held above 6 percent last quarter, as domestic spending and rising investment countered falling exports, giving the central bank room to refrain from cutting interest rates. Gross domestic product probably grew 6.2 percent in the three months through September from a year earlier, according to the median estimate of 12 economists surveyed by Bloomberg News ahead of a government report due Nov. 5. The economy expanded 6.37 percent in the previous quarter. Bank Indonesia will probably keep its benchmark rate at 5.75 percent on Nov. 8, according to all 11 economists in a separate survey.
•
Japan Stocks Rise Third Day on U.S. Jobs, Weaker Yen. Japanese stocks rose for a third day as the yen weakened and reports on U.S. employment, manufacturing and consumer confidence signaled improvement in the world’s largest economy. The Nikkei 225 Stock Average (NKY) rose 1.2 percent to 9,051.22 at the 3 p.m. close in Tokyo, with a weekly gain of 1.3 percent. Volume on the gauge was more than 10 percent more than the 30- day average for the time of day. The broader Topix (TPX) Index climbed 1.2 percent to 752.09, with more than three shares advancing for each that fell.
IFIs NEWS (compiled from their websites) FSB – Press Release: Update of the group of G-SIBs and progress in resolution of SIFIs and supervision of SIFIs •
The Financial Stability Board has published the following three documents on latest steps in the implementing the FSB's policy framework for addressing the systemic and moral hazard risks associated with systemically important financial institutions (SIFIs). • Update of the group of global systemically important banks (G-SIBs) http://www.financialstabilityboard.org/publications/r_121031ac.pdf • Progress report on resolution of SIFIs, including progress in reforming national resolution regimes and advancing recovery and resolution planning for global SIFIs http://www.financialstabilityboard.org/publications/r_121031aa.pdf • Progress report on increasing the intensity and effectiveness of SIFI supervision, including further recommendations to make supervision more proactive and effective http://www.financialstabilityboard.org/publications/r_121031ab.pdf Page 2 of 6
IMF – Press Release: New IMF Executive Board Begins Two-Year Term •
The IMF has announced that its Executive Board began a two-year term on 1 November following an election for the Board’s 19 elected seats. The full list of Executive Directors and the member countries who elected or appointed them can be found online. http://www.imf.org/external/np/sec/pr/2012/pr12409.htm (Press Release) http://www.imf.org/external/np/sec/memdir/ED_110112.pdf (List of ED) IMF – Publication: “Fiscal Transparency, Accountability, and Risk”
•
The IMF has published the captioned policy paper. This paper surveys that state of fiscal transparency in the wake of the current crisis and looks at what can be done to improve it. It examines the relationship between fiscal transparency and fiscal outcomes; reviews progress in promoting greater fiscal transparency over the past decade; considers the lessons of the recent crisis for existing fiscal transparency standards, practices, and monitoring arrangements; and makes a series of recommendations for renewing the global fiscal transparency effort in the wake of the crisis. http://www.imf.org/external/np/pp/eng/2012/080712.pdf UNCTAD – Press Release: Experts urge regional efforts and reliance by the South on the South to spur growth despite global downturn •
At the fourth session of UNCTAD's Multi-year Expert Meeting on International Cooperation: South-South Cooperation and Regional Integration, regional resource-pooling, reliance on regional banks, even the creation of a Bank of the South were suggested to help developing countries in the wake of the world financial crisis. Participants emphasized the importance of regional monetary and financial cooperation, and the role of regional banks as a source of both short-run trade finance and long-run development finance. They said that such an approach was perhaps the best way to cope with the severity of the recent global financial crisis. They noted that the downturn had raised serious questions about the effectiveness of the international financial system, including its ability to provide a stable environment for international trade - a situation of particular importance for developing countries. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=343&Sitemap_x0020_Taxono my=Economic Cooperation and Integration among Developing Countries;#20;#UNCTAD Home World Bank – Press Release: 1.7 million Vietnamese in rural communities to gain access to safe water with new World Bank financing linked to delivery of results •
Safe clean water for 1.7 million people, improved sanitation for 650,000 people --- these are the services that Vietnamese in 8 provinces in the Red River Delta will receive through the government’s National Target Program (NTP) for Rural Water Supply and Sanitation. The World Bank’s Board of Executive Directors has approved a US$ 200 million IDA credit to fund the ongoing program, using an innovative new approach to financing which links funds directly to results, ensuring that benefits will be delivered to people in need. http://www.worldbank.org/en/news/2012/11/01/one-point-seven-million-vietnamese-ruralcommunities-gain-access-safe-water-new-world-bank-financing-linked-delivery-results World Bank and IFC – Press Release: World Bank Group steps up support for reforms in Myanmar with new interim strategy to improve people’s lives •
A new Interim Strategy for Myanmar has been endorsed by the World Bank Group’s Board of Directors reaffirming support for reforms to improve the lives of the people of Myanmar. The Strategy will guide the World Bank Group’s work in the country for the next 18 months, focusing on accelerating poverty reduction by helping reform institutions to deliver better services to people during this critical transition period. http://www.worldbank.org/en/news/2012/11/01/world-bank-group-steps-up-support-reformsmyanmar-new-interim-strategy-improve-lives (Press Release) http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/10/12/000386194_20 Page 3 of 6
121012024925/Rendered/PDF/724580ISN0IDA00Official0Use0Only090.pdf (Interim Strategy Report) http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/10/21/000386194_20 121021234337/Rendered/PDF/724600P1325000000Offial0Use0Only090.pdf (Report of National Community Driven Development Project) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 1-Nov 2-Nov 2011 close close China 6.2980 6.2420 6.2397 6.2416 Hong Kong 7.7698 7.7503 7.7501 7.75 Indonesia 9,126.0 9,617.0 9,622.0 9,631.0 Japan 76.8 80.3 80.12 80.25 Korea 1,150.8 1,098.1 1,092.4 1,090.8 Malaysia 3.1507 3.0385 3.0518 3.0535 Philippines 43.765 41.195 41.205 41.176 Singapore 1.2906 1.2216 1.22 1.2226 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,850.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.03 0.00 -0.09 -0.16 0.14 -0.06 0.07 -0.21 -0.03 0.00
2012 YTD (%chg) 0.9 0.3 -5.2 -4.3 5.5 3.2 6.3 5.6 2.4 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,101.6 21,810.2 4,339.2 9,055.2 1,924.5 1,671.9 5,405.2 3,057.5 1,297.4 389.9
1-Nov
2-Nov
% change
2,104.4 21,821.9 4,335.4 8,946.9 1,898.4 1,675.7 5,424.5 3,026.6 1,298.0 388.0
2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,305.7 375.3
0.60 1.33 0.08 1.17 1.07 -1.17 0.00 0.47 0.60 -3.27
OVERNIGHT LENDING RATE (%) 1-Nov 2-Nov bps change 3.050 2.660 -39.00 0.099 0.098 -0.07 4.184 4.183 -0.09 0.095 0.098 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.016 2.016 0.00 0.024 0.024 0.00 2.750 2.750 0.00 2.500 2.417 -8.30
CREDIT DEFAULT SWAP (IN BPS) 1-Nov China 71.8 Hong Kong * na Indonesia 165.6 Japan 75.8 Korea 71.2 Malaysia 95.3 Philippines 131.4 Thailand 129.2 Vietnam 304.4
2-Nov 71.8 n.a 165.6 75.6 71.2 95.3 131.4 129.2 304.4
2012 YTD (%chg) -3.7 17.1 12.5 7.0 2.3 9.3 22.7 13.0 27.3 7.2
3-MONTH INTERBANK LENDING RATE (%) 1-Nov 2-Nov bps change 3.716 3.720 0.40 0.396 0.396 0.00 4.888 4.907 1.97 0.325 0.319 -0.58 2.820 2.820 0.00 3.210 3.210 0.00 0.599 0.599 0.00 0.379 0.379 0.00 2.882 2.882 0.00 6.969 6.708 -26.10
bps change 0.00 na 0.00 -0.21 0.00 0.00 0.00 0.00 0.00
Page 4 of 6
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 1-Nov 1,714.2
Gold Spot (in US$ per ounce)
2-Nov 1,708.3
% change -0.35
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2011 31-Dec 3,181.2 285.4 110.1 1,295.8 306.4 133.6 75.3 237.7 175.1 13.1
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
EXTERNAL LIQUIDITY RATIOS
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 31-Jul 3,240.0 n.a 295.0 296.3 106.5 106.6 1,270.5 1,272.8 312.4 314.4 134.2 134.5 76.1 79.8 243.4 244.1 174.7 175.3 n.a n.a
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
3,240.0 292.8 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
498.9 134.4 55.0 258.3 158.6 58.0 18.5 124.0 68.6 29.9
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
30-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Import cover (Qtrs of imports covered by reserves) 6.5 2.2 2.0 4.9 2.0 2.3 4.4 2.0 2.6 -
31-Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
Reserves over short-term debt 5.5 0.4 2.7 0.5 2.2 3.8 11.5 0.3 3.0 -
DATA RELEASES FOR THE DAY Country
THAILAND
Indicators
Consumer Confidence Economic
Period
Oct
Last
68.1
Previous
67.5
Page 5 of 6
SELECTED ECONOMIC RELEASES CALENDAR (29 October - 2 November 2012) Expected released date
10/29/2012
10/30/2012
10/31/2012
11/1/2012
11/2/2012
Country
VIETNAM SOUTH KOREA SOUTH KOREA JAPAN SOUTH KOREA JAPAN JAPAN SOUTH KOREA SOUTH KOREA SINGAPORE HONG KONG THAILAND THAILAND THAILAND THAILAND THAILAND INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA THAILAND THAILAND HONG KONG HONG KONG INDONESIA CHINA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA CHINA THAILAND
Indicators
Retail Sales YTD (YoY)% Business Survey- Non-Manufacturing Business Survey- Manufacturing Industrial Production YOY% Current Account in (USD mn) Jobless Rate % Job-To-Applicant Ratio Industrial Production (YoY)% Industrial Production (MoM)% Unemployment Rate (sa)% Govt Mthly Budget Surp/Def (HKD bn) Total Trade Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index Consumer Confidence Index Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn) Consumer Price Index (YoY)% Core CPI (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Total Imports (YoY)% PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% HSBC Manufacturing PMI HSBC Manufacturing PMI Consumer Confidence Economic
Period
Oct Nov Nov Sep P Sep Sep Sep Sep Sep 3Q P Sep Sep Sep Sep Sep Sep Oct Oct Sep Oct Oct Sep Oct Oct Sep Sep Sep Oct Oct Oct Oct Oct Oct Oct Oct Oct
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 5 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
All bonds rally first time since 2008. From the U.S. to Germany and even Japan, where the bond market is twice the size of the economy, investors could not get enough government securities even though rising debt loads are blamed for curbing global growth. For the first time since the financial crisis in 2008, all 26 markets tracked by Bloomberg and the European Federation of Financial Analysts Societies are poised to generate positive returns on an annual basis. Gains this year range from Portugal’s 47 percent to Japan’s 1.78 percent.
•
Asian stocks decline on Korean carmakers’ slide. Asian stocks fell as Hyundai Motor Co. and Kia Motors Corp slid on findings they overstated claims about gas mileage. Trading volume in the region was below average before tomorrow’s U.S. presidential election. The MSCI Asia Pacific (MXAP) Index slid 0.3 percent to 122.21 as of 5:17 p.m. in Tokyo. Asia’s equities benchmark gained about 12 percent from this year’s low in May as central banks added stimulus to counter a global economic slump and the European debt crisis. Shares on the measure trade at 13.2 times average estimated earnings, compared with 13.7 for the Standard & Poor’s 500 Index and 12.3 for the Stoxx Europe 600 Index.
•
Oil trades near four month low as storms hit refineries stay shut. Oil traded near the lowest level in almost four months in New York as refineries in New Jersey remained shut, curbing demand for crude a week after Atlantic superstorm Sandy struck the U.S. East Coast. Crude for December delivery was at US$84.79 a barrel, down 7 cents, in electronic trading on the NYMEX at 8:18 a.m. London time. The contract slid 1.7 percent last week to US$84.86 a barrel, the lowest close since 10 July. Prices have lost 14 percent so far this year.
BREAKING NEWS GLOBAL •
G-20 tells U.S. to avoid fiscal cliff as focus widens. Global finance chiefs pressed the U.S. to avoid harming the fragile world economy with excessive austerity, widening their focus on fiscal challenges beyond concerns over Europe’s debt woes. On the eve of the U.S. presidential election, Group of 20 finance ministers and central bankers meeting in Mexico City pushed for swift action to prevent the US$607 billion in tax increases and spending cuts that will hit in January unless lawmakers act. As President Barack Obama and Republican Mitt Romney tussle for the White House, the fear of foreign officials is that failure to limit the damage of the socalled fiscal cliff would tip the world’s largest economy into recession and drag their countries down with it. Europe, the subject of the G-20’s ire for the past three years, remained under pressure amid calls to take promised crisis-fighting steps.
•
Euro area resolve for single currency faces Greek test. European leaders’ determination to keep Greece in the euro area will be tested this week as Prime Minister Antonis Samaras struggles to secure political support for measures to assure the country’s financial lifeline. Samaras pledged yesterday that the raft of wage and pension cuts in the latest austerity package will be the last and that Greek society would not tolerate any more, according to comments made to lawmakers of his New Democracy party. The first parliamentary vote in Athens may come as early as 7 November. According to economists, Greece matters as a trigger of potential contagion to the much bigger economies of Italy and Spain. Negotiations between Greece and its troika of international creditors have sought to keep the country inside the 17-member monetary union.
•
Bank of England (BOE) tests faith in funding for lending plan as QE loses its bite. BOE might need to take a leap of faith on an untested credit plan to do what quantitative easing is failing to achieve. With both of its deputy governors questioning the effectiveness of asset purchases, and economists forecasting a halt to that stimulus, that leaves the so-called Funding for Lending Scheme as officials’ primary policy tool. Policy makers begin a two-day meeting on 7 November to decide on QE’s future. The Bank of England’s three-month old plan encourages banks to provide cheap credit to companies and households, which contrasts with the trickle-down effect of gilt purchases through QE. A rethink by policy makers will reach a climax this week as they assess new forecasts and the impact of a program that’s left them with almost a third of the gilt market.
REGIONAL •
Indonesia’s economic growth exceeds 6 percent as investment climbs. Indonesia’s economic growth held above 6 percent for an eighth quarter as domestic consumption and rising investment countered an export slump, reducing the need for the central bank to cut interest rates. Real GDP expanded by 6.17 percent year-on-year in the third quarter as compared to 6.37 percent gain in the second quarter. Policymakers in Southeast Asia’s biggest economy have avoided adding to a February rate cut even as neighbors from Thailand to the Philippines extended monetary easing to counter faltering global growth. President Susilo Bambang Yudhoyono has pledged to build more highways, airports and ports to improve infrastructure and meet a growth target of an average 6.6 percent by the end of his second term in 2014.
•
China’s non-manufacturing industries signal rebound ahead. China’s services industries rebounded from the slowest expansion in at least 19 months, adding to manufacturing gains that indicate the world’s second-biggest economy is recovering from a seven-quarter slowdown. The purchasing managers’ index rose to 55.5 in October from 53.7 the previous month, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing last Saturday. A separate services index released today by HSBC Holdings Plc and Markit Economics in Beijing fell to 53.5 in October from 54.3. Growth in services along with two reports last week that showed a pickup in manufacturing industries may ease pressure on China’s leaders to roll out more stimulus as they start a once-a-decade power transfer on 8 November.
•
Hong Kong private sector expands modestly in October. Activity in Hong Kong's private sector increased marginally in October, after declining in the previous month, reflecting mainly a rebound in output and a rise in employment, data from a survey by Markit Economics and HSBC Bank showed today. The seasonally adjusted purchasing managers' index for the private sector increased to 50.5 in October from 49.6 in September, but remained below its long-run series average. New orders received by Hong Kong's private sector firms decreased for the second consecutive month in October, partly reflecting a sharp contraction in new orders from Mainland China. Private sector output increased during the month, reversing the reduction reported one month previously. Furthermore, employment in the sector returned to growth in October, ending a five-month sequence of job losses.
•
Korea’s total debts reached 3 quadrillion won. Korea’s total debt, combining those in private and public sectors, has reached 3 quadrillion won (about US$2.75 trillion) in the second quarter, fanning worries that the country is increasingly exposed to a credit crisis. According to the Bank of Korea (BOK) and the financial industry, the nation’s total debt stood at 2.96 quadrillion won in June, accounting for 233.8 percent of its nominal GDP. The combined debt increased by 103 trillion won, or 3.6 percent for six months since December. Fast growth in national debt may hamper economic growth of Asia’s fourth-largest economy, which has already been overshadowed by sluggish exports and weak domestic consumption. According to market analysts, Korean household’s high indebtedness remains a big obstacle, often referred to as a Page 2 of 6
ticking time-bomb. In particular, the debt problem for low-income families is deepening as they are marginalized by the prolonged economic slump. Latest data from the Financial Services Commission show that the delinquency ratio of low-income earners, whose annual income is between 10 million and 20 million won, reached 17.4 percent in June from 11.4 percent in 2010. •
Malaysian company is US$5 billion railway deal in Lao PDR. A little known Malaysian company, Giant Consolidated Ltd, has won a US$5bil deal to build a 220km rail link in Laos, a spokesman for the Prime Minister's department confirmed today. Prime Minister Datuk Seri Najib Tun Razak, who is on a working visit to Laos, is scheduled to witness the signing ceremony between the Malaysian firm and the Laotian government in Vientiane. Giant Consolidated, a unit of Giant Group Ltd, will build an electrified double-track standard gauge railway from Savannakhet to Lao Bao, near the country's border with Vietnam.
IFIs NEWS (compiled from their websites) IMF – Working Paper •
The IMF has published the following working papers: •
“The Effectiveness of Monetary Policy Transmission Under Capital Inflows: Evidence from Asia” http://www.imf.org/external/pubs/ft/wp/2012/wp12265.pdf
•
“Exogenous Shocks and Growth Crises in Low-Income Countries: A Vulnerability Index” http://www.imf.org/external/pubs/ft/wp/2012/wp12264.pdf
•
“Allocating Business Income between Capital and Labor under a Dual Income Tax: The Case of Iceland” http://www.imf.org/external/pubs/ft/wp/2012/wp12263.pdf
•
“The Evolution of Asian Financial Linkages: Key Determinants and the Role of Policy” http://www.imf.org/external/pubs/ft/wp/2012/wp12262.pdf
•
“Performance of Publicly Listed Chilean Firms During the 2008–09 Global Financial Crisis” http://www.imf.org/external/pubs/ft/wp/2012/wp12261.pdf
UNCTAD – Event: 29th annual ISAR session •
UNCTAD has hosted a three-day meeting on International Standards of Accounting and Reporting (ISAR) between 29 Oct and 2 Nov. To help countries improve accounting and corporate reporting, UNCTAD has rolled out the Accounting Development Toolkit (ADT). http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=345&Sitemap_x0020_Taxono my=ISAR - Corporate Transparency - Accounting;#20;#UNCTAD Home
UNCTAD – Press Release: UNCTAD and ASEAN review harmonization of e-commerce laws •
UNCTAD has announced, “Senior South-east Asian policymakers will assess cyber-legislation and make recommendations to further the harmonization of e-commerce laws at a joint ASEAN/UNCTAD workshop in Cebu, the Philippines, on 10 and 11 November 2012. The outcome will be reported to the twelfth ASEAN Telecommunications Senior Officials Meeting.” http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=344&Sitemap_x0020_Taxono my=Technology and Logistics;#1713;#Information and Communication Technologies;#20;#UNCTAD Home
Page 3 of 6
World Bank – Press Release: “Modernizes Investment Lending Policy” •
The World Bank’s Board of Executive Directors has endorsed a move that will make the Bank’s original financing instrument more effective and clear for governments, staff, and civil society organizations. The Bank has consolidated the policies and procedures governing Investment Financing, the main lending vehicle available to clients to support specific investments ranging from infrastructure to social safety nets to judicial reform. Investment Finance was the Bank’s original financing instrument for making loans for post-World War II reconstruction in Europe in the late 1940s. Over time, the lending policy has evolved, resulting in a maze of 30-some policy and procedure statements that have now been consolidated into a single coherent policy. The critical policies of procurement and environmental and social safeguards are on a separate track and are now undergoing public consultations. http://www.worldbank.org/en/news/2012/11/02/bank-modernizes-investment-lending-policy (Press Release) http://siteresources.worldbank.org/PROJECTS/Resources/40940-1244163232994/61804031351803579104/ILPolicyReform_11-1-12_FinalPostBoard.pdf (Board Paper)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 2-Nov 5-Nov close China 6.2980 6.2416 6.2416 6.2453 Hong Kong 7.7698 7.7503 7.7503 7.7502 Indonesia 9,126.0 9,631.0 9,631.0 9,634.0 Japan 76.8 80.43 80.43 80.3 Korea 1,150.8 1,090.8 1,090.8 1,091.1 Malaysia 3.1507 3.0535 3.0535 3.0627 Philippines 43.765 41.176 41.176 41.255 Singapore 1.2906 1.2248 1.2248 1.2253 Thailand 31.5 30.8 30.8 30.8 Vietnam 21,031.0 20,850.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.06 0.00 -0.03 0.16 -0.03 -0.30 -0.19 -0.04 -0.16 0.00
2012 YTD (%chg)
0.8 0.3 -5.3 -4.4 5.5 2.9 6.1 5.3 2.1 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
2-Nov 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
OVERNIGHT LENDING RATE (%) 2-Nov 5-Nov bps change 2.660 2.700 4.00 0.098 0.098 0.00 4.183 4.180 -0.24 0.098 0.098 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.016 2.440 42.40 0.064 0.064 0.00 2.750 2.750 0.00 2.417 2.500 8.30
5-Nov 2,114.0 22,006.4 4,296.7 9,007.4 1,908.2 1,651.3 5,457.8 3,031.0 1,305.9 377.3
% change -0.14 -0.47 -0.97 -0.48 -0.55 -0.29 0.61 -0.32 -0.05 0.54
2012 YTD (%chg) -3.9 16.6 11.4 6.5 1.7 9.0 23.4 12.6 27.4 7.8
3-MONTH INTERBANK LENDING RATE (%) 2-Nov 5-Nov bps change 3.720 3.722 0.16 0.396 0.396 0.00 4.907 4.914 0.72 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.599 0.813 21.40 0.379 0.379 0.00 2.882 2.878 -0.31 6.708 6.972 26.40
Page 4 of 6
CREDIT DEFAULT SWAP (IN BPS) 2-Nov 5-Nov bps change China 71.8 71.8 0.00 Hong Kong * n.a. n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 75.5 75.5 -0.01 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 2-Nov Gold Spot (in US$ per ounce)
5-Nov
1,678.0
% change
1,675.1
-0.18
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
EXTERNAL LIQUIDITY RATIOS
Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,285.1 301.2 110.2 1,277.0 322.0 137.7 82.0 252.1 181.5 n.a
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
3 months imports of goods/serv (US$bn) 504.3 139.1 55.0 69.9 150.9 58.0 19.7 122.5 54.3 29.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 n.a
Short-term external debt (US$bn) 588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 n.a
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a n.a n.a n.a 323.5 137.7 n.a n.a 181.5 n.a
Import cover (Qtrs of import cover)
Reserves over short term debt
6.5 2.2 2.0 18.3 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 5 of 6
DATA RELEASES FOR THE DAY Country
China Hong Kong Korea Indonesia
Indicators
HSBC Services PMI (points) Purchasing Managers’ Index (points) Foreign reserves GDP (% yoy)
Period
Oct Oct Oct 3Q
Last
Previous
53.5 50.5 323.46 6.17
54.3 49.6 322.01 6.37
SELECTED ECONOMIC RELEASES CALENDAR (5 - 9 November 2012) Expected released date
5 Nov
6 Nov
7 Nov
8 Nov
9 Nov
5 – 9 Nov
Country
China Hong Kong Korea Indonesia Japan Japan Philippines Philippines Hong Kong Japan Malaysia Philippines Korea Singapore Singapore Indonesia Japan Japan Malaysia Malaysia Malaysia China China China Indonesia Malaysia Malaysia Korea Thailand Indonesia Indonesia
Indicators
HSBC Services PMI (points) Purchasing Managers’ Index (points) Foreign reserves GDP (% yoy) Leading index Coincident index Consumer price inflation (% yoy) Core consumer price inflation (% yoy) Foreign reserves (USD bn) Official reserve assets (USD bn) Foreign reserves (USD bn) Foreign reserves (USD bn) Bank lending to households (KRW trillion) Automobiles COEs Foreign reserves (USD bn) Bank Indonesia Reference Rate (%) Machinery orders (% yoy) Total current account balance (USD bn) Industrial production (% yoy) Overnight policy rate (%) Manufacturing sales (% yoy) Consumer price index (% yoy) Industrial production (% yoy) Retails sales (% yoy) Current account balance (USD bn) Exports (% yoy) Imports (% yoy) Bank of Korea Base Rate Foreign reserves (USD bn) Foreign reserves (USD bn) Consumer confidence index (points)
Period
Oct Oct Oct 3Q Sep prelim Sep prelim Oct Oct Oct Oct 31 Oct Oct Oct 7 Nov Oct Oct Sep Sep Sep 8 Nov Sep Oct Oct Oct 3Q Sep Sep 8 Nov 2 Nov Oct Oct
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 6 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks rise before U.S. vote. Asian stocks rose amid low trading volume, with gains in Japanese utilities helping reverse yesterday’s losses on the regional benchmark index, as investors awaited the results of the U.S. presidential election and a once-in-a-decade leadership change in China. The MSCI Asia Pacific Index rose by 0.2 percent to 122.55 as of 4:34 p.m. in Tokyo, having earlier fallen as much as 0.3 percent. Asia’s equity benchmark gained 12 percent through yesterday from this year’s low on 4 June as central banks added stimulus amid a slowdown in global economic growth and the European debt crisis. Shares on the measure trade at 13.4 times average estimated earnings, compared with 13.6 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index.
•
Oil fluctuates before U.S. election and on the resumption of New York shipping. Oil swung between gains and losses as deliveries resumed on the U.S. East Coast after Hurricane Sandy. Increases were capped before presidential elections in the U.S. while fifteen tankers, including two crude carriers, will arrive this week in New York Harbor. The West Texas Intermediate oil for December delivery was at US$85.56 a barrel, down 10 cents in electronic trading on the NYMEX at 3:36 p.m. Singapore time. The contract advanced by 79 cents to US$85.65 yesterday after closing last week at the lowest level since 10 July. Prices have dropped by 13 percent this year.
•
Asian currencies closed mostly flat, with the exception of the yen. Yen rose on Greece and U.S. uncertainties as investors sought the currency as a haven amid concern Greece will struggle to win bailout funds and before the U.S. presidential election today. The yen gained 0.2 percent to 80.17 against the greenback.
BREAKING NEWS GLOBAL •
Spain extends rescue fund for regions into 2013. Spain's government announced that it will extend the life of a rescue fund through 2013 to help struggling regions finance crippling debts. Spain’s recession-struck 17 regions have already flooded the rescue fund with cries for help as they try to pay off debts at the same time as slashing budgets to meet stringent deficit targets. Prime Minister Mariano Rajoy's right-leaning government created the regional liquidity fund in July this year with a budget of 18 billion euros (US$23 billion) to bail out regions. It is already clear that the regions' cash problems will not be resolved by the end of 2012, by when the government has predicted they will have a combined public debt of 160.1 billion euros.
•
Greek government introduces austerity bill amid mass strikes. Greece's government introduced a new austerity bill needed to get a creditor lifeline for the cash-strapped nation, where public transport and media workers went on strike to protest the new cuts. Lawmakers will hold an emergency vote this Wednesday on the 1,500-page bill, which proposes 18.5 billion euros (US$23.6 billion) in new cuts and other reforms by 2016. The bill was introduced to parliament several hours behind schedule, as the coalition government's three leaders grappled for a compromise on the latest cuts.
•
U.K. October retail sales fell as Britons cut spending. U.K. retail sales fell in October as weak consumer confidence caused Britons to curtail spending. Sales at stores open at least 12 months, measured by value, dropped by 0.1 percent from a year earlier, according to the British Retail Consortium. Sales rose by 1.5 percent from the previous month, the strongest in nine
months. The disappointing figures are a reminder of the difficult economic realities many are still facing. Falling consumer confidence means people are limiting spending to essential items and are cautious about committing to big-ticket and discretionary buying. Including stores open less than 12 months, retail sales rose by 1.1 percent last month from a year earlier, the slowest pace since April. •
Reserve Bank of Australia (RBA) kept its benchmark interest rate unchanged. The RBA kept its benchmark policy interest rate unchanged at a developed-world high as the global economy stabilizes and domestic inflation picks up, driving the local currency to a five-week high. Governor Glenn Stevens and his board left the overnight cash-rate target at 3.25 percent, a move that surprised most economists, which predicted a cut to 3.00 percent. His decision to hold reflects Australia’s standing as one of the few industrial economies that need to remain alert to inflation risks. The nation’s trade-driven economy is reliant on Chinese resource demand for growth and its currency remains above parity with the U.S. dollar even as America’s expansion accelerates.
REGIONAL •
Philippines’ October inflation slowed to 3.1 percent. Inflation rose by a slower pace in October as price increases in the heavily weighted food and non-alcoholic beverages index and the recreation and culture index decelerated, the National Statistics Office reported today. The October rate, the slowest in four months, was well below September’s 3.6 percent, and fell within the central bank’s 2.9-3.8 percent outlook. Core inflation, which excludes volatile price movements of items such as food and energy, was also slower at 3.6 percent in October from 3.8 percent in September. Annual price increases in the heavily weighted food and non-alcoholic beverages decelerated to 2.5 percent in October from 3.7 percent in September.
•
Korea’s risk premium falls to pre-crisis levels. Korea's credit default risk has dropped to levels seen before the 2008 financial crisis erupted, mirroring its solid economic fundamentals. The credit default swap (CDS) premium on the country's five-year Treasuries came to 65 basis points - the lowest in more than four years since the 64 basis points tallied on 22 May 2008, according to data from the Korea Center for International Finance (KCIF). The figure had spiked to as high as 699 basis points on 27 October 2008, in the aftermath of the collapse of the Lehman which sparked the global financial meltdown. The CDS premium had hovered around 85 basis points early October, before it dropped by more than 20 basis points within a month, following the consecutive sovereign rating upgrades on Korea by several global rating agencies.
•
Malaysia to proceed with minimum wage implementation in 2013. The Malaysian Government will not back down from its pledge to implement the RM900 minimum wage on 1 January next year. Human Resources Minister Datuk Seri Dr S. Subramaniam said there would not be any delay in the implementation of the new rule, regardless of some 4,500 applications from smalland-medium industries for more time to adjust to it. In the Act (Minimum Wage Order 2012), there is a provision that companies who want to make any appeals should do so 90 days before the announced date of implementation. Using the provision, many industries have made appeals. According to the Minister, the National Wage Council has to deliberate, but in all likelihood they will reject most of the applications.
•
Laos given the go-ahead to build a massive dam on the lower Mekong river, despite opposition from neighbouring countries and environmentalists. A formal ceremony marking the start of full construction at Xayaburi would be held on Wednesday, according to the Lao government. However, countries downstream from the US$3.5bn dam fear that it will affect fish stocks and the livelihoods of millions. The announcement came as leaders from Asia and Europe Page 2 of 7
began a two-day meeting in the Laos capital, Vientiane. Landlocked Laos is one of South-east Asia's poorest countries and its strategy for development is based on generating electricity from its rivers and selling the power to its neighbours. The Xayaburi dam is being built by a Thai company with Thai money - and almost all of the electricity has been pre-sold to Thailand. •
Cambodia’s trade with Thailand increases in the first nine months of 2012. Trade between Cambodia and Thailand increased by about 40 percent to US$3 billion in the first nine months of this year in comparison with the same period last year, according to figures provided by the Royal Embassy of Thailand in Cambodia. According to Nat Vimonchandra, a counselor for the Thai embassy, factors influencing the increase in trade include greater consumption within Cambodia due to the ASEAN summit, increased tourist numbers and the growing economy. The counselor added that Cambodia’s economy has improved in every sector including agriculture, real estate, garments and tourism.
IFIs NEWS (compiled from their websites) ADB – Press Release: ADB, Norway to Help Update Myanmar Electricity Law •
The Government of Norway will provide an $850,000 technical assistance (TA) grant to the ADB to help Myanmar update its 1984 Electricity Law so that it reflects current international standards, and creates the right conditions for establishing an electricity regulator, expanding rural electrification, and promoting off-grid solutions. http://www.adb.org/news/adb-norway-help-update-myanmar-electricity-law
FSB – Press Release: Establishment of the Regulatory Oversight Committee for the Global Legal Entity Identifier (LEI) System •
The G20 Finance Ministers and Central Bank Governors endorsed the Charter of the Regulatory Oversight Committee (ROC) for the Global Legal Entity Identifier (LEI) System on 5 November, initiating the process to establish the ROC. Membership of the ROC is open to all eligible authorities that assent to the Charter, by letter to the Chair of the Financial Stability Board. Observer status is also available. To participate in the first meeting of the ROC in January 2013, the deadline for receipt of assent letters is 10 January 2013. http://www.financialstabilityboard.org/publications/r_121105d.pdf
FSB– Press Release: FSB reports to the G20 on progress of financial regulatory reforms •
The Chairman of the FSB reported to G20 Ministers and Governors on 4-5 November 2012 on progress in the financial regulatory reform programme. The FSB has published: (i) a letter by the FSB Chair to the G20 on progress in reforms; (ii) a summary of FSB member jurisdictions' declared approaches to central clearing of OTC derivatives; and (iii) a roadmap on reducing reliance on CRA ratings. http://www.financialstabilityboard.org/press/pr_121105.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_121105.pdf (Progress of Financial Regulatory Reform) http://www.financialstabilityboard.org/publications/r_121105a.pdf (Jurisdictions’ declared approaches to central clearing of OTC derivatives) http://www.financialstabilityboard.org/publications/r_121105b.pdf (Roadmap and workshop for reducing reliance on CRA ratings)
Page 3 of 7
G20 – Press Release: “Communiqué of Ministers of Finance and Central Bank Governors of the G20” •
Ministers of Finance and Central Bank Governors of the G20 has held a meeting in Mexico on 45 November, and issued the communique. http://www.g20mexico.org/index.php/es/comunicados-de-prensa/537-final-communique (Communiques) http://www.imf.org/external/np/sec/pr/2012/pr12413.htm (Statement by IMF Managing Director Christine Lagarde) http://www.worldbank.org/en/news/2012/11/04/opening-remarks-world-bank-grouppresident-jim-yong-kim-g20-joint-press-conference-disaster-risk-management (Opening remarks by World Bank Group President Jim Yong Kim)
IMF – Press Release: Concluding Statement of 2012 Article IV Mission to France •
The IMF has issued a statement upon conclusion of its 2012 Article IV mission to France. “The growth outlook for France remains fragile reflecting weak conditions in Europe generally, but the ability of the French economy to rebound is also undermined by a competitiveness problem. Going forward, policy priorities should be: (i) quality fiscal adjustment, based on a stronger containment and rationalization of public spending to improve its efficiency and to create room for a reduction of the tax burden over the medium term; (ii) reforms of the labor market and services to reduce costs, increase the capacity of enterprises to invest and adapt, and create more efficient and inclusive outcomes in terms of growth and employment; and (iii) a rationalization of the taxation of financial income to ensure an adequate flow of long-term (including equity) financing to enterprises.” http://www.imf.org/external/np/ms/2012/102912.htm
IMF – Publication: “Guidance Note for Article IV Consultations” •
The IMF has publicised the captioned note. This note provides guidance to staff on the conduct of surveillance in the context of Article IV consultations, a core activity of the Fund. Surveillance involves the continuous monitoring of members‘ economic and financial policies and their impact on their own and global stability. During Article IV consultations, staff holds pointed discussions with country authorities on the economic situation, the authorities‘ policies and how these affect the country‘s stability, the role of potential or actual spillovers where relevant, and desirable policy adjustments. These discussions are then reported to the Fund‘s Executive Board for its consideration. The goal, through thorough analysis, candid discussions, and a peerreview mechanism, is to promote the stability of members‘ economies, as well as the effective operation of the international monetary system, including through maintaining global stability. http://www.imf.org/external/np/pp/eng/2012/101012.pdf
IMF – Working Paper: “The Spillover Effects of a Downturn in China’s Real Estate Investment” •
The IMF has publicised the captioned working paper. “We find that a 1-percent decline in China’s real estate investment would shave about 0.1 percent off China’s real GDP within the first year, with negative spillover impacts to China’s G20 trading partners that would cause global output to decline by roughly 0.05 percent from baseline. Japan, Korea, and Germany would be among the hardest hit. In that event, commodity prices, especially metal prices, could fall by as much as 0.8–2.2 percent below baseline one year after the shock.” http://www.imf.org/external/pubs/ft/wp/2012/wp12266.pdf
Page 4 of 7
WTO – Press Release: China files dispute against the EU and certain member states •
China notified the WTO Secretariat on 5 November 2012 of a request for consultations with the European Union and certain member states. It alleges that certain measures affecting the renewable energy generation sector relating to the feed-in tariff programmes of EU member states, including but not limited to Italy and Greece, include domestic content restrictions and are inconsistent with the GATT 1994, the Agreement on Subsidies and Countervailing Measures and the Agreement on Trade-Related Investment Measures. http://www.wto.org/english/news_e/news12_e/ds452rfc_05nov12_e.htm
WTO – Press Release: EU offers EUR 1.18 million to WTO programmes for developing countries •
The European Union (EU) donated EUR 1 million to the Doha Development Agenda Global Trust Fund (DDAGTF) and EUR 180,000 to the Trade Facilitation Negotiation Group Fund for 2012. With these last donations, the EU’s total contribution to the WTO trust funds in favour of developing countries has reached about CHF 14 million (about EUR 11.5 million). http://www.wto.org/english/news_e/pres12_e/pr681_e.htm
WTO – Press Release: Information technology: progress reported on expanding product coverage •
At the meeting of the Information Technology Agreement (ITA) Committee on 1 November 2012, Korea reported some progress on technical discussions it hosted early in the week on expanding the current product coverage of the ITA. It said that the 17 participating members are moving towards more substantial discussions, and that a revised consolidated list of products proposed for inclusion in ITA expansion would be circulated in mid-December. http://www.wto.org/english/news_e/news12_e/ita_01nov12_e.htm
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 5-Nov 6-Nov close China 6.2980 6.2416 6.2453 6.2455 Hong Kong 7.7698 7.7503 7.7502 7.7502 Indonesia 9,126.0 9,631.0 9,633.0 9,626.0 Japan 76.8 80.43 80.29 80.17 Korea 1,150.8 1,090.8 1,091.1 1,090.7 Malaysia 3.1507 3.0535 3.0635 3.064 Philippines 43.765 41.176 41.255 41.215 Singapore 1.2906 1.2248 1.2247 1.2235 Thailand 31.5 30.8 30.8 30.8 Vietnam 21,031.0 20,850.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.00 0.00 0.07 0.15 0.04 -0.02 0.10 0.10 0.10 0.00
2012 YTD (%chg)
0.8 0.3 -5.2 -4.2 5.5 2.8 6.2 5.5 2.2 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
5-Nov 2,114.0 22,006.4 4,302.9 9,007.4 1,908.2 1,654.0 5,457.8 3,031.7 1,306.7 377.3
6-Nov 2,106.0 21,944.4 4,314.3 8,975.2 1,928.2 1,645.6 5,473.6 3,022.1 1,301.9 377.0
% change -0.38 -0.28 0.26 -0.36 1.05 -0.51 0.29 -0.32 -0.37 -0.08
2012 YTD (%chg) -4.2 16.2 11.8 6.1 2.8 8.7 23.8 12.3 27.0 7.7
Page 5 of 7
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (%) 5-Nov 6-Nov bps change 2.700 2.530 -17.00 0.098 0.098 0.00 4.180 4.182 0.20 0.100 0.098 -0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.440 2.580 14.00 0.042 0.042 0.00 2.750 2.750 0.00 2.500 2.750 25.00
3-MONTH INTERBANK LENDING RATE (%) 5-Nov 6-Nov bps change 3.722 3.722 0.01 0.396 0.397 0.07 4.914 4.916 0.20 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.813 0.786 -2.70 0.379 0.379 0.00 2.878 2.878 0.00 6.972 6.821 -15.10
CREDIT DEFAULT SWAP (IN BPS) 5-Nov 6-Nov bps change China 71.8 71.8 0.00 Hong Kong * n.a. n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 74.6 70.7 -3.96 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 5-Nov Gold Spot (in US$ per ounce)
6-Nov
1,685.0
% change
1,688.4
0.20
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 n.a
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 n.a
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a n.a n.a n.a 323.5 137.7 n.a n.a 181.5 n.a
Page 6 of 7
EXTERNAL LIQUIDITY RATIOS
Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,285.1 301.2 110.2 1,277.0 322.0 137.7 82.0 252.1 181.5 n.a
3 months imports of goods/serv (US$bn) 504.3 139.1 55.0 69.9 150.9 58.0 19.7 122.5 54.3 29.9
DATA RELEASES FOR THE DAY
Country Japan Japan Philippines Philippines
Short-term external debt (US$bn) 588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Indicators
Leading index Coincident index Consumer price inflation (% yoy) Core consumer price inflation (% yoy)
Import cover (Qtrs of import cover)
Reserves over short term debt
6.5 2.2 2.0 18.3 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Period
Last
Sep prelim Sep prelim Oct Oct
Previous 91.7 91.2 3.1 3.6
93.2 93.5 3.6 3.8
SELECTED ECONOMIC RELEASES CALENDAR (5 - 9 November 2012) Expected released date 5 Nov
6 Nov
7 Nov
8 Nov
9 Nov
5 – 9 Nov
Country China Hong Kong Korea Indonesia Japan Japan Philippines Philippines Hong Kong Japan Malaysia Philippines Korea Singapore Singapore Indonesia Japan Japan Malaysia Malaysia Malaysia China China China Indonesia Malaysia Malaysia Korea Thailand Indonesia Indonesia
Indicators HSBC Services PMI (points) Purchasing Managers’ Index (points) Foreign reserves GDP (% yoy) Leading index Coincident index Consumer price inflation (% yoy) Core consumer price inflation (% yoy) Foreign reserves (USD bn) Official reserve assets (USD bn) Foreign reserves (USD bn) Foreign reserves (USD bn) Bank lending to households (KRW trillion) Automobiles COEs Foreign reserves (USD bn) Bank Indonesia Reference Rate (%) Machinery orders (% yoy) Total current account balance (USD bn) Industrial production (% yoy) Overnight policy rate (%) Manufacturing sales (% yoy) Consumer price index (% yoy) Industrial production (% yoy) Retails sales (% yoy) Current account balance (USD bn) Exports (% yoy) Imports (% yoy) Bank of Korea Base Rate Foreign reserves (USD bn) Foreign reserves (USD bn) Consumer confidence index (points)
Period Oct Oct Oct 3Q Sep prelim Sep prelim Oct Oct Oct Oct 31 Oct Oct Oct 7 Nov Oct Oct Sep Sep Sep 8 Nov Sep Oct Oct Oct 3Q Sep Sep 8 Nov 2 Nov Oct Oct
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 7 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stock advanced for a second day. Asian stocks lifted regional benchmark index (MSCI Asia Pacific) by 0.6 percent as of 3.10 p.m. in Tokyo. Korea’s KOSPI rose 0.5 percent, Australia’s S&P/ASX 200 Index advanced 0.7 percent, while Hong Kong’s Hang Seng added 0.2 percent, erasing losses of as much 0.6 percent. The Shanghai Composite slid 0.2 percent, and Japan’s Nikkei 225 Stock Average was little changed after swinging between gains and losses.
•
Gold and copper climb as crude oil pares losses on Obama’s victory. Gold and copper advanced, while oil pared losses after Barack Obama won a second term as U.S. president, entrenching prospects for continued stimulus in the world’s biggest economy and weakening the dollar. Spot gold gained as much as 0.7 percent to US$1,727.55 an ounce and was at uS$1,727.05 at 2:46 p.m. in Singapore. Copper rose as much as 1.3 percent to US$7,798 a metric ton in London, and was at US$7,780. West Texas Intermediate oil for December delivery pared losses of as much as 1 percent.
BREAKING NEWS GLOBAL •
Obama wins re-election for with Romney defeated in key states. Barack Obama, the postpartisan candidate of hope four years ago who became the first black U.S. president, won reelection by overcoming four years of economic discontent with a mix of political populism and electoral math. Obama has shifted the U.S.’s economic and security focus to the Asia-Pacific, repositioning naval assets and prioritizing a trade deal with countries in the region as China’s economy expands. The president, who spent part of his childhood in Indonesia, is scheduled to attend a summit of Asian leaders later this month in Cambodia.
•
U.K. home prices seen falling for a second straight year. U.K. home prices are expected to fall 2 percent next year, the second straight decline, as values in every region of the country decrease for the first time since the financial crisis began in 2008, according to industry experts. The biggest drops will be in Wales and Scotland, while London properties will depreciate the least, according to Knight Frank LLP. The common cited reasons are weak economic conditions, nervousness among potential buyers, and difficulty in getting mortgages for first-time buyers.
•
ING NV will cut 2,350 jobs after quarterly profits slumped by 64 percent. ING NV, the biggest Dutch financial-services company, will cut 2,350 jobs in its banking and insurance units after reporting a 64 percent drop in third-quarter profit. Net income fell to 609 million euros (US$783 million) from 1.69 billion euros a year earlier, the Amsterdam-based lender said in a statement today. Profit fell after losses on hedges protecting the insurer’s capital and a charge related to changed policy holder behavior assumptions at its U.S. annuity unit. ING is under orders to sell its insurance operations before the end of 2013 after receiving a government bailout. As the bank prepares to sell shares in its European insurer to the public, it is cutting 1,350 jobs by 2014 and another 1,000 in commercial banking to make savings of 460 million euros annually from 2015.
REGIONAL •
Indonesia sees at least 6.6 percent growth in 2013. Indonesia’s growth may accelerate to the fastest pace since before the Asian financial crisis next year on investment and infrastructure spending, even as the faltering global economy may cause expansion to miss a government target. According to the Vice Finance Minister Anny Ratnawati, gross domestic product may expand by 6.6 percent in 2013, compared with the official budget target of 6.8 percent. That would be the biggest gain since 1996, based on International Monetary Fund data. She added that “It’s possible we may need to make a downward correction to the economic growth target but it would not be far from the current number”. The government will boost infrastructure spending to more than 200 trillion rupiah (US$21 billion) and will require monthly budget disbursement plans from ministries to speed-up projects. Indonesia’s growth has outperformed every major Asian economy after China this year as the world’s fourth-most populous nation lures investment. President Susilo Bambang Yudhoyono has pledged to build more highways, airports and ports to improve infrastructure and meet a growth target of an average 6.6 percent by the end of his second term in 2014.
•
5th ASEAN Tourism Investment Forum opens in Lombok, Indonesia. The 5th ASEAN Tourism Investment Forum (ATIF), attended by around 100 participants from the government and private sectors of ASEAN country members as well as China, Japan and Korea, kicked off at Santika Mataram Hotel in Lombok, West Nusa Tenggara today. Senior officer at ASEAN secretariat infrastructure division, Eddy Krismeidi Soemawilaga, Tourism and Creative Economy Ministry’s Cultural and Tourism Development director-general, Firmansyah Rahim, the ministry’s inspector general I Gusti Putu Laksaguna and NTB Tourism Agency head Gita Aryadi were among state officials attending the opening ceremony of the two-day forum. Unlike last year's forum, which only involved government officials, Eddy said that this year’s event also involved private sectors. There will be a business to business session this year so that every country can promote its tourism destinations as potential investments.
•
Transaction prices of houses drop 1.4 percent in October in Korea. Actual transaction prices of houses in Korea declined in October. According to a state-run think tank, the country's property market continues to slump, as report showed that actual transaction prices of houses in capital Seoul dropped by 4.6 percent year-on-year in October, while those in its surrounding Gyeonggi Province and Incheon fell by 4.5 percent and by 5.8 percent, respectively. Meanwhile, transaction prices of houses outside the metropolitan area inched up 0.5 percent, bringing the average price decline to 1.4 percent.
•
Japan’s economy may be in contraction phase. According to a government report, the Japanese economy could have entered a contraction phase after being dragged down by sluggish manufacturing and exports amid a slowdown in global economic growth. In a preliminary report on the country's key composite index for September, the Cabinet Office revised downward the basic assessment of the coincident index from "weakening" to "signaling a possible turning point." The change tentatively shows the economy is highly likely to be moving toward a contraction. The September index of coincident indicators such as production, retail sales and the ratio of new job offers to seekers fell 2.3 points from August to 91.2 against the 2005 base of 100, marking the longest losing streak since the 10 months of deterioration from June 2008 to March 2009 amid the global financial crisis.
•
Top performing Korean won threatens to hurt Korea’s export rebound. The best performer among Asia’s most-traded currencies since June is threatening to curtail exports just as the economy shows signs of a rebound in growth. The won may appreciate by 8.6 percent to 1,000 per dollar by the end of 2013, according to industry analysts. Kia Motors Corp., the nation’s second-largest carmaker said that currency gains may hurt profitability. The won touched a 14Page 2 of 6
month high after Barack Obama secured re-election as U.S. president today. The exchange rate, Europe’s debt crisis and a slowdown in China may prevent the economy from meeting the government’s 2013 growth estimate of 4 percent, according to the National Assembly Budget Office. While the central bank is forecast to keep rates unchanged on 9 November, policy makers may come under increasing pressure to cut rates in coming months should inflows of capital drive the currency higher. The interest-rate gap between developed countries and Korea is spurring bond market inflows and triggering won appreciation. •
Vietnam seeks ways to stem decline in FDI. Vietnam’s Ministry of Planning and Investment is seeking effective measures to prevent the decline of direct foreign investment (FDI) in the country. The country attracted US$10.49 billion of FDI by the end of October this year, accounting for only 75.3 per cent compared with the same period last year. Of total, 881 newly licensed projects had registered US$6.68 billion (a year-on-year decrease of 36.7 per cent), and 359 on-going projects expanded their investment capital of US$3.8 billion (a year-on-year increase of 12.3 per cent). According to Do Nhat Hoang, director of the Foreign Investment Agency, the country's FDI inflow continued to drop in recent years. This year, the investment ministry estimates that it will be very difficult to reach US$15 billion in FDI, as there is only two months left before the year-end and it was not easy to attract an additional US$5 billion.
IFIs NEWS (compiled from their websites) ADB – Press Release: Launches Bicycle-Sharing Schemes in Three Asian Cities •
The ADB and the Government of Japan formally launched a bicycle-sharing scheme which will be tested in three cities for possible replication across developing Asia and the Pacific. The cities of Davao in the Philippines and Vientiane in Lao People’s Democratic Republic have been selected as demonstration sites. A third city will be located in Indonesia. The project will help improve air quality, as well as reduce the rate of pedestrian accidents and fatalities linked with too many private vehicles on the road. In 1980s, only 9% of the world’s 360 million motorized vehicles were found in the Asia and Pacific region. By 2030, it is estimated that nearly half of the world’s projected 1.5 billion vehicles will be in the region. http://www.adb.org/news/adb-launches-bicycle-sharing-schemes-three-asian-cities
ADB – Press Release: Asia's Shift to Greener Transport Key to Global Sustainability - ADB Forum •
The ADB is organizing, on 6-8 November, the third ADB Transport Forum, which focuses on “Inclusive and Sustainable Transport,” providing a platform for more than 400 global transport experts, civil society representatives, development partners and senior officials from developing member countries to discuss key regional transport challenges, share knowledge, and brainstorm ideas to improve the sector. Asia must scale up sustainable transport development or face a bleak future of congested roads, pollution, ill health and economic damage, which could have ripple effects around the world, a high level transport forum in Manila heard. http://www.adb.org/news/asias-shift-greener-transport-key-global-sustainability-adb-forum
BIS – Speech: “Basel III: Necessary, but not sufficient” •
The BIS published the remarks by Wayne Byres, Secretary General of the Basel Committee on Banking Supervision, prepared for the Financial Stability Institute's 6th Biennial Conference on Risk Management and Supervision, Basel, 6 November 2012. http://www.bis.org/speeches/sp121106.pdf
Page 3 of 6
IMF – Appointment: New Director of Western Hemisphere Department •
Ms. Christine Lagarde, Managing Director of the IMF, named Mr. Alejandro Werner to the position of Director, Western Hemisphere Department. His appointment will become effective early in January 2013. Mr. Werner succeeds Mr. Nicolas Eyzáguirre, who resigned effective July 26, 2012. http://www.imf.org/external/np/sec/pr/2012/pr12416.htm
UNCTAD – Publication: “Technology and Innovation Report 2012” •
The Technology and Innovation Report 2012, subtitled Innovation, Technology and South-South Collaboration, has been launched in India by Ms. Anne Miroux, Director of UNCTAD's Division on Technology and Logistics, and Ms. Padmashree Gehl Sampath, Chief of the Division's taskforce on the Technology and Innovation Report series. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=347&Sitemap_x0020_Taxono my=Technology and Logistics;#1713;#Information and Communication Technologies;#20;#UNCTAD Home (Press Release) http://unctad.org/en/PublicationsLibrary/tir2012_en.pdf (Report)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 6-Nov 7-Nov close China 6.2980 6.2416 6.2455 6.2436 Hong Kong 7.7698 7.7503 7.7505 7.7504 Indonesia 9,126.0 9,631.0 9,626.0 9,629.0 Japan 76.8 80.43 80.35 80.34 Korea 1,150.8 1,090.8 1,090.7 1,085.5 Malaysia 3.1507 3.0535 3.0640 3.049 Philippines 43.765 41.176 41.215 40.997 Singapore 1.2906 1.2248 1.2225 1.2214 Thailand 31.5 30.8 30.8 30.7 Vietnam 21,031.0 20,850.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.03 0.00 -0.03 0.01 0.48 0.49 0.53 0.09 0.23 0.00
2012 YTD (%chg)
0.9 0.3 -5.2 -4.4 6.0 3.3 6.8 5.7 2.5 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
6-Nov 2,106.0 21,944.4 4,314.3 8,975.2 1,928.2 1,645.6 5,473.6 3,019.3 1,300.8 377.0
OVERNIGHT LENDING RATE (%) 6-Nov 7-Nov bps change 2.530 2.570 4.00 0.098 0.098 0.00 4.182 4.180 -0.20 0.100 0.103 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.580 2.501 -7.90 0.027 0.027 0.00 2.750 2.750 0.00 2.750 2.781 3.10
7-Nov 2,105.7 22,099.9 4,350.4 8,972.9 1,937.6 1,645.5 5,437.3 3,043.2 1,300.4 380.9
% change -0.01 0.71 0.84 -0.03 0.49 -0.01 -0.66 0.79 -0.03 1.05
2012 YTD (%chg) -4.3 17.1 12.8 6.1 3.3 8.6 23.0 13.1 26.8 8.8
3-MONTH INTERBANK LENDING RATE (%) 6-Nov 7-Nov bps change 3.722 3.729 0.64 0.397 0.397 0.00 4.916 4.917 0.08 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.786 0.634 -15.20 0.379 0.379 0.00 2.878 2.876 -0.23 6.821 7.042 22.10
Page 4 of 6
CREDIT DEFAULT SWAP (IN BPS) 6-Nov 7-Nov bps change China 71.8 71.8 0.00 Hong Kong * n.a. n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 70.6 69.5 -1.08 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 6-Nov Gold Spot (in US$ per ounce)
7-Nov
1,716.0
% change
1,725.5
0.55
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
EXTERNAL LIQUIDITY RATIOS
Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
3 months imports of goods/serv (US$bn) 504.3 139.1 55.0 69.9 150.9 58.0 19.7 122.5 54.3 29.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
Short-term external debt (US$bn) 588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
Import cover (Qtrs of import cover)
Reserves over short term debt
6.5 2.2 2.0 18.2 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 5 of 6
DATA RELEASES FOR THE DAY Country Hong Kong Japan Malaysia Philippines Singapore
Singapore
Indicators Foreign reserves (USD bn) Official reserve assets (USD bn) Foreign reserves (USD bn) Foreign reserves (USD bn) Automobiles COEs (SGD) Cat A Cat B Cat E Foreign reserves (USD bn)
Period Oct Oct 31 Oct Oct
Last 301.7 1,274.2 138.3 82.1
Previous 301.2 1,277.0 137.7 82.0
7 Nov 7 Nov 7 Nov Oct
77,201 92,400 92,100 254.22
71,001 85,801 87,000 252.15
SELECTED ECONOMIC RELEASES CALENDAR (5 - 9 November 2012) Expected released date 5 Nov
6 Nov
7 Nov
8 Nov
9 Nov
5 – 9 Nov
Country China Hong Kong Korea Indonesia Japan Japan Philippines Philippines Hong Kong Japan Malaysia Philippines Singapore Singapore Indonesia Japan Japan Malaysia Malaysia Malaysia China China China Indonesia Malaysia Malaysia Korea Thailand Indonesia Indonesia
Indicators HSBC Services PMI (points) Purchasing Managers’ Index (points) Foreign reserves GDP (% yoy) Leading index Coincident index Consumer price inflation (% yoy) Core consumer price inflation (% yoy) Foreign reserves (USD bn) Official reserve assets (USD bn) Foreign reserves (USD bn) Foreign reserves (USD bn) Automobiles COEs Foreign reserves (USD bn) Bank Indonesia Reference Rate (%) Machinery orders (% yoy) Total current account balance (USD bn) Industrial production (% yoy) Overnight policy rate (%) Manufacturing sales (% yoy) Consumer price index (% yoy) Industrial production (% yoy) Retails sales (% yoy) Current account balance (USD bn) Exports (% yoy) Imports (% yoy) Bank of Korea Base Rate Foreign reserves (USD bn) Foreign reserves (USD bn) Consumer confidence index (points)
Period Oct Oct Oct 3Q Sep prelim Sep prelim Oct Oct Oct Oct 31 Oct Oct 7 Nov Oct Oct Sep Sep Sep 8 Nov Sep Oct Oct Oct 3Q Sep Sep 8 Nov 2 Nov Oct Oct
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 8 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks decline as China leadership congress begins. Asian stocks fell, with the regional benchmark poised for its biggest drop in six weeks, as investors turned their attention to the U.S. budget debate and China’s Communist Party began a meeting to choose new leaders. The MSCI Asia Pacific (MXAP) Index lost 1.3 percent to 121.82 as of 3:00 p.m. in Tokyo, the biggest slide since 26 September with all 10 industry groups retreating. The gauge gained 13 percent through yesterday from this year’s low on 4 June as central banks added stimulus amid a slowdown in global economic growth and the European debt crisis. Japan’s Nikkei 225 Stock Average fell 1.5 percent, Korea’s KOSPI lost 1.1 percent, Singapore’s Strait Times dropped 1 percent, whereas the Hong Kong’s Hang Seng dropped 2.4 percent.
•
Oil rebounded from four-month low. Oil rebounded from the lowest level in almost four months on speculation the biggest decline this year was exaggerated amid signs of increased demand in Asia. Futures climbed as much as 0.8 percent in New York. Crude slumped 4.8 percent yesterday after U.S. stockpiles gained and fuel demand dropped, while President Barack Obama’s re-election stoked speculation there will be a budget showdown. China may boost demand the most in two years this quarter, according to Sanford C. Bernstein & Co. and the International Energy Agency. Oil for December delivery rose as much as 71 cents to US$85.15 a barrel in electronic trading on the NYMEX. The contract was at US$85.03 at 4:46 p.m. Tokyo time. It lost US$4.27 yesterday to US$84.44, the lowest close since 10 July. Prices are down 14 percent this year.
BREAKING NEWS GLOBAL •
U.S. warned by Fitch on fiscal cliff. Fitch warned that the U.S. may be downgraded next year unless lawmakers avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, while Moody’s Investors Service said it will wait to see the economic impact should the nation experience a fiscal shock. Congress and President Barack Obama must confront more than US$600 billion in tax increases and spending cuts set to take effect in 2013 or risk the economy tipping back into recession. Standard & Poor’s stripped the U.S. of its AAA credit rating on 5 August 2011 after months of political wrangling that pushed the nation to the deadline an agreement to lift the debt ceiling.
•
Bank of England (BOE) confronts QE potency as it considers halting U.K. stimulus. BOE officials will confront growing concerns about the potency of their main policy tool today as they consider halting bond purchases for an economy that may still need support. While most economists forecasted a halt to the asset-buying program at 375 billion pounds (US$599 billion) in a decision to be announced at noon in London, Royal Bank of Scotland Group Plc and Berenberg Bank said that the decision will be “close.” The bind for Governor Mervyn King and the Monetary Policy Committee is whether to rely on QE to bolster the cooling economy, or focus on credit-boosting initiatives such as the Funding for Lending Scheme. Adding to the debate are warnings from some officials that looser policy now may not be the right move as inflation slows less than previously forecast and threatens to stay above their target into next year.
•
Samaras wins Greek Austerity Bill in race to secure aid. Greek Prime Minister Antonis Samaras mustered the support of enough lawmakers to secure approval of austerity measures needed to unlock bailout funds, after more than 50,000 protesters ringed Parliament. The bill on pension, wage and benefit cuts was approved with 153 votes in favor in the 300-seat Parliament early today, according to acting Parliament speaker.
•
Australian employers added more jobs than forecast in October. Australian employers boosted payrolls more than economists forecast in October and the unemployment rate unexpectedly held as the nation weathered a global slowdown, sending the local currency higher. The number of people employed rose by 10,700 after a 15,500 gain in September, the statistics bureau said in Sydney today. That compares with the median estimate for an increase of 500 last month in a Bloomberg News survey of 26 economists. The jobless rate was unchanged at 5.4 percent, compared with expectations for a rise to 5.5 percent.
•
New Zealand jobless rate surges to 13-year high. New Zealand’s unemployment rate unexpectedly rose last quarter to a 13-year high, adding to evidence of a faltering recovery and sending the best-performing Group of 10 currency this year plunging. The jobless rate jumped to 7.3 percent from 6.8 percent in the second quarter, Statistics New Zealand said in a report today in Wellington - the highest since the first quarter of 1999. Employment fell by 0.4 percent (or 8,000 jobs) from the second quarter when it dropped 0.1 percent.
REGIONAL •
Chinese President Hu Jintao sets income target for 2020. President Hu Jintao said that China must double per-capita income by 2020, setting a target for the incoming generation of leaders to be unveiled at the close of a Communist Party Congress that started today. According to Hu, China should double its gross domestic product by the same year in a speech at the opening of the party’s 18th congress. The make-up of the new Politburo Standing Committee, the top ruling body whose members will be announced after the congress ends on 14 November, may give clues to China’s appetite for policy shifts that the World Bank says the country must embrace to become a high-income economy. The reform agenda ranges from breaking up state-owned monopolies to deregulating lending rates and correcting underpricing of natural resources.
•
Japan machinery orders fall more than forecast on exports. Japan’s machinery orders fell more than expected in September as slowing global demand hurts exports, while the nation’s current account surplus narrowed to its lowest level for the month since at least 1985. Orders, an indicator of capital spending in three to six months, declined by 4.3 percent from the previous month, according to the Cabinet Office today.
•
Indonesia holds key rate as growth withstand global risks. Indonesia kept its benchmark interest rate unchanged for a ninth straight meeting as economic growth exceeding 6 percent reduced the need for monetary stimulus. Bank Indonesia Governor Darmin Nasution and his board held the reference rate at a record-low 5.75 percent, the central bank said in Jakarta today. Indonesia’s growth has outperformed every major Asian economy after China this year as the world’s fourth-most populous nation lures investment, helping gross domestic product expand 6.17 percent last quarter from a year earlier. The country has avoided adding to a February rate cut while neighbors from Thailand to the Philippines extended monetary easing to counter faltering global growth, as the region’s worst-performing currency this year boosted inflation pressure.
•
Malaysia’s industrial output in September surged. Malaysia's industrial production index (IPI) surged by 4.9 percent in September from a year ago, boosted by the increase in manufacturing output. According to the Statistics Department, the manufacturing segment recorded a 5.2 Page 2 of 7
percent increase, while mining and electricity rose by 3.6 percent and electricity 5.9 percent, respectively. On a seasonally adjusted month-on-month basis, the IPI in September rose by 5.8 percent which was contributed by manufacturing index and electricity index. The department said that the IPI in August 2012 was revised to negative 0.2 percent year-on-year. For the third quarter of 2012, the IPI increased by 2.4 percent from the previous corresponding period. •
University of Thai Chamber of Commerce (UTCC) lowers 2012 growth to 5.4 percent. The Economic and Business Forecasting Centre at the UTCC slashed its growth projection for 2012 to 5.4 percent, from 5.6 percent, due to impact of global recession. The centre projected a gross domestic product growth at 4.5 percent for 2013, on the back of several negative factors, including the ongoing global economic slowdown, both overseas and domestic political conflicts and exchange rate fluctuation. It expected an export expansion of only 3.5 percent this year and about 7.4 percent next year. On the inflation front, the centre is expecting a 3.1 percent inflation this year and the figure would increase to 3.5 percent in 2013.
•
Vietnam and Russia to strengthen co-operation over oil and gas. Vietnam will continue to support the joint pursuit of oil and gas projects in its continental shelf with Russia, Prime Minister Nguyen Tan Dung said today. Pointing out the nation paid special attention to boosting cooperation with Russia in the energy sector; the Prime Minister stressed the issue during his talks with Russian Prime Minister Dmitry Medvedev in Ha Noi yesterday. The talks followed an official welcome ceremony at the Presidential Palace for the Russian Prime Minister. He asked for Russian reciprocation by allowing the establishment of new joint ventures between Vietnamese and Russian companies on projects in Russia. Both sides discussed measures to implement strategic cooperation projects and increase economic exchanges to realize the set target of raising bilateral trade to US$7 billion by 2015.
IFIs NEWS (compiled from their websites) ADB – Press Release: Help Mitigate Risk of Floods, Droughts in Lower Mekong Basin •
The ADB and Australian Agency for International Development (AusAID) will provide an $87.39 million package of loans and grants to help Lao PDR and Viet Nam pair infrastructure upgrades with community-based disaster risk management and enhanced regional forecasting to improve flood and drought preparedness in the Greater Mekong Subregion (GMS). http://www.adb.org/news/adb-help-mitigate-risk-floods-droughts-lower-mekong-basin
IFC – Press Release: IFC, Malaysian Central Bank Help Strengthen Credit-Risk Management to Boost Access to Finance •
The IFC and Bank Negara Malaysia this week began a five-day training program that brings together more than 100 regulators, credit-reporting professionals, and microfinance practitioners from 43 countries of the world. The Fourth Credit Reporting and Risk Management Training in Kuala Lumpur is designed to help attendees improve their skills in assessing and managing credit risks. http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/A568244F7848BBE885257AAF006B BDC9
IMF – Working Papers •
The IMF has publicised the following papers: o
“FX Funding Risks and Exchange Rate Volatility–Korea’s Case” – “This paper examines how exchange rate volatility and Korean banks’ foreign exchange liquidity mismatches interacted with each other during the Global Financial Crisis, and whether the vulnerability stemming from this interaction has been reduced since then. Structural and cyclical changes after the crisis, including decreasing demand for currency hedges and the Page 3 of 7
diversifying investor base for bonds, point to a possible weakening of the interaction mechanism; and we find evidences are strongly supportive of this.” http://www.imf.org/external/pubs/ft/wp/2012/wp12268.pdf o
“Investment-Led Growth in China: Global Spillovers” – “This note quantifies potential global spillovers from an investment slowdown in China. It finds that a one percentage point slowdown in investment in China is associated with a reduction of global growth of just under one-tenth of a percentage point. The impact is about five times larger than in 2002. Regional supply chain economies and commodity exporters with relatively less diversified economies are most vulnerable to an investment slowdown in China. The spillover effects also register strongly across a range of macroeconomic, trade, and financial variables among G20 trading partners.” http://www.imf.org/external/pubs/cat/longres.aspx?sk=40086.0
UNCTAD – Publication: “Trade Policy and Gender Inequalities: A Country-based Analysis” •
UNCTAD has publicised the captioned paper, which provides a review of the situation in Cape Verde, the Gambia and Lesotho, and is a contribution to global consultations on how to approach development issues after 2015. This UNCTAD paper uses country case studies to "map" the gendered effects of trade in each country, while testing three different methodologies. Drawing a common thread between the three case studies, the paper points to the fact that trade policy impacts different segments of the population - men and women, rural and urban dwellers, the well-off and the poor - in different ways. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=348&Sitemap_x0020_Taxono my=Trade, Gender and Development;#20;#UNCTAD Home (Press Release) http://www.worldwewant2015.org/file/284170/download/308061 (Report)
World Bank – Press Release: New Strategy Supports Greener and More Inclusive Growth in China •
The World Bank Group’s Board of Directors discussed a new Country Partnership Strategy (CPS) for the People’s Republic of China covering the Bank’s fiscal years 2013-2016. The Board endorsed the strategy's overall goals of helping China achieve greener growth, more inclusive development, and mutually beneficial relations with the world. The new CPS is aligned with China’s 12th Five-Year Plan, and informed by the study, China 2030, prepared jointly by the World Bank and the Development Research Center of the State Council. To support China’s goal of a harmonious society, the Bank Group will focus on three main areas of engagement: (1) Supporting greener growth, (2) Promoting more inclusive development, and (3) Advancing mutually beneficial relations with the world. http://www.worldbank.org/en/news/2012/11/06/world-bank-group-new-strategy-supportsgreener-more-inclusive-growth-china
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 7-Nov 8-Nov close China 6.2980 6.2416 6.2436 6.2429 Hong Kong 7.7698 7.7503 7.7504 7.7505 Indonesia 9,126.0 9,631.0 9,629.0 9,632.0 Japan 76.8 80.43 80 79.95 Korea 1,150.8 1,090.8 1,085.5 1,089.7 Malaysia 3.1507 3.0535 3.0490 3.0615 Philippines 43.765 41.176 40.997 41.055 Singapore 1.2906 1.2248 1.2225 1.2244 Thailand 31.5 30.8 30.7 30.7 Vietnam 21,031.0 20,850.0 20,850.0 20,840.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.01 0.00 -0.03 0.06 -0.39 -0.41 -0.14 -0.16 0.00 0.05
2012 YTD (%chg) 0.9 0.2 -5.3 -3.9 5.6 2.9 6.6 5.4 2.4 0.9
Page 4 of 7
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
7-Nov
8-Nov
2,105.7 22,099.9 4,350.4 8,972.9 1,937.6 1,645.5 5,437.3 3,043.3 1,299.7 380.9
OVERNIGHT LENDING RATE (%) 7-Nov 8-Nov bps change 2.570 2.580 1.00 0.098 0.098 -0.04 4.180 4.169 -1.16 0.100 0.103 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.501 2.025 -47.60 0.024 0.024 0.00 2.750 2.750 0.00 2.781 2.875 9.40
% change
2,071.5 21,566.9 4,327.9 8,837.2 1,914.4 1,641.1 5,446.7 3,012.3 1,292.2 385.6
-1.63 -2.41 -0.52 -1.51 -1.19 -0.27 0.17 -1.02 -0.58 1.23
2012 YTD (%chg) -5.8 14.2 12.2 4.5 2.1 8.4 23.2 11.9 26.0 10.2
3-MONTH INTERBANK LENDING RATE (%) 7-Nov 8-Nov bps change 3.729 3.733 0.47 0.397 0.396 -0.07 4.917 4.915 -0.20 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.634 0.688 5.40 0.379 0.379 0.00 2.876 2.875 -0.15 7.042 6.792 -25.00
CREDIT DEFAULT SWAP (IN BPS) 7-Nov 8-Nov bps change China 71.8 71.8 0.00 Hong Kong * n.a. n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 68.8 68.4 -0.44 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 7-Nov Gold Spot (in US$ per ounce)
1,717.6
8-Nov
% change
1,720.6
0.18
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods/serv (US$bn) 504.3 139.1 55.0 69.9 150.9 58.0 19.7 122.5 54.3 29.9
Short-term external debt (US$bn) 588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of import cover)
Reserves over short term debt
6.5 2.2 2.0 18.2 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
DATA RELEASES FOR THE DAY Country Indonesia Japan Japan Malaysia Malaysia Malaysia
Indicators Bank Indonesia Reference Rate (%) Machinery orders (% yoy) Total current account balance (JPY bn) Industrial production (% yoy) Overnight policy rate (%) Manufacturing sales (% yoy)
Period Oct Sep Sep Sep 8 Nov Sep
Last
Previous 5.75 5.75 -7.8 -6.1 503.6 454.7 4.9 -0.2 Release time (6.00 p.m.) 3.3 1.0
SELECTED ECONOMIC RELEASES CALENDAR (5 - 9 November 2012) Expected released date 5 Nov
6 Nov
7 Nov
Country China Hong Kong Korea Indonesia Japan Japan Philippines Philippines Hong Kong Japan Malaysia Philippines Singapore Singapore
Indicators HSBC Services PMI (points) Purchasing Managers’ Index (points) Foreign reserves GDP (% yoy) Leading index Coincident index Consumer price inflation (% yoy) Core consumer price inflation (% yoy) Foreign reserves (USD bn) Official reserve assets (USD bn) Foreign reserves (USD bn) Foreign reserves (USD bn) Automobiles COEs Foreign reserves (USD bn)
Period Oct Oct Oct 3Q Sep prelim Sep prelim Oct Oct Oct Oct 31 Oct Oct 7 Nov Oct
Page 6 of 7
Expected released date 8 Nov
9 Nov
5 – 9 Nov
Country Indonesia Japan Japan Malaysia Malaysia Malaysia China China China Indonesia Malaysia Malaysia Korea Thailand Indonesia Indonesia
Indicators Bank Indonesia Reference Rate (%) Machinery orders (% yoy) Total current account balance (USD bn) Industrial production (% yoy) Overnight policy rate (%) Manufacturing sales (% yoy) Consumer price index (% yoy) Industrial production (% yoy) Retails sales (% yoy) Current account balance (USD bn) Exports (% yoy) Imports (% yoy) Bank of Korea Base Rate Foreign reserves (USD bn) Foreign reserves (USD bn) Consumer confidence index (points)
Period Oct Sep Sep Sep 8 Nov Sep Oct Oct Oct 3Q Sep Sep 8 Nov 2 Nov Oct Oct
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 9 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks fell with the regional benchmark index headed for the biggest two-day loss in two months. The MSCI Asia Pacific Index fell 0.3 percent to 121.38 as of 5:15 p.m. in Tokyo after dropping as much as 0.8 percent, with about two stocks sliding for each that gained. The gauge has declined 1 percent this week as China’s Communist Party meets in Beijing to choose new leaders. Japan’s Nikkei and Hong Kong’s Hang Seng both declined by 0.9 percent, while Korea’s KOSPI and Singapore’s STI retreated by 0.5 percent and 0.2 percent, respectively.
•
Asian currencies advanced as Obama’s re-election supports inflows. Asian currencies rose this week as President Barack Obama’s re-election increased the likelihood the Federal Reserve will keep boosting the supply of dollars that can be invested in emerging markets. Thailand’s baht strengthened 0.3 percent to 30.65, while South Korea’s won and the Philippine peso gained 0.2 percent to 1,088.57 and 41.083, respectively. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, added 0.1 percent.
•
Oil climbed from a four-month low. Oil climbed higher after fewer Americans than forecast filed claims for unemployment insurance and Greek lawmakers approved a package of austerity measures needed to unlock further financial aid. Crude oil for December delivery rose 65 cents to settle at US$85.09 a barrel on the NYMEX. The contract dropped US$4.27 yesterday to US$84.44, the lowest settlement since 10 July . Prices are down 14 percent this year. Brent oil for December settlement increased 43 cents, or 0.4 percent, to end the session at US$107.25 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL •
Draghi relegating rates makes OMT policy weapon of choice. Mario Draghi’s bond-buying plan has become the European Central Bank’s (ECB) weapon of choice to reduce interest rates even before it has been activated. ECB President Draghi yesterday praised the impact of the so-called OMT program in lowering borrowing costs, while playing down the prospect of further ECB rate cuts. “Market confidence has visibly improved on the back of our decisions as regards Outright Monetary Transactions,” he said. The announcement “by itself produced an easing of financialmarket conditions. Draghi gave no indication of an imminent cut in the ECB’s benchmark rate, which it left at a record low of 0.75 percent yesterday, even as he acknowledged the central bank is likely to lower its economic forecasts next month. A rate reduction may involve the complication of taking the deposit rate, currently at zero, into negative territory.
•
Healing U.S. labour market means fewer temporary jobs. Temporary employment is contributing less to job creation in the U.S. in the first six months of the year - a sign employers are more confident about the durability of the economic expansion. The monthly change in the number of people on payrolls of temporary-help service businesses averaged 2.2 percent of the monthly gains in total nonfarm payrolls during the July-October period, well below almost 19 percent in the first half of 2012, based on seasonally adjusted data from the Labor Department. The steep decline came as the total number of jobs created each month rose to an average of 173,000 in July-October compared with 66,667 in the second quarter.
REGIONAL •
China’s industrial output accelerates as inflation eases. China’s factory output and retail sales exceeded forecasts and inflation unexpectedly cooled to the slowest pace in 33 months, signaling the government is boosting growth without driving a rebound in prices. Industrial production rose by 9.6 percent in October from a year earlier, the National Bureau of Statistics said today in Beijing. Meanwhile, retail sales expanded by 14.5 percent year-on-year (from September’s 14.2 percent). China’s inflation remained comfortably low, increasing by 1.7 percent year-on-year in October (Sep: 1.9 percent year-on-year).
•
Bank of Korea holds rate amid positive economic signs. Bank of Korea held borrowing costs as policy makers pause to assess the effects of two cuts earlier this year amid signs that growth in Asia’s fourth-largest economy may rebound. Governor Kim Choong Soo and his board kept the benchmark seven-day repurchase rate at 2.75 percent, the central bank said in a statement in Seoul today, after a 25 basis point cut last month and in July. Korea’s first increase in four months in exports in October signaled that the economy may be recovering just as the nation readies for a presidential election on 19 December, although strength in the won could act as a drag.
•
Hong Kong investors look to Bursa Malaysia, world's 3rd largest IPO venue this year, to tap into ASEAN growth. Bursa Malaysia, the world's third largest initial public offering (IPO) venue this year, has presented the Invest Malaysia capital market roadshow in Hong Kong and garnered a strong response from 61 fund managers. In a statement, Bursa Malaysia CEO Datuk Tajuddin Atan said the Invest Malaysia Hong Kong roadshow was an ideal platform for Bursa Malaysia to showcase the strength and depth of market to fund managers there.
•
Implied volatility of JGB futures at record low, signaling more stimulus by Bank of Japan. The drop in a measure of potential swings in Japanese government bonds (JGB) to a record low is a signal of more monetary easing to come as the economy shrinks. Implied volatility in JGB futures, a gauge of expected moves used to price options, dropped to 1.27 percent, the least since at least 2002 and compared with 3.71 percent for similar U.S. contracts, according to data compiled by Bloomberg. Japan’s 10-year note yield slid to a three-month low of 0.73 percent today, extending its decline from yesterday when data showed machinery orders decreased more than estimated. Central bank interest rates near zero are limiting the scope for bond yields to decline, keeping volatility low. The government and domestic companies have ramped up pressure on Bank of Japan Governor Masaaki Shirakawa to add to stimulus as the strong yen weighs on exports from the world’s third-biggest economy. Japan’s gross domestic product probably shrank the most since last year’s record earthquake in the third quarter, according to a survey of economists.
•
Soaring won squeezes companies. The majority of exporters in Korea have seen their bottom lines deteriorate as a result of the steep appreciation of the Korean won against the dollar and other major foreign currencies over the past few months. Among others, makers of semiconductors, home appliances and chemical products have failed to generate profits from selling goods on the global market, due to the strong won. If the local currency continues to gain ground against the greenback, automakers and most other exporters will face difficulties in remaining profitable. According to a survey of 500 local exporters conducted by the Korea Chamber of Commerce and Industry (KCCI), nearly 58 percent said they are suffering from the won’s recent strength against the dollar, citing foreign exchange losses, worsening profitability and weakening price-competitiveness.
•
Thailand’s Prime Minister urged to delay considering minimum wage rise by one month. The Joint Standing Committee on Commerce, Industry and Banking of Thailand will send a letter to Prime Minister Yingluck Shinawatra asking to delay by one month the submission for the cabinet Page 2 of 7
approval of the nationwide increase of the daily minimum wage to 300 baht. Thaveekit Jaturajarernkul, a vice-chairman of the Federation of Thai Industries (FTI), said the committee yesterday agreed that they would like to see the delay the cabinet's consideration on the new nationwide wage hike, expected to be on the agenda at the meeting on 13 November. A joint committee of government and private sector representatives should first be set up to review support measures for small and medium enterprises (SMEs), he said. The Labour Ministry earlier proposed 27 measures aimed at increasing productivity for SMEs and minimising the effects of the wage increase. Tanit Sorat, another FTI vice-chairman, said the government's proposed tax reductions are not enough to counter the negative effects of the 300-baht daily wage on SMEs. SMEs with 200 staff on average will see their annual wage bills rise by 80 percent to 18 million baht, from 10 million now. He added that the annual wage bill cannot be offset by only 6 percent tax reductions equal to between 400,000 and 500,000 baht that these small companies will get from the government, as only big firms will benefit from the tax reductions. •
Iskandar Malaysia nears RM100 billion investment target. Iskandar Malaysia is poised to breach the targeted RM100bil investment mark after recording RM99.79bil in total cumulative investment up to the third quarter of this year. Iskandar Region Development Authority (IRDA) chief executive, Datuk Ismail Ibrahim said 42 percent of the total committed investment had been spent as of September this year. For this year alone until September he said, the economic corridor has managed to attract a total of RM15bil in cumulative investment.
IFIs NEWS (compiled from their websites) ADB – Press Release: ADB, OFID Sign Risk-sharing Agreement on Trade Finance Program •
The ADB and the OPEC Fund for International Development (OFID) signed a risk distribution agreement to support trade in emerging Asian countries under ADB’s Trade Finance Program (TFP). The agreement will support an estimated incremental trade flow between $800 million and $1.2 billion in countries such as Bangladesh, Mongolia, Pakistan, Sri Lanka and Uzbekistan, and other markets where financing from private financial institutions is limited. http://www.adb.org/news/adb-ofid-sign-risk-sharing-agreement-trade-finance-program
ADB – Press Release: First Supply Chain Finance Program to Help Region's Small Businesses •
The ADB is creating a Supply Chain Finance Program (SCFP) that will bring over $1 billion to help cash-strapped small and medium-sized enterprises in Asia and the Pacific access capital that can help them grow. The ADB is supplying up to $200 million for the SCFP, which will revolve at least twice a year because of the short-term maturities involved in supply chains. Furthermore, the $200 million is estimated to attract an additional $300 million, at least, in private sector investment through the SCFP. http://www.adb.org/news/adbs-first-supply-chain-finance-program-help-regions-smallbusinesses
IMF – Working Paper: “Shock Therapy! What Role for Thai Monetary Policy?” •
The IMF has publicised the captioned working paper. “Thailand had to endure three major shocks during 2008–2011: the global financial crisis, the Japanese earthquake, and the Thai floods of 2011. Over this period, consistent with its inflation targeting framework, the Bank of Thailand (BOT) let the exchange rate depreciate and cut interest rates (to, for example, a historically low level of 1¼ percent by mid-2009). This paper seeks to uncover the role of monetary policy in softening the impact of these shocks.” http://www.imf.org/external/pubs/ft/wp/2012/wp12269.pdf
Page 3 of 7
World Bank – Press Release: Launching the Financial Disclosure Law Library •
To support countries in their fight against corruption, the World Bank is launching the Financial Disclosure Law Library to help policymakers and practitioners establish strong financial disclosure systems. The Library compiles over 1,000 laws and regulations on financial disclosure and restrictions on public officials’ activities from 176 countries. Financial disclosure by public officials provides law enforcement with information and evidence for the prevention, investigation and prosecution of corruption, illicit enrichment and tax crimes. It also gives citizens the information they need to hold public officials accountable for their actions. http://www.worldbank.org/en/news/2012/11/08/only-fourty-three-percent-countries-disclosepublic-officials-financial-assets-says-world-bank
World Bank – Press Release: Supports institutional development for Vietnam’s Climate Change Response Program •
The World Bank Board of Directors approved a credit of US$70 million for the second Vietnam Climate Change Development Policy Operation, part of a series of three operations to support Vietnam’s institutional development which will help the country respond to climate change. The credit provides parallel financing under a multi-donor budget support program for the Government’s Support Program to Respond to Climate Change. Accordingly, JICA and AfD will jointly provide roughly US$145 million, AusAID will join with a first AUD8 million, and Korea Eximbank with US$30 million, bringing total support to about US$253 million in the context of the proposed operation. http://www.worldbank.org/en/news/2012/11/08/world-bank-supports-institutionaldevelopment-for-vietnam-climate-change-response-program
WTO – Press Release: WTO council on intellectual property •
The WTO had a two-hour exchange of information and ideas on Intellectual property and innovation at the request of the US and Brazil. The participants offered different perspectives on the subject but agreed that the council should broaden its deliberations into this important subject. They said, innovation is essential for raising living standards, and intellectual property has an important role to play provided an appropriate balance is struck and governments act to help smaller players. http://www.wto.org/english/news_e/news12_e/trip_06nov12_e.htm
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 8-Nov 9-Nov close China 6.2980 6.2416 6.2429 6.2430 Hong Kong 7.7698 7.7503 7.7515 7.7509 Indonesia 9,126.0 9,631.0 9,632.0 9,631.0 Japan 76.8 80.43 79.47 79.32 Korea 1,150.8 1,090.8 1,089.7 1,087.9 Malaysia 3.1507 3.0535 3.0615 3.0635 Philippines 43.765 41.176 41.055 41.068 Singapore 1.2906 1.2248 1.2249 1.2234 Thailand 31.5 30.8 30.7 30.7 Vietnam 21,031.0 20,850.0 20,840.0 20,840.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.00 0.01 0.01 0.19 0.17 -0.07 -0.03 0.12 0.10 0.00
2012 YTD (%chg)
0.9 0.2 -5.2 -3.2 5.8 2.8 6.6 5.5 2.6 0.9
Page 4 of 7
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
8-Nov
9-Nov
2,071.5 21,566.9 4,327.9 8,837.2 1,914.4 1,641.1 5,446.7 3,012.3 1,293.7 385.6
OVERNIGHT LENDING RATE (%) 8-Nov 9-Nov bps change 2.580 2.620 4.00 0.098 0.098 0.04 4.169 4.170 0.12 0.100 0.103 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.025 1.830 -19.50 0.028 0.028 0.00 2.750 2.750 0.00 2.875 2.875 0.00
% change
2,069.1 21,384.4 4,314.8 8,757.6 1,904.4 1,640.4 5,468.8 3,006.6 1,289.1 386.7
-0.12 -0.85 -0.30 -0.90 -0.52 -0.04 0.41 -0.19 -0.35 0.29
2012 YTD (%chg) -5.9 13.3 11.8 3.6 1.5 8.3 23.7 11.7 25.7 10.5
3-MONTH INTERBANK LENDING RATE (%) 8-Nov 9-Nov bps change 3.733 3.741 0.75 0.396 0.396 0.00 4.915 4.915 -0.04 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.688 0.534 -15.40 0.379 0.379 0.00 2.875 2.873 -0.15 6.792 6.792 0.00
CREDIT DEFAULT SWAP (IN BPS) 8-Nov 9-Nov bps change China 71.8 71.8 0.00 Hong Kong * n.a. n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 68.3 68.1 -0.20 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 8-Nov Gold Spot (in US$ per ounce)
1,731.4
9-Nov
% change
1,734.9
0.20
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods/serv (US$bn) 504.3 139.1 55.0 69.9 150.9 58.0 19.7 122.5 54.3 29.9
Short-term external debt (US$bn) 588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of import cover)
Reserves over short term debt
6.5 2.2 2.0 18.2 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Last
Previous 1.9 9.2 14.2 -7.7 -4.5 2.8 2.75 181.5
DATA RELEASES FOR THE DAY Country China China China Indonesia Malaysia Malaysia Korea Thailand
Indicators Consumer price index (% yoy) Industrial production (% yoy) Retails sales (% yoy) Current account balance (USD bn) Exports (% yoy) Imports (% yoy) Bank of Korea Base Rate Foreign reserves (USD bn)
Period Oct Oct Oct 3Q Sep Sep 8 Nov 2 Nov
1.7 9.6 14.5 -5.3 2.6 9.6 2.75 180.5
SELECTED ECONOMIC RELEASES CALENDAR (5 - 9 November 2012) Expected released date 5 Nov
6 Nov
7 Nov
Country China Hong Kong Korea Indonesia Japan Japan Philippines Philippines Hong Kong Japan Malaysia Philippines Singapore Singapore
Indicators HSBC Services PMI (points) Purchasing Managers’ Index (points) Foreign reserves GDP (% yoy) Leading index Coincident index Consumer price inflation (% yoy) Core consumer price inflation (% yoy) Foreign reserves (USD bn) Official reserve assets (USD bn) Foreign reserves (USD bn) Foreign reserves (USD bn) Automobiles COEs Foreign reserves (USD bn)
Period Oct Oct Oct 3Q Sep prelim Sep prelim Oct Oct Oct Oct 31 Oct Oct 7 Nov Oct
Page 6 of 7
Expected released date 8 Nov
9 Nov
5 – 9 Nov
Country Indonesia Japan Japan Malaysia Malaysia Malaysia China China China Indonesia Malaysia Malaysia Korea Thailand Indonesia Indonesia
Indicators Bank Indonesia Reference Rate (%) Machinery orders (% yoy) Total current account balance (USD bn) Industrial production (% yoy) Overnight policy rate (%) Manufacturing sales (% yoy) Consumer price index (% yoy) Industrial production (% yoy) Retails sales (% yoy) Current account balance (USD bn) Exports (% yoy) Imports (% yoy) Bank of Korea Base Rate Foreign reserves (USD bn) Foreign reserves (USD bn) Consumer confidence index (points)
Period Oct Sep Sep Sep 8 Nov Sep Oct Oct Oct 3Q Sep Sep 8 Nov 2 Nov Oct Oct
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 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Yuan Surged Though Other Currencies Basically Kept Stable. Yuan climbed to a 19-year high, testing the upper limit of its permitted trading band around the People’s Bank of China’s daily fixing. The yuan strengthened 0.22 percent to close at 6.2291 per USD. HKD, JPY and SGD only appreciated slightly and no more than 0.1%. On the other hand, IDR, KRW, MYR, PHP and VND slight slid.
•
Asian Stocks Drop as Shrinking Japan Economy. Asian stocks fell, with the regional benchmark index headed for its lowest close in a month, after Japan’s economy shrank at the fastest pace since last year’s earthquake. Japan, Indonesia’s stock markets slid 0.9% and 0.4 %, respectively. Both Malaysia and Korea markets were down by 0.2%. On the other hand, both China and Vietnam markets rose by 0.5%.
•
Oil Fluctuates as Japan Contraction Counters China, U.S. Data. Oil in New York fluctuated after its first weekly gain in a month as signs of an improving economic outlook in China and the U.S. countered concern that a contraction in Japan will curb demand. Futures were little changed after two days of gains. China’s export growth and net crude purchases rose to the highest level in five months in October, customs data showed. Oil pared an earlier advance after Japan said its economy shrank last quarter as overseas sales and consumer spending slumped.
BREAKING NEWS GLOBAL •
•
•
EU Finance Chiefs Seek to Keep Bailout on Track After Greek Vote. Greek lawmakers’ midnight approval of a 2013 austerity budget put the onus on European finance ministers meeting later today to keep their three-year crisis fight on track. The finance chiefs gathering at 5 p.m. in Brussels intend to prevent a 5 billion-euro ($6.4 billion) Greek bill redemption on Nov. 16 from triggering an accidental default, while they’re unlikely to ratify a 31.5 billion-euro payment to Greece that has been frozen since June, a European official said Nov. 9. Americans Say Europe Lesson Means Act Now as Austerity Will Fail. When the housing bubble burst in 2006, U.S. policy makers looked to Japan for clues about what to do -- and not do -- in response. Now their attention is shifting to Europe as America gets set to follow that region with a concerted attack on its budget deficit. Among the lessons being drawn: Don’t put off budget action until the financial markets demand it. Big, immediate cuts aren’t always the best way to reduce deficits. And central bankers should be ready to try to offset the economic impact of any fiscal contraction. “The lesson of Europe is, don’t wait until you’re in a crisis to act. Do it now,” said Alice Rivlin, the founding director of the Congressional Budget Office in Washington. “The other lesson is that austerity is not a good prescription for weak economies.”. U.K. Inflation Seen Eluding BOE Goal as Cost Increases Intensify. U.K. inflation probably rebounded in October as higher costs of energy and food pushed up the pace of price increases from the closest it got to the Bank of England’s target in almost three years. Data tomorrow will show consumer prices rose an annual 2.4 percent last month, compared with a 34-month low of 2.2 percent in September, according to the median forecast of 36 economists surveyed by Bloomberg News. Those figures arrive on the eve of the central bank’s quarterly economic forecasts during a three-day flurry also featuring statistics on jobs and retail sales. The Bank of England’s predictions may incorporate Governor Mervyn King’s view expressed last month that annual price gains could remain above the Bank of England’s 2 percent target.
•
India Industrial Output, Exports Decline as Economy Falters. Indian industrial production unexpectedly fell in September and the trade deficit widened to a record last month as exports declined, adding to signs that Asia’s third-largest economy is struggling. Output at factories, utilities and mines dropped 0.4 percent from a year earlier after a revised 2.3 percent gain in August, the Central Statistical Office said in a statement in New Delhi today. The trade deficit was $20.96 billion in October, the Commerce Ministry said in a separate report.
REGIONAL •
•
•
•
•
Japan’s economy shrank last quarter as exports tumbled and consumer spending slumped, putting pressure on the central bank to add stimulus and hurting Prime Minister Yoshihiko Noda’s record as he prepares for elections. Gross domestic product fell an annualized 3.5 percent, the most since the earthquake and tsunami in early 2011, Cabinet Office data showed today in Tokyo. Shipments to Asia, Europe and the U.S. all slid, as did capital spending. With analysts also seeing a GDP decline this quarter, according to a Bloomberg survey last week, Japan faces the risk of its third textbook-definition recession since 2008. The deterioration may undermine plans by Noda to implement the nation’s first sales-tax rise in more than a decade, and raises the stakes of a political impasse that’s left the government running out of cash. Japan Curbing Investment in China as Feud-Weary Firms Flee. After anti-Japan protesters in China smashed cars and torched dealerships, Koito Manufacturing Co. suspended a plan to triple output in the country. With a new factory half-built, Koito -- a Toyota Motor Corp. supplier -reasoned that it may no longer need it. “Demand from automakers is unclear, so we don’t know how long we will have to freeze the project,” said Shinji Karasawa, spokesman for the Tokyobased headlight maker. Along with Koito, Japanese parts-makers including Sumitomo Electric Industries Ltd. and Toyo Tire & Rubber Co. are rethinking plans to expand in China, where Toyota’s sales plunged 41 percent in September as demonstrations over disputed East China Sea islands flared. The manufacturers are focusing expansion plans on Thailand, Vietnam, Myanmar, Indonesia and Cambodia, a sign that this year’s drop in Japanese investment in China may deepen next year, crimping bilateral trade that has tripled to $340 billion in the last decade. China’s Loans Unexpectedly Fall as Money Supply Misses Forecasts. China’s new yuan loans unexpectedly fell in October from a year earlier and money supply rose less than forecast, damping signs the world’s second-biggest economy is recovering after a seven-quarter slowdown. Banks extended 505.2 billion yuan ($81.1 billion) of local-currency loans, down 14 percent from a year earlier, data from the Beijing-based People’s Bank of China showed today. The median estimate was 590 billion yuan in a Bloomberg News survey. M2, the broadest measure of money supply, increased 14.1 percent, compared with a median forecast of 14.5 percent. Today’s reports show weaker-than-forecast credit expansion may limit a rebound in economic growth as the ruling Communist Party holds a congress in Beijing to anoint new leaders. Vietnam 5-Year Bonds Rise as Government Plans to Issue Less Debt. Vietnam’s benchmark five-year bonds rose for a second day on speculation banks stepped up debt purchases before the government reins in issuance of the securities. The dong was steady. The National Assembly on Nov. 10 approved selling a maximum 60 trillion dong of notes for 2013, according to a posting on the government’s website the same day. That is half the planned issuance for this year that was reported by the Lao Dong newspaper on Nov. 8. Indonesia Pension Fund Increases Bets on Growth. Indonesia’s biggest pension fund is preparing to put more money into stocks and bonds, betting the fastest pace of economic growth in Southeast Asia will continue. PT Jaminan Sosial Tenaga Kerja will raise its holdings of consumer, construction and banking-related stocks that are poised to gain from a bigger middle class and government infrastructure spending, President Director Elvyn Masassya said in a Nov. 8 interview in Jakarta. The state-owned institution, known as Jamsostek, will increase its corporate-bond investments to seek better returns as yields on government notes fall toward a record low reached in February, Masassya said. Page 2 of 7
IFIs NEWS (compiled from their websites) ADB – Publication: “Improving Transitions: From School to University to Workplace” •
The ADB has published the captioned report. The report advocates, “Asian universities and secondary schools must better align with labor market needs to ensure graduates have the skills and knowledge required by employers.” The report shows Asia’s students need to be better prepared for the rigors of higher learning, including problem solving and critical thinking needed in math and science studies. The role of education in supporting human resource development is increasingly in the spotlight as more Asian countries move toward middle income status and demand grows for skilled labor to support higher economic growth. http://www.adb.org/news/schools-universities-not-adequately-aligned-asias-labor-marketneeds (Press Release) http://www.adb.org/sites/default/files/pub/2012/improving-transitions-school-universityworkplace.pdf (Report)
BIS – Speech: “Financial inclusion: the role of the Basel Process” •
The BIS has publicised the Opening remarks by Jaime Caruana, General Manager of the Bank for International Settlements, at the First Annual GPFI Conference on Standard-Setting Bodies and Financial Inclusion: Promoting Financial inclusion through Proportionate Standards and Guidance, hosted by the Financial Stability Institute at the Bank for International Settlements, Basel, 29 October 2012. http://www.bis.org/speeches/sp121109.pdf
BIS – Speech: “On time, stocks and flows: Understanding the global macroeconomic challenges” •
The BIS has publicised the essay prepared for a lecture by Claudio Borio, Deputy Head of Monetary and Economic Department and Director of Research and Statistics of the Bank for International Settlements, at the Munich Seminar series, co-organised by the University of Munich, the Ifo Institute for Economic Research and the Sueddeutsche Zeitung, Munich, 15 October 2012. http://www.bis.org/speeches/sp121109a.pdf
BIS – Publication: “Improving the BIS international banking statistics” •
The BIS has publicised the captioned report submitted by an Ad-hoc Group established by the Committee on the Global Financial System. This report documents a series of enhancements of the BIS international banking statistics (IBS) that have recently been endorsed by the Committee on the Global Financial System (CGFS) and are designed to make significant and long-lasting improvements to the IBS. The report provides a short introduction to the IBS and their main uses and discusses the nature and rationale of the forthcoming changes, which have been developed by a group of statistical experts and economists chaired by Werner Hermann (Swiss National Bank). The enhancements will provide a more comprehensive picture of national banking systems' global consolidated balance sheets, allow for a more detailed analysis of vis-à-vis country information, and help to better track banks' funding patterns and associated risks. They will also make national contributions to the IBS more complete and accessible. http://www.bis.org/publ/cgfs47.pdf
BIS – Working Paper: “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 intraeuro 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 Page 3 of 7
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.pdf IMF – Working Paper •
The IMF has publicised the following working papers: •
“Measures of Fiscal Risk in Hydrocarbon-Exporting Countries” – This study analyses risks of fiscal vulnerabilities that increased as a consequence of the substantial spending packages in recent years in several hydrocarbon-exporting countries and develops measures of fiscal risk stemming from oil price fluctuations. It is noted that countries with large net assets and proven oil reserves are much less vulnerable to fiscal risk than is indicated by standard measures based on break-even prices. http://www.imf.org/external/pubs/ft/wp/2012/wp12260.pdf
•
“Customs Administration Reform and Modernization in Francophone Sub-Saharan Africa, 1995–2010” - This paper outlines reforms that have been achieved in the modernization of the customs administrations of francophone sub-Saharan (African) countries since the mid1990s. http://www.imf.org/external/pubs/ft/wp/2012/wp12259.pdf
•
“Long-Run and Short-Run Determinants of Sovereign Bond Yields in Advanced Economies” - We analyze determinants of sovereign bond yields in 22 advanced economies over the 1980-2010 period using panel cointegration techniques. The application of cointegration methodology allows distinguishing between long-run (debt-to-GDP ratio, potential growth) and short-run (inflation, short-term interest rates, etc.) determinants of sovereign borrowing costs. http://www.imf.org/external/pubs/ft/wp/2012/wp12271.pdf
•
“On the Sources and Consequences of Oil Price Shocks: the Role of Storage” - Building on recent work on the role of speculation and inventories in oil markets, we embed a competitive oil storage model within a DSGE model of the U.S. economy. We find that business-cycle driven oil demand shocks are the most important drivers of U.S. oil price fluctuations during 1982-2007. Disregarding the storage facility in the model causes a considerable upward bias in the estimated role of oil supply shocks in driving oil price fluctuations. http://www.imf.org/external/pubs/ft/wp/2012/wp12270.pdf
OECD – Publication: “Looking to 2060: Long-term growth prospects for the world” •
The OECD has published the captioned report. It says, “The balance of economic power is expected to shift dramatically over the next half century, with fast-growing emerging-market economies accounting for an ever-increasing share of global output. The United States is expected to cede its place as the world's largest economy to China, as early as 2016. India’s GDP is also expected to pass that of the United States over the long term. Combined, the two Asian giants will soon surpass the collective economy of the G7 nations. Fast-ageing economic heavyweights, such as Japan and the euro area, will gradually lose ground on the global GDP table to countries with a younger population, like Indonesia and Brazil.” http://www.oecd.org/newsroom/balanceofeconomicpowerwillshiftdramaticallyoverthenext50y earssaysoecd.htm (Press Release)
Page 4 of 7
http://www.oecd.org/economy/economicoutlookanalysisandforecasts/lookingto2060.htm (Portal site) http://www.oecd.org/eco/economicoutlookanalysisandforecasts/2060%20policy%20paper%20 FINAL.pdf (Report) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 9-Nov 12-Nov close China 6.2980 6.2430 6.2430 6.2295 Hong Kong 7.7698 7.7515 7.7515 7.7508 Indonesia 9,126.0 9,634.0 9,634.0 9,638.0 Japan 76.8 79.49 79.49 79.47 Korea 1,150.8 1,087.9 1,087.9 1,088.7 Malaysia 3.1507 3.0633 3.0633 3.0638 Philippines 43.765 41.068 41.068 41.102 Singapore 1.2906 1.2244 1.2244 1.2234 Thailand 31.5 30.6 30.6 30.6 Vietnam 21,031.0 20,840.0 20,840.0 20,848.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.22 0.01 -0.04 0.03 -0.07 -0.02 -0.08 0.08 0.00 -0.04
2012 YTD (%chg) 1.1 0.2 -5.3 -3.4 5.7 2.8 6.5 5.5 2.7 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
9-Nov 2,069.1 21,384.4 4,333.6 8,757.6 1,904.4 1,641.1 5,468.8 3,009.6 1,290.8 386.7
OVERNIGHT LENDING RATE (%) 9-Nov 12-Nov bps change 2.620 2.520 -10.00 0.098 0.098 0.00 4.170 4.166 -0.36 0.103 0.098 -0.50 2.750 2.750 0.00 3.000 3.000 0.00 1.830 1.897 6.70 0.042 0.042 0.00 2.750 2.750 0.00 2.875 2.813 -6.20
12-Nov
% change
2,079.3 21,430.3 4,318.6 8,676.4 1,900.9 1,637.6 5,470.7 3,005.8 1,294.3 388.6
0.49 0.21 -0.35 -0.93 -0.19 -0.21 0.03 -0.13 0.27 0.49
2012 YTD (%chg) -5.5 13.5 11.9 2.6 1.4 8.1 23.7 11.7 26.2 11.0
3-MONTH INTERBANK LENDING RATE (%) 9-Nov 12-Nov bps change 3.741 3.756 1.52 0.396 0.398 0.14 4.915 4.919 0.40 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.534 0.548 1.40 0.379 0.379 0.00 2.873 2.872 -0.08 6.792 7.444 65.20
CREDIT DEFAULT SWAP (IN BPS) 9-Nov 12-Nov bps change China 71.8 71.8 0.00 Hong Kong * n.a. n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 68.4 68.1 -0.22 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price
Page 5 of 7
9-Nov Gold Spot (in US$ per ounce)
12-Nov
1,731.1
% change
1,734.6
0.21
Source: Bloomberg
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 Ba2 -Baa1 B1
Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods/serv (US$bn) 504.3 139.1 55.0 69.9 150.9 58.0 19.7 122.5 54.3 29.9
Short-term external debt (US$bn) 588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of import cover)
Reserves over short term debt
6.5 2.2 2.0 18.2 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
DATA RELEASES FOR THE DAY Country
Indicators
Period
CHINA
New Yuan Loans (RMB bn)
Oct
JAPAN JAPAN JAPAN
Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)%
3Q P 3Q P 3Q P
Last 505.2 -0.9 -3.50 -0.90
Previous 623.2 0.2 0.7 -0.3
Page 6 of 7
SELECTED ECONOMIC RELEASES CALENDAR (5 - 9 November 2012) 11/12/2012
11/12/2012
11/13/2012
11/14/2012 11/15/2012 11/16/2012
CHINA
New Yuan Loans (RMB bn)
CHINA
New Yuan Loans (RMB bn)
Oct
JAPAN JAPAN JAPAN PHILIPPINES JAPAN JAPAN SOUTH KOREA CHINA SINGAPORE PHILIPPINES THAILAND SINGAPORE SINGAPORE MALAYSIA SINGAPORE Indonesia
Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)% Total Exports (YoY)% Capacity Utilization (MoM)% Industrial Production YOY% Unemployment Rate (SA)% Actual FDI (YoY)% Retail Sales (YoY)% Overseas Remittances (YoY)% Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% Current Account Balance (MYR mn) Non-oil Domestic Exports (YoY)% Consumer confidence index (points)
3Q P 3Q P 3Q P Sep Sep F Sep F Oct Oct Sep Sep Nov 9 3Q F 3Q F 3Q Oct Oct
Oct
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 14 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian shares ended higher on Wednesday, rising after several days of declines, as the conclusion of China's 18th Party Congress helped Chinese markets. The biggest beneficiary was Hong Kong, where the Hang Seng Index which ended the day up 1.2% higher at 21441.99, The Shanghai Composite also added 0.4% to end at 2055.42. The softening in the yen after Japanese Prime Minister Yoshihiko Noda offered to dissolve parliament in a matter of days if the opposition agrees to key legislation, occurred too late in the day to help Japanese stocks. The Nikkei Stock Average finished up just 0.04% to 8664.73, allowing the market to snap a seven-day losing streak by the barest of margins. The MSCI Asia Pacific Index added 0.2 percent as of 3:17 p.m. in Tokyo as Standard & Poor’s 500 Index futures rose 0.4 percent.
•
Oil Trades Near One-Week Low on U.S. Stockpiles, Demand Outlook. Oil traded near the lowest price in a week in New York before a report forecast to show U.S. stockpiles rose to the highest level since July and after the International Energy Agency cut its demand forecasts. Crude for December delivery was at $85.54 a barrel, up 16 cents, in electronic trading on the New York Mercantile Exchange at 2:43 p.m. Singapore time. The contract declined 19 cents to $85.38 yesterday, the lowest close since Nov. 8. Prices have lost 13 percent this year.
BREAKING NEWS GLOBAL •
Euro Crisis Weighs on Germany's Economy. Economic expectations in Germany fell well below consensus forecasts in November, the latest sign that the euro zone's largest economy is likely to deteriorate over the next six months as the currency bloc's debt crisis drags on, data showed Tuesday. The Center for European Economic Research, also known as ZEW, said its closely watched economic index fell to -15.7 in November from -11.5 in October. Experts polled by Dow Jones Newswires had forecast an increase to -10. The decline in the ZEW index dashes hopes that the German economy will escape the broader slowdown in the euro zone, and adds weight to the possibility that it could contract in the fourth quarter. ZEW attributed its negative assessment partly to disappointing leading indicators, including a 3.3% drop in manufacturing orders and a 1.8% drop in industrial output in September from August. German exports also fell 2.5% in September from August, as orders from the European Union, and in particular the euro zone, dried up.
•
Lenders at Odds Over Greek Debt. Differences among Greece's official lenders about how to reduce the country's debt to manageable levels spilled into the open late Monday, as the head of the International Monetary Fund emphasized she opposed euro-zone efforts to avoid making significant debt concessions to Greece. The public show of disagreement after a meeting of euro-zone finance ministers meeting here indicated that lenders have a lot of work to do to settle on how to release a long-delayed €31.5 billion ($40 billion) aid payment. Pressure to secure a deal immediately was lifted when officials indicated that Greece would be able to roll over some €5 billion in short-term debt maturing Friday. Without a rollover Athens would have defaulted on that debt. Ministers called for a special meeting for Nov. 20 and expressed confidence that they could still find a way to agree to the payment then. Christine Lagarde, the IMF's managing director, said Greece's government debt should be reduced to 120% of annual economic output by 2020. Greece's latest budget forecasts show
the country's debt peaking at more than 190% in 2014. On Sunday night Greece's Parliament passed a new round of spending cuts for its 2013 budget, but its deeper-than-expected recession means the country will need European financing for an additional two years. REGIONAL
•
Japan PM Sets Conditions for Early Election. Japanese Prime Minister Yoshihiko Noda laid down a bold challenge to the opposition on Wednesday, offering to dissolve parliament within the next two days if they agree to key legislation. Speaking directly to the chief opposition leader Shinzo Abe in a parliamentary debate, Mr. Noda said that if the opposition votes for a deficit-covering bond issuance bill this week and agrees to major electoral reform at the next ordinary session of parliament in 2013, he will dissolve the lower house on Friday. While he did not propose a date for an election, a poll would have to come 40 days after parliament is dissolved. With the Cabinet's approval rating now under 20% by most polls, the ruling party is widely expected to be soundly defeated in any poll, paving the way for a return to power by Mr. Abe's Liberal Democratic Party, which had ruled Japan for almost all of the post-World War II period. With authorization of deficit-covering bonds long held up by the opposition, the government has been at risk of running out of money to operate, making the matter pressing. Mr. Noda also wants the LDP to support reforms to Japan's lopsided electoral districts–which favors rural voters–as well as a major reduction on the number of parliamentary seats.
•
Hong Kong Financial Chief Rejects Calls for Review of Dollar Peg. Hong Kong Financial secretary John Tsang rejected calls from lawmakers to review the city’s 29- year-old dollar peg amid rising concern asset prices are being driven to unsustainable levels by record-low borrowing costs. The exchange-rate system ties the city’s monetary policy to that of the U.S., where the Federal Reserve is using near-zero interest rates to help the economy recover from a recession. Linking the Hong Kong dollar to a basket of currencies won’t have much effect on local rates, Tsang told the Legislative Council today. “It is not transparent enough and is more complex and hard to understand,” he said. “A peg to a basket is still a fixed exchange-rate system and it also takes away an independent monetary policy. Interest rates wouldn’t be much different from the current levels.”Hong Kong’s home prices more than doubled in the past three years and have surpassed their 1997 peak, fueled by low interest rates and purchases by mainland Chinese. The Hong Kong Monetary Authority bought a combined $4.2 billion of the U.S. currency this month, defending the upper limit of the peg for the first time in three years, as a third round of asset purchases by the Federal Reserve boosted the supply of the greenback.
•
U.S. Looks to Indonesia for Big Trade Boost. The U.S. hopes to double its trade with Indonesia over the next five years, as Southeast Asia's largest economy continues to expand and consume more American goods and services, America's international trade chief, Francisco Sanchez, said. Sanchez also said that as Indonesia continues to grow and U.S. companies get more excited about the opportunities here, trade between the two nations could grow to $60 billion per year over the next five years from around $30 billion today. The U.S. runs an annual trade deficit with Indonesia of about $5 billion. Sanchez also said that U.S. trade with the 10 nations of the Association of Southeast Asian Nations has ballooned, making them increasingly important trading partners. Mr. Sanchez said while he's hoping a trade boost from Southeast Asia, Indonesia and other Southeast Asian countries need to take more steps to make it easier for international companies to do business. The U.S. would like to see fewer restrictions on pharmaceutical and health-care equipment and quicker processing of imports. And corruption remains a worry in some countries in the region.
Page 2 of 6
•
Indonesia Mulls Minimum Wage Boost Amid Protests: Southeast Asia. Indonesia may boost the average minimum wage by as much as 50 percent next year as labor groups demand higher pay amid economic growth that has exceeded 6 percent for eight straight quarters. The government may raise the lowest required compensation to an average of 2 million rupiah ($208) a month, Industry Minister Mohamad S. Hidayat said yesterday in Jakarta. The Confederation of Indonesian Labor Unions is seeking an increase to 2.5 million rupiah from 1.5 million rupiah, Andi Gani Nena Wea, the group’s president, said in an interview. Indonesia’s minimum wage is among the highest in the world relative to average salaries at 65 percent, according to the Organization of Economic Cooperation and Development’s September economic survey. Representatives of Indonesian businesses, labor groups, academics and the government are in talks under a so-called wage council to decide on the increase, with Jakarta expected to make a decision Nov. 20, Dita Indah Sari, an expert staff member at the Manpower and Transmigration Ministry, said last week. The latest survey in the capital shows a minimum living cost of 1.99 million rupiah, which will have to be adjusted for variables such as inflation and labor market conditions, Indah Sari said. The final increase may bring the minimum wage to 2.1 million rupiah, she said.
•
Lagarde Woos Southeast Asia as Region Cuts IMF Reliance. Fresh from yet another meeting in Brussels on Europe’s debt crisis, IMF Managing Director Christine Lagarde today kicks off a three- country tour of Southeast Asia, which is thriving after emerging from turmoil more than a decade ago. Her week-long visit, which starts in Malaysia and includes the Philippines and Cambodia, builds on ties that took years to mend after the 1997 Asian financial crisis forced some countries into unpopular IMF austerity policies. Now the fund is seeking to maintain its influence in a region that is helping power the world economy while reducing its reliance on the IMF’s financial support. For Lagarde, who spent most of her first 17 months at the IMF consumed by Europe’s debt crisis, the trip also shows appreciation for the contribution Malaysia and the Philippines made to a $461 billion increase in the fund’s resources this year, when the U.S. and Canada abstained. The visit, which mixes meetings with officials and business leaders, concludes Nov. 20 in Cambodia with the East Asia Summit. Her goal is to “engage, listen and exchange views about the global economy,” Anoop Singh, who heads the IMF’s Asia- Pacific department, said in a phone interview last week. Lagarde’s initial stop is also her first trip as IMF chief to Malaysia, which turned down the fund’s assistance during the Asian currency crisis and implemented capital controls.
IFIs NEWS (compiled from their websites) ADB – Publication: “ADB’s Response to Natural Disasters and Disaster Risks •
The ADB has published the captioned report. “The growing incidence of natural disasters in Asia and the Pacific—where four of five cities globally classified as at extreme risk are located— threatens to undermine seriously rapid economic progress, calling for a much stronger focus among governments on disaster prevention. This study calls for projects and programs to put a far greater emphasis on improving disaster prevention. Much wider recognition is needed of the fact that natural disasters, particularly storms and floods, are becoming endemic and that their increasing frequency and severity can slash economic growth and development.” http://www.adb.org/news/investments-disaster-risk-management-essential-sustaining-growthand-reducing-poverty (Press Release) http://www.adb.org/sites/default/files/news/IED-disaster-management.pdf (Report)
BIS – Publication: “OTC derivatives market activity in the first half of 2012” •
The BIS has published the captioned report, which summarises key developments in the first half of 2012. “Total notional amounts outstanding of OTC derivatives amounted to $639 trillion at end-June 2012, down 1% from end-2011. The appreciation of the US dollar against key Page 3 of 6
currencies between end-2011 and end-June 2012 contributed to the decline by reducing the US dollar value of contracts denominated in euros in particular. Interest rate contracts fell slightly to $494 trillion. Credit derivatives notional amounts also declined, to $27 trillion. In contrast, foreign exchange contracts outstanding rose to $67 trillion.” http://www.bis.org/publ/otc_hy1211.htm (Press Release) http://www.bis.org/publ/otc_hy1211.pdf (Report) FSB – Press Release: FSB Regional Consultative Group for Asia holds its third meeting •
The FSB Regional Consultative Group (RCG) for Asia held its third meeting on 12 Nov 2012 in Seoul, South Korea. http://www.financialstabilityboard.org/press/pr_121112.pdf
G20 – Event: G20 Trade and Investment Promotion Summit •
In response to the recommendations issued by the B20 Taskforce on Trade and Investment, ProMéxico, OECD, UNCTAD and ITC organized the first summit that brings together both the Trade Promotion Organizations and Investment Promotion Agencies of the G20 member states. The G20 Trade and Investment Promotion Summit is meant to initiate an ongoing dialogue between agencies, and include trade and investment on future agendas of the B20 and G20. http://www.g20tipsummit.mx/
IEA – Publication: “World Energy Outlook 2012” •
The IEA has launched the 2012 edition of the World Energy Outlook. It says, “The global energy map is changing in dramatic fashion. North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency.” http://www.iea.org/newsroomandevents/pressreleases/2012/november/name,33015,en.html (Press Release) http://www.iea.org/publications/freepublications/publication/name,33339,en.html (Summary Report)
Vienna Initiative – Press Release: Fifth Full Forum Meeting in Brussels •
The European Bank Coordination (“Vienna”) Initiative held its fifth Full Forum Meeting in Brussels on 9 November, 2012. It introduced, “As a practical application of the principles of dialogue between the public and private sector embodied in the Vienna Initiative, an innovative Host Country Cross-Border Forum was convened in late October by the Croatian National Bank.” http://www.imf.org/external/np/sec/pr/2012/pr12430.htm
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 12-Nov 14-Nov close China 6.2980 6.2430 6.2295 6.2252 Hong Kong 7.7698 7.7515 7.7508 7.7507 Indonesia 9,126.0 9,634.0 9,638.0 9,630.0 Japan 76.8 79.49 79.5 79.98 Korea 1,150.8 1,087.9 1,088.7 1,085.1 Malaysia 3.1507 3.0633 3.0638 3.0631 Philippines 43.765 41.068 41.102 41.13 Singapore 1.2906 1.2244 1.2228 1.2221 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,840.0 20,848.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.07 0.00 0.08 -0.60 0.33 0.02 -0.07 0.06 -0.16 -0.01
2012 YTD (%chg)
1.2 0.2 -5.2 -4.0 6.1 2.9 6.4 5.6 2.5 0.9
Page 4 of 6
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
12-Nov 2,079.3 21,430.3 4,318.6 8,676.4 1,900.9 1,637.6 5,470.7 3,007.6 1,294.5 388.6
OVERNIGHT LENDING RATE (%) 12-Nov 14-Nov bps change 2.520 2.300 -22.00 0.098 0.098 0.00 4.166 4.167 0.10 0.100 0.098 -0.25 2.750 2.750 0.00 3.000 3.000 0.00 1.897 3.799 190.20 0.031 0.031 0.00 2.750 2.750 0.00 2.813 2.200 -61.30
14-Nov
% change
2,055.4 21,442.0 4,351.3 8,664.7 1,894.0 1,631.7 5,451.1 2,981.4 1,283.8 387.7
-1.15 0.05 0.76 -0.13 -0.36 -0.36 -0.36 -0.87 -0.82 -0.23
2012 YTD (%chg) -6.5 13.6 12.8 2.5 1.0 7.7 23.3 10.8 25.2 10.8
3-MONTH INTERBANK LENDING RATE (%) 12-Nov 14-Nov bps change 3.756 3.770 1.40 0.398 0.398 -0.04 4.919 4.915 -0.40 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.548 0.691 14.30 0.379 0.379 0.00 2.872 2.872 -0.08 7.444 7.000 -44.40
CREDIT DEFAULT SWAP (IN BPS) 12-Nov 14-Nov bps change China 71.8 71.8 0.00 Hong Kong * 45.3 n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 68.3 69.6 1.29 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 12-Nov Gold Spot (in US$ per ounce)
1,728.2
14-Nov
% change
1,725.9
-0.14
Source: Bloomberg
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 6
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS 3 months imports of goods & services (US$bn)
Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
504.3 139.1 50.5 70.9 150.9 58.0 19.7 122.5 54.3 29.9
Indicators
Unemployment Rate (SA)%
Import cover (Qtrs of imports covered by reserves)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
DATA RELEASES FOR THE DAY
Country
SOUTH KOREA
Short-term external debt (US$bn)
Period
Oct
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Last
Previous
3.0
3.1
SELECTED ECONOMIC RELEASES CALENDAR (12 - 16 November 2012) 11/12/2012
11/12/2012
11/13/2012
11/14/2012 11/15/2012 11/16/2012
CHINA
New Yuan Loans (RMB bn)
Oct
CHINA
New Yuan Loans (RMB bn)
Oct
JAPAN JAPAN JAPAN PHILIPPINES JAPAN JAPAN SOUTH KOREA CHINA SINGAPORE PHILIPPINES
Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)% Total Exports (YoY)% Capacity Utilization (MoM)% Industrial Production YOY% Unemployment Rate (SA)% Actual FDI (YoY)% Retail Sales (YoY)% Overseas Remittances (YoY)%
3Q P 3Q P 3Q P Sep Sep F Sep F Oct Oct Sep Sep
HONG KONG HONG KONG MALAYSIA MALAYSIA SINGAPORE SINGAPORE SINGAPORE SINGAPORE THAILAND
Foreign Reserves (USD bn) Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% GDP (YoY)% GDP (QoQ)% Current Account Balance (MYR mn) GDP (YoY)% GDP sa (QoQ)% GDP YoY%
3Q 3Q 3Q 3Q Oct Oct 3Q F 3Q F Nov 9
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 15 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asia Stocks Outside Japan Drop; Japan Shares Rise on Poll. Asian stocks outside Japan slid toward a two-month low amid concern a budget standoff in the U.S. may curb global growth. Japanese shares gained on speculation a change of government may result in more action to stimulate the economy. The MSCI Asia Pacific Ex-Japan Index (MXAPJ) fell 1.1 percent to 433.82 as of 5:52 p.m. in Tokyo, the lowest level since September. The MSCI Asia Pacific Index, which includes Japanese shares, fell 0.2 percent today. Hong Kong’s Hang Seng lost 1.6 percent and China’s Shanghai Composite declined 1.2 percent as Xi Jinping replaced Hu Jintao as head of the Chinese Communist Party. Japan’s Nikkei 225 Stock Average (NKY) rose 1.9 percent.
•
Oil Trades Near One-Week High After Israeli Air Strikes on Gaza. Oil traded near the highest level in more than a week after Israel attacked the Gaza Strip, raising concern Middle East unrest will disrupt supplies. A report showed U.S. stockpiles rose to the most since July. Crude for December delivery was at $86.30 a barrel, down 2 cents, in electronic trading on the New York Mercantile Exchange at 4:11 p.m. Singapore time. The contract increased 94 cents, or 1.1 percent, to $86.32 yesterday, the highest settlement since Nov. 6. Prices have lost 13 percent this year.
BREAKING NEWS GLOBAL •
French Economy Grows Unexpectedly in Third Quarter. Gross domestic product in the eurozone's second largest economy rose 0.2 percent in the third quarter from the previous quarter, statistics agency Insee said. GDP in the third quarter grew 0.2 percent from the same period a year ago. Economists polled by Dow Jones Newswires had forecast zero GDP growth in the third quarter. Consumer spending rebounded, rising 0.3 precent on quarter after falling 0.2 percent in the second quarter. Export growth accelerated to 0.5 percent in the third quarter from 0.3 percent in the previous quarter. As imports shrank in the third quarter, trade contributed 0.3 percentage point to GDP growth, Insee said.
•
German Growth Slowed Less Than Forecast in Third Quarter. German growth slowed less than forecast in the third quarter. German gross domestic product climbed 0.2 percent from the second quarter, when it gained 0.3 percent, the Federal Statistics Office said in Wiesbaden today. Economists predicted a 0.1 percent increase, according to the median of 46 estimates in a Bloomberg News survey. The better-than-expected reports from France and Germany, Europe’s two largest economies may help the euro area to skirt recession. The German economy will expand 0.8 percent this year and in 2013, according to the European Commission. It predicts French GDP will rise 0.2 percent this year and 0.4 percent next year. By contrast, the commission forecasts a 0.4 percent decline in euro-area GDP this year and just 0.1 percent growth next year. It expects annual economic contractions next year in six of the 17 euro nations.
•
Australia Tries to Push Currency Down. The Reserve Bank of Australia allowed its foreign currency holdings to rise by 457 million Australian dollars (US$473 million) during the month, adding to a rise of A$891 million in the previous two months, compared with an average of just under A$50 million in the second quarter. Normally, the central bank would balance the inflow by buying Australian dollars in the spot market. The strong Australian dollar, trading up
7.5 percent since hitting its year-low in June, remains a drag on certain areas of the economy such as tourism and manufacturing. The currency is also blamed by energy and mining companies for adding to development costs and undermining the competitiveness of Australia's crucial resource exports. Despite 1.5 percentage points of interest-rate cuts over the past year and a fall in the price of key industrial commodity exports such as coal and iron ore, the Aussie dollar hasn't refused to respond by moving lower. By allowing its foreign currency reserves to grow, the RBA is using one of the only tools it has left, short of full intervention, to manage the currency. The RBA last openly intervened to influence the level of the currency during the global financial crisis in 2008, when it vigorously defended the Australian dollar as it plunged 40 percent in the space of weeks. REGIONAL
•
China Unveils New Leadership. Xi Jinping took the helm Thursday of a new, trimmed down Communist Party leadership. In a surprise move, Mr. Xi replaced outgoing Party chief Hu Jintaoas head of the powerful Central Military Commission, which controls the armed forces, making Mr. Hu the first Communist Chinese leader to cede all formal powers without bloodshed, purges or political unrest. But the new leadership lineup did not include the two figures with the strongest track record on political reform - Li Yuanchaothe head of the Party's Organization Department, and Wang Yangthe Party chief of Guangdong province - dimming prospects that a new generation of rulers is committed to tackling vested interests within its own ranks. Following Mr. Xi onto the dais in second place was Li Keqiangwho is widely expected to take over from Wen Jiabao as premier and chief steward of the world's second largest economy at a parliament meeting next year.
•
China's Banking Chief Dropped From Central Committee. China sent its strongest signal to date that its top central banker is likely to step down next year as he approaches retirement age, raising questions about who will be the next head of a central bank that has seen its global influence growing rapidly. The name of People's Bank of China Gov. Zhou Xiaochuan was absent from the list of 205 members of the Communist Party's Central Committee, a main policymaking group in China, read aloud on state television Wednesday evening. Membership of the committee is required for holding a cabinet-ranked job such as central-bank chief. Mr. Zhou, 64 years old, was appointed to the job in December 2002 and has been widely viewed as a key architect of China's financial reforms. He reaches the retirement age of 65 next year for a Chinese cabinet minister, though he doesn't have to step down immediately and China has carved out plenty of exceptions in the past.
•
China’s Bad Loans Rise for Fourth Quarter as Economy Slows. Chinese banks’ bad loans increased for a fourth straight quarter, the longest streak of deterioration since the data became available in 2004, highlighting pressures on profit growth as the economy weakens. Non-performing loans rose by 22.4 billion yuan ($3.6 billion) in the three months ended Sept. 30, to 478.8 billion yuan, the China Banking Regulatory Commission said in a statement on its website today. Bad loans increased at all types of institutions, including the largest state-owned lenders, rural banks and foreign banks, the regulator said. China’s banking system is grappling with rising defaults and weaker loan demand after economic growth decelerated for a seventh quarter. Combined net income growth at the nation’s 3,800 lenders slowed to 14 percent in the third quarter from 23 percent in the second, the regulator said today. Non-performing loans, or those overdue for at least three months, accounted for 0.95 percent of banks’ total advances as of September, up from 0.94 percent in June, according to the regulator.
•
Singapore Curbs to Slash Home Sales in 2013. Singapore home sales may fall as much as 27 percent in 2013 after climbing to a record this year as six rounds of housing curbs by the government crimps demand, according to Jones Lang LaSalle Inc. Private home sales next year may drop to 16,000 units from 22,000 units this year, said David Neubronner, the head of the Page 2 of 7
property brokerage’s Singapore residential business. The island state introduced measures including higher down-payments for second home purchases and new taxes for foreign buyers since the start of 2010, he said. Singapore home prices climbed to a record in the third quarter, prompting The Monetary Authority of Singapore or the central bank to tell banks on Oct. 5 to restrict home-loan maturities “to curb continued upward pressure on residential property prices,” in its latest attempt to avert a housing bubble. In December last year, the government imposed an additional stamp duty on foreigners and corporations buying property, and additional levies on permanent residents buying a second home and citizens purchasing a third residential property. Private home sales fell 26 percent in October from the previous month, when sales jumped to the highest in more than three years, according to data released by the Urban Redevelopment Authority today. IFIs NEWS (compiled from their websites) IMF – Press Release and Speech: Calls for Greater Regional Economic Cooperation in Asia •
Christine Lagarde, Managing Director of the IMF, highlighted the increasing leadership role that Asia plays in the global economy—and in the IMF – at the Global Public Lecture hosted by the Malaysia Economic Association. Ms. Lagarde also urged greater international policy cooperation. “Asia understands this well”, she noted. She highlighted that at the regional level, the Chiang Mai Initiative Multileralization and the emergence of the ASEAN +3 Macroeconomic Research Office (AMRO), is a good example of the ASEAN countries’ commitment to deeper cooperation. At the global level, Asia has a major and highly-respected voice in global economic governance, including through the G20 where it has six members. And Asia also plays an increasingly important role in the IMF. http://www.imf.org/external/np/sec/pr/2012/pr12432.htm (Press Release) http://www.imf.org/external/np/speeches/2012/111412.htm (Speech)
IMF – Press Release: MD Lagarde Visits Malaysia, Meets Prime Minister Najib •
The IMF has issued a press release. MD stated, “I congratulated Prime Minister Najib and his colleagues on their skillful and pragmatic economic management and continuing robust growth. Great credit is due also to Governor Zeti and the Bank Negara Malaysia. I am impressed by the government's long-term economic strategy—the Economic Transformation Program—and its vision of bringing Malaysia to advanced country status by 2020. The Malaysian authorities also recognize that policy initiatives in a number of areas can further enhance the quality and equity aspects of growth. Such reforms would focus on improving the business climate, enhancing competition, upgrading workers’ skills, and creating even more economic opportunities for all Malaysians.” http://www.imf.org/external/np/sec/pr/2012/pr12433.htm
IMF – Press Release: Launches Japanese-Funded Project to Improve External Sector Statistics in the Pacific •
The IMF has launched a three-year project this week aimed at building statistical capacity and improving external sector statistics in Pacific Island Countries. The project, funded by the Government of Japan, began with a November 13-16 workshop in Fiji, which brought together officials from nine beneficiary countries: Fiji, Kiribati, Marshall Islands, Micronesia, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu. http://www.imf.org/external/np/sec/pr/2012/pr12440.htm
IMF – Press Release: Reviews Progress in Members' Provision of Data to the Fund for Surveillance Purposes
Page 3 of 7
•
The Executive Board of the IMF considered the staff paper 2012 Review of Data Provision to the Fund for Surveillance Purposes. Executive Directors welcomed the timely review of data provision to the Fund for surveillance purposes. They noted that significant progress has been made since the last review in 2008, and considered that the current data provision framework remains adequate. Nevertheless, Directors agreed that there remains scope for strengthening its implementation within the existing resource envelope, drawing on the conclusions of the 2011 Triennial Surveillance Review and the data gaps revealed by the global financial crisis. To this end, Directors broadly supported the recommendations to further strengthen data provision and encouraged staff to continue to improve the treatment of data issues in surveillance. http://www.imf.org/external/np/sec/pn/2012/pn12125.htm (Press Release) http://www.imf.org/external/np/pp/eng/2012/082812a.pdf (Staff Paper)
IMF – Press Release: Status of Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas The IMF has issued the captioned information. As of November 9, 137 members having 75.56 percent of quotas as of November 5, 2010 had consented to their proposed quota increases under the 14th General Review of Quotas (N.B. passing 70% of threshold line). As of the same date, 125 members having 69.43 percent of the total voting power had accepted the proposed Board Reform Amendment (N.B. still short of 85% of threshold line). http://www.imf.org/external/np/pp/eng/2012/110912.pdf IMF – Working Paper: “Fiscal Rules at a Glance: Country Details from a New Dataset” •
The IMF has issued the captioned working paper. This paper provides country-specific information on fiscal rules in use in 81 countries from 1985 to end-September 2012. It serves as background material and update of the July 2012 Working Paper “Fiscal Rules in Response to the Crisis—Toward the ‘Next Generation’ Rules: A New Dataset” and is also available in an easy accessible electronic data visualization tool (http://www.imf.org/external/datamapper/FiscalRules/map/map.htm). http://www.imf.org/external/pubs/ft/wp/2012/wp12273.pdf
World Bank – Publication: “Localizing Development: Does Participation Work?” •
The World Bank has published a new Policy Research Report analyzing participatory development efforts. This report shows that such projects often fail to be sensitive to complex contexts – including social, political, historical and geographical realities – and fall short in terms of monitoring and evaluation systems, which hampers learning. Citing numerous examples, the authors demonstrate that participatory projects are not a substitute for weak states, but instead require strong central support to be effective. http://www.worldbank.org/en/news/2012/11/14/when-do-participatory-developmentprojects-work (Press Release) http://intresources.worldbank.org/INTRES/Resources/469232-1321568702932/82737251352313091329/PRR_Localizing_Development_full.pdf (Report)
Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 14-Nov 15-Nov close China 6.2980 6.2430 6.2252 6.2302 Hong Kong 7.7698 7.7515 7.7505 7.7508 Indonesia 9,126.0 9,634.0 9,630.0 9,619.0 Japan 76.8 79.49 80.25 80.15 Korea 1,150.8 1,087.9 1,085.1 1,087.2 Malaysia 3.1507 3.0633 3.0631 3.0648 Philippines 43.765 41.068 41.13 41.177 Singapore 1.2906 1.2244 1.2232 1.2235 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,840.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.08 0.00 0.11 0.12 -0.19 -0.06 -0.11 -0.02 -0.07 0.00
2012 YTD (%chg) 1.1 0.2 -5.1 -4.2 5.9 2.8 6.3 5.5 2.4 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
14-Nov 2,055.4 21,442.0 4,351.3 8,664.7 1,894.0 1,631.7 5,451.1 2,978.0 1,279.3 387.7
OVERNIGHT LENDING RATE (%) 14-Nov 15-Nov bps change 2.300 2.270 -3.00 0.098 0.098 0.00 4.167 4.167 0.00 0.095 0.090 -0.50 2.750 2.750 0.00 3.000 3.000 0.00 3.799 3.799 0.00 0.096 0.096 0.00 2.750 2.750 0.00 2.200 2.200 0.00
15-Nov
% change
2,043.0 21,210.4 4,351.3 8,747.7 1,862.9 1,631.7 5,438.0 2,954.9 1,279.3 387.7
-0.60 -1.08 0.00 0.96 -1.64 0.00 -0.24 -0.78 0.00 0.00
2012 YTD (%chg) -7.1 12.4 12.8 3.5 -0.7 7.7 23.0 9.8 24.8 10.8
3-MONTH INTERBANK LENDING RATE (%) 14-Nov 15-Nov bps change 3.770 3.770 0.00 0.398 0.398 0.00 4.916 4.916 0.00 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.691 0.691 0.00 0.379 0.379 0.00 2.872 2.872 0.00 7.000 7.000 0.00
CREDIT DEFAULT SWAP (IN BPS) 14-Nov 15-Nov bps change China 71.8 71.8 0.00 Hong Kong * 44.5 n.a. n.a. Indonesia 165.6 165.6 0.00 Japan 69.5 72.1 2.56 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price
Page 5 of 7
14-Nov Gold Spot (in US$ per ounce)
15-Nov
1,726.5
% change
1,725.5
-0.06
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods & services (US$bn)
504.3 139.1 50.5 70.9 150.9 58.0 19.7 122.5 54.3 29.9
Short-term external debt (US$bn)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of imports covered by reserves)
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.1 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 6 of 7
DATA RELEASES FOR THE DAY Country SINGAPORE PHILIPPINES
Indicators Retail Sales (YoY)% Overseas Remittances (YoY)%
Period Sep Sep
Last 2.5 5.9
Previous 3.3 7.6
SELECTED ECONOMIC RELEASES CALENDAR (12 - 16 November 2012) 11/12/2012 11/12/2012
11/13/2012
11/14/2012 11/15/2012 11/16/2012
CHINA CHINA JAPAN JAPAN JAPAN PHILIPPINES JAPAN JAPAN SOUTH KOREA CHINA SINGAPORE PHILIPPINES HONG KONG HONG KONG MALAYSIA MALAYSIA SINGAPORE SINGAPORE SINGAPORE SINGAPORE THAILAND
New Yuan Loans (RMB bn) New Yuan Loans (RMB bn) Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)% Total Exports (YoY)% Capacity Utilization (MoM)% Industrial Production YOY% Unemployment Rate (SA)% Actual FDI (YoY)% Retail Sales (YoY)% Overseas Remittances (YoY)% Foreign Reserves (USD bn) Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% GDP (YoY)% GDP (QoQ)% Current Account Balance (MYR mn) GDP (YoY)% GDP sa (QoQ)% GDP YoY%
Oct Oct 3Q P 3Q P 3Q P Sep Sep F Sep F Oct Oct Sep Sep 3Q 3Q 3Q 3Q Oct Oct 3Q F 3Q F Nov 9
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 16 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian equities rose, with Japan’s Nikkei 225 Stock Average surging the most since March amid speculation that a December election might bring radical policy change. Japan’s Nikkei Stock Average jumped 2.2%, adding to a 1.9% surge made Thursday, with Hong Kong the only other major market gaining ground in East Asia, as the Hang Seng Index edged fractionally higher. The Shanghai Composite index fell 1.2% on Friday, extending month-to-date losses to 3% while South Korea’s Kospi edged down 0.4%. The MSCI Asia Pacific (MXAP) Index added 0.5 percent to 120.03 as of 2:41 p.m. in Tokyo, paring this week’s decline to 1%.
•
Oil Heads for Weekly Decline as Economy Counters Mideast Tension. Oil headed for the fourth weekly decline in five in New York as signs of a slowing economy in the U.S., the world’s biggest crude user, countered concern that rising tension in the Middle East may disrupt supplies. Crude for December delivery, which expires today, rose 4 cents to $85.49 a barrel in electronic trading on the New York Mercantile Exchange at 4:02 p.m. Singapore time. The more-actively traded January contract gained 1 cent to $85.88. The front-month future dropped 87 cents yesterday to $85.45 and is down 0.7 percent this week. Prices have lost 14 percent this year.
BREAKING NEWS GLOBAL •
Euro-Zone Economy Shrinks Again. The euro-zone economy contracted in the third quarter, offering little hope for the worsening global environment as rising unemployment and fiscal austerity across much of Europe undermine the region's fortunes. The euro zone hasn't grown for four straight quarters and the latest decline in gross domestic product was the second straight. Economists often define recession as two straight quarterly GDP contractions. Europe's debt crisis, which has pushed unemployment higher and forced governments to enact tax increases and spending cuts, is largely to blame for the malaise. Germany and France, the euro-zone's two largest economies, posted modest growth in the quarter. But GDP for the 17-member currency union as a whole slid 0.2% from the previous quarter, at an annualized rate, according to calculations by J.P. Morgan based on figures from the European Union's statistics agency. GDP fell 0.7% in the second quarter. That is a fraction of the 5.6% that was sliced off by the 2008-2009 recession. But the pace of contraction may accelerate in the fourth quarter, economists warned, and grip Germany and France. •
Dutch Economic Woes Deepen. The Dutch statistics agency on Thursday said the euro zone’s fifth-largest economy contracted 1.1% in the third quarter. It was one of the European Union’s worst third-quarter GDP outcomes and much worse than the flat growth for the quarter that the European Commission forecast just last week. Consumption fell 1.8% compared to the quarter a year ago. Investment was down 6.4%. Export growth slowed substantially. The Dutch government is one of the euro zone’s stalwarts, with a strong credit rating, a relatively low deficit and small debt burden. But Dutch households are shouldering some of the largest mortgage debts in Europe and real-estate prices are falling. An austerity package proposed by the government of Prime Minister Mark Rutte scales back a tax deduction for interest paid on new mortgages, which is only putting more downward pressure on house prices at a time when Dutch households are in fragile shape.
•
U.K. Data Compound Gloomy Outlook. The bleak outlook for the U.K. economy was underscored on Thursday as new data revealed a slump in spending in October and an expected increase in residential property repossessions in 2013. The Office for National Statistics said the volume of retail sales, which account for about a fifth of U.K. gross domestic product, fell 0.8% in October compared with September, the largest fall since April. The economy returned to growth in the third quarter of the year after contracting for nine consecutive months, but economists have cautioned that output could shrink again in the last three months. Underscoring the weakening outlook for the U.K. economy, the Bank of England on Wednesday cut its growth forecasts to a year-on-year rate of 1.75% in the final three months of 2013, having previously forecast an expansion of 2.0%. British consumer spending is being constrained by muted wage growth, a spike in the rate of inflation and high levels of personal debt. In addition, The prospect of rising unemployment, with the number of Britons claiming unemployment benefits in the three months to September rising by the largest amount in more than a year, will prompt consumers to keep a closer eye on their budgets.
REGIONAL •
Japan Downgrades Economic View After Contraction Last Quarter. Japan’s government downgraded its view of the economy for a fourth month, the longest streak since the global financial crisis as slumping exports and weak demand threaten to tip the country into a recession. “The Japanese economy is showing weakness recently due to the deceleration of the world economy,” the Cabinet Office said in a report released today, as it cut its assessment of consumption, investment, corporate profits and the job market. “Attention should be paid to employment and income situations in the future, and the adverse effects of deflation on the economy.” Prime Minister Yoshihiko Noda will today dissolve parliament for a general election on Dec. 16 that polls suggest he will lose. Japan is at risk of entering its third technical recession since 2008. Gross domestic product may fall 0.4 percent in this quarter, according to the median forecast in a Bloomberg survey of economists. Japanese recessions are officially defined by a government-charged panel that considers data beyond GDP figures.
•
Singapore Slump Highlights Stiff Global Headwinds. Singapore's government said Friday the economy shrank more than previously estimated in the third quarter and reported another decline in exports for October, highlighting the tough conditions in an economy tied closely to global trade trends. Gross domestic product contracted 5.9% in the July-September period from the previous quarter in seasonally adjusted, annualized terms, sharper than an October estimate of a 1.5% contraction, the Ministry of Trade and Industry said. That followed a 0.2% expansion in the April-June quarter. Manufacturing shrank 9.6% on a sequential basis in the third quarter, largely driven by a contraction in the electronics sector. Construction, usually a bright spot, didn't fare well either, dropping 17.2% from the prior quarter because of a decline in private-sector building activities. The trade ministry said economic growth this year could come in even lower than 1.5% "if the weakness in the externally oriented sectors persists into the final quarter of 2012." It had previously forecast growth of between 1.5% to 2.5% for 2012. For next year, the government forecast growth of 1%-3%, as it expects global conditions to remain difficult.
•
Tensions on the Table at Asean Summit. Territorial tensions will dominate a gathering of Southeast Asia's leaders in Cambodia this weekend as the U.S. and China look to exert influence in a region plagued by deepening disputes over resource-rich seas. Leaders from the 10-member Association of Southeast Asian Nations plus heads of state from the U.S., China, Japan, Australia and others will meet in Phnom Penh starting Sunday, where claims on the South China Sea are expected to top the agenda. The waters, which are crossed by more than half of the world's total trade, are broadly claimed by China and in part by nations including Malaysia, the Philippines and Vietnam. What are thought to be vast energy and mineral Page 2 of 7
reserves are helping to fuel the disputes. Trade pacts will be another focus at the summit. Officials are due to establish a Regional Comprehensive Economic Partnership, covering Asean members along with Australia, China, India, Japan, New Zealand and South Korea. IFIs NEWS (compiled from their websites) ADBI – Working Paper: “Regional Financial Arrangements and the International Monetary Fund” •
In a new ADBI working paper, Barry Eichengreen, a professor of economics at the University of California, Berkeley, examines the rise of regional monetary arrangements and the challenge this poses for the International Monetary Fund's (IMF) global surveillance efforts. The paper reviews how the IMF has responded to earlier regional initiatives, from the European Payments Union of the 1950s and the Gold Pool of the 1960s to the CFA franc zone and the European Monetary System. The penultimate section draws out the implications for monetary regionalism in East Asia. http://www.adbi.org/files/2012.11.06.wp394.regional.financial.arrangements.imf.pdf
BIS – Speech: “Current focus of the Basel Committee: Raising the bar” •
The BIS has publicised the remarks by Mr Stefan Ingves, Governor of Sveriges Riksbank and Chairman of the Basel Committee on Banking Supervision, at the 7th High-Level Meeting jointly organised by the Association of Supervisors of Banks of the Americas, the Basel Committee on Banking Supervision and the Financial Stability Institute, Panama City, Panama, 15 November 2012. http://www.bis.org/speeches/sp121115.pdf
BIS – Working Paper: “Emerging market local currency bonds: diversification and stability” •
The BIS has publicised the captioned working paper. “Over the past three years, cross-border inflows into emerging market (EM) local currency bonds have surged. This paper first demonstrates that domestic factors have tended to dictate the dynamics of the EM local currency government yield. Second, the paper confirms that EM local currency government yields have behaved more like safe haven yields since 2008: they have dropped, rather than increased, in response to worsening global risk sentiment. Moreover, the international role of EM local currency bonds depends crucially on the behaviour of exchange rates. Nevertheless, the further development of local currency bond markets should help strengthen the stability of the international monetary and financial system.” http://www.bis.org/publ/work391.pdf
IMF – Press Release: 2012 Article IV Consultation with Australia •
The IMF has concluded the Article IV consultation with Australia. Executive Directors commended the Australian authorities for their sound and prudent macroeconomic management, which had contributed to impressive growth, low unemployment, and subdued inflation. They noted that the economic outlook remains favorable, although risks are tilted to the downside, including a possible deterioration in external demand and elevated stress in the global financial market. Directors underscored the need to preserve adequate policy space to respond to adverse shocks and to persevere with structural adjustments aimed at facilitating more balanced growth. http://www.imf.org/external/np/sec/pn/2012/pn12127.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2012/cr12305.pdf (Staff Report) http://www.imf.org/external/pubs/ft/scr/2012/cr12308.pdf (Financial System Stability Assessment)
Page 3 of 7
http://www.imf.org/external/pubs/ft/scr/2012/cr12307.pdf (Report on the Observance of Standards and Codes (ROSC)—Summary Assessments) IMF – Press Release & Publication: Global Risks, Vulnerabilities, and Policy Challenges Facing LowIncome Countries •
The IMF’s Executive Board has met to discuss Global Risks, Vulnerabilities, and Policy Challenges Facing Low-Income Countries (LICs) in an uncertain global environment. Executive Directors considered appropriate and timely the report’s focus on risks to low-income countries from a sharp downturn in global growth, a more protracted slowdown in growth, and a spike in food and fuel prices. They concurred with staff’s policy recommendations, while emphasizing the importance of a more discriminating analysis based on individual country or regional differences. http://www.imf.org/external/np/sec/pn/2012/pn12128.htm (Press Release)
•
The IMF has also publicised the policy paper. “The rapid recovery in many low-income countries (LICs) following the global crisis has been sustained in 2012. Softening commodity prices have led to moderating inflation pressures in most LICs. However, progress in rebuilding policy buffers has halted over the past two years, despite continued strong growth in LICs.” http://www.imf.org/external/np/pp/eng/2012/101012a.pdf (Policy Paper)
IMF – Press Release: Results of 2011 Coordinated Portfolio Investment Survey •
The IMF released preliminary results from its 2011 annual Coordinated Portfolio Investment Survey (CPIS), the only global survey of portfolio investment holdings. For the 73 economies that reported data for both 2010 and 2011, cross-border holdings of securities decreased 3.1 percent in 2011, to US$38.9 trillion, from $40.1 trillion in 2010. The decrease resulted from a decline in the value of equity holdings (the value of holdings of debt instruments for the 73 economies declined by $0.1 trillion in 2011), reflecting lower equity prices in a number of economies. Complete CPIS results are available on the IMF website at http://cpis.imf.org/. http://www.imf.org/external/np/sec/pr/2012/pr12438.htm
IMF – Working Paper: “Public Investment in Resource-Abundant Developing Countries” •
The IMF has publicised the captioned working paper. “Natural resource revenues provide a valuable source to finance public investment in developping countries, which frequently face borrowing constraints and tax revenue mobilization problems. This paper develops a dynamic stochastic small open economy model to analyze the macroeconomic effects of investing natural resource revenues, making explicit the role of pervasive features in these countries including public investment inefficiency, absorptive capacity consrtraints, Dutch disease, and finance needs to sustain capital.” http://www.imf.org/external/pubs/ft/wp/2012/wp12274.pdf
World Bank – Appointment: Global Fund Appoints Mark Dybul as Executive Director •
The Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria appointed as its new Executive Director Ambassador Mark R. Dybul, a former United States Global AIDS Coordinator. http://www.theglobalfund.org/en/mediacenter/newsreleases/2012-1115_Global_Fund_Appoints_Mark_Dybul_as_Executive_Director/
Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 15-Nov 16-Nov close China 6.2980 6.2430 6.2339 6.2355 Hong Kong 7.7698 7.7515 7.752 7.7518 Indonesia 9,126.0 9,634.0 9,629.0 9,629.0 Japan 76.8 79.49 81.17 80.99 Korea 1,150.8 1,087.9 1,086.7 1,092.2 Malaysia 3.1507 3.0633 3.0663 3.07 Philippines 43.765 41.068 41.25 41.332 Singapore 1.2906 1.2244 1.2237 1.2282 Thailand 31.5 30.6 30.7 30.8 Vietnam 21,031.0 20,840.0 20,848.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.03 0.00 0.00 0.22 -0.50 -0.12 -0.20 -0.37 -0.03 -0.01
2012 YTD (%chg) 1.0 0.2 -5.2 -5.2 5.4 2.6 5.9 5.1 2.3 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
15-Nov 2,030.3 21,108.9 4,351.3 8,829.7 1,870.7 1,631.7 5,414.8 2,945.9 1,274.0 386.9
OVERNIGHT LENDING RATE (%) 15-Nov 16-Nov bps change 0.000 0.000 0.00 0.098 0.098 0.00 4.167 4.167 0.00 0.095 0.098 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.698 2.732 3.40 0.179 0.179 0.00 2.750 2.750 0.00 1.923 1.786 -13.70
16-Nov
% change
2,014.7 21,159.0 4,351.3 9,024.2 1,860.8 1,629.3 5,439.3 2,950.5 1,279.0 385.7
-0.77 0.24 0.00 2.20 -0.53 -0.15 0.45 0.15 0.39 -0.31
2012 YTD (%chg) -8.4 12.1 12.8 6.7 -0.8 7.6 23.0 9.6 24.7 10.2
3-MONTH INTERBANK LENDING RATE (%) 15-Nov 16-Nov bps change 3.771 3.778 0.67 0.397 0.397 0.00 4.916 4.916 0.00 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.770 0.906 13.60 0.379 0.378 -0.17 2.872 2.872 0.00 6.614 7.180 56.60
CREDIT DEFAULT SWAP (IN BPS) 15-Nov 16-Nov bps change China 71.8 71.8 0.00 Hong Kong * 42.7 n.a n.a Indonesia 165.6 165.6 0.00 Japan 69.7 70.3 0.62 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price
Page 5 of 7
15-Nov Gold Spot (in US$ per ounce)
16-Nov
1,715.8
% change
1,711.9
-0.23
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods & services (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
Short-term external debt (US$bn)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of imports covered by reserves)
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 6 of 7
DATA RELEASES FOR THE DAY Country
HONG KONG HONG KONG SINGAPORE SINGAPORE SINGAPORE SINGAPORE THAILAND
Indicators
GDP (YoY)% GDP sa (QoQ)% GDP (YoY)% GDP (QoQ)% Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Foreign Reserves (USD bn)
Period
3Q 3Q 3Q F 3Q F Oct Oct Nov 9
Last
1.3 0.6 0.3 -5.9 7.9 -0.8 180.52
Previous 1.2 -0.1 1.3 0.5 -3.6 -16.6 180.5
SELECTED ECONOMIC RELEASES CALENDAR (12 - 16 November 2012) 11/12/2012 11/12/2012
11/13/2012
11/14/2012 11/15/2012 11/16/2012
CHINA CHINA JAPAN JAPAN JAPAN PHILIPPINES JAPAN JAPAN SOUTH KOREA CHINA SINGAPORE PHILIPPINES HONG KONG HONG KONG MALAYSIA MALAYSIA SINGAPORE SINGAPORE SINGAPORE SINGAPORE THAILAND
New Yuan Loans (RMB bn) New Yuan Loans (RMB bn) Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)% Total Exports (YoY)% Capacity Utilization (MoM)% Industrial Production YOY% Unemployment Rate (SA)% Actual FDI (YoY)% Retail Sales (YoY)% Overseas Remittances (YoY)% Foreign Reserves (USD bn) Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% GDP (YoY)% GDP (QoQ)% Current Account Balance (MYR mn) GDP (YoY)% GDP sa (QoQ)% GDP YoY%
Oct Oct 3Q P 3Q P 3Q P Sep Sep F Sep F Oct Oct Sep Sep 3Q 3Q 3Q 3Q Oct Oct 3Q F 3Q F Nov 9
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 19 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Emerging-market stocks rose for the first time in eight days, led by exporters, after U.S. President Barack Obama expressed confidence that lawmakers will reach a budget agreement. The MSCI Emerging Markets Index gained 0.4 percent to 973.70 at 4:40 p.m. in Hong Kong, snapping a seven-day, 3.7 percent losing streak and rebounding from its lowest close in 10 weeks. Obama started a new round of deficit-reduction talks with congressional leaders on Nov. 16 in a bid to avoid automatic tax increases and spending cuts that threaten to throw the country into a recession. The 21 countries in the MSCI emerging-market index send about 17 percent of their exports to the U.S., World Trade Organization data show.
•
Oil gained for a second day in New York amid concern that Middle East unrest will disrupt supply and speculation the U.S. will avert automatic spending cuts and tax rises that threaten to throw the nation into a recession. West Texas Intermediate futures climbed as much as 1.5 percent after a second weekly advance, while Brent crude advanced 0.9 percent in London. Israel will continue to attack Gaza and may intensify operations, Defense Minister Ehud Barak said. U.S. President Barack Obama is “confident” of a deal on the so-called fiscal cliff, he said after Nov. 16 talks with congressional leaders.
BREAKING NEWS GLOBAL •
The U.S. economy looks set to weather the headwinds from Hurricane Sandy and the budget battles in Washington after picking up speed in the third quarter. Gross domestic product probably increased at about a 2.9 percent annual rate in July-September, according to economists from Goldman Sachs Group Inc. and Barclays Plc. That would be the fastest quarterly growth this year, beating the Commerce Department’s initial estimate of 2 percent. Help is coming from a housing recovery, strengthening job market and healthier household finances that are driving gains in consumer confidence and spending. While the damage from Sandy and an anticipated tightening of fiscal policy mean growth will decelerate this quarter and next, the world’s largest economy may emerge on stronger footing in the second half of 2013.
•
Sales of previously owned U.S. homes probably held in October near a two-year high, indicating the recovery in residential real estate is being sustained by cheap borrowing costs, economists said a report may show today. Purchases held at a 4.75 million annual rate last month, according to the median forecast of 64 economists surveyed by Bloomberg. In August, demand reached a 4.83 million rate, the most since May 2010. Propelled by the lowest mortgage rates on record, cheaper properties and improved consumer sentiment, housing is one of the economy’s sources of strength.
•
European finance ministers aim to stitch together Greece’s next aid payment this week as a sputtering euro-area economy and a spat with the International Monetary Fund cloud efforts to resolve the debt crisis. The finance chiefs are due to meet in Brussels tomorrow for the second time in a week after they agreed seven days ago to keep Greece’s bailout aid flowing. In addition to a disagreement between the European Union and IMF over softening Greece’s debt target, the ministers will attempt to re-engineer the current bailout without asking taxpayers to put up more money.
•
Even with all the concern about the so-called fiscal cliff, another confrontation over government borrowing limits and Chinese ownership of U.S. debt, foreign investors can’t get
enough Treasuries. Brazil, Belgium, Luxembourg, Russia, Switzerland, Taiwan and Hong Kong boosted their holdings of U.S. government securities by a collective $264.8 billion since the last debt ceiling debate ended in August 2011, Treasury data released Nov. 16 show. The purchases more than made up for the $123 billion decline in Treasuries owned by China, America’s biggest overseas creditor, to $1.156 trillion. The rise in international ownership shows growing confidence in the U.S. while China’s reduced stake undermines Republican assertions that the nation has gained too much influence. REGIONAL •
The Bank of Japan could buy bonds more aggressively if the government commits to lowering the world’s largest public debt, said Nobuo Inaba, a former central bank official and a possible candidate to replace Governor Masaaki Shirakawa in April. “The bank is concerned that continued massive bond purchases will lead to a worsening of the nation’s fiscal position,” Inaba said in an interview with Bloomberg on Nov. 16. “The bank could strengthen its easing and increase the impact of its policies” if the government commits to achieving fiscal health.
•
China’s new home prices rose in October in more cities than the previous month, indicating the government will refrain from relaxing curbs on the property market. Prices climbed in 35 of the 70 cities the government tracks, compared with 31 in September, according to data from the statistics bureau yesterday. Prices fell in 17 cities. Investors are gauging the government’s policy direction on real estate, rolled out over two years to rein in surging home prices that raised concerns about affordability, after the Communist Party unveiled the new generation of leaders last week. The measures have had a “relatively good” effect and the government will “steadfastly” enforce property controls, Housing Minister Jiang Weixin said in Beijing last week.
•
China’s central bank governor said convertibility will be the next step in the overhaul of the exchange-rate system as calls grow for the nation’s new leadership to deepen changes in the economy to sustain growth. “For the central bank, I think the next movement related to the yuan is going to be reform of convertibility,” Zhou Xiaochuan said at a conference in Beijing on Nov. 17. “We are going to realize it, we are moving in this direction, we need to go further, we will have some deregulation.” Zhou’s comments underscore pledges by the ruling Communist Party, which last week completed the most important phase of a once-a-decade power transition, to promote freer movement of capital in and out of the country for investment purposes and to make the exchange rate more market-based. The reforms may be part of a broader sweep of changes the nation’s new leadership, headed by Xi Jinping, will be pressured to roll out in the world’s second-biggest economy.
•
Southeast Asia is emerging resilient from a period of global turmoil, with rising investment and domestic consumption that will propel growth in coming years, the Organization for Economic Cooperation and Development said. Indonesia’s growth will average 6.4 percent from 2013 to 2017, the OECD estimated in a report yesterday, equal to that recorded in the two decades before the 1997 Asian financial crisis. The Philippines will expand about 5.5 percent a year, the OECD said, up from 5 percent in the decade through 2012, according to International Monetary Fund data. Malaysia and Thailand will see gains of about 5.1 percent, the OECD predicted. The outlook underscores President Barack Obama’s aim to strengthen U.S. trade ties with the region as its middle class swells.
•
Philippines’ Jan-Oct balance of payments surplus of $6.43b exceeded central bank’s previous estimate of about $3b, Deputy Governor Diwa Guinigundo says in mobile-phone text message. Central bank to release new BOP estimates early next week at latest.
•
Thailand’s growth slowed in the third quarter as cooling global demand hurt the nation’s exports, even as signs of a recovery in China and the U.S. signal the economy may have bottomed. Gross domestic product increased 3 percent in the three months through September from a year earlier, after expanding a revised 4.4 percent in the previous quarter, the National Economic and Social Development Board said in Bangkok today. The median of 13 Page 2 of 6
estimates in a Bloomberg News survey was 3 percent. Prime Minister Yingluck Shinawatra extended fuel subsidies and introduced wage increases after last year’s floods to spur domestic demand and offset falling exports. The central bank unexpectedly cut its benchmark rate last month as “insurance” against uncertainties, even as some policy makers in the region signal growing confidence about growth prospects next year. IFIs NEWS (compiled from their websites) ADB – Press Release: Clean-up for One of PRC's Most Polluted Lakes Intensified with ADB Loan •
A $250 million loan by the ADB to rehabilitate the fifth largest freshwater lake in the People’s Republic of China (PRC) will also test an eco-compensation program and a water emissions trading system aimed at controlling ubiquitous sources of rural water pollution. http://www.adb.org/news/clean-one-prcs-most-polluted-lakes-intensified-adb-loan ADB – Press Release: Supports Indonesia Economic Master Plan to Narrow Urban-Rural Divide through Improved Connectivity •
The ADB is supporting Indonesia’s long-term economic master plan (MP3EI) by helping to improve domestic and international connectivity. Through a $300 million program loan, ADB is partnering with the government to reduce infrastructure gaps and strengthen links to poor, rural areas, which will pave the way to more sustainable and inclusive growth. http://www.adb.org/news/adb-supports-indonesia-economic-master-plan-narrow-urban-ruraldivide-through-improved-connecti BIS – Speech: “International monetary policy interactions: challenges and prospects” •
The BIS has publicised the speech by Jaime Caruana, General Manager of the Bank for International Settlements, to the CEMLA-SEACEN conference on "The role of central banks in macroeconomic and financial stability: the challenges in an uncertain and volatile world", Punta del Este, Uruguay, 16 November 2012. http://www.bis.org/speeches/sp121116.pdf IMF – Working Paper: “Effects of Capital Flow Liberalization—What is the Evidence from Recent Experiences of Emerging Market Economies?” •
The IMF has issued the captioned working paper. “This paper analyzes the experiences of emerging market economies (EMEs) that have liberalized capital flows over the past 15 years with respect to macroeconomic performance and risks to financial stability. The results of the panel data regressions indicate that greater openness to capital flows is associated with higher growth, gross capital flows, and equity returns and with lower inflation and bank capital adequacy ratios.” http://www.imf.org/external/pubs/ft/wp/2012/wp12275.pdf OECD – Publication: “Health at a Glance: Europe 2012”
•
The captioned new joint report by the OECD and the European Commission has been published. “Health spending fell across the European Union in 2010, as cash-strapped governments curbed outlays to help cut budgetary deficits. This drop in spending per person and as a percentage of GDP reverses increases seen in the years before the economic crisis, when health spending per person grew two or three times faster than incomes in many countries. From an annual average growth rate of 4.6% between 2000 and 2009, health spending per capita fell to -0.6% in 2010. This is the first time health spending has fallen in Europe since 1975.” http://www.oecd.org/newsroom/healthspendingineuropefallsforthefirsttimeindecades.htm (Press Release) http://www.oecd.org/els/healthpoliciesanddata/HealthAtAGlanceEurope2012.pdf (Report)
Page 3 of 6
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 16-Nov 19-Nov close China 6.2980 6.2430 6.2355 6.2348 Hong Kong 7.7698 7.7515 7.7525 7.752 Indonesia 9,126.0 9,634.0 9,629.0 9,632.0 Japan 76.8 79.49 81.32 81.27 Korea 1,150.8 1,087.9 1,092.2 1,087.0 Malaysia 3.1507 3.0633 3.0700 3.0639 Philippines 43.765 41.068 41.332 41.175 Singapore 1.2906 1.2244 1.2272 1.2252 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,840.0 20,850.0 20,863.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.01 0.01 -0.03 0.06 0.48 0.20 0.38 0.16 0.03 -0.06
2012 YTD (%chg) 1.0 0.2 -5.3 -5.5 5.9 2.8 6.3 5.3 2.4 0.8
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
16-Nov 2,014.7 21,159.0 4,351.3 9,024.2 1,860.8 1,629.3 5,439.3 2,945.6 1,280.1 385.7
OVERNIGHT LENDING RATE (%) 16-Nov 19-Nov bps change 2.280 2.160 -12.00 0.098 0.098 -0.04 4.167 4.169 0.16 0.098 0.098 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.732 2.408 -32.40 0.130 0.130 0.00 2.750 2.750 0.00 1.786 2.000 21.40
19-Nov
% change
2,017.0 21,262.1 4,313.4 9,153.2 1,878.1 1,623.3 5,449.6 2,956.8 1,283.6 383.3
0.11 0.49 -0.87 1.43 0.93 -0.37 0.19 0.38 0.27 -0.62
2012 YTD (%chg) -8.3 12.6 11.8 8.3 0.1 7.2 23.2 9.9 25.2 9.5
3-MONTH INTERBANK LENDING RATE (%) 16-Nov 19-Nov bps change 3.778 3.784 0.62 0.397 0.397 0.00 4.916 4.916 0.00 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.906 0.908 0.20 0.378 0.378 0.08 2.872 2.872 0.00 7.180 7.050 -13.00
CREDIT DEFAULT SWAP (IN BPS) 16-Nov 19-Nov bps change China 71.8 71.8 0.00 Hong Kong * 42.2 n.a n.a Indonesia 165.6 165.6 0.00 Japan 71.3 71.6 0.32 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price
Page 4 of 6
16-Nov Gold Spot (in US$ per ounce)
19-Nov
1,713.7
% change
1,722.2
0.50
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods & services (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
Short-term external debt (US$bn)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of imports covered by reserves)
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 5 of 6
DATA RELEASES FOR THE DAY Country HONG KONG PHILIPPINES THAILAND THAILAND
Indicators Unemployment Rate SA% Balance of Payments (USD mn) Gross Domestic Product (YoY)% Gross Domestic Product SA (QoQ)%
Period
Last
Oct Oct 3Q 3Q
3.4 604 3.0 1.2
Previous 3.3 751 4.4 2.8
SELECTED ECONOMIC RELEASES CALENDAR (12 - 16 November 2012) 11/12/2012 11/19/2012
11/20/2012 11/21/2012 11/22/2012
11/23/2012
11/24/2012
CHINA CHINA HONG KONG THAILAND THAILAND HONG KONG MALAYSIA PHILIPPINES THAILAND SOUTH KOREA JAPAN JAPAN CHINA JAPAN MALAYSIA THAILAND THAILAND SINGAPORE VIETNAM VIETNAM VIETNAM
New Yuan Loans (RMB bn) Actual FDI (YoY)% Unemployment Rate SA% Gross Domestic Product (YoY)% Gross Domestic Product SA (QoQ)% All Industry Activity Index (MoM) % External Short-Term Debt (USD bn) Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn) HSBC Flash China Manufacturing PMI Budget Deficit/Surplus (PHP bn) CPI - Composite Index (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI YoY % Customs Imports (YoY)% Customs Exports (YoY)% CPI (YoY)% Imports YTD (YoY)% Exports YTD (YoY)% CPI (YoY) %
Oct Oct Oct 3Q 3Q Oct Nov 14 Oct Nov 16 3Q Oct Oct Nov Sep Oct Oct Oct Oct Nov Nov Nov
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 20 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Most emerging-market stocks fell after France lost its top credit rating at Moody’s Investors Service, overshadowing the biggest rally for technology companies in five weeks. The MSCI Emerging Markets Index was little changed at 978.32 as of 5:01 p.m. in Hong Kong, as 337 stocks declined and 276 rose. The gauge earlier gained as much as 0.5 percent. Moody’s cut France to Aa1 from Aaa and maintained a negative outlook for Europe’s second-largest economy. Euro-area finance ministers will meet to try to plug a hole in Greece’s public accounts and win over the International Monetary Fund.
BREAKING NEWS GLOBAL •
European finance ministers will try to plug a 15 billion-euro ($19 billion) hole in Greece’s finances and win over the International Monetary Fund in the latest instalment of three years of debt-crisis brinkmanship. Recycling European Central Bank profits on Greek bonds, charging Greece lower interest rates and extending repayment deadlines are among the options under consideration today for filling the new gap in Greece’s public accounts. European governments tore open the hole last week, by giving Greece two extra years to cut its budget deficit. The required extra financing provoked a clash with the IMF, since it would add to Greece’s debt load instead of reducing it.
•
Housing starts in October probably capped the strongest two months in four years, indicating U.S. residential construction is improving, economists said before a report today. Housing permits, a proxy for future construction, may show the gains will be sustained. Record-low mortgage rates and less risk that property values will keep falling may continue to attract buyers, giving the economy a lift. Federal Reserve Chairman Ben S. Bernanke is among those that have singled out housing as one of the industries to nurture in order to spur the economic recovery.
•
France’s government bonds fell after Moody’s Investors Service yesterday lowered the nation’s top credit rating, citing a worsening economic growth outlook. French 10-year bonds dropped for the first time in four days after Moody’s cut the nation’s rating to Aa1 from Aaa and maintained a negative outlook on the debt. Germany’s 10-year yields were three basis points from an 11-week low as European finance ministers prepare to meet in Brussels to discuss aid for Greece.
•
The Reserve Bank of Australia said more interest-rate reductions may be appropriate to spur economic growth as a mining boom wanes, minutes of its Nov. 6 policy meeting showed, sending the nation’s currency lower. “Members considered that further easing may be appropriate in the period ahead,” according to the minutes released today in Sydney. “While a gradual recovery in both dwelling and other business investment was anticipated, assisted in part by the lower level of interest rates, there was also uncertainty about the timing and magnitude of this pick-up.” At the meeting, the central bank held the overnight cash- rate target, citing a better global outlook and faster domestic inflation, after five cuts in the prior year to help extend a 21-year run without a recession. RBA Governor Glenn Stevens lowered the benchmark by 1.5 percentage points to 3.25 percent from November 2011 to October this year as the bank aims to help industries including construction rebound to offset a slower pace of resource investment.
REGIONAL •
Bank of Japan Governor Masaaki Shirakawa pushed back against pressure on the central bank, criticizing the unlimited easing advocated by opposition leader Shinzo Abe and urging respect for the BOJ’s independence. “I want respect for the BOJ’s independence as it’s doing its utmost to conduct appropriate monetary policy,” Shirakawa told reporters in Tokyo today. Without naming Abe, Shirakawa said that unlimited money- printing could worsen the national debt and that a 3 percent inflation goal, also suggested by the opposition leader, would be unrealistic. A shrinking economy and an election on Dec. 16 are encouraging politicians to press the central bank for more aggressive action to spur growth and counter deflation.
•
The Japanese government will spend 1 trillion yen ($12.3 billion) on a second round of fiscal stimulus as it tries to revive an economy at risk of sliding into recession. The government will tap reserve funds from this fiscal year’s budget, Chief Cabinet Secretary Osamu Fujimura told reporters in Tokyo today. The latest measures follow the announcement of 750 billion yen of stimulus last month. Economy Minister Seiji Maehara said last week that using reserve funds won’t be enough to support the economy and the government should compile a supplementary budget. The Bank of Japan refrained today from adding to monetary stimulus, with most analysts in a Bloomberg News survey forecasting more easing in December.
•
Foreign direct investment in China fell for the 11th time in 12 months as labor costs rose, an economic slowdown threatened to drag growth to a 13-year low and a territorial dispute with Japan weighed on trade. Investment dropped 0.2 percent in October from a year earlier to $8.31 billion, the Ministry of Commerce said in Beijing today. FDI inflows in the first 10 months of the year declined 3.5 percent to $91.7 billion, while non-financial outbound investment rose 25.8 percent to $58.2 billion.
•
China may refrain from cutting lenders’ reserve requirements for the rest of the year after an economic slowdown subsided and the central bank increased its use of a separate tool to adjust funds in the financial system. The People’s Bank of China will probably keep the reserve- requirement ratio for large lenders at 20 percent, based on the median estimate of economists in a Bloomberg News survey conducted Nov. 14-19. That compares with the halfpoint cut projected last month and the full point forecast in September. The shift in projections reflects a second month of pickups in industrial production and retail sales and the government’s reluctance to boost stimulus more aggressively as a new leadership headed by Xi Jinping takes office.
•
South Korea’s short-term overseas debt fell the most in a year as regulators encouraged banks to shift to longer-term borrowing amid Europe’s debt crisis. External debt maturing in one year or less dropped $8.1 billion to $132.6 billion as of the end of September from a quarter earlier, the Bank of Korea said in a statement today. Short-term debt fell to 31.6 percent of the total, the lowest since 1999, down from 33.8 percent in the previous quarter. The Finance Ministry will “preemptively” act against any external risks while closely monitoring changes in external debt and capital flows, it said in a separate statement today. Long- term external debt increased to $286.7 billion from a revised $275 billion in the second quarter as foreign investors boosted South Korean bond purchases, according to today’s report.
•
Malaysia’s public finances are weak relative to rating peers and offer limited scope for counter-cyclical stimulus at its current rating level of A-, Fitch Ratings writes in report. Growing provision of guarantees to government-linked borrowers is “concerning,” says Fitch. Public sector gross fixed capital formation increased 22.4% y/y in 3Q following 28.9% increase in 2Q, the ratings company says. Government and government-linked activity was expected to remain a significant contributor to growth with general elections due 1H 2013. Greater drawdown of existing federal government guarantees of debt issued by public sector Page 2 of 7
enterprises suggests increasing use of quasi-fiscal policy to support economic activity and may apply further pressure on sovereign credit profile, Fitch says. The value of outstanding debt guaranteed by Malaysian federal government is now equivalent to 15% of GDP vs 9% end-2008, suggesting growing contingent liability on sovereign. Increasing reliance on off-balance sheet funding could potentially question the meaning of 55% of GDP federal debt ceiling; the debt to GDP rose to 52.4% end-3Q. This trend may eventually lead to some form of negative rating action, says Fitch. •
Thailand’s daily minimum wage will rise to 300 baht in the remaining 70 provinces from the beginning of 2013, says Chalitrat Chandrubeksa, a deputy government spokesman. The Cabinet also approved measures to help SMEs cope with wages, and extended a diesel tax cut to end of 2012. Thailand raised minimum wages in April to 300 baht in 7 provinces including Bangkok.
•
Vietnam’s two-year bonds rose for a third day, pushing the yield to the lowest level in almost three months, on speculation inflation will slow. The dong was steady. Consumer prices in Ho Chi Minh City may rise 0.1 percent in November from the previous month, online newswire VnEconomy reported today, after increasing 0.4 percent in October. Annual inflation has averaged 5.97 percent in the second half of 2012, less than half the rate in the previous six months, official data show. Vietnam will cut interest rates in 2013 as price pressures decrease, Prime Minister Nguyen Tan Dung said Nov. 14. The yield on the two-year bonds fell five basis points, or 0.05 percentage point, to 9.36 percent, according to a daily fixing rate from banks compiled by Bloomberg. That’s the lowest since Aug. 27. The yield on benchmark five-year bonds was unchanged at 9.90 percent.
IFIs NEWS (compiled from their websites) ADB – Press Release: Developing Asian Economies Must Focus on Greener, More Inclusive Growth •
While advanced economies gradually rebuild their balance sheets, Asia’s emerging markets need to diversify sources of growth to boost GDP, ADB President Haruhiko Kuroda said during an address at the ASEAN Global Dialogue in Phnom Penh, Cambodia. http://www.adb.org/news/developing-asian-economies-must-focus-greener-more-inclusivegrowth-adb FSB – Press Release: Publishes Initial Integrated Set of Recommendations to Strengthen Oversight and Regulation of Shadow Banking •
The FSB published on 18 November 2012 for public consultation an initial integrated set of policy recommendations to strengthen oversight and regulation of the shadow banking system: (i) An Integrated Overview of Policy Recommendations; (ii) Policy Framework for Strengthening Oversight and Regulation of Shadow Banking Entities; and (iii) Policy Recommendations to Address Shadow Banking Risks in Securities Lending and Repos. The FSB also issued its Global Shadow Banking Monitoring Report 2012 (and accompanying data) analysing recent trends and risks in the shadow banking system. http://www.financialstabilityboard.org/press/pr_121118.pdf IMF – Press Release: Managing Director Christine Lagarde Concludes Visit to the Philippines •
Ms. Christine Lagarde, Managing Director of the IMF, made the following statement in Manila at the end of her visit to the Philippines: “During my discussions, I congratulated the Filipino authorities for their excellent economic stewardship during difficult times. Credit is also due to the Bangko Sentral ng Pilipinas for containing inflation and ensuring financial stability. Thanks to these good policies and reforms, the Philippines has become a vibrant emerging market that is approaching investment-grade status. Growth has averaged 5 percent over the past decade. And during the financial crisis, the Philippines remained resilient.” http://www.imf.org/external/np/sec/pr/2012/pr12444.htm IMF – Press Release: Statement by the EC, ECB, and IMF on the Sixth Review Mission to Portugal Page 3 of 7
•
Staff teams from the EC, ECB, and IMF visited Lisbon during November 12 - 19 for the sixth quarterly review of Portugal’s economic program. Upon conclusion, they issued a statement, “The program is broadly on track, despite stronger headwinds. With much already accomplished, strong commitment and perseverance need to be maintained as the program enters its second half. External and fiscal adjustment continues to advance, adequate capital and liquidity buffers have reduced financial stability risks, and structural reforms are proceeding apace. At the same time, rising unemployment, lower incomes, and uncertainty are weighing on confidence, while the recession in the euro area is beginning to bear on export dynamics. Given financing constraints and high debts, the program adequately balances the need to adjust, against the unavoidable costs of adjustment for economic activity and jobs.” http://www.imf.org/external/np/sec/pr/2012/pr12448.htm World Bank – Publication: “Turn Down the Heat”
•
A new scientific report was released that was commissioned by the World Bank. A snapshot of the latest climate science prepared for the World Bank by the Potsdam Institute for Climate Impact Research (PIK) and Climate Analytics, says that the world is on a path to a 4 degree Celsius (4°C) warmer world by end of this century and current greenhouse gas emissions pledges will not reduce this by much. http://www.worldbank.org/en/news/2012/11/18/new-report-examines-risks-of-degree-hotterworld-by-end-of-century WTO – Press Release: Adopts ruling on electrical steel
•
At a meeting on 16 November 2012, the Dispute Settlement Body adopted the Appellate Body Report and the Panel Report, as upheld by the Appellate Body Report, pertaining to the dispute over anti-dumping duties applied by China on grain oriented flat-rolled electric steel from the United States. http://www.wto.org/english/news_e/news12_e/dsb_16nov12_e.htm WTO – Press Release: Launches new “International Trade and Market Access” interactive tool
•
The “International Trade and Market Access” interactive tool, launched by the WTO on 19 November 2012, provides a new dynamic presentation for all WTO data on merchandise and commercial services trade as well as selected market access indicators from World Tariff Profiles, a WTO, ITC and UNCTAD co-publication. The tool is accessed through the WTO’s website: www.wto.org/stats. http://www.wto.org/english/news_e/news12_e/stat_19nov12_e.htm
Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 19-Nov 20-Nov close China 6.2980 6.2430 6.2348 6.2329 Hong Kong 7.7698 7.7515 7.7523 7.7517 Indonesia 9,126.0 9,634.0 9,632.0 9,640.0 Japan 76.8 79.49 81.41 81.27 Korea 1,150.8 1,087.9 1,087.0 1,082.2 Malaysia 3.1507 3.0633 3.0639 3.0608 Philippines 43.765 41.068 41.175 41.171 Singapore 1.2906 1.2244 1.2235 1.2243 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,840.0 20,860.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.03 0.01 -0.08 0.17 0.44 0.10 0.01 -0.07 -0.03 0.05
2012 YTD (%chg) 1.0 0.2 -5.3 -5.5 6.3 2.9 6.3 5.4 2.5 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
19-Nov 2,017.0 21,262.1 4,313.4 9,153.2 1,878.1 1,623.3 5,449.6 2,950.9 1,283.7 383.3
OVERNIGHT LENDING RATE (%) 19-Nov 20-Nov bps change 2.160 2.250 9.00 0.098 0.098 0.00 4.169 4.172 0.36 0.095 0.103 0.75 2.750 2.750 0.00 3.000 3.000 0.00 2.408 2.227 -18.10 0.046 0.046 0.00 2.750 2.750 0.00 2.000 2.000 0.00
20-Nov
% change
2,008.9 21,228.3 4,312.4 9,142.6 1,890.2 1,624.2 5,500.6 2,958.8 1,274.5 385.1
-0.40 -0.16 -0.02 -0.12 0.64 0.05 0.94 0.27 -0.72 0.46
2012 YTD (%chg) -8.7 12.5 11.8 8.1 0.8 7.2 24.4 9.9 24.3 10.0
3-MONTH INTERBANK LENDING RATE (%) 19-Nov 20-Nov bps change 3.784 3.789 0.54 0.397 0.397 0.00 4.916 4.916 0.00 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.908 0.681 -22.70 0.378 0.378 0.00 2.872 2.870 -0.15 7.050 6.660 -39.00
CREDIT DEFAULT SWAP (IN BPS) 19-Nov 20-Nov bps change China 71.8 71.8 0.00 Hong Kong * 41.8 n.a n.a Indonesia 165.6 165.6 0.00 Japan 71.1 71.8 0.66 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price
Page 5 of 7
19-Nov Gold Spot (in US$ per ounce)
20-Nov
1,731.7
% change
1,732.5
0.05
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods & services (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
Short-term external debt (US$bn)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of imports covered by reserves)
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 6 of 7
DATA RELEASES FOR THE DAY Country CHINA JAPAN JAPAN SOUTH KOREA
Indicators Actual FDI (yoy) BOJ Target Rate All Industry Activity Index (MoM) % External Short-Term Debt (USD bn)
Period
Last
Oct Nov 20 Sep Nov 20
-0.2% 0.10% -0.3% 132.6
Previous -6.8% 0.10% 0.1% 141.4
SELECTED ECONOMIC RELEASES CALENDAR (12 - 16 November 2012) 11/12/2012 11/19/2012
11/20/2012
11/21/2012 11/22/2012
11/23/2012
11/24/2012
CHINA CHINA HONG KONG THAILAND THAILAND
CHINA JAPAN SOUTH KOREA JAPAN MALAYSIA THAILAND THAILAND THAILAND CHINA PHILIPPINES HONG KONG MALAYSIA JAPAN SINGAPORE VIETNAM VIETNAM VIETNAM
New Yuan Loans (RMB bn) Actual FDI (YoY)% Unemployment Rate SA% Gross Domestic Product (YoY)% Gross Domestic Product SA (QoQ)%
Actual FDI (YoY)% All Industry Activity Index (MoM) % External Short-Term Debt (USD bn) Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn) HSBC Flash China Manufacturing PMI Budget Deficit/Surplus (PHP bn) CPI - Composite Index (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI YoY % Customs Imports (YoY)% Customs Exports (YoY)% CPI (YoY)% Imports YTD (YoY)% Exports YTD (YoY)% CPI (YoY) %
Oct Oct Oct 3Q 3Q
Oct Sep 3Q Oct Oct Oct Nov 16 Oct Nov Oct Oct Nov 14 Oct Oct Nov Nov Nov
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 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks gained, with the regional benchmark index headed for its highest close in two weeks, in signs the U.S. jobs markets is stabilizing and Chinese manufacturing is recovering. The MSCI Asia Pacific Index rose 0.9 percent to 122.07 as of 5:10 p.m. in Tokyo, heading for its highest close since Nov. 7. More than two shares rose for each that fell on the gauge. The measure is poised for its first weekly advance in three weeks on the back of a surge in Japanese shares and as data on China manufacturing and U.S. jobs added to signs the world’s two largest economies are on the mend.
BREAKING NEWS GLOBAL •
The European Central Bank would have veto powers over any bank mergers in nations that sign up to ECB-led supervision, under draft banking union rules designed to tame the euroarea’s debt crisis. National supervisors would notify the ECB of a proposed banking acquisition at least 10 days before the deadline for a deal to be completed, according to a compromise plan obtained by Bloomberg News. The ECB “shall decide whether to oppose the acquisition,” according to the draft measures drawn up by Cyprus, which holds the European Union’s rotating presidency. The proposals would also create a panel in the ECB to review its supervisory decisions. EU leaders agreed in June and October to move forward with common ECB-led bank supervision to separate financial-sector risks from sovereign debt troubles, with the goal of agreeing on a political framework by Jan. 1. If a common supervisor is set up next year, it would open the door for the euro area’s firewall-fund to offer direct aid to banks.
•
Euro-area services and manufacturing output shrank for a 10th month in November as the debt crisis continued to weigh on confidence across the currency bloc. A composite index based on a survey of purchasing managers in both industries rose to 45.8 from 45.7, Londonbased Markit Economics said today. Economists had forecast a November reading of 45.7, according to the median of 23 estimates a Bloomberg News survey. A reading below 50 indicates contraction. The economy of the 17 euro nations has slipped back into a recession and the European Commission cut its 2013 growth forecast this month, saying there are “concerns” about the region’s prospects. Sentiment across Europe also is being undermined by a deadlock over Greek aid and tensions between nations over European Union budget talks that start today in Brussels.
•
More Americans this month said the world’s largest economy will improve than at any time in the past decade, led by a surge among Democrats following the re-election of President Barack Obama. The share of households projecting the economy will get better rose to 37 percent in November, the highest since March 2002, according to a survey accompanying the Bloomberg Consumer Comfort Index. That propelled the survey’s monthly consumer expectations gauge to 4 from minus 7. Jobless claims fell last week, while the index of leading economic indicators advanced in October, other reports showed. Rising home values, job growth and falling gasoline prices are shoring up household finances.
REGIONAL •
A Chinese manufacturing index signaled the first expansion in 13 months, adding to signs that economic growth is rebounding after a seven-quarter slowdown. The preliminary reading was 50.4 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. It compares with a final level of 49.5 for October. A reading above 50 indicates expansion. Gains in manufacturing bolster prospects for a sustained pickup in economic growth
that slowed last quarter to the weakest pace in more than three years. A rebound may smooth a once-a-decade leadership transition for the ruling Communist Party, set to install Li Keqiang as premier in March, and reduce the likelihood of additional monetary stimulus. •
Sony Corp. and Panasonic Corp., the Japanese electronics makers reeling from record losses, had their long-term credit ratings downgraded to junk by Fitch Ratings, citing a weak recovery in the television market. Sony’s rating was cut by three levels to BB-, three steps below investment grade, with a negative outlook, Fitch said in a statement today. Panasonic’s was lowered two levels to BB, also with a negative outlook, the ratings company said in a separate statement. Both companies had their short-term ratings reduced to B from F3. The companies will struggle amid a strong yen and weakened economic conditions in Japan and overseas, Fitch said.
•
South Korea’s won fell for a second day after Deputy Finance Minister Choi Jong Ku said action needs to be taken to curb “excessive” fluctuations in the exchange rate. Government bonds declined. The currency retreated from a 14-month high after Choi said at a press briefing in Gwacheon that various steps are being studied to address won volatility, and measures on foreign-exchange forward positions may be announced next week. The won opened higher as global stocks advanced after U.S. Secretary of State Hillary Clinton and Egyptian Foreign Minister Mohamed Amr announced a cease-fire between Israel and Hamas
•
East Asian bond markets, which are outperforming developed nations, face the risk of a capital exit should an event such as the U.S. fiscal deficit trigger a recession, according to the Asian Development Bank. Regional policy makers need to increase efforts to shield their economies from another crisis even after doubling the pool of combined foreign-currency reserves to $240 billion as of May, Iwan Azis, head of the ADB’s economic integration office, said before the release of the Asian Bond Monitor today. The U.S. budget issue threatens a recovery and an agreement in Congress that doesn’t address the long-run sustainability of the deficit may not be welcomed, the Manila-based lender said in the report. A volatile debt market and swings in yields may deter both bond issuers and international investors, who raised holdings of fixedincome securities in the region last quarter, Azis said in an interview from Jakarta yesterday.
•
Thailand, the world’s biggest rubber producer, will expand a state-buying program by more than doubling purchases from farmers to support prices, according to Deputy Farm Minister Yuttapong Charasathien. Futures gained. The Southeast Asian nation will purchase a further 250,000 metric tons by March after buying 170,000 tons since May, Yuttapong said in an interview in Bangkok yesterday. The country will also proceed with plans agreed with Indonesia and Malaysia in August to cut its shipments by 150,000 tons, he said. Rubber in Tokyo has entered a bull market, rebounding from a near three-year low in August, after the three countries agreed to cut exports by a combined 300,000 tons. The rally, also driven by prospects for increased demand as China and the U.S. recover, may raise farmers’ incomes, while lifting costs for tiremakers such as Tokyo-based Bridgestone Corp.
•
Vietnam’s three-year bonds rose the most in almost four months after yields fell at a government debt auction. The dong weakened. The State Treasury sold 1 trillion dong ($48 million) of three-year notes with a 9.29 percent coupon yesterday, according to a posting on the Hanoi Stock Exchange website. The treasury sold the same tenor debt with a coupon of 9.55 percent on Nov. 13. Another 1 trillion dong of two-year securities were sold at 9.15 percent, compared with 9.35 percent previously. The yield on the three-year bonds fell 18 basis points, or 0.18 percentage point, to 9.41 percent, according to a daily fixing rate from banks compiled by Bloomberg. That’s the biggest decline since July 30 and the lowest level since Aug. 23. The yield on the benchmark five-year notes dropped eight basis points to 9.83 percent.
IFIs NEWS (compiled from their websites) ADB – Press Release: ADB Helps People's Republic of China Boost Crop Output, Food Security Page 2 of 6
•
The ADB is extending a $200 million loan to improve crop output and farming productivity in some of the People’s Republic of China’s (PRC) most important grain producing regions. Funds for the Comprehensive Agricultural Development Project will improve irrigation and drainage in about 117,000 hectares of land in Ningxia Hui Autonomous Region and Anhui, Heilongjiang, Henan, Jilin and Yunnan provinces. The provinces collectively produced more than 28% of PRC’s total grain output in 2008. http://www.adb.org/news/adb-helps-peoples-republic-china-boost-crop-output-food-security
ADB – Publication: “Asia Bond Monitor - November 2012” •
The ADB has published the latest edition of its Asia Bond Monitor. It says, “Emerging East Asia’s local currency bond markets continue to expand and are performing well, but risks loom large on the horizon.” http://www.adb.org/news/asias-regional-bond-markets-expand-many-risks-loom (Press Release) http://www.adb.org/sites/default/files/pub/2012/abm-201211.pdf (Report)
Basel Committee – Publication: “Basel III FAQs on counterparty credit risk rules” •
The Basel Committee on Banking Supervision has issued frequently asked questions (FAQs) on Basel III's counterparty credit risk rules. To promote consistent global implementation of Basel III, the Committee has agreed to periodically review frequently asked questions and publish answers along with any technical elaboration of the rules text and interpretative guidance that may be necessary. http://www.bis.org/publ/bcbs235.htm
IFC – Publication: “The Corporate Governance Scorecard for Vietnam 2012” •
A new report by IFC calls on Vietnam’s companies to strengthen corporate governance in order to enhance their competitiveness and attract local and foreign capital as they work to expand their businesses amid a tough economy. The Corporate Governance Scorecard for Vietnam 2012 reviewed the corporate governance practices of the top 100 companies listed on the Hanoi and Ho Chi Minh City stock exchanges. The results show that the average corporate governance score dropped 2.2 percentage points to 42.5 percent from last year, indicating that Vietnamese companies need to step up their efforts in the push for better corporate governance. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/BD20BF0E51CDC95785257ABE000E 81B3
IMF – Press Release: 2012 Article IV Consultation and Third Post-Program Monitoring with Mongolia •
The Executive Board of the IMF has concluded the 2012 Article IV Consultation1 and PostProgram Monitoring with Mongolia. The Executive Directors commended the authorities for an impressive record of economic growth over the last few years, but noted that there is scope to make growth more inclusive. Directors considered that the key policy challenge going forward will be to meet large investment needs without undermining macroeconomic stability. They agreed that this task would be facilitated by the recently revamped legal underpinnings of the fiscal framework. http://www.imf.org/external/np/sec/pn/2012/pn12131.htm
IMF – Press Release: Statement at the Conclusion of an IMF Staff Mission to Myanmar •
An IMF mission visited Myanmar November 5–22, 2012, to hold discussions on macroeconomic policies that could support the authorities’ ambitious reform program over the next year. It reached an understanding that could form the basis of a possible Staff-Monitored Program1 during January-December 2013. Page 3 of 6
http://www.imf.org/external/np/sec/pr/2012/pr12453.htm IMF – Publication: “Work Program of the Executive Board” •
The IMF’s Executive Board considered the IMF’s Work Program for the next twelve months. The focus will be on key policies that, building on the latest reforms, will secure recovery and lay the foundation for a more robust global financial architecture. http://www.imf.org/external/np/sec/pr/2012/pr12454.htm (Press Release) http://www.imf.org/external/np/pp/eng/2012/071012.pdf (Background paper) http://www.imf.org/external/np/pp/eng/2012/110812.pdf (MD’s statement)
World Bank – Press Release: President Jim Yong Kim to Visit China •
World Bank Group President Jim Yong Kim will visit China from November 27 to 30 – his first official visit since becoming Bank president in July 2012. http://www.worldbank.org/en/news/2012/11/22/world-bank-group-president-jim-yong-kimto-visit-china
World Bank – Publication: “Paying Taxes 2013” •
A new report from the World Bank, IFC, and PwC finds that governments continue to reform their tax systems despite global economic uncertainty, with 31 economies having taken steps from June last year through May 2012 to make it easier and cost less for small and medium businesses to pay taxes. The Paying Taxes 2013 study looks at tax regimes in 185 economies and finds that the most common tax reform is the introduction or improvement of online systems for tax compliance, which occurred in 16 economies. http://www.worldbank.org/en/news/2012/11/21/tax-reforms-continue-worldwide-despiteeconomic-turmoil-electronic-filing-increasing-especially (Press Release)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 21-Nov 22-Nov close China 6.2980 6.2430 6.2304 6.2206 Hong Kong 7.7698 7.7515 7.7509 7.7509 Indonesia 9,126.0 9,634.0 9,654.0 9,644.0 Japan 76.8 79.49 82.52 82.81 Korea 1,150.8 1,087.9 1,083.4 1,085.7 Malaysia 3.1507 3.0633 3.0620 3.061 Philippines 43.765 41.068 41.135 41.085 Singapore 1.2906 1.2244 1.2247 1.2253 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,840.0 20,850.0 20,863.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.16 0.00 0.10 -0.35 -0.22 0.03 0.12 -0.05 -0.07 -0.06
2012 YTD (%chg)
1.2 0.2 -5.4 -7.3 6.0 2.9 6.5 5.3 2.4 0.8
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
21-Nov 2,030.3 21,524.4 4,317.3 9,222.5 1,884.0 1,623.0 5,534.2 2,960.3 1,276.4 383.9
22-Nov 2,015.6 21,743.2 4,335.9 9,366.8 1,899.5 1,619.4 5,513.4 2,986.3 1,279.2 383.2
% change -0.72 1.02 0.43 1.56 0.82 -0.22 -0.38 0.88 0.22 -0.17
2012 YTD (%chg) -8.4 15.2 12.4 10.8 1.3 6.9 24.7 11.0 24.8 9.5
Page 4 of 6
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (%) 21-Nov 22-Nov bps change 2.100 2.320 22.00 0.098 0.098 -0.04 4.173 4.172 -0.12 0.100 0.100 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.152 0.935 -121.70 0.028 0.028 0.00 2.750 2.750 0.00 2.000 2.000 0.00
3-MONTH INTERBANK LENDING RATE (%) 21-Nov 22-Nov bps change 3.790 3.798 0.79 0.397 0.397 0.00 4.914 4.915 0.12 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.729 0.844 11.50 0.378 0.378 0.00 2.871 2.871 0.00 7.250 7.067 -18.30
CREDIT DEFAULT SWAP (IN BPS) 21-Nov 22-Nov bps change China 71.8 71.8 0.00 Hong Kong * 44.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 71.4 71.3 -0.10 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price
21-Nov Gold Spot (in US$ per ounce)
22-Nov
1,728.7
% change
1,730.2
0.09
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3
Page 5 of 6
Philippines Singapore Thailand Vietnam
77.0 247.0 180.6 14.4
76.1 243.6 179.3 17.4
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
76.5 246.1 178.5 19.5
76.1 237.7 172.6 19.9
3 months imports of goods & services (US$bn)
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
76.1 243.4 174.7 19.7
79.8 244.1 175.3 20.0
Short-term external debt (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
80.7 246.2 179.2 n.a
82.0 252.1 183.6 n.a
Import cover (Qtrs of imports covered by reserves)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
82.1 254.2 181.5 n.a
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
DATA RELEASES FOR THE DAY Country
CHINA HONG KONG MALAYSIA
Indicators
HSBC Flash China Manufacturing PMI CPI - Composite Index (YoY)% Foreign Reserves (USD bn)
Period
Nov Oct Nov 14
Last
50.4 3.8
Previous 49.5 3.8 138.3
SELECTED ECONOMIC RELEASES CALENDAR (12 - 16 November 2012) 11/12/2012 11/19/2012
11/20/2012
11/21/2012 11/22/2012
11/23/2012 11/24/2012
CHINA CHINA HONG KONG THAILAND THAILAND
CHINA JAPAN SOUTH KOREA JAPAN MALAYSIA CHINA HONG KONG MALAYSIA THAILAND PHILIPPINES PHILIPPINES
New Yuan Loans (RMB bn) Actual FDI (YoY)% Unemployment Rate SA% Gross Domestic Product (YoY)% Gross Domestic Product SA (QoQ)%
Actual FDI (YoY)% All Industry Activity Index (MoM) % External Short-Term Debt (USD bn) Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn) HSBC Flash China Manufacturing PMI CPI - Composite Index (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) Customs Exports (YoY)% CPI (YoY) %
Oct Oct 3Q 3Q
Oct
Oct Sep 3Q Oct Oct Nov Oct Nov 14 Nov 16 Sep 3Q
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 23 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks rose, led by gains in rare-earth companies and Chinese developers. Japanese markets are closed today. The MSCI Asia Pacific Excluding Japan Index rose 0.7 percent to 443.22 as of 4:26 p.m. in Hong Kong, with almost two shares rising for each that fell. The gauge is heading for its first weekly advance in three weeks as data on China manufacturing, U.S. jobs and housing added to signs the world’s two largest economies are on the mend.
•
Asian currencies headed for their first weekly gain in a month, led by the Philippine peso, on optimism regional economic growth is starting to pick up. A preliminary Chinese manufacturing index released yesterday indicated output may have expanded for the first time in 13 months. Malaysia reported Nov. 16 that gross domestic product rose 5.2 percent in the third quarter, compared with the 4.8 percent increase forecast in a Bloomberg survey.
BREAKING NEWS GLOBAL •
Divisions between rich and poor countries flared over the European Union’s next seven-year budget, leading German Chancellor Angela Merkel to rule out an accord until the new year. France defended farm subsidies, Britain clung to a rebate and Denmark demanded its own refund, while countries in eastern and southern Europe said reduced financing for public-works projects would condemn their economies to lag behind the wealthier north. The political stakes dwarf the economic significance of spending equal to 1 percent of European gross domestic product. In the budget debate, the numbers have been whittled down since the first proposal came out in mid-2011. The latest draft foresaw spending of 973 billion euros ($1.3 trillion) for the 2014-2020 period, down 6 percent from the original European Commission proposal and 2 percent from the 994 billion euros for the current seven-year period.
•
Germany’s economic expansion in the third quarter was primarily driven by exports and household spending, a breakdown of the data shows. Net trade contributed 0.3 percentage point to growth and private consumption added 0.2 percentage point, the Federal Statistics Office in Wiesbaden said today. Economic growth slowed to 0.2 percent in the third quarter from 0.3 percent in the second, the office said, confirming an initial estimate published Nov. 15. Europe’s largest economy is still outperforming most of its euro-area partners as exporters benefit from demand in faster- growing markets abroad. Still, the sovereign debt crisis is taking its toll on Germany as demand within the euro region wanes, companies cut investment and unemployment begins to rise.
•
German business confidence unexpectedly rose from a 2 1/2 year low in November, signaling growth in Europe’s largest economy may rebound. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 101.4 from 100 in October for its first gain in eight months. Economists predicted a drop to 99.5 according to the median of 48 forecasts in a Bloomberg News survey. French business confidence increased from the lowest in more than three years this month, a separate report showed today. German growth slowed less than economists forecast in the third quarter even as the euro area, Germany’s largest trading partner, slipped into recession and the outlook for the global economy dimmed. While companies are becoming more cautious and there are signs the economy could contract in the current quarter, the slowdown may prove to be temporary.
•
Luxembourg’s Yves Mersch was named to the European Central Bank’s board after the longest battle over an appointment in the euro’s 13-year history, bolstering the ECB’s anti-
inflation wing. Mersch, 63, overcame Spain’s attempt to retain the seat and a plea by European parliamentarians to give the post to a woman. He will join the ECB’s six-member Frankfurt-based Executive Board on Dec. 15, according to a European Union statement issued at a summit in Brussels early today. Mersch’s selection tilts the ECB board further toward monetary rigor after financially ailing Spain unsuccessfully sought to hold on to the post. As Luxembourg’s representative on the ECB’s wider interest-rate-setting Governing Council, Mersch is the euro area’s longest serving central-bank chief and enjoys a reputation as an inflation hawk. REGIONAL •
Chinese Vice Premier Li Keqiang, promoted last week to the No. 2 spot in the ruling Communist Party and set to take the job of premier in March, said three decades of economic opening must be accelerated as the push to overhaul the economy encounters obstacles. Li, speaking Nov. 21 at a meeting in Beijing, said China needed to accelerate economic overhaul, citing areas including improving state-owned enterprises and the taxation system, according to remarks published on the government’s website. “At present reform has encountered a ‘fortress area’ and a ‘deep water area,’” where there are countercurrents that can push back progress, Li said. “We must overcome difficulties and get rid of all institutional obstacles that hinder scientific development.” Li didn’t cite specific policies the government would push to boost the economy and overhaul the country’s growth model. Economic growth in the past decade accelerated under Premier Wen Jiabao to an average 10.6 percent a year following decisions made under his predecessor, Zhu Rongji, to reshape the management of state-owned companies and open China’s economy and financial industry to foreign investment as part of its entry into the World Trade Organization in 2001.
•
South Korean consumers faced with falling home prices and elevated household debt are cutting spending, dragging on demand just as export growth is restrained by gains in the won. Borrowing and credit purchases rose to a record 937.5 trillion won ($864 billion) in the third quarter, the Bank of Korea said yesterday. At the same time, an index of household consumption fell to a record low, according to a Statistics Korea report last week. Candidates campaigning for a Dec. 19 presidential election have highlighted household debt as a weakness that remains in South Korea’s economy even after three credit-rating companies upgraded the nation this year. The ruling party’s Park Geun Hye, who leads in polls, proposes an 18 trillion won fund to help avoid defaults by the indebted poor.
•
Malaysia’s inflation rate held at the lowest in more than two years in October, giving the central bank room to maintain borrowing costs and support the economy. Consumer prices rose 1.3 percent last month from a year earlier, after climbing at the same pace in September, the Putrajaya-based Statistics Department said in a statement today. That matched the median of 18 estimates in a Bloomberg News survey. Malaysia’s consumer-price gains are the lowest among Southeast Asia’s major economies, allowing the central bank to keep interest rates steady for nine straight meetings. Gross domestic product will expand at least 5 percent this year, Governor Zeti Akhtar Aziz said last week, as the government boosts spending and lures investments to spur growth.
•
Singapore’s inflation slowed in October as gains in food and housing costs eased, reducing pressure on the central bank to tighten monetary policy. The consumer price index rose 4 percent from a year earlier the Department of Statistics said in a statement today. The median estimate of 19 economists in a Bloomberg News survey was for a 4.5 percent increase, after a 4.7 percent pace reported earlier for September. The October core inflation rate was 2.2 percent. Singapore’s central bank, which uses the exchange rate to manage inflation, held off from slowing the currency’s appreciation last month to curb price pressures even after the economy contracted in the third quarter. The government has introduced more measures to restrain surging home costs as housing sales climbed to a record this year. Page 2 of 5
IFIs NEWS (compiled from their websites) BIS – Speech: “Assessing global liquidity from a financial stability perspective” •
The BIS has publicised the speech by Jaime Caruana, General Manager of the Bank for International Settlements, at the 48th SEACEN Governors' Conference and High-Level Seminar, Ulaanbaatar, 22-24 November 2012. http://www.bis.org/speeches/sp121122.pdf
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 22-Nov 23-Nov close China 6.2980 6.2430 6.2290 6.2283 Hong Kong 7.7698 7.7515 7.7508 7.7504 Indonesia 9,126.0 9,634.0 9,644.0 9,649.0 Japan 76.8 79.49 82.48 82.27 Korea 1,150.8 1,087.9 1,085.7 1,086.1 Malaysia 3.1507 3.0633 3.0610 3.0603 Philippines 43.765 41.068 41.085 41.05 Singapore 1.2906 1.2244 1.225 1.2245 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,840.0 20,865.0 20,865.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.01 0.01 -0.05 0.26 -0.04 0.02 0.09 0.04 -0.03 0.00
2012 YTD (%chg)
1.1 0.3 -5.4 -6.6 6.0 3.0 6.6 5.4 2.4 0.8
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
22-Nov 2,015.6 21,743.2 4,335.9 9,366.8 1,899.5 1,618.6 5,513.4 2,986.6 1,279.5 383.2
OVERNIGHT LENDING RATE (%) 22-Nov 23-Nov bps change 2.320 2.280 -4.00 0.098 0.098 0.00 4.172 4.167 -0.48 0.100 0.100 0.00 2.750 2.750 0.00 3.000 3.000 0.00 0.935 2.847 191.20 0.026 0.026 0.00 2.750 2.750 0.00 2.000 2.000 0.00
23-Nov 2,027.4 21,914.0 4,348.8 9,366.8 1,911.3 1,614.3 5,552.3 2,989.3 1,279.6 381.7
% change 0.58 0.79 0.30 0.00 0.62 -0.26 0.71 0.09 0.01 -0.39
2012 YTD (%chg) -7.8 16.1 12.7 10.8 1.9 6.6 25.6 11.1 24.8 9.1
3-MONTH INTERBANK LENDING RATE (%) 22-Nov 23-Nov bps change 3.798 3.801 0.33 0.397 0.397 0.00 4.915 4.913 -0.16 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.844 0.603 -24.10 0.378 0.378 0.00 2.871 2.871 0.00 7.067 6.883 -18.40
Page 3 of 5
CREDIT DEFAULT SWAP (IN BPS) 22-Nov 23-Nov bps change China 71.8 71.8 0.00 Hong Kong * 44.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 71.0 71.2 0.14 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 22-Nov Gold Spot (in US$ per ounce)
23-Nov
1,729.6
% change
1,733.3
0.21
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods & services (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
Short-term external debt (US$bn)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Import cover (Qtrs of imports covered by reserves)
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 4 of 5
DATA RELEASES FOR THE DAY Country
THAILAND MALAYSIA SINGAPORE
Indicators
Foreign Reserves (USD bn) CPI YoY % CPI (YoY)%
Period
Nov 16 Oct Oct
Last
180.6 1.3 4.0
Previous 180.5 1.3 4.7
SELECTED ECONOMIC RELEASES CALENDAR (12 - 16 November 2012) 11/12/2012 11/19/2012
11/20/2012
11/21/2012 11/22/2012
11/23/2012
CHINA CHINA HONG KONG THAILAND THAILAND
CHINA JAPAN SOUTH KOREA JAPAN MALAYSIA CHINA HONG KONG MALAYSIA THAILAND MALAYSIA SINGAPORE
New Yuan Loans (RMB bn) Actual FDI (YoY)% Unemployment Rate SA% Gross Domestic Product (YoY)% Gross Domestic Product SA (QoQ)%
Actual FDI (YoY)% All Industry Activity Index (MoM) % External Short-Term Debt (USD bn) Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn) HSBC Flash China Manufacturing PMI CPI - Composite Index (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI YoY % CPI (YoY)%
Oct Oct Oct 3Q 3Q
Oct Sep 3Q Oct Oct Nov Oct Nov 14 Nov 16 Oct Oct
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 5 of 5
MARKET UPDATE FOR ASEAN+3 26 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asia Stocks Head for Longest Winning Streak in Two Months. Asian stocks rose, with the benchmark regional gauge heading for its longest streak of gains in two months, as a weakening yen boosted the earnings outlook for Japanese exporters and U.S. consumer spending jumped during the Thanksgiving weekend. The MSCI Asia Pacific Index advanced 0.3 percent to 123.29 as of 4:15 p.m. in Tokyo. The measure is poised to gain for a fourth day, the longest winning streak since the second week of September. The Asian benchmark gained 13 percent from this year’s low on June 4 through Nov. 23 as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending.
•
Oil Trades Near One-Week High Before Europe Meeting on Greek Aid. Oil traded near the highest level in almost a week before euro-area finance ministers discuss aid for Greece to tame a debt crisis that threatens to derail the economic recovery and curb fuel demand.
BREAKING NEWS GLOBAL •
Retailers Keep Deals Flowing on 13 percent Holiday-Sales Jump. U.S. retailers are extending deals into Cyber Monday and beyond to try to sustain a 13 percent gain in Thanksgiving weekend sales. Spending in stores and online rose to $59.1 billion in the four days starting Nov. 22, the National Retail Federation said in a statement yesterday. A year ago, sales advanced 16 percent over the holiday weekend. Retailers have turned Black Friday into a week’s worth of deals, with earlier openings and online offers. Thanksgiving Day, once reserved for family gatherings, saw the number of shoppers rise to more than 35 million from 29 million last year, the NRF said.
•
Euro Ministers Take Third Swing at Clearing Greek Payment. Euro-area finance ministers try for the third time this month to clear an aid payment to Greece and forge a blueprint to keep the country a solvent member of the currency bloc. Finance chiefs from the 17-member single currency return to Brussels today, less than a week after an all-night meeting failed to yield agreement and days after a European Union summit broke up without a proposed seven-year budget. At stake at the euro meeting is the continuation of a three-year mission to return Greece to financial health.
•
Overnight Rates Surge in Fed’s Operation Twist. The federal funds effective rate on overnight loans between banks was 0.16 percent on Nov. 21, up from 0.06 percent at the end of September 2011, the month Fed officials announced they would begin swapping short-term securities in their portfolio for long-term debt under Operation Twist. The rate for borrowing and lending Treasuries for one day through repurchase agreements also has surged. Higher overnight interest costs are a side effect of Operation Twist that has persisted despite new accommodation, including a third round of quantitative easing and extending the horizon for near-zero borrowing costs through mid-2015. When the program ends in December, the Fed will have shrunk its portfolio of short-term securities by $667 billion through Twist sales and redemptions, designed to lower long-term interest rates while keeping the size of the Fed’s balance sheet constant.
REGIONAL •
Vietnam Empty Office Towers Increases. State firms’ so-called non-core investments, such as property and stocks, account for as much as 12 percent of their registered capital, Deputy State Auditor Le Minh Khai said in July. The Communist Party’s Central Committee on Oct. 15 called on state-owned enterprises to end non-core investments. Office and retail rents in Vietnam’s two largest cities have slumped as a wave of supply entered the market at a time when slowing economic and retail-sales growth curbs demand for commercial real estate. The Hanoi market added more office and retail space since the start of 2011 than in the previous four years combined, according to property broker CBRE. The average asking rent for top-grade central business district office space in Hanoi was about $47 per square meter per month in 2009, more than double the levels for the same grade space in Bangkok and Kuala Lumpur at that time, according to data from the Vietnam unit of Los Angeles-based CBRE. The rate was 11 percent lower at $42.01 per square meter in the third quarter.
•
China Wage Gains Hurt by Weaker Profit Damp Consumption. China’s wage gains have moderated on weaker corporate profits, capping consumer demand as the government seeks to sustain a rebound after a seven-quarter economic slowdown. Average urban salaries rose 12 percent in the first nine months from a year earlier without adjusting for inflation, slowing from 14.4 percent for all of 2011 and 13.3 percent in 2010, government data show. Deeper declines in wage growth would undermine efforts by China’s new leadership under Xi Jinping to boost consumer spending and shift the world’s second-biggest economy away from dependence on investment and exports. Overcapacity in manufacturing is weighing on profits, with the latest reading due tomorrow when the statistics bureau releases industrial companies’ net income for this year through October. Li Keqiang, the second-highest ranked official in the new Communist Party leadership and set to take over from Wen Jiabao as premier in March, said last week that household spending is key to boosting domestic demand.
•
New BOJ Members Sought More-Expansionary Wording. Two new members of the Bank of Japan’s nine-person policy board voted for a more expansionary wording of the bank’s price outlook released at its Oct. 30 meeting, minutes of the session show. Takehiro Sato and Takahide Kiuchi voted for phrasing that aggressive easing should continue until a 1 percent inflation goal “has been steadily maintained,” according to a summary released in Tokyo today. The proposal suggested by Sato was defeated by majority vote and the bank kept language that it will continue “powerful easing until it judges the 1 percent goal to be in sight.” The BOJ expanded its asset-purchase program at the Oct. 30 meeting for the second time in two months, and is expected to ease further after the Dec. 16 poll, according to a Bloomberg News survey.
•
Korean Consumer Confidence Rebounds From Nine-Month Low. South Korean consumer confidence rebounded from a nine-month low this month as the economy began to show signs of improvement. The sentiment index was at 99 from 98 in October, the Bank of Korea said in an e-mailed statement today. A reading below 100 indicates pessimists outnumber optimists. Unemployment fell to the lowest since 2008 last month as gains in exports and industrial output signaled growth may pick up from the weakest pace in three years in the third quarter. Risks for Asia’s fourth-largest economy include record household debt and strength in the won, which threatens to weigh on exporters’ sales.
•
Asia Bond Risk Decreases. The cost of insuring corporate and sovereign bonds in Asia is poised to fall to its lowest in a more than a month, according to Royal Bank of Scotland Group Plc and CMA prices. Sales of dollar debt in the region slowed to $1.8 billion last week, the least in a month, as issuers paused for national holidays in the U.S. and Japan. The yield premium borrowers must pay to sell dollar notes is falling, dropping last week for the first time since the five-day period ending Oct. 19, according to HSBC Holdings Plc indexes. China Cosco Holdings Co., the nation’s largest listed shipping company, and India’s ICICI Bank Ltd. (ICICIBC) are marketing U.S. dollar-denominated debt. China Cosco is offering 10-year notes at about 275 Page 2 of 5
basis points more than similar-maturity Treasuries while ICICI plans to sell $250 million more of its 4.7 percent bonds due February 2018, according to people familiar with the offerings. IFIs NEWS (compiled from their websites) BIS – Working Paper: “Liquidity in Government versus Covered Bond Markets” •
The BIS has publicized the captioned working paper. “We present findings on the secondary market liquidity of government and covered bonds in Denmark before, during and after the 2008 financial crisis. The analysis focuses on wholesale trading in the two markets and is based on a complete transaction level dataset covering November 2007 until end 2011. Overall, our findings suggest that Danish benchmark covered bonds by and large are as liquid as Danish government bonds - including in periods of market stress.” http://www.bis.org/publ/work392.pdf
IMF – Press Release: Statement by the EC, ECB, and IMF on the Mission to Cyprus •
An EC/ECB/IMF mission has had productive discussions with the Cypriot authorities on the policy building blocks of a macroeconomic adjustment program. The authorities and EC/ECB/IMF teams made good progress towards agreement on key policies to strengthen public finances, restore the health of the financial system, and strengthen competitiveness, so as to pave the way for the economy to return to sustained growth and financial stability. Discussions are expected to continue from respective headquarters with a view to making further progress toward a potential program. The preliminary results of a bank due-diligence exercise, expected in the next few weeks, will inform discussions between official lenders and Cyprus on financing solutions consistent with debt sustainability. http://www.imf.org/external/np/sec/pr/2012/pr12457.htm
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 23-Nov 26-Nov close China 6.2980 6.2283 6.2283 6.2255 Hong Kong 7.7698 7.7504 7.7504 7.7502 Indonesia 9,126.0 9,649.0 9,649.0 9,600.0 Japan 76.8 82.4 82.4 82.09 Korea 1,150.8 1,086.1 1,086.1 1,085.5 Malaysia 3.1507 3.0603 3.0603 3.0543 Philippines 43.765 41.05 41.05 41.003 Singapore 1.2906 1.2228 1.2228 1.2228 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,865.0 20,865.0 20,865.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.04 0.00 0.51 0.38 0.06 0.20 0.11 0.00 0.00 0.00
2012 YTD (%chg) 1.2 0.3 -4.9 -6.4 6.0 3.2 6.7 5.5 2.5 0.8
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
23-Nov 2,027.4 21,914.0 4,348.8 9,366.8 1,911.3 1,614.3 5,552.3 2,989.3 1,281.7 381.7
26-Nov 2,017.5 21,861.8 4,375.2 9,388.9 1,908.5 1,607.9 5,579.4 3,004.5 1,290.9 377.9
% change -0.49 -0.24 0.61 0.24 -0.15 -0.40 0.49 0.51 0.72 -1.00
2012 YTD (%chg) -8.3 15.8 13.4 11.0 1.8 6.2 26.2 11.6 25.9 8.0
Page 3 of 5
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (%) 23-Nov 26-Nov bps change 2.280 2.350 7.00 0.098 0.098 0.04 4.167 4.168 0.12 0.100 0.100 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.847 0.340 -250.70 0.033 0.033 0.00 2.750 2.750 0.00 2.000 1.814 -18.60
3-MONTH INTERBANK LENDING RATE (%) 23-Nov 26-Nov bps change 3.801 3.806 0.43 0.397 0.398 0.04 4.913 4.912 -0.08 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.603 0.494 -10.90 0.378 0.378 0.00 2.871 2.871 0.00 6.883 6.986 10.30
CREDIT DEFAULT SWAP (IN BPS) 23-Nov 26-Nov bps change China 71.8 71.8 0.00 Hong Kong * 44.0 44.2 0.24 Indonesia 165.6 165.6 0.00 Japan 71.0 70.9 -0.10 Korea 71.2 71.2 0.00 Malaysia 95.3 95.3 0.00 Philippines 131.4 131.4 0.00 Thailand 129.2 129.2 0.00 Vietnam 304.4 304.4 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * Hong Kong USD SR 5Y CDS trades in New York, hence the one day lag in the latest closing price 23-Nov Gold Spot (in US$ per ounce)
26-Nov
1,753.0
% change
1,747.1
-0.34
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
Page 4 of 5
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
Country
SOUTH KOREA THAILAND SINGAPORE
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods & services (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
Short-term external debt (US$bn)
Import cover (Qtrs of imports covered by reserves)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Consumer Confidence Customs Exports (YoY)% Industrial Production YoY%
Period
Nov Oct Oct
short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
DATA RELEASES FOR THE DAY Indicators
Reserves over
Last
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
99 15.57 -2.1
Previous
SELECTED ECONOMIC RELEASES CALENDAR (26 - 30 November 2012)
Expected Release Date 11/26/2012
11/27/2012
11/28/2012
11/29/2012
11/30/2012
Country SOUTH KOREA THAILAND SINGAPORE SOUTH KOREA PHILIPPINES HONG KONG HONG KONG PHILIPPINES PHILIPPINES SOUTH KOREA PHILIPPINES SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA THAILAND THAILAND THAILAND MALAYSIA THAILAND THAILAND
Indicators Consumer Confidence Customs Exports (YoY)% Industrial Production YoY% Exports YoY% Trade Balance (USD mn) Customs Exports and Imports (YoY)% Trade Balance (HKD bn) Total Imports (YoY)% GDP (YoY)% Current Account in (USD mn) GDP sa (QoQ)% Business Survey- Non-Manufacturing Business Survey- Manufacturing Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Industrial Production YOY% National CPI YoY % National CPI Ex Food, Energy YoY % Jobless Rate % Job-To-Applicant Ratio Industrial Production (YoY)% Total Trade Balance (USD mn) Total Exports and Imports YOY% Business Sentiment Index Unemployment Rate % Total Exports YOY% Current Account Balance (USD mn)
Period Nov Oct Oct Nov Oct Oct Oct Sep 3Q Oct 3Q Dec Dec Oct Oct Oct P Oct Oct Oct Oct Oct Oct Oct Oct 3Q Oct Oct
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 5 of 5
98 0.2 -2.5
MARKET UPDATE FOR ASEAN+3 27 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Gain on Greek Debt Agreement, China Profits. Asian stocks gained for a fifth day after European finance ministers cut borrowing costs for Greece and gave the indebted nation more time to repay rescue loans. Shares also rose after profit growth at Chinese industrial companies accelerated last month. The MSCI Asia Pacific Index (MXAP) advanced 0.4 percent to 123.79 as of 3:51 p.m. in Tokyo, extending the benchmark gauge’s longest winning streak since the second week of September. International Monetary Fund Managing Director Christine Lagarde said her aim to get Greece’s debt on a “sustainable path” was achieved in discussions in Brussels.
•
Euro Advances After Funding Deal Agreed for Greece. The euro advanced after a European Union official said the currency bloc’s finance ministers reached agreement on Greece’s debt burden and its funding gap. The yen maintained a three-day gain versus the dollar as expectations eased that Japanese opposition leader Shinzo Abe will push the central bank for more aggressive monetary easing.
BREAKING NEWS GLOBAL •
Greece Wins Easier Terms on Debt as EU Hails Rescue Formula. European finance ministers eased the terms on emergency aid for Greece, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health. In the latest bid to keep the 17-nation euro intact, the ministers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback. The country was also cleared to receive a 34.4 billion-euro ($44.7 billion) loan installment in December. The euro rose to a three-week high on the agreement.
•
Fiscal Cliff Reality Awaits Republicans. Turning post-election Republican talk of openness to tax increases into bipartisan action could cause a fracture within the party while requiring significant spending concessions from Democrats. As Congress returns this week to confront a so-called fiscal cliff at year’s end, many Republicans who have long dismissed any tax increase as unacceptable say they’re willing to entertain higher revenue -- so long as Democrats accept cuts in entitlement programs as part of a deficit-reduction deal. This is particularly noticeable in the Senate, where Saxby Chambliss of Georgia and Bob Corker of Tennessee have said they’re willing to renounce their past anti-tax pledges.
REGIONAL •
Korea to further tighten banks' handling of currency forwards. Korea said Tuesday it will lower the ceiling of foreign exchange forward positions held by local and foreign banks by 25 percent in a bid to curb the volatility of cross-border capital flows. The move will restrict local branches of foreign banks from holding currency forward deals to 150 percent of their equity capital from the current 200 percent. The ceiling for domestic banks will be lowered to 30 percent from 40 percent, the government said. The move will fully take effect starting on Jan. 1. Korea has taken similar steps twice since 2010 as part of the so-called macro-prudential measures to stem excessive cross-border capital movements. The move came as the Bank of Korea and the
Financial Supervisory Service wrapped up an inspection of local banks' handling of foreign exchange forward positions amid the local currency's ascending trend. •
Japan Automakers Jump on Bets Abe Will Weaken Yen. After the global recession, a strengthening yen, recalls, the tsunami and Thai floods, the market value of Japan’s automakers has fallen by 53 percent over the past five years. Now, investors are betting a change in government will give them a boost. Shinzo Abe, leader of the opposition Liberal Democratic Party expected to win a Dec. 16 election, has vowed to weaken the nation’s currency and boost government spending to stimulate the economy. That has spurred speculation carmakers will see rising profit from exports and increased sales at home. Abe, who previously served as prime minister when Japan’s automakers were at their peak, on Nov. 15 said the LDP would seek “unlimited” easing from the central bank to weaken the yen. Since then, Nissan Motor Co. and Honda Motor Co. have jumped 18 percent and Toyota Motor Corp. has gained 17 percent.
•
GDP target likely to be set at 7.5% for China. The first annual economic work conference of China's new Communist Party leadership will set the economic growth target for 2013 at 7.5 percent, China Business News reported. The newspaper said the meeting, which is expected to be held in December, is likely to set the annual gross domestic product growth target for the next year at 7.5 percent, the same as this year's target. The CPC Central Committee holds the economic work conference at the end of every year. It sets the tone for the next year's economic priorities and policy. Setting the target at 7.5 percent will maintain the continuity of the economic policy and is consistent with the target in the 12th Five-Year Plan (2011-2015). The 12th Five-Year Plan set the annual GDP growth in the five-year period at 7 percent.
•
Inflation hits 6-month high in Vietnam. Vietnamese inflation picked up to the fastest pace in six months in November, official data showed, adding to the economic challenges facing the country's rulers. Consumer prices gained an estimated 7.08 percent this month from a year earlier, following a 7.0 percent rise in Oct, according to the General Statistics Office. It was the sharpest increase since May. Annual inflation dropped to a three-year low of around 5 percent in August, well off a peak of 23 percent seen a year earlier. The authorities have since changed tack in response to slowing economic growth, cutting interest rates five times since the start of 2012. The country expects economic growth of just 5.2 percent for 2012 -- the slowest rate in 13 years. Vietnam is also grappling with falling foreign direct investment and rising fears about toxic debts in the fragile banking system.
•
Cambodia may need more time to open service industries. Cambodia is aiming to persuade all of the World Trade Organization's (WTO) least developed country members to propose a further suspension of the opening of their service sectors to the WTO's rich members as the 2013 deadline for the proposal draws nearer. The least developed countries (LDCs), which benefit greatly from quota and duty-free exports from the WTO's rich member countries, will have to open their service industries to those countries by 2013. Cambodia's commerce minister claims that most LDC members are not ready, and further postponement is needed. The UN has listed 49 of the world's countries -- including Cambodia -- under the 'least developed' classification. Thirty-three of these nations are WTO members.
•
Rents are rising as confidence grows in Manila. Manila's changing skyline demonstrates a city coming up in the world. The capital of the Philippines is in the throes of a property boom described as the best in two decades, reflecting the increasing confidence in an economy that only recently began shedding its image as one of the region's basket cases. Outside Manila, a similar transformation is unfolding, with industrial parks, especially those close to the capital and devoted to manufacturing, drawing more foreign firms than ever before, despite cribs about the high price paid for power. Renting in Manila's business districts far cheaper than Hong Kong, Shanghai or Singapore. But then infrastructure remains a drawback.
Page 2 of 6
IFIs NEWS (compiled from their websites) ADB – Press Release: “ADB Energy Assessment Shows Wealth of Possibilities in Myanmar” •
An initial assessment of Myanmar’s energy sector by the ADB shows that the country has a wealth of possibilities for power generation, from oil and gas exploration to harnessing the energy of geothermal and other renewables, but lacks the capital needed to develop it. The assessment suggests that international investment in Myanmar’s energy sector could focus on medium- and long-term planning; rehabilitation works in power generation, transmission, and distribution; and the construction of gas power plants in Yangon; the construction of a 500kV transmission line from the north to Yangon; an integrated, comprehensive plan for hydropower development; and the rehabilitation and upgrading of coal and gas-fired generation plants, refineries, and natural gas pipelines. http://www.adb.org/sites/default/files/myanmar-energy-sector-assessment.pdf
ADB – Press Release: “Social Protection for the Poor in Asia Can be Affordable and Deliver Big Gains” •
Social protection systems in most Asian countries fall far short of meeting the needs of the poor and vulnerable even though better safety nets can be affordable for poorer countries, says a new study from Independent Evaluation at the Asian Development Bank. Despite high economic growth in much of the region, public spending on social protection in Asia and the Pacific is lower than in any part of the world except for sub-Saharan Africa. Recent economic and financial crises, food and fuel emergencies, and the rapidly increasing frequency of natural disasters have starkly exposed the inadequacy of the region’s national social protection systems to guarantee a minimum level of subsistence and meet people’s basic needs http://www.adb.org/sites/default/files/ses-socialprotection.pdf
BIS – Press Release: “Payment, clearing and settlement systems in the CPSS countries – Vol 2” •
The Committee on Payment and Settlement Systems (CPSS) has today released the second volume of its new edition of Payment, clearing and settlement systems in the CPSS countries. This second volume covers 13 CPSS countries (Belgium, China, France, Germany, Hong Kong SAR, Italy, Japan, the Netherlands, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States) and the euro area and includes a chapter on international arrangements. The first volume, which covers 10 CPSS countries (Australia, Brazil, Canada, India, Korea, Mexico, Russia, Singapore, Sweden and Switzerland), was published in September 2011 http://www.bis.org/publ/cpss105.pdf
IFC – Press Release: “IFC Helps Simpa Scale up Mobile-Based Affordable Solutions for Clean Energy” •
The IFC is advising India’s local technology start-up Simpa Networks to expand a meter-based prepaid energy service using an innovative pricing system to provide half-a-million rural Indians access to affordable and clean energy over the next three years. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/272E61F9A4184D4385257AC20033 3AD0
IMF – Press Releases: “Republic of Latvia: 2012 Article IV and Second Post-Program Monitoring Discussions” “Benin: IMF Executive Board Concludes 2012 Article IV Consultation” •
The IMF has publicised Latvia’s and Benin’s mission concluding statement for the 2012 Article IV Consultations http://www.imf.org/external/np/ms/2012/112612.htm http://www.imf.org/external/np/sec/pn/2012/pn12132.htm
Page 3 of 6
IMF – Press Release: “Statement on Greece by IMF Managing Director” •
The IMF issued the captioned statement at the conclusion of the Eurogroup meeting in Brussels. According to the MD, the IMF welcomes the initiatives agreed by the Eurogroup aimed at further supporting Greece’s economic reform program and making a substantial contribution to the sustainability of its debt. This builds on the significant efforts by the Greek government to carry forward its fiscal and structural reform agenda.
http://www.imf.org/external/np/sec/pr/2012/pr12458.htm FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 26-Nov 27-Nov close China 6.2980 6.2283 6.2255 6.2223 Hong Kong 7.7698 7.7504 7.7501 7.7501 Indonesia 9,126.0 9,649.0 9,600.0 9,639.0 Japan 76.8 82.4 82.08 82.21 Korea 1,150.8 1,086.1 1,085.5 1,084.1 Malaysia 3.1507 3.0603 3.0543 3.0445 Philippines 43.765 41.05 41.003 40.84 Singapore 1.2906 1.2228 1.2214 1.2218 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,865.0 20,865.0 20,858.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.05 0.00 -0.40 -0.16 0.13 0.32 0.40 -0.03 0.00 0.03
2012 YTD (%chg) 1.2 0.3 -5.3 -6.6 6.2 3.5 7.2 5.6 2.5 0.8
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
26-Nov 2,017.5 21,861.8 4,375.2 9,388.9 1,908.5 1,607.9 5,579.4 3,004.5 1,290.9 377.9
OVERNIGHT LENDING RATE (%) 26-Nov 27-Nov bps change 2.350 2.320 -3.00 0.098 0.098 -0.04 4.168 4.170 0.16 0.100 0.100 0.00 2.750 2.750 0.00 3.000 3.000 0.00 0.340 0.098 -24.20 0.049 0.049 0.00 2.750 2.750 0.00 1.814 1.875 6.10
CREDIT DEFAULT SWAP (IN BPS) 23-Nov China 60.7 Hong Kong 44.2 Indonesia 122.3 Japan 72.3 Korea 58.9 Malaysia 68.7
26-Nov 59.7 44.5 124.2 72.0 57.6 68.5
27-Nov 1,991.2 21,844.0 4,337.5 9,423.3 1,925.2 1,598.2 5,586.5 3,012.0 1,296.3 376.9
% change -1.30 -0.08 -0.86 0.37 0.87 -0.60 0.13 0.25 0.42 -0.27
2012 YTD (%chg) -9.5 15.7 12.4 11.4 2.7 5.5 26.3 11.9 26.4 7.7
3-MONTH INTERBANK LENDING RATE (%) 26-Nov 27-Nov bps change 3.806 3.813 0.70 0.398 0.398 0.00 4.912 4.913 0.04 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.494 0.263 -23.10 0.378 0.378 0.00 2.871 2.871 0.00 6.986 7.044 5.80
bps change -0.99 0.26 1.89 -0.30 -1.28 -0.24
Page 4 of 6
Philippines 98.5 100.2 1.72 Thailand 85.1 84.2 -0.87 Vietnam 205.0 203.6 -1.44 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * CDS trades in New York, hence the one day lag in the latest closing price 26-Nov Gold Spot (in US$ per ounce)
27-Nov
1,748.7
% change
1,749.1
0.03
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
3 months imports of goods & services (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
Short-term external debt (US$bn)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
Import cover (Qtrs of imports covered by reserves)
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Page 5 of 6
DATA RELEASES FOR THE DAY Country
VIETNAM VIETNAM VIETNAM VIETNAM PHILIPPINES PHILIPPINES HONG KONG HONG KONG
Indicators
Imports YTD (YoY)% Exports YTD (YoY)% Industrial Production Index YoY % Retail Sales YTD (YoY)% Imports YoY% Trade Balance (USD mn) Trade Balance (HKD bn) Total Exports (YoY)%
Period
Nov Nov Nov Nov 3Q Oct Oct Oct
Last
6.8 18.4 6.7 16.4 3.6 -483 -42.7 -2.8
Previous
5.7 18.4 6.8 17.1 -0.4 -1259 -45.2 15.2
SELECTED ECONOMIC RELEASES CALENDAR (26 - 30 November 2012)
Expected Release Date 11/26/2012
11/27/2012
11/28/2012
11/29/2012
11/30/2012
Country SOUTH KOREA THAILAND SINGAPORE SOUTH KOREA PHILIPPINES HONG KONG HONG KONG PHILIPPINES PHILIPPINES SOUTH KOREA PHILIPPINES SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA THAILAND THAILAND THAILAND MALAYSIA THAILAND THAILAND
Indicators Consumer Confidence Customs Exports (YoY)% Industrial Production YoY% Exports YoY% Trade Balance (USD mn) Customs Exports and Imports (YoY)% Trade Balance (HKD bn) Total Imports (YoY)% GDP (YoY)% Current Account in (USD mn) GDP sa (QoQ)% Business Survey- Non-Manufacturing Business Survey- Manufacturing Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Industrial Production YOY% National CPI YoY % National CPI Ex Food, Energy YoY % Jobless Rate % Job-To-Applicant Ratio Industrial Production (YoY)% Total Trade Balance (USD mn) Total Exports and Imports YOY% Business Sentiment Index Unemployment Rate % Total Exports YOY% Current Account Balance (USD mn)
Period Nov Oct Oct Nov Oct Oct Oct Sep 3Q Oct 3Q Dec Dec Oct Oct Oct P Oct Oct Oct Oct Oct Oct Oct Oct 3Q Oct Oct
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 28 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks and Europe Equity Futures Drop on Fiscal Cliff. European equity futures declined and Asian stocks dropped for the first time in six days on concern budget talks to avoid the U.S. fiscal cliff have made little progress. The yen gained and Japanese bond yields dropped to a nine-year low. Euro Stoxx 50 Index futures lost 0.3 percent as of 7:26 a.m. in London. Contracts on the Standard & Poor’s 500 Index fell 0.1 percent and the MSCI Asia Pacific Index (MXAP) of shares dropped 0.6 percent. Copper, nickel and zinc sank at least 0.5 percent. The yen rose 0.6 percent to 105.70 against the euro, while yields on Japan’s 10-year government bonds fell 1.5 basis points to 0.715 percent, the lowest level since June 2003.
•
Oil Trades Near One-Week Low as U.S. Crude Stockpiles Increase. Oil traded near the lowest level in a week in New York after an industry-funded report showed rising stockpiles in the U.S., the world’s biggest crude consumer. Brent for January settlement declined $1.05 to $109.87 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $22.69 to West Texas Intermediate futures.
BREAKING NEWS GLOBAL •
Demand for U.S. Capital Goods Climbs in Spending Rebound. Consumer confidence climbed to a four-year high, home prices increased by the most since 2010 and demand for business equipment rose, signaling resilience in the U.S. economy as the new year approaches. The Conference Board’s confidence index increased to 73.7 in November from 73.1 the prior month, the New York-based group said today. The S&P/Case-Shiller index of property values in 20 cities advanced 3 percent in September from a year earlier. Bookings for non-defense capital goods excluding aircraft rose 1.7 percent last month, the most since May, the Commerce Department reported. Household finances and sentiment are getting a boost from a revival in the real-estate market, making it more likely that Americans will keep up the spending that accounts for 70 percent of the economy. At the same time, a rebound in business demand for machinery indicates that some companies were undeterred by the threat of automatic spending cuts and tax increases scheduled to take effect in January.
•
U.S. Treasury Declines to Name China Currency Manipulator. China isn’t a currency manipulator under U.S. law, though the yuan “remains significantly undervalued” and needs to rise further, the Treasury Department said. China “has substantially reduced the level of official intervention in exchange markets since the third quarter of 2011,” the Treasury said in a statement accompanying its semi-annual currency report to Congress yesterday. The yuan has gained 9.3 percent in nominal terms and 12.6 percent in real terms against the dollar since June 2010, the Treasury said. In declining to brand China a manipulator, the Treasury cited the reduced intervention and “steps to liberalize controls on capital movements, as part of a broader plan to move to a more flexible exchange-rate regime.”
•
Credit Rating Firms in EU to Face Limits. Credit rating companies face curbs on when they can assess government debt and restrictions on their ownership under draft plans agreed on by European Union officials and legislators. Lawmakers from the European Parliament and Cyprus, which holds the rotating presidency of the EU, also agreed yesterday to let investors sue ratings companies if they lose money because of malpractice or gross negligence. They proposed the tougher ratings rules after warnings from nations including France and Germany that
downgrades of sovereign debt had deepened the bloc’s fiscal crisis. Last year ratings companies were seen as guilty of “serious mistakes” and shouldn’t be allowed to “increase market volatility” through ill-timed or unjustified downgrades. The European Commission, the 27nation EU’s executive arm, has said that tougher regulation is needed to boost competition for the so-called big three ratings companies, Fitch Ratings Ltd., Moody’s Investors Service Inc. and Standard & Poor’s. Negotiators at yesterday’s meeting brokered a draft deal on the rules, which must be formally approved by governments and by the full parliament before they can be implemented. REGIONAL •
China’s U.S. Debt Purchases Seen Limited, Former Adviser Says. China may limit its purchases of U.S. Treasuries because the central bank has reduced its buying of dollars at home, according to a Chinese academic who has served as a government adviser. The People’s Bank of China has “noticeably” reduced its purchases of dollars from local banks to allow commercial banks to trade among themselves, Ding Zhijie, dean of finance at Beijing’s University of International Business and Economics, said in a Nov. 23 interview. That may cap the nation’s foreignexchange reserves and consequently its demand for U.S. government debt, he said. The scaledback intervention is part of a shift toward managing the currency through the daily price fixing, Ding said. A reduction in China’s U.S. debt holdings may help defuse criticism by some American politicians that their country is becoming too dependent on the world’s second-largest economy.
•
Abe Spurs Tripling of Overseas Debt. Shinzo Abe, the front-runner to become Japan’s next prime minister, is helping drive an almost tripling of foreign bond buying by local investors as he calls for central bank steps to fuel inflation and weaken the yen. Net purchases of overseas debt climbed 285 percent to 15.2 trillion yen ($185 billion) this year through Nov. 17, Ministry of Finance data show. Japan’s currency dropped 5.1 percent this quarter, boosting import costs and eroding demand for local securities. While Japan’s 20-year bond yield has climbed 1 1/2 basis points to 1.66 percent since the end of September, it’s lower than the 2.3 percent on similar-maturity U.S. Treasuries. The opposition Liberal Democratic Party’s Abe has called on the Bank of Japan to pump unlimited cash into the market to kindle inflation, sapping demand for longer-dated bonds before elections next month. The extra yield investors demand to hold Japan’s 20-year debt instead of 10-year bonds rose to a 13-year high on Nov. 16.
•
Korea’s Current-Account Surplus Narrows to $5.8 Billion. South Korea’s current-account surplus narrowed to a two-month low after imports of machinery and equipment increased. The surplus was $5.8 billion last month, compared with a revised excess of $5.9 billion in September, the Bank of Korea said in a statement in Seoul today.
•
Asia Funds Buy London Offices in Bet Volatility Is Past. Asian investors are the biggest buyers of office property in the City of London this year, wagering that the financial district’s volatile market has changed since it routed Japanese buyers in the 1990s. Malaysia’s state pension fund and the Korean Teachers’ Credit Union are among investors from the region that spent about 1.77 billion pounds ($2.8 billion) on income-producing office buildings in the district in 2012, more than a quarter of the total, data compiled by Jones Lang LaSalle Inc. shows. National funds from Asia are increasing their proportion of investments in real estate and looking overseas for higher yields amid slower growth in the region. A weak pound, a reputation as a safe haven and returns that beat financing costs help make London the world’s most attractive city for foreign property investment.
•
Lee Rues Singapore as Retirement Home Without Boosting Birthrate. The government will debate its population policy in Parliament in January, Lee said in the interview. Areas being considered include priority housing for couples with young kids, paternity or shared parental leave, the defraying of childhood medical expenses, better pre-school and improved cash Page 2 of 7
benefits for having children, Lee said in August. The median age of Singaporeans will rise to 43.1 in 2020 from 37.6 in 2010, Bank of America Corp. analysts estimated in an April report. That compares with 23.9 in the Philippines, 31 in Indonesia and 28.4 in Malaysia at the end of this decade. Immigration has filled the gap for employers, a pattern that’s put strains on the housing market and public services. Singapore is host to 2 million foreign residents, compared with 3.3 million citizens. •
Philippines 7.1% Growth Surprise May Herald End of Rate Cuts. Philippine growth unexpectedly accelerated last quarter to the fastest pace since 2010 as government spending and investment increased, easing pressure on the central bank to cut interest rates further. Stocks rose. Gross domestic product increased 7.1 percent in the three months through September from a year earlier, compared with a 6 percent gain in the previous quarter, the National Statistical Coordination Board said in Manila today. The pace exceeded all 22 estimates in a Bloomberg survey, whose median was 5.4 percent. President Benigno Aquino is increasing spending to a record this year while seeking more than $17 billion of investment in roads and airports. The Southeast Asian nation is forecast to be among the 10 fastest growing economies in 2012, according to a Bloomberg survey, making it less likely that Bangko Sentral ng Pilipinas will cut its benchmark interest rate again in December.
•
Thai Central Bank Holds Rate as Economic Data Point to Recovery. Thailand kept its policy interest rate unchanged today after an unexpected cut last month, as data signal the economy is improving after last year’s floods. The Bank of Thailand held its one-day bond repurchase rateat 2.75 percent, it said in Bangkok today. Thai manufacturing and exports increased in October, adding to signs from the U.S. and China of a recovery in the global economy. Still, the central bank last month lowered its growth forecast for 2013, as Europe’s debt crisis damps demand for the region’s goods and hampers the Southeast Asian nation’s recovery from the worst floods in almost 70 years.
•
Census for Myanmar will help with key economic indicators. Myanmar is getting ready for a population census in 2014, its first in three decades. The headcount is also expected to prepare the ground for the country's next general election in 2015, which, it is hoped, will usher in a genuine people's government. The last census was in 1983, and people born after that have never been enumerated. An accurate count of the population would both be a critical part of the government's political reforms, as well as one of its main drivers. The census will enable an accurate estimate of key economic indicators such as GDP, per capita income and other socioeconomic data of the country for national development, economic planning and balanced assessment. It would be crucial to several key policies relating to education, health care, housing, employment, sanitation, transport and communication, to name just a few.
IFIs NEWS (compiled from their websites) ADB – Press Release: “ADB Providing $700 Million to Help End Crippling Power Shortages in Bangladesh” •
The Asian Development Bank (ADB) is providing a US$700 million loan to dramatically boost Bangladesh’s power supply system, which will reduce outages and shortages that are crippling the economy and causing severe hardship across the country.The overall program, costing US$1.6 billion, includes co-financing from the Agence Française de Développement, the European Investment Bank (EIB), and the Islamic Development Bank, as well as a government contribution of US$222 million. As part of the programme, ADB will also administer a US$7 million capacity building grant from EIB.
http://www.adb.org/news/adb-providing-700-million-help-end-crippling-power-shortagesbangladesh
Page 3 of 7
IFC – Press Release: “IFC Capitalization Fund Invests $25 Million in Banco BHD’s Expansion in the Dominican Republic” •
IFC Capitalization Fund, a fund managed by IFC Asset Management Company, signed today an investment in Dominican Republic-based Banco BHD, helping the bank expand operations and support lending to small- and medium-size enterprises (SMEs). http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/A86E70DEF6910D0485257AC3005377A6 IFC – Press Release: “IFC and Bank of Jiangsu Promote Sustainable Energy Financing to Support Green Growth in China” •
IFC and Bank of Jiangsu today launched a risk-sharing facility to support energy-efficiency and renewable-energy projects in China’s coastal province of Jiangsu. The risk-sharing facility helps mitigate Bank of Jiangsu’s default risk when financing climate-friendly projects and will promote loans worth 924 million yuan (US$144 million) for around 30 sustainable-energy projects. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/BF571FE8C90D258485257AC30041DEA4 IMF – Publications & Working Papers: •
Ukraine: Staff Report for the 2012 Article IV Consultation
http://www.imf.org/external/pubs/ft/scr/2012/cr12315.pdf •
Is China Over-Investing and Does it Matter?
http://www.imf.org/external/pubs/ft/wp/2012/wp12277.pdf •
Modeling the Impact of Taxes on Petroleum Exploration and Development
http://www.imf.org/external/pubs/ft/wp/2012/wp12278.pdf •
Enhancing Surveillance - Interconnectedness and Clusters
http://www.imf.org/external/np/pp/eng/2012/031512.pdf IMF – Press Release: “IMF Holds Informal Board Briefing on Ecuador” •
The IMF released a statement whereby the Executive Board of the IMF was briefed on economic developments in Ecuador, whose Article IV consultation is delayed by 42 months. http://www.imf.org/external/np/sec/pr/2012/pr12461.htm
IMF – Press Release: “IMF Executive Board Completes Fifth Review Under Mauritania’s Extended Credit Facility Arrangement and Approves US$16.9 Million Disbursement” •
The IMF released a statement where the Executive Board of the IMF completed the fifth review of Mauritania’s economic performance under the program supported by an Extended Credit Facility arrangement (ECF) and approved an extension of the arrangement by three months until June 30, 2012. http://www.imf.org/external/np/sec/pr/2012/pr12460.htm
IMF – Press Release: “ IMF Executive Board Completes Fourth Review Under Extended Credit Facility Arrangement for the Kingdom of Lesotho, and Approves US$ 8.7 Million Disbursement” •
The IMF released a statement where Executive Board of the IMF completed the fourth review of the Kingdom of Lesotho's economic performance under a program supported by the Extended Credit Facility (ECF) arrangement. In completing the review, the Board also approved a waiver for the missed continuous cumulative quantitative performance criterion on new nonconcessional external debt contracted or guaranteed by the public sector. http://www.imf.org/external/np/sec/pr/2012/pr12462.htm
Page 4 of 7
World Bank – Press Release: “China and World Bank Group Launch New Knowledge Hub to Provide Solutions for Reducing Poverty” •
The World Bank Group and China today launched a new knowledge hub to improve development outcomes, aiming to spread practical knowledge from China’s successes in reducing poverty both within China as well as to other countries. Initially, the knowledge hub will help find environmentally friendly solutions to expand urban transport in China’s cities. http://www.worldbank.org/en/news/2012/11/27/china-world-bank-group-launch-newknowledge-hub-to-provide-solutions-reducing-poverty
World Bank – Press Release: “World Bank approves $500 million to accelerate Tunisia’s economic recovery, pave way for more inclusive growth” •
The World Bank today approved a US$500 million loan to Tunisia that continues Bank support for key reforms as the government manages the country’s political transition. The Governance, Opportunity, and Jobs Development Policy Loan also helps pave the way for stronger economic growth and job creation over the medium term.
http://www.worldbank.org/en/news/2012/11/27/world-bank-approves-fiv-million-acceleratetunisias-economic-recovery-pave-way-more-inclusive-growth FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 27-Nov 28-Nov close China 6.2980 6.2283 6.2223 6.2240 Hong Kong 7.7698 7.7504 7.7502 7.7502 Indonesia 9,126.0 9,649.0 9,639.0 9,644.0 Japan 76.8 82.4 82.15 81.79 Korea 1,150.8 1,086.1 1,084.1 1,086.4 Malaysia 3.1507 3.0603 3.0445 3.053 Philippines 43.765 41.05 40.84 40.88 Singapore 1.2906 1.2228 1.2229 1.2228 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,865.0 20,860.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.03 0.00 -0.05 0.44 -0.22 -0.28 -0.10 0.01 -0.10 0.05
2012 YTD (%chg) 1.2 0.3 -5.4 -6.1 5.9 3.2 7.1 5.5 2.4 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
27-Nov 1,991.2 21,844.0 4,337.5 9,423.3 1,925.2 1,598.2 5,586.5 3,011.9 1,297.0 376.9
28-Nov 1,973.5 21,709.0 4,304.8 9,308.4 1,912.8 1,604.2 5,633.7 3,008.6 1,300.5 375.8
% change -0.89 -0.62 -0.75 -1.22 -0.65 0.37 0.85 -0.11 0.27 -0.29
2012 YTD (%chg) -10.3 15.0 11.6 10.1 2.0 5.9 27.4 11.8 26.8 7.4
Page 5 of 7
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (%) 27-Nov 28-Nov bps change 2.320 2.320 0.00 0.098 0.098 0.00 4.170 4.170 -0.04 0.100 0.103 0.25 2.750 2.750 0.00 3.000 3.000 0.00 0.098 -0.611 -70.90 0.053 0.053 0.00 2.750 2.750 0.00 1.875 1.813 -6.20
3-MONTH INTERBANK LENDING RATE (%) 27-Nov 28-Nov bps change 3.813 3.814 0.15 0.398 0.397 -0.04 4.913 4.910 -0.32 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.263 -0.028 -29.10 0.378 0.378 0.00 2.871 2.869 -0.15 7.044 6.800 -24.40
CREDIT DEFAULT SWAP (IN BPS) 26-Nov 27-Nov bps change China 59.7 57.1 -2.60 Hong Kong 44.5 43.7 -0.77 Indonesia 124.2 122.5 -1.67 Japan 72.0 69.6 -2.44 Korea 57.6 56.0 -1.64 Malaysia 68.5 66.5 -2.00 Philippines 100.2 98.0 -2.18 Thailand 84.2 83.2 -1.02 Vietnam 203.6 203.5 -0.04 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * CDS trades in New York, hence the one day lag in the latest closing price 27-Nov Gold Spot (in US$ per ounce)
28-Nov
1,742.1
% change
1,740.8
-0.08
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
Page 6 of 7
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
Country
PHILIPPINES SOUTH KOREA THAILAND
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
3 months imports of goods & services (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
Short-term external debt (US$bn)
Import cover (Qtrs of imports covered by reserves)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
GDP (YoY)% Current Account in (USD mn) Benchmark Interest Rate
short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
DATA RELEASES FOR THE DAY Indicators
Reserves over
Period
3Q Oct Nov 28
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
Last
7.1 5820.1 2.75
Previous
6.0 6066.2 2.75
SELECTED ECONOMIC RELEASES CALENDAR (26 - 30 November 2012)
Expected Release Date 11/26/2012
11/27/2012
11/28/2012
11/29/2012
11/30/2012
Country SOUTH KOREA THAILAND SINGAPORE SOUTH KOREA PHILIPPINES HONG KONG HONG KONG PHILIPPINES PHILIPPINES SOUTH KOREA PHILIPPINES SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA THAILAND THAILAND THAILAND MALAYSIA THAILAND THAILAND
Indicators Consumer Confidence Customs Exports (YoY)% Industrial Production YoY% Exports YoY% Trade Balance (USD mn) Customs Exports and Imports (YoY)% Trade Balance (HKD bn) Total Imports (YoY)% GDP (YoY)% Current Account in (USD mn) GDP sa (QoQ)% Business Survey- Non-Manufacturing Business Survey- Manufacturing Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Industrial Production YOY% National CPI YoY % National CPI Ex Food, Energy YoY % Jobless Rate % Job-To-Applicant Ratio Industrial Production (YoY)% Total Trade Balance (USD mn) Total Exports and Imports YOY% Business Sentiment Index Unemployment Rate % Total Exports YOY% Current Account Balance (USD mn)
Period Nov Oct Oct Nov Oct Oct Oct Sep 3Q Oct 3Q Dec Dec Oct Oct Oct P Oct Oct Oct Oct Oct Oct Oct Oct 3Q Oct Oct
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 29 November 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Rise on U.S. Budget Remarks, Japan Stimulus. Asian stocks rose as U.S. lawmakers said they’re optimistic for an agreement to avoid automatic spending cuts and tax increases and as the leader of Japan’s opposition party called for unlimited monetary policy easing. The MSCI Asia Pacific (MXAP) Index gained 0.9 percent to 124.14 as of 3:15 p.m. in Tokyo, with about four stocks climbing for each that fell. The gauge rose 13 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur growth and data showed a slowdown in China may be ending.
•
Dollar Trades Near November Low Before Geithner Discusses Cliff. The dollar was 0.5 percent from a four-week low against the euro before Treasury Secretary Timothy F. Geithner meets congressional leaders to discuss the so-called fiscal cliff. The Dollar Index (DXY) fell yesterday for the first time this week after comments from U.S. lawmakers fueled optimism the $607 billion combination of tax increases and spending cuts due to take effect in January will be avoided. The yen weakened against the majority of its counterparts as Asian stocks gained before U.S. data forecast to show that gross domestic product expanded faster than previously estimated.
BREAKING NEWS GLOBAL •
World Economy in Best Shape Since 2011. The world economy is in its best shape in 18 months as China’s prospects improve and the U.S. looks likely to avoid the so-called fiscal cliff, according to the latest Bloomberg Global Poll of investors. Two-thirds of the 862 surveyed described the global economy as either stable or improving. That’s up from just over half who said that in September and is the most since May 2011. The U.S. came out on top for the eighth straight quarter when investors were asked which markets will offer the best opportunities over the next year. China ranked second, reversing a decline to fourth in the September poll of investors, analysts and traders who are Bloomberg subscribers. The European Union, beset by a debt crisis, was seen offering the worst returns.
•
Fed Sees Measured Economic Growth as Fiscal Cliff Nears. The U.S. economy expanded at a “measured pace” in recent weeks as gains in consumer demand and housing were tempered by a slowdown in manufacturing and the impact of superstorm Sandy, the Federal Reserve said. Consumer spending grew at a moderate pace in most districts, while manufacturing weakened,” the central bank said in its Beige Book business survey, which is based on reports from the Fed’s 12 district banks. The report indicates that Fed policy makers are unlikely to curtail monthly purchases of $40 billion in housing debt to boost the three-year economic expansion. It also bolsters Fed Chairman Ben S. Bernanke’s view that an agreement on reducing long-term federal budget deficits without abrupt tax increases and spending cuts would remove a barrier to growth. The Beige Book provides anecdotal evidence on the health of the economy two weeks before the Federal Open Market Committee meets in Washington on Dec. 11-12.
•
Sales of New U.S. Homes Fell 0.3% in October. Builders in the U.S. sold fewer new homes than forecast in October and purchases were revised down for the prior month, highlighting the hurdles facing a rebound in the industry at the heart of the financial crisis. Sales dropped 0.3 percent to a 368,000 annual pace following a 369,000 rate in September that was20,000 lower than initially reported, figures from the Commerce Department showed today in Washington. The report runs counter to recent data showing gains in residential construction, builder
confidence and mortgage applications that indicate housing is on the verge of contributing more to economic growth. Easier access to credit and more employment are still needed to ensure the real-estate rebound is sustained -- one reason why Federal Reserve Chairman Ben S. Bernanke has pledged to maintain record stimulus. •
Rutte Sees Possible Extra Steps to Keep Greece on Track. Dutch Prime Minister Mark Rutte said Greece may need more financial help to stay in the euro, retreating from a hard line that included a willingness to consider the country’s exit from the currency bloc. Echoing his German allies, Rutte declined to speculate on Greece leaving the 17-nation euro. Rutte said he opposed granting concessions to Ireland and Portugal that euro-area finance ministers this week agreed to give the government in Athens to keep it solvent. He declined to comment on a potential aid request by Spain and ruled out writing off European taxpayers’ loans to Greece.
•
EU Nations Clash on Thresholds for Direct ECB Oversight. The European Union is quarreling over thresholds on how big euro-area lenders must be in order to be designated for direct oversight by the European Central Bank, according to draft proposals. Some countries are seeking to set the bar as low as banks with more than 2.5 billion euros ($3.2 billion) in assets, while others are calling for divisions at 20 billion euros or 60 billion euros. States are also split over having direct ECB supervision triggered by a ratio between a bank’s assets and the gross domestic product of its home country. Governments are racing to meet an end of 2012 deadline to set up a single supervisor at the Frankfurt-based ECB. EU finance ministers will meet next week to seek compromises on the bank-oversight plan, which the bloc’s leaders have 2labeled as an essential step to break the bank-sovereign link that has worsened Europe’s debt crisis.
REGIONAL •
Copper Shortage Seen Extending as China Accelerates. Copper supply shortages will extend into the first half of next year as an accelerating Chinese economy more than doubles the pace of growth in global consumption even as mines extract a record amount of metal. China, which uses 41 percent of the world’s copper, is rebounding from seven quarters of slowing growth after the government approved a $161 billion subways-to-roads construction plan in September. It’s being joined by central banks from the U.S. to Europe to Japan, who also pledged more stimulus. Housing starts in the U.S., the second-largest consumer, reached a fouryear high last month and business confidence unexpectedly strengthened in Germany, Europe’s biggest economy.
•
Japan’s Retail Sales Fall in October as Car Sales Drop. Japan’s retail sales fell in October by the most in 11 months as consumers purchased fewer cars and televisions, adding pressure on the government to stimulate an economy that may be entering a recession. Sales fell 1.2 percent from a year earlier, the Trade Ministry said in Tokyo today, after a 0.4 percent advance in September. Weakening consumer demand is dragging on growth in the world’s third-largest economy before Dec. 16 elections. Candidates from the two largest political parties have said they will implement additional spending to rekindle expansion after exports fell for a fifth month in October and wages stagnated.
•
Korea Manufacturer Confidence Falls to Lowest in 3 Years. South Korean manufacturers’ confidence fell to the lowest level in more than three years as gains in the won threaten to slow a rebound in exports and the country prepares to vote for a new president next month. An index measuring expectations for December fell to 67 from 70 for November, the lowest since April 2009, the Bank of Korea said in a statement in Seoul today. A reading below 100 indicates that pessimists outnumber optimists. Asia’s fourth largest economy has shown improvement before the Dec. 19 election, with overseas sales rising for the first time in fourth months in October. Page 2 of 8
•
Malaysia's debt-to-GDP seen at 53 percent. Malaysia's debt-to-gross domestic product (GDP) ratio should hit 53% end of this year, slightly higher than the 51.8% last year but still below the debt ceiling the Government had set. Deputy Finance Minister Datuk Donald Lim Siang Chai said the Government would keep the debt-to-GDP ceiling at 55% as a “safeguard measure” for the public to understand the country's financial position. He said the Government had been serious in ensuring the federal debt did not exceed the 55% cap it set as a fiscal rule.
•
Singapore central bank flags risks from rising corporate debt. Singapore banks could see loan quality fall sharply should interest rates rise or if the economy worsens as corporate debt levels are high by historical standards, the city-state’s central bank warned. “Corporates are more leveraged today than they were a year ago as low borrowing costs may have prompted some corporates to borrow more than they would have otherwise,” the Monetary Authority of Singapore (MAS) said in its annual Financial Stability Review. Large firms have issued twice the amount of debt in the first nine months of this year compared with the same period last year, while loans to small- and medium-sized enterprises have continued to expand robustly, MAS added. “If economic conditions worsen or interest rates rise from current low levels, bank loan quality could deteriorate substantially,” the central bank said, although it added companies in the city-state appear well-positioned to cover their interest expenses. Singapore interest rates are hovering near all-time lows amid a surge in inflows resulting from quantitative easing by Western central banks. The yield on the 10-year government bond is around 1.36% while bank deposits earn as little as 0.1% per annum, well below inflation that has averaged 4.7% so far this year.
•
Vietnam Money Supply Rises 7.86 percent by End-August. Vietnam’s money supply, or M2, was VND3,371.6 trillion ($161.3 billion) by the end of August, up 7.86% from end-2011, the State Bank of Vietnam (SBV), the country’s central bank, said on its website. Of the sum, total deposits by economic institutions reached VND1,172 trillion, up 2.02% from end-2011, while deposits by local residents soared 19.99% to VND1,555.9. Data from the SBV, the country’s central bank, also stated that total outstanding loans grew by only 2.11% during the period to VND2,904 trillion ($139 billion). The big gap in the growth rates of M2 and credits shows that the capital absorption capability of the economy remained weak and local businesses were still unable to access loans though many commercial banks launched soft lending packages following the SBV’s request mid-July. Experts attributed the situation to piling bad debts and inventories, which are now a headache for local enterprises, especially those in the real estate sector. Vietnam’s National Assembly, the country’s highest policy- making body, concluded its regular meeting on Nov 23 without announcing considerable support measures to resolve hurdles of the economy. Lawmakers approved the government’s proposed socio- economic targets set for 2013 with a modest GDP growth of 5.5% and inflation rate to be curbed at 8%. For 2012, Vietnam set the target of 14%-16% increase in money supply.
IFIs NEWS (compiled from their websites) ADB – Press Release: “ADB to Help South Asia Clear Path for Intraregional Trade Expansion” •
The Asian Development Bank (ADB) is providing US$48 million to help goods move more smoothly in and out of Bangladesh, Bhutan, and Nepal, by overhauling time-consuming, costly, and often opaque customs procedures that are inhibiting intraregional trade. The project will help the three countries, all members of the South Asia Subregional Economic Cooperation (SASEC) program, adopt an international customs administration protocol, upgrade existing automated customs management systems, and establish web-based electronic trade portals. http://www.adb.org/news/adb-help-south-asia-clear-path-intraregional-trade-expansion Page 3 of 8
BIS – Press Release: “BIS, ECB and IMF publish third part of Handbook on Securities Statistics” •
The Bank for International Settlements (BIS), the European Central Bank (ECB) and the International Monetary Fund (IMF) today jointly released the third and final part of the Handbook on Securities Statistics, which covers equity securities issues and holdings. The aim of the Handbook is to assist national and international agencies in the production of relevant, coherent and internationally comparable securities statistics for use in monetary policy formulation and financial stability analysis. http://www.bis.org/press/p121128.htm IFC – Press Release: “IFC, Uzbekistan Work to Expand Access to Finance for Smaller Businesses” •
The IFC and the Central Bank of the Republic of Uzbekistan are partnering to strengthen the country’s financial infrastructure and expand access to finance for entrepreneurs and smaller businesses. The two institutions will develop laws that allow companies to use movable assets – including inventory, accounts receivable, and equipment – as collateral for loans. That will make it easier for smaller businesses, who may not have traditional collateral like land, to obtain financing, expand, and create jobs. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/E2D3BBAAB60237AB85257AC4003B396 4 IFC – Press Release: “IFC, Ukraine’s Ukreximbank Expand Cooperation Under Global Trade Finance Program” •
IFC is increasing its trade finance guarantee to Export-Import Bank of Ukraine (Ukreximbank) to US$100 million to support better access to finance for export-oriented companies, helping sustain the country’s economic recovery and create jobs. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/456927747B5380EF85257AC40053EE17 IFC – Press Release: “IFC Launches Volga Bond, Marking Largest Domestic Placement in Russia by an International Issuer” •
IFC launched an inaugural Volga bond, raising 13 billion Russian rubles (equivalent to about US$410 million) for private sector development. The five-year bond is IFC’s first rubledenominated bond placed in the Russian market. It is the first corporate bond issued in Russia that has its coupon linked to an inflation-target index, and the largest domestic placement by an international issuer.
http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/A3536C1368FDCE8585257AC400532C26 IFC – Press Release: “IFC Helps Russian Regions to Develop Renewable Energy and Address Climate Change” • The IFC signed a cooperation agreement with Belgorod and Nizhny Novgorod regions to develop renewable energy, rehabilitate small hydro power plants, and address climate change. The IFC Russia Renewable Energy Program works with regions in Russia and assists them in assessing their renewable energy potential. The program helps state authorities evaluate the regional legal framework and identify renewable energy project opportunities http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/9EFBC91108A45D1885257AC400330836 IFC – Press Release: “IFC Brings Together Governments, Private Sector to Expand Renewable Energy in Emerging Markets” •
The IFC is helping governments in developing countries form partnerships with the private sector to expand access to renewable energy and address the challenges of climate change. IFC hosted a two-day workshop on public-private partnerships in renewable energy. It brought together government representatives and private sector executives from Africa, Asia, the Caribbean, Eastern Europe, and the Middle East. The workshop covered solar, geothermal, Page 4 of 8
wind and hydropower energy and also addressed legal and regulatory issues in the design and implementation of public-private partnerships in renewable energy http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/CD0493F9A734E93485257AC4006B2F97 IMF – Call for Papers – Asia: Challenges of Stability & Growth” •
The Bank of Korea (BOK), the International Monetary Fund (IMF), and the IMF Economic Review are organizing a conference on “Asia: Challenges of Stability and Growth.” The conference will be hosted by the BOK and will take place in Seoul on September 26–27, 2013. The conference will provide a forum to discuss innovative research on challenges of stability and growth that Asia is facing and to facilitate the exchange of views among researchers and policymakers. The Program Committee welcomes papers addressing the following issues in the context of Asia.
http://www.imf.org/external/np/seminars/eng/2012/korea/index.htm IMF – Publication: Staff Report: “IMF Executive Board Concludes 2012 Article IV Consultation with Mexico” •
The IMF has publicised Mexico’s Staff Report for the 2012 Article IV Consultation, alongside with selected issue papers. http://www.imf.org/external/pubs/ft/scr/2012/cr12316.pdf http://www.imf.org/external/pubs/ft/scr/2012/cr12317.pdf Working Paper: “he Challenges of Fiscal Consolidation and Debt Reduction in the Caribbean” •
This paper examines debt dynamics in the Caribbean and discusses policy options for reducing the high debt levels. Based on empirical studies of factors underlying global large debt reduction episodes, important policy lessons are drawn for the Caribbean. The analysis shows that major debt reductions are associated with strong growth and decisive and lasting fiscal consolidation efforts. http://www.imf.org/external/pubs/ft/wp/2012/wp12276.pdf IMF – Press Release: “Spain: Financial Sector Reform—First Progress Report” http://www.imf.org/external/pubs/ft/scr/2012/cr12318.pdf FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 28-Nov 29-Nov close China 6.2980 6.2283 6.2240 6.2235 Hong Kong 7.7698 7.7504 7.75 7.75 Indonesia 9,126.0 9,649.0 9,644.0 9,634.0 Japan 76.8 82.4 82.08 82.16 Korea 1,150.8 1,086.1 1,086.4 1,084.1 Malaysia 3.1507 3.0603 3.0530 3.0452 Philippines 43.765 41.05 40.88 40.822 Singapore 1.2906 1.2228 1.2224 1.2208 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,865.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.01 0.00 0.10 -0.10 0.21 0.26 0.14 0.13 0.07 0.00
2012 YTD (%chg) 1.2 0.3 -5.3 -6.5 6.2 3.5 7.2 5.7 2.4 0.9
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan
2,199.4 18,877.4 3,857.9 8,455.4
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2
28-Nov 1,973.5 21,709.0 4,304.8 9,308.4
29-Nov 1,963.5 21,922.9 4,319.1 9,400.9
% change -0.51 0.99 0.33 0.99
2012 YTD (%chg) -10.7 16.1 12.0 11.2
Page 5 of 8
Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
1,912.8 1,606.5 5,633.7 3,011.8 1,299.9 375.8
OVERNIGHT LENDING RATE (%) 28-Nov 29-Nov bps change 2.320 2.350 3.00 0.098 0.098 0.04 4.169 4.172 0.24 0.100 0.100 0.00 2.750 2.750 0.00 3.000 3.000 0.00 n.a. n.a n.a. 0.050 0.050 0.00 2.750 2.750 0.00 1.813 1.517 -29.60
1,934.9 1,609.5 5,640.5 3,040.2 1,305.6 378.2
1.15 0.18 0.12 0.94 0.43 0.64
3.2 6.3 27.5 13.0 27.3 8.1
3-MONTH INTERBANK LENDING RATE (%) 28-Nov 29-Nov bps change 3.814 3.821 0.70 0.397 0.398 0.04 4.909 4.906 -0.28 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 -0.028 0.029 5.70 0.378 0.378 0.00 2.869 2.869 0.00 6.800 7.114 31.40
CREDIT DEFAULT SWAP (IN BPS) 27-Nov 28-Nov bps change China 57.1 57.7 0.67 Hong Kong 43.7 43.9 0.13 Indonesia 122.5 123.4 0.90 Japan 69.6 68.2 -1.40 Korea 56.0 57.2 1.17 Malaysia 66.5 66.4 -0.08 Philippines 98.0 98.7 0.69 Thailand 83.2 82.9 -0.27 Vietnam 203.5 200.0 -3.52 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * CDS trades in New York, hence the one day lag in the latest closing price 28-Nov Gold Spot (in US$ per ounce)
1,719.7
29-Nov
% change
1,723.0
0.19
Source: Bloomberg
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3 months imports of goods & services (US$bn)
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
Short-term external debt (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
Import cover (Qtrs of imports covered by reserves)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
DATA RELEASES FOR THE DAY Country
PHILIPPINES SOUTH KOREA SOUTH KOREA HONG KONG JAPAN
Indicators
Budget Deficit/Surplus (PHP bn) Business Survey- Non-Manufacturing Business Survey- Manufacturing Retail Sales - Value (YoY)% Retail Sales - Value (YoY)%
Period
Oct Dec Dec Oct Oct
Last
-9.7 65 67 4 -1.2
Previous
-34.9 67 70 9.4 0.4
SELECTED ECONOMIC RELEASES CALENDAR (26 - 30 November 2012)
Expected Release Date 11/26/2012
11/27/2012
11/28/2012
11/29/2012
Country SOUTH KOREA THAILAND SINGAPORE SOUTH KOREA PHILIPPINES HONG KONG HONG KONG PHILIPPINES PHILIPPINES SOUTH KOREA PHILIPPINES SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG
Indicators Consumer Confidence Customs Exports (YoY)% Industrial Production YoY% Exports YoY% Trade Balance (USD mn) Customs Exports and Imports (YoY)% Trade Balance (HKD bn) Total Imports (YoY)% GDP (YoY)% Current Account in (USD mn) GDP sa (QoQ)% Business Survey- Non-Manufacturing Business Survey- Manufacturing Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)%
Nov Oct Oct Nov Oct Oct Oct Sep 3Q Oct 3Q Dec Dec Oct Oct
Period
Page 7 of 8
11/30/2012
JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA THAILAND THAILAND THAILAND MALAYSIA THAILAND THAILAND
Industrial Production YOY% National CPI YoY % National CPI Ex Food, Energy YoY % Jobless Rate % Job-To-Applicant Ratio Industrial Production (YoY)% Total Trade Balance (USD mn) Total Exports and Imports YOY% Business Sentiment Index Unemployment Rate % Total Exports YOY% Current Account Balance (USD mn)
Oct P Oct Oct Oct Oct Oct Oct Oct Oct 3Q Oct Oct
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 30 November 2012, 10:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Rise, Extend Weekly Gain, on Japan Stimulus. Asian stocks rose, with the benchmark regional index heading for its second weekly advance, as Japan’s cabinet approved an economic stimulus package and the country’s industrial production unexpectedly increased. The MSCI Asia Pacific Index gained 0.4 percent to 124.72 as of 3:47 p.m. in Tokyo, with about two shares rising for each that fell. The gauge has increased 1.5 percent this week. Japan’s Nikkei 225 Stock Average rose 0.5 percent today, capping its best month since February, as the government boosted stimulus measures ahead of elections. Japan’s cabinet today approved a second round of fiscal stimulus worth 880 billion yen ($10.7 billion) using budget reserves as Prime Minister Yoshihiko Noda attempts to boost the economy before next month’s election. The yen weakened against all of its 16 major peers.
•
Oil Heads for First Monthly Gain Since August on Economic Growth. Oil headed for its first monthly gain since August in New York amid signs of economic growth in the U.S. and China, the world’s biggest crude consumers. West Texas Intermediate futures were little changed after climbing 1.8 percent yesterday, the most since Nov. 19. The U.S. economy expanded more than previously estimated last quarter, the Commerce Department said in Washington. China’s economy will improve or remain stable, according to most respondents in a Bloomberg quarterly survey this week. Oil has also advanced on concern that violence in the Gaza Strip and Egypt will spread and disrupt Middle East crude supplies.
BREAKING NEWS GLOBAL •
Geithner Said to Offer Fiscal Plan With Entitlement Cuts. Treasury Secretary Timothy Geithner offered Republican House Speaker John Boehner a proposal to avert an end-of-the-year fiscal cliff that would trade $1.6 trillion in tax increases for $400 billion in unspecified entitlement program cuts, a Republican aide said. The proposal calls for a permanent increase in the U.S. debt limit that would avoid the need for congressional action, said the aide, who wasn’t authorized to speak publicly. The plan was modeled on Obama’s budget proposal from February and includes at least $50 billion in economic stimulus spending for the current fiscal year, according to the aide. After meeting today with Geithner, Boehner was dismissive, saying President Barack Obama must “get serious” about the fiscal cliff talks. Democrats haven’t offered “real spending cuts,” said Boehner, an Ohio Republican. Still, the speaker said he remains “hopeful” about talks to avert more than $600 billion in spending cuts and tax increases scheduled to begin in January.
•
Consumer Spending in U.S. Grows Less Than Forecast. Consumer spending in the U.S. grew less than forecast in the third quarter, underscoring why Federal Reserve policy makers are zeroing in on fighting unemployment to spur the world’s largest economy. Household purchases climbed at a 1.4 percent rate, the smallest gain in more than a year and down from a previously reported 2 percent advance, revised figures from the Commerce Department showed today in Washington. Gains in inventories and a smaller trade deficit more than offset the slowdown to propel gross domestic product to a 2.7 percent rate, exceeding the 2 percent pace previously reported.
•
Euro-Area Economic Sentiment Unexpectedly Up in November. Economic confidence in the euro area unexpectedly rose in November even as the single-currency bloc was mired in its
second recession in four years and leaders worked to contain the debt crisis. An index of executive and consumer sentiment in the 17- nation euro area increased to 85.7 from a revised 84.3 in October, the European Commission in Brussels said today. Euro-area finance ministers earlier this week eased the terms on emergency aid for Greece, declaring that after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health. •
New Norm High Food Costs Boost Supply Risk as World Hunger Grows. High and volatile global food prices have become the “new norm,” creating increased risk for supplies at a time when 12 percent of the population remains chronically undernourished, the World Bank said. Even after the World Bank’s food-price index slipped from a record in July, the measure was still 7 percent higher in October than a year earlier, the Washington-based lender said today in a report. While costs have dropped in recent months, fats and oils still are 12 percent more expensive than a year earlier, and grains are “very close” to the all-time high reached in 2008, the bank said. “A new norm of high prices seems to be consolidating,” Otaviano Canuto, the World Bank Group’s vice president for poverty reduction and economic management, said in an e-mailed statement. “Although we haven’t seen a food crisis as the one of 2008, food security should remain a priority.”
REGIONAL •
Japan’s Industrial Production Unexpectedly Gains in October. Japan’s output unexpectedly rose the most since December, signaling a contraction in the world’s third-largest economy may be short lived. Industrial production in October increased 1.8 percent from the previous month, when it dropped 4.1 percent, the Trade Ministry said in Tokyo today. Japan’s economy is at risk of a recession as a contraction in Europe and a diplomatic dispute with China hurt exports and the expiry of car-purchase subsidies weakens consumer demand at home. Government reports showing signs of recovery in the U.S. and China, the world’s two biggest economies, may alleviate an economic slump in Japan.
•
Japan’s Consumer Prices Unchanged as Abe Calls for More Easing. Japan’s consumer prices were unchanged in October after five months of declines, limiting the case for more monetary easing being made by Shinzo Abe, the front-runner to become the nation’s next prime minister. Consumer prices excluding fresh food didn’t change from a year earlier, the statistics bureau said in Tokyo today. The nation’s jobless rate stayed at 4.2 percent for a third month, according to a separate report.
•
China Economic Optimism Returns in Poll as Xi Beats Hu. Confidence in China’s economy is at the highest in more than a year amid optimism that the new leadership headed by Xi Jinping will be better for the financial climate, according to a Bloomberg investor poll. Respondents who see the Chinese economy improving or remaining stable surged to 72 percent this week from September’s 38 percent in the quarterly global poll of investors, analysts and traders who are Bloomberg subscribers. Fifty-three percent said they’re more optimistic about the effect of Xi’s policies on investors, up from 42 percent who were asked in September about President Hu Jintao. The renewed faith in the world’s second-largest economy reflects data from factory production to retail sales showing growth picking up this quarter after a seven-quarter slowdown. Almost half of respondents anticipate Xi’s government will pursue policies that boost expansion or keep it stable.
•
Dung Sees Vietnam Inflation at Decade Low With Investment Rising. Vietnam’s Prime Minister Nguyen Tan Dung pledged to bring inflation down to a decade low as the nation seeks to boost foreign investment and cope with the aftermath of a credit boom that’s hobbled the banking industry. “Inflation in 2012 will be about 7 percent and next year we will have even better control of it, at about 6 percent,”Dung, 63, said in an interview in Hanoi on Nov. 28. He said overseas investment will rise “sharply” in the next two years as officials overhaul state Page 2 of 7
enterprises and recapitalize banks. Slower gains in consumer prices would reduce the risk of labor strikes undermining Vietnam’s campaign to position itself as an alternative manufacturing base to China. Concern that growth has peaked after a quarter-century of market opening, and that policy makers are struggling to manage a legacy of non-performing loans, contributed to a 21 percent slide in investment pledges from abroad so far this year. •
GM Plans Thailand, Indonesia Dealership Expansion to Drive Sales. General Motors Co. (GM) plans to increase the number of dealerships in Indonesia and Thailand to tap rising incomes in the two Southeast Asian countries with a combined population the size of the U.S. GM will boost the number of dealers in Thailand to 120 by the end of next year from 91 currently, and the total in Indonesia to 55 from 35, Martin Apfel, the U.S. automaker’s Southeast Asia head, said in an interview on Nov. 28. Among other countries in the region, Myanmar holds “great prospect and opportunity” as it opens up to foreign investment, he said. GM is among foreign automakers seeking to expand in Southeast Asia as incomes rise with economic growth. U.S. President Barack Obama this month made visits to Myanmar and Cambodia and attended a summit of regional leaders as he seeks to expand trade ties to regain economic influence.
IFIs NEWS (compiled from their websites) IFC – Press Release: “IFC, Partners to Help Improve Skills of Young ICT Workers in Jordan” •
IFC is helping develop new standards for information and communication technology (ICT) professionals in Jordan, part of an effort to help young people find work in the fast-growing sector. IFC signed a partnership agreement with Int@j, Jordan’s leading ICT industry association. The accord will see the two organizations design international-caliber certification standards for the sector, which while growing quickly is suffering from a shortage of skilled workers. Universities, training providers, and professional associations will be encouraged to adopt the standards, which would ensure that graduating students have the skills necessary to find work in the ICT sector.
http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/24822C32860ECA9385257AC50052DEC7 IFC – Press Release: “IFC Increasing its Support for Africa’s Post-Conflict Countries” •
IFC is increasing its support for African countries recovering from conflict, providing advisory services and seeking partners for investments to help these countries build strong private sectors and achieve lasting stability and growth. As part of this effort, IFC, in partnership with the World Bank and This is Africa, a Financial Times Publication, this week hosted a conference in Nairobi that gathered high-ranking Africa government officials, and members of the private sector and civil society groups to discuss ways to increase investment in Africa’s post conflict countries.
http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/6DE40F9F450D050F85257AC5002DB9FD IMF – Working Paper: “Non-financial Firms in Latin America: A Source of Vulnerability?” •
This paper examines corporate sector vulnerabilities in Brazil, Chile, Colombia, Mexico and Peru. Results suggest that vulnerabilities may be building in Latin America led by leverage, currency exposures and moderating buffers. These effects are partially offset, however, by a significant reduction in maturity exposures. http://www.imf.org/external/pubs/ft/wp/2012/wp12279.pdf
IMF – Press Release: “IMF Completes the Second Review Under the Standby Credit Facility Arrangement with Solomon Islands” •
The IMF has publicised the captioned press release where the Executive Board concludes that firm program implementation under the Standby Credit Facility arrangement as well as some Page 3 of 7
progress in structural reforms have succeeded in restoring macroeconomic and financial stability. http://www.imf.org/external/np/sec/pr/2012/pr12464.htm IMF – Publication: “Staff Report: 2012 Article IV Consultation of the Republic of Slovenia” •
The IMF has publicised the captioned press release where the Executive Board concludes that firm program implementation under the Standby Credit Facility arrangement as well as some progress in structural reforms have succeeded in restoring macroeconomic and financial stability.
http://www.imf.org/external/pubs/ft/scr/2012/cr12319.pdf http://www.imf.org/external/np/sec/pn/2012/pn12134.htm (PIN) World Bank – Publication: “Malaysia Economic Monitor, November 2012” http://www.worldbank.org/en/news/2012/11/29/mem-nov-2012-unlocking-womens-potentialkeyfindings World Bank – Press Release: “World Bank Warns Against Complacency Amid High Food Prices and Hunger” •
According to the latest edition of the World Bank Group’s Food Price Watch report, published quarterly, global food prices stabilized following last July’s record peak. In October, prices were 5 percent below that peak. Prices were driven down by fats and oils, with more modest declines in grains. Seasonal increase in supplies, the absence of panic policies, such as food export restrictions, and better expectations for the future are behind such trends, although markets remain tight in general
http://www.worldbank.org/en/news/2012/11/29/world-bank-warns-against-complacency-amidhigh-food-prices-hunger World Bank – Press Release: “FYR Macedonia Country Partnership Strategy Progress Report helps the country in the midst of Eurozone crisis” • The World Bank’s Executive Directors discussed the Country Partnership Strategy Progress Report (CPSPR) for FYR Macedonia. The Progress Report assesses the implementation of the 2011-14 joint World Bank-International Finance Corporation (IFC) Country Partnership Strategy (CPS) for FYR Macedonia, which focuses on three pillars: (i) faster growth by improving competitiveness; (ii) more inclusive growth by strengthening employability and social protection, and continued improvement of social programs; and (iii) more sustainable resource use and an analysis of options for “greener” economic growth. http://www.worldbank.org/en/news/2012/11/29/macedonia-country-partnership-strategyprogress-report-helps-eurozone-crisis FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 29-Nov 30-Nov close China 6.2980 6.2283 6.2235 6.2266 Hong Kong 7.7698 7.7504 7.7501 7.7501 Indonesia 9,126.0 9,649.0 9,634.0 9,619.0 Japan 76.8 82.4 82.12 82.68 Korea 1,150.8 1,086.1 1,084.1 1,082.9 Malaysia 3.1507 3.0603 3.0452 3.0388 Philippines 43.765 41.05 40.822 40.795 Singapore 1.2906 1.2228 1.2206 1.2207 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,865.0 20,855.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.05 0.00 0.16 -0.68 0.12 0.21 0.07 -0.01 0.07 0.02
2012 YTD (%chg) 1.1 0.3 -5.1 -7.1 6.3 3.7 7.3 5.7 2.5 0.9
Page 4 of 7
STOCK MARKET INDEX 2011 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,199.4 18,877.4 3,857.9 8,455.4 1,875.4 1,514.6 4,422.2 2,691.1 1,025.3 350.0
Previous wk's close 2,117.0 22,111.3 4,338.9 9,051.2 1,918.7 1,656.1 5,424.5 3,040.8 1,306.6 375.3
29-Nov 1,963.5 21,922.9 4,319.1 9,400.9 1,934.9 1,607.3 5,640.5 3,045.9 1,309.6 378.2
OVERNIGHT LENDING RATE (%) 29-Nov 30-Nov bps change 2.350 2.260 -9.00 0.098 0.098 0.00 4.172 4.170 -0.16 0.100 0.088 -1.25 2.750 2.750 0.00 3.000 3.000 0.00 n.a. n.a. n.a. 0.062 0.062 0.00 2.750 2.750 0.00 1.517 1.708 19.10
30-Nov
% change
1,980.1 22,030.4 4,287.2 9,446.0 1,932.9 1,610.2 5,640.5 3,078.1 1,324.4 377.8
0.85 0.49 -0.74 0.48 -0.10 0.18 0.00 1.06 1.13 -0.10
2012 YTD (%chg) -10.0 16.7 11.1 11.7 3.1 6.3 27.5 14.4 29.2 7.9
3-MONTH INTERBANK LENDING RATE (%) 29-Nov 30-Nov bps change 3.821 3.826 0.46 0.398 0.398 0.00 4.906 4.906 0.04 0.319 0.319 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.029 0.029 0.00 0.378 0.378 0.00 2.869 2.869 0.00 7.114 7.200 8.60
CREDIT DEFAULT SWAP (IN BPS) 28-Nov 29-Nov bps change China 57.7 56.5 -1.25 Hong Kong 43.9 43.7 -0.13 Indonesia 123.4 122.1 -1.34 Japan 68.2 68.2 0.06 Korea 57.2 56.0 -1.17 Malaysia 66.4 66.2 -0.22 Philippines 98.7 97.2 -1.52 Thailand 82.9 82.8 -0.09 Vietnam 200.0 199.7 -0.25 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * CDS trades in New York, hence the one day lag in the latest closing price 29-Nov Gold Spot (in US$ per ounce)
1,725.7
30-Nov
% change
1,729.7
0.23
Source: Bloomberg
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore
S&P AAAAA BB+ AAA ABB+ AAA
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 --
Fitch A+ AA+ BBBAA A+ ABB+ AAA
Page 5 of 7
Thailand Vietnam
BBB+ BB-
Baa1 B1
BBB B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
31-Mar 3,305.0 294.6 110.5 1,288.7 316.0 135.7 76.1 243.6 179.3 17.4
EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
30-Apr 3,298.9 295.6 116.4 1,289.5 316.8 135.9 76.5 246.1 178.5 19.5
31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9
3 months imports of goods & services (US$bn)
3,285.1 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
2012 30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7
Short-term external debt (US$bn)
504.3 139.0 50.5 70.9 150.9 58.0 19.7 118.2 54.3 29.9
31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0
31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a
30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a
Import cover (Qtrs of imports covered by reserves)
588.2 736.2 40.1 2,332.3 141.4 35.4 7.0 923.9 58.9 6.9
31-Oct n.a 301.7 110.3 1,274.2 323.5 138.3 82.1 254.2 181.5 n.a
Reserves over short-term debt
6.5 2.2 2.2 18.0 2.1 2.4 4.2 2.2 3.3 -
5.6 0.4 2.7 0.5 2.3 3.9 11.7 0.3 3.1 -
DATA RELEASES FOR THE DAY Country
JAPAN JAPAN JAPAN THAILAND SOUTH KOREA THAILAND THAILAND
Indicators
Industrial Production YOY% National CPI YoY % National CPI Ex Food, Energy YoY % Business Sentiment Index Industrial Production YOY% Total Exports YOY% Current Account Balance (USD mn)
Period
Oct P Oct Oct Oct Oct Oct Oct
Last
-4.3 -0.4 -0.5 52.1 -0.8 14.4 -199
Previous
-8.1 -0.3 -0.6 49.9 0.7 -0.1 1769
SELECTED ECONOMIC RELEASES CALENDAR (26 - 30 November 2012)
Expected Release Date 11/26/2012
11/27/2012
Country SOUTH KOREA THAILAND SINGAPORE SOUTH KOREA PHILIPPINES HONG KONG
Indicators Consumer Confidence Customs Exports (YoY)% Industrial Production YoY% Exports YoY% Trade Balance (USD mn) Customs Exports and Imports (YoY)%
Nov Oct Oct Nov Oct Oct
Period
Page 6 of 7
11/28/2012
11/29/2012
11/30/2012
HONG KONG PHILIPPINES PHILIPPINES SOUTH KOREA PHILIPPINES SOUTH KOREA SOUTH KOREA HONG KONG HONG KONG JAPAN JAPAN JAPAN JAPAN JAPAN SOUTH KOREA THAILAND THAILAND THAILAND MALAYSIA THAILAND THAILAND
Trade Balance (HKD bn) Total Imports (YoY)% GDP (YoY)% Current Account in (USD mn) GDP sa (QoQ)% Business Survey- Non-Manufacturing Business Survey- Manufacturing Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Industrial Production YOY% National CPI YoY % National CPI Ex Food, Energy YoY % Jobless Rate % Job-To-Applicant Ratio Industrial Production (YoY)% Total Trade Balance (USD mn) Total Exports and Imports YOY% Business Sentiment Index Unemployment Rate % Total Exports YOY% Current Account Balance (USD mn)
Oct Sep 3Q Oct 3Q Dec Dec Oct Oct Oct P Oct Oct Oct Oct Oct Oct Oct Oct 3Q Oct Oct
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