MARKET UPDATE FOR ASEAN+3 October 2012
MARKET UPDATE FOR ASEAN+3 10 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian currencies fell, led by South Korea’s won and India’s rupee, after data this week fuelled concern the global economic slowdown is worsening. Korean government bond yields slid to record lows. Korea’s won dropped by 0.35 percent at 1114.7. Peso slides most since Sept. 26 and down to 41.535 today; Baht drops to weakest level since Oct. 3 and closed at 30.7.
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Asian Stocks Drop as China Slowdown Weighs on Corporate Earnings. Asian stocks fell, with the regional benchmark index heading for a one-month low, on concern China’s economic slowdown and its territorial dispute with Japan are weighing on corporate earnings. Japan’s Nikkei 225 Stock Average declined 2 percent, while South Korea’s Kospi Index slipped 1.6 percent. Australia’s S&P/ASX 200 Index fell 0.3 percent. Hong Kong’s Hang Seng Index slid 0.1 percent, while China’s Shanghai Composite Index added 0.2 percent.
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Oil Declines From One-Week High as Crude Stockpiles Seen Rising. Oil declined from the highest price in a week in New York on speculation that crude stockpiles climbed in the U.S.. Futures slid as much as 0.7 percent after surging 3.4 percent yesterday amid increased tension in the Middle East. Crude inventories probably rose 1.5 million barrels last week, according to a Bloomberg News survey before an Energy Department report tomorrow.
BREAKING NEWS GLOBAL •
IMF Sees European Banks Facing $4.5 Trillion Sell-Off. The International Monetary Fund said European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis, up 18 percent from its April estimate. Failure to implement fiscal tightening or set up a single supervisory system in the timing agreed could force 58 European Union banks from UniCredit SpA to Deutsche Bank AG to shrink assets, the IMF said. That would hurt credit and crimp growth by 4 percentage points next year in Greece, Cyprus, Ireland, Italy, Portugal and Spain, Europe’s periphery. “Intensification of the crisis has manifested itself in capital outflows from the periphery to the core at a pace typically associated with currency crises or sudden stops,” the IMF wrote in its Global Financial Stability Report released today.
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World Bank’s Kim Says Global Slump Could Destroy Africa’s Gains. World Bank President Jim Yong Kim said the global economy is at risk of a slowdown that wipes out gains in Africa, the poorest continent, and Latin America. “Our job now is to make sure the growth over the last five years that we’ve seen in Africa and Latin America is not destroyed by further worsening in the situation,” Kim said in an interview with Bloomberg Television today on a Japanese bullet train to Sendai, a city in the region hit hardest by last year’s earthquake and tsunami.
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ECB’s Visco Says Risk of Euro Collapse Only Due to Credibility. European Central Bank Governing Council member Ignazio Visco said speculation about a euro breakup is founded exclusively on investor concern about the credibility of governments’ fiscal-reform efforts. “The risk we are seeing now of a collapse in the euro is only due to credibility,” Visco said at a panel discussion in Tokyo today. “The euro area has much lower debt than the U.S. and Japan.” Visco also said that the reasons for the sovereign debt crisis aren’t “only fiscal profligacy but also the failure to grow at a sufficient pace.”
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Drought Cuts U.S. Crops Below Demand First Time in 38 Years. Drought damage to corn and soybean fields in the U.S., the world’s top grower and exporter, is eroding supplies of the nation’s two largest crops to below year-earlier consumption levels for the first time since 1974. The government probably will say tomorrow that the U.S. corn harvest and inventories on Sept. 1 will be a combined 11.604 billion bushels, less than the 12.33 billion consumed and exported last year, according to a Bloomberg survey of 31 analysts. Soybean supplies will be 2.932 billion bushels, below the 3.157 billion used in 2011. Supplies failed to top usage from the previous year only twice since 1960 for corn and five times for soybeans, U.S. Department of Agriculture data show.
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India Rating May Be Cut to Junk If Growth Outlook Dims, S&P Says. India may lose its investment-grade credit rating within the next 24 months if economic growth slows and political opposition to policy overhauls increases, Standard and Poor’s said. India faces at least a one-inthree possibility of a downgrade, analysts Takahira Ogawa and Elena Okorochenko said in a report received today, reiterating comments made in April when S&P lowered the outlook on the nation’s rating to negative. The nation is rated BBB- by S&P, one level above junk and the lowest in the BRIC group, which also includes Brazil, Russia and China. “On the other hand, we may revise the outlook back to stable if the government implements initiatives to reduce structural fiscal deficits, improve its investment climate, and increase growth prospects,” S&P said.
REGIONAL •
BOJ’s Inflation Failure Boosts Yen Debt Demand. Foreign investors are adding to holdings of Japan’s debt, showing no faith in the Bank of Japan’s ability to ignite inflation and weaken the yen. Overseas money managers were net buyers of money-market securities, notes and bonds in Japan for a sixth month in September, the longest stretch since at least 2005, Ministry of Finance figures showed yesterday. Japan’s 10-year government note yields are 1.17 percentage points higher than the nation’s inflation rate, offering the best so-called real yield after Italy among the Group of Seven countries, according to data compiled by Bloomberg.
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China Auto Sales Unexpectedly Shrink on Anti-Japan Protests. Chinese passenger-vehicle sales unexpectedly shrank for the first time in eight months as a territorial dispute with Japan turned consumers away from buying cars made by Toyota Motor Corp. to Nissan Motor Co. Wholesale deliveries, including multipurpose and sport utility vehicles, fell 0.3 percent to 1.32 million units last month, the China Association of Automobile Manufacturers said in a statement today. That compared with the 1.35 million average estimate of nine analysts surveyed by Bloomberg.
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South Korea Adds Workers as September Jobless Rate Holds at 3.1%. South Korea’s workforce expanded last month, with the unemployment rate unchanged from August as jobs increased in sectors including services and manufacturing. The jobless rate was at 3.1 percent in September, unchanged from August, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 13 economists was for a rate of 3.2 percent. The number of employed people increased by 655,000 to 25 million last month from a year earlier. Employment has provided a sign of resilience amid South Korea’s economic data this year, as exports that make up about half the economy fell for a third month in September. The International Monetary Fund lowered its 2012 South Korea growth forecast yesterday, ahead of tomorrow’s central bank decision on interest rates and a presidential election in December.
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Philippines Has Space to Cut Rates as Capital Flows Pose Risk. The Philippine central bank has room to add to three interest-rate cuts this year with inflation remaining contained, Governor Amando Tetangco said, as policy makers seek to anchor growth while curbing capital inflows. “Given that the inflation outlook remains benign for both this year and next, we have monetary Page 2 of 7
policy space,” Tetangco said today in an interview in Tokyo during the International Monetary Fund-World Bank annual meetings. Separately, he said the short-term challenge is for policy makers to “respond adequately and appropriately to strong capital inflows.” •
Singapore May Ease Currency Gain as Growth Slows. The Monetary Authority of Singapore will probably slow the pace of appreciation in the local dollar as moderating price pressures provide scope for measures to support economic growth, according to a survey of analysts. Officials will curb gains in Singapore’s currency when they meet Oct. 12 by decreasing the slope of its trading band, according to 17 of 23 financial companies surveyed by Bloomberg News. Two said there’s a chance the MAS will widen the band in addition to reducing its slope. Five predict no change, while one projected a shift to a zero slope, the poll showed.
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Palm Oil Stockpiles in Malaysia Surge to Record on Output. Palm-oil stockpiles in Malaysia, the world’s second-largest producer, jumped to a record as a surge in output and an economic slowdown in China and Europe weakened demand for the commodity used in food and biofuel. Inventories jumped 17.4 percent to 2.48 million metric tons in September from a revised 2.11 million tons in August, the Malaysian Palm Oil Board said in a statement today. That is higher than the median estimate of 2.43 million tons in a Bloomberg survey last week and surpassed the previous all-time high of 2.27 million tons in November 2008. Output surged 20 percent to 2 million tons, a monthly record, while exports rose 4.5 percent to 1.51 million tons.
IFIs NEWS (compiled from their websites) BIS – Publication: “Fiscal policy, public debt and monetary policy in emerging market economies” •
The BIS has published the captioned paper. This BIS Paper volume brings together the papers prepared by the BIS staff for the meeting as well as the contributions of central banks for the 17th Annual Meeting of Deputy Governors from major EMEs held at the BIS in Basel on 16-17 February 2012. The meeting addressed three issues: (i) the fiscal constraints on monetary policy; (ii) the impact of local currency bond markets on central bank policies; and (iii) the role of central banks in public debt management. This BIS Paper volume brings together the papers prepared by the BIS staff for the meeting as well as the contributions of central banks. http://www.bis.org/publ/bppdf/bispap67.pdf
IFC – Press Release: IFC in East Asia and Pacific Posts Record Investment and Strong Development Impact in Fiscal Year 2012 •
The IFC has announced that its investments in East Asia and the Pacific reached a record $2.9 billion in 71 projects in fiscal year 2012, with an emphasis on those countries and markets most in need. About two-thirds of the loan and equity financing by IFC went to less developed and frontier areas, such as Mongolia, the Mekong region, rural China, and the Pacific Islands. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/90B9518527FE919585257A9200307 5A9
IFC – Press Release: Invested about $300 Million in Indonesia Last Fiscal Year to Support Private Sector Development •
The IFC has made investments of close to $300 million in eight projects and spent almost $7 million on advisory projects in Indonesia during fiscal year 2012, expanding access to financial services for millions of Indonesians, developing vital infrastructure, improving corporate practices, and fighting climate change. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/9D0E74CE6C1AB70085257A9200342 E2F
IMF – Press Release: Quota Formula Review •
On September 28, 2012, the Executive Board of the IMF held further discussions on the review of the quota formula. Executive Directors welcomed a further exchange of views on the quota Page 3 of 7
formula review. They reaffirmed their commitment to complete the review by the January 2013 deadline, in a spirit of cooperation and compromise, and reiterated that the current review should continue to be underpinned by the principles agreed as part of the 2008 reform. The discussion highlighted several areas where a broad consensus is emerging as well as areas where views continue to diverge. http://www.imf.org/external/np/sec/pn/2012/pn12120.htm IMF – Publication: “Fiscal Monitor– Taking Stock: A Progress Report on Fiscal Adjustment” •
The IMF has publicised the captioned report. It says, “With growth weakening in many parts of the world and downside risks on the rise, fiscal consolidation remains challenging. However, considerable progress has been made in strengthening fiscal accounts following their sharp deterioration in 2008–09. This issue of the Fiscal Monitor takes stock of this progress, focusing on its size, composition, and implications for employment and social equity.” http://www.imf.org/external/pubs/ft/fm/2012/02/fmindex.htm (Index site) http://www.imf.org/external/pubs/ft/fm/2012/02/pdf/fm1202.pdf (Report)
IMF – Publication: “Global Financial Stability Report – Restoring Confidence and Progressing on Reforms” •
The IMF has publicised the full chapters of the captioned report. It says, “The October 2012 Global Financial Stability Report (GFSR) finds increased risks to the global financial system, with the euro area crisis the principal source of concern. The report urges policymakers to act now to restore confidence, reverse capital flight, and reintegrate the euro zone.” http://www.imf.org/external/pubs/ft/gfsr/2012/02/index.htm (Index site) http://www.imf.org/external/pubs/ft/gfsr/2012/02/pdf/text.pdf (Report)
IMF – Working Paper •
The IMF has publicised the following working papers: • “Natural Disasters: Mitigating Impact, Managing Risks” http://www.imf.org/external/pubs/ft/wp/2012/wp12245.pdf • “To Cut or Not to Cut? That is the (Central Bank’s) Question In Search of the Neutral Interest Rate in Latin America” http://www.imf.org/external/pubs/ft/wp/2012/wp12243.pdf
World Bank – Publication: “Annual Report: Integrity Vice Presidency fiscal 2012 - finding the right balance” •
The World Bank has published the captioned report. It says, “As the World Bank Group pursues its mission to eliminate poverty, the Bank’s Integrity Vice Presidency (INT) concluded another strong year in its preventive and investigative efforts, with 83 debarments of wrongdoing firms, new agreements with national law enforcement authorities to expand the impact of INT’s investigations, numerous referrals to law enforcement agencies, and robust preventive efforts to help ensure Bank-financed projects deliver results.” http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/10/08/000356161_20 121008012319/Rendered/PDF/731010AR0Box370C0disclosed010050120.pdf
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close close China 6.2980 6.3009 Hong Kong 7.7698 7.7523 Indonesia 9,126.0 9,594.0 Japan 76.8 78.67 Korea 1,150.8 1,111.4
9-Oct 6.2884 7.7522 9,614.0 78.26 1,110.8
10-Oct 6.2989 7.7525 9,624.0 78.29 1,114.7
% change -0.17 0.00 -0.10 -0.04 -0.35
2012 YTD (%chg) 0.0 0.2 -5.2 -1.9 3.2
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Malaysia 3.1507 3.0545 3.0716 3.072 Philippines 43.765 41.45 41.445 41.535 Singapore 1.2906 1.2295 1.2308 1.2291 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,885.0 20,870.0 20,855.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
-0.01 -0.22 0.14 -0.07 0.07
2.6 5.4 5.0 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 2,024.8 20,590.9 4,217.5 9,087.0 1,990.3 1,625.6 5,295.0 3,062.6 1,282.7 389.3
9-Oct 2,115.2 20,937.3 4,280.3 8,769.6 1,979.0 1,663.3 5,394.9 3,065.9 1,292.5 393.7
OVERNIGHT LENDING RATE (%) 9-Oct 10-Oct bps change 2.300 3.350 105.00 0.150 0.150 0.00 4.120 4.129 0.92 0.098 0.095 -0.25 3.000 3.000 0.00 3.000 3.000 0.00 2.202 2.104 -9.80 0.025 0.025 0.00 3.000 3.000 0.00 2.400 2.385 -1.50
10-Oct
% change
2,119.9 20,919.6 4,270.0 8,596.2 1,948.2 1,660.2 5,369.6 3,041.4 1,290.4 394.7
0.22 -0.08 -0.24 -1.98 -1.56 -0.19 -0.47 -0.80 -0.16 0.25
2012 YTD (%chg) -3.6 10.8 10.7 1.7 3.9 9.6 21.4 13.0 25.9 12.8
3-MONTH INTERBANK LENDING RATE (%) 9-Oct 10-Oct bps change 3.688 3.689 0.09 0.400 0.400 0.00 4.892 4.900 0.80 0.328 0.328 0.00 3.040 3.040 0.00 3.200 3.200 0.00 0.996 1.002 0.60 0.381 0.381 0.00 3.132 3.132 -0.08 6.800 7.389 58.90
CREDIT DEFAULT SWAP (IN BPS) 9-Oct 10-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 83.0 83.5 0.51 Korea 82.7 82.7 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
Gold Spot (in US$ per ounce)
9-Oct 1,764.2
10-Oct
% change
1,763.4
-0.05
Source: Bloomberg
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia
S&P AAAAA BB+ AAA A-
Moody's Aa3 Aa1 Baa3 -Aa3 A3
Fitch A+ AA+ BBBAA A+ A-
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Philippines Singapore Thailand Vietnam
BB+ AAA BBB+ BB-
Ba2 -Baa1 B1
BB+ 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
29-Feb 3,309.7 294.7 112.2 1,302.9 315.8 134.7 77.0 247.0 180.6 14.4
EXTERNAL LIQUIDITY RATIOS
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
2012 31-May 30-Jun 3,206.1 3,240.0 291.9 295.0 111.5 106.5 1,277.7 1,270.5 310.9 312.4 136.0 134.2 76.1 76.1 237.7 243.4 172.6 174.7 19.9 n.a
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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-Jul n.a 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 n.a
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 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-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 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 PHILIPPINES SOUTH KOREA SOUTH KOREA
Indicators Total Exports (YoY)% Unemployment Rate (SA)% Bank Lending to HH (KRW Tln)
Period Aug Sep Sep
Last -9.0 3.1 458.5
Previous 7.8 3.1 459.3
SELECTED ECONOMIC RELEASES CALENDAR (1 5 October 2012)
Expected Release Date 10/8/2012
10/9/2012 10/10/2012
10/11/2012
Country INDONESIA CHINA HONG KONG JAPAN JAPAN PHILIPPINES SOUTH KOREA SOUTH KOREA JAPAN SOUTH KOREA JAPAN
Indicators Consumer Confidence Index China HSBC Services PMI Purchasing Managers Index Current Account Balance YOY% Current Account Total (JPY bn) Total Exports (YoY)% Unemployment Rate (SA)% Bank Lending to HH (KRW Tln) Machine Orders YOY% Producer Price Index (YoY)% Consumer Confidence
Period Sep Sep Sep Aug Aug Aug Sep Sep Aug Sep Sep
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10/12/2012
CHINA CHINA INDONESIA SOUTH KOREA THAILAND
New Yuan Loans (RMB bn) Foreign Exchange Reserves (USD bn) Bank Indonesia Reference Rate% South Korea 7-Day Repo Rate % Foreign Reserves (USD bn)
Sep Sep Oct 11 Oct 11 Oct 5
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 11 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Eastern Asia Currencies Show Stronger Performance. China’s yuan rose beyond 6.28 per dollar for the first time in 19 years, moving to within 0.01 percent of the upper end of its permitted trading range, amid speculation policy makers will act to revive economic growth. Yen climbs for fourth day against dollar, strengthens beyond 78 per U.S. currency for first time since Oct. 2. Also, Singapore dollar and Taiwan dollar advance. However, Indonesian rupiah, Philippine peso weaken among regional currencies.
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Asian Stocks Drop Fourth Day on Spain Cut, Japan Machine Orders. Asian stocks fell, with the regional index heading for its lowest level in a month, after Standard &Poor’s downgraded Spain’s credit rating and orders for Japanese machinery makers dropped. China, Japan, Korea and Philippines’ index dropped by 0.81, 0.58, 0.78 and 0.30 percent respectively.
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Oil Rises as Mideast Tensions Outweigh Forecast of Rising Supply. Oil advanced in New York amid concern that escalating tensions between Syria and Turkey may disrupt supplies from the Middle East. Brent’s premium to West Texas Intermediate crude widened to the most in almost a year. Futures rose as much as 0.8 percent after Turkey seized cargo on a Syrian passenger plane and on unconfirmed reports of the discovery of weapons parts and military communications gear.
BREAKING NEWS GLOBAL •
Geithner Backs Europe Crisis Strategy as Powerful, Promising. U.S. Treasury Secretary Timothy F. Geithner said Europe has finally crafted a policy armory that’s robust enough to beat back the sovereign debt turmoil hampering global economic growth. The region has a “much more viable strategy to hold the system together,” Geithner said at a banking conference today in Tokyo. “It’s a much more powerful, promising path.” Even as he warned the euro area faces a “multiyear challenge,” calling it the chief threat to the world economy, Geithner’s comments mark a reversal from last year’s IMF talks at which he warned Europe’s lackluster policy response left it prone to “catastrophic risk.”
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IMF’s Lagarde Says Greece Needs More Time to Meet Targets. International Monetary Fund Managing Director Christine Lagarde said Greece should get two years to meet fiscal targets and suggested debt reductions are needed before a 130 billion-euro ($167 billion) bailout can proceed. “It’s sometimes better to have a bit more time,” Lagarde said today at a press conference in Tokyo marking the start of the fund’s annual meeting. “This is what we advocated for Portugal, this is what we advocated for Spain and this is what we are advocating for Greece.”
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BOE’s Weale Signals Inflation Concern as QE Decision Approaches. Bank of England policy maker Martin Weale said he’s concerned about whether pumping more money into the economy is the right thing to do with inflation above the central bank’s target. “It is certainly not self-evident to me in the light of the apparent stickiness of inflation that substantial extra support for the economy would be compatible with the inflation target,” Weale said in an interview with the Daily Mail newspaper, published today. “I am concerned about the stickiness of inflation.”
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Australia Adds More Workers as Unemployment Hits 2 1/2-Year High. Australian employers hired almost three times the number of workers economists forecast for September, pushing up
the local currency, even as the unemployment rate jumped to a 2 1/2-year high. The number of people employed rose by 14,500, the biggest increase since May, after a revised 9,100 drop the prior month, the statistics bureau said in Sydney today. The jobless rate climbed to 5.4 percent, the highest since April 2010, from 5.1 percent as more workers sought employment. That 0.3 percentage point rise was the biggest since May 2009. REGIONAL •
Noda Calls for China Talks as Island Spat Threatens Growth. Japanese Prime Minister Yoshihiko Noda called for talks to contain economic damage from a diplomatic dispute with China as Japan’s largest trading partner downgraded its delegation to an annual gathering in Tokyo. “These are the second and third largest economies in the world and our interdependence is deepening,” Noda, 55, said yesterday in an interview at his office in Tokyo. “If our ties cool, particularly economic ones, then it isn’t a question of one or the other country suffering. Both countries lose out.”
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BOJ Case for Buying Risk Assets Pushed by Member, Minutes Show. A Bank of Japan board member said buying risk assets would benefit markets, according to a record of the central bank’s meeting last month when it unexpectedly decided to expand monetary easing. “One member expressed the view that, together with these purchases of government securities, increasing the size of purchases of risk assets would further encourage a reduction in risk premiums and thereby have a positive impact,” according to the minutes of the Sept. 18-19 meeting, released today in Tokyo. The minutes may fuel expectations that Governor Masaaki Shirakawa’s board will loosen policy when it next gathers on Oct. 30. after taking no action at a meeting last week.
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Indonesia Holds Benchmark Rate to Shield Weakening Currency. Indonesia held its benchmark interest rate for an eighth month in October as a declining currency reduced scope for the central bank to ease monetary policy even after inflation slowed. Bank Indonesia Governor Darmin Nasution and his board kept the reference rate at a record-low 5.75 percent, the central bank said in a statement in Jakarta today. The decision was predicted by all 23 economists surveyed by Bloomberg News.
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Korea Matches Brazil Rate Cut as World Growth Stumbles. South Korea cut interest rates hours after Brazil as economies around the world shield themselves from the risk of a deeper slowdown driven by weakness in China and austerity measures in Europe. Governor Kim Choong Soo and his board in Seoul today lowered the benchmark seven-day repurchase rate to 2.75 percent from 3 percent, a decision predicted by 13 of 16 economists surveyed by Bloomberg News. Brazil’s Selic rate fell by the same amount to a record low 7.25 percent. Indonesia left its benchmark unchanged.
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Vietnam’s Dollar Bonds Defy Moody’s Downgrade. Vietnam’s dollar bonds are defying a credit downgrade by Moody’s Investors Service as efforts by the government to stabilize the economy since 2011 show progress. The average yield on Vietnamese debt fell to a record low of 4.06 percent on Oct. 10, according to JPMorgan Chase & Co.’s EMBI Global index, even after Moody’s said Sept. 28 there was an “elevated risk” that the government may have to bear the cost of recapitalizing banks. Pictet Asset Management plans to add to its holdings of the nation’s securities and Aberdeen Asset Management Plc said it will maintain its investments.
IFIs NEWS (compiled from their websites) IFC – Publication: “Being the Change: Inspiring the Next Generation of Inclusive Business Entrepreneurs Impacting the Base of the Pyramid” •
The IFC has publicised the captioned report. It says, “Leadership, local knowledge, and financial sustainability are key components in creating opportunity at the base of the economic pyramid. Page 2 of 5
This report highlights the personal stories of the leaders of some of IFC’s inclusive business clients. These clients have developed innovative and successful business models that expand access to goods, services, and livelihoods for poor people, while generating strong financial returns.” http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/988CF79F8A8A3B3B85257A9300499 809 (Press Release) http://www1.ifc.org/wps/wcm/connect/71f2a6804cf556c1b4d5f5f81ee631cc/CIB+Inclusive+Bu siness+PROOF.pdf?MOD=AJPERES (Report) World Bank – Press Release: Sendai Dialogue Advances Global Consensus on Disaster Risk Management •
The World Bank and the Government of Japan, together with global policymakers, called for greater efforts to integrate disaster risk management into national development planning and international development assistance. A joint statement issued by the Government of Japan and the World Bank urges national governments and development partners to accelerate efforts to pro-actively manage growing disaster risks by incorporating disaster risk management in all development policy and investment programs. http://www.worldbank.org/en/news/2012/10/10/sendai-dialogue-advances-global-consensuson-disaster-risk-management
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 10-Oct 11-Oct close China 6.2980 6.3009 6.2989 6.2773 Hong Kong 7.7698 7.7523 7.7528 7.7523 Indonesia 9,126.0 9,594.0 9,594.0 9,631.0 Japan 76.8 78.67 78.18 78.05 Korea 1,150.8 1,111.4 1,114.7 1,114.4 Malaysia 3.1507 3.0545 3.0740 3.0663 Philippines 43.765 41.45 41.535 41.558 Singapore 1.2906 1.2295 1.2305 1.2278 Thailand 31.5 30.6 30.7 30.7 Vietnam 21,031.0 20,885.0 20,855.0 20,860.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.34 0.01 -0.38 0.17 0.03 0.25 -0.06 0.22 0.03 -0.02
2012 YTD (%chg) 0.3 0.2 -5.2 -1.6 3.3 2.8 5.3 5.1 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 2,024.8 20,590.9 4,217.5 9,087.0 1,990.3 1,625.6 5,295.0 3,062.6 1,282.7 389.3
10-Oct 2,119.9 20,919.6 4,280.0 8,596.2 1,948.2 1,659.4 5,369.6 3,033.8 1,289.4 394.7
11-Oct 2,102.9 20,999.1 4,267.6 8,546.8 1,933.1 1,654.8 5,353.5 3,031.3 1,291.1 394.2
% change -0.81 0.38 -0.29 -0.58 -0.78 -0.27 -0.30 -0.08 0.14 -0.12
2012 YTD (%chg) -4.4 11.2 10.6 1.1 3.1 9.3 21.1 12.6 25.9 12.6
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OVERNIGHT LENDING RATE (%) 10-Oct 11-Oct bps change 2.300 2.430 13.00 0.150 0.131 -1.93 4.129 4.128 -0.08 0.095 0.095 0.00 3.000 2.750 -25.00 3.000 3.000 0.00 2.104 2.860 75.60 0.034 0.034 0.00 3.000 3.000 0.00 2.385 2.500 11.50
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3-MONTH INTERBANK LENDING RATE (%) 10-Oct 11-Oct bps change 3.689 3.700 1.07 0.400 0.400 0.00 4.900 4.898 -0.16 0.328 0.328 0.00 3.040 3.040 0.00 3.200 3.200 0.00 1.002 1.008 0.60 0.381 0.381 0.00 3.132 3.132 0.08 7.389 7.000 -38.90
CREDIT DEFAULT SWAP (IN BPS) 10-Oct 11-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 83.5 83.7 0.12 Korea 82.7 82.7 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 10-Oct Gold Spot (in US$ per ounce)
11-Oct
1,762.3
% change
1,769.7
0.42
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
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
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
2012 31-May 30-Jun 3,206.1 3,240.0 291.9 295.0 111.5 106.5 1,277.7 1,270.5 310.9 312.4 136.0 134.2 76.1 76.1 237.7 243.4 172.6 174.7 19.9 n.a
31-Jul n.a 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 n.a
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Page 4 of 5
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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 JAPAN JAPAN SOUTH KOREA INDONESIA
Indicators Machine Orders YOY% Consumer Confidence Producer Price Index (YoY)% Bank Indonesia Reference Rate%
Period Aug Sep Sep Oct 11
Last -6.1 40.1 1.0 5.75
Previous 1.7 40.5 0.3 5.75
SELECTED ECONOMIC RELEASES CALENDAR (1 5 October 2012)
Expected Release Date 10/8/2012
10/9/2012 10/10/2012
10/11/2012
10/12/2012
Country INDONESIA CHINA HONG KONG JAPAN JAPAN PHILIPPINES SOUTH KOREA SOUTH KOREA JAPAN JAPAN SOUTH KOREA INDONESIA SOUTH KOREA THAILAND
Indicators Consumer Confidence Index China HSBC Services PMI Purchasing Managers Index Current Account Balance YOY% Current Account Total (JPY bn) Total Exports (YoY)% Unemployment Rate (SA)% Bank Lending to HH (KRW Tln) Machine Orders YOY% Consumer Confidence Producer Price Index (YoY)% Bank Indonesia Reference Rate% South Korea 7-Day Repo Rate % Foreign Reserves (USD bn)
Period Sep Sep Sep Aug Aug Aug Sep Sep Aug Sep Sep Oct 11 Oct 11 Oct 5
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 12 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Currencies Advanced as Singapore Retains Appreciation Bias. Singapore dollar, Malaysia Ringgit, Indonesia Rupiah and Korean won lead advance among regional currencies, after Singapore unexpectedly kept its bias for currency gains and U.S. jobless claims fell, spurring demand for riskier assets. Yuan also rallies for third day to touch strongest level since 1993. However, Yen weakens 0.1% against dollar and 0.2% vs euro with the prospect of weak growth.
•
Asian Stocks Advance on Japan-China Talks, U.S. Jobless Claims. Asian stocks rose, with the regional benchmark index headed for its first gain this week, after U.S. jobless claims fell more than estimated and China and Japan agreed to hold talks over a territorial dispute that has disrupted trade. The Shanghai Composite Index rose 0.1 percent to 2,104.93 at the close, adding to this week’s gain of 0.9 percent. Hong Kong, Indonesia and Singapore rose by around 0.5 percent.
•
Oil Heads for First Weekly Gain in Month on Economy, Middle East. Oil headed for its first weekly gain in a month in New York after claims for U.S. jobless benefits dropped to the lowest level in four years and increasing Middle East tensions prompted concern crude supplies may be disrupted. Futures were little changed after rising 0.9 percent yesterday. First-time unemployment claims fell to 339,000 last week, the lowest since February 2008, according to Labor Department data. Brent oil traded near the highest premium in a year to West Texas Intermediate grade.
BREAKING NEWS GLOBAL •
G-7 Discusses Potential Fiscal Measures If Growth Falters. Some Group of Seven nations raised the possibility of extra fiscal measures if the global recovery weakens, Canadian Finance Minister Jim Flaherty said after a G-7 meeting in Tokyo yesterday. “There has been some discussion by some of the participants along those lines, generally relating to the European situation,” Flaherty said on a conference call with reporters today. “The continent is in recession and there’s rising unemployment.”
•
IMF Urges Latin America to Maintain Fiscal Rigor as Growth Cools. Latin American and Caribbean nations should resist the urge to use fiscal policy to stimulate their economies even as the region’s growth outlook weakens, the International Monetary Fund said. Governments should only consider such actions in the event of a sharp downturn, the IMF said in a regional economic outlook update published today. “Looking forward, fiscal consolidation should continue as public debt levels remain above pre-crisis levels in most countries,” the fund said. “Authorities should avoid the temptation of easing fiscal policy too early; this should be considered only if large downside risks materialize.”
•
U.K. Will Stay Out of European Banking Union, FSA’s Turner Says. The U.K. won’t allow its lenders to be supervised by the European Central Bank, Financial Services Authority Chairman Adair Turner said in a speech designed to boost his candidacy for the top post at the Bank of England. The U.K. “does not need to, and will not, be part of that Eurozone banking union,” Turner told financial executives in London yesterday. He also said regulators may further ease capital and liquidity rules if economic growth remains elusive.
•
Indian Consumer Prices Increase at Slowest Pace in Six Months. Indian consumer prices rose at the slowest pace in six months in September as fruit and vegetable costs moderated. The consumer-price index climbed 9.73 percent from a year earlier, compared with a 10.03 percent advance in August, the Statistics Office said in a statement in New Delhi today. The pace of consumer inflation remains the fastest in Asia and almost double the Reserve Bank of India’s comfort level of about 5 percent. A diesel-price rise threatens to further stoke the cost of living, curbing Governor Duvvuri Subbarao’s scope to follow South Korea and Brazil in lowering rates this month.
REGIONAL •
Asia-Pacific Policy Makers Have Scope to Ease Further, IMF Says. Policy makers in the AsiaPacific region have scope to further ease monetary policy to bolster growth in the event the global economy sputters, the International Monetary Fund said. “Inflation expectations have remained well anchored in most of Asia,” the IMF said in a regional economic report today. “Should activity fail to pick up as projected, further easing may be warranted” in countries including South Korea and Malaysia, while elevated consumer-price growth in India and Vietnam “may limit the room for policy maneuver” in those economies, it said. Japan may need more easing to accelerate achievement of its 1 percent inflation goal, the fund said.
•
China Room to Ease Seen Fading as Inflation Lull Set to End. A U.S. drought that pushed soybean and corn prices to records is adding to the risk of a rebound in inflation in China, where consumer-price gains were probably close to the slowest in two years in September. The prospect of faster price gains in coming months may encourage policy makers to refrain from cutting interest rates for a third time this year, contrasting with reductions in Brazil, South Korea and Australia and adding to the risk economic growth will be the weakest since 1999. Increased grain costs are feeding into pork prices and the government is also battling to prevent a rebound in the housing market.
•
Japan Cuts Economic Assessment as Maehara Talks of ‘Crisis’. Japan’s Economy Minister Seiji Maehara said he has a “sense of crisis” as the government downgraded its economic assessment for a third month, the longest streak since the 2009 global recession. “It’s necessary to take a proper response on both fiscal and financial fronts,” Maehara told reporters in Tokyo today after the government released a report for October. Today’s reduction underscores concern that Japan’s economy may contract as global demand slows and the expiry of government subsidies for car purchases weakens consumer spending.
•
BOJ Member Warns of JGB Yield Spike If Safe-Haven Flows Reverse. Bank of Japan board member Sayuri Shirai said safe-haven investment flows may increase the chance of a spike in Japanese government bond yields due to the risk of a “sudden reversal” in sentiment. “The flight-to-safety premium, while lowering the cost of financing for borrowers, may amplify the sudden reversal risk in Japan and other related countries,” Shirai said at a conference in Tokyo today. Given the correlation between JGB yields and those on other sovereign debt, “such a risk could materialize through a spillover effect from one country to another,” she said.
•
Singapore Forgoes Currency Stimulus on Inflation Risk. Singapore unexpectedly refrained from monetary stimulus, spurring gains in the region’s best-performing currency as inflation risks trump worries over a shrinking economy. Singapore joins Asian nations from China to India in limiting monetary stimulus as they guard against price risks even as fiscal austerity in the euro area weighs on the world economy. The island’s dollar rose to the strongest level since Sept. 17 after the central bank said inflation will remain elevated for some time even as growth is set to slow to a three-year low in 2012.
•
Malaysia to Reduce Palm Oil Export Tax, Abolish Duty Free Quota. Malaysia, the secondbiggest producer of palm oil, will reduce the export duty on the crude variety and abolish the Page 2 of 7
duty-free shipment quota from Jan. 1, said the Ministry of Plantation Industries and Commodities. The reduction will allow the industry to compete with other exporting countries in terms of prices, the ministry said. The change will also allow refineries to market their products at competitive prices in global markets, it said in a statement, without specifying the extent of the tax cut. IFIs NEWS (compiled from their websites) Basel Committee – Publication: “Framework for dealing with domestic systemically important banks” •
The Basel Committee on Banking Supervision has issued its Framework for dealing with domestic systemically important banks. In November 2011, the Basel Committee issued final rules for global systemically important banks (G-SIBs). Subsequently, the Basel Committee developed a set of principles on the assessment methodology and the higher loss absorbency requirement for domestic systemically important banks (D-SIBs). The framework takes a complementary perspective to the G-SIB framework by focusing on the impact that the distress or failure of banks will have on the domestic economy. http://www.bis.org/press/p121011.htm (Press Release) http://www.bis.org/publ/bcbs233.htm (Paper)
FSB – Press Release: Meeting of the Financial Stability Board in Tokyo on 10-11 October •
At its meeting in Tokyo, the Financial Stability Board (FSB) discussed vulnerabilities currently affecting the global financial system and the progress in authorities’ ongoing work to strengthen global financial regulation. The meeting reviewed a number of reports to be published in the coming weeks. http://www.financialstabilityboard.org/press/pr_121011.pdf (Press Release)
G24 – Press Release: Intergovernmental Group of Twenty-Four on International Monetary Affairs And Development Communiqué •
The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, held its eighty-eighth meeting in Tokyo, Japan, on October 11, 2012 with Mr. P. Chidambaram, Minister of Finance of India, in the Chair. http://www.imf.org/external/np/cm/2012/101112.htm (Communique)
IFC – Press Release: Inclusive Business Clients and Japanese Firms See Opportunities at Base of Pyramid •
The IMF has this week brought together its clients from across the globe and a host of Japanese companies to discuss new approaches to inclusive business, part of the Corporation’s effort to boost access to goods, services, and jobs for the 4 billion people living at the base of the economic pyramid. The day-long workshop was held ahead of the Annual Meetings of the International Monetary Fund and the World Bank Group. Japan’s Ministry of Economy, Trade, and Industry and the Japan External Trade Organization co-hosted the event—a reflection of the growing interest of the Japanese government and the Japanese business community in inclusive business. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/07365AF3144D5A1485257A9400557 D6F
IMF – Publication: “Asia and Pacific Regional Economic Outlook Update - October 2012” •
The IMF has publicised the latest edition of the captioned report. It said, “Growth in the AsiaPacific region has slowed. External headwinds played a major role, as the recovery in advanced Page 3 of 7
economies suffered setbacks. Weaker momentum in China and India also weighed on regional economies. For Asia as a whole, GDP growth fell to its lowest rate since the 2008 global financial crisis during the first half of 2012. With inflationary pressures easing, macroeconomic policy stances remained generally supportive of domestic demand and in some cases were eased further in response to the slowdown. More broadly, financial conditions remain accommodative, and capital inflows have resumed. Going forward, growth is projected to pick up very gradually, and Asia should remain the global growth leader, expanding over 2 percentage points faster than the world average next year. However, considerable downside risks remain, in particular with regard to the euro area crisis. The priorities for policymakers are to support noninflationary growth, maintain financial stability, and remain responsive to weaker-than-expected outcomes. Refocusing structural and fiscal reform efforts toward sustained and more inclusive growth remains a priority.” http://www.imf.org/external/pubs/ft/reo/2012/apd/eng/areo1012.pdf (Report) IMF – Working Paper: “Exploring the Dynamics of Global Liquidity” •
This paper explores the concept of global liquidity, its measurement and macro-financial importance. We construct two sets of indicators for global liquidity: a quantity series distinguishing between core and noncore liabilities of financial intermediaries and a corresponding price series. Using price and quantity indicators simultaneously, it is possible to distinguish between shocks to the supply and demand for global liquidity, and isolate their impact on the economy. Our results confirm that global liquidity conditions matter for economic and financial stability, and points to indicators whose regular monitoring could be valuable to policymakers. http://www.imf.org/external/pubs/ft/wp/2012/wp12246.pdf
WTO – Press Release: Sub-Committee of Least-Developed Countries •
The WTO had the meeting of the Sub-Committee of Least-Developed Countries on 10 October 2012, where many members said they were encouraged by a WTO Secretariat report that the value of LDCs’ total exports (goods and commercial services) grew by 23.9 per cent in 2011 to reach US$229.8 billion. However, they agreed with Haiti, the LDC coordinator in the WTO, that “a lot remains to be done”. http://www.wto.org/english/news_e/news12_e/devel_10oct12_e.htm
Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 11-Oct 12-Oct close China 6.2980 6.3009 6.2773 6.2644 Hong Kong 7.7698 7.7523 7.7524 7.7521 Indonesia 9,126.0 9,594.0 9,634.0 9,593.0 Japan 76.8 78.67 78.34 78.46 Korea 1,150.8 1,111.4 1,114.4 1,111.3 Malaysia 3.1507 3.0545 3.0685 3.0578 Philippines 43.765 41.45 41.558 41.438 Singapore 1.2906 1.2295 1.2278 1.2216 Thailand 31.5 30.6 30.7 30.6 Vietnam 21,031.0 20,885.0 20,860.0 20,845.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.21 0.00 0.43 -0.15 0.27 0.35 0.29 0.51 0.23 0.07
2012 YTD (%chg) 0.5 0.2 -4.9 -2.1 3.6 3.0 5.6 5.6 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 2,024.8 20,590.9 4,217.5 9,087.0 1,990.3 1,625.6 5,295.0 3,062.6 1,282.7 389.3
11-Oct 2,102.9 20,999.1 4,285.0 8,546.8 1,933.1 1,655.5 5,353.5 3,032.7 1,294.9 394.2
OVERNIGHT LENDING RATE (%) 11-Oct 12-Oct bps change 2.430 2.300 -13.00 0.131 0.129 -0.14 4.128 4.132 0.36 0.095 0.098 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.860 2.837 -2.30 0.031 0.031 0.00 3.000 3.000 0.00 2.500 2.500 0.00
12-Oct
% change
2,104.9 21,115.5 4,306.7 8,534.1 1,933.3 1,655.0 5,369.7 3,047.3 1,298.0 392.5
0.10 0.55 0.51 -0.15 0.01 -0.03 0.30 0.48 0.24 -0.42
2012 YTD (%chg) -4.3 11.9 11.6 0.9 3.1 9.3 21.4 13.2 26.6 12.2
3-MONTH INTERBANK LENDING RATE (%) 11-Oct 12-Oct bps change 3.700 3.703 0.29 0.400 0.400 0.00 4.898 4.898 0.00 0.328 0.328 0.00 2.840 2.840 0.00 3.200 3.200 0.00 1.008 1.016 0.80 0.381 0.381 0.00 3.132 3.132 0.00 7.000 7.667 66.70
CREDIT DEFAULT SWAP (IN BPS) 11-Oct 12-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 83.7 83.3 -0.34 Korea 82.7 82.7 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 11-Oct Gold Spot (in US$ per ounce)
1,767.2
12-Oct 1,771.0
% change 0.22
Source: Bloomberg
Page 5 of 7
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
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
31-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 n.a 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 Foreign Reserves (USD bn)
Period Oct 5
Last 183.3
Previous 183.6
SELECTED ECONOMIC RELEASES CALENDAR (1 5 October 2012)
Expected Release Date 10/8/2012
10/9/2012
Country INDONESIA CHINA HONG KONG JAPAN JAPAN
Indicators Consumer Confidence Index China HSBC Services PMI Purchasing Managers Index Current Account Balance YOY% Current Account Total (JPY bn)
Period Sep Sep Sep Aug Aug Page 6 of 7
10/10/2012
10/11/2012
10/12/2012
PHILIPPINES SOUTH KOREA SOUTH KOREA JAPAN JAPAN SOUTH KOREA INDONESIA THAILAND
Total Exports (YoY)% Unemployment Rate (SA)% Bank Lending to HH (KRW Tln) Machine Orders YOY% Consumer Confidence Producer Price Index (YoY)% Bank Indonesia Reference Rate% Foreign Reserves (USD bn)
Aug Sep Sep Aug Sep Sep Oct 11 Oct 5
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 7 of 7
MARKET UPDATE FOR ASEAN+3 15 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks swung between gains and losses as concern on the global economy was tempered by China reporting the slowest inflation in almost two years and better-thanestimated exports. The MSCI Asia Pacific Index was little changed at 120.82 after swinging between gains and losses more than 10 times. The MSCI Asia Pacific excluding Japan Index dropped 0.1 percent to 438.86 as of 4:18 p.m. in Tokyo. The MSCI Asia Pacific Index added 6.1 percent this year through October 12 as a series of stimulus measures from Europe to the U.S. and China countered a global economic slowdown and the European debt crisis. The Asian benchmark traded at 12.8 times estimated earnings on average, compared with 13.6 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index.
•
The euro fell for the first time in three days versus the dollar as concern growth in the region is faltering overshadowed prospects that leaders meeting this week. The 17-nation currency fell against 10 of its 16 major counterparts as investors waited for a decision on whether Spain will seek a bailout and before a report forecast to show investor confidence declined in Germany, the region’s biggest economy. Meanwhile, the yen weakened before a U.S. report that economists said will show retail sales rose for a third month, reducing demand for the safety of Japan’s currency. Japan’s currency slid 0.2 percent to 78.62 per dollar and 0.3 percent to 101.92 per euro at 9:32 a.m. London time.
•
Oil drops a second day as Iran offers uranium-enrichment deal before European officials meet to discuss tighter sanctions on the Persian Gulf country. Iran is ready to enter talks about its nuclear program in exchange for guaranteed supplies of 20 percent-enriched uranium for its Tehran Research Reactor, said a Foreign Ministry spokesman. Futures slid as much as 1.1 percent to the lowest level in almost a week. Crude for November delivery fell as much as $1.04 to $90.82 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.07 at 2:30 p.m. Singapore time. Brent oil for November settlement on the London-based ICE Futures Europe exchange lost as much as 0.7 percent to $113.85 a barrel. The contract expires tomorrow. The European benchmark was at a $22.99 premium to New York-traded West Texas Intermediate grade, up from $22.76 on Oct. 12.
BREAKING NEWS GLOBAL •
Finance chiefs at the IMF and World Bank annual meetings left Tokyo this weekend at odds over how to address the distress in global economy. The meetings in Tokyo ended yesterday with both expressions of optimism that Europe now has a policy infrastructure to quell its turmoil. On the other hand, developed economies including Switzerland and Japan joined Brazil in sounding the alert on excess currency strength, while delegates disagreed over the right degree of budget austerity as they pushed the U.S. to avoid tumbling over its fiscal cliff. The debate also focused on how much further emerging markets want to spur growth. Requests for expansionary policies still ran into resistance from several emerging-market officials. On the IMF voting, negotiations over a 2014 shift in voting rights are also already subject to disagreement over how to calculate the reshuffle.
•
European leaders meet this week as Greece seeks to justify renewed aid and Spain holds out on tapping a bailout. The European Union’s leaders convene for an October 18-19 summit in Brussels after a weekend in which international finance chiefs expressed some optimism that a
firewall is in place to contain the euro’s turmoil and urged further action to quell the main threat to global growth. With German Finance Minister Wolfgang Schaeuble yesterday ruling out a Greek exit, the 17-nation euro area faces the challenge of harnessing positive sentiment by resolving differences on aid for Greece and Spain before investors pounce again. Also contentious is how to knit euro nations more closely together amid spats over the timing and depth of a banking union. •
Federal Reserve Chairman Ben S. Bernanke says easing won’t destabilize emerging markets. In his remark on a seminar in Tokyo on the last day of IMF annual meetings, he said that it is not at all clear that accommodative policies in advanced economies impose net costs on emerging market economies. Bernanke said that the most important determinants of capital flows are differences in expected returns and the rebound in emerging markets from the global financial crisis. He argued that any costs for emerging market economies of monetary easing in advanced economies should be set against the very real benefits of those policies. That comments contrasted with those of IMF Managing Director Christine Lagarde, who said that such easing is likely to cause large and volatile flows that risk leading to overheating, asset-price bubbles and the build-up of financial imbalances in emerging economies.
REGIONAL •
China inflation cools amid signs growth is stabilizing. China’s inflation was close to the slowest pace in two years in September, giving the government room to ease policies should the economy deteriorate. Consumer prices rose 1.9 percent from a year earlier while the producerprice index dropped 3.6 percent, the National Bureau of Statistics said on its website today. China’s food-price gains slowed to 2.5 percent in September from 3.4 percent in August as pork costs slid, while non-food inflation accelerated to 1.7 percent from 1.4 percent. Producer prices fell 3.6 percent, the seventh straight decline.
•
China’s exports and money supply grew more than estimated in September. This gives a signal that the world’s second-biggest economy may be stabilizing after a slowdown that began in the first quarter of 2011. Overseas shipments increased 9.9 percent from a year earlier, the customs administration said on October 13 in Beijing. That was more than the 5.5 percent median estimate in a Bloomberg News survey of economists. M2 money supply gained 14.8 percent, the fastest pace since June 2011, a central bank report showed the same day.
•
Malaysia can store 5.2 million metric tons of the edible oil, according to Plantation Industries and Commodities Minister Bernard Dompok. That is more than twice the record reserves that were being held last month as prices tumbled. Reserves of palm oil increased to an all-time high of 2.48 million tons last month, according to data from the Malaysian Palm Oil Board. That was the third straight increase in monthly holdings, and 46 percent above the level in June. Minister Dompok said on Oct. 12 that the government will cut the export duty on the crude variety and abolish a duty-free shipment quota from 2013. The new rates will range from 4.5 percent to 8.5 percent, rising as prices climb from 2,250 ringgit ($734) a ton to 3,600 ringgit. The existing rate is 23 percent.
•
Malaysia pledged investments in Philippines. Malaysian Prime Minister Najib Razak pledged on Monday to support economic development in the conflict-wracked and impoverished southern Philippines after helping to broker a peace plan with Muslim rebels. Philippine President Benigno Aquino met Datuk Seri Najib for one-on-one talks ahead of the planned signing of the peace roadmap with the Moro Islamic Liberation Front (MILF) in Manila, a joint statement said after their meeting. The statement said that the Malaysian government affirmed its support to the Philippine government's sustained socio-economic programmes, which are designed to foster further economic opportunities and jobs in Mindanao.
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•
Singapore’s September home sales rebound to highest in 3 years. Home sales rose 84 percent last month, the highest in more than three years as developers sold more apartments after a decline in August, a month considered inauspicious based on the Chinese lunar calendar. Home sales in September climbed to 2,621 units from 1,427 units in the previous month, according to data released by the Urban Redevelopment Authority today. Sales climbed 7.7 percent to 5,999 units in the three months ended September 30 from the previous quarter. In its latest attempt to avert a housing bubble, the Monetary Authority of Singapore (MAS) told banks on October 5 to restrict home-loan maturities to curb continued upward pressure on residential property prices.
•
Vietnam’s Ministry of Industry and Trade said that Vietnamese exports are likely to exceed this year's target of US$109.5 billion. Exports were worth $83.78 billion in the first nine
months as July and August figures surged above $10 billion. In the same period, imports were worth $83.75 billion, a 6.6 per cent rise year-on-year, for a marginal trade surplus. Exports of mobile phones and spares, computers, electronics and spares, fertilizers, electric cables, transport equipment and spares, and others saw strong growth. The number of products of which exports exceeded $1 billion was 22, compared with 19 last year. According to the Ministry of Industry and Trade exports by foreign-invested businesses jumped by nearly 38 percent year-on-year, while public companies exports fell by 0.6 per cent in the first nine months.
IFIs NEWS (compiled from their websites) ADB – Press Release: Wins 2012 Asia's Most Admired Knowledge Enterprise Award •
The ADB has been selected as a winner of the prestigious 2012 Asian Most Admired Knowledge Enterprises (MAKE) award, in recognition of its work to devise knowledge-based products, services, and solutions for development in the region. http://www.adb.org/news/adb-wins-2012-asias-most-admired-knowledge-enterprise-award
IFC – Press Release: IFC and JBIC Extend Partnership Investing in Systemically Important Banks in Developing Countries •
The IFC and Japan Bank for International Cooperation (JBIC) will extend the investment period of the $3 billion IFC Capitalization Fund by one year, based on its successful track record and continuing investment opportunities. The fund is managed by IFC Asset Management Company, a wholly owned subsidiary of IFC. It was designed in the wake of the global financial crisis to invest in Tier One and Tier Two capital in emerging market commercial banks that are systemically important for their local economies. Since its inception in 2009, the fund has made approximately $1.6 billion in investment commitments in 13 banks across all regions of the world. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/CA3EE9E09FF3B41085257A95004E2 4DA
IMF – Press Release: Distributes US$1.1 Billion of Gold Sales Profits in Strategy to Boost Low-Cost Crisis Lending to Low-Income Countries •
The IMF will distribute SDR 700 million (about US$1.1 billion) in reserves attributed to windfall gold sales profits to its members in order to boost its concessional lending capacity for lowincome countries during the global crisis. http://www.imf.org/external/np/sec/pr/2012/pr12389.htm
IMF – Press Release: Signing Ceremony for 2012 Bilateral Borrowing Agreements •
The IMF has publicised the MD’s speech at the Signing Ceremony for 2012 Bilateral Borrowing Agreements.
Page 3 of 8
http://www.imf.org/external/np/speeches/2012/101212.htm IMF – Press Release: Welcomes Pledges from Brunei Darussalam to Boost Fund Resources •
The IMF MD has issued a statement to welcome commitments by the authorities of Brunei Darussalam to contribute additional financing to the IMF. The financial pledge of US$300 million from Brunei Darussalam are in addition to US$456 billion already pledged by member countries and their institutions to reinforce the IMF’s capacity to fight crises. http://www.imf.org/external/np/sec/pr/2012/pr12388.htm
IMF – Publication: “MANAGING DIRECTOR’S GLOBAL POLICY AGENDA” •
The IMF published the captioned report prepared for the IMFC. http://www.imf.org/external/np/pp/eng/2012/101312.pdf
IMF – Publication: “Regional Economic Outlook: Sub-Saharan Africa - Maintaining Growth in an Uncertain World” •
The IMF has publicised the latest edition of the captioned report. It said, “Economic conditions in sub-Saharan Africa have remained generally robust despite a sluggish global economy. The near-term outlook for the region remains broadly positive, and growth is projected at 5¼ percent a year in 2012–13. Most low-income countries are projected to continue to grow strongly, supported by domestic demand, including from investment. The outlook is less favorable for many of the middle-income countries, especially South Africa, that are more closely linked to European markets and thus experience a more noticeable drag from the external environment. The main risks to the outlook are an intensification of financial stresses in the euro zone and a sharp fiscal adjustment in the US–the so called fiscal cliff.” http://www.imf.org/external/pubs/ft/reo/2012/afr/eng/sreo1012.htm (Index site) http://www.imf.org/external/pubs/ft/reo/2012/afr/eng/sreo1012.pdf (Report)
IMF – Publication: “Regional Economic Outlook Update: Western Hemisphere – Latin America and the Caribbean” •
The IMF has publicised the latest edition of the captioned report. It said, “Growth in the Latin America and Caribbean (LAC) region has softened since our April report, reflecting the largerthan-anticipated impact of earlier policy tightening and the somewhat less favorable external environment. Global downside risks have increased, as the crisis in Europe continues to simmer, and the U.S. fiscal cliff looms. Nevertheless, with slack in many countries limited, and the twin tailwinds of external finance and commodity prices still stimulative, policies need to be carefully calibrated to keep domestic demand and credit growth in check. The key task for many countries remains to strengthen the resilience of their economies by rebuilding fiscal buffers and safeguarding financial stability. Challenges are more pressing in some countries, particularly those in the Caribbean, where the recovery has been held back by weak balance sheets and external demand.” http://www.imf.org/external/pubs/ft/reo/2012/whd/eng/wreo1012.htm (Index site) http://www.imf.org/external/pubs/ft/reo/2012/whd/eng/pdf/wreo1012.pdf (Report)
IMF – Publication: “Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries” •
The IMF has publicised the captioned report. New commitments under PRGT-supported programs are expected to increase to about SDR 2 billion in 2012, in part reflecting the large ECF commitment (SDR 0.6 billion) for Bangladesh approved in April. Commitments in the first eight months of 2012 amounted to SDR 1.4 billion and a further SDR 0.6 billion is expected to be committed by year end. This compares to total commitments of SDR 1.2 billion in each of 2010 Page 4 of 8
and 2011. If all elements of the 2009 financing package are secured, the PRGT will have an annual average lending capacity of SDR 2.2 billion remaining under this package for the period 2013–14. http://www.imf.org/external/np/pp/eng/2012/100412.pdf IMF – Speech: “The Road Ahead—A Changing Global Economy, A Changing IMF” •
The IMF has publicised the speech by the MD delivered at the Annual Meeting. http://www.imf.org/external/np/speeches/2012/101212a.htm
IMF & WB – Press Release: Communiqué of IMFC and Development Committee •
Communiqué of the Twenty-Sixth Meeting of the International Financial and Monetary Committee http://www.imf.org/external/np/sec/pr/2012/pr12391.htm
•
Development Committee Communiqué http://www.imf.org/external/np/cm/2012/101312a.htm
World Bank – Press Release: Japan and Korea Pledge Additional $60 Million to Boost Food Security in World’s Poorest Countries •
U.S. Treasury Secretary Timothy Geithner challenged the international development community to commit new financial resources to the Global Agriculture and Food Security Program (GAFSP) – a multidonor trust fund established in 2010 to improve food security in the world’s poorest countries. Secretary Geithner stated that the United States is prepared to contribute an additional $1 to GAFSP for every $2 contributed by other donors, up to a total U.S. contribution of $475 million. Japan and the Republic of Korea responded immediately, each pledging an additional $30 million, and the Bill & Melinda Gates Foundation indicated its intent to double its commitment. http://www.worldbank.org/en/news/2012/10/12/japan-republic-of-korea-pledge-additional60-million-boost-food-security-worlds-poorest-countries
World Bank – Press Release: Sign Memorandum of Understanding with Islamic Development Bank on Islamic Finance •
The World Bank and Islamic Development Bank today signed a Memorandum of Understanding (MoU) to set out a framework for collaboration between the two parties and lend support to global, regional and country efforts in the development of Islamic Finance. http://www.worldbank.org/en/news/2012/10/14/world-bank-islamic-development-bank-signmemorandum-of-understanding-islamic-finance
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 12-Oct 15-Oct close China 6.2980 6.2658 6.2658 6.2692 Hong Kong 7.7698 7.7515 7.7515 7.7514 Indonesia 9,126.0 9,585.0 9,585.0 9,623.0 Japan 76.8 78.44 78.44 78.61 Korea 1,150.8 1,111.3 1,111.3 1,110.5 Malaysia 3.1507 3.0577 3.0577 3.0584 Philippines 43.765 41.42 41.42 41.435 Singapore 1.2906 1.2222 1.2222 1.2219 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,845.0 20,845.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.05 0.00 -0.39 -0.22 0.08 -0.02 -0.04 0.02 -0.10 -0.02
2012 YTD (%chg) 0.5 0.2 -5.2 -2.3 3.6 3.0 5.6 5.6 2.5 0.9
Page 5 of 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 2,104.9 21,136.4 4,311.4 8,534.1 1,933.3 1,653.4 5,369.7 3,041.8 1,297.0 392.5
12-Oct 2,104.9 21,136.4 4,311.4 8,534.1 1,933.3 1,653.4 5,369.7 3,041.8 1,297.0 392.5
OVERNIGHT LENDING RATE (%) 12-Oct 15-Oct bps change 2.500 2.050 -45.00 0.129 0.129 0.00 4.132 4.140 0.79 0.098 0.098 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.837 2.309 -52.80 0.028 0.028 0.00 3.000 3.000 0.00 2.500 2.560 6.00
15-Oct
% change
2,098.7 21,148.3 4,313.5 8,577.9 1,925.6 1,654.4 5,383.2 3,046.6 1,293.8 391.6
-0.30 0.06 0.05 0.51 -0.40 0.07 0.25 0.16 -0.25 -0.25
2012 YTD (%chg) -4.6 12.0 11.8 1.4 2.7 9.2 21.7 13.2 26.2 11.9
3-MONTH INTERBANK LENDING RATE (%) 12-Oct 15-Oct bps change 3.703 3.699 -0.34 0.400 0.400 0.00 4.898 4.910 1.15 0.328 0.328 0.00 2.840 2.840 0.00 3.200 3.200 0.00 1.016 0.901 -11.50 0.381 0.379 -0.17 3.132 3.132 0.00 7.667 7.188 -47.90
CREDIT DEFAULT SWAP (IN BPS) 12-Oct 15-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 83.0 83.0 -0.03 Korea 82.7 82.7 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-Oct Gold Spot (in US$ per ounce)
1,754.0
15-Oct
% change
1,745.7
-0.47
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+
Page 6 of 8
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
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
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
31-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 n.a 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 SINGAPORE CHINA JAPAN PHILIPPINES JAPAN CHINA CHINA
Indicators Retail Sales (YoY)% Actual FDI (YoY)% Industrial Production YOY% Overseas Remittances (YoY)% Capacity Utilization (MoM)% Consumer Price Index (YoY)% Producer Price Index (YoY)%
Period Aug Sep Aug F Aug Aug F Sep Sep
Last 3.2 -4.6 7.6 -2.6 1.9 -3.6
Previous -2.9 -1.4 -4.3 5.4 0.5 2.0 -3.5
SELECTED ECONOMIC RELEASES CALENDAR (15 19 October 2012)
Expected Release Date 10/15/2012
10/17/2012
Country SINGAPORE CHINA JAPAN PHILIPPINES JAPAN CHINA CHINA SINGAPORE
Indicators Retail Sales (YoY)% Actual FDI (YoY)% Industrial Production YOY% Overseas Remittances (YoY)% Capacity Utilization (MoM)% Consumer Price Index (YoY)% Producer Price Index (YoY)% Non-oil Domestic Exports (YoY)%
Period Aug Sep Aug F Aug Aug F Sep Sep Sep Page 7 of 8
10/18/2012
10/19/2012
SINGAPORE THAILAND HONG KONG CHINA CHINA CHINA CHINA THAILAND MALAYSIA THAILAND THAILAND JAPAN
Electronic Exports (YoY)% Benchmark Interest Rate Unemployment Rate SA% Retail Sales (YoY)% Industrial Production (YoY)% Real GDP (YoY)% Real GDP (QoQ)% Foreign Reserves (USD bn) CPI YoY % Customs Imports (YoY)% Customs Exports (YoY)% All Industry Activity Index (MoM) %
Sep Oct 17 Sep Sep Sep 3Q 3Q Oct 12 Sep Sep Sep Aug
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 16 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks rose as exporters gain on U.S. retail sales. The MSCI Asia Pacific Index gained 0.8 percent to 121.74 as of 5:11 p.m. in Tokyo, the biggest advance since September 27. More than two stocks rose for each that fell in the gauge, with all of the index’s 10 industry groups climbed. The MSCI Asia Pacific Index rebounded 11 percent from this year’s low on June 4 through yesterday as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 12.8 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 12 for the Stoxx Europe 600 Index.
•
Asian currencies advance after U.S. retail data beat economists’ estimates. The Bloomberg-JP Morgan Asia Dollar Index, which tracks the region’s 10 most-active currencies outside Japan, rose 0.1 percent and touched the highest level since March. The won reached the strongest level against the dollar in almost a year as the yen fell for a fourth day and the Kospi index rose by the most in a month.
•
Gold was set to gain for the first time in three days as some investors bought bullion after prices dropped the most in three months yesterday. Gold for immediate delivery gained 0.3 percent to $1,741.95 an ounce by 9:24 a.m. in London. The metal tumbled as much as 1.5 percent yesterday, the most since July, to a one-month low of $1,728.85. The metal for December delivery was 0.3 percent higher at $1,743.30 an ounce on the Comex in New York.
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Brent oil premium rises to one-year high. Brent crude traded at the highest premium in a year to futures in New York amid concern that supplies from the North Sea and the Middle East will be disrupted and speculation U.S. stockpiles are increasing. Brent in London climbed to as high as $24.28 a barrel more than West Texas Intermediate as WTI remained little changed near a three-day low. Brent for November settlement advanced 20 cents to $116 a barrel on the London-based ICE Futures Europe exchange after gaining $1.18 yesterday. The contract expires today. The more-active December future climbed 28 cents to $114.68.
BREAKING NEWS GLOBAL •
Two US economists, Alvin E. Roth and Lloyd S. Shapley, shared the 2012 Nobel Prize in Economic Sciences for their work on matching supply and demand. Shapley, 89, designed theoretical constructs and algorithms to study and compare different matching methods. Meanwhile, Roth, 60, built on his work using experimental economics and market design to solve real-world problems, including matching 20,000 doctors annually with U.S. hospitals during their first year of employment and 90,000 teens with New York City high schools. The two men’s research focuses on markets that do not use prices to match supply and demand, such as organ donations. Their work underpins the economics discipline by providing insights into how scarce resources can be allocated.
•
European car sales plunged the most in almost two years as the region’s sovereign-debt crisis led to reduced demand in Germany. Registrations plummeted 11 percent to 1.13 million vehicles last month from 1.27 million a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today. It was the 12th consecutive monthly drop and the biggest decline since October 2010. Nine-month sales fell 7.2 percent to 9.72 million cars.
Four of Europe’s five biggest automotive markets shrank last month, with drops of 11 percent in Germany and 37 percent in Spain. •
US retail sales beating forecasts. The 1.1 percent advance in US retail sales followed a revised 1.2 percent increase in August, the best back-to-back showing since late 2010, Commerce Department figures showed yesterday. This is much higher than the median forecast of 77 economists surveyed by Bloomberg at a 0.8 percent rise. Gains were broad-based, with 12 of 13 retail categories showing an improvement, as shoppers were heartened by higher stock prices and home values. Other reports yesterday showed that inventories in the U.S. rose at a slower pace in August, indicating that unexpected strength in sales may be starting to drain stockpiles.
REGIONAL •
Indonesian government predicts that energy subsidy realization in 2012 might exceed its original allocation by at least Rp 103 trillion (US$10.7 billion) to Rp 305 trillion. During the hearing with parliament, Finance Minister Agus Martowardojo managed to convince legislators to approve the disbursement of contingency energy subsidy reserve funds worth Rp 23 trillion allocated in the revised 2012 state budget. Agus said the government needed about Rp 80 trillion more to cover the energy subsidy and that Rp 12 trillion could be taken from the state’s oil and gas income, Rp 1.7 trillion from non-energy subsidy savings and about Rp 50 trillion left over from last year’s allocation. He added that, despite the potentially significant rise in the energy subsidy, the government would be able to maintain the state budget deficit at 2.3 percent at the most.
•
South Korea will ask companies to cut greenhouse gas emissions by a combined 17.2 million metric tons next year. This is equivalent to a 3 percent reduction and twice as much as this year’s target. The government has asked companies to reduce emissions by 8 million tons this year. South Korea is mapping out regulations to boost participation by companies in curtailment efforts. The government pledged in 2009 to limit the country’s total emissions by 2020 to 30 percent below the estimated level it would have reached with no reduction plan. The government has also passed a bill in May to establish a cap-and-trade program in 2015, a market-based system that requires companies exceeding their emission quotas to buy permits from those that discharge less.
•
Bank Negara Malaysia’s Governor Zeti Akhtar Aziz said that Malaysia can withstand capital flows. The country has policy tools and the flexibility to absorb any excess liquidity, said Governor Zeti, who oversaw Malaysia’s response to capital outflows during the Asian financial crisis more than a decade ago. She said that the Malaysian financial system has reached a level of maturity in terms of development and in its functioning that is able to intermediate these flows, both surges of inflows as well as reversals.
•
Prime Minister Datuk Seri Najib Razak urged the business communities of Malaysia and the Philippines to tap economic opportunities available to increase two-way trade and investment. He said the Asean Economic Community (AEC) would bring about greater economic integration and as such more opportunities for both sides to increase investment and trade. The prime minister said total trade between Malaysia and the Philippines dropped between 20 and 22 per cent last year compared with 2010 because of the global economic downturn. Najib was speaking during a breakfast meeting with the Malaysia-Philippines Business Council at the end of his three-day official visit to the republic.
•
Thai’s Prime Minister Yingluck Shinawatra said the government will join hands with the Kuwait government in spurring economic growth in both countries. She said that the two countries had been partners in enhancing mutual economic growth over the past five years. The premier said Kuwait is capable of ensuring its energy security, while Thailand is strong on food security. The two countries should join forces to ensure mutual security in energy and food, and Page 2 of 7
sustainable economic growth. Ms Yingluck is on a three-day official visit to Kuwait to attend the Asia Cooperation Dialogue summit and to strengthen bilateral ties, from Monday to Wednesday October 17. •
Vietnam’s Prime Minister Nguyen Tan Dung has called for ministries and localities nationwide to take actions to settle outstanding debts in infrastructure construction. A document outlining the new measures, issued on October 10, states that the measures will be implemented to stabilise the macro economy and to ensure the nation's sustainable economic growth. He said that all localities have developed plans to settle the debts from their own budget and financial sources to ensure that by 2015 all the debts will be cleared. He also announced that from next year all localities must allocate a certain sum in their annual budget to be set aside for the payment of the debts. To avoid further cases of outstanding debt in 2013, Prime Minister Dung ordered provinces and cities affiliated to the central government to step up their inspection activities on construction projects.
IFIs NEWS (compiled from their websites) ADBI – Publication: “Asia-Latin America Free Trade Agreements: An Instrument for Inter-Regional Liberalization and Integration?” •
The ADBI has published the captioned report. “Trade integration and free trade agreement (FTA)-led cooperation between Asia and Latin America has increased since the early 2000s. Using new criteria, this paper examines whether Asia-Latin America FTAs have facilitated market-led integration by liberalizing trade and behind the border regulatory barriers. Overall Asia-Latin America FTAs provide the foundations for inter-regional integration by liberalizing goods and services trade as well as some regulatory barriers. Future FTAs can support deeper integration by reducing residual regulatory barriers. Other policy priorities include forming a large inter-regional FTA, stimulating business use of FTAs and accelerating structural reforms.” http://www.adbi.org/files/2012.09.24.wp382.asia.latin.america.free.trade.agreements.pdf
IMF – Speech at various seminars at IMF-WB Annual Meeting in Tokyo •
The IMF has publicised the following statement at various seminars at IMF-WB Annual Meeting in Tokyo: •
Special Event on Frontier and Developing Asia and Pacific http://www.imf.org/external/np/sec/pr/2012/pr12393.htm
•
Bank of Japan-IMF High-Level Seminar “Challenges of the Global Financial System: Risks and Governance under Evolving Globalization” http://www.imf.org/external/np/speeches/2012/101412.htm
•
Pacific Seminar http://www.imf.org/external/np/speeches/2012/101412b.htm http://www.imf.org/external/np/sec/pr/2012/pr12392.htm
IMF – Working Paper: “Ukraine Gas Pricing Policy: Distributional Consequences of Tariff Increases” •
The IMF has publicised the captioned working paper. “Ukraine’s gas pricing policy subsidizes gas and heating for all households. As the cost of imported gas rises, this policy increasingly weighs on government finances, sustains energy over-consumption, dampens investment in delivery systems, and undermines incentives for domestic production. However, gas price hikes have been deferred to the medium-term as they are politically unpopular. Through estimation of household demand functions by income quintiles to evaluate the distributional consequences of tarrif reform, this paper finds that tariff reforms combined with targeted social support can Page 3 of 7
address the economic inefficiencies of the current pricing policy without large welfare costs to the lower income segments of the population.” http://www.imf.org/external/pubs/ft/wp/2012/wp12247.pdf UNCTAD – Publication: “Expropriation” •
UNCTAD has issued the captioned new publication. A new UNCTAD publication, the sequel to the 1999 Pink Series paper on expropriation, analyses expropriation provisions in international investment agreements (IIAs) and their interpretation by arbitral tribunals. Moving beyond a merely descriptive role, the paper offers policy options to assist States in drafting IIA clauses that help to promote sustainable development. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=321&Sitemap_x0020_Taxono my=International Investment Agreements (IIA);#6;#Investment and Enterprise;#20;#UNCTAD Home (Press Release) http://unctad.org/en/Docs/unctaddiaeia2011d7_en.pdf (Report)
World Bank – Press Release: “World Bank Group and Korea to Strengthen Partnership with New Office and New Fund” •
The World Bank Group President, Jim Yong Kim, and South Korea’s Minister of Strategy and Finance, Jaewan Bahk today announced the opening of a new World Bank Group Office in Korea in 2013, to deepen joint efforts to find sustainable development solutions for emerging countries around the globe. The office will focus on infrastructure, information communications technology, the financial sector and knowledge sharing. In a further sign of strengthening ties between the World Bank Group and Korea, they also announced the launch of a new $90 million fund to support developing countries, the Korea-World Bank Partnership Facility. The Facility will support a broad range of economic development opportunities with a focus on promoting best practices, by leveraging the Bank’s knowledge and convening power and Korea’s expertise in areas such as economic development policy, information communications technology, infrastructure and the financial sector. http://www.worldbank.org/en/news/2012/10/15/world-bank-group-korea-to-strengthenpartnership-with-new-office--new-fund
WTO – Press Release: “Trade Policy Review: Bangladesh” •
The WTO has announced that the fourth review of the trade policies and practices of Bangladesh takes place on 15 and 17 October 2012. The basis for the review is a report by the WTO Secretariat and a report by the Government of Bangladesh. http://www.wto.org/english/tratop_e/tpr_e/tp370_e.htm
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 15-Oct 16-Oct close China 6.2980 6.2658 6.2692 6.2635 Hong Kong 7.7698 7.7515 7.7511 7.7509 Indonesia 9,126.0 9,585.0 9,623.0 9,598.0 Japan 76.8 78.44 78.65 78.88 Korea 1,150.8 1,111.3 1,110.5 1,107.2 Malaysia 3.1507 3.0577 3.0584 3.0516 Philippines 43.765 41.42 41.435 41.33 Singapore 1.2906 1.2222 1.2218 1.2215 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,845.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.09 0.00 0.26 -0.29 0.29 0.22 0.25 0.02 0.13 0.00
2012 YTD (%chg) 0.6 0.2 -4.9 -2.6 3.9 3.2 5.9 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 2,104.9 21,136.4 4,311.4 8,534.1 1,933.3 1,653.4 5,369.7 3,041.8 1,297.0 392.5
15-Oct 2,098.7 21,148.3 4,313.5 8,577.9 1,925.6 1,654.4 5,383.2 3,043.1 1,290.6 391.6
OVERNIGHT LENDING RATE (%) 15-Oct 16-Oct bps change 2.050 2.220 17.00 0.129 0.129 0.00 4.140 4.150 1.09 0.098 0.095 -0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.309 2.604 29.50 0.030 0.030 0.00 3.000 3.000 0.00 2.560 2.793 23.30
16-Oct
% change
2,098.8 21,207.1 4,329.1 8,701.3 1,941.5 1,653.5 5,399.9 3,043.5 1,289.8 399.2
0.01 0.28 0.36 1.44 0.83 -0.06 0.31 0.01 -0.06 1.96
2012 YTD (%chg) -4.6 12.3 12.2 2.9 3.5 9.2 22.1 13.1 25.8 14.1
3-MONTH INTERBANK LENDING RATE (%) 15-Oct 16-Oct bps change 3.699 3.699 0.02 0.400 0.400 0.00 4.910 4.906 -0.35 0.328 0.328 0.00 2.830 2.830 0.00 3.200 3.200 0.00 0.901 0.721 -18.00 0.379 0.379 0.00 3.132 3.132 0.00 7.188 7.354 16.60
CREDIT DEFAULT SWAP (IN BPS) 15-Oct 16-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 82.2 80.5 -1.74 Korea 82.7 82.7 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 15-Oct Gold Spot (in US$ per ounce)
1,737.4
16-Oct
% change
1,740.6
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 Ba2 -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
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
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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a n.a n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
Reserves over short-term debt 5.5 0.4 2.7 0.5 2.2 3.8 11.5 0.3 3.0 -
SELECTED ECONOMIC RELEASES CALENDAR (15 19 October 2012)
Expected Release Date 10/15/2012
10/17/2012
10/18/2012
10/19/2012
Country SINGAPORE CHINA JAPAN PHILIPPINES JAPAN CHINA CHINA SINGAPORE SINGAPORE THAILAND HONG KONG CHINA CHINA CHINA CHINA THAILAND MALAYSIA THAILAND THAILAND JAPAN
Indicators Retail Sales (YoY)% Actual FDI (YoY)% Industrial Production YOY% Overseas Remittances (YoY)% Capacity Utilization (MoM)% Consumer Price Index (YoY)% Producer Price Index (YoY)% Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Benchmark Interest Rate Unemployment Rate SA% Retail Sales (YoY)% Industrial Production (YoY)% Real GDP (YoY)% Real GDP (QoQ)% Foreign Reserves (USD bn) CPI YoY % Customs Imports (YoY)% Customs Exports (YoY)% All Industry Activity Index (MoM) %
Period Aug Sep Aug F Aug Aug F Sep Sep Sep Sep Oct 17 Sep Sep Sep 3Q 3Q Oct 12 Sep Sep Sep Aug
Page 6 of 7
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 17 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks rise after U.S. industrial production beat estimates and Spain retained its investment-grade credit rating from Moody’s Investors Service. The MSCI Asia Pacific Index rose 0.9 percent to 122.79 as of 5:47 p.m. in Tokyo, headed for the biggest advance since September 14. The MSCI Asia Pacific Index rebounded 12 percent through yesterday from this year’s low on June 4 as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 12.9 times estimated earnings on average, compared with 13.9 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index.
•
The euro strengthened to a one-month high against the dollar on speculation that Spain will move toward seeking financial aid. The 17-nation currency rose versus 14 of its 16 major peers after Moody’s Investors Service kept Spain’s credit rating at investment grade and as European Union leaders prepared for a two-day summit in Brussels starting tomorrow. The dollar fell before a report that economists said will show U.S. housing construction climbed last month, damping demand for safer assets. Meanwhile, Australia’s currency appreciated to a two-week high as investors sought higher-yielding assets.
•
Wheat and corn advanced as dry weather in Australia added to global supply concerns after the worst U.S. drought in half a century parched crops. Wheat for December delivery advanced for the first time in four days, rising 0.7 percent to $8.5375 a bushel on the Chicago Board of Trade at 3:17 p.m. in Singapore. Corn for delivery in December delivery rose 0.6 percent to $7.4275 a bushel. Wheat reserves in Australia, the second-largest shipper, fell 14 percent at the end of the marketing year on September 30 from a year earlier, the government said today. Western Australia will remain dry over the next six days, increasing the risk of winter-crop damage, Telvent DTN Inc. said yesterday.
•
Oil traded nears the highest level in a week in New York on Spanish bailout and after industrial production in the U.S rose more than forecast. Futures were little changed after rising as much as 0.7 percent today. Crude for November delivery was at $92.30 a barrel, up 21 cents, in electronic trading on the New York Mercantile Exchange at 1:23 p.m. Singapore time. Brent oil for December settlement rose 1 cent to $114.01 a barrel on the London-based ICE Futures Europe. November futures expired yesterday. The front-month European benchmark grade’s premium to the corresponding West Texas Intermediate contract was at $21.28 a barrel. It settled at $23.95 on October 15, the widest gap since reaching a record on October 14, 2011.
BREAKING NEWS GLOBAL •
Spain kept its investment grade credit rating from Moody’s Investors Service. Moody’s assigned a negative outlook on the Baa3 sovereign debt, one step above junk, as it concluded the review for a possible further downgrade of Spain’s rating that it had initiated in June, the New York-based company said in a statement yesterday. A Moody’s analyst in London said that the willingness of the ECB to purchase Spain’s government bonds in the secondary market is an important step for Spain to maintain access to credit markets.
•
U.K. inflation slowed to the least in almost three years in September as electricity and gas price increases a year earlier dropped out of the index. Consumer prices rose 2.2 percent from
a year earlier, the smallest gain since November 2009 and down from a 2.5 percent gain in August, the Office for National Statistics said today in London. The largest downward effect was from utility bills which knocked 0.43 percentage point off the rate. From the previous month, consumer prices rose 0.4 percent in September, the statistics office said. Meanwhile, core annual inflation, which excludes alcohol, food, tobacco and energy prices, remained at 2.1 percent in September from August, according to today’s report. REGIONAL •
Brunei is laying the groundwork for further halal industry growth by extending its reach while also encouraging product innovation. The Sultanate has benefitted from its position as one of the early entrants in the international halal market, which today supplies approximately 1.8 billion people worldwide and is estimated to be worth $2.3 trillion. Having launched the Brunei Halal brand in 2010, the Sultanate has since strengthened its reputation by becoming one of the few countries outside of the Middle East to establish an internationally recognised certifying body for the industry.
•
Indonesia expects to seal a preferential trade agreement (PTA) with South Africa. Indonesia planned to conduct a preliminary study to assess complementarity between both countries, Trade Minister Gita Wirjawan said in Jakarta on Tuesday. The study was due to begin next year with completion set for six months to a year thereafter. Bilateral trade between Indonesia and South Africa expanded by 78.93 percent in 2011 to US$2.14 billion from a year earlier. South Africa ranks 23rd as an export destination for Indonesian firms. Indonesia’s exports mainly comprise palm oil and its derivatives, rubber, cars, and paper, while importing chemical wood pulp, ferrous waste and scrap, sugar cane, sweeteners and cotton
•
Malaysian companies boosted borrowing by almost 40 percent this year to support economic development program. Syndicated loans in Malaysia total $13.1 billion since December 31 compared with $9.5 billion in the same period of 2011, the most on record for this part of the year in Bloomberg-compiled data. That’s bucking the trend in the rest of Asia, where lending has dropped 31 percent, the data show. A larger driver of the loan market this year has been companies raising money for acquisitions and capital expenditure requirements.
•
Philippines’ annual growth in factory output eased further to 3.5% in August. August’s annual gain, as measured by the volume of production index (VoPI), was slower than the revised 3.7% growth recorded in July. Meanwhile, production in terms of value went up by 3%, faster than July’s revised 2.5%. Eight out of 20 sectors registered double-digit growth and pushed the VoPI up are footwear and wearing apparel, furniture and fixtures, transport equipment, wood and wood products, publishing and printing, food manufacturing, textiles and fabricated metal products.
•
Singapore’s exports unexpectedly declined for a second month in September as manufacturers sold fewer electronics and pharmaceuticals to customers abroad. Non-oil domestic exports slid 3.4 percent from a year earlier, after a revised 10.7 percent drop in August, the trade promotion agency said in a statement today. Non-electronics shipments, which include petrochemicals and pharmaceuticals, rose 4.2 percent. Petrochemicals exports gained 5.5 percent, while pharmaceutical shipments slid 3 percent after dropping 3.2 percent in August.
•
Thailand unexpectedly cuts rate as global outlook worsens. The Bank of Thailand cut its oneday bond repurchase rate by a quarter of a percentage point to 2.75 percent, it said in Bangkok today. The decision was predicted by only three of 23 economists in a Bloomberg News survey, while the rest expected no change. The monetary authority today maintained its forecast for economic growth in 2012 at 5.7 percent, and said it would reduce its prediction for 2013. While weak exports will affect local demand in the future, the interest-rate cut is not a signal of a downward trend, Assistant Governor Paiboon Kittisrikangwan told a news briefing. Page 2 of 6
IFIs NEWS (compiled from their websites) ADB – Press Release: Supports Cold Chain Logistics Hub to Improve Food Safety in China •
Agricultural products moving through the northeastern port area of Tianjin will soon have an expanded shelf life and lower spoilage rates with the ADB providing its first-ever logisticsrelated loan to establish a large capacity cold chain facility. http://www.adb.org/news/adb-supports-cold-chain-logistics-hub-improve-food-safety-prc
ADB – Press Release: Open Bhutan Office in Early 2013 •
The ADB will open an office in the South Asian nation of Bhutan in early 2013 to more efficiently manage a growing portfolio focusing on transport, energy and urban development. http://www.adb.org/news/adb-open-bhutan-office-early-2013
ADB – Publication: “Microfinance Development Strategy 2000: Sector Performance and Client Welfare” •
The ADB has publicised the captioned report. This report emphasizes the twin goals of microfinance—reaching the poor and being financially sustainable. With microfinance becoming increasingly commercialized in the region, the study stresses the role of government and agencies such as ADB in addressing the financial needs of the poor, while at the same time ensuring the institutional sustainability of microfinance providers. http://www.adb.org/news/greater-focus-poor-key-effectiveness-microfinance-asia-and-pacific (Press Release) http://www.adb.org/sites/default/files/news/IED-Microfinance-PR.pdf (Report)
IFC & MIGA – Press Release: Partners with Korean Private Businesses to Invest in Emerging Markets •
In partnership with KoFC (Korea Finance Corporation), IFC and MIGA hosted the Korea–World Bank Group Private Sector Seminar in Seoul to discuss opportunities to strengthen their partnership when making sustainable and profitable private sector investments in emerging markets. The forum discussed ways of bringing innovative private sector solutions, including financing, guarantees, and knowledge transfer, to more developing countries around the world. It marks a milestone in the partnership between the World Bank Group and South Korea. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/7DBF84A4BF9B439E85257A990012 FC26
IMF – Working Paper: “Can Women Save Japan?” •
The IMF has publicised the captioned working paper. “Japan's potential growth rate is steadily falling with the aging of its population. This paper explores the extent to which raising female labor participation can help slow this trend. Using a cross-country database we find that smaller families, higher female education, and lower marriage rates are associated with much of the rise in women's aggregate participation rates within countries over time, but that policies are likely increasingly important for explaining differences across countries. Raising female participation could provide an important boost to growth, but women face two hurdles in participating in the workforce in Japan. First, few working women start out in career-track positions, and second, many women drop out of the workforce following childbirth. To increase women’s attachment to work Japan should consider policies to reduce the gender gap in career positions and to provide better support for working mothers.” http://www.imf.org/external/pubs/ft/wp/2012/wp12248.pdf
Page 3 of 6
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 16-Oct 17-Oct close China 6.2980 6.2658 6.2635 6.2543 Hong Kong 7.7698 7.7515 7.7513 7.752 Indonesia 9,126.0 9,585.0 9,598.0 9,606.0 Japan 76.8 78.44 78.89 78.71 Korea 1,150.8 1,111.3 1,107.2 1,105.6 Malaysia 3.1507 3.0577 3.0516 3.0355 Philippines 43.765 41.42 41.33 41.19 Singapore 1.2906 1.2222 1.2196 1.2182 Thailand 31.5 30.7 30.7 30.6 Vietnam 21,031.0 20,845.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.15 -0.01 -0.08 0.23 0.15 0.53 0.34 0.11 0.07 0.00
2012 YTD (%chg) 0.7 0.2 -5.0 -2.4 4.1 3.8 6.3 5.9 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 2,104.9 21,136.4 4,311.4 8,534.1 1,933.3 1,653.4 5,369.7 3,041.8 1,297.0 392.5
16-Oct 2,098.8 21,207.1 4,329.1 8,701.3 1,941.5 1,653.5 5,399.9 3,046.8 1,287.5 399.2
OVERNIGHT LENDING RATE (%) 16-Oct 17-Oct bps change 2.220 2.220 0.00 0.129 0.128 -0.11 4.150 4.151 0.04 0.095 0.098 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.604 0.922 -168.20 0.045 0.045 0.00 3.000 3.000 0.00 2.793 3.450 65.70
17-Oct
% change
2,105.6 21,416.6 4,337.5 8,806.6 1,955.2 1,660.7 5,438.4 3,053.4 1,300.1 397.0
0.32 0.99 0.20 1.21 0.70 0.43 0.71 0.22 0.98 -0.55
2012 YTD (%chg) -4.3 13.5 12.4 4.2 4.3 9.6 23.0 13.5 26.8 13.4
3-MONTH INTERBANK LENDING RATE (%) 16-Oct 17-Oct bps change 3.699 3.699 -0.03 0.400 0.400 0.00 4.906 4.906 0.04 0.328 0.328 0.00 2.830 2.830 0.00 3.200 3.200 0.00 0.721 0.844 12.30 0.379 0.379 0.00 3.132 3.132 0.00 7.354 6.842 -51.20
CREDIT DEFAULT SWAP (IN BPS) 16-Oct 17-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 81.4 79.4 -2.05 Korea 82.7 82.7 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 16-Oct Gold Spot (in US$ per ounce)
1,747.5
17-Oct 1,747.7
% change 0.01
Source: Bloomberg
Page 4 of 6
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
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
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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a n.a n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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 SINGAPORE SINGAPORE THAILAND
Indicators Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Benchmark Interest Rate
Period Sep Sep Oct 17
Last -3.4 -16.4 2.75
Previous -10.6 -11.0 3.00
Page 5 of 6
SELECTED ECONOMIC RELEASES CALENDAR (15 19 October 2012)
Expected Release Date 10/15/2012
10/17/2012
10/18/2012
10/19/2012
Country SINGAPORE CHINA JAPAN PHILIPPINES JAPAN CHINA CHINA SINGAPORE SINGAPORE THAILAND HONG KONG CHINA CHINA CHINA CHINA THAILAND MALAYSIA THAILAND THAILAND JAPAN
Indicators Retail Sales (YoY)% Actual FDI (YoY)% Industrial Production YOY% Overseas Remittances (YoY)% Capacity Utilization (MoM)% Consumer Price Index (YoY)% Producer Price Index (YoY)% Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Benchmark Interest Rate Unemployment Rate SA% Retail Sales (YoY)% Industrial Production (YoY)% Real GDP (YoY)% Real GDP (QoQ)% Foreign Reserves (USD bn) CPI YoY % Customs Imports (YoY)% Customs Exports (YoY)% All Industry Activity Index (MoM) %
Period Aug Sep Aug F Aug Aug F Sep Sep Sep Sep Oct 17 Sep Sep Sep 3Q 3Q Oct 12 Sep Sep Sep Aug
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 18 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks rise as Chinese GDP growth matches estimates. The MSCI Asia Pacific Index gained 0.9 percent to 124.03 as of 3:36 p.m. in Tokyo, headed for the highest close since Sept. 19. About three stocks advanced for each that fell on the measure, with nine of the 10 industry groups rising. The MSCI Asia Pacific Index rebounded about 13 percent through yesterday from this year’s low on June 4 as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 13 times estimated earnings on average, compared with 13.9 for the Standard & Poor’s 500 Index and 12.3 for the Stoxx Europe 600 Index.
•
Asian currencies halted a five-day advance as some investors judged recent gains as excessive. The Asia Dollar Index, which tracks the region’s 10 most active currencies excluding the yen, was little changed at 117.81 as of 10:57 a.m. in Hong Kong from 117.85 yesterday. The measure touched 117.87 yesterday, the highest level since February. India’s rupee fell 0.4 percent to 53.10 per dollar, the Philippine peso dropped 0.3 percent to 41.285 and the Indonesian rupiah declined 0.1 percent to 9,586, according to data compiled by Bloomberg. China’s yuan halted a two-day rally that sent it to a 19-year high of 6.2525 per dollar yesterday, falling 0.02 percent to 6.2556, according to China Foreign Exchange Trade System.
•
Oil traded near the highest level in a week in New York amid signs that the economy is recovering in the U.S. Futures for West Texas Intermediate oil were little changed after rising 3 cents yesterday. Oil pared gains after a report showed stockpiles were the highest for this time of year since government records began in 1982. U.S. crude inventories gained 2.9 million barrels last week to 369 million, the Energy Department said in a report yesterday. Crude for November delivery was at $92.09 a barrel, down 3 cents, in electronic trading on the New York Mercantile Exchange at 3:02 p.m. Singapore time. Brent oil for December settlement rose 18 cents to $113.40 a barrel on the London-based ICE Futures Europe.
BREAKING NEWS GLOBAL •
EU tussle over costs threatens to derail bank union plan. The French-backed effort to fast- track a European bank supervisor is running into German-led concern over potential costs as the region’s leaders tussle over putting their crisis-fighting blueprint into action. As leaders gather in Brussels for a two-day summit, French President Francois Hollande says efforts to stem the turmoil that began in 2009 could unravel if the EU fails to deliver on its promises. He called on the EU to press ahead on banking union, provide economic help to countries that rein in budget deficits, and show investors that Greece will be able to stay in the euro zone if it keeps its commitments. The splits over banking may emerge as proxies for wider disagreements over EU budget rules.
•
Spain banks face more losses as worst-case scenario turns real. Bad loans as a proportion of total loans reached a record 9.86 percent, or 169.3 billion euros ($222.1 billion), in July, and may rise further when the Bank of Spain publishes data for August at about 10 a.m. in Madrid. The ratio, which has risen for 16 straight months, climbed from 0.72 percent in December 2006 before Spain’s property boom turned to bust. The default rate for 604 billion euros of Spanish home mortgages stood at 3.2 percent in June, according to the Bank of Spain.
•
Housing starts in the U.S. surged 15 percent in September to the highest level in four years. Beginning home construction jumped last month to an 872,000 annual rate, the fastest since July 2008, Commerce Department figures showed yesterday in Washington. An increase in building permits may mean the gains will be sustained. A pickup in sales stoked by record-low mortgage rates and population growth combined with dwindling supply indicates construction can continue strengthening, contributing more to economic growth. Improving demand may also help revive a part of the job market that’s seen construction employment fall by almost 2 million since the end of 2007.
•
The Amir of Kuwait announced plans for a US$2 billion fund to finance projects in non-Arab Asian countries. The announcement was made on Tuesday as leaders from 32 Asian nations gathered in Kuwait City for the first Asian Co-operation Dialogue summit. Established to discuss measures for promoting economic and trade cooperation in the region, Sheikh Al-Ahmad AlSabah kicked off proceeding by unveiling plans for the fund, which Kuwait will contribute $300 million towards. As well as non-Arab Asian development, the Asian Development Bank proposed fund will also finance projects that contribute to achieving the Millennium Development Goals.
REGIONAL •
China's growth continues to slow. China's National Bureau of Statistics said Thursday that growth in China's gross domestic product fell to 7.4% in the third quarter compared with a year earlier, down from 7.6% in the second quarter and the weakest since the beginning of 2009. The seventh consecutive deceleration reflected a combination of weak demand from abroad, flagging investment at home, and insufficient spending by China's households to pick up the slack. China's leaders hope that domestic consumption, spurred by strong rises in wages, can play a bigger part in driving growth. Retail sales were up 14.2% year-on-year in September, ticking up from 13.2% growth in August.
•
Indonesia and Thailand agreed on Wednesday to step up cooperation in the area of the meeting, incentive, convention and exhibition (MICE) industry. This initiative is taken to promote each country’s potential in the sector at the regional level. The closer cooperation was outlined in a memorandum of understanding signed in Jakarta by the Trade Ministry’s national export development director general Gusmardi Bustami and director of the Thailand Convention and Exhibition Bureau, Pravit Sribanditmongkol.
•
Japan’s government plans to tap discretionary budget funds to counter an economic slowdown. As reported by Bloomberg, Chief Cabinet Secretary Osamu Fujimura said that Prime Minister Yoshihiko Noda yesterday ordered his Cabinet to draw up economic stimulus measures by November. While Mr. Fujimara didn’t give details on the size of the planned government stimulus, he said funds would come from reserves and special accounts in the budget for the current fiscal year. The issuance of deficit-financing bonds is needed to pay for the rest of this year’s budget, with Finance Minister Koriki Jojima reiterating yesterday that the government will run out of money by the end of November without passage of a bond issuance bill. He told reporters that it could be possible to use reserves to pay for spending.
•
The Thai Industries Sentiment Index (TISI) for September was down from 98.5 in August to stand at 94.1, the lowest for nine months. The industry confidence figure has been below the 100 level for three straight months due to the impact of the prolonged eurozone debt crisis, which affected the export sector, and the increases in prices of raw materials and labour, chairman of the Federation of Thai Industries (FTI), said on Thursday. He said the industry confidence for the coming three months also dropped, down to 103.5 from 105.7 reported in August on manufacturers’ concerns about the global economic slowdown, the debt problem in Europe, rising global oil prices and internal political problems.
Page 2 of 6
•
Vietnam would focus on sustainable poverty reduction from 2012-15 under a National Target Programme. Minister of Labour, Invalids and Social Affairs said that the programme on sustainable poverty reduction prioritised people living in the most disadvantaged areas. In addition, there would also be specific policies for other groups including old-aged people, the disabled and orphans. Head of the ministry's Co-ordination Office for the Poverty Reduction Programme said that the programme was part of national socio-economic development, in which Vietnam planned to spend around VND27 trillion (US$1.3 billion) to increase the average income of poor households nationwide by 160 per cent during the 2012-15 period. Most of the programme's funding comes from the State Budget. The rest comes from local budgets and international aid organizations.
IFIs NEWS (compiled from their websites) EC, ECB and IMF – Press Release: Statement by the EC, ECB and IMF on Greece •
Staff teams of the European Commission (EC), the European Central Bank (ECB), and the IMF have concluded their visit to Greece to discuss with the authorities the set of policies that could serve as a basis for the completion of the first review of the country’s economic adjustment program. The authorities and staff teams agreed on most of the core measures needed to restore the momentum of reform and pave the way for the completion of the review. Discussions on remaining issues will continue from respective headquarters and through technical representatives in the field with a view to reaching full staff level agreement over the coming days. Furthermore, financing issues will be discussed between the official lenders and Greece. http://www.imf.org/external/np/sec/pr/2012/pr12395.htm
IMF – Press Release: Launches Japan-Funded Project to Improve External Sector Statistics in Asia and Pacific Countries •
The IMF and Japan have launched a three-year project to improve external sector statistics in Asia and Pacific countries. The project, funded by the Japanese government and implemented by the IMF, began this week with an opening workshop for mid- and senior-level central bank officials of the 10 Asian beneficiary countries: Bangladesh, Bhutan, Cambodia, Lao People’s Democratic Republic, Maldives, Mongolia, Myanmar, Nepal, Sri Lanka and Vietnam. A similar event is planned for mid-November, to launch the project for selected Pacific Island beneficiary countries. http://www.imf.org/external/np/sec/pr/2012/pr12394.htm
UNCTAD & WTO – Press Release: New Executive Director of International Trade Centre being recruited •
The post of Executive Director of the International Trade Centre (ITC) will become vacant in June 2013 upon the completion of the term of the incumbent. Based on a joint recommendation by the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) and the Director-General of the World Trade Organization (WTO), the new Executive Director will be appointed by the Secretary-General of the United Nations. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=327&Sitemap_x0020_Taxono my=UNCTAD Home
World Bank – Press Release: Private Sector Liaison Officers Mission to Indonesia and Vietnam •
Representatives of the World Bank, Asian Development Bank, Millennium Challenge Corporation and the Government of Indonesia welcomed an international delegation of companies to the World Bank Private Sector Liaison Officers (PSLO) Mission to Indonesia. The mission presents a unique opportunity for companies to learn about the business environment Page 3 of 6
in Indonesia and projects financed by the International Finance Institutions (IFIs). The World Bank Group Private Sector Liaison Officers (PSLO) Network is composed of 134 business intermediary organizations (i.e. Chambers of Commerce, business and trade associations, investment promotion agencies) in 87 countries. PSLOs work to foster trade and investment between countries through the support of products and services provided by the IFIs. http://www.worldbank.org/en/news/2012/10/17/world-bank-private-sector-liaison-officersmission-to-indonesia-and-vietnam
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 17-Oct 18-Oct close China 6.2980 6.2658 6.2543 6.2514 Hong Kong 7.7698 7.7515 7.7515 7.7508 Indonesia 9,126.0 9,585.0 9,606.0 9,599.0 Japan 76.8 78.44 78.93 79.16 Korea 1,150.8 1,111.3 1,105.6 1,104.4 Malaysia 3.1507 3.0577 3.0355 3.0373 Philippines 43.765 41.42 41.19 41.28 Singapore 1.2906 1.2222 1.2163 1.2176 Thailand 31.5 30.7 30.6 30.6 Vietnam 21,031.0 20,845.0 20,850.0 20,845.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.05 0.01 0.07 -0.29 0.11 -0.06 -0.22 -0.11 -0.10 0.02
2012 YTD (%chg) 0.7 0.2 -4.9 -3.0 4.2 3.7 6.0 6.0 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 2,104.9 21,136.4 4,311.4 8,534.1 1,933.3 1,653.4 5,369.7 3,041.8 1,297.0 392.5
17-Oct 2,105.6 21,416.6 4,337.5 8,806.6 1,955.2 1,660.7 5,438.4 3,045.7 1,301.3 397.0
OVERNIGHT LENDING RATE (%) 17-Oct 18-Oct bps change 2.220 2.200 -2.00 0.128 0.129 0.11 4.151 4.151 0.00 0.098 0.100 0.25 2.750 2.750 0.00 3.000 3.000 0.00 0.922 -3.621 -454.30 0.070 0.070 0.00 3.000 2.750 -25.00 3.450 3.469 1.90
18-Oct 2,131.7 21,518.7 4,357.0 8,982.9 1,959.1 1,665.4 5,435.9 3,060.0 1,310.5 398.5
% change 1.24 0.48 0.45 2.00 0.20 0.29 -0.04 0.47 0.71 0.38
2012 YTD (%chg) -3.1 14.0 12.9 6.2 4.5 10.0 22.9 13.7 27.8 13.9
3-MONTH INTERBANK LENDING RATE (%) 17-Oct 18-Oct bps change 3.699 3.704 0.46 0.400 0.400 0.00 4.906 4.906 -0.04 0.328 0.328 0.00 2.830 2.830 0.00 3.200 3.200 0.00 0.844 0.458 -38.60 0.379 0.379 0.00 3.132 2.884 -24.85 6.842 7.323 48.10
Page 4 of 6
CREDIT DEFAULT SWAP (IN BPS) 17-Oct 18-Oct bps change China 83.0 83.0 0.00 Hong Kong * 42.9 42.9 0.02 Indonesia 165.6 165.6 0.00 Japan 78.5 75.8 -2.68 Korea 82.7 82.7 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 17-Oct Gold Spot (in US$ per ounce)
18-Oct
1,750.2
% change
1,747.0
-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 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
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
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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a n.a n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
Reserves over short-term debt 5.5 0.4 2.7 0.5 2.2 3.8 11.5 0.3 3.0 -
Page 5 of 6
DATA RELEASES FOR THE DAY
Country HONG KONG CHINA CHINA CHINA CHINA
Indicators Unemployment Rate SA% Retail Sales (YoY)% Industrial Production (YoY)% Real GDP (YoY)% Real GDP (QoQ)%
Period Sep Sep Sep 3Q 3Q
Last 3.3 14.2 9.2 7.4 2.2
Previous 3.2 13.2 8.9 7.6 1.8
SELECTED ECONOMIC RELEASES CALENDAR (15 19 October 2012)
Expected Release Date 10/15/2012
10/17/2012
10/18/2012
10/19/2012
Country SINGAPORE CHINA JAPAN PHILIPPINES JAPAN CHINA CHINA SINGAPORE SINGAPORE THAILAND HONG KONG CHINA CHINA CHINA CHINA THAILAND MALAYSIA THAILAND THAILAND JAPAN
Indicators Retail Sales (YoY)% Actual FDI (YoY)% Industrial Production YOY% Overseas Remittances (YoY)% Capacity Utilization (MoM)% Consumer Price Index (YoY)% Producer Price Index (YoY)% Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Benchmark Interest Rate Unemployment Rate SA% Retail Sales (YoY)% Industrial Production (YoY)% Real GDP (YoY)% Real GDP (QoQ)% Foreign Reserves (USD bn) CPI YoY % Customs Imports (YoY)% Customs Exports (YoY)% All Industry Activity Index (MoM) %
Period Aug Sep Aug F Aug Aug F Sep Sep Sep Sep Oct 17 Sep Sep Sep 3Q 3Q Oct 12 Sep Sep Sep Aug
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 19 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks fall as earnings drag down technology shares. The MSCI Asia Pacific Index dropped 0.2 percent to 123.66 as of 4:14 p.m. in Tokyo with about five stocks falling for every four that rose. The measure has risen 2.4 percent this week. The MSCI Asia Pacific Index rebounded 14 percent through yesterday from this year’s low on June 4 as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 13.1 times estimated earnings on average, compared with 13.9 for the Standard & Poor’s 500 Index and 12.3 for the Stoxx Europe 600 Index.
•
The yen was poised for the biggest five-day decline in 9 weeks against the dollar. Japan’s currency fell versus all but one of its 16 major peers as the premium investors demand for holding U.S. two-year Treasuries instead of their Japanese counterparts reached the highest in two months. The yen was little changed at 79.36 per dollar at 8:56 a.m. London time, after depreciating yesterday to 79.47, the weakest since August 21. It’s down 1.2 percent this week, the biggest slide against the greenback since the five days through August 17. The Japanese currency lost 0.1 percent to 103.70 per euro. It slid as much as 0.6 percent to 104.14 yesterday, the weakest since May 8.
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Oil headed for a second weekly gain in New York after TransCanada shut its keystone pipeline for repairs, disrupting crude supplies to the U.S. Midwest. Futures rose 0.2 percent, extending the longest run in more than a decade of daily price moves of less than 25 cents. Crude pared a decline of as much as 1.6 percent yesterday after TransCanada shut the 590,000 barrel-a-day line for three days. Crude for November delivery was at $92.25 a barrel, up 15 cents, in electronic trading on the New York Mercantile Exchange at 8:37 a.m. London time. Brent for December settlement was at $112.94 a barrel, up 52 cents, on the London-based ICE Futures Europe exchange. The front-month European benchmark’s premium to the corresponding West Texas Intermediate contract was at $20.23. The gap has narrowed since reaching a one-year high of $23.95 on Oct. 15.
BREAKING NEWS GLOBAL •
EU aims for Euro-area bank supervision to start in 2013. The EU will seek to agree on a framework that makes the European Central Bank the main supervisor by January 1st, according to conclusions released after leaders met at a summit in Brussels. The new system, intended to break the link between banks and governments at the root of the region’s financial crisis, will phase in over the next year and could cover all 6,000 euro-area banks by Jan. 1, 2014. The EU leaders vowed to ensure that the single supervisor won’t put countries outside the euro area at a disadvantage. They said non-euro nations that join the supervisory framework can receive equitable treatment and representation, and intensive technical work in this area will continue.
•
Greek Prime Minister Antonis Samaras moved closer to winning a delayed aid disbursement when European leaders praised his government’s budget-cutting push. At his first European Union summit since becoming premier in June, Samaras said record unemployment showed the price Greece was paying for austerity demanded by the euro area as a condition for emergency loans. He urged parallel steps to kick-start the economy and stuck to a request for two extra years until 2016 to meet targets for narrowing the budget deficit, prompting signs of European
goodwill. The Samaras government has been negotiating with the euro area and IMF over 13.5 billion euros ($17.6 billion) of austerity measures for 2013 and 2014 needed to qualify for the release of more loan instalments. •
U.K. retail sales rose more than economists forecast in September. Sales including fuel gained 0.6 percent from August, when they fell 0.1 percent, the Office for National Statistics said in London. The median forecast of 24 economists in a Bloomberg News survey was for a 0.4 percent gain. Clothes surged 2.1 percent, adding 0.2 percentage points to total sales. While cooling inflation is easing the squeeze on Britons, any recovery in consumer spending may be kept in check as the economy struggles to recover from a recession and government budget cuts undermine sentiment.
REGIONAL •
Foreign direct investment in China fell for the 10th time in 11 months as companies reined in spending amid a slowdown in the world’s second-biggest economy. Investment fell 6.8 percent from a year earlier to $8.43 billion, the Ministry of Commerce said in Beijing today. Spending in the first nine months of the year dropped 3.8 percent to $83.4 billion compared with a drop of 3.4 percent in the first eight months. Meanwhile, non-financial outbound investment in the first nine months increased 28.9 percent from a year earlier to $52.5 billion after a 39 percent gain in the first eight months. The decline in foreign direct investment underscores foreign investors’ concerns that moderating expansion in China will weigh on sales and profitability.
•
Franchise industry in Cambodia expands. Cambodia's growing economy and hunger for new brands, particularly among young people, contribute to making Cambodia a profitable market for the franchise business, industry insiders said at the Franchising Forum in Phnom Penh last week. According to Laurent Notin, general manager of Indochina Research, economic growth contributes to the growth of the franchise business. He also said there is a growing middle class in Cambodia, especially in Phnom Penh.
•
Malaysian banks eye China stakes. Malaysian ambassador to China said that one or two Malaysian banks have expressed interest at buying stakes in Chinese lenders and are keen to participate in the growing financial services sector in China. CIMB Group has a 19.9 per cent stake in Bank of Yingkou, a mid-sized lender based in northeast China, while Affin Holdings Bhd has a 23.5 per cent stake in Hong Kong-based Bank of East Asia. On the other hand, there are two Chinese banks operating in Malaysia, namely Industrial and Commercial Bank of China, better known as ICBC - the world's largest lender by market value - and Bank of China.
•
Myanmar has given approval for the introduction of Visa and other foreign credit cards. Visa, MasterCard, China Union Pay and Japan Credit Bureau have been granted permission by the finance ministry to enter the long-closed country, the state-run New Light of Myanmar newspaper announced on Friday. The Post and Telecommunications department and Myanmar Information Technology Co. will handle the technical side of the launch of card services at local banks and ATMs and their usage at hotels and restaurants.
•
Vietnam exports rice to Indonesia. The Southern Food Corporation has signed a deal with the Indonesian Bureau of Logistics (Bulog) to export 300,000 tonnes of 15-per-cent broken rice to Indonesia by the end of this year, an official of the Viet Nam Food Association (VFA) has confirmed. The VFA chairman said the rice exports would be delivered to Indonesia from the end of October through to December. The Indonesian Government had signed a memorandum of understanding with Vietnam agreeing to import 1.2 million tonnes of rice from Vietnam. In the past Indonesia, Malaysia and the Philippines have always signed Government contracts, but recently Indonesia has permitted private enterprises to import rice via auctions in place of signing Government contracts.
Page 2 of 5
IFIs NEWS (compiled from their websites) IMF – Press Release: Concludes 2012 Article IV Consultation with the Lao People’s Democratic Republic •
The IMF has concluded the Article IV consultation with the Lao P.D.R. Executive Directors commended the authorities for their sound policies, which have contributed to impressive economic growth, reduction in poverty, lower inflation, and improved debt dynamics. Directors encouraged the authorities to take advantage of the favorable conditions to maintain macroeconomic and financial stability, build external and fiscal buffers, and achieve sustainable and broad-based growth. http://www.imf.org/external/np/sec/pn/2012/pn12121.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2012/cr12286.pdf (Staff Report)
IMF – Working Paper: “Financing Growth in the WAEMU Through the Regional Securities Market: Past Successes and Current Challenges” •
The IMF has published the captioned working paper. “The West African Economic and Monetary Union (WAEMU) regional securities market saw increasing activity in the last decade, but still fell short of supplying sufficient long-term financing for growth-enhancing public and private investment projects. In addition to providing an institutional background, this paper studies recent developments and the determinants of interest rates on the market—using yield curve and principal component analyses. It also identifies challenges and prospective reforms that could help the region reap the full benefits of a more dynamic securities market and assesses the potential systemic risk the market may pose for the region’s banking system.” http://www.imf.org/external/pubs/ft/wp/2012/wp12249.pdf
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 18-Oct 19-Oct close China 6.2980 6.2658 6.2514 6.2535 Hong Kong 7.7698 7.7515 7.7502 7.7504 Indonesia 9,126.0 9,585.0 9,599.0 9,629.0 Japan 76.8 78.44 79.28 79.33 Korea 1,150.8 1,111.3 1,104.4 1,103.5 Malaysia 3.1507 3.0577 3.0373 3.0522 Philippines 43.765 41.42 41.28 41.405 Singapore 1.2906 1.2222 1.2189 1.2198 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,845.0 20,845.0 20,845.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.03 0.00 -0.31 -0.06 0.08 -0.49 -0.30 -0.07 -0.16 0.00
2012 YTD (%chg)
0.7 0.3 -5.2 -3.2 4.3 3.2 5.7 5.8 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 2,104.9 21,136.4 4,311.4 8,534.1 1,933.3 1,653.4 5,369.7 3,041.8 1,297.0 392.5
18-Oct 2,131.7 21,518.7 4,357.0 8,982.9 1,959.1 1,665.4 5,435.9 3,060.4 1,311.2 398.5
19-Oct 2,128.3 21,551.8 4,331.3 9,002.7 1,943.8 1,666.4 5,432.4 3,054.0 1,309.6 398.2
% change -0.16 0.15 -0.59 0.22 -0.78 0.06 -0.07 -0.21 -0.12 -0.07
2012 YTD (%chg) -3.2 14.2 12.3 6.5 3.6 10.0 22.8 13.5 27.7 13.8
Page 3 of 5
OVERNIGHT LENDING RATE (%) 18-Oct 19-Oct bps change 2.200 2.200 0.00 0.129 0.129 0.00 4.151 4.154 0.36 0.100 0.088 -1.25 2.750 2.750 0.00 3.000 3.000 0.00 -3.621 0.524 414.50 0.052 0.052 0.00 2.750 2.750 0.00 3.469 3.444 -2.50
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3-MONTH INTERBANK LENDING RATE (%) 18-Oct 19-Oct bps change 3.704 3.708 0.38 0.400 0.400 0.00 4.906 4.908 0.24 0.328 0.328 0.00 2.830 2.830 0.00 3.200 3.200 0.00 0.458 0.514 5.60 0.379 0.379 0.00 2.884 2.889 0.54 7.323 7.341 1.80
CREDIT DEFAULT SWAP (IN BPS) 18-Oct 19-Oct bps change China 83.0 83.0 0.00 Hong Kong * 42.9 50.6 7.70 Indonesia 165.6 165.6 0.00 Japan 76.7 75.6 -1.17 Korea 82.7 82.7 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 18-Oct Gold Spot (in US$ per ounce)
19-Oct
1,741.4
% change
1,734.1
-0.42
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
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
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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a n.a n.a n.a 183.3 n.a
Page 4 of 5
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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 CHINA THAILAND MALAYSIA JAPAN
Indicators Actual FDI (YoY)% Foreign Reserves (USD bn) CPI YoY % All Industry Activity Index (MoM) %
Period Sep Oct 12 Sep Aug
Last -6.8 182.6 1.3 0.1
Previous -1.4 183.3 1.4 -0.6
SELECTED ECONOMIC RELEASES CALENDAR (15 19 October 2012)
Expected Release Date 10/15/2012
10/17/2012
10/18/2012
10/19/2012
Country SINGAPORE CHINA JAPAN PHILIPPINES JAPAN CHINA CHINA SINGAPORE SINGAPORE THAILAND HONG KONG CHINA CHINA CHINA CHINA THAILAND MALAYSIA THAILAND THAILAND JAPAN
Indicators Retail Sales (YoY)% Actual FDI (YoY)% Industrial Production YOY% Overseas Remittances (YoY)% Capacity Utilization (MoM)% Consumer Price Index (YoY)% Producer Price Index (YoY)% Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Benchmark Interest Rate Unemployment Rate SA% Retail Sales (YoY)% Industrial Production (YoY)% Real GDP (YoY)% Real GDP (QoQ)% Foreign Reserves (USD bn) CPI YoY % Customs Imports (YoY)% Customs Exports (YoY)% All Industry Activity Index (MoM) %
Period Aug Sep Aug F Aug Aug F Sep Sep Sep Sep Oct 17 Sep Sep Sep 3Q 3Q Oct 12 Sep Sep Sep Aug
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 22 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Decline on Japan Exports, Earnings Outlook. Asian stocks fell, with the regional benchmark index retreating after its biggest weekly advance in a month, as Japan’s exports dropped. Korean stock price declined by 0.12 percent, Philippines stock was brought down by 0.14 percent, Singapore stock by 0.05 percent, while Vietnam stock declined the most by 0.31 percent, followed by Malaysia stock by 0.30 percent. Meanwhile, China stock gained by 0.21 percent, Indonesia stock by 0.23 percent, while Hong Kong gained the most by 0.68 percent.
Most European Stocks Decline as Japanese Exports Sink. Most European stocks dropped as Japan’s exports tumbled the most since the aftermath of last year’s earthquake. Asian shares declined, while U.S. index futures gained. Nexans SA (NEX) slid 5.3 percent after cutting its forecasts. Royal Philips Electronics NV climbed 3.6 percent after the world’s largest lighting company reported third-quarter profit that beat analysts’ estimates. Actelion Ltd. (ATLN) gained 1 percent after submitting an application to U.S. authorities for its macitentan drug. The Stoxx Europe 600 Index (SXXP) fell 0.3 percent to 273.35 at 8:10 a.m. in London, as three shares declined for each one that advanced. The benchmark gauge has still rallied 17 percent from this year’s low on June 4 as the European Central Bank unveiled a bond-purchase program and the Federal Reserve announced further stimulus measures. Standard & Poor’s 500 Index futures added 0.2 percent today, while the MSCI Asia Pacific Index retreated 0.3 percent.
Oil Rises From Two-Week Low; Keystone Pipeline Planned to Start. Oil rebounded from the lowest close in almost two weeks in New York on speculation last week’s losses were excessive. TransCanada Corp. planned to start its Keystone pipeline today after a second delay. Futures climbed as much as 0.6 percent after reaching technical support levels. Prices also advanced after the White House denied a New York Times report that administration officials agreed to one-on-one talks with Iran’s government over its nuclear program. TransCanada originally planned to resume operations Oct. 20 on the line that runs from Alberta to the main U.S. oilstorage hub in Cushing, Oklahoma. Crude for November delivery rose as much as 52 cents to $90.57 a barrel in electronic trading on the New York Mercantile Exchange and was at $90.40 at 3:09 p.m. in Singapore. Oil fell 2 percent on Oct. 19 to $90.05, the lowest close since Oct. 8. The contract expires today. The more actively traded December futures were 34 cents higher at $90.78 a barrel. Brent oil for December settlement gained 14 cents, or 0.1 percent, to $110.28 on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $19.47 to New York-traded West Texas Intermediate grade, compared with $19.70 on Oct. 19.
BREAKING NEWS GLOBAL
Bernanke Sedates Bond Traders Seeing Treasuries Added to QE3. The world’s biggest bond traders say the Federal Reserve will decide before year-end to buy Treasuries in addition to purchasing $40 billion of mortgage bonds a month as gains in U.S. employment and consumer confidence prove unsustainable. All 21 primary dealers that trade with the Fed expect its latest QE measures to be expanded to include government securities. Rather than increasing on speculation the central bank’s latest measures would spur the economy, volatility in the bond market has held at about the lowest since 1988, a sign of continued demand for the safety of Treasuries. While the unemployment rate fell to 7.8 percent in September, the lowest level
since 2009, and consumer confidence reached a six-month high, traders are looking ahead to a potential slowdown if Congress fails to avert $607 billion in mandated tax increases and spending cuts starting Dec. 31 and as Europe’s debt crisis drags into a fourth year.
Rajoy Claims Vindication in Galicia as Basque Nationalists Win. Spanish Prime Minister Mariano Rajoy’s People’s Party said victory in regional elections yesterday that extended its majority in Galicia vindicated his austerity program. “The steps that we have explained have to be taken to resolve the crisis have had overwhelming support,” Carlos Floriano, the party campaign chief, said in an interview on public broadcaster Radio Nacional de Espana. “There is no precedent in this crisis situation of a government not just defending but increasing its majority.” The PP won 41 of the 75 seats in the regional assembly, adding three. The Socialists lost almost half of their votes and a new leftist group took nine seats. In the Basque Country, the Basque Nationalist Party won 27 seats, allowing it to lead a government in the 75-seat chamber through alliances with other parties including the 21 separatist lawmakers of Bildu. The election result clears one obstacle from Rajoy’s path as he mulls a bailout, putting Europe’s newest crisis-fighting tools to the test in an economy that’s twice the combined size of Greece, Ireland and Portugal. At a summit last week, European Union leaders failed to fulfill pledges made in June for greater integration, as German Chancellor Angela Merkel pushed back against demands from France and Spain.
REGIONAL
Japan Exports Tumble 10% as Maehara Presses BOJ to Ease: Economy. Japan’s exports fell the most since the aftermath of last year’s earthquake as a global slowdown, the yen’s strength and a dispute with China increase the odds of a contraction in the world’s third-largest economy. Shipments slid 10.3 percent in September from a year earlier, leaving a trade deficit of 558.6 billion yen ($7 billion), the Finance Ministry said in Tokyo today. Imports rose 4.1 percent. Economy Minister Seiji Maehara pressed the Bank of Japan (BoJ) for more action yesterday, saying the nation is “falling behind” in monetary stimulus and is at risk of another credit- rating downgrade. The BoJ today cut its view of eight out of nine regional economies while Taiwanese unemployment rose to a one-year high, underscoring weakness across Asia after China’s thirdquarter growth was the slowest since 2009.
S. Korea Prepares to Evacuate DMZ Citizens After Threat. South Korea is preparing to evacuate more than 800 residents along the DMZ after North Korea threatened to fire on activists planning to send balloons across the border carrying leaflets critical of its regime. While no orders to leave are currently in place, authorities have been preparing citizens residing within the civilian control line to evacuate if any signs of a possible attack emerge, Park Kwang Hae, an official at Paju City Council, said by telephone today. The threat of an attack against activists is the first since North Korean leader Kim Jong Un succeeded his father Kim Jong Il in December. South Korea has not sighted any unusual troop movements north of the border today, said a Defense Ministry official, who could not be named due to military policy. The activists are pushing ahead with their plan to send 200,000 leaflets at 11 a.m. today, according to Park Sang Hak, leader of the Fighters for Free North Korea, one of the organizers. They have sent balloons carrying leaflets on five occasions since the younger Kim’s ascension, he said. North Korea’s army will conduct a “merciless military strike” if any move to drop leaflets is detected, according to a statement carried by the official Korean Central News Agency on Oct. 19. South Korea’s military is prepared to “completely destroy” the origin of a North Korean attack if it occurs, Defense Minister Kim Kwan Jin told lawmakers the same day.
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IFIs NEWS (compiled from their websites)
IFC – Publication: “Global Investment Promotion Best Practices report (GIPB 2012)”
The World Bank Group (WBG) and the Australian APEC Study Centre (AASC) are hosting a workshop for investment promotion officials from low-income member countries of the Asia-Pacific Economic Cooperation (APEC), helping them improve services for investors in light of the growing competition for foreign direct investment across the region.
http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/F4D2ED457DA21CE185257A9F000EAD5B IMF – Working Paper
The IMF has publicised the following working papers:
“Workers’ Remittances: An Overlooked Channel of International Business Cycle Transmission?” - This paper shows that remittance flows significantly increase the business cycle synchronization between remittance-recipient countries and the rest of the world. Using both aggregate and bilateral remittances data in a panel data setting, the study demonstrates that this effect is robust and causal. Moreover, the econometric analysis reveals that remittance flows are more effective in channeling economic downturns than upswings from the sending countries to remittance-receiving economies. The analysis suggests that measures of openness and spillovers could be enhanced by accounting for the role of the remittances channel.
http://www.imf.org/external/pubs/ft/wp/2012/wp12251.pdf
“Social Spending in Korea: Can it Foster Sustainable and Inclusive Growth?” - Going forward, Korea faces two closely related challenges: sustaining economic growth against the backdrop of a rapidly aging population and ameliorating income inequality. This paper argues that a gradual increase in social spending could promote more sustainable and inclusive growth in Korea. In particular, simulation results suggest that social spending which supports labor market reforms can boost longer-term growth. However, despite rapid increases recently—albeit from a low base—there is still a social spending gap relative to Korea’s OECD peers. Because of several fiscal challenges in the coming decades, increases in social spending should be incremental, and would be usefully guided by a longer-term fiscal framework.
http://www.imf.org/external/pubs/ft/wp/2012/wp12250.pdf OECD – Press Release: launches online portal to boost product safety
The OECD has launched an online portal to give consumers, businesses and governments quick and easy access to the latest information on products recalled from the market in Australia, Canada, Europe and the United States. The portal, http://globalrecalls.oecd.org, is designed to promote and improve product safety. Deaths and injuries worldwide from unsafe products are estimated to cost more than USD 1 trillion each year, according to the OECD.
http://www.oecd.org/newsroom/oecdlaunchesonlineportaltoboostproductsafety.htm World Bank – Press Release: Conduct Stock-Taking Review of Doing Business Project on 10-year Anniversary
The World Bank has announced the appointment of an independent panel of experts to conduct a review of Doing Business. Doing Business measures and analyzes regulations that apply to small and medium size local businesses in 185 economies. The report is based on 10 indicators and updated on an annual basis. The indicators reflect on regulations affecting local businesses throughout their life cycle, capturing such areas as start-up regulations, the Page 3 of 6
efficiency of court systems, trading across borders, and paying taxes. According to the Terms of Reference of the review, “The 10-year point is a good time to conduct a thorough review, taking stock of the experience to date, analyzing results, distilling lessons learned, and mapping the way forward. Given the issues that have been raised by policy makers, Executive Directors and other stakeholders, as well as the public attention that the Doing Business indicators attract and their use in policy making and research, a close and independent review will be of great value.� http://www.worldbank.org/en/news/2012/10/19/world-bank-conduct-stock-taking-review-doingbusiness-project-10-year-anniversary
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 19-Oct 22-Oct close China 6.2980 6.2535 6.2535 6.2545 Hong Kong 7.7698 7.7501 7.7501 7.7504 Indonesia 9,126.0 9,629.0 9,629.0 9,611.0 Japan 76.8 79.32 79.32 79.83 Korea 1,150.8 1,103.5 1,103.5 1,104.3 Malaysia 3.1507 3.0523 3.0523 3.0529 Philippines 43.765 41.405 41.405 41.378 Singapore 1.2906 1.2217 1.2217 1.2227 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,845.0 20,845.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change -0.02 0.00 0.19 -0.64 -0.07 -0.02 0.07 -0.08 -0.10 -0.02
2012 YTD (%chg) 0.7 0.3 -5.0 -3.8 4.2 3.2 5.8 5.6 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 2,128.3 21,551.8 4,331.3 9,002.7 1,943.8 1,666.4 5,432.4 3,048.9 1,307.7 398.2
19-Oct 2,128.3 21,551.8 4,331.3 9,002.7 1,943.8 1,666.4 5,432.4 3,048.9 1,307.7 398.2
OVERNIGHT LENDING RATE (%) 19-Oct 22-Oct bps change 2.200 2.250 5.00 0.129 0.122 -0.71 4.154 4.152 -0.20 0.088 0.098 1.00 2.750 2.750 0.00 3.000 3.000 0.00 0.524 2.063 153.90 0.032 0.032 0.00 2.750 2.750 0.00 3.444 3.429 -1.50
22-Oct 2,132.8 21,697.6 4,341.4 9,010.7 1,941.6 1,661.4 5,424.8 3,047.5 1,308.5 397.0
% change 0.21 0.68 0.23 0.09 -0.12 -0.30 -0.14 -0.05 0.06 -0.31
2012 YTD (%chg) -3.0 14.9 12.5 6.6 3.5 9.7 22.7 13.2 27.6 13.4
3-MONTH INTERBANK LENDING RATE (%) 19-Oct 22-Oct bps change 3.708 3.702 -0.56 0.400 0.399 -0.07 4.908 4.904 -0.40 0.328 0.328 0.00 2.830 2.830 0.00 3.200 3.210 1.00 0.514 0.557 4.30 0.379 0.379 0.00 2.889 2.885 -0.46 7.341 6.900 -44.10
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CREDIT DEFAULT SWAP (IN BPS) 19-Oct 22-Oct bps change China 83.0 83.0 0.00 Hong Kong * 50.6 n.a n.a Indonesia 165.6 165.6 0.00 Japan 77.1 76.2 -0.93 Korea 82.7 82.7 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 19-Oct Gold Spot (in US$ per ounce)
22-Oct
1,721.8
% change
1,724.8
0.17
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
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
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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
Reserves over short-term debt 5.5 0.4 2.7 0.5 2.2 3.8 11.5 0.3 3.0 -
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DATA RELEASES FOR THE DAY Country
Indicators
MALAYSIA
Foreign Reserves (USD bn)
HONG KONG
CPI - Composite Index (YoY)%
Period
Last
Previous
Oct 15
137.7
137.5
Sept
3.8
3.7
SELECTED ECONOMIC RELEASES CALENDAR (22-25 October 2012) Expected released date 22/10/2012 23/10/2012
24/10/2012
25/10/2012
Country
Indicators
Period
MALAYSIA
Foreign Reserves (USD bn)
Oct 15
HONG KONG
CPI - Composite Index (YoY)%
Sep
SINGAPORE
CPI (YoY)%
Sep
CHINA
HSBC Flash China Manufacturing PMI
Oct
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Sep
THAILAND
Customs Imports (YoY)%
Sep
THAILAND
Customs Exports (YoY)%
Sep
VIETNAM
Imports YTD (YoY)%
Oct
VIETNAM
Exports YTD (YoY)%
Oct
VIETNAM
CPI (YoY) %
Oct
PHILIPPINES
Total Imports (YoY)%
Aug
PHILIPPINES
Trade Balance (USD mn)
Aug
VIETNAM
Industrial Production Index YoY %
Oct
VIETNAM
Retail Sales YTD (YoY)%
Oct
SINGAPORE
Industrial Production YoY%
Sep
HONG KONG
Imports YoY%
Sep
HONG KONG
Exports YoY%
Sep
HONG KONG
Trade Balance (HKD bn)
Sep
JAPAN
National CPI YoY %
Sep
JAPAN
National CPI Ex Food, Energy YoY %
Sep
SOUTH KOREA
SK Consumer Confidence
Oct
SOUTH KOREA
GDP (YoY)%
3Q P
SOUTH KOREA
GDP (QoQ)%
3Q P
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 23 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Fall for Third Day on Earnings, Europe. Asian stocks fell, with the regional benchmark index heading for a third day of losses, after companies including Acer Inc. posted earnings that missed estimates and Moody’s Investors Service lowered credit ratings on five Spanish regions. Acer slid 3.3 percent in Taipei as Asia’s second-largest computer maker posted third-quarter profit and sales that missed estimates. Canon Inc., the world’s biggest camera maker that gets about 31 percent of sales from Europe, dropped 1.5 percent in Tokyo. Kansai Electric Power Co. sank 7.9 percent after the Nikkei newspaper reported the Japanese utility won’t pay a dividend. The MSCI Asia Pacific Index (MXAP) lost 0.4 percent to 122.76 as of 12:52 p.m. in Tokyo, erasing gains of as much as 0.3 percent. More than 100 companies in Australia, China, India, Japan, South Korea and Taiwan are scheduled to post results this week.
Gold drops before Fed Policy Meeting; Silver, Platinum Retreat. Gold dropped before the policy-setting Federal Open Market Committee meets from today amid signs that the U.S. economy is improving, reducing demand for bullion as an alternative investment. Silver and platinum fell. Spot gold fell as much as 0.3 percent to $1,722.88 an ounce, and was at $1,723.88 at 2:43 p.m. in Singapore. Gold for December delivery was little changed at $1,724.50 an ounce on the Comex in New York. Bullion, up 10 percent this year, has erased gains made after the Federal Reserve announced a third round of debt-buying on Sept. 13. Stimulus measures taken by central banks from Europe to China and Japan helped drive gold to an 11-month high of $1,796.05 on Oct. 5. Cash silver slid as much as 0.8 percent to $32.1587 an ounce, before trading at $32.1975. Spot platinum declined for a fourth day, falling 0.3 percent to $1,603.75 an ounce. Palladium lost 0.7 percent to $620.50 an ounce, dropping for a fourth day.
Asian Currencies Approach Eight-Month High on Japan Easing Bets. Asian currencies strengthened, approaching an eight-month high, as speculation Japan will take further measures to stimulate its economy spurred demand for riskier assets. Exports from Japan slid 10.3 percent in September from last year; increasing the odds the central bank will ease monetary policy at its next review on Oct. 30. The BoJ last expanded its asset-buying program by 10 trillion yen ($125 billion) on Sept. 19. The Philippine peso appreciated 0.15 percent to 41.31 per dollar. The won gained 0.12 percent to 1,103.0. The yen weakened past 79.75 against the dollar and the euro was little changed after advancing 0.3 percent yesterday. The yuan rose 0.05 percent to 6.2513 per dollar even as the PBoC set the currency’s daily fixing weaker for a third day. Elsewhere, Malaysia’s ringgit was little changed at 3.0535 per dollar, depreciated by 0.02 percent. Indonesia’s rupiah dropped 0.06 percent to 9,617.0, while Vietnam’s dong dropped by 0.02 percent, at 20,855.0.
BREAKING NEWS GLOBAL
U.S. Stocks Erase Losses as Apple Offsets Earnings. U.S. stocks erased earlier losses, sending the benchmark Standard & Poor’s 500 Index higher for the first time in three days, as an advance in Apple (AAPL) Inc. shares overshadowed disappointing corporate results. Apple, the world’s most valuable company, jumped 4 percent and paced gains in technology companies. Peabody Energy Corp. (BTU), the largest U.S. coal producer by volume, surged 12 percent after earnings beat projections. Freeport-McMoRan Copper & Gold Inc. (FCX), the world’s biggest publicly traded copper producer, and SunTrust Banks Inc. (STI) retreated at least 1.4 percent after reporting earnings that missed analysts’ estimates. The S&P 500 rose less than 0.1 percent to 1,433.81 at
4 p.m. New York time, after falling 0.8 percent earlier. The Dow Jones Industrial Average added 2.38 points, or less than 0.1 percent, to 13,345.89. The Nasdaq-100 Index rose 0.6 percent to 2,694.56. Volume for exchange-listed stocks in the U.S. was 5.8 billion shares, or 3.4 percent below the three-month average. Third-quarter results at about 69 percent of S&P 500 companies beat analysts’ estimates, according to data compiled by Bloomberg. Sales missed forecasts at 59 percent of companies, the data showed.
Oil Snaps Three-Day Decline in New York; Keystone Curbed. Oil snapped a three-day decline in New York while London’s Brent futures swung between gains and losses. The Keystone pipeline won’t resume full deliveries until next month after a shutdown. Front-month futures traded 0.3 percent higher after losing 3.7 percent since Oct. 17 to settle at the lowest in more than two weeks yesterday. Brent crude fell as much as 0.2 percent and rose 0.3 percent. Prices fluctuated before reports tomorrow that may show new home sales in the U.S. in September rose to the highest in more than two years and crude stockpiles advanced. Crude for December delivery was up 25 cents at $88.90 a barrel in electronic trading on the New York Mercantile Exchange at 3:03 p.m. in Singapore. It earlier rose as much as 64 cents. The November contract fell 1.5 percent yesterday to $88.73, the lowest close since Oct. 3. Prices are down 10 percent this year. Brent for December settlement was 15 cents higher at $109.59 a barrel on the London-based ICE Futures Europe exchange after losing 70 cents to settle at $109.44 yesterday. The European benchmark crude was at a premium of $20.72 to the New York-traded West Texas Intermediate grade, compared with $20.79 yesterday. New York prices halted their slide after nearing technical support along the lower Bollinger band. Buy orders tend to be clustered near chartsupport levels. The band was at about $87.04 a barrel today.
REGIONAL
China’s Factories Losing Pricing Power in Earnings Threat. Chinese factories are losing pricing power in the worst wholesale-cost deflation since 2009, signaling corporate earnings may deteriorate further and putting a damper on global inflation pressures. Steelmaker China Oriental Group Co. (581) says falling prices are wiping out profits, while Yunnan Copper Industry Co. cited the declines for a third-quarter loss. The producer-price index (SHCOMP) fell 3.6 percent in September from a year earlier and may stay negative until the second half of 2013 without large stimulus, according to Mizuho Securities Asia Ltd. With the U.S. reporting the longest stretch in three years that Chinese imports have gone without a price increase, the trend also gives policy makers around the world more room for easing to support faltering global growth. Sluggish earnings growth may prompt the government to reduce corporate taxes to aid earnings and help boost spending after China’s expansion slowed for a seventh quarter.
Vietnam will struggle to meet its 2012 growth target without pumping money into the economy, according to economists including an adviser to Prime Minister Nguyen Tan Dung. Vietnam’s economy needs to grow 6.5 percent in the fourth quarter in order to meet the government’s full-year growth target of 5.2 percent, the prime minister told lawmakers at the National Assembly in Hanoi yesterday. Vietnam’s 2012 economic growth may reach 5 percent to 5.2 percent, Nguyen Van Giau, chairman of the assembly’s economic committee, told lawmakers. Vietnam’s economy is set to expand at its lowest rate in 13 years after rising bad debt levels at banks curbed lending while investment and consumer spending growth slowed. This year’s expansion would be the fifth straight year of sub-7 percent growth, the longest streak since reforms opened the country’s economy in 1986. In yesterday’s address, Dung apologized for the government’s mistakes in managing state-owned firms.
India’s Always Bullish Analysts Turning Bearish as Mobius Adds. Indian stock analysts who predicted gains in the nation’s benchmark index while the gauge fell last year are now turning bearish as equities surge the most since 2009. More than 1,200 estimates showed analysts Page 2 of 6
projecting a 1 percent drop for the BSE India Sensitive Index (SENSEX) in the next 12 months, after they overestimated returns by an average 21 percentage points in 2011. The benchmark measure has climbed 22 percent this year, the best performance among the largest emerging markets, as international money managers bought a net $18 billion of Indian shares. While Mumbai-based securities firm Dolat Capital Market Pvt. advises cutting holdings of State Bank of India because of loan losses and Prabhudas Lilladher Pvt. has downgraded Reliance Industries Ltd. (RIL) on slower earnings growth, Templeton Emerging Markets Group’s Mark Mobius is increasing his Indian holdings. Mobius, who oversees $48 billion, cites Prime Minister Manmohan Singh’s efforts to open up the economy for his bullish stance.
Hong Kong Intervenes to Defend Peg as Upper Limit Tested. The HKMA sold its own currency for a second time in a week to stem appreciation after it traded near the upper limit of a 29year- old peg to the U.S. dollar. The central bank injected HK$3.914 billion ($505 million) today, according to data published by the authority. That followed a HK$4.673 billion intervention on Oct. 19, marking the first time it stepped into the market since 2009. The Hong Kong dollar was at HK$7.7501 against the greenback as of 2:52 p.m. local time. The central bank fixed the currency in 1983 when negotiations between China and the U.K. over the city’s return to Chinese rule stoked capital outflows. Policy makers committed to keep the exchange rate between HK$7.85 and HK$7.75 in 2005. The monetary authority said it bought $603 million during New York trading on Oct. 19 after the local currency’s move to HK$7.75 obliged it to intervene. The pressure on the peg arose from capital inflows into the region, the HKMA said in a statement on Oct. 20. One-year implied volatility in the Hong Kong dollar, a measure of exchange-rate swings used to price options, rose five basis points, or 0.05 percentage point, to 0.95 percent. China’s yuan strengthened 0.09 percent to 6.2488 against the U.S. dollar, snapping two days of losses.
IFIs NEWS (compiled from their websites) BIS – Statistics: Preliminary international banking statistics at end-June 2012
The BIS has publicized the captioned statistics at end-June 2012. The locational banking statistics show that cross-border claims of BIS reporting banks contracted sharply between endMarch and end-June 2012, falling by $596 billion (1.9%) after adjusting for breaks in series and exchange rate movements, to $29.4 trillion. While cross-border claims on non-bank borrowers were relatively stable, interbank claims declined by $609 billion (3%), much of which was the result of reduced inter-office positions. The consolidated banking statistics, which exclude interoffice positions and thus provide a better measure of exposures to unaffiliated banks, confirm a fall in interbank positions, particularly amongst euro area banks. These statistics also indicate that euro area banks' exposures to Greek, Irish, Italian, Portuguese and Spanish public sector borrowers continued to decline between end-March and end-June 2012. http://www.bis.org/statistics/rppb1210.htm (Press Release) http://www.bis.org/statistics/rppb1210.pdf (Statistical Report)
IFC – Publication: “Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises”
The IFC has publicized the captioned report. “This report marks the 10th edition of the Doing Business series. Over the past decade, these reports have recorded nearly 2,000 regulatory reforms implemented by 180 economies. The reforms have yielded major benefits for local entrepreneurs across the globe. Singapore topped the global ranking on the ease of doing business for the seventh consecutive year. Joining it on the list of the top 10 economies with the most business-friendly regulation Page 3 of 6
were Hong Kong SAR, China; New Zealand; the United States; Denmark; Norway; the United Kingdom; the Republic of Korea; Georgia; and Australia. “ http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/55CAB969A831647685257A9F00800 D47 (Press Release) http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/AnnualReports/English/DB13-full-report.pdf (Report) OECD – Event: “World Forum on Measuring Well-Being for Policy-Making and Development”
The OECD has organized the captioned international conference in New Delhi, India. Experts and policy makers from fields as diverse as the environment, development, health and education, discussed the progress achieved and improvements needed in the way we monitor and analyze our changing societies. The forum also took stock of the substantial level of work being undertaken internationally to broaden our notions and assessment of progress beyond the limits of traditional indicators such as GDP (gross domestic product). http://www.oecd.org/newsroom/measuringwell-beingneedstobeattheheartofpolicymakingsaysoecdworldforum.htm
UNCTAD – Press Release: Assistance to Myanmar: inter-agency coordination ongoing
UNCTAD has held a meeting of the United Nations Inter-Agency Cluster on Trade and Productive Capacity with the Permanent Mission of Myanmar in Geneva. Participating in the meeting were representatives of the Economic and Social Commission for Asia and the Pacific, the International Trade Centre, the United Nations Development Programme, the United Nations Commission on International Trade Law and the United Nations Office for Project Services. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=332&Sitemap_x0020_Taxono my=UNCTAD Home;#1792;#UN-CEB Inter-agency Cluster
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 22-Oct 23-Oct close China 6.2980 6.2535 6.2545 6.2513 Hong Kong 7.7698 7.7501 7.7503 7.7501 Indonesia 9,126.0 9,629.0 9,611.0 9,617.0 Japan 76.8 79.32 79.84 79.75 Korea 1,150.8 1,103.5 1,104.3 1,103.0 Malaysia 3.1507 3.0523 3.0529 3.0535 Philippines 43.765 41.405 41.378 41.314 Singapore 1.2906 1.2217 1.2216 1.222 Thailand 31.5 30.7 30.7 30.8 Vietnam 21,031.0 20,845.0 20,850.0 20,855.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.05 0.00 -0.06 0.11 0.12 -0.02 0.15 -0.03 -0.07 -0.02
2012 YTD (%chg) 0.7 0.3 -5.1 -3.7 4.3 3.2 5.9 5.6 2.3 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 2,128.3 21,551.8 4,331.3 9,002.7 1,943.8 1,666.4 5,432.4 3,048.9 1,307.7 398.2
22-Oct 2,132.8 21,697.6 4,341.4 9,010.7 1,941.6 1,662.0 5,424.8 3,045.7 1,310.4 397.0
23-Oct 2,114.4 21,697.6 4,330.1 9,014.3 1,926.8 1,664.2 5,432.3 3,053.0 1,310.4 397.7
% change -0.86 0.00 -0.26 0.04 -0.76 0.14 0.14 0.24 0.00 0.18
2012 YTD (%chg) -3.9 14.9 12.2 6.6 2.7 9.9 22.8 13.4 27.8 13.6
Page 4 of 6
OVERNIGHT LENDING RATE (%) 22-Oct 23-Oct bps change 2.250 2.400 15.00 0.122 0.122 0.00 4.152 4.160 0.76 0.098 0.100 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.063 2.111 4.80 0.061 0.061 0.00 2.750 2.750 0.00 3.429 3.417 -1.20
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
3-MONTH INTERBANK LENDING RATE (%) 22-Oct 23-Oct bps change 3.702 3.692 -1.01 0.399 0.399 0.00 4.904 4.906 0.16 0.328 0.328 0.00 2.830 2.830 0.00 3.210 3.210 0.00 0.557 0.719 16.20 0.379 0.379 0.00 2.885 2.885 0.00 6.900 7.477 57.70
CREDIT DEFAULT SWAP (IN BPS) 22-Oct 23-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 76.7 75.7 -1.00 Korea 82.7 82.7 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-Oct Gold Spot (in US$ per ounce)
23-Oct
1,725.0
% change
1,719.4
-0.32
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
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
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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
Page 5 of 6
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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 SINGAPORE
Indicators
Period
Last
Previous
Sept
4.7
3.9
CPI (YoY)%
SELECTED ECONOMIC RELEASES CALENDAR (22-25 October 2012) Expected released date 22/10/2012 23/10/2012
24/10/2012
25/10/2012
Country
Indicators
Period
MALAYSIA
Foreign Reserves (USD bn)
Oct 15
HONG KONG
CPI - Composite Index (YoY)%
Sep
SINGAPORE
CPI (YoY)%
Sep
CHINA
HSBC Flash China Manufacturing PMI
Oct
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Sep
THAILAND
Customs Imports (YoY)%
Sep
THAILAND
Customs Exports (YoY)%
Sep
VIETNAM
Imports YTD (YoY)%
Oct
VIETNAM
Exports YTD (YoY)%
Oct
VIETNAM
CPI (YoY) %
Oct
PHILIPPINES
Total Imports (YoY)%
Aug
PHILIPPINES
Trade Balance (USD mn)
Aug
VIETNAM
Industrial Production Index YoY %
Oct
VIETNAM
Retail Sales YTD (YoY)%
Oct
SINGAPORE
Industrial Production YoY%
Sep
HONG KONG
Imports YoY%
Sep
HONG KONG
Exports YoY%
Sep
HONG KONG
Trade Balance (HKD bn)
Sep
JAPAN
National CPI YoY %
Sep
JAPAN
National CPI Ex Food, Energy YoY %
Sep
SOUTH KOREA
SK Consumer Confidence
Oct
SOUTH KOREA
GDP (YoY)%
3Q P
SOUTH KOREA
GDP (QoQ)%
3Q P
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 24 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Decline as Global Slowdown Erodes Earnings. The MSCI Asia Pacific Index declined 0.5 percent to 122.02 as of 3:40 p.m. in Tokyo, with about two shares falling for each that advanced on the measure. The gauge rose 13 percent from this year’s low on June 4 through yesterday as stimulus measures in the U.S., Japan and China boosted sentiment amid a global slowdown and Europe’s debt crisis. Japan’s Nikkei 225 Stock Average (NKY) fell 0.67 percent, reversing gains of as much as 0.3 percent. South Korea’s Kospi Index slipped 0.67 percent. Hong Kong’s Hang Seng Index gained 0.31 percent. China’s Shanghai Composite Index was up by 0.07 percent. Indonesia’s JCI indicated a modest loss of 0.02 percent, while Malaysian stock gained 0.15 percent. Thai stock lost the most by 1.39 percent. The Philippines stock fell 0.62 percent, and Vietnam stock by 0.57 percent. Elsewhere, Singapore stock was slightly brought down by 0.08 percent.
Asian Currencies Weaken on Concern. Asian currencies weakened, led by the Philippine peso, as concern Europe’s debt crisis will worsen damped the export outlook and curbed demand for riskier assets. The peso lost 0.34 percent to 41.455 per dollar. Malaysia’s ringgit fell 0.27 percent to 3.0618, touching a one-week low, and Thailand’s baht remained unchanged at the level of 30.8 per dollar. The Chinese yuan slightly appreciated by 0.06 percent at 6.2477 per dollar, after gaining 0.05 percent yesterday. Elsewhere, South Korea’s won weakened 0.07 percent to 1,103.70 per dollar, Indonesia’s rupiah depreciated by 0.12 percent at 9,629.0 per dollar, while, Vietnam’s dong was little changed at 20,850. Hong Kong dollar was steady at 7.7503, and Japanese yen appreciated slightly by 0.16 percent at 79.76 per dollar. Meanwhile, Singapore dollar little changed to 1.2239 per dollar.
Oil Falls to Three-Month Low as Earnings Bolster Concern. Oil rebounded from the lowest close in three months in New York on signs that China’s seven-quarter growth slowdown is ebbing. Futures rose as much as 0.9 percent after sliding for a fourth day yesterday. London’s Brent crude advanced 1 percent. Oil for December delivery advanced as much as 79 cents to $87.46 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.34 a barrel at 3:22 p.m. in Tokyo. The contract closed yesterday at $86.67, the lowest settlement since July 12. Prices are down 12 percent this year. Brent oil for December settlement gained 75 cents to $109 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium to the New York-traded West Texas Intermediate grade was at $21.70 compared with $21.58 yesterday.
BREAKING NEWS GLOBAL
Draghi Takes Pitch Into Lion’s Den as German Faith Wavers. By appearing before a joint session of three committees of the German parliament in Berlin today, the European Central Bank president is seeking popular support in Europe’s largest economy for his plan to purchase government bonds to stem the debt crisis. While Draghi says his so-called Outright Monetary Transactions are required for price stability, some German policy makers say they are an affront to the monetary orthodoxy upon which the ECB was founded. “Draghi is on a mission to smooth concern that OMT won’t send inflation skyrocketing or lumber German taxpayers with liabilities they can’t pay,” said Frank Schaeffler, finance spokesman for the Free Democrats, who are in coalition with Chancellor Angela Merkel’s Christian Democrats. While the announcement of Draghi’s yet-to-be-deployed bond-buying program has calmed financial markets, Germany’s
revered Bundesbank has openly opposed the plan, fanning concerns among politicians and the public. Some 42 percent of respondents to a Stern survey published Sept. 6 said they had little or no trust in the ECB president, compared with just 18 percent who judged him favorably.
Apple Unveils Smaller IPad to Boost Tablet Rivalry. Apple Inc. CEO Tim Cook introduced a smaller, cheaper version of the iPad designed to keep customers from buying low-cost tablets from competitors Microsoft Corp., Amazon.com Inc. and Google Inc. The iPad mini boasts a 7.9inch screen diagonally, compared with the 9.7-inch screen of the iPad, which was also upgraded today. It’s also thinner and lighter, and costs $329 to $659. Shares of Apple, the world’s most valuable company, fell on concern the price isn’t low enough to draw users from rivals like Amazon’s Kindle and Barnes & Noble Inc. (BKS)’s Nook. Cook is seeking to widen Apple’s lead in the tablet market, which NPD Display Search predicts will more than double to $162 billion in the next five years. By broadening the iPad lineup, Cupertino, California-based Apple aims to add to its 70 percent market share just as Microsoft introduces its own device, and Google and Amazon upgrade their own handheld lines.
Bernanke QE3 Stocks Miss Greenspan Irrational Exuberance. Federal Reserve Chairman Ben S. Bernanke is trying to inject a little of the exuberance his predecessor Alan Greenspan called “irrational” into markets for everything from stocks to housing. Bernanke, who is seeking to spur the economy with a third round of so-called QE, has said his stimulus works by lowering borrowing costs and encouraging investors to seek higher-yielding assets. Boosting home and equity prices through bond buying will encourage consumers and businesses to spend more, according to Bernanke. Since these are the same assets that plummeted during the financial crisis after reaching record highs, “is there some risk you could start a new bubble and repeat the whole cycle? I suppose there is,” said Robert Shiller, the Yale University professor who forecast the end of the Internet boom in his book,“Irrational Exuberance,” which was published in March 2000, the month the Nasdaq Composite Index peaked before crashing
REGIONAL
China Industry Gauge Rises as Easing Prospects Abate. A Chinese manufacturing index (MXAP) rose and economists have pared forecasts for cuts in interest rates and bank reserve requirements as confidence grows that the world’s second-biggest economy is stabilizing. The preliminary, or flash, reading was 49.1 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics, after a final level of 47.9 for September. China will probably keep the benchmark one-year lending rate at 6 percent through the end of 2012, based on median estimates in a survey conducted Oct. 18-22, instead of prior forecasts for a quarter percentage-point reduction. A rebound in China would help bolster confidence as Europe struggles to contain the effects of its debt turmoil and a global slowdown hits corporate earnings. Strength in the Chinese economy may encourage investors to keep paring bets for an Australian interest-rate cut after a report today showed that that nation’s consumer prices exceeded forecasts last quarter.
Priciest Malaysian Phone Stocks Get Top Fund to Ride Gain. Investor demand for bigger dividends and smaller stock swings has pushed Malaysian telecommunications shares to record valuations and convinced at least one of the nation’s top-ranked fund managers the rally isn’t over. The MSCI Malaysia Telecommunication Services Index (MXMY0TC) has climbed to 24 times estimated earnings, the highest level since Bloomberg began tracking the data in 2006 and the most expensive among peers in emerging and advanced nations. Telecommunications shares pay the biggest dividends of nine industries in Malaysia, where stock volatility is lower than any major market worldwide. The companies, which benefit from growing demand for smartphones in Southeast Asia’s third-biggest economy, pay dividend yields that exceed returns on Malaysian bonds.
Page 2 of 7
Japan, China Envoys Met Last Week for Talks on Island Feud. Senior Japanese and Chinese diplomats met last week in an attempt to improve ties damaged by rival claims to uninhabited East China Sea islands that have hurt Asia’s two biggest economies. Japan’s Chief Cabinet Secretary Osamu Fujimura today confirmed reports that Vice Foreign Minister Chikao Kawai met with Chinese officials in Shanghai, declining to give details on the talks. Kawai met Chinese counterpart Zhang Zhijun. The two sides agreed this month to hold vice-ministerial discussions at a unspecified date after Japan’s purchase of the islands, called Senkaku in Japanese and Diaoyu in Chinese, sparked violent protests in China and hurt Japanese companies doing business there.
IFIs NEWS (compiled from their websites) ADB – Press Release: Support Myanmar Education Assessment, Reforms
The ADB and the Government of Australia are providing $570,000 in technical assistance to strengthen planning and reforms in post-primary education in Myanmar, including secondary education, technical and vocational education and training, and higher education, a vital component to ensuring the country is prepared for opportunities created by ongoing democratic and financial reforms. ADB will administer the technical assistance, which includes $200,000 from ADB and $370,000 equivalent in co-financing from the Government of Australia. http://www.adb.org/news/adb-support-myanmar-education-assessment-reforms
ADBI – Publication: “Capital Market Reform in Asia”
The ADBI has published the captioned book. “Why is capital market reform so difficult? Financial markets are human institutions and behavior is not formed overnight. Changing financial markets requires an understanding of the political economy and what drives behavior. Failure to understand history is what leads to a repeat of financial crises. A new ADBI book analyses the progress of capital market reform in Asia after the 1997–1998 Asian financial crisis. In particular, Capital Market Reform in Asia edited by Masahiro Kawai and Andrew Sheng, examines the complex process of capital market deepening in emerging market economies in the aftermath of the global financial crisis of 2007–2008.” http://www.adbi.org/book/2012/10/18/5269.capital.market.reform.asia/
IMF – Working Paper
The IMF has issued the following working papers: o
“The Differential Effects of Oil Demand and Supply Shocks on the Global Economy” – “We employ a set of sign restrictions on the generalized impulse responses of a Global VAR model, estimated for 38 countries/regions over the period 1979Q2–2011Q2, to discriminate between supply-driven and demand-driven oil-price shocks and to study the time profile of their macroeconomic effects for different countries. The results indicate that the economic consequences of a supply-driven oil-price shock are very different from those of an oil-demand shock driven by global economic activity, and vary for oilimporting countries compared to energy exporters. While oil importers typically face a long-lived fall in economic activity in response to a supply-driven surge in oil prices, the impact is positive for energy-exporting countries that possess large proven oil/gas reserves. However, in response to an oil-demand disturbance, almost all countries in our sample experience long-run inflationary pressures and a short-run increase in real output.” http://www.imf.org/external/pubs/ft/wp/2012/wp12253.pdf
o
“Globalization and Corporate Taxation” – “This paper analyzes the extent to which the degree of international economic integration, both financial and trade, affects corporate Page 3 of 7
tax rates. It explores this issue in the context of strategic behavior by countries, taking into account other global and domestic political economy factors. Tax rates are analyzed using a unique tax dataset for advanced and developing economies extending over five decades. We report a number of novel results: there is no general negative relationship between financial globalization and corporate tax rates and revenues—results vary according to country grouping with OECD countries showing a positive relationship; the United States exhibits a “Stackelberg” type of leadership on other countries; trade integration is inversely correlated with tax rates; and public sentiment and ideology affect tax rates. The policy implications of these findings, particularly given budgetary pressures in the aftermath of the global crisis, are noted.” http://www.imf.org/external/pubs/ft/wp/2012/wp12252.pdf World Bank – Statistics: Entrepreneurship Database
The World Bank has released the new data on the captioned database. “Most economies are recovering from the sharp drops in new firm registration triggered by the 2008 global financial crisis—an improvement that may have been bolstered by government reforms. In 2011, more than 60 percent of the world’s economies saw a faster pace of new firm registration than in the year before. That is almost double the 2009 rate of 34 percent, although it still lags behind the 2007 rate of 75 percent, according to the World Bank Group Entrepreneurship Database, which is updated every two years.” http://www.worldbank.org/en/news/2012/10/23/new-survey-suggests-doing-businessreforms-may-have-boosted-new-firm-registrations (Press Release) http://www.doingbusiness.org/data/exploretopics/entrepreneurship (Statistics)
WTO – Press Release: Panels set up on China’s duties on US automobiles and on US compliance in Boeing dispute
The WTO’s Dispute Settlement Body (DSB) has established a panel to examine a complaint by the United States against China’s anti-dumping and countervailing duties on US automobiles. In the Boeing dispute, it established a panel, at the request of the European Union, to examine whether the US had complied with DSB recommendations, and referred to arbitration a request by the EU to take countermeasures for $12 billion against the US. http://www.wto.org/english/news_e/news12_e/dsb_23oct12_e.htm
WTO – Statistics: 2011 trade and tariff data
The WTO has released its annual package of trade and tariff data, providing detailed statistics on import/export trade flows and tariff rates in 2011. This package includes the 2012 editions of its annual publications — International Trade Statistics, Trade Profiles and World Tariff Profiles — plus an update of the WTO Statistics Database and other data sources. http://www.wto.org/english/news_e/news12_e/stat_23oct12_e.htm (Press Release) http://www.wto.org/english/res_e/statis_e/statis_e.htm (Statistics Index Site)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close close China 6.2980 6.2535 Hong Kong 7.7698 7.7501 Indonesia 9,126.0 9,629.0 Japan 76.8 79.32 Korea 1,150.8 1,103.5 Malaysia 3.1507 3.0523 Philippines 43.765 41.405
23-Oct 6.2513 7.7502 9,617.0 79.89 1,103.0 3.0535 41.314
24-Oct 6.2477 7.7503 9,629.0 79.76 1,103.7 3.0618 41.455
% change 0.06 0.00 -0.12 0.16 -0.07 -0.27 -0.34
2012 YTD (%chg) 0.8 0.3 -5.2 -3.7 4.3 2.9 5.6
Page 4 of 7
Singapore 1.2906 1.2217 1.2245 1.2239 Thailand 31.5 30.7 30.8 30.8 Vietnam 21,031.0 20,845.0 20,855.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
0.05 0.00 0.02
5.4 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 2,128.3 21,551.8 4,331.3 9,002.7 1,943.8 1,666.4 5,432.4 3,048.9 1,307.7 398.2
23-Oct 2,114.4 21,697.6 4,330.1 9,014.3 1,926.8 1,664.9 5,432.3 3,050.9 1,310.4 397.7
OVERNIGHT LENDING RATE (%) 23-Oct 24-Oct bps change 2.400 2.850 45.00 0.122 0.099 -2.36 4.160 4.162 0.24 0.100 0.100 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.111 2.111 0.00 0.088 0.088 0.00 2.750 2.750 0.00 3.417 3.458 4.10
24-Oct
% change
2,116.0 21,763.8 4,329.3 8,954.3 1,914.0 1,667.4 5,398.7 3,048.5 1,292.2 395.5
0.07 0.31 -0.02 -0.67 -0.67 0.15 -0.62 -0.08 -1.39 -0.57
2012 YTD (%chg) -3.8 15.3 12.2 5.9 2.1 10.1 22.1 13.3 26.0 13.0
3-MONTH INTERBANK LENDING RATE (%) 23-Oct 24-Oct bps change 3.692 3.704 1.21 0.399 0.396 -0.29 4.906 4.894 -1.20 0.328 0.328 0.00 2.830 2.830 0.00 3.210 3.210 0.00 0.719 0.719 0.00 0.379 0.379 0.00 2.885 2.885 0.00 7.477 7.250 -22.70
CREDIT DEFAULT SWAP (IN BPS) 23-Oct 24-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 77.2 76.8 -0.42 Korea 82.7 82.7 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-Oct Gold Spot (in US$ per ounce)
1,709.3
24-Oct
% change
1,709.2
-0.01
Source: Bloomberg
CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines
S&P AAAAA BB+ AAA ABB+
Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba2
Fitch A+ AA+ BBBAA A+ ABB+
Page 5 of 7
Singapore Thailand Vietnam
AAA BBB+ BB-
-Baa1 B1
AAA BBB B+
INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)
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
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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 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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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 PHILIPPINES
Indicators
Period
Last
Previous
Customs Imports (YoY)%
Sept
-7.70
-8.78
Customs Exports (YoY)%
Sept
0.20
-6.95
Customs Trade Balance (USD mn)
Sept
1153
-1021
Budget Deficit/Surplus (PHP bn)
Sept
-34.9
2.5
SELECTED ECONOMIC RELEASES CALENDAR (22-25 October 2012) Expected released date 22/10/2012 23/10/2012
24/10/2012
Country
Indicators
Period
MALAYSIA
Foreign Reserves (USD bn)
Oct 15
HONG KONG
CPI - Composite Index (YoY)%
Sep
SINGAPORE
CPI (YoY)%
Sep
CHINA
HSBC Flash China Manufacturing PMI
Oct
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Sep
THAILAND
Customs Imports (YoY)%
Sep
THAILAND
Customs Exports (YoY)%
Sep
THAILAND
Customs Trade Balance
Sep
VIETNAM
Imports YTD (YoY)%
Oct
VIETNAM
Exports YTD (YoY)%
Oct
VIETNAM
CPI (YoY) %
Oct
Page 6 of 7
25/10/2012
PHILIPPINES
Total Imports (YoY)%
Aug
PHILIPPINES
Trade Balance (USD mn)
Aug
VIETNAM
Industrial Production Index YoY %
Oct
VIETNAM
Retail Sales YTD (YoY)%
Oct
SINGAPORE
Industrial Production YoY%
Sep
HONG KONG
Imports YoY%
Sep
HONG KONG
Exports YoY%
Sep
HONG KONG
Trade Balance (HKD bn)
Sep
JAPAN
National CPI YoY %
Sep
JAPAN
National CPI Ex Food, Energy YoY %
Sep
SOUTH KOREA
SK Consumer Confidence
Oct
SOUTH KOREA
GDP (YoY)%
3Q P
SOUTH KOREA
GDP (QoQ)%
3Q P
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 25 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Rise as Exporters Gain on U.S. Housing Data. Asian stocks gained, with the regional benchmark index heading for its first advance in five days, as exporters climbed amid signs of improvement in China’s factory output and the U.S. housing market. All the regional stock prices rose slightly, with an exception for China and Vietnam stock markets. China’s Shanghai Composite Index dropped 0.68 percent, and Vietnam stocks fell by 1.40 percent. The Nikkei 225 Stock Average (NKY) advanced 1.13 percent, while South Korea’s Kospi Index rose 0.55 percent. Hong Kong’s Hang Seng Index gained 0.21 percent, Singapore Stock was up by 0.38 percent, and Thailand stock rose by 0.24 percent. Elsewhere, Malaysia stock advanced 0.23 percent, while Indonesia and Philippines stock prices gained by 0.21 and 0.12 percent, respectively.
Yen Weakens to Four-Month Low on BOJ Stimulus Bets. The yen dropped to its weakest level by 0.52 percent in four months against the dollar at 80.19 as investors speculated that the BoJ will expand monetary stimulus next week. Other currencies of the region appreciated against the dollar, except for Hong Kong dollar and Vietnam dong which remained unchanged at 7.7503 and 20,850.0 per dollar, respectively. Malaysian ringgit appreciated the most by 0.75 percent, at 3.0385 per dollar, followed by Philippines peso and Korean won, up by 0.63 and 0.52 percent, at 41.195 and 1,098.1 per dollar, respectively. Singapore dollar gained by 0.34 percent, at 1.2199, Thai baht was up by 0.16 at 30.7 per dollar, and Indonesian rupiah strengthened 0.12 percent at 9,617.0 per dollar, while Chinese Yuan slightly appreciated against the dollar by 0.09 percent at 6.2420.
Oil Falls for Fifth Day as Inventories Increase. Oil in New York traded near the lowest close since July after U.S. inventories rose more than forecast and fuel demand dropped. Prices were little changed after five days of losses, the longest decline in five months. The Energy Department said crude stockpiles jumped 5.9 million barrels last week. Gasoline demand fell to a sevenmonth low, and the Federal Reserve said unemployment remains elevated. Crude for December delivery was at $86.05 a barrel in electronic trading on the New York Mercantile Exchange, up 32 cents, at 1:30 p.m. Singapore time. The contract settled at $85.73 yesterday, the lowest since July 10. Prices are down 13 percent this year. Brent oil for December settlement on the Londonbased ICE Futures Europe exchange was at $108.12 a barrel, up 27 cents. The European benchmark crude was at a premium of $22.05 to New York-traded West Texas Intermediate grade, from $22.12 yesterday. U.S. crude stockpiles increased to 375.1 million barrels in the week ended Oct. 19, the highest for this time of year since the government started reporting inventories in 1982. Supplies at Cushing, Oklahoma, the delivery point for the WTI contract, rose by 40,000 barrels to 44.1 million, 40 percent more than a year ago.
BREAKING NEWS GLOBAL
France’s Quiet Bank Rescues Top $78 Billion With Peugeot. France’s aid to PSA Peugeot Citroen SA (UG)’s troubled finance arm brings the state’s backing for the nation’s banks to more than 60 billion euros ($78 billion). The government yesterday said it will guarantee 7 billion euros in new bonds by Banque PSA Finance, the consumer-finance unit of Europe’s second-largest carmaker. The aid comes on top of support for Dexia SA (DEXB), the French-Belgian municipal lender, and for home-loans company Credit Immobilier de France. The third such French bailout in the past year coincides with President Francois Hollande’s push for a European banking union and a common euro-area bank supervisor to break the link between lenders and governments. It also comes as the French government struggles to keep a pledge to cap its budget deficit at 3
percent of GDP next year. Specialized lenders have been hit by a liquidity crunch as a result of Europe’s debt crisis, leaving them with rising funding costs. Banque PSA, Dexia and Credit Immobilier de France all tapped the ECB’s long-term loans. Peugeot “can’t pass on higher funding costs to clients; buyers will turn to Volkswagen.”
U.S. Stocks Fall to Seven-Week Low as Fed Offsets Economy. U.S. stocks declined, sending the Standard & Poor’s 500 Index to a seven-week low, as the Federal Reserve’s call for moderate growth offset signs of improvement in Chinese factory output and America’s housing market. Netflix Inc. (NFLX) plunged 12 percent after the world’s largest online video service cut its forecast for domestic growth. Altera Corp. (ALTR) slumped 8.4 percent as the maker of programmable chips used in phone systems predicted sales that fell short of estimates. D.R. Horton Inc. (DHI) and Toll Brothers Inc. (TOL) added at least 1.5 percent to pace gains in homebuilders. Facebook Inc. (FB), the world’s biggest social networking site, surged 19 percent after reporting sales that topped analysts’ projections. The S&P 500 declined 0.3 percent to 1,408.75 at 4 p.m. New York time, dropping 1.8 percent in two days. The DJIA lost 25.19 points, or 0.2 percent, to 13,077.34.
Credit Suisse to Cut More Costs as Quarterly Profit Falls. Credit Suisse Group AG (CSGN), the second- biggest Swiss bank, increased a target for cost reductions after posting a drop in Q3 profit on an accounting charge related to its own debt. The bank plans to save an additional 1 billion francs ($1.07 billion) in costs by the end of 2015, adding to the 1 billion-franc savings program announced in July and a 2 billion-franc expense reduction achieved since last year, Zurich-based Credit Suisse said in a statement today. Net income fell 63 percent to 254 million Swiss francs. CEO Brady Dougan is cutting costs and accelerating a capital buildup as Europe’s sovereign-debt crisis curtails client activity and hurts earnings. While the investment bank benefited from the increase in asset prices that lifted profit at U.S. competitors in the quarter, margins in wealth management fell to the lowest in at least five years.
REGIONAL
Singapore Airlines to End World’s Longest Non-Stop Flights. Singapore Airlines Ltd. (SIA) will end non-stop services to New York’s Newark Airport and Los Angeles, the world’s longest commercial flights, next year because of rising fuel prices and slower demand for intercontinental trips. The all-business-class flights will end in Q4 2013, the airline said in a statement yesterday, as it announced an order for 25 Airbus SAS aircraft. The Toulouse-based plane maker will acquire the five four-engine A340-500s used on the routes as part of the deal. The end of the almost 19-hour Newark service will leave SIA travellers facing a five hour longer trip to New York, as the carrier’s alternative route goes to the city’s JFK airport via Frankfurt. The airline is canceling the non-stop services, which started in 2004, as businesses cutting costs hit long-haul travel. Average premium-seat fares between Asia and the U.S. were 4.8 percent lower in September than a year earlier. Fuel prices have jumped more than 30 percent in the last two years. Cathay Pacific Airways Ltd. has also this year pared capacity plans on long-haul routes including to North America.
India Rate-Cut Odds Climb as Policy Revamp Aids Rupee: Economy. India’s central bank will consider reducing interest rates for the first time since April after government efforts to pare the budget deficit stemmed a slide in the rupee, boosting scope to stimulate the economy. Governor Duvvuri Subbarao will cut the repurchase rate to 7.75 percent from 8 percent. Finance Minister Palaniappan Chidambaram said Oct. 12 that India needs cheaper credit, following a revamp of economic policy that included fuel-subsidy curbs and helped make the rupee one of Asia’s best-performing currencies in the past three months. While Subbarao has signaled that a narrower budget gap may provide more room to join nations from Brazil to Thailand in extending rate cuts, he also faces inflation of almost 8 percent. The Reserve Bank of India unexpectedly reduced the amount of deposits lenders must set aside as reserves last month to boost growth, even as it kept interest rates unchanged. Page 2 of 7
Ishihara Quits as Tokyo Governor to Form New Political Party. Tokyo Governor Shintaro Ishihara, an advocate of Japan acquiring nuclear weapons and a longtime critic of China, said he will resign and form a new political party ahead of an election that must be called by August. Ishihara, 80, said at a press conference today in Tokyo that he plans to run for a parliamentary seat in the elections. He said he was interested in tying up with the minority Sunrise Party of Japan as well as Osaka Mayor Toru Hashimoto’s new Japan Restoration Party. Re-elected head of Japan’s capital last year for a fourth term, Ishihara has called for rewriting the nation’s pacifist constitution and said last year’s record earthquake and tsunami was “divine punishment.” His proposal in April to buy an island chain also claimed by China forced Prime Minister Yoshihiko Noda’s government to purchase the territory, fanning a dispute that has hurt Asia’s two biggest economies. Noda is battling to revive his Democratic Party of Japan’s popularity, which has plummeted since the party took power in 2009, ousting the Liberal Democratic Party from half a century of government control. The prime minister last week failed to reach a deal with opposition leaders on legislation needed to fund this year’s budget. The LDP is pressuring him to fulfill a pledge to call elections “soon.”
IFIs NEWS (compiled from their websites) BIS – Speech: “Regulatory reforms - incentives matter (can we make bankers more like pilots?)”
The BIS has publicized the remarks by Wayne Byres, Secretary General of the Basel Committee on Banking Supervision, to the Bank of Portugal conference on "Global Risk Management: Governance and Control", Lisbon, 24 October 2012. http://www.bis.org/speeches/sp121024.pdf
FSB – Press Release: Third progress note on the implementation of the global LEI Initiative
The FSB has issued the captioned progress note. This is the third of a series of notes on the implementation of the legal entity identifier (LEI) initiative. The progress note follows the global LEI system operational solution demonstration day, as well as Private Sector Preparatory Group (PSPG) and the FSB LEI Implementation Group (IG) meetings. http://www.financialstabilityboard.org/publications/r_121024.pdf
IFC and World Bank – Press Release: Support Water Resource Reforms in Lao PDR
The IFC and the World Bank are supporting the Lao People’s Democratic Republic in revising the country’s water resource law, helping foster sustainable management of the nation’s abundant water resources. The revisions will improve water regulation to ensure sufficient supply for the people of Lao PDR and the development of the country's hydropower sector. IFC, the World Bank, and the Department of Water Resources of the Ministry of Natural Resources and Environment will co-host a conference in Vientiane on Wednesday, October 24. The event will be attended by Lao civil society, international organizations, and development partners. Participants will have the opportunity to contribute to the revision of the Law on Water and Water Resources. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/5EE4CCB9E6DC36CE85257AA1003A 36E6
IMF – Press Release: Completes Fifth Review Under an EFF Arrangement with Portugal, Approves €1.5 Billion Disbursement
The IMF has completed the fifth review of Portugal’s performance under an economic program supported by a 3-year, SDR 23.742 billion (about €28.2 billion) Extended Fund Facility (EFF) arrangement. The completion of the review enables the immediate disbursement of an amount equivalent to SDR 1.259 billion (about €1.5 billion), bringing total disbursements under the EFF Page 3 of 7
arrangement to SDR 18.402 billion (about €21.8 billion). The Executive Board also approved a request for waivers of applicability and nonobservance of the end-September 2012 performance criteria. http://www.imf.org/external/np/sec/pr/2012/pr12397.htm IMF – Working Paper: “Financial Spillovers to Chile”
The IMF has issued the captioned working paper. This paper quantifies financial spillovers from global risk factors to banks’ funding costs in Chile. It decomposes Chilean banks’ bond and interbank spreads into domestic and external factors. The results suggest moderate spillovers. On average, global spillovers pushed up bank bond and interbank spreads in Chile by about 50 basis points in 2008–12. While in 2008–09, most spillovers originated in the U.S., in mid-2010 onwards, European distress played a prominent role. http://www.imf.org/external/pubs/ft/wp/2012/wp12254.pdf
OECD – Publication: “Revenue Statistics 2012”
The OECD has issued the captioned report. New data show that tax revenues in relation to GDP in most OECD countries are continuing to rise gradually from the 2008 – 2009 declines seen at the beginning of the crisis. http://www.oecd.org/newsroom/taxrevenuesrisingslowlyacrosstheoecd.htm
UNCTAD & WTO – Statistics: Commercial services exports in the second quarter of 2012
UNCTAD and the WTO have released the captioned statistics. According to preliminary estimates by the WTO and UNCTAD, in the second quarter of 2012, world exports of commercial services (balance-of-payments basis, current prices) recorded zero growth as compared with the same quarter of the last year, following the declining pattern of growth observed during the last four quarters. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=336&Sitemap_x0020_Taxono my=UNCTAD Home; #561; #Statistics
World Bank – Press Release: Urges Oil Producers to Reduce Gas Flaring, Increase Gas Utilization for Development
The World Bank-led Global Gas Flaring Reduction (GGFR) partnership called on oil producers, both countries and companies, to reduce flaring of natural gas associated with oil production by 30% by 2017. This would reduce flaring from 140 bcm of gas flared in 2011 to 100 bcm by end of 2017, for a reduction in CO2 emissions equivalent to taking 60 million cars off the road. http://www.worldbank.org/en/news/2012/10/24/world-bank-urges-oil-producers-reduce-gasflaring-increase-gas-utilization-development
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 24-Oct 25-Oct close China 6.2980 6.2535 6.2477 6.2420 Hong Kong 7.7698 7.7501 7.7503 7.7503 Indonesia 9,126.0 9,629.0 9,629.0 9,617.0 Japan 76.8 79.32 79.77 80.19 Korea 1,150.8 1,103.5 1,103.7 1,098.1 Malaysia 3.1507 3.0523 3.0613 3.0385 Philippines 43.765 41.405 41.455 41.195 Singapore 1.2906 1.2217 1.2241 1.2199 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,845.0 20,850.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.09 0.00 0.12 -0.52 0.52 0.75 0.63 0.34 0.16 0.00
2012 YTD (%chg) 0.9 0.3 -5.1 -4.2 4.8 3.7 6.2 5.8 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 2,128.3 21,551.8 4,331.3 9,002.7 1,943.8 1,666.4 5,432.4 3,048.9 1,307.7 398.2
24-Oct 2,116.0 21,763.8 4,335.4 8,954.3 1,914.0 1,668.0 5,398.7 3,044.7 1,295.0 395.5
OVERNIGHT LENDING RATE (%) 24-Oct 25-Oct bps change 2.850 3.000 15.00 0.099 0.097 -0.14 4.162 4.167 0.44 0.100 0.118 1.75 2.750 2.750 0.00 3.000 3.000 0.00 2.111 2.941 83.00 0.136 0.136 0.00 2.750 2.750 0.00 2.850 3.000 15.00
25-Oct
% change
2,101.6 21,810.2 4,339.2 9,055.2 1,924.5 1,671.9 5,405.2 3,056.4 1,298.1 389.9
-0.68 0.21 0.09 1.13 0.55 0.23 0.12 0.38 0.24 -1.40
2012 YTD (%chg) -4.4 15.5 12.5 7.1 2.6 10.4 22.2 13.6 26.6 11.4
3-MONTH INTERBANK LENDING RATE (%) 24-Oct 25-Oct bps change 3.704 3.709 0.47 0.396 0.396 -0.04 4.894 4.902 0.80 0.328 0.328 0.00 2.830 2.830 0.00 3.210 3.210 0.00 0.719 0.781 6.20 0.379 0.379 0.00 2.885 2.882 -0.23 7.250 7.275 2.50
CREDIT DEFAULT SWAP (IN BPS) 24-Oct 25-Oct bps change China 83.0 83.0 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 76.8 77.4 0.58 Korea 82.7 82.7 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 24-Oct Gold Spot (in US$ per ounce)
1,709.7
25-Oct
% change
1,715.1
0.32
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+
Page 5 of 7
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
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
31-Aug n.a 298.2 109.0 1,273.2 316.9 134.9 80.8 246.2 179.2 n.a
31-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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 SINGAPORE HONG KONG
Indicators
Period
Last
Previous
Industrial Production YoY%
Sept
-2.5
-2.2
Imports YoY%
Sept
14.9
0.9
Exports YoY%
Sept
15.2
0.6
Trade Balance (HKD bn)
Sept
-45.2
-36.0
SELECTED ECONOMIC RELEASES CALENDAR (22-25 October 2012) Expected released date 22/10/2012 23/10/2012
24/10/2012
25/10/2012
Country
Indicators
Period
MALAYSIA
Foreign Reserves (USD bn)
Oct 15
HONG KONG
CPI - Composite Index (YoY)%
Sep
SINGAPORE
CPI (YoY)%
Sep
CHINA
HSBC Flash China Manufacturing PMI
Oct
PHILIPPINES
Budget Deficit/Surplus (PHP bn)
Sep
THAILAND
Customs Imports (YoY)%
Sep
THAILAND
Customs Exports (YoY)%
Sep
THAILAND
Customs Trade Balance
Sep
VIETNAM
Imports YTD (YoY)%
Oct
VIETNAM
Exports YTD (YoY)%
Oct
VIETNAM
CPI (YoY) %
Oct
PHILIPPINES
Total Imports (YoY)%
Aug
PHILIPPINES
Trade Balance (USD mn)
Aug
VIETNAM
Industrial Production Index YoY %
Oct
Page 6 of 7
VIETNAM
Retail Sales YTD (YoY)%
Oct
SINGAPORE
Industrial Production YoY%
Sep
HONG KONG
Imports YoY%
Sep
HONG KONG
Exports YoY%
Sep
HONG KONG
Trade Balance (HKD bn)
Sep
JAPAN
National CPI YoY %
Sep
JAPAN
National CPI Ex Food, Energy YoY %
Sep
SOUTH KOREA
SK Consumer Confidence
Oct
SOUTH KOREA
GDP (YoY)%
3Q P
SOUTH KOREA
GDP (QoQ)%
3Q P
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 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Gasoline Gains on Sandy as Europe Stock Futures Decline. Gasoline rose and European stock futures fell as Hurricane Sandy threatened refineries and forced the U.S. to cancel equity trading. Soybeans declined. Gasoline in New York advanced 1 percent to $2.725 a gallon as of 7:13 a.m. in London as crude futures fell 0.5 percent to $85.83 a barrel. Euro Stoxx 50 Index futures dropped 0.4 percent while contracts for Standard & Poor’s 500 Index lost 0.4 percent. Soybeans in Chicago fell 1 percent and corn was 0.2 percent lower. The U.S. securities industry canceled equity trading on all markets today, and some New Jersey refineries shut or reduced operations as Sandy headed toward New York City with 70-mile- per-hour winds. Jobless rates in the U.S. and Germany probably rose in October, while the Spanish economy shrank in the third quarter, according to economists polled by Bloomberg News before reports this week.
•
U.S. Stock Trading Canceled as New York Girds for Storm. The U.S. securities industry canceled equity trading on all markets today, moving to protect workers as Hurricane Sandy barreled toward New York City with 70-mile-per-hour winds and the threat of an 11-foot sea surge. The shutdown, announced by the Securities and Exchange Commission, may extend through Oct. 30 and followed an earlier decision by the New York Stock Exchange to close floor trading. Risks posed by the storm, expected to come ashore tomorrow in southern New Jersey and potentially affect 60 million people, were deemed too great to require workers to travel.
•
Speculators Reduce Wagers as Annual Advance Erased. Speculators lowered bullish wagers on commodities for the third straight week, the longest streak since April, as prices erased this year’s gain on mounting concern about slowing economic growth. Hedge funds cut net-long positions across 18 U.S. futures and options by 0.2 percent to 1.18 million contracts in the week ended Oct. 23, the lowest since July 24, U.S. Commodity Futures Trading Commission data show. Copper holdings fell the most in seven weeks, and sugar wagers dropped to a one-month low. Bullish bets on gold slumped the most in three months. The Standard & Poor’s GSCI Spot Index of 24 raw materials dropped to a 12-week low Oct. 26, two days after the Federal Reserve said that the strains in the global economy present “significant downside risks.” Services and manufacturing in the 17-nation euro area contracted more than economists forecast, and orders for U.S. capital goods stalled.
BREAKING NEWS GLOBAL •
Spain’s Pain Seen Intensifying as Slump Deepens Plight. Spanish data this week will reveal the extent of damage wrought on the euro-area’s fourth-biggest economy as the government fights to cap a swelling deficit that is propelling the country toward requiring international aid. Retail sales fell 11 percent in September from a year ago, the National Statistics Institute said today. Figures on public finances, consumer prices, and gross domestic product tomorrow may confirm a deteriorating economy and debt profile amid the toughest austerity in its democratic history. The Bank of Spain estimated last week that GDP fell for a fifth quarter.The Spanish statistics onslaught will extend scrutiny by investors on the country’s economy after unemployment data last week showed a record in the third quarter with one in four workers jobless. The prospect of a worsening growth profile threatens to defy the government’s forecast for an easing in a slump that has now extended for five years, adding pressure on the country to apply for help.
•
UBS Said to Plan 10,000 Job Cuts, Investment Bank Shrinks. UBS AG (UBSN)’s decision to cut as many as 10,000 jobs and retreat from capital-intensive trading businesses will help position Switzerland’s largest bank to return more funds to shareholders. UBS intends to split off and wind down much of its fixed- income operations, reducing risk-weighted assets by an additional
100 billion Swiss francs ($107 billion), said a person with knowledge of the matter who requested anonymity because the plans are private. The revamp stands to help Zurich- based UBS meet capital goals faster than it would otherwise. •
Consumers Spur Growth in U.S. as Exports Decline. The U.S. economy is being thrown back on its own devices as sputtering global growth blunts America’s efforts to use exports to help power its expansion even as the value of the dollar hovers near a record low. Exports fell last quarter for the first time in 3-1/2 years, according to Commerce Department figures released on Oct. 26, clipping growth by almost a quarter percentage point. The shortfall was made up by increased consumer spending, higher government outlays and gains in residential construction. Gross domestic product climbed at an annual rate of 2 percent in the third quarter after rising 1.3 percent in the second.
REGIONAL •
Myanmar Seeks to Restore Status Among Top Rice Exporters. Myanmar, the world’s top rice shipper before five decades of military dictatorship made it Southeast Asia’s poorest nation, plans to double exports over five years, threatening to aggravate a global glut. Overseas sales may climb to as much as 3 million metric tons by 2017 from 1.5 million tons in the year ending March 2013 as yields and infrastructure improve, Ye Min Aung, secretary- general of the Myanmar Rice Federation, said on Oct. 25. The U.S. Department of Agriculture raised its export forecast for Myanmar by 25 percent to 750,000 tons for this year on Oct. 11. The country that could be Asia’s next economic frontier, according to the International Monetary Fund, is reviving the rice trade as it reengages with the global economy and shifts back toward democracy. The 2017 target would be equivalent to 8 percent of world exports this year, which are forecast by the USDA at 37.7 million tons. The global market in rice, a staple for half the world, has been in a surplus for seven years.
•
China’s Slowing Revenue Gains Seen Limiting Spending. China’s government spent more than planned in the first nine months of the year, and revenue gains moderated, leaving little room for public outlays to stoke the economy this quarter without an expansion of the budget. Fiscal revenue rose 10.9 percent in January-to-September from a year earlier to 9.06 trillion yuan ($1.5 trillion), compared with a 29.5 percent gain in the same period in 2011, Ministry of Finance data showed this month. Spending in the January-September period rose 21.1 percent, higher than the targeted 14.1 percent rise for the full year, leaving a surplus of about half last year’s level..
•
Singh Overhauls Cabinet Amid Push to Bolster Indian Economy. Indian Prime Minister Manmohan Singh overhauled his cabinet six weeks after unveiling the biggest policy changes in a decade as he bids to invigorate an embattled minority government in what may be his last reshuffle ahead of elections due within 18 months. Seven cabinet ministers and 15 junior ministers were sworn in by President Pranab Mukherjee at a ceremony in the colonial- era president’s palace in central New Delhi yesterday. Salman Khurshid, 59, was named foreign minister after S.M. Krishna, 80, resigned from the post ahead of the reshuffle. Rahul Gandhi, the scion of three Indian prime ministers who is expected to take on a more senior party role, was not among those drafted into Singh’s team of ministers.
IFIs NEWS (compiled from their websites) ADB – Press Release: “New Interim Country Partnership Strategy for Myanmar” •
The ADB and the Government of Myanmar have agreed on a new Interim Country Partnership Strategy that sets the stage for ADB’s re-engagement in the country. http://www.adb.org/news/adb-moves-towards-re-engagement-myanmar (Press Release) http://www.adb.org/sites/default/files/icps-mya-2012-2014.pdf (Paper) Page 2 of 7
ADB – Publication: “Growing beyond the Low Cost Advantage: How the People’s Republic of China can Avoid the Middle Income Trap” •
The ADB and Peking University have published the captioned study report. It says, “China could achieve high income status before 2030 if it adopts an economic strategy which fosters innovation, upgrading, inclusivity and green growth.” http://www.adb.org/news/prc-could-be-high-income-economy-2030-right-steps-adb-report (Press Release) http://www.adb.org/sites/default/files/pub/2012/growing-beyond-prc-avoid-middle-incometrap.pdf (Report)
ADB – Publication: “Myanmar: Transport Sector Initial Assessment” •
The ADB has published the captioned study report. It says, “Myanmar’s fragmented and underresourced transport sector needs a top-to-bottom overhaul to meet an expected boom in demand for quality roads, railways, airports and transport services in coming years.” http://www.adb.org/news/transport-reforms-can-pave-way-myanmars-sustainable-growth (Press Release) http://www.adb.org/sites/default/files/myanmar-transport-assessment.pdf (Report)
EC, ECB and IMF – Press Release: Statement by the EC, ECB, and IMF on the Review Mission to Ireland •
Staff teams from the European Commission (EC), European Central Bank (ECB), and IMF visited Dublin during October 16–25, 2012 for the eighth review of the government’s economic programme and also met with a variety of stakeholder groups. Policy implementation remains steadfast despite the challenging external environment, helping Ireland to start to regain market access. It is expected that fiscal targets for 2012 will be met despite expenditure overruns in some areas, and the authorities are committed to the 2013 deficit ceiling of 7.5 percent of GDP. Banks remain well-capitalised and downsizing has progressed well, yet further efforts are needed to address their profitability and asset quality challenges. In line with the euro area summit conclusions of 29 June, EC/ECB/IMF teams continued to discuss with the authorities possible technical solutions to improve the sustainability of the well-performing adjustment programme. http://www.imf.org/external/np/sec/pr/2012/pr12398.htm
IMF – Press Release: Statement on the First Financial Sector Monitoring Mission to Spain •
A staff team from the IMF visited Madrid October 15-26 for the first independent monitoring mission of the financial sector in the context of the European financial assistance for bank recapitalization, agreed with the Spanish authorities and the European partners on July 20, 2012. The team met with official and private sector representatives, and at the end of the visit presented a preliminary report to the Spanish authorities and the European Commission. The final report will be conveyed to the authorities and the Commission in early November. http://www.imf.org/external/np/sec/pr/2012/pr12400.htm
IMF – Press Release: Vienna 2 proposes enhancements in cross-border supervision to European authorities •
The Steering Committee of the Vienna Initiative 2 has submitted observations and proposals on cross-border supervisory practices to a number of European authorities. 1 These focus on critical aspects of home-host cooperation, which are of particular importance for host countries in Central, Eastern, and Southeastern Europe where locally systemic affiliates of foreign banks operate. http://www.imf.org/external/np/sec/pr/2012/pr12399.htm
IMF – Working Paper •
The IMF has publicised the following working papers. Page 3 of 7
•
•
•
“The Global Impact of the Systemic Economies and MENA Business Cycles” – This paper analyzes spillovers from macroeconomic shocks in systemic economies (China, the Euro Area, and the United States) to the Middle East and North Africa (MENA) region as well as outward spillovers from a GDP shock in the Gulf Cooperation Council (GCC) countries and MENA oil exporters to the rest of the world. http://www.imf.org/external/pubs/ft/wp/2012/wp12255.pdf “The Domestic Credit Supply Response to International Bank Deleveraging: Is Asia Different?” – During the global financial crisis, European banks contracted foreign claims on recipient economies sharply. This paper examines the impact of that deleveraging on credit supply in recipient economies, with a particular focus on Asia. http://www.imf.org/external/pubs/ft/wp/2012/wp12258.pdf “Oil and the World Economy: Some Possible Futures” - This paper, using a six-region DSGE model of the world economy, assesses the GDP and current account implications of permanent oil supply shocks hitting the world economy at an unspecified future date. http://www.imf.org/external/pubs/ft/wp/2012/wp12256.pdf
UNCTAD – Publication: “Global Investment Trend Monitor No. 10” •
UNCTAD has issued the captioned publication. It says, “In the first half of 2012, global foreign direct investment (FDI) inflows decline by 8 per cent compared with the same period of 2011. UNCTAD now projects that FDI flows will, at best, level-off in 2012.” http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=337&Sitemap_x0020_Taxono my=UNCTAD Home;#1618;#Investment Trends and Policies Monitors (Press Release) http://unctad.org/en/PublicationsLibrary/webdiaeia2012d20_en.pdf (Paper)
World Bank – Event: 5th Asian Ministerial Conference on Disaster Risk Management •
The Government of Indonesia, in partnership with the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR), brought together decision makers from national governments and development organizations to share best practices in building resilient schools and hospitals, and to explore ways to scale-up and adapt successful programs to disaster-vulnerable countries. The Yogyakarta Declaration on Disaster Risk Reduction in Asia, issued by participating countries urged for support towards local-level efforts to make schools safer in a cost-effective manner and a global program for safe schools and hospitals. http://www.worldbank.org/en/news/2012/10/25/asian-leaders-call-for-global-program-investin-disaster-resilient-schools-hospitals
World Bank – Press Release: Supports managing pollution in Vietnam’s most industrialized provinces •
The World Bank has agreed to fund US$ 50 million to support the enforcement of wastewater treatment regulations for industrial zones in Nam Dinh, Ha Nam, Dong Nai and Ba Ria Vung Tau, four of the most industrialized provinces in Vietnam. The funding for the Industrial Pollution Management Project is part of a multi-donor support to Vietnam to manage its industrial pollution issues. The project will also support a comprehensive review of the legal and regulatory framework on pollution management. http://www.worldbank.org/en/news/2012/10/25/world-bank-supports-managing-pollution-invietnams-most-industrialized-provinces
WTO – Press Release: General Council accepts Laos’ membership, only ratification left •
WTO members meeting as the General Council on 26 October 2012 have agreed to Laos joining the organization, paving the way for the southeast Asian country to become a member in early 2013. http://www.wto.org/english/news_e/news12_e/acc_lao_26oct12_e.htm
Page 4 of 7
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 25-Oct 29-Oct close China 6.2980 6.2420 6.2420 6.2436 Hong Kong 7.7698 7.7503 7.7503 7.7502 Indonesia 9,126.0 9,617.0 9,617.0 9,610.0 Japan 76.8 80.19 80.3 79.66 Korea 1,150.8 1,098.1 1,098.1 1,095.9 Malaysia 3.1507 3.0385 3.0385 3.0608 Philippines 43.765 41.195 41.195 41.3 Singapore 1.2906 1.2199 1.2216 1.2214 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 0.07 0.80 0.20 -0.73 -0.25 0.02 -0.16 0.00
2012 YTD (%chg) 0.9 0.3 -5.0 -3.6 5.0 2.9 6.0 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 3,056.4 1,298.1 389.9
25-Oct
29-Oct
% change
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
2,058.9 21,511.1 4,331.4 8,929.3 1,891.5 1,672.6 5,397.4 3,033.6 1,279.4 391.4
-2.03 -1.37 -0.18 -1.39 -1.71 0.04 -0.14 -0.78 -1.39 0.37
OVERNIGHT LENDING RATE (%) 25-Oct 29-Oct bps change 3.000 4.480 148.00 0.097 0.099 0.14 4.167 4.169 0.20 0.118 0.098 -2.00 2.750 2.750 0.00 3.000 3.000 0.00 2.941 2.978 3.70 0.174 0.174 0.00 2.750 2.750 0.00 3.271 2.750 -52.10
2012 YTD (%chg) -6.4 14.0 12.3 5.6 0.9 10.4 22.1 12.7 24.8 11.8
3-MONTH INTERBANK LENDING RATE (%) 25-Oct 29-Oct bps change 3.709 3.722 1.34 0.396 0.396 0.04 4.902 4.894 -0.80 0.328 0.328 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.781 0.604 -17.70 0.379 0.379 0.00 2.882 2.881 -0.15 7.275 7.205 -7.00
CREDIT DEFAULT SWAP (IN BPS) 25-Oct 29-Oct bps change China 83.0 71.8 -11.19 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 76.4 76.3 -0.11 Korea 82.7 71.2 -11.51 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
Gold Spot (in US$ per
25-Oct 1,712.1
29-Oct 1,711.5
% change -0.04
Page 5 of 7
ounce) 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
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
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
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
Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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 Period
Last
Previous
VIETNAM
Country
Retail Sales YTD (YoY)%
Indicators
Oct
SOUTH KOREA
Business Survey- Non-Manufacturing Business Survey- Manufacturing
Nov Nov
17.1 67 70
17.3 67 72
SELECTED ECONOMIC RELEASES CALENDAR (29 October - 2 November 2012) Expected released date
10/29/2012
Country
VIETNAM
Indicators
Retail Sales YTD (YoY)%
Oct
Period
Page 6 of 7
10/30/2012
10/31/2012
11/1/2012
11/2/2012
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 JAPAN INDONESIA CHINA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA CHINA THAILAND
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)% Official Reserve Assets (USD bn) 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
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 Oct 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 7 of 7
MARKET UPDATE FOR ASEAN+3 30 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
European Stocks Climb as BP, Deutsche Bank Top Estimates. European stocks rose as companies from BP Plc (BP/) to Deutsche Bank AG (DBK) reported earnings that topped estimates. Asian shares and U.S. futures were little changed as Hurricane Sandy closed New York markets for a second day. BP, Europe’s second-biggest oil company, gained 3.7 percent and Deutsche Bank, Germany’s largest lender, advanced 3.4 percent. UBS AG, Switzerland’s biggest bank, jumped 5.3 percent after raising a profitability goal. Danske Bank (DANSKE) A/S tumbled 4.6 percent after unveiling plans to sell new shares.
•
U.S. Stock Trading Shut for Second Day, Joining Bonds. For the first time in more than a century, weather has stopped U.S. equity trading for two straight days as Hurricane Sandy swept across New York City. NYSE Euronext (NYX) will this morning test a back-up plan in case its headquarters or trading floor are unable to open tomorrow.
•
Asian Currencies Strengthen on Japanese Stimulus, U.S. Spending. Asian currencies strengthened, led by South Korea’s won, after the Bank of Japan announced additional stimulus and U.S. consumer spending topped estimates. The BOJ increased its asset-purchase program today by 11 trillion yen ($138 billion) to 66 trillion yen, hours after a report showed the biggest decline in industrial output since last year’s earthquake. U.S. personal spending rose by the most since February, official data showed yesterday. Chinese manufacturing expanded for the first time in three months in October, according to a Bloomberg survey before a report due Nov. 1.
•
Most Emerging Stocks Rise, Led by Technology Stocks. Most emerging-market stocks rose, led by information technology companies. Indian shares fell to a five-week low after the central bank refrained from cutting interest rates. The MSCI Emerging Markets Index (MXEF) gained 0.2 percent to 991.92 at 4:08 p.m. in Hong Kong. The gauge has lost 1.2 percent this month, headed for the largest monthly decline since May. India faces a monthly inflation rate of almost 8 percent, limiting the central bank’s scope to join nations from Brazil to Thailand in extending rate cuts. Equity trading volumes in some Asian markets were lower than average as Hurricane Sandy shuttered U.S. stock markets for a second day and sent floodwaters gushing into New York City.
BREAKING NEWS GLOBAL •
Spanish Contraction Continues as Austerity Spur Inflation. Spain’s economy contracted for a fifth quarter, undermining efforts to plug the budget deficit that’s pushing the nation closer to a bailout, while austerity measures kept inflation at a 17-month high. Gross domestic product declined 0.3 percent in the three months through September, compared with 0.4 percent the prior quarter, the National Statistics Institute said today. That compared with the Bank of Spain’s estimate on Oct. 23 of a 0.4 percent contraction. Consumer prices, rose 3.5 percent from a year earlier, Madrid-based INE said. The prolongation of Spain’s five-year slump, which is prompting record loan defaults at the nation’s banks and job cuts at companies including Gamesa SA (GAM), adds to pressure on Prime Minister Mariano Rajoy as he resists requesting international aid. While the tax hikes he’s implementing as part of his austerity program are depressing consumption, they are also spurring inflation, which threatens to add 3 billion euros ($3.9 billion) to the country’s pension bill.
•
German October Unemployment Rose Twice as Much as Forecast. German unemployment rose twice as much as economists forecast in October as the sovereign debt crisis damped economic growth and prompted companies to curtail investment. The number of people out of
work climbed a seasonally adjusted 20,000 from September to 2.94 million, the Federal Labor Agency in Nuremberg said today. Economists forecast a gain of 10,000, the median of 31 estimates in a Bloomberg News survey shows. The adjusted jobless rate increased for the first time in more than three years, rising from a two-decade low of 6.8 percent in August to a revised 6.9 percent in September and holding there in October, the agency said. •
Hurricane Sandy Threatens $20 Billion in Economic Damage. Hurricane Sandy’s economic toll is poised to exceed $20 billion after the biggest Atlantic storm slammed into the Eastern U.S., damaging homes and offices and flooding subways in America’s most populated city. The total would include insured losses of about $7 billion to $8 billion, said Charles Watson, research and development director at Kinetic Analysis Corp., a hazard-research company in Silver Spring, Maryland. Much of the remaining tab will be picked up by cities and states to repair infrastructure, such as New York City’s subways and tunnels, he said.
REGIONAL •
Bank of Japan Expands Stimulus as GDP Poised to Decline. The Bank of Japan expanded its asset-purchase program for the second time in two months, a move that failed to cheer investors as stocks slumped amid mounting evidence that the economy contracted last quarter. The fund will increase by 11 trillion yen ($138 billion) to 66 trillion yen while a separate credit loan program will stay at 25 trillion yen, the bank said in Tokyo, acting hours after data showed the biggest decline in industrial output since last year’s earthquake. The BOJ will also offer unlimited loans to banks to boost credit demand.
•
ICBC Profit Rebounds, Beats Estimates on Wider Lending Margin. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, posted better-than-estimated 15 percent growth in third-quarter profit, boosted by higher income from loans and a better margin. Net income climbed to 62.4 billion yuan ($10 billion), or 0.18 yuan a share, from 54.4 billion yuan, or 0.15 yuan a share, a year earlier, the Beijing-based bank said in a statement today. That exceeded the 60.7 billion-yuan average estimate of 12 analysts surveyed by Bloomberg. Growth at the world’s most profitable lender, led by Chairman Jiang Jianqing, 59, rebounded from a three-year low as it joined rivals including Bank of China Ltd. and Agricultural Bank of China Ltd. (601288) in maintaining pricing power on loans. Full- year earnings growth may slow to 8.5 percent, a Bloomberg survey shows, after reaching at least 10 percent each year since its first public share sale in 2006.
•
Singapore Sees Below-Potential Growth as Price Pressures Persist. Singapore’s economy will grow at below-potential levels for a second year in 2013 even as a tight labor market and rising costs of goods and services add to inflationary pressures, the central bank said. The island’s pace of growth “slowed discernibly” in the past two quarters, and external demand is expected to remain “tepid and volatile” next year, the Monetary Authority of Singapore said in a twiceyearly review today. Gross domestic product may increase 1.5 percent to 2.5 percent this year, it said, reiterating a previous forecast. It didn’t give a prediction for 2013 growth.
IFIs NEWS (compiled from their websites) Basel Committee – Publication: “Report to G20 Finance Ministers and Central Bank Governors on Basel III implementation” •
The Basel Committee on Banking Supervision has publicised the captioned report that reviews Basel Committee members' progress in introducing the Basel standards ahead of the globally agreed start date of 1 January 2013. http://www.bis.org/publ/bcbs234.pdf
BIS – Working Paper: “Challenges related to capital flows: Latin American perspectives” Page 2 of 6
•
The BIS has publicised the captioned working paper, which is a collection of essays focusing on the drivers and effects of capital flows and the challenges they pose for the implementation of monetary and other policies. The collection draws on selected presentations made at the BISsponsored sessions at the Latin American and Caribbean Economic Association (LACEA) meetings in 2010 in Medellín, Colombia and in 2011 in Santiago, Chile. http://www.bis.org/publ/bppdf/bispap68.htm (Index site) http://www.bis.org/publ/bppdf/bispap68.pdf (Report)
FSB – Press Release: Enhanced Disclosure Task Force (EDTF) publishes report with recommendations for improving bank risk disclosures •
The EDTF, a private-sector task force formed at the initiative of the FSB, published on 29 October its report, Enhancing the Risk Disclosures of Banks. The EDTF's principles and recommendations for improving disclosures, together with examples of leading practice risk disclosures, are designed to provide timely information useful to investors and other users. http://www.financialstabilityboard.org/publications/r_121029.pdf
IMF – Working Paper: “Tax Composition and Growth: A Broad Cross-Country Perspective” •
The IMF has publicised the captioned working paper. “We investigate the relation between changes in tax composition and long-run economic growth using a new dataset covering a broad cross-section of countries with different income levels. We specifically consider 69 countries with at least 20 years of observations on total tax revenue during the period 19702009—21 high-income, 23 middle-income and 25 low-income countries. We find that increasing income taxes while reducing consumption and property taxes is associated with slower growth over the long run.” http://www.imf.org/external/pubs/ft/wp/2012/wp12257.pdf
UNCTAD – Event: Special event on Sovereign Debt Crises and Restructurings: Lessons Learnt and Proposals for Debt Resolution Mechanisms •
UNCTAD has, in repose to Resolution A/GA/66/189 of the General Assembly, took the lead to organize the captioned special event, which took place on Thursday, 25 October 2012 at the United Nations Headquarters in New York and attracted more than 300 participants, with delegates from over 150 nations. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=339&Sitemap_x0020_Taxono my=Globalization and Development;#1705;#Debt and Development Finance;#20;#UNCTAD Home (Press Release) http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23300355~pagePK:34370 ~piPK:34424~theSitePK:4607,00.html (World Bank’s remarks)
FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 29-Oct 30-Oct close China 6.2980 6.2420 6.2436 6.2401 Hong Kong 7.7698 7.7503 7.7502 7.7501 Indonesia 9,126.0 9,617.0 9,610.0 9,623.0 Japan 76.8 80.19 79.8 79.38 Korea 1,150.8 1,098.1 1,095.9 1,091.5 Malaysia 3.1507 3.0385 3.0608 3.052 Philippines 43.765 41.195 41.3 41.193 Singapore 1.2906 1.2199 1.2215 1.2207 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,850.0 20,850.0 20,845.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.06 0.00 -0.14 0.53 0.40 0.29 0.26 0.07 0.00 0.02
2012 YTD (%chg) 0.9 0.3 -5.2 -3.3 5.4 3.2 6.2 5.7 2.4 0.9
Page 3 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 2,101.6 21,810.2 4,339.2 9,055.2 1,924.5 1,671.9 5,405.2 3,056.4 1,298.1 389.9
29-Oct
30-Oct
% change
2,058.9 21,511.1 4,331.4 8,929.3 1,891.5 1,672.6 5,397.4 3,029.6 1,279.6 391.4
2,062.3 21,428.6 4,364.6 8,842.0 1,899.6 1,674.7 5,426.7 3,038.7 1,292.7 389.9
0.17 -0.38 0.77 -0.98 0.43 0.13 0.54 0.30 1.03 -0.38
OVERNIGHT LENDING RATE (%) 29-Oct 30-Oct bps change 4.480 3.080 -140.00 0.099 0.099 0.00 4.169 4.179 1.04 0.098 0.095 -0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.978 2.801 -17.70 0.094 0.094 0.00 2.750 2.750 0.00 2.750 2.500 -25.00
2012 YTD (%chg) -6.2 13.5 13.1 4.6 1.3 10.6 22.7 12.9 26.1 11.4
3-MONTH INTERBANK LENDING RATE (%) 29-Oct 30-Oct bps change 3.722 3.719 -0.27 0.396 0.396 0.00 4.894 4.904 1.00 0.328 0.328 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.604 0.577 -2.70 0.379 0.377 -0.25 2.881 2.881 0.00 7.205 6.650 -55.50
CREDIT DEFAULT SWAP (IN BPS) 29-Oct 30-Oct bps change China 71.8 71.8 0.00 Hong Kong * 0.0 n.a n.a Indonesia 165.6 165.6 0.00 Japan 76.5 76.5 0.05 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
Gold Spot (in US$ per ounce)
29-Oct 1,709.3
30-Oct 1,712.0
% change 0.16
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 4 of 6
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
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
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
Oct n.a n.a n.a n.a n.a 137.7 n.a n.a 183.3 n.a
EXTERNAL LIQUIDITY RATIOS
Reserves - latest
3 months imports of goods/serv
Short-term external debt
(US$bn)
(US$bn)
(US$bn)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
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
SOUTH KOREA SOUTH KOREA
Indicators
Current Account in (USD mn) Industrial Production YOY% Jobless Rate % Job-To-Applicant Ratio
Period
Sep Sep P Sep Sep
Last
Previous
6066.2 -4.1
2357.3 -1.6
4.2 0.81
4.2 0.83
SELECTED ECONOMIC RELEASES CALENDAR (29 October - 2 November 2012) Expected released date
10/29/2012
10/30/2012
10/31/2012
Country
VIETNAM SOUTH KOREA SOUTH KOREA JAPAN SOUTH KOREA JAPAN JAPAN SOUTH KOREA SOUTH KOREA SINGAPORE HONG KONG THAILAND 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%
Period
Oct Nov Nov Sep P Sep Sep Sep Sep Sep 3Q P Sep Sep Sep
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11/1/2012
11/2/2012
THAILAND THAILAND THAILAND INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA THAILAND THAILAND HONG KONG HONG KONG JAPAN INDONESIA CHINA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA CHINA THAILAND
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)% Official Reserve Assets (USD bn) 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
Sep Sep Sep Oct Oct Sep Oct Oct Sep Oct Oct Sep Sep Oct 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.
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MARKET UPDATE FOR ASEAN+3 31 October 2012, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Stocks Advance With Commodities on Economic Optimism. Stocks climbed for a second day and commodities rose after data from South Korea to Taiwan signaled the global slowdown may be easing. The yen weakened. The MSCI All-Country World Index (MXWD) rose 0.3 percent at 8:28 a.m. in London. Futures on the Standard & Poor’s 500 Index advanced 0.6 percent as U.S. equity markets reopen today after a two-day shutdown caused by Hurricane Sandy. The S&P GSCI Spot Index of 24 raw materials climbed 0.7 percent, paring a monthly loss. Copper rallied 1.5 percent, while the yen fell against all of its 16 major peers.
•
European Stocks Rise Second Day as Airlines Profit Beat. European (SXXP) stocks climbed, extending yesterday’s biggest rally in two weeks, as France-KLM Group and Deutsche Lufthansa AG (LHA) posted earnings that beat estimates. U.S. futures and Asian shares also advanced. Air France-KLM and Lufthansa, Europe’s two largest airlines, both rallied more than 5 percent. ArcelorMittal (MT) declined 3.2 percent after the world’s biggest steelmaker posted its lowest quarterly profit in almost three years. Anheuser- Busch InBev NV also fell.
•
Treasuries Fall as Market Opens After Sandy, Home Prices. Treasuries fell as the market opened following yesterday’s closure for Atlantic storm Sandy and before a report that economists forecast will show business sentiment improved in October. Government debt was set to deliver a third month of losses, the longest streak since the last quarter of 2010, after the Federal Reserve announced a new round of measures on Sept. 13 to spur growth. Yields that are less than the inflation rate led investors to seek higher returns in corporate bonds and stocks. Treasury 10-year note futures fell yesterday after a report showed U.S. house prices rose the most in more than two years.
BREAKING NEWS GLOBAL •
EU Convenes on Greece as Samaras Coalition Squabbles. Euro-area finance chiefs may cut Greece some slack in meeting its bailout targets even as they split on whether the country needs another debt writedown and Greek politicians squabble over further austerity measures. With Greece facing an unprecedented sixth year of recession, fellow euro-area governments are preparing to allow Prime Minister Antonis Samaras’s government “a somewhat flatter adjustment path” in achieving its deficit-reduction goal, said Thomas Wieser, head of the group that prepares meetings of euro- area finance ministers..
•
U.K. October Consumer Sentiment Falls to Six-Month Low, GfK Says. U.K. consumer confidence fell to a six-month low in October as Britons become more pessimistic about their finances and spending, GfK NOP Ltd. said. An index of sentiment declined to minus 30 from minus 28 in September, the London-based research group said in an e-mailed report today. A gauge of how consumers see their personal financial situation over the next year dropped 5 points to minus 13, also the lowest in six months. Britain exited a recession in the third quarter as gross domestic product surged the most in five years. Still, the Confederation of British Industry said yesterday that while its retail sales index rose to a four-month high in October, “uncertainty over the global economic outlook could dent consumer confidence, hitting prospects for the retail sector.”
•
Spain Narrows Central Government Budget Deficit to 4.39%. Spain’s central government budget deficit narrowed in September as a sales-tax increase buoyed government revenue, boosting Prime Minister Mariano Rajoy’s campaign to resist asking for a sovereign bailout. The
central government’s deficit was 4.39 percent of gross domestic product in the nine months through September, compared with 4.77 percent in the eight months through August. Valueadded tax receipts surged 11.9 percent in September from a year earlier as an increase came into effect, Deputy Budget Minister Marta Fernandez Curras told reporters in Madrid late yesterday. REGIONAL •
China Luxury Sales to Get Boost After Leadership Change. Luxury companies are betting that Chinese shoppers who are buying fewer gold bars and lavish gifts for their business dealings will loosen the purse strings after a once-a-decade government change in Beijing. The leadership transition beginning Nov. 8 will clear uncertainty on political appointees and economic policy, encourage business gifting and boost luxury sales next year, said Kent Wong, managing director at the world’s largest jeweler, Chow Tai Fook Jewellery Group Ltd. (1929)
•
Korea Best in Asia on Investor Confidence in Economy. Kang Man Soon wept on the day 15 years ago that she gave her gold wedding ring to the government, joining the millions who donated heirlooms to boost South Korea’s reserves during the Asian financial crisis. “We just couldn’t let the country go bankrupt after all the sacrifices and hard work to save it from Japanese colonial rule and civil war,” said Kang, whose husband fulfilled a promise to replace the gold band by giving her a one-carat diamond ring this year for her 60th birthday. “The economy is much bigger and stronger now and our cars and products and pop songs are famous around the world.”
•
BOJ Action Raises Developer Bond Sales to ’10 High. Bank of Japan Governor Masaaki Shirakawa’s decision to boost purchases of real estate funds to stimulate the economy may spur debt sales by developers that reached the highest in 2 1/2 years this month. Daiwa House Industry Co. (1925), Japan’s biggest home builder, and Mori Building Co. drove 97.8 billion yen ($1.2 billion) in offerings by property issuers this month, the highest since April 2010, according to data compiled by Bloomberg. The 9 basis point yield premium over government debt that Daiwa House is paying on its six-year notes compares with the 43 basis point average for Japanese companies and the 168 gap for peers worldwide, according to Bank of America Merrill Lynch indexes.
IFIs NEWS (compiled from their websites) ADB – Operation: Supports Lao PDR, Viet Nam in Addressing HIV Threat in Border Areas •
The ADB is providing $20 million in grants and loans to support Lao People’s Democratic Republic (Lao PDR) and Viet Nam prevent the spread of HIV infections in 23 border provinces where risks are growing due to increased population movement and commercial activities along economic corridors. http://www.adb.org/news/adb-supports-lao-pdr-viet-nam-addressing-hiv-threat-border-areas
BIS – Event: First GPFI Conference on Standard-Setting Bodies and Financial Inclusion •
The Financial Stability Institute of the Bank for International Settlements (BIS) has hosted the first annual Global Partnership for Financial Inclusion (GPFI) Conference on Standard-Setting Bodies and Financial Inclusion. Under the theme "Promoting financial inclusion through proportionate standards and guidance", participants discussed the challenges faced and overcome by standard-setting bodies in their efforts to broaden financial inclusion. Convened by the GPFI, the conference was held on 29 October. http://www.bis.org/press/p121030.htm Page 2 of 6
BIS – Speech: “The future of financial intermediation and regulation” •
The BIS has publicised the script of the remarks by Mr Stephen G Cecchetti, Economic Adviser and Head of Monetary and Economic Department of the BIS, prepared for the Second Conference of the European System of Central Banks Macro-prudential Research Network, Frankfurt, Germany, 30 October 2012. http://www.bis.org/speeches/sp121030.pdf
IFC – Operation: Invests in China’s Fosun Pharma, Increasing Supply of Quality and Affordable Drugs •
The IFC has agreed to invest $25 million equity in Fosun Pharma as part of the company’s public offering on the Hong Kong Stock Exchange to help expand its business and increase the availability of quality and affordable drugs in China and other developing countries. Listed on the Shanghai Stock Exchange since 1998, Fosun Pharma is one of China’s leading pharmaceutical companies, distributing, selling, and manufacturing medicines as well as providing healthcare services. Fosun Pharma is also one of the largest suppliers of anti-malaria drugs to developing countries through international institutions like the World Health Organization and the International Red Cross. To date, it has provided anti-malaria drugs to more than 300 million people in Africa and Southeast Asia. http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/859456888914FB7A85257AA80014 E311
IFC – Operation: Partners with Krungsri to Provide Financing for Small and Medium Enterprises in Thailand •
The IFC is providing US$200 million in financing to Krungsri (Bank of Ayudhya), Thailand’s fifthlargest commercial bank, to increase lending to small and medium enterprises. The financing will help create employment and income opportunities that contribute to Thailand’s overall economic growth. The funding will focus on local enterprises, especially small and medium enterprises looking to expand and contribute to the country’s export growth. The financing package is part of IFC’s Thailand flood response strategy that complements the government’s efforts to help local businesses recover from last year’s devastating floods. http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/A44E78538C702CCE85257AA70015 F597
IFC – Publication: “Launches Media Guide to Raise Awareness of Impact of Good Corporate Governance” •
The IFC has launched a media guide “Who’s Running the Company: A Guide to Reporting on Corporate Governance” aimed at helping business journalists report on corporate governance and raise public awareness of the impact it has on businesses, shareholders, and the broader community of stakeholders. http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/9D8C84CB5F37642F85257AA70059 427B
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FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2011 close 30-Oct 31-Oct close China 6.2980 6.2420 6.2401 6.2373 Hong Kong 7.7698 7.7503 7.7501 7.75 Indonesia 9,126.0 9,617.0 9,623.0 9,624.0 Japan 76.8 80.3 79.63 79.76 Korea 1,150.8 1,098.1 1,091.5 1,090.7 Malaysia 3.1507 3.0385 3.0520 3.0476 Philippines 43.765 41.195 41.193 41.165 Singapore 1.2906 1.2216 1.2191 1.2191 Thailand 31.5 30.7 30.7 30.7 Vietnam 21,031.0 20,850.0 20,845.0 20,850.0 Note: Negative values indicate depreciation and positive values indicate appreciation.
% change 0.04 0.00 -0.01 -0.16 0.07 0.14 0.07 0.00 0.13 -0.02
2012 YTD (%chg) 1.0 0.3 -5.2 -3.7 5.5 3.4 6.3 5.9 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 2,101.6 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
30-Oct 2,062.3 21,428.6 4,364.6 8,842.0 1,899.6 1,674.7 5,426.7 3,038.7 1,294.4 389.9
OVERNIGHT LENDING RATE (%) 30-Oct 31-Oct bps change 3.080 2.950 -13.00 0.099 0.099 0.00 4.179 4.189 1.00 0.095 0.095 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.801 2.016 -78.50 0.049 0.049 0.00 2.750 2.750 0.00 2.500 2.143 -35.70
31-Oct
% 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 1,299.1 388.4
0.32 1.00 -0.33 0.98 0.66 -0.10 -0.04 -0.01 0.36 -0.37
2012 YTD (%chg) -5.9 14.6 12.8 5.6 2.0 10.5 22.7 12.9 26.7 11.0
3-MONTH INTERBANK LENDING RATE (%) 30-Oct 31-Oct bps change 3.719 3.719 -0.08 0.396 0.396 0.00 4.904 4.906 0.20 0.328 0.328 0.00 2.820 2.820 0.00 3.210 3.210 0.00 0.577 0.599 2.20 0.377 0.379 0.25 2.881 2.881 0.00 6.650 6.750 10.00
CREDIT DEFAULT SWAP (IN BPS) 30-Oct 31-Oct bps change China 71.8 71.8 0.00 Hong Kong * na 51.2 na Indonesia 165.6 165.6 0.00 Japan 75.7 75.5 -0.12 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 30-Oct Gold Spot (in US$ per ounce)
1,709.6
31-Oct 1,716.7
% change 0.41
Source: Bloomberg
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CREDIT RATINGS S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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)
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
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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)
China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
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
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 -
30-Sep n.a n.a 110.2 1,277.0 322.0 135.3 81.9 n.a 183.6 n.a
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
South Korea Singapore Hong Kong Thailand
Indicators
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
Period
Sep Sep 3Q P Sep Sep Sep Sep Sep Sep
Last
Previous
0.7 0.8
0.3 -0.7
1.9 -21.98 2982
2.0 -14.4 1541
-7.2 -0.1
-11 -5.1
1769 49.9
858 50.2
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 JAPAN 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)% Official Reserve Assets (USD bn) 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 Oct 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