Market Update for ASEAN+3 Feb2013

MARKET UPDATE FOR ASEAN+3 February 2013

MARKET UPDATE FOR ASEAN+3 1 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS 

Yen Falls as Abe Nears BOJ Governor Selection. The yen fell to its lowest in 2 1/2 years against the dollar and euro amid speculation Prime Minister Shinzo Abe is nearing selection of a new BoJ governor who will boost monetary stimulus to spur inflation. The yen sank 1.13 percent to 92.04 per dollar as of 5:00 PM in Singapore. South Korea’s won slid 0.80 percent to 1,097.38 per dollar, while China’s yuan and Hong Kong’s dollar slightly depreciated against the dollar by 0.13 percent and 0.01 percent, respectively. In the meantime, Malaysia’s ringgit, Philippines’ peso, Singapore’s dollar, and Vietnam’s dong weakened against the dollar 0.34 percent, 0.05 percent, 0.33 percent and 0.01 percent, respectively. In contrast, Indonesia’s rupiah slightly strengthened against the dollar 0.15 percent, while the exchange rate between Thailand’s baht and the dollar remained unchanged at the level of 29.82 per dollar.

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Japan Stocks Rise on Yen. In Japan, optimism about the nation’s new government is having a stronger impact than corporate earnings. The Asia-Pacific gauge yesterday capped its third monthly advance amid a rally in Japanese shares on optimism Prime Minister Shinzo Abe’s new government take steps to end deflation. Japan’s Nikkei 225 Stock Average (NKY) rose 0.47 percent today, capping a 12th weekly advance, its longest such streak since at least 1970. Hong Kong’s Hang Seng Index fell 0.03 percent, while Shanghai Composite Index rose 1.41 percent. South Korea’s Kospi Index slid 0.21 percent, while Indonesia’s JCI index climbed 0.87 percent to 4,492.6. The FTSE Bursa Malaysia KLCI Index remained unchanged at the level of 1,627.6, while Singapore’s Straits Times Index rose slightly by 0.09 percent to 3,285.6. Meanwhile, the Philippine Stock Exchange Index, Thailand’s index and Vietnam’s index increased by 1.22 percent, 1.42 percent and 0.76 percent, respectively.

BREAKING NEWS GLOBAL 

Growth Stall Obscures U.S. Consumer, Business Gains: Economy. The economy in the U.S. unexpectedly came to a standstill in the fourth quarter as the biggest plunge in defense spending in 40 years swamped gains for consumers and businesses. GDP dropped at a 0.1 percent annual rate, the worst performance since the second quarter of 2009, when the world’s largest economy was still in the recession, Commerce Department figures showed today in Washington. A decline in government outlays and a smaller gain in stockpiles subtracted a combined 2.6 percentage points from growth. Rising auto sales led the advance in consumer spending last quarter as a drop in fuel prices and the largest income gain in four years enabled the biggest part of the economy to overcome superstorm Sandy and Washington budget battles. Little inflation and a stop-and-go expansion are why Federal Reserve policy makers, who wrapped up a two-day meeting today, pressed on with plans to pump more money into financial markets. Consumer- spending growth picked up, fixed investment was fairly strong.” Stocks fell, dragging benchmark indexes from five-year highs. The Standard & Poor’s 500 Index declined 0.4 percent to 1,501.96 at the close in New York.

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Credit Agricole to Book EU2.68 Billion in Goodwill Writedowns. Credit Agricole SA (ACA), France’s thirdlargest bank by market value, will book a net 2.68 billion euros ($3.64 billion) of goodwill writedowns in the fourth quarter to reflect stricter rules and a worsening economy. “These measures do not involve any cash outflows and do not affect the strength of the group,” the Montrouge-based bank said in a statement today. While the goodwill charges come “primarily” from complying with tighter rules, “they also reflect the present macro-economic and financial environment in the relevant countries and business lines,” it said. Credit Agricole is taking the charges following recent recommendations from the European Union’s markets authority. The bank had 16.9 billion euros in goodwill on its balance sheet at the end of September, according to its website. Goodwill is an accounting convention that represents the amount paid for an acquisition over and above the fair value of its net assets. While writing down goodwill doesn’t deplete capital, it reduces profit and signals a company overpaid for acquisitions.

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Abe Shortens List for BOJ Chief as Japan Faces Monetary Overhaul. Prime Minister Shinzo Abe shortened his list of candidates for governor as he seeks to end decades of reluctance at the central bank to accept responsibility for the nation’s inflation rate. Abe is probably narrowing down his picks, Economy Minister Akira Amari told reporters in Tokyo today. The government should unveil the name, and replacements for deputies whose terms are up in coming weeks, by the end of February, the ruling party’s upper-house legislative affairs chief said last month. Abe, who took office five weeks ago, today said he expects the BOJ to take responsibility for its 2 percent inflation target -- a point he’s made repeatedly since the bank agreed to set the objective Jan. 22. The short-list to replace Shirakawa, whose term concludes April 8, is probably composed of ADB President Haruhiko Kuroda, former BOJ Deputy Governor Kazumasa Iwata and Toshiro Muto, another ex-deputy, according to Masaaki Kanno, chief economist at JPMorgan Securities Japan Co., who used to work at the central bank.

REGIONAL 

China’s Manufacturing Sustained Expansion in January: Economy. Chinese manufacturing expanded in January, validating the nation’s reluctance to add to policy stimulus amid increasing inflation concern. The Purchasing Managers’ Index (SHCOMP) was 50.4 in January compared with 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing as they more than tripled the number of companies surveyed. A separate gauge from HSBC Holdings Plc and Markit Economics covering fewer businesses rose to a two-year high of 52.3 from 51.5. Readings above 50 indicate expansion. Chinese officials have been hesitant to add stimulus beyond accelerated approvals for investment projects and two interest- rate cuts last year, with a measure of input prices in the government-backed gauge rising to a 17-month high. Today’s official report showed export orders contracted, underscoring concern about the strength of global demand.

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Boeing 787 Grounding Threatens Scoot’s Expansion: Southeast Asia. Scoot Pte, the budget carrier owned by Singapore Airlines Ltd. (SIA), said its growth hinges on getting Boeing (BA) Co. Dreamliners, which have been grounded worldwide for three weeks amid an investigation into battery fires. Boeing is keeping the airline “well informed” about the Dreamliner, CEO Campbell Wilson said in an interview yesterday in

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Singapore, where the carrier is based. Singapore Air in October transferred its 20 onorder 787s to Scoot, which currently operates Boeing 777s. Scoot is scheduled to get its first Dreamliner next year and 10 more in 2015. Getting the planes on time is critical for the airline, which started operations last year, as some of the 787s are to replace the existing fleet and the rest needed to expand the network. Even as regulators probe the battery faults, Boeing is boosting output and developing two more versions of the 787, which the plane maker has touted as burning 20 percent less fuel. 

China Home Prices Have Biggest Gain in Two Years, SouFun Says. China’s new home prices rose 1 percent in January, the biggest gain in two years, as developers turned optimistic because the government did not impose additional measures to curb the property market last month. Prices climbed for an eighth month in January to 9,812 yuan ($1,577) per square meter (10.76 square feet) from December, SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner, said in an e-mailed statement today, based on its survey of 100 cities. The increase was the biggest since January 2011. Developers have supplied more high-end properties to the market since the Ministry of Housing and Urban-Rural Development said in December that it would support demand from residents seeking bigger homes this year, SouFun said. China may delay expansion of property tax trials because the timing is not “mature”, China Securities Journal reported today, citing an unidentified person.

IFIs NEWS (compiled from their websites) ADB – Publication: “Investing in Resilience - Ensuring a Disaster-Resistant Future” 

Disaster losses have risen faster than Asia-Pacific’s economy has expanded, says a new report from the ADB, which recommends regional governments find ways to offer disaster risk financing instruments such as calamity funds, tax credits, and catastrophe bonds to strengthen disaster resilience. http://www.adb.org/news/risk-financing-key-building-resilience-against-disasters-study (Press Release) http://www.adb.org/sites/default/files/pub/2013/investing-in-resilience.pdf (Report)

Basel Committee – Publication: “Regulatory consistency assessment programme (RCAP) Analysis of risk-weighted assets for market risk” 

The Basel Committee on Banking Supervision has published its report on the regulatory consistency of risk-weighted assets for market risk. This analysis of risk-weighted assets in the trading book is part of the wider Regulatory Consistency Assessment Programme (RCAP) initiated by the Committee in 2012; a similar analysis is currently under way for the banking book. The programme aims to ensure consistent implementation of the Basel framework, which will help strengthen the resilience of the global banking system, maintain market confidence in regulatory ratios and provide a level playing field for banks operating internationally. http://www.bis.org/press/p130131.htm (Press Release) http://www.bis.org/publ/bcbs240.htm (Report)

BIS – Publication: International Journal of Central Banking - January 2013 issue 

The BIS has issued the Jan 2013 edition of its quarterly magazine. This is a Special Supplemental Issue - Central Banking: Before, During, and After the Crisis.

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http://www.ijcb.org/journal/ijcb13q0a0.pdf

IMF – Press Release: Statement by IMF Deputy Managing Director Naoyuki Shinohara at the Conclusion of his visit to Lao P.D.R. 

Mr. Naoyuki Shinohara, Deputy Managing Director of the IMF, issued the following statement in Vientiane at the conclusion of his visit to Lao People’s Democratic Republic (P.D.R.): “Our discussions focused on how to broaden and sustain this growth, ensure macroeconomic and financial stability, and take full advantage of regional and global integration. While near-term economic prospects for Lao P.D.R. remain favorable, strong credit growth and low international reserves coverage have emerged as sources of vulnerability. To safeguard macroeconomic and financial stability, actions are needed to expand the fiscal space, especially by increasing revenues, while maintaining fiscal sustainability; bring credit growth down to a healthier level and safeguard international reserves; build a well-supervised and sound financial system; and promote private sector-led economic growth to enhance competitiveness in the non-resource sector.”

IMF – Publication: “Outcome of the Quota Formula Review - Report of the Executive Board to the Board of Governors” 

The IMF has publicised the captioned report, which responds to the request by the Board of Governors that the Executive Board complete a comprehensive review of the quota formula by January 2013. The Executive Board was also requested to bring forward the timetable for completion of the Fifteenth General Review of Quotas (hereafter the 15th Review) to January 2014. http://www.imf.org/external/np/pp/eng/2013/013013.pdf

IMF – Publication: “Status of Acceptances and Consents – Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas” 

The IMF has publicised the status report which reviews progress toward implementation of the 2010 Quota and Governance Reforms. As of January 15, 2013, 130 members having 70.2 percent of the total voting power had accepted the proposed Board Reform Amendment. The proposed Board Reform Amendment enters into force once the Fund certifies that three-fifths of the members (i.e., currently 113 members) representing 85 percent of the total voting power have accepted the proposed amendment. http://www.imf.org/external/np/pp/eng/2013/011513.pdf

IMF – Working Paper 

Determinants of Bank Interest Margins in Sub-Saharan Africa – “Financial intermediation is low in sub-Saharan Africa (SSA) compared to other regions of the world. This paper examines the determinants of bank interest margins using a sample of 456 banks in 41 SSA countries.” http://www.imf.org/external/pubs/ft/wp/2013/wp1334.pdf

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International Reserves and Rollover Risk – “Two striking facts about international capital flows in emerging economies motivate this paper: (1) Governments hold large amounts of international reserves, for which they obtain a return lower than their borrowing cost. (2) Purchases of domestic assets by nonresidents and purchases of

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foreign assets by residents are both procyclical and collapse during crises. We propose a dynamic model of endogenous default that can account for these facts.” http://www.imf.org/external/pubs/ft/wp/2013/wp1333.pdf

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Exchange Rate Liberalization in Selected Sub-Saharan African Countries Successes, Failures, and Lessons – “Many sub-Saharan African (SSA) countries liberalized their economies in the 1980s and early 1990s. This paper reviews the foreign exchange regime reforms in selected SSA, and their associated macroeconomic policies and economic performance during and after these reforms were undertaken.” http://www.imf.org/external/pubs/ft/wp/2013/wp1332.pdf

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Inward and Outward Spillovers in the SACU Area – “Spillovers from South Africa into the other members of the Souther Africa Customs Union (known as the BLNS for Botstwana, Lesotho, Namibia, and Swaziland) are substantial reflecting sizeable real and financial interlinkages.” http://www.imf.org/external/pubs/ft/wp/2013/wp1331.pdf

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Wholesale Bank Funding, Capital Requirements and Credit Rationing – “This paper analyzes how different types of bank funding affect the extent to which banks ration credit to borrowers, and the impact that capital requirements have on that rationing.” http://www.imf.org/external/pubs/ft/wp/2013/wp1330.pdf

World Bank – Personnel: Axel van Trotsenburg appointed new World Bank Vice President for East Asia and Pacific Region 

Axel van Trotsenburg has been appointed the World Bank’s new Vice President for East Asia and Pacific by World Bank Group President Jim Yong Kim, effective February 1st. Mr. van Trotsenburg is both Dutch and Austrian, and holds Masters and Doctorate degrees in Economics and a Masters degree in International Affairs. He takes over from former East Asia and Pacific Vice President, Pamela Cox, who has been appointed World Bank Senior Vice President for Change Management. Most recently, as Vice President for Concessional Finance and Global Partnerships, Mr. van Trotsenburg led negotiations for the last replenishment of resources for the International Development Association (IDA), the Bank’s fund for the poorest, which raised a record $49.3 billion for the world’s poor countries over the three-year period ending June 30, 2014. http://www.worldbank.org/en/news/2013/01/31/axel-van-trotsenburg-appointed-new-worldbank-vice-president-for-east-asia-and-pacific-region

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 31-Jan 1-Feb close China 6.23 6.22 6.22 6.23 Hong Kong 7.75 7.75 7.76 7.76 Indonesia 9,793.00 9,653.00 9,744.00 9,729.00 Japan 86.75 90.91 91.03 92.07 Korea 1,064.40 1,074.05 1,088.59 1,097.38 Malaysia 3.06 3.04 3.11 3.12 Philippines 41.01 40.66 40.67 40.69 Singapore 1.22 1.23 1.24 1.24 Thailand 30.59 29.94 29.82 29.82 Vietnam 20,840.00 20,840.00 20,840.00 20,843.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.13 -0.01 0.15 -1.13 -0.80 -0.34 -0.05 -0.33 0.00 -0.01

2013 YTD (%chg) 0.1 -0.1 -0.8 -5.1 -3.1 -2.6 0.4 -1.7 1.7 0.0

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STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,291.3 23,580.4 4,437.6 10,926.7 1,946.7 1,637.1 6,167.6 3,266.4 1,459.2 468.1

31-Jan 2,385.4 23,729.5 4,453.7 11,138.7 1,961.9 1,627.6 6,242.7 3,282.7 1,474.2 479.8

OVERNIGHT LENDING RATE (%) 31-Jan 1-Feb bps change 2.310 2.690 38.00 0.095 0.095 0.00 4.190 4.188 -0.20 0.088 0.095 0.75 2.750 2.750 0.00 3.000 3.000 0.00 2.183 2.189 0.60 0.072 0.072 0.00 2.750 2.750 0.00 2.333 2.500 16.70

1-Feb

% change

2,419.0 23,721.8 4,492.6 11,191.3 1,957.8 1,627.6 6,318.6 3,285.6 1,495.1 483.4

1.41 -0.03 0.87 0.47 -0.21 0.00 1.22 0.09 1.42 0.76

2013 YTD (%chg) 6.6 1.8 3.4 7.7 -3.6 -2.8 7.8 2.6 6.2 15.6

3-MONTH INTERBANK LENDING RATE (%) 31-Jan 1-Feb bps change 3.888 3.888 0.05 0.386 0.386 0.00 4.952 4.952 0.00 0.294 0.294 0.00 2.810 2.810 0.00 3.210 3.210 0.00 0.366 0.537 17.10 0.377 0.377 0.00 2.869 2.868 -0.08 6.200 6.563 36.30

CREDIT DEFAULT SWAP (IN BPS) 30-Jan 31-Jan bps change China 64.67 70.15 5.47 Hong Kong 44.35 45.34 0.99 Indonesia 138.88 144.25 5.36 Japan 75.94 76.42 0.48 Korea 66.91 72.84 5.93 Malaysia 91.17 96.10 4.94 Philippines 99.09 104.01 4.92 Thailand 95.11 99.06 3.94 Vietnam 212.05 215.81 3.77 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 31-Jan Gold Spot (in US$ per ounce)

1,674.9

1-Feb 1,664.0

% change -0.65

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

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INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

Country JAPAN INDONESIA THAILAND

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

Short-term external debt (US$bn) 572.8 711.2 38.3 2,255.1 132.6 32.4 8.0 924.3 57.2 10.0

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Import cover (Qtrs of imports covered by reserves) 6.6 2.2 2.2 18.0 2.2 2.4 4.4 2.2 2.7 -

DATA RELEASES FOR THE DAY Indicators Period Official Reserve Assets (USD bn) Jan Vehicle sales (YoY)% Jan Consumer Confidence Index Jan Foreign Reserves (USD bn) Jan 25 Forward Contracts (USD bn) Jan 25

Last -12.9 181.6 23.4

SELECTED ECONOMIC RELEASES CALENDAR (28 Jan to 01 Feb 2013) Expected released date Country Indicators SOUTH KOREA Business Survey- Non-Manufacturing 28/1/2013 SOUTH KOREA Business Survey- Manufacturing SOUTH KOREA Current Account in (USD mn) SOUTH KOREA Good Balance in (USD mn) 29/1/2013 SOUTH KOREA Industrial Production (YoY)% SOUTH KOREA Industrial Production (MoM)% JAPAN Retail Trade MoM SA JAPAN Retail Trade YoY JAPAN Small Business Confidence JAPAN Industrial Production YOY% JAPAN Industrial Production MoM % JAPAN Markit/JMMA Manufacturing PMI PHILIPPINES GDP sa (QoQ)% 30/1/2013 PHILIPPINES GDP (YoY)% PHILIPPINES Annual GDP (YoY)% SINGAPORE Unemployment Rate (sa)% SINGAPORE M1 Money Supply (YoY)% SINGAPORE M2 Money Supply (YoY)%

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a n.a n.a n.a n.a 140.0 n.a n.a 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

Previous 1,268.1 -3.4 116.4 182.0 23.0

Period Feb Feb Dec Dec Dec Dec Dec Dec Jan Dec P Dec P Jan 4Q 4Q 2012 4Q P Dec Dec

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31/1/2013

1/2/2013

HONG KONG HONG KONG HONG KONG HONG KONG HONG KONG HONG KONG THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND MALAYSIA JAPAN JAPAN JAPAN JAPAN CHINA CHINA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA JAPAN JAPAN INDONESIA INDONESIA THAILAND THAILAND

Money Supply M1 in HK$ (YoY)% Money Supply M2 in HK$ (YoY)% Money Supply M3 in HK$ (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Govt Mthly Budget Surp/Def (HKD bn) Total Trade Balance (USD mn) Overall Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index Consumer Price Index (YoY)% Consumer Price Index NSA (MoM) Core CPI (YoY)% Overnight Rate % Jobless Rate % Job-To-Applicant Ratio Overall hhold spending (YoY)% Construction Orders (YoY)% PMI Manufacturing HSBC Manufacturing PMI Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% HSBC Manufacturing PMI Core Consumer Price Index(YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% Total Imports (YoY)% Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn) Official Reserve Assets (USD bn) Vehicle sales (YoY)% Consumer Confidence Index Money Supply - M2 (YoY)% Foreign Reserves (USD bn) Forward Contracts (USD bn)

Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Jan Jan Jan Jan 31 Dec Dec Dec Dec Jan Jan Jan Jan Jan Jan Jan Jan Dec Jan Dec Jan Jan Dec Jan Jan Jan Jan Jan 25 Jan 25

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 4 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Global Stocks Signal Increased Confidence in Global Economy. Stocks in the world’s developed nations posted the best start to a year in two decades, a sign the global economy is poised to accelerate after contractions in Japan, the U.S. and Europe, if history is a guide. The MSCI World Index of stocks in 24 markets rose 5 percent in January, the most since 1994, as individual investors pumped record deposits into mutual funds, U.S. profits increased for an 11th quarter, central banks kept interest rates at record lows and growth from Europe to China improved. The last two times stocks gained this much in January, world gross domestic product expanded at least three times the 2.4 percent that economists forecast for 2013.

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U.S., Japan, Aussie Bonds Fall on Growth Bets, Stock Gain. U.S., Japanese and Australian bonds tumbled as stocks rallied after an American report spurred optimism the world’s biggest economy will keep adding jobs. The gap between U.S. 5- and 30year notes widened to 2.35 percentage points, the most in four months and above the decade average of 1.50 points. Rising long-term rates indicate traders expect the economy to pick up, as they demand higher yields in case inflation quickens. The rate on Japan’s December 2022 note climbed four basis points to 0.805 percent, the highest since January 15. The extra yield investors demand to hold 10-year government bonds in the U.S. instead of Japan widened to 1.28 percentage points, the most since March. Similar-maturity Australian yields touched 3.61 percent, the highest since May. The equivalent rate for Singapore bonds climbed to 1.55 percent, the most since September.

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Asian Stocks Rise on U.S. Jobs, China Services Expansion. Asia’s benchmark stock index rose to the highest level in 18 months as U.S. payrolls expanded and China services industries grew at the fastest pace since August, adding to optimism in the global economic recovery. The MSCI Asia Pacific Index added 0.7 percent to 133.64 as of 5:16 p.m. in Tokyo, with five stocks advancing for every four that fell. Japan’s Nikkei 225 Stock Average rose 0.6 percent after capping a 12-week winning streak on February 1., the longest run of weekly gain since 1959, according to Nikkei Inc.

BREAKING NEWS GLOBAL •

Too-Big-to-Fail Too Hard to Fix Amid Calls to Curb Banks. Top U.S. bank regulators and lawmakers are pushing for action to limit the risk that the government again winds up financing the rescue of one or more of the nation’s biggest financial institutions. Officials leading the debate, including Federal Reserve Governor Daniel Tarullo, Dallas Fed President Richard Fisher and Senator Sherrod Brown, share the view that the 2010 Dodd-Frank Act failed to curb the growth of large banks after promising in its preamble to “end too big to fail.” Strategies under consideration range from legislation that would cap the size of big banks or make them raise more capital to regulatory actions to discourage mergers or require that financial firms hold specified levels of long-term debt to convert into equity in a failure. The push for revisiting the law or writing new

rules “is absolutely driven by a sense that Dodd-Frank did not end too big to fail,” said Mark Calabria, director of financial-regulation studies at the Cato Institute in Washington and a former aide to Senator Richard Shelby of Alabama when he was the ranking Republican on the Banking Committee. •

Euro Tremors Risk Market Respite on Spain-Italy, Banks. Europe’s political tremors risk spoiling the region’s market calm, with corruption allegations buffeting Spanish Premier Mariano Rajoy and Italy’s Silvio Berlusconi narrowing the front-runner’s lead as elections loom. Rajoy, facing opposition calls to resign amid contested reports about illegal payments, travels to Berlin today as euro- area leaders schedule a flurry of meetings this week ahead of a February 7-8 European Union summit. Last week’s nationalization of the Netherlands’ fourth-largest bank and a 2.17 billion-euro ($3 billion) loss at Deutsche Bank AG underscore the fragile economic health in the region. A sluggish economy, uncertainty over the outcome of this month’s Italian election and Rajoy’s new troubles threaten to curtail the time won by politicians with the centralbank bond buying. For now, European policy makers have room to maneuver as borrowing costs for indebted nations have fallen and investor confidence returns.

REGIONAL •

Japan Finance Minister Models Policy After 1930s Stimulus. Japanese Finance Minister Taro Aso said the government is imitating his Depression-era predecessor, Korekiyo Takahashi, who told the Bank of Japan to underwrite government debt to fund deficit spending. “There is no one in the government, the bureaucracy or the BOJ who has experience in anti-deflation policy,” Aso said yesterday in an interview on NHK television. “We can only learn from history,” he said, adding that the new administration is looking to Takahashi’s example. Emulating Takahashi’s policies of monetary expansion and government-financed spending has a chance of helping Japan beat deflation. Yet lobbying by interest groups empowered by increased spending, such as the construction industry, could make it difficult for leaders to tighten policy once growth is achieved.

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Hong Kong Debt Adds to Home Risks as Cooling Steps Eyed. Hong Kong monetary chief Norman Chan said more measures are possible to cool the city’s housing market as elevated household debt adds to risks from property- price gains over the past four years. Debt is “near historic high levels,” Chan, the chief executive of the Hong Kong Monetary Authority, told lawmakers today, citing ratios of 58 percent to 59 percent of gross domestic product in the third and fourth quarters. In a housing and economic downturn, repayment may become more difficult, the official said. Chan told reporters that the HKMA can roll out a sixth package of measures if necessary to rein in the property market after already using tools such as limits on mortgage terms. In October, the government added a tax on foreigners’ home purchases. Overheating in the housing market is the biggest risk to financial stability, Chan said, echoing a warning in December from the International Monetary Fund.

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Myanmar Opening to Foreigners Draws Best Western Hotels. Best Western International Inc., the world’s second-largest closely held hotel chain, will open its first Myanmar property in 2013, taking advantage of friendlier investment rules and a shortage of rooms in the country. The Phoenix-based group is considering locations including Yangon and Mandalay, the nation’s two largest cities, for the hotel. International visitor arrivals to Myanmar, excluding border crossings, more than tripled Page 2 of 7

to 593,381 in 2012 from 2008, figures from the nation’s ministry of hotels and tourism show. The total number of hotels in the country climbed 27 percent to 787 in the same time, the data shows. The average daily room rate surged more than 350 percent to $130 for four- and five-star hotels in 2012 from 2008, and will climb as much as 25 percent this year. The government is planning a new 200-acre hotel zone in Yangon to boost the supply of hotels as the nation prepares to host the 27th Southeast Asian Games in December. •

Lao PDR Officially joins WTO. Laos joined the World Trade Organization on Saturday, a major step for the small country. Fifteen years after it first sought membership of the global trade mediator, Laos finally wrapped up negotiations late last year, having adopted dozens of new laws on investment, regulation and intellectual property. However, observers expect Laos's journey onto the international economic stage to be slow and still dominated by neighbour countries in the short to medium term. Between 2000 and 2011, three countries were Laos's largest foreign investors by far - $4.7 billion from Vietnam, $3.4 billion from China, and $2.8 billion from Thailand, according to official figures. No other country invested more than $600,000.

IFIs NEWS (compiled from their websites) Basel Committee – Working Paper •

Foundations of the Proposed Modified Supervisory Formula Approach - This technical paper describes the modelling framework underlying the Modified Supervisory Formula Approach (MSFA) as proposed in the Basel Committee's recent consultative paper Revisions to the Basel Securitisation Framework. http://www.bis.org/publ/bcbs_wp22.pdf

•

The Proposed Revised Ratings-Based Approach - This technical paper describes the assumptions and methodology underlying the Revised Ratings-Based Approach (RRBA) as proposed in the Basel Committee's recent consultative paper Revisions to the Basel Securitisation Framework. http://www.bis.org/publ/bcbs_wp23.pdf

IMF – Press Release: Statement by the IMF Executive Board on Argentina •

The IMF’s Executive Board met on February 1, 2013 to consider the Managing Director’s report on Argentina’s progress in implementing remedial measures to address the quality of the official data reported to the Fund for the Consumer Price Index for Greater Buenos Aires (CPI-GBA) and Gross Domestic Product (GDP). The Executive Board found that Argentina’s progress in implementing the remedial measures since the September 17, 2012 Board meeting (see Press Release No. 12/319) has not been sufficient. As a result, the Fund has issued a declaration of censure against Argentina in connection with its breach of obligation to the Fund under the Articles of Agreement. http://www.imf.org/external/np/sec/pr/2013/pr1333.htm

IMF – Working Paper: “Boosting Competitiveness to Grow Out of Debt—Can Ireland Find a Way Back to Its Future?” •

The IMF has publicised the captioned working paper. “This paper investigates the prospects for Ireland to grow its economy against the backdrop of high indebtedness. The paper uses vector autoregressive analysis to explore the interlinkages among Page 3 of 7

competitiveness, exports, economic growth, and fiscal performance. The emerging conclusion is that Ireland, which has regained cost competitiveness following the crisisdriven fall in domestic prices, is poised to return to its path of strong exports and economic growth and lower imbalances provided that it maintains competitiveness, though a pickup in external demand is critical.” http://www.imf.org/external/pubs/ft/wp/2013/wp1335.pdf World Bank – Personnel: Joachim von Amsberg Assumes Role of Vice President for Concessional Finance and Global Partnerships •

Joachim von Amsberg became the World Bank’s Vice President for Concessional Finance and Global Partnerships (CFP) on February 1, 2013. In his new role, Mr. von Amsberg will be responsible for the replenishment and stewardship of the IDA, Global Partnership and Trust Fund Operations, trusteeship of financial intermediary funds and innovative financing, and financial management of the concessional finance portfolio. He will oversee a trust fund portfolio of about $27 billion and implementation of the $49.3 billion IDA16 replenishment. http://www.worldbank.org/en/news/press-release/2013/02/01/joachim-von-amsbergassumes-role-vice-president-concessional-finance-global-partnerships

World Bank – Personnel: Kyle Peters Takes Up Role as Vice President for Operations Policy and Country Services •

Kyle Peters became the World Bank’s Vice President for Operations Policy and Country Services (OPCS) on February 1, 2013. In his new role, Mr. Peters will be responsible for overseeing the development and implementation of operational policy reforms to help Bank clients achieve results. Peters is returning to the Operations Policy and Country Services Vice Presidency, where he served for six years as Director of Strategy and Country Services, from 2006-2012. There, he was responsible for working on the Bank’s response to the financial crisis of 2008-09, aid effectiveness, operational policy issues related to the International Development Association (IDA—the World Bank’s fund for the poorest), and overseeing policy and reviews of country assistance strategies, development policy lending, and guarantees. http://www.worldbank.org/en/news/press-release/2013/02/01/kyle-peters-takes-uprole-vice-president-operations-policy-country-services

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 1-Feb 4-Feb close China 6.23 6.23 6.23 6.23 Hong Kong 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,727.00 9,727.00 9,685.00 Japan 86.75 92.77 92.77 92.61 Korea 1,064.40 1,097.38 1,097.38 1,084.78 Malaysia 3.06 3.12 3.12 3.10 Philippines 41.01 40.68 40.68 40.61 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.80 29.72 Vietnam 20,840.00 20,833.00 20,833.00 20,845.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.08 0.02 0.43 0.17 1.16 0.56 0.17 0.24 0.27 -0.06

2013 YTD (%chg) 0.0 -0.1 -0.3 -5.7 -2.0 -2.1 0.6 -1.4 2.1 0.0

Page 4 of 7

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

1-Feb

4-Feb

2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

OVERNIGHT LENDING RATE (%) 1-Feb 4-Feb bps change 2.690 2.860 17.00 0.095 0.096 0.14 4.188 4.189 0.12 0.095 0.095 0.00 2.750 2.750 0.00 3.000 3.000 0.00 2.189 2.189 0.00 0.059 0.059 0.00 2.750 2.750 0.00 2.500 3.000 50.00

% change

2,429.0 23,821.0 4,485.8 11,260.4 1,953.2 1,633.8 6,435.5 3,303.7 1,507.9 486.5

0.41 0.42 0.09 0.62 -0.23 0.38 1.85 0.38 0.58 0.64

2013 YTD (%chg) 7.0 2.2 3.2 8.3 -3.8 -2.4 9.8 3.2 7.1 16.3

3-MONTH INTERBANK LENDING RATE (%) 1-Feb 4-Feb bps change 3.888 3.889 0.07 0.386 0.385 -0.07 4.952 4.952 0.00 0.294 0.294 0.00 2.810 2.810 0.00 3.210 3.210 0.00 0.537 0.537 0.00 0.377 0.377 0.00 2.868 2.868 0.00 6.563 6.786 22.30

CREDIT DEFAULT SWAP (IN BPS) 31-Jan 1-Feb bps change China 70.15 68.69 -1.46 Hong Kong 45.34 45.36 0.02 Indonesia 144.25 142.82 -1.42 Japan 76.42 74.01 -2.41 Korea 72.84 71.38 -1.46 Malaysia 96.10 93.17 -2.93 Philippines 104.01 104.07 0.06 Thailand 99.06 98.10 -0.96 Vietnam 215.81 215.73 -0.08 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. Gold Spot (in US$ per ounce)

1-Feb 1,667.4

4-Feb

% change

1,671.6

0.25

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

Page 5 of 7

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

Country JAPAN

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

DATA RELEASES FOR THE DAY Indicators Period

Monetary Base (YoY)

Jan

Last 10.9%

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a n.a n.a n.a n.a 140.0 n.a n.a 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

Previous 11.8%

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/4/2013

2/5/2013

2/7/2013

2/8/2013

Country

INDONESIA INDONESIA INDONESIA SOUTH KOREA PHILIPPINES CHINA HONG KONG INDONESIA INDONESIA SOUTH KOREA JAPAN THAILAND JAPAN SINGAPORE PHILIPPINES HONG KONG THAILAND MALAYSIA

Indicators

Consumer Confidence Index Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) Consumer Price Index (YoY)% China HSBC Services PMI Purchasing Managers Index GDP Constant Price (QoQ)% GDP Constant Price (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Confidence Economic Machine Orders YOY% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD bn) Imports YoY%

Period

Jan Jan Jan Jan Jan Jan Jan 4Q 4Q Jan Jan Jan Dec Jan Jan Jan Feb 1 Dec

Page 6 of 7

MALAYSIA JAPAN JAPAN CHINA MALAYSIA CHINA CHINA CHINA CHINA CHINA

Exports YoY% Current Account Balance YOY% Current Account Total (JPY bn) New Yuan Loans (RMB bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Producer Price Index (YoY)%

Dec Dec Dec Jan Jan 31 Jan Jan Jan Jan Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 5 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Fall From 18-Month High while European Stock Futures Are Little Changed. European stocks climbed, rebounding from their biggest plunge in more than three months, as companies from Munich to BP reported earnings. U.S. index futures also advanced, while Asian shares retreated. Munich added 1.7 percent after the world’s biggest reinsurer said it will increase its dividend for 2012. The Stoxx Europe 600 Index gained 0.3 percent to 284.72 at 8:10 a.m. in London. Standard & Poor’s 500 Index futures added 0.2 percent following the equity benchmark’s biggest drop since November, while the MSCI Asia Pacific Index fell 1.1 percent.

•

Interest-Rate Swap Most in Four Months Versus Treasuries. U.S. interest-rate swap levels rose to the highest in four months relative to Treasury yields, reflecting demand for safer assets before a report that economists said will show growth in service industries slowed. The difference between five-year swap rates and similar- maturity Treasuries was 16 basis points, the most since September 27. A widening spread suggests investors are seeking refuge in government bonds. While Treasury yields have surged this year on speculation the U.S. economy will grow enough to allow the Federal Reserve to reduce debt purchases, they dropped yesterday on concern Europe’s fiscal crisis is intensifying.

•

Euro Weakens on Italy, Spain Uncertainty; Aussie Declines. The euro fell against the yen, following yesterday’s biggest drop since June, amid corruption allegations against Spanish Premier Mariano Rajoy and uncertainty ahead of Italian elections this month. The 17-nation currency halted this year’s climb against the dollar before European Central Bank policy makers meet on February 7. The yen rose against most major peers as investors bought haven assets after Asian equities slid. Australia’s dollar fell after the central bank kept interest rates unchanged while saying the inflation outlook allows scope for further easing.

BREAKING NEWS GLOBAL •

World Risks ‘Perfect Storm’ on Capital Flows, Carstens Says. A “perfect storm” may be forming in the world economy as signs of a recovery spur capital flows to emerging markets and some advanced nations that may lead to asset bubbles, Banco de Mexico Governor Agustin Carstens said. “Risk appetite among investors has returned and the search for yield is in full force,” Carstens said in a speech in Singapore today. “Concerns of asset-price bubbles fed by credit booms are starting to appear.” The risk of a “currency war” has surfaced as monetary easing from Japan to the U.S. spurs demand for higher-yielding assets and boosts inflows into emerging markets. Russia warned last month that Japan’s currency-weakening policies may lead to reciprocal action as nations try to protect their export industries, while South Korea and the Philippines have said they’ll consider how to reduce the impact of such funds.

•

U.K. Economy Faces Risk of Prolonged Stagnation. Britain’s economy will grow more slowly this year than previously forecast and stagnation may persist, according to the National Institute of Economic and Social Research. The institute sees the economy expanding 0.7 percent this year instead of the 1.1 percent forecast in November, and 1.5 percent in 2014. It also said Chancellor of the Exchequer George Osborne should relax his fiscal squeeze to help the recovery. The economy shrank 0.3 percent in the fourth quarter and is facing the threat of a triple-dip recession. With gross domestic product more than 3 percent below its 2008 peak, NIESR said the U.K. is in the slowest post-recession recovery in 100 years and it doesn’t expect GDP to regain its previous peak until 2015. The institute also forecast that net debt will peak at about 85 percent of GDP in the 2016–2017 fiscal year. That compares with the Office for Budget Responsibility’s projection in December that debt will reach its highest point in 20152016 at about 80 percent and then start to decline.

REGIONAL •

China Services Industries Expand at Faster Pace, HSBC Says. China’s services industries expanded at the fastest pace in four months in January, a private survey found, supporting a recovery in the world’s second-biggest economy. The services Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics today rose to 54 from 51.7 in December. A reading above 50 indicates expansion. A separate government-backed survey published on February 3 showed services industries expanded at the fastest pace since August. Today’s report adds to signs that growth will accelerate for a second quarter after an almost two-year slowdown. The government is counting on expansion of services and domestic demand to become a bigger part of the economy as it tries to reduce the reliance on exports and investment spending.

•

Indonesia’s Economy Grows at Slowest Pace in Over Two Years. Indonesia’s economy grew at the slowest pace in more than two years last quarter as an export slump countered gains in domestic consumption, increasing pressure on policy makers to add stimulus to bolster growth. Gross domestic product increased 6.11 percent in the three months through December from a year earlier, the Central Bureau of Statistics said in Jakarta today, compared with a revised 6.16 percent for the third quarter. The economy grew 6.2 percent in 2012. Slowing growth may compound challenges for an economy that is already contending with a weakening rupiah, declining exports and a widening current account deficit. While a global recovery is brightening the outlook for Asia, President Susilo Bambang Yudhoyono faces growing pressure to raise fuel prices and curb oil imports as currency risks persist and the window to act narrows ahead of elections due in 2014.

•

Yen Slide Against Baht a Boon for Thai Carmakers. Japan’s policies that weakened the yen will boost Thailand’s baht, unlike the currencies of South Korea and Taiwan, as the Detroit of Asia benefits from cheaper car parts and engines from the world’s thirdlargest economy. Thailand, a hub for Japanese carmakers including Toyota and Nissan, bought 54 percent of auto components from Japan in 2012, official data show. Importers are “too pleased with the situation,” Thai Finance Minister Kittiratt NaRanong said January 24, after Japanese Prime Minister Shinzo Abe’s push for “bold monetary easing” to revive the economy sent the yen to a 2 1/2-year low against the dollar. Page 2 of 7

•

Vietnam to Unveil State Firms’ Overhaul Plan by June, Trung Says. Vietnam will unveil a plan to overhaul 52 state-owned groups by June and lay out steps to sell stakes or unprofitable assets in most of the companies, seeking to curb bad debt that has hurt economic growth. A roadmap to clean up state-owned enterprises that account for about 37 percent of gross domestic product will be ready by then, Deputy Finance Minister Truong Chi Trung said in an interview. The government plans to sell all nonessential units by the end of 2015, and will retain just 50 percent to 75 percent in most of its companies, he said. Trung’s remarks are the first indication of a mid-year target for the proposals, which would mark the biggest effort yet to clean up state-owned monopolies whose operations have swelled since the 1986 “Doi Moi” economic renovation allowed private business. The companies now tie up 60 percent of bank lending and account for more than half of bad debt, crimping credit growth and slowing economic expansion to a 13-year low. “Restructuring the state sector is one of our most crucial and urgent tasks in the process of reforming the Vietnamese economy,” Trung, 56, said in the Feb. 1 interview in Hanoi. “We aim to have state companies focus their resources on their core businesses and leave the opportunities in those non-core areas to be developed by others.”

IFIs NEWS (compiled from their websites) ADBI – Event: ADBI seminar on next steps for APEC •

At an ADBI seminar on 28 January, three distinguished speakers, Professor Ippei Yamazawa, Dr Julius Parrenas and Professor Shujiro Urata, discussed the role of AsiaPacific Economic Cooperation (APEC) in achieving economic integration. ADBI has a new project, "Economic Ties between Asia and the Pacific and Other Developing Regions" which will continue this work and build on the publication in 2012 (with ADB and the Inter-American Development Bank) of Shaping the Future of the Asia and the PacificLatin America and the Caribbean Relationship, a guide to the dynamic economic relationship between the two regions. Also in 2012, an ADBI working paper examined Asia–Latin America free trade agreements. http://www.adbi.org/event/5403.next.steps.apec.assessment.way.forward/

ADBI – Event: The 3rd Roundtable on Labor Migration: Assessing Labor Market Requirements for Foreign Workers and Policies for Regional Skills Mobility •

The ADBI, the OECD and the International Labour Organization (ILO) organized a roundtable on labor migration in Asia, in Bangkok, Thailand, 23-25 January 2013. This was the third of these successful round tables and is part of continuing work by ADBI on the issue of migration, which can be seen in recent reports (Managing migration to support inclusive and sustainable growth) , blog posts (Migration matters: the race to ensure a future supply of workers in Asia), and research policy briefs (Social security and labor migration in ASEAN). http://www.adbi.org/event/5335.3rd.roundtable.labor.migration.asia/

IMF – Press Release: IMF Approves New Rules and Regulations for Investment Account •

The IMF has adopted a new set of rules and regulations for the IMF’s Investment Account. The rules replace those approved by the Board in 2006, and provide the legal framework for the implementation of the expanded investment authority that is Page 3 of 7

authorized under the Fifth Amendment to the Articles of Agreement, which became effective in February 2011 and is a key element of the Fund’s income model. The income model aims to diversify the Fund’s sources of income and to put the Fund’s finances on a sound long-term footing. http://www.imf.org/external/np/sec/pr/2013/pr1337.htm (Press Release) http://www.imf.org/external/pp/longres.aspx?id=4734 (Paper) IMF – Press Release: Statement on the Second Financial Sector Monitoring Mission to Spain •

A staff team from the IMF visited Madrid January 25-February 1 for the second independent monitoring mission of the financial sector in the context of the European financial assistance for bank recapitalization, as agreed with the Spanish authorities and the European Commission (EC) on July 20, 2012. The main finding of the mission is that major progress has been made in implementing financial sector reforms. The program remains on track: the clean-up of undercapitalized banks has reached an advanced stage, and key reforms of Spain’s financial sector framework have been either adopted or designed. Indeed, the bulk of all of the measures for the entire program have now been completed. Going forward, it will be important to maintain this momentum with strong completion of initiated reforms and continued vigilant oversight, as risks to the economy and hence to the financial sector remain elevated as Spain undergoes a difficult process of fiscal and external adjustment. http://www.imf.org/external/np/sec/pr/2013/pr1334.htm

IMF – Publication: “The Interaction of Monetary and Macroprudential Policies” •

The IMF has publicised the captioned policy paper. “The recent crisis showed that price stability does not guarantee macroeconomic stability. In several countries, dangerous financial imbalances developed under low inflation and small output gaps. To ensure macroeconomic stability, policy has to include financial stability as an additional objective. But a new objective demands new tools: macroprudential tools that can target specific sources of financial imbalances (something monetary policy is not well suited to do). Effective macroprudential policies (which include a range of constraints on leverage and the composition of balance sheets) could then contain risks ex ante and help build buffers to absorb shocks ex post.” http://www.imf.org/external/np/pp/eng/2013/012913.pdf (Paper)(Paper) http://www.imf.org/external/np/pp/eng/2013/012713.pdf (Background Paper)

IMF – Working Paper •

Competition among Exchanges and Enforcement Policy – “In this paper, we explore how competition among stock exchanges, operated as self-regulatory organizations (SROs), affects the design of their members' surveillance. We develop a model where two for-profit SROs compete for trading volume, while brokers execute transactions on behalf of the investors and may misreport the true cash flow.” http://www.imf.org/external/pubs/ft/wp/2013/wp1337.pdf

•

Fiscal Consolidation and the Cost of Credit: Evidence from Syndicated Loans – “We examine how the cost of corporate credit varies around fiscal consolidations aimed at reducing government debt. Using a new dataset on fiscal consolidations and syndicated Page 4 of 7

corporate loan data, we find that loan spreads increase with fiscal consolidations, especially for small firms, domestic firms, and for firms with limited alternative financing sources.â&#x20AC;? http://www.imf.org/external/pubs/ft/wp/2013/wp1336.pdf FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 4-Feb 5-Feb close China 6.23 6.23 6.23 6.23 Hong Kong 7.75 7.76 7.75 7.75 Indonesia 9,793.00 9,727.00 9,664.00 9,662.00 Japan 86.75 92.77 92.38 92.96 Korea 1,064.40 1,097.38 1,084.78 1,087.00 Malaysia 3.06 3.12 3.10 3.09 Philippines 41.01 40.68 40.62 40.64 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.76 29.73 Vietnam 20,840.00 20,833.00 20,835.00 20,830.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change 0.03 0.00 0.02 -0.62 -0.20 0.22 -0.04 0.19 0.10 0.02

2013 YTD (%chg)

0.0 0.0 -0.1 -6.0 -2.2 -1.7 0.5 -1.3 2.0 0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

4-Feb 2,428.2 23,685.0 4,490.6 11,260.4 1,953.2 1,634.6 6,436.0 3,297.4 1,506.4 482.4

OVERNIGHT LENDING RATE (%) 4-Feb 5-Feb bps change 2.800 3.270 47.00 0.096 0.095 -0.14 4.189 4.187 -0.16 0.095 0.078 -1.75 2.750 2.750 0.00 3.000 3.000 0.00 1.437 0.795 -64.20 0.071 0.071 0.00 2.750 2.750 0.00 3.000 3.667 66.70

5-Feb

% change

2,433.1 23,148.5 4,479.4 11,046.9 1,938.2 1,633.4 6,470.5 3,272.7 1,503.9 477.4

0.20 -2.27 -0.25 -1.90 -0.77 -0.07 0.54 -0.75 -0.17 -1.04

2013 YTD (%chg) 7.2 -0.7 3.1 6.3 -4.6 -2.5 10.4 2.2 6.9 14.1

3-MONTH INTERBANK LENDING RATE (%) 4-Feb 5-Feb bps change 3.889 3.891 0.23 0.385 0.385 0.00 4.952 4.952 0.00 0.294 0.294 0.00 2.810 2.810 0.00 3.210 3.210 0.00 0.300 0.268 -3.20 0.377 0.377 0.00 2.868 2.868 0.00 6.786 6.750 -3.60

CREDIT DEFAULT SWAP (IN BPS) 1-Feb 4-Feb bps change China 68.69 68.73 0.04 Hong Kong 45.36 44.35 -1.01 Indonesia 142.82 143.89 1.07 Japan 74.01 72.61 -1.40 Korea 71.38 71.43 0.05 Malaysia 93.17 94.21 1.04 Philippines 104.07 106.19 2.13 Thailand 98.10 98.17 0.08 Vietnam 215.73 216.81 1.08 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag.

Page 5 of 7

4-Feb Gold Spot (in US$ per ounce)

5-Feb

1,674.3

% change

1,675.1

0.05

Sources: Bloomberg & Datastream

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)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a n.a n.a n.a 328.9 140.0 n.a n.a 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

SOUTH KOREA PHILIPPINES CHINA HONG KONG INDONESIA INDONESIA

Indicators

Foreign Exchange Reserve (USD bn) Consumer Price Index (YoY)% China HSBC Services PMI Purchasing Managers Index GDP Constant Price (QoQ)% GDP Constant Price (YoY)%

Period

Jan Jan Jan Jan 4Q 4Q

Last

328.91 3.0 54 52.5 -1.45 6.11

Previous 326.97 2.9 51.7 51.7 3.21 6.17

Page 6 of 7

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/4/2013

2/5/2013

2/7/2013

2/8/2013

Country

INDONESIA INDONESIA INDONESIA SOUTH KOREA PHILIPPINES CHINA HONG KONG INDONESIA INDONESIA SOUTH KOREA JAPAN THAILAND JAPAN SINGAPORE PHILIPPINES HONG KONG THAILAND MALAYSIA MALAYSIA JAPAN JAPAN CHINA MALAYSIA CHINA CHINA CHINA CHINA CHINA

Indicators

Consumer Confidence Index Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) Consumer Price Index (YoY)% China HSBC Services PMI Purchasing Managers Index GDP Constant Price (QoQ)% GDP Constant Price (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Confidence Economic Machine Orders YOY% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Current Account Balance YOY% Current Account Total (JPY bn) New Yuan Loans (RMB bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Producer Price Index (YoY)%

Period

Jan Jan Jan Jan Jan Jan Jan 4Q 4Q Jan Jan Jan Dec Jan Jan Jan Feb 1 Dec Dec Dec Dec Jan Jan 31 Jan Jan Jan Jan Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 6 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Climb as Yen Hits 3-Year Low; Europe Futures Steady. Japanese shares led a rally in Asian stocks as Toyota raised its earnings forecast and the yen weakened beyond 94 per dollar for the first time since May 2010. European stock futures were little changed and Australia’s dollar hit its low for the year. The Nikkei 225 Stock Average jumped 3.8 percent, the biggest advance since March 2011, and the MSCI Asia Pacific Index was 1.2 percent higher. Euro Stoxx 50 Index futures gained less than 0.1 percent as of 7:30 a.m. in London. S&P 500 Index contracts added 0.1 percent.

•

Euro Weakens Against Dollar, Yen Amid Spanish Political Turmoil. The euro fell versus the dollar and yen as European Central Bank policy makers led by Mario Draghi prepare to meet tomorrow amid political turmoil in Spain that threatens to deepen the debt crisis gripping the currency bloc. The 17-nation euro slid against most of its 16 major peers as Spanish Prime Minister Mariano Rajoy faced opposition calls to resign amid contested reports of corruption in his party. The euro area’s third-largest economy is scheduled to auction debt due between 2015 and 2029 tomorrow. The yen weakened to 94 per dollar for the first time since May 2010 on speculation Japan’s government will select a new central bank chief committed to ending deflation.

BREAKING NEWS GLOBAL •

Obama Urges Congress to Delay Automatic Spending Cuts. President Barack Obama’s call for Congress to postpone automatic spending cuts is landing at the doorstep of Senate Democrats to propose how to replace the reductions scheduled to take effect March 1. Obama urged lawmakers to act on a short-term package of spending cuts and tax-code changes, such as limiting tax breaks, to replace part of the $1.2 trillion in across-the- board reductions. The March 1 deadline marks another fiscal showdown between the administration and Republicans, who control the House of Representatives. Republican leaders have said they expect the spending cuts to take effect, because they won’t agree to new tax revenue that Obama and other Democrats are seeking along with a different blend of spending cuts.

•

S&P Lawsuit Undermined by SEC Rules Impeding Ratings Competition. The U.S. lawsuit against Standard & Poor’s raises pressure to accelerate competition in the ratings industry while the government itself has adopted rules that left the business dominated by the same companies whose flawed grades sparked the worst financial crisis since the Great Depression. The Justice Department accuses McGraw-Hill and its S&P unit of deliberately understating the risk of bonds backed by mortgages made to the riskiest borrowers to win business from Wall Street banks. S&P, Moody’s Investors Service and Fitch Ratings provided 96 percent of all ratings for governments and companies in the $42 trillion debt market in 2011, versus 97 percent in 2008.

•

RBS Said to Face Up to $783 Million Libor Manipulation Fine. Royal Bank of Scotland Group is set to pay 400 million to 500 million pounds ($783 million) in fines for

manipulating interest rates, the second-largest penalty imposed in a global regulatory probe. An RBS unit will plead guilty to criminal charges as part of a deal with the U.S. Justice Department, a person familiar with the talks said. It’s the third fine to result from a probe into whether lenders rigged the London interbank offered rate, or Libor. Investment banking chief John Hourican also was expected to resign, the people said. The penalty is the biggest blow to Chief Executive Officer Stephen Hester’s attempt to overhaul the Edinburgh-based bank after it took 45.5 billion pounds in a 2008 taxpayer bailout, the largest in history. The fine, the third to result so far from the global probe, would exceed the 290 million pounds Barclays Plc paid in June, and be second only to the $1.5 billion UBS AG paid in December. REGIONAL •

Danger Seen in Pension Fund Cuts on Abe Inflation. Prime Minister Shinzo Abe’s push to end deflation is cutting demand for the world’s largest debt pile among its biggest owners just as he ramps up spending. An auction of 10-year Japanese government bonds yesterday met the weakest demand since August, days after the public pension fund said it was considering reducing its JGB holdings. Investors seeking protection against inflation drove the five- year breakeven rate, a measure of expectations for consumer prices, above 1 percentage point this week for the first time in data going back to June 2009. The similar measure is 2.35 points in the U.S. and 1.25 points in Germany. Japan’s Government Pension Investment Fund, which oversees 108 trillion yen ($1.15 trillion), will hold talks in April about reducing its 67 percent allocation to domestic notes, President Takahiro Mitani said in a Feb. 1 interview. He said Abe’s targeting of 2 percent consumer-price increases will drive interest rates higher, with 10year JGB yields unlikely to remain below 1 percent should the economy recover.

•

Philippines May Find Peso Relief on Imports Gain. Philippine demand for capital goods imports, spurred by faster economic growth, may help counter the effect of surging inflows of funds from abroad and cool the peso’s gains, central bank Assistant Governor Cyd Amador said. “The peso could likely move within a narrower range, be more stable and less volatile,” Amador said in an interview. “On the one hand, the country’s bright growth prospects and expectations of its continuing strength could serve to draw in more foreign money. On the other hand, import requirements of the economy could rise as public and private investments increase.” Monetary easing from Japan to the U.S. has spurred demand for higher-yielding assets and boosted inflows into emerging markets, prompting policy makers to take action.

•

Myanmar May Allow Foreign Bank Joint Ventures as Early as April. Myanmar’s central bank may allow foreign lenders to form joint ventures with local banks as early as April in a further step to overhaul the financial system, according to an official who oversees regulatory issues. The central bank will set regulations for joint ventures in the financial year starting April 1, said Khin Saw Oo, head of the Financial Institutions Regulation and Anti-Money Laundering Department. Officials are considering a requirement that local banks own at least 20 percent of the venture, she said. “We will allow them at least two years’ time to form the joint ventures,” Khin Saw Oo said in an interview in the central bank’s headquarters in Naypyidaw yesterday. “After that we will allow the establishment of the subsidiary.” Joint ventures for foreign banks will eventually be followed by wholly owned subsidiaries and then full branches, Khin Saw Oo said. The Page 2 of 7

central bank will look for “reputable banks” to engage in partnerships, checking for financial soundness and setting capital requirements, she said. •

Bank Indonesia Calls for Onshore Rupiah Fixing Amid Probe. Indonesia’s central bank will tell local lenders to create an onshore reference rate to settle rupiah forward transactions domestically as rates set by the Association of Banks in Singapore are investigated. The fixing will be set by a group of local lenders and can be used as a benchmark to settle foreign-exchange forwards transactions within the country, Bank Indonesia Deputy Governor Halim Alamsyah said. It follows a similar move by Bank Negara Malaysia requiring the nation’s lenders to use a ringgit benchmark rate set onshore. The Monetary Authority of Singapore began a probe of the Association of Banks in Singapore in September to ascertain whether there was any manipulation of benchmarks, including daily fixings that are used to settle non-deliverable forwards.

•

China Approves Income Plan as Wealth Divide Poses Risks. China’s State Council approved an income-distribution plan intended to tackle the nation’s wealth gap, with the government describing the task as huge, complicated and unable to be completed in a single step. The 35-point blueprint targets boosting minimum wages to at least 40 percent of average salaries, loosening controls on lending and deposit rates and increasing spending on education and affordable housing. State-owned enterprises should contribute more to the treasury, according to a statement yesterday on the government’s website. The nation’s Gini coefficient was 0.474 in 2012, statistics bureau data showed last month, above the 0.4 level used by analysts as a gauge of the potential for social unrest.

IFIs NEWS (compiled from their websites) ADB – Press Release: ADB President to Meet Myanmar President •

The ADB President Haruhiko Kuroda will tomorrow meet Myanmar President U Thein Sein in Nay Pyi Taw, and on Friday speak at a conference in Yangon, as one of ADB’s first initiatives since resuming full operations. This is the first official visit by a head of a Multilateral Development Bank since arrears were cleared by Myanmar last month. http://www.adb.org/news/adb-president-meet-myanmar-president

FSB – Press Release: FSB completes peer review of South Africa •

The FSB published on 5 February 2013 the report on the peer review of South Africa. This forms part of a regular programme of peer reviews of FSB member jurisdictions that began in 2010. The report examines the progress in implementing two important financial reforms for South Africa that are relevant for the broader FSB membership: interagency coordination and the regulatory structure; and regulation of over-thecounter (OTC) derivatives markets. The draft report for discussion was prepared by a team of experts drawn from FSB member institutions. http://www.financialstabilityboard.org/press/pr_130205.pdf

IMF – Press Release: IMF’s Intensifying Engagement with Myanmar •

An IMF team headed by Mr. Anoop Singh, Director of the Asia Pacific Department visited Myanmar January 31-February 6, 2013, to discuss intensification of the IMF’s relations with the Government of the Union of Myanmar. Mr. Singh issued the following Page 3 of 7

statement at the conclusion of the visit: “The recent debt rescheduling agreements with the World Bank, Asian Development Bank and the Paris Club demonstrate the international community’s commitment to supporting the reform process. The IMF is closely assisting the Government of the Union of Myanmar develop and implement the policies to ensure macroeconomic stability and strengthen reforms under the Framework for Economic and Social Reforms supported by their SMP (Staff Monitored Program).” http://www.imf.org/external/np/sec/pr/2013/pr1339.htm OECD – Publication: “Strengthening Social Cohesion in Korea” •

The OECD has publicised the captioned report. Korea should build on its strong economy and well-educated workforce in order to meet the challenges of a fast-ageing population and rising income inequality, according to a new OECD report. http://www.oecd.org/newsroom/korea-must-strengthen-social-cohesion-to-boostgrowth.htm (Press Release) http://www.oecd.org/els/strengthening-social-cohesion-in-korea.htm (Report)

WTO – Press Release: Tajikistan to become 159th WTO member •

The WTO has announced that Tajikistan will become the 159th WTO member on 2 March 2013. The Working Party on the accession of Tajikistan was established by the General Council on 18 July 2001. Tajikistan completed its membership negotiations on 26 October 2012, when the Working Party adopted the accession package. The General Council approved the accession on 10 December 2012. http://www.wto.org/english/news_e/news13_e/acc_tjk_31jan13_e.htm

WTO – Press Release: “WTO and Singapore hold government procurement workshop for Asia-Pacific economies •

The WTO Secretariat, in co-operation with the Government of Singapore, organized a regional workshop on the WTO Agreement on Government Procurement and related aspects of national procurement policies in Singapore on 29-31 January 2013. Sixty-six participants from 22 WTO members in the Asia and Pacific participated in the workshop. http://www.wto.org/english/news_e/news13_e/gpro_29jan13_e.htm

World Bank – Press Release: World Bank Group to Support Myanmar’s Plan to Improve People’s Access to Electricity •

The World Bank Group and Myanmar reinforced their commitment to grow the economy, create jobs and reduce poverty through accelerated reforms and a focus on energy infrastructure development during a three-day visit by a high-level delegation led by IFC Executive Vice President and CEO Jin-Yong Cai. Mr. Cai was joined by World Bank East Asia and the Pacific Vice President Axel van Trotsenburg, IFC Asia Pacific Vice President Karin Finkelston, and MIGA Vice President Michel Wormser. The delegation agreed to support Myanmar in meeting its urgent need for electric power and in improving the telecommunications and banking sectors. http://www.worldbank.org/en/news/press-release/2013/02/05/World-Bank-Group-toSupport-Myanmar-8217-s-Plan-to-Improve-People-8217-s-Access-to-Electricity Page 4 of 7

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 5-Feb 6-Feb close China 6.23 6.23 6.23 6.23 Hong Kong 7.75 7.76 7.75 7.75 Indonesia 9,793.00 9,727.00 9,662.00 9,700.00 Japan 86.75 92.77 93.63 93.80 Korea 1,064.40 1,097.38 1,087.00 1,088.00 Malaysia 3.06 3.12 3.09 3.10 Philippines 41.01 40.68 40.64 40.68 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.77 29.79 Vietnam 20,840.00 20,833.00 20,830.00 20,830.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.01 0.01 -0.39 -0.18 -0.09 -0.29 -0.11 -0.16 -0.07 0.00

2013 YTD (%chg) 0.0 0.0 -0.5 -6.9 -2.2 -2.0 0.4 -1.5 1.8 0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

5-Feb 2,433.1 23,148.5 4,479.4 11,046.9 1,938.2 1,633.4 6,470.5 3,272.7 1,505.7 477.4

OVERNIGHT LENDING RATE (%) 5-Feb 6-Feb bps change 3.270 3.633 36.28 0.095 0.095 0.00 4.187 4.186 -0.12 0.095 0.078 -1.75 2.750 2.750 0.00 3.000 3.000 0.00 0.795 1.849 105.40 0.027 0.027 0.00 2.750 2.750 0.00 3.667 3.775 10.80

6-Feb

% change

2,434.5 23,256.9 4,499.0 11,463.8 1,936.2 1,614.1 6,431.4 3,276.5 1,502.9 488.4

0.06 0.47 0.44 3.77 -0.10 -1.18 -0.60 0.12 -0.19 2.30

2013 YTD (%chg) 7.3 -0.2 3.5 10.3 -4.7 -3.6 9.7 2.3 6.8 16.7

3-MONTH INTERBANK LENDING RATE (%) 5-Feb 6-Feb bps change 3.891 3.893 0.16 0.385 0.385 0.00 4.952 4.950 -0.20 0.294 0.294 0.00 2.810 2.810 0.00 3.210 3.210 0.00 0.268 0.200 -6.80 0.377 0.377 0.00 2.868 2.868 0.00 6.750 6.500 -25.00

CREDIT DEFAULT SWAP (IN BPS) 4-Feb 5-Feb bps change China 68.73 68.76 0.03 Hong Kong 44.35 44.35 0.00 Indonesia 143.89 145.87 1.98 Japan 72.61 74.58 1.97 Korea 71.43 70.96 -0.47 Malaysia 94.21 94.73 0.52 Philippines 106.19 105.28 -0.91 Thailand 98.17 99.19 1.01 Vietnam 216.81 220.93 4.11 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. Gold Spot (in US$ per ounce)

5-Feb 1,673.0

6-Feb 1,669.7

% change -0.19

Sources: Bloomberg & Datastream

Page 5 of 7

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)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

2013 31-Jan n.a n.a n.a n.a 328.9 140.0 n.a n.a 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

Singapore Singapore Singapore

Indicators

Automobile COE Open Bid Cat A Automobile COE Open Bid Cat B Automobile COE Open Bid Cat E

Period

Feb 6 Feb 6 Feb 6

Last

87109 92901 94890

Previous

91010 95501 97889

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/4/2013

Country

INDONESIA INDONESIA

Indicators

Consumer Confidence Index Net Foreign Assets (IDR Tln)

Period

Jan Jan

Page 6 of 7

2/5/2013

2/7/2013

2/8/2013

INDONESIA SOUTH KOREA PHILIPPINES CHINA HONG KONG INDONESIA INDONESIA SOUTH KOREA JAPAN THAILAND JAPAN SINGAPORE PHILIPPINES HONG KONG THAILAND MALAYSIA MALAYSIA JAPAN JAPAN CHINA MALAYSIA CHINA CHINA CHINA CHINA CHINA

Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) Consumer Price Index (YoY)% China HSBC Services PMI Purchasing Managers Index GDP Constant Price (QoQ)% GDP Constant Price (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Confidence Economic Machine Orders YOY% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Current Account Balance YOY% Current Account Total (JPY bn) New Yuan Loans (RMB bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Producer Price Index (YoY)%

Jan Jan Jan Jan Jan 4Q 4Q Jan Jan Jan Dec Jan Jan Jan Feb 1 Dec Dec Dec Dec Jan Jan 31 Jan Jan Jan Jan Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 7 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Most Asian Stocks Drop on Profit Concern. Most Asian shares dropped on earnings concern after Nikon and News Corp. cut forecasts and Japan’s Nikkei 225 Stock Average fell from a four-year high. The MSCI Asia Pacific Index slid 0.1 percent to 132.99 as of 5:17 p.m. in Tokyo, with about five shares falling for every four that rose. Japan’s Nikkei 225 lost 0.9 percent, retreating from yesterday’s highest closing level since September 2008, the month that Lehman Brothers Holdings Inc. collapsed. The benchmark regional equities gauge gained 8.9 percent in the three months through yesterday, led by Japanese shares as Prime Minister Shinzo Abe’s campaign for aggressive monetary policy easing weakened the yen, boosting the earnings outlook for exporters.

•

Euro Advances Before ECB Policy Decision, Spain Bond Auctions. The euro strengthened against the dollar and yen as European Central Bank policy makers meet today to set policy in the 17-member region. The shared currency rose versus all except one of its 16 major peers before Spain sells as much as 4.5 billion euros ($6.09 billion) of bonds amid opposition calls for Prime Minister Mariano Rajoy to step down amid reports of corruption. The euro advanced 0.4 percent to $1.3572 at 8:41 a.m. London time after falling to $1.3459 on Feb. 5, the weakest level since Jan. 29. The currency rose 0.5 percent to 127.25 yen after climbing to 127.71 yesterday, the strongest since April 2010. The yen fell 0.1 percent to 93.73 per dollar.

BREAKING NEWS GLOBAL •

Libor Accords Leave Banks Facing Massive State Claims. A multistate probe of alleged manipulation of interest rates threatens to leave banks liable for billions of dollars in estimated state and local losses from the scandal, even as they settle with national regulators. New York Attorney General Eric Schneiderman is helping lead a probe into claims that banks rigged global benchmarks for borrowing, adding to investigations by other authorities, including the U.S. Justice Department. Royal Bank of Scotland agreed yesterday to pay about $612 million to U.S. and U.K. regulators to resolve their claims. States have joined forces as banks reach settlements to resolve liability tied to Libor, or the London interbank offered rate. Barclays in June agreed to pay 290 million pounds ($454 million), and in December, UBS AG agreed to pay 1.4 billion Swiss francs ($1.5 billion).

•

Stournaras Sees Greek Recovery as Cash Returns. Greek Finance Minister Yannis Stournaras, appointed in June as Greece grappled with political turmoil that threatened to tip it out of the euro, says the economy could begin recovering by the end of this year as investors and depositors regain confidence in the country. Greece’s economy, which has lost a fifth of its output since 2008, is in the sixth year of a recession after pensions and wages were cut and taxes raised to avert the euro area’s first financial collapse. A turnaround could appear on a monthly or quarterly basis toward the end of this year, Stournaras said. He agreed with an International Monetary Fund forecast of a

return to annual growth of 0.6 percent in 2014. The Washington- based lender expects Greece’s economy to contract 4.2 percent this year. •

Sovereign Funds Seen Expanding Property Buying After Record Year. Sovereign wealth funds from China to Azerbaijan, which pushed their real estate deal making to a record last year, are set to extend their buying spree as they seek alternatives to low-yielding bonds and volatile stocks. The funds made 38 property investments valued at almost $10 billion in 2012, according to the Sovereign Investment Lab at Bocconi University in Milan, which has data going back to 1985. While lower than the $13 billion spent on real estate the year before, such deals were 21 percent of all sovereign fund investments last year, the highest percentage on record and topping the 2011 high of 16 percent. Sovereign wealth funds, state-owned investment vehicles that manage their countries’ surpluses from exports such as commodities, have said they plan more purchases this year, with the U.S. and Paris real estate markets among favorites.

REGIONAL •

PBOC Signals Inflation Concern as Economy Rebounds. China’s central bank signaled concern that inflation risks will increase and said that monetary easing by nations, including the U.S. and Japan, may push up commodity prices and make global capital flows more volatile. China must be alert to changes in price-gain expectations and to imported inflation, the People’s Bank of China said yesterday in its fourth-quarter monetary policy report. The costs of labor-intensive products, services and agricultural goods may rise persistently on slowing labor-supply growth, the PBOC said. Chinese officials are trying to sustain a rebound in growth without spurring a pickup in consumer or home prices as the Communist Party completes a once-a-decade power handover. Expansion in gross domestic product accelerated in the final three months of last year for the first time in two years.

•

Abe’s Easing Push Fuels Speculation on Negative Yields for BOJ. Prime Minister Shinzo Abe’s push for more easing by the Bank of Japan is fueling speculation that it may have to accept negative interest rates on the bonds it buys from financial institutions. Yields on Japan’s two-year note fell to 0.03 percent today, the lowest since 2002, as investors expect the early resignation of BOJ Governor Masaaki Shirakawa to hasten more aggressive easing measures. Cutting the 0.1 percent interest that the BOJ pays on lenders’ excess deposits, a move that policy makers have discussed, could lead to negative yields on bonds bought by the central bank, saidYasuhide Yajima, chief economist at NLI Research Institute in Tokyo.

•

Private sector in Indonesia needs to take lead in job creation. According to a jobs study released in January 2013 by the International Finance Corporation (IFC), the private sector provides 9 out of every 10 jobs. Therefore, it must play a key part of any lasting solution for job creation and poverty reduction. The IFC report identifies four main obstacles that impede job growth in the private sector: a weak investment climate, inadequate infrastructure, limited access to finance for micro, small and medium enterprises, and insufficient training and skills. Micro, small and medium enterprises can generate the most jobs in developing countries, including Indonesia. Much needed is support in financing and other assistance to grow their businesses and to realize their full potential.

Page 2 of 7

•

Microfinance loans climb in Cambodia. Loans and deposits at Cambodia's 32 microfinance institutions and four NGOs, as well as small loans from Acleda Bank, rose sharply last year compared with a year earlier. Industry players say this is a result of the country's rapid economic improvement and political stability. Official data from the Cambodia Microfinance Association (CMA) shows the value of loans outstanding rose about 38 percent to $890 million in 2012, compared with $644.6 million in 2011. Total deposits reached $280 million, a rise of 144 percent. Bun Mony, the general manager and chairman of Sathapana Ltd and chairman of CMA, told the Post last week the rapid growth of credit had mainly resulted from an increase in the number of new businesses and economic activity generally.

•

Suzuki to resume auto production in Myanmar. Japanese automaker Suzuki said on Wednesday that it will resume production in Myanmar, the latest in a push by Tokyo to tap the once-isolated state. Small-vehicle producer Suzuki, which has seen huge success in India with its Maruti Suzuki unit, said it will invest about $7 million to restart its wholly-owned Suzuki (Myanmar) Motor in the commercial capital Yangon. Production will start from May at the factory, which was operated as a joint venture with Myanmar's government between 1998 and 2010, a Suzuki spokesman said. The plant shuttered after the contract expired, the spokesman added, without saying why the agreement was not extended at the time.

IFIs NEWS (compiled from their websites) BIS – Publication: “Globalisation and inflation dynamics in Asia and the Pacific” •

The BIS has publicised the captioned report, which is a collection of presentations during the workshop on globalisation and inflation dynamics in Asia and the Pacific the BIS organised on June 18-19 in Hong Kong SAR. The topic was endorsed by the Asian Consultative Council in February 2012 as the new monetary stability research theme for the two-year research programme of the BIS Representative Office for Asia and the Pacific. http://www.bis.org/publ/bppdf/bispap70.pdf

BIS – Working Paper: “Understanding Global Liquidity” •

The BIS has publicised the captioned working paper. “We explore the concept of global liquidity based on a factor model estimated using a large set of financial and macroeconomic variables from 24 advanced and emerging market economies. The results suggest that global liquidity conditions are largely driven by three common factors and can therefore not be summarised by a single indicator. These three factors can be identified as global monetary policy, global credit supply and global credit demand.” http://www.bis.org/publ/work402.pdf

IMF – Press Release: Concludes 2013 Article IV Consultation with India •

The IMF has concluded the 2013 Article IV consultation with India. Executive Directors noted that India’s growth has slowed markedly due to structural and cyclical factors, while inflation remains elevated. Directors noted, however, that growth prospects continue to be strong and welcomed the authorities’ recent measures to address supply

Page 3 of 7

constraints and revive investment activity. Structural reforms, fiscal consolidation, and low inflation were seen as critical for a sustained recovery and to lower vulnerabilities. http://www.imf.org/external/np/sec/pn/2013/pn1314.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr1337.pdf (Staff Paper) IMF – Working Papers •

Monetary Transmission Mechanism in the East African Community: An Empirical Investigation “Do changes in monetary policy affect inflation and output in the East African Community (EAC)? We find that Monetary Transmission Mechanism (MTM) tends to be generally weak when using standard statistical inferences, but somewhat strong when using non-standard inference methods.” http://www.imf.org/external/pubs/ft/wp/2013/wp1339.pdf

•

Global House Price Fluctuations: Synchronization and Determinants - “We examine the properties of house price fluctuations across 18 advanced economies over the past 40 years. We find that house prices are synchronized across countries, and the degree of synchronization has increased over time. Global interest rate shocks tend to have a significant negative effect on global house prices whereas global monetary policy shocks per se do not appear to have a sizeable impact. Interestingly, uncertainty shocks seem to be important in explaining fluctuations in global house prices.” http://www.imf.org/external/pubs/ft/wp/2013/wp1338.pdf

OECD – Publication: “Economic Survey of the UK” •

The OECD has published the latest Economic Survey of the UK, which says “Fiscal consolidation needs to be embedded in a comprehensive package of reforms that boost growth and reduce inequality. Britain must continue to pursue pro-growth, as well as inequality reducing structural reforms in order to recover from the nation's deepest recession in nearly a century. The effects of the global financial crisis, turbulence from the euro area, and weak domestic demand risk prolonging the downturn. This could reduce the country’s long-term growth potential and add to social pressures.” http://www.oecd.org/newsroom/uk-boosting-growth-and-tackling-inequality-are-keysto-recovery.htm

World Bank – Launch of new Trade Costs database •

The UN ESCAP and the World Bank have jointly developed a new database on Trade Costs, which uses an innovative method to estimate trade costs in agriculture and manufactured goods, opening new analytical possibilities for policymakers and researchers interested in trade integration. According to the research, although the international economy has integrated considerably in recent decades, trade costs fall disproportionately on developing countries. http://www.worldbank.org/en/news/press-release/2013/02/06/developing-countriesface-higher-trade-costs

Page 4 of 7

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 6-Feb 7-Feb close China 6.23 6.23 6.23 6.23 Hong Kong 7.75 7.76 7.75 7.76 Indonesia 9,793.00 9,727.00 9,700.00 9,677.00 Japan 86.75 92.77 93.64 93.79 Korea 1,064.40 1,097.38 1,088.00 1,087.90 Malaysia 3.06 3.12 3.10 3.09 Philippines 41.01 40.68 40.68 40.66 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.78 29.76 Vietnam 20,840.00 20,833.00 20,830.00 20,820.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.02 -0.01 0.24 -0.16 0.01 0.17 0.05 0.12 0.07 0.05

2013 YTD (%chg) 0.0 -0.1 -0.2 -6.9 -2.2 -1.8 0.5 -1.4 1.9 0.1

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

6-Feb 2,434.5 23,256.9 4,499.0 11,463.8 1,936.2 1,614.1 6,431.4 3,276.5 1,500.4 488.4

OVERNIGHT LENDING RATE (%) 6-Feb 7-Feb bps change 3.633 3.650 1.72 0.095 0.095 0.00 4.186 4.185 -0.10 0.095 0.100 0.50 2.750 2.750 0.00 3.000 3.000 0.00 1.849 1.343 -50.60 0.027 0.027 0.00 2.750 2.750 0.00 3.775 4.067 29.20

7-Feb

% change

2,418.5 23,177.0 4,503.1 11,357.1 1,931.8 1,619.6 6,460.0 3,261.8 1,501.0 490.6

-0.66 -0.34 0.09 -0.93 -0.23 0.34 0.45 -0.45 0.04 0.46

2013 YTD (%chg) 6.6 -0.6 3.6 9.3 -4.9 -3.3 10.2 1.9 6.6 17.3

3-MONTH INTERBANK LENDING RATE (%) 6-Feb 7-Feb bps change 3.893 3.894 0.08 0.385 0.385 0.00 4.950 4.970 2.00 0.294 0.294 0.00 2.810 2.810 0.00 3.210 3.210 0.00 0.200 0.531 33.10 0.377 0.377 0.00 2.868 2.868 0.00 6.500 6.500 0.00

CREDIT DEFAULT SWAP (IN BPS) 5-Feb 6-Feb bps change China 68.76 65.82 -2.94 Hong Kong 44.35 43.36 -0.99 Indonesia 145.87 143.96 -1.91 Japan 74.58 70.69 -3.90 Korea 70.96 68.52 -2.44 Malaysia 94.73 91.75 -2.98 Philippines 105.28 103.40 -1.88 Thailand 99.19 96.28 -2.91 Vietnam 220.93 218.34 -2.59 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. Gold Spot (in US$ per ounce)

6-Feb 1,677.6

7-Feb 1,676.2

% change -0.08

Sources: Bloomberg & Datastream

Page 5 of 7

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)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

INDONESIA INDONESIA JAPAN THAILAND JAPAN SINGAPORE PHILIPPINES HONG KONG

Indicators

Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Consumer Confidence Economic Machine Orders YOY% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Currency Reserves (USD bn)

Period

Jan Jan Jan Jan Dec Jan Jan Jan

Last

1021.36 108.78 1267.299 72.1 -3.4 258.8 85.8 321

Previous

1056.08 112.78 1268.1 70.6 0.3 259.31 84.2 317.3

Page 6 of 7

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/4/2013

2/5/2013

2/7/2013

2/8/2013

Country

INDONESIA INDONESIA INDONESIA SOUTH KOREA PHILIPPINES CHINA HONG KONG INDONESIA INDONESIA SOUTH KOREA JAPAN THAILAND JAPAN SINGAPORE PHILIPPINES HONG KONG THAILAND MALAYSIA MALAYSIA JAPAN JAPAN CHINA MALAYSIA CHINA CHINA CHINA CHINA CHINA

Indicators

Consumer Confidence Index Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) Consumer Price Index (YoY)% China HSBC Services PMI Purchasing Managers Index GDP Constant Price (QoQ)% GDP Constant Price (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Confidence Economic Machine Orders YOY% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Current Account Balance YOY% Current Account Total (JPY bn) New Yuan Loans (RMB bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Producer Price Index (YoY)%

Period

Jan Jan Jan Jan Jan Jan Jan 4Q 4Q Jan Jan Jan Dec Jan Jan Jan Feb 1 Dec Dec Dec Dec Jan Jan 31 Jan Jan Jan Jan Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 8 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

European Stocks Rise on China Trade Report, EU Budget. European stocks rose for the first time in three days, paring a weekly decline, as trade data from China exceeded estimates and European Union leaders prepared the first-ever cuts in the bloc’s budget. U.S. futures were little changed, while Asian shares fell. The Stoxx Europe 600 Index advanced 0.4 percent to 285.05 at 8:05 a.m. in London, paring its weekly decline to 1.1 percent. The benchmark gauge has still gained 1.9 percent so far this year as U.S. lawmakers agreed on a compromise budget. Standard & Poor’s 500 Index futures added 0.1 percent today, while the MSCI Asia Pacific Index retreated 0.2 percent. About four stocks fell for every three that gained on the MSCI Asia Pacific Index, which rose 0.1 percent to 133.23 as of 4:22 p.m. in Hong Kong. The gauge is headed for a 0.4 percent gain for the week.

•

China Yuan Erases Gain to Touch Eight-Week Low Before Holiday. China’s yuan erased an earlier gain and touched an eight-week low on speculation investors pared holdings ahead of next week’s Lunar New Year holiday. The currency lost 0.09 percent since Feb. 1, falling for a third week, on concern a slide in the yen will prompt Chinese policy makers to rein in the exchange rate to protect exporters. The yuan strengthened as much as 0.14 percent earlier today as a report showed the nation’s overseas shipments grew more than economists estimated and after the central bank bolstered the currency’s reference rate by the most since October. The yen fell 7.7 percent against the dollar this year.

•

Treasuries Head for Biggest Weekly Gain in 2013. Treasuries headed for the biggest weekly gain in three months as efforts to trim the European Union budget raised concern the region’s economy will struggle to expand, boosting appetite for safer assets. Government securities drew demand after 10-year yields climbed to 2.06 percent this week, the highest level since April. European Central Bank President Mario Draghi signaled yesterday that a strengthening euro may hurt the currency bloc’s recovery. EU leaders are scheduled to finish a two-day meeting on the budget today, with U.K. Prime Minister David Cameron calling for cuts.

BREAKING NEWS GLOBAL •

EU Nears Cuts in Budget in Bow to Cameron’s Thrift Demand. European Union leaders prepared the first-ever cuts in the bloc’s budget, bowing to U.K. Prime Minister David Cameron’s insistence on thrift. After an all-night bargaining session interspersed with catnaps on couches at EU headquarters in Brussels, the leaders reassembled at 6:30 a.m. to consider a 2014-2020 spending ceiling of 960 billion euros ($1.3 trillion), down from an original proposal of 1.047 trillion euros and less than the 994 billion euros spent in the current budget cycle. At the center of the controversy was Cameron, making his first EU summit appearance since announcing plans for a referendum that could result in Britain leaving the 27-nation bloc as early as 2017. Britain’s demands for

savings ran into opposition from France, Italy and eastern and southern European economies keen to tap EU subsidies. •

Consumers Regaining Confidence as U.S. Hiring Improves. American consumers are starting to regain confidence as an improving job market eases the strain caused by a higher payroll tax. The Bloomberg Consumer Comfort Index climbed to minus 36.3 in the week ended Feb. 3, marking the first gain since the two percentage-point increase in the levy that funds Social Security took effect at the start of the year. Another report showed fewer workers filed claims for jobless benefits last week. Chains including Macy’s Inc., Gap Inc. and Target Corp.today reported January sales that topped analysts’ estimates, indicating gains in hiring, stock prices and home values are helping make up for the reduction in take-home pay. At the same time, climbing gasoline costs and looming cuts in government spending may prevent the world’s largest economy from making a stronger comeback following a fourth-quarter slump.

•

Stein Sees Signs of Excessive Risk Taking in Some Markets. Federal Reserve Governor Jeremy Stein said some credit markets, such as corporate debt, are showing signs of potentially excessive risk-taking, while not posing a threat to financial stability. “We are seeing a fairly significant pattern of reaching- for-yield behavior emerging in corporate credit,” Stein said today in a speech in St. Louis. Central bank officials, including Kansas City Fed President Esther George, are voicing increased concern that record-low interest rates are overheating markets for assets from farmland to junk bonds. Stein today cited leveraged loans and the junk bonds as areas that have been “very robust of late.” The Fed should be open to using policy tools such as interest rates to safeguard stability, Stein said, while not suggesting the central bank take any such action now. Chairman Ben S. Bernanke has argued for a clear separation between oversight and interest rate policy, saying regulation should be used to deal with assetprice bubbles. Last month he said he considers supervisory tools “the first line of defense” against such bubbles.

REGIONAL •

China Trade Tops Forecasts in Holiday-Distorted Month. China’s exports and imports rose more than estimated in a January that had five more working days than last year, helping sustain a growth rebound in the world’s second-biggest economy. Overseas shipments increased 25 percent from a year earlier, the customs administration said today, compared with the 17.5 percent median estimate in a Bloomberg News survey. Imports rose 28.8 percent, more than the 23.5 percent median estimate, and inflation was 2 percent. Separately, Japan posted back-to-back monthly current-account deficits for the first time since 1981. China’s data may indicate a strengthening economy, according to Nomura Holdings Inc., even as indicators in the first two months are distorted by the weeklong Lunar New Year holiday that was in January in 2012 and starts tomorrow for 2013. The new leadership, headed by Xi Jinping, is seeking to sustain a recovery without fueling inflation or spurring excessive financial risks from shadow banking and local-authority debt.

•

Myanmar Central Bank Revamp. The Central Bank of Myanmar will undergo its biggest revamp since the military junta set it up in 1990 as lawmakers prepare to vote on a bill that would allow it to conduct an independent monetary policy. The proposed legislation, drafted with the help of Japan, Thailand, the International Monetary Fund, Page 2 of 7

World Bank and Asian Development Bank, will pass with only “superficial changes” in parliament, according to Win Myint, a lawmaker who sits on the bank’s monetary affairs development committee. President Thein Sein may sign the bill next month, he said. Previously “only military officers were appointed to the central bank,” Win Myint said in an interview in Naypyidaw on Feb. 5. “Since they came from the military, they only received military management training. Now we are looking for experts in monetary policy, the banking sector and economic development.” Finding the right talent poses one of the central bank’s biggest challenges as it shifts from serving as the finance ministry’s money-printing arm into an autonomous authority responsible for macroeconomic stability. Thein Sein dismantled a fixed exchange rate last year and moved to clear $11 billion in bad debts as the country reconnects with the global financial system following about five decades of military rule. •

Japan Posts Back-to-Back Current-Account Deficit in December. Japan posted back-toback monthly current-account deficits for the first time since 1981, highlighting challenges for Prime Minister Shinzo Abe’s campaign to revive the economy. The shortfall in the widest measure of the nation’s trade was 264.1 billion yen ($2.8 billion) in December, the Ministry of Finance said in Tokyo today. The median estimate of 23 economists surveyed by Bloomberg News was for a deficit of 144.2 billion yen. Weakness in global demand, a spat with China and increased energy imports because of nuclear plant shutdowns are weighing on the world’s third-biggest economy as Abe pushes the Bank of Japan to end deflation and spur growth. The yen’s slide against the dollar is offering the prospect of an export revival.

•

Malaysia December Exports Unexpectedly Fall, Output Growth Slows. Malaysia’s exports unexpectedly dropped in December amid fewer shipments to the U.S. and China, while industrial production rose less than economists estimated. Overseas shipments fell 5.8 percent from a year earlier after rising a revised 2.3 percent in November, the Trade Ministry said today. Malaysia’s export-dependent economy remains vulnerable to fluctuations in global demand as the U.S. debates spending cuts and Europe continues to struggle with a debt crisis. The International Monetary Fund cut its global growth forecasts last month, and the nation’s central bank said in January world economic activity remains uneven. Imports fell 6.5 percent in December from a year earlier, after gaining 4.3 percent the previous month, today’s report showed. The trade surplus narrowed to 8.2 billion ringgit ($2.7 billion) from a revised 8.74 billion ringgit in November.

•

China Holiday Sales Seen Gaining as Economy Strengthens. From free hand pouches at Coach Inc. to discounts on flat-screen televisions at Gome Electrical Appliances Holding Ltd., retailers are dangling promotions to lure Chinese shoppers during next week’s Lunar New Year holiday. The offers combined with an improving economic outlook in the world’s second-largest economy are set to give retail sales a boost during the biggest buying season of the year. China’s retail sales for January and February may rise 15.4 percent, the fastest pace in 13 months, according to nine economists surveyed by Bloomberg.

Page 3 of 7

IFIs NEWS (compiled from their websites) ADB – Press Release: Regional Cooperation Key to Myanmar's Development - ADB President •

The ADB reconfirms its commitment to Myanmar’s development, ADB President Haruhiko Kuroda said today in a meeting with Myanmar President U Thein Sein. “I have come here today to reaffirm our long-term commitment to support Myanmar in addressing its development challenges and achieving its aspirations,” Mr. Kuroda said during his first visit to Myanmar since full ADB operations resumed last month. “We are determined to help accelerate inclusive growth, create income opportunities, bridge rural–urban gaps, and more closely integrate Myanmar within a region that is now the most dynamic in the world.” http://www.adb.org/news/regional-cooperation-key-myanmars-development-adbpresident

BIS – Publication: “International financial markets and bank funding in the euro area: dynamics and participants” •

The BIS has publicised the captioned report. This article investigates the development of bank funding in the euro area in recent years, analysing how euro area funding markets were severely disrupted by adverse feedback effects between the weaknesses of sovereigns and banks. http://www.bis.org/publ/othp18.pdf

BIS – Publication: “Proceedings of the Sixth IFC Conference on "Statistical issues and activities in a changing environment", Basel, 28-29 August 2012” •

The BIS has publicised the papers prepared for the captioned conference. http://www.bis.org/ifc/publ/ifcb36.htm

FSB – Press Release: FSB Regional Consultative Group for Sub-Saharan Africa holds its third meeting •

The FSB Regional Consultative Group for Sub-Saharan Africa held its third meeting on 7 February in Nairobi, Kenya. http://www.financialstabilityboard.org/press/pr_130207.pdf

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 January 29–February 7, 2013 for the ninth review of the government’s economic programme and met with a range of stakeholders. Ireland’s strong track record of programme implementation has been maintained, contributing to substantial improvements in market access and conditions for the sovereign and also – albeit more moderately – for the banks. EC/ECB/IMF mission teams continued technical discussions with the authorities on the scope for further improving the sustainability of the well-performing adjustment programme. Mission teams also began discussions on how best to prepare for and support a successful and durable exit from programme financing. http://www.imf.org/external/np/sec/pr/2013/pr1340.htm

Page 4 of 7

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 7-Feb 8-Feb close China 6.23 6.23 6.23 6.24 Hong Kong 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,727.00 9,677.00 9,657.00 Japan 86.75 92.77 93.63 92.87 Korea 1,064.40 1,097.38 1,087.90 1,095.80 Malaysia 3.06 3.12 3.09 3.10 Philippines 41.01 40.68 40.66 40.70 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.78 29.78 Vietnam 20,840.00 20,833.00 20,825.00 20,845.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.04 -0.01 0.21 0.82 -0.72 -0.21 -0.10 0.13 0.00 -0.10

2013 YTD (%chg) 0.0 -0.1 0.0 -6.0 -2.9 -2.0 0.4 -1.4 1.8 0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

7-Feb 2,418.5 23,177.0 4,503.1 11,357.1 1,931.8 1,619.6 6,460.0 3,261.8 1,499.8 490.6

OVERNIGHT LENDING RATE (%) 7-Feb 8-Feb bps change 3.650 2.410 -124.00 0.095 0.095 0.00 4.185 4.185 0.02 0.100 0.098 -0.25 2.750 2.750 0.00 3.000 3.000 0.00 1.343 1.457 11.40 0.032 0.032 0.00 2.750 2.750 0.00 4.067 4.350 28.30

8-Feb

% change

2,432.4 23,215.2 4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,498.3 494.0

0.57 0.16 -0.26 -1.80 0.99 0.26 -0.02 0.26 -0.10 0.70

2013 YTD (%chg) 7.2 -0.4 3.3 7.3 -3.9 -3.0 10.2 2.1 6.5 18.1

3-MONTH INTERBANK LENDING RATE (%) 7-Feb 8-Feb bps change 3.894 3.892 -0.21 0.385 0.385 0.00 4.970 4.954 -1.60 0.294 0.293 -0.17 2.800 2.800 0.00 3.210 3.210 0.00 0.531 0.594 6.30 0.377 0.377 0.00 2.868 2.868 -0.08 6.500 6.500 0.00

CREDIT DEFAULT SWAP (IN BPS) 6-Feb 7-Feb bps change China 65.82 67.31 1.50 Hong Kong 43.36 43.36 0.01 Indonesia 143.96 143.51 -0.46 Japan 70.69 72.14 1.46 Korea 68.52 69.02 0.50 Malaysia 91.75 92.75 1.00 Philippines 103.40 103.46 0.06 Thailand 96.28 96.31 0.03 Vietnam 218.34 218.74 0.40 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. Gold Spot (in US$ per ounce)

7-Feb 1,671.4

8-Feb 1,670.4

% change -0.06

Sources: Bloomberg & Datastream

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 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

INDONESIA THAILAND MALAYSIA MALAYSIA JAPAN JAPAN CHINA CHINA CHINA CHINA CHINA CHINA

Indicators

Consumer Confidence Index Foreign Reserves (USD bn) Imports YoY% Exports YoY% Current Account Balance YOY% Current Account Total (JPY bn) New Yuan Loans (RMB bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Producer Price Index (YoY)%

Period

Jan Feb 1 Dec Dec Dec Dec Jan Jan Jan Jan Jan Jan

Last

116.2 181.6 -6.5 -5.8 -199.4 -264.1 1070 28.8 25 29.15 2 -1.6

Previous

116.4 181.6 4.3 3.3 -276.4 -222.4 454.3 6.0 14.1 31.62 2.5 -1.9

Page 6 of 7

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/4/2013

2/5/2013

2/7/2013

2/8/2013

Country

INDONESIA INDONESIA INDONESIA SOUTH KOREA PHILIPPINES CHINA HONG KONG INDONESIA INDONESIA SOUTH KOREA JAPAN THAILAND JAPAN SINGAPORE PHILIPPINES HONG KONG THAILAND MALAYSIA MALAYSIA JAPAN JAPAN CHINA MALAYSIA CHINA CHINA CHINA CHINA CHINA

Indicators

Consumer Confidence Index Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) Consumer Price Index (YoY)% China HSBC Services PMI Purchasing Managers Index GDP Constant Price (QoQ)% GDP Constant Price (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Confidence Economic Machine Orders YOY% Foreign Reserves (USD mn) Foreign Reserves (USD mn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Current Account Balance YOY% Current Account Total (JPY bn) New Yuan Loans (RMB bn) Foreign Reserves (USD bn) Imports YoY% Exports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Producer Price Index (YoY)%

Period

Jan Jan Jan Jan Jan Jan Jan 4Q 4Q Jan Jan Jan Dec Jan Jan Jan Feb 1 Dec Dec Dec Dec Jan Jan 31 Jan Jan Jan Jan Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 13 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

European Stocks Little Changed; Societe Generale Falls. European stocks were little changed before euro-area industrial output data and as U.S. President Barack Obama pledged to expand trade with the region. U.S. futures were also little changed, while most Asian markets were closed for the Lunar New Year. Societe Generale SA retreated 3.4 percent after posting a fourth-quarter loss that missed analyst estimates. PSA Peugeot Citroen gained 3.3 percent after it reported a narrower operating loss than analysts had predicted. The benchmark Stoxx 600 lost 0.1 percent to 286.94 at 8:32 a.m. in London, after yesterday gaining 0.5 percent. The gauge has advanced 2.6 percent this year as U.S. lawmakers agreed on a budget avoiding tax increases and spending cuts that had threatened to push the world’s largest economy into a recession. Standard & Poor’s 500 Index futures added 0.1 percent. Markets in China and Hong Kong were closed. The volume of shares changing hands in companies listed on the Stoxx 600 was less than 0.1 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

•

Asian Stock Gains Tempered by Falling Japanese Shares. Asia’s benchmark stocks gauge traded at an 18-month high as earnings from Commonwealth Bank of Australia and Leighton Holdings Ltd. boosted investor optimism. Japanese shares dropped as a stronger yen soured the earnings outlook for exporters. The MSCI Asia Pacific Index gained less than 0.1 percent to 133.49 as of 3:23 p.m in Tokyo. About the same number of shares rose and fell. Equity markets in Singapore and Malaysia reopened today after public holidays, while markets in China, Hong Kong, Taiwan and Vietnam remain shut.

•

Oil Near One-Week High; API Reports First Inventory Drop. West Texas Intermediate traded near the highest level in more than a week after a second day of gains. U.S. crude stockpiles declined for the first time this year, according to the American Petroleum Institute.Futures were little changed in New York after climbing 0.5 percent yesterday. Crude inventories fell 2.3 million barrels last week, the first drop in six weeks, data from the industry- funded API showed yesterday. An Energy Information Administration report today may show supplies rose, according to a Bloomberg News survey of analysts. The Energy Department increased its WTI price forecast for 2013.

BREAKING NEWS GLOBAL •

No Agreement on $1.2 Trillion in Cuts as Deadline Nears. Democrats and Republicans in the U.S. Congress are nowhere near a plan to avert $1.2 trillion in spending cuts about two weeks before they are set to begin.It’s the latest in a series of fiscal deadlines created by Congress that in the past two years took the U.S. to the brink of a debt default, a government shutdown and middle-class tax increases that neither party wanted. Unless lawmakers act, the across-the-board spending reductions will begin March 1.

•

G-7 Roils Currency Markets With Split on Concern Over Yen. Group of Seven policy makers roiled the currency markets they sought to calm amid conflicting messages on how much of an economic threat is posed by the weakening yen. The yen whipsawed as

the G-7 appeared at first yesterday to signal joint acceptance of the Japanese currency’s recent drop, only to see its members offer contradictory interpretations of the group’s stance. One G-7 official said there’s concern about excessive moves in the yen, while the U.K. said the group wasn’t singling out an individual country or exchange rate. •

King Inflation Stance Backed by CBI Amid Elusive Recovery. The Bank of England is right to look through accelerating inflation to help the economy, the country’s biggest business lobby group said, backing Governor Mervyn King’s view that tighter policy now would be a mistake. As King prepares to publish the Bank of England’s latest economic outlook in its Inflation Report in London today, the Confederation of British Industry cut its 2013 growth projection to 1 percent from 1.4 percent and forecast that the central bank will keep policy unchanged until near the end of 2014. The CBI endorsement follows a BOE statement last week that its current stance is “appropriate” as the recovery struggles to build momentum. Inflation has been above the central bank’s target for more than three years, and policy makers’ forecast for a further acceleration means King won’t see it return to the goal before he retires in less than five months.

REGIONAL •

Cnooc Wins Final Approval for $15.1 Billion Nexen Buy. Cnooc Ltd., China’s biggest offshore oil and natural gas producer, won approval to acquire the U.S. assets of Nexen Inc., its last regulatory hurdle in the $15.1 billion purchase of the Canadian energy company. The Committee on Foreign Investment in the U.S. approved the deal, now expected to close the week of Feb. 25, Nexen said in a statement yesterday. The panel reviews takeovers by foreign-owned companies for national security implications. Cnooc’s acquisition of the Calgary-based company falls under U.S. jurisdiction because of Nexen’s Gulf of Mexico oil and gas operations, which account for about 8 percent of its output.

•

Japanese Stocks Decline as Yen Gains on G-7. Japanese stocks fell, with the Topix Index erasing yesterday’s advance, as the yen climbed after Group of Seven officials gave conflicting signals about the currency’s volatility. Gree Inc. plunged after cutting its profit forecast.Toyota Motor Corp., the world’s biggest auto manufacturer, lost 1.8 percent. Gree slumped 15 percent after reducing its outlook on delays to new socialnetworking games. Pioneer Corp., a maker of audio equipment, plunged 11 percent after forecasting a loss. Daikin Industries Ltd. lost 6.1 percent as the maker of air conditioners was cut to underperform from outperform at CLSA after net income fell. The Nikkei 225 Stock Average slid 1 percent to close at 11,251.41 in Tokyo, with trading volume 10 percent above the 30- day average. The broader Topix fell 1.2 percent to 957.02, with more than six stocks dropping for each that gained, eliminating yesterday’s 1.2 percent gain.

•

Malaysia PM Lobbied Canada on Petronas Bid for Progress. Malaysian Prime Minister Najib Razak asked his Canadian counterpart Stephen Harper to reverse the initial rejection of Petroliam Nasional Bhd.’s C$5.2 billion ($5.2 billion) takeover of Progress Energy Resources Corp., correspondence between the two leaders shows. Najib wrote to Harper promising that Petronas, as the country’s state-owned oil company is known, would invest C$68 billion to C$70 billion over 30 years to develop the natural gas reserves of Calgary-based Progress, according to a Nov. 2 letter obtained by Bloomberg News under Canada’s freedom-of-information law.

Page 2 of 7

•

S. Korea Household Loans Post Record Fall on Tax Break End. South Korea’s bank lending to households fell the most on record after home-transaction tax benefits expired at the end of last year. Banks’ loans to households declined 3.5 trillion won ($3.2 billion) last month to 463.1 trillion won, the biggest drop since the central bank began to compile the data in 2003, the Bank of Korea said in an e-mailed statement today. Mortgage lending dropped 2.3 trillion won to 314.7 trillion won while loans to companies rose 4.7 trillion won to 593.7 trillion won.

IFIs NEWS (compiled from their websites) Basel Committee – Press Release: Consultative paper - Mortgage insurance: market structure, underwriting cycle and policy implications •

The Joint Forum has released a consultative report on Mortgage insurance: market structure, underwriting cycle and policy implications. This report examines the interaction of mortgage insurers with mortgage originators and underwriters. The report sets out the recommendations directed at policymakers and supervisors with the aim of reducing the likelihood of mortgage insurance stress and failure in such tail events. Comments on this consultative report should be submitted by 30 April 2013 either by email to baselcommittee@bis.org or by post to the Secretariat of the Joint Forum. http://www.bis.org/publ/joint30.htm (Press Release) http://www.bis.org/publ/joint30.pdf (Paper)

FSB – Press Release: FSB completes thematic peer review on risk governance •

The FSB published on 12 February a thematic peer review on risk governance. The report takes stock of risk governance practices at both national authorities and firms, notes progress made since the financial crisis, identifies sound practices and offers recommendations to support further improvements. http://www.financialstabilityboard.org/press/pr_130212.pdf

G20 – Event: G20 Finance Ministers and Central Bank Governors' Meeting •

The first G20 Finance Ministers and Central Bank Governors' Meeting within Russia's Presidency will be held on February 15-16 in Moscow. Delegates are going to discuss traditional G20 agenda, such as global economy outlook, implementation of the G20 Framework agreement for strong, sustainable and balanced growth, as well as further implementation of the IFA's reform and financial regulation reforms. According to the Agenda delegates are planning to continue developing Russia's priority issues - the financing for investment and government borrowing and public debt management. http://www.g20.org/events_financial_track/20130215/780960861.html http://www.g20.org/events_financial_track/20130214/781042181.html (Deputies’ meeting)

G20 – Event: Side events to G20 meeting •

The following side events have been announced at the time of G20 Finance Ministers and Central Bank Governors' Meeting in Moscow: • The Bretton Woods Committee’s seminar - The seminar "Investment and Investment Finance: the Supply and Demand of Long Term Finance", organized by

Page 3 of 7

•

•

the Reinventing Bretton Woods Committee together with the Ministry of Finance of Russia, will be held on February 13-14 at the Marriott Royal Aurora Hotel in Moscow. http://www.g20.org/news/20130207/781179089.html The IIF conference on the G20 Agenda – The conference "The G20 Agenda under the Russian Chairmanship" will be held on February 14-15, 2013 at the Ritz-Carlton in Moscow. This special roundtable event is organized by the Institute of International Finance in cooperation with Ministry of Finance of Russia. The conference is dedicated to identifying the key risks in the global economy and interaction between public and private-sector on the overcoming the effects of the financial crisis. http://www.g20.org/news/20130207/781178954.html The OECD Going for Growth report – The OECD 2013 Going for Growth report will be presented on February 15, 2013 in the Central Exhibition Hall Manezh. This event will be held within the framework of G20 Finance Ministers and Central Bank Governors' Meeting. OECD Secretary-General Angel Gurria will make presentation together with the Minister of Finance of the Russian Federation Anton Siluanov. http://www.g20.org/news/20130207/781179348.html

IMF – Working Paper •

The IMF has publicised the following working papers: • Infrastructure and Income Distribution in ASEAN-5: What are the Links? – Adequate infrastructure has long been viewed as an important factor in economic development. Based on regressions covering 76 advanced and emerging market economies, this paper estimates the impact of infrastructure and investment on income distribution. http://www.imf.org/external/pubs/ft/wp/2013/wp1341.pdf • Growth and Employment in the Dominican Republic: Options for a Job-Rich Growth - The Dominican Republic has posted high rates of output and productivity growth, but labor market indicators have remained weak during the past 20 years. This paper documents these trends, showing that the rapid productivity growth originates in a few sectors, while the bulk of job creation is concentrated elsewhere. http://www.imf.org/external/pubs/ft/wp/2013/wp1340.pdf

OECD – Publication: “Addressing Base Erosion and Profit Shifting (BEPS)” •

The OECD has published the captioned report commissioned by the G-20. It finds that some multinationals use strategies that allow them to pay as little as 5% in corporate taxes when smaller businesses are paying up to 30%. OECD research also shows that some small jurisdictions act as conduits, receiving disproportionately large amounts of Foreign Direct Investment compared to large industrialised countries and investing disproportionately large amounts in major developed and emerging economies. http://www.oecd.org/newsroom/oecd-urges-stronger-international-co-operation-oncorporate-tax.htm

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close close China 6.23 6.23 Hong Kong 7.75 7.76 Indonesia 9,793.00 9,727.00

8-Feb 6.24 7.76 9,657.00

13-Feb 6.23 7.76 9,635.00

% change 0.05 -0.01 0.23

2013 YTD (%chg) 0.0 -0.1 0.2

Page 4 of 7

Japan 86.75 92.77 92.68 93.27 Korea 1,064.40 1,097.38 1,095.80 1,086.94 Malaysia 3.06 3.12 3.10 3.09 Philippines 41.01 40.68 40.70 40.67 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.80 29.84 Vietnam 20,840.00 20,833.00 20,845.00 20,840.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

-0.63 0.82 0.25 0.07 -0.04 -0.13 0.02

-6.4 -2.2 -1.8 0.4 -1.5 1.6 0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

8-Feb 2,432.4 23,215.2 4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

OVERNIGHT LENDING RATE (%) 8-Feb 13-Feb bps change 2.410 2.410 0.00 0.095 0.095 0.00 4.185 4.177 -0.81 0.098 0.098 0.00 2.750 2.750 0.00 3.000 3.000 0.00 1.457 1.550 9.30 0.077 0.077 0.00 2.750 2.750 0.00 4.350 4.350 0.00

13-Feb

% change

2,432.4 23,215.2 4,571.6 11,251.4 1,976.1 1,631.2 6,528.0 3,301.0 1,511.6 494.0

0.00 0.00 1.79 0.88 1.29 0.45 1.07 0.94 0.95 0.00

2013 YTD (%chg) 7.2 -0.4 5.2 8.2 -2.7 -2.6 11.4 3.1 7.4 18.1

3-MONTH INTERBANK LENDING RATE (%) 8-Feb 13-Feb bps change 3.892 3.892 0.00 0.385 0.385 0.00 4.954 4.915 -3.90 0.293 0.284 -0.83 2.800 2.800 0.00 3.210 3.210 0.00 0.594 0.592 -0.20 0.377 0.377 0.00 2.868 2.864 -0.38 6.500 6.500 0.00

CREDIT DEFAULT SWAP (IN BPS) 6-Feb 7-Feb bps change China 65.82 67.31 1.50 Hong Kong 43.36 43.36 0.01 Indonesia 143.96 143.51 -0.46 Japan 70.69 72.14 1.46 Korea 68.52 69.02 0.50 Malaysia 91.75 92.75 1.00 Philippines 103.40 103.46 0.06 Thailand 96.28 96.31 0.03 Vietnam 218.34 218.74 0.40 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 8-Feb Gold Spot (in US$ per ounce)

1,667.3

13-Feb

% change

1,646.9

-1.22

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan

S&P AAAAA BB+ AA-

Moody's Aa3 Aa1 Baa3 --

Fitch A+ AA+ BBBAA

Page 5 of 7

Korea Malaysia Philippines Singapore Thailand Vietnam

A ABB+ AAA BBB+ BB-

Aa3 A3 Ba1 -Baa1 B1

A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

31-Aug 3,272.9 298.2 109.0 1,273.2 316.9 134.9 80.7 246.2 179.2 n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

30-Sep 3,285.1 301.2 110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 n.a

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

SOUTH KOREA SOUTH KOREA

Indicators

Period

Unemployment Rate (SA)% Bank Lending to HH (KRW Tln)

Jan Jan

Last

3.0 466.5

Previous

3.2 463.1

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/13/2013

2/14/2013

Country

Indicators

Period

SOUTH KOREA

Unemployment Rate (SA)%

Jan

SOUTH KOREA

Bank Lending to HH (KRW Tln)

Jan

SOUTH KOREA

South Korea 7-Day Repo Rate %

Feb 14

JAPAN

Gross Domestic Product (QoQ)%

4Q P

JAPAN

GDP Annualized %

4Q P

JAPAN

Nominal GDP (QoQ)%

4Q P

CHINA

Actual FDI (YoY)%

Jan

Page 6 of 7

2/15/2013

THAILAND

Foreign Reserves (USD bn)

Feb 8

JAPAN

Capacity Utilization (MoM)%

Dec F

JAPAN

Industrial Production YOY%

Dec F

SINGAPORE

Retail Sales (YoY)%

Dec

PHILIPPINES

Overseas Remittances (YoY)%

Dec

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 14 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Gain to 18-Month High After BOJ Meeting. Asian stocks rose after the Bank of Japan maintained its asset purchasing program amid speculation an unexpected contraction in Japan’s economy in the fourth quarter will boost Prime Minister Shinzo Abe’s efforts to end deflation. The MSCI Asia Pacific Index climbed 0.3 percent to 133.65 as of 2:09 p.m. in Hong Kong, headed for the highest closing level in 18 months. About four shares advanced for each three that fell. Hong Kong’s market reopened today while China, Taiwan, and Vietnam remain shut for public holidays.

•

European Stocks Are Little Changed; BNP Paribas Climbs European stocks were little changed as companies from BNP Paribas SA to Rio Tinto Group reported results and German, French and Japanese economies shrank in the fourth quarter. U.S. index futures were little changed, while Asian shares advanced. BNP Paribas, France’s largest bank, rose 2.6 percent after increasing its dividend. Rio Tinto Group added 1.8 percent after reporting second-half loss that was narrower than projected. The Stoxx Europe 600 Index slipped less than 0.1 percent to 288.23 at 8:05 a.m. in London. The equity benchmark has gained 3.1 percent this year as U.S. lawmakers agreed on a compromise federal budget. Futures on the Standard & Poor’s 500 Index fell less than 0.1 percent. The MSCI Asia Pacific Index gained 0.2 percent.

•

Gold Demand Rose 3.8% in Fourth Quarter, Narrowing Annual Drop Gold demand rose 3.8 percent in the fourth quarter as Indian purchases jumped, narrowing the first drop in annual usage in three years, the World Gold Council said. India remained last year’s biggest buyer, ahead of China. Global demand gained to 1,195.9 metric tons in the quarter, the most ever for an October-to-December period, from 1,151.7 tons a year earlier, as Indian consumption surged 41 percent, the London-based industry group said today in a report. Jewelry usage rose 11 percent to the highest since the first quarter of 2011, leaving total demand for 2012 down 3.9 percent at 4,405.5 tons. That’s still 15 percent more than the five-year average.

BREAKING NEWS GLOBAL •

Obama Deficit Vow in Speech Leaves Billions to Be Found. President Barack Obama said the proposals in his State of the Union speech won’t increase the U.S. deficit “by a single dime.” He didn’t say they’d be free. The president’s wish list, involving a mix of one-time and continuing costs, amounts to billions of dollars largely to boost the economy and job creation. Just how many billions will become clearer when he submits his budget proposal to Congress in mid-March.

•

American Wage Gains Seen Spurring Greater Job Mobility. More American employees may voluntarily quit their jobs this year as an increase in wages and openings boosts confidence in the labor market. About 2.2 million U.S. workers resigned in December, a 7.4 percent increase from a year earlier, based on seasonally- adjusted data from the

Department of Labor. These employees represent 53 percent of total separations, the highest since June 2008. •

German Economy Contracted More Than Forecast in 4Q. The German economy, Europe’s largest, shrank more than economists forecast in the fourth quarter as exports declined. Gross domestic product fell 0.6 percent from the third quarter, when it gained 0.2 percent, the Federal Statistics Office in Wiesbaden said today. That’s more than the 0.5 percent contraction predicted in a Bloomberg News survey of 47 economists. The French economy also shrank more than forecast, with GDP falling 0.3 percent in the fourth quarter.

REGIONAL •

China’s Citic to Buy 13% Stake in Alumina for A$452 Million. Citic Group Corp., China’s largest state-owned investment company, will pay about A$452 million ($468 million) for a stake in Alumina Ltd., partner in the world’s biggest alumina business. Alumina’s shares soared. Citic, through its Citic Resources Holdings Ltd. and Citic Ltd. units, will take a 13 percent stake by agreeing to purchase about 366 million new shares at A$1.235 each, 3 percent higher than Alumina’s close yesterday, the Melbourne-based company said today in a statement.

•

Japan GDP Decline Strengthens Abe’s Case for Stimulus. Japan’s economy unexpectedly shrank last quarter as falling exports and a business investment slump outweighed improved consumption, bolstering Prime Minister Shinzo Abe’s case for more monetary stimulus to end deflation. Gross domestic product contracted an annualized 0.4 percent, following a revised 3.8 percent fall in the previous quarter, the Cabinet Office said in Tokyo today. The median forecast of 32 economists surveyed by Bloomberg News was for 0.4 percent growth. Nominal GDP shrank 0.4 percent on quarter. The prolonging of Japan’s recession into a third quarter shows that benefits from a weaker yen and rising stocks have yet to be felt. The lower house of parliament passed Abe’s fiscal stimulus package today, while Bank of Japan Governor Masaaki Shirakawa and his colleagues raised their assessment for the economy and left monetary policy unchanged.

•

South Korea Keeps Rates on Hold as Officials Watch Yen Slide. South Korea’s central bank kept interest rates on hold as officials monitor the won’s gains against the yen and look ahead to policy changes after President Park Geun Hye takes office Feb. 25. Governor Kim Choong Soo and his board kept the benchmark seven-day repurchase rate at 2.75 percent after a 25 basis point cut in October, the central bank said in a statement in Seoul today. For a second month, the decision was not unanimous. Fourteen of 15 economists surveyed by Bloomberg News predicted the decision and one forecast a cut.

•

Indonesia’s Palm Oil Exports Seen Poised for 4-Month Low. Palm oil shipments from Indonesia, the world’s largest grower, may decline to the lowest level in four months in February as more buyers turn to Malaysia after it extended duty-free shipments to clear record stockpiles. Exports will probably drop 5.6 percent to 1.51 million metric tons from January, according to the median of estimates from three plantation companies, one analyst and one refiner compiled by Bloomberg. Output may fall 8 percent to 2 million tons, while inventories contract 14 percent to 3 million tons.

Page 2 of 6

IFIs NEWS (compiled from their websites) G20 – Press Release: The first International Financial Architecture Working Group within Russia’s Presidency in the G20 took place in Moscow •

The IFA Working Group meeting was held on February 13, 2013 in Moscow (Russia). The representatives of the G20 Finance Ministries and Central Banks and experts from IMF, World Bank, OECD, BIS, G24 took part in the meeting. During the meeting participants reaffirmed the need to continue the work towards further increasing the efficiency and legitimacy of the IMF governance structure and complete it in accordance with the earlier agreed commitments by January 2014. http://www.g20.org/news/20130213/781184424.html

IMF – Press Release: Consultation on the 2013 Review of the IMF’s Transparency Policy •

The IMF is seeking the views on its Transparency Policy in the context of the 2013 Review. This on-line consultation process will be open until March 22, 2013. We would be grateful for your input and have suggested several questions below for your consideration. Please send your reply, and any other comments/questions you might have on the Review and this consultation, to IMFconsultation@imf.org. http://www.imf.org/external/np/exr/consult/2013/transpol/index.htm

IMF – Publication: “A Banking Union for the Euro Area” •

The IMF has publicised the captioned staff discussion note. This note elaborates the case for, and the design of, a banking union for the euro area. It discusses the benefits and costs of a banking union, presents a steady state view of the banking union, elaborates difficult transition issues, and briefly discusses broader EU issues. As such, it assesses current plans and provides advice. It is accompanied by three background technical notes that analyze in depth the various elements of the banking union: a single supervisory framework; a single resolution and common safety net; and urgent issues related to repair of weak banks in Europe. http://www.imf.org/external/pubs/ft/sdn/2013/sdn1301.pdf

IMF – Working Paper: “Macroeconomic Evaluation of Labor Market Reform in Germany” •

The IMF has publicised the captioned working paper. “In 2005 the German government implemented the so-called Hartz IV reform, which amounted to a complete overhaul of the German unemployment insurance system and resulted in a significant reduction in unemployment benefits for the long-term unemployed. In this paper, we use an incomplete-market model with search unemployment to evaluate the macro-economic and welfare effects of the Hartz IV reform.” http://www.imf.org/external/pubs/ft/wp/2013/wp1342.pdf

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close close China 6.23 6.23 Hong Kong 7.75 7.76 Indonesia 9,793.00 9,727.00 Japan 86.75 92.77 Korea 1,064.40 1,097.38 Malaysia 3.06 3.12

13-Feb 6.23 7.76 9,635.00 93.39 1,086.94 3.09

14-Feb 6.23 7.76 9,656.00 93.48 1,083.59 3.09

% change 0.00 0.01 -0.22 -0.10 0.31 0.04

2013 YTD (%chg) 0.0 -0.1 0.0 -6.6 -1.8 -1.7

Page 3 of 6

Philippines 41.01 40.68 40.67 40.63 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.85 29.82 Vietnam 20,840.00 20,833.00 20,835.00 20,840.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

0.11 0.06 0.10 -0.02

0.5 -1.3 1.7 0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,419.0 23,721.8 4,481.6 11,191.3 1,957.8 1,627.6 6,318.6 3,291.1 1,499.2 483.4

13-Feb 2,432.4 23,215.2 4,571.6 11,251.4 1,976.1 1,631.2 6,528.0 3,301.0 1,514.1 494.0

OVERNIGHT LENDING RATE (%) 13-Feb 14-Feb bps change 2.410 2.410 0.00 0.095 0.095 0.00 4.177 4.176 -0.14 0.100 0.100 0.00 2.750 2.750 0.00 3.000 3.000 0.00 1.550 0.763 -78.70 0.079 0.079 0.00 2.750 2.750 0.00 4.350 4.350 0.00

14-Feb

% change

2,432.4 23,413.3 4,588.7 11,307.3 1,979.6 1,630.9 6,513.4 3,294.1 1,523.6 494.0

0.00 0.85 0.37 0.50 0.18 -0.02 -0.22 -0.21 0.63 0.00

2013 YTD (%chg) 7.2 0.4 5.6 8.8 -2.5 -2.6 11.1 2.9 8.3 18.1

3-MONTH INTERBANK LENDING RATE (%) 13-Feb 14-Feb bps change 3.892 3.892 0.00 0.385 0.386 0.07 4.915 4.914 -0.07 0.284 0.280 -0.42 2.800 2.800 0.00 3.210 3.210 0.00 0.592 0.594 0.20 0.377 0.376 -0.08 2.864 2.864 0.00 6.500 6.500 0.00

CREDIT DEFAULT SWAP (IN BPS) 8-Feb 13-Feb bps change China 66.32 65.85 -0.48 Hong Kong 43.36 43.36 0.00 Indonesia 142.53 141.61 -0.92 Japan 72.15 72.75 0.60 Korea 68.53 67.57 -0.96 Malaysia 92.75 91.80 -0.95 Philippines 103.46 102.55 -0.91 Thailand 96.80 96.82 0.02 Vietnam 218.70 218.14 -0.56 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. Gold Spot (in US$ per ounce)

13-Feb 1,642.5

14-Feb

% change

1,645.3

0.17

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines

S&P AAAAA BB+ AAA ABB+

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1

Fitch A+ AA+ BBBAA A+ ABB+

Page 4 of 6

Singapore Thailand Vietnam

AAA BBB+ BB-

-Baa1 B1

AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

SOUTH KOREA JAPAN JAPAN JAPAN

Indicators

Period

South Korea 7-Day Repo Rate % Gross Domestic Product (QoQ)% GDP Annualized % Nominal GDP (QoQ)%

Feb 14 4Q P 4Q P 4Q P

Last

2.75 -0.1 -0.4 -0.4

Previous

2.75 -1.0 -3.8 -1.1

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/13/2013

2/14/2013

2/15/2013

Country

Indicators

Period

SOUTH KOREA

Unemployment Rate (SA)%

Jan

SOUTH KOREA

Bank Lending to HH (KRW Tln)

Jan

SOUTH KOREA

South Korea 7-Day Repo Rate %

Feb 14

JAPAN

Gross Domestic Product (QoQ)%

4Q P

JAPAN

GDP Annualized %

4Q P

JAPAN

Nominal GDP (QoQ)%

4Q P

THAILAND

Foreign Reserves (USD bn)

Feb 8

JAPAN

Capacity Utilization (MoM)%

Dec F

Page 5 of 6

JAPAN

Industrial Production YOY%

Dec F

SINGAPORE

Retail Sales (YoY)%

Dec

PHILIPPINES

Overseas Remittances (YoY)%

Dec

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 6 of 6

MARKET UPDATE FOR ASEAN+3 15 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Fall as Topix Snaps 13-Week Winning Streak. Asian stocks fell, with Japan’s Topix Index snapping the longest weekly winning streak in 40 years, as the yen rose and profit reports from Trend Micro Inc. and Rio Tinto Group disappointed investors. The MSCI Asia Pacific Index slid 0.2 percent to 133.56 as of 2:43 p.m. in Hong Kong after closing yesterday at the highest level since August 2011. It’s risen 0.4 percent this week. Five stocks fell for every three that rose. Equity markets in China, Taiwan and Vietnam remain shut today for public holidays.

•

S&P 500 Rises as Heinz Deal Overshadows Economic Concern. The Standard & Poor’s 500 Index climbed to a five-year high as a drop in jobless claims and Warren Buffett’s deal for H.J. Heinz Co. overshadowed concern over shrinking economies in Europe and Japan. Heinz surged 20 percent after Buffett’s Berkshire Hathaway Inc. and 3G Capital agreed to buy the company in a deal valued at about $23 billion. Constellation Brands Inc. soared 37 percent after Anheuser-Busch InBev NV offered to cede full control of U.S. distribution for Corona beer in a bid to salvage its deal for Grupo Modelo. US Airways Group Inc. dropped 4.6 percent after agreeing to an $11 billion merger with AMR Corp.’s American Airlines.

•

Oil Heads for Ninth Gain in 10 Weeks as Open Interest at Record. West Texas Intermediate oil headed for its ninth weekly gain in 10 weeks after a report signaled OPEC will cut crude shipments this month. Open interest for the U.S. benchmark grade rose to a record. WTI was little changed in New York and up 1.7 percent this week. Prices climbed 0.3 percent yesterday as the number of contracts outstanding rose to the highest level since the futures began trading on the New York Mercantile Exchange in March 1983. OPEC will cut crude shipments by 0.9 percent this month, according to Oil Movements, a tanker tracker. U.S. claims for jobless benefits were less than forecast last week, government data showed.

BREAKING NEWS GLOBAL •

Democrats’ Plan Keeps Divide on U.S. Taxes as Cuts Near. Senate Democrats unveiled a $110 billion plan to delay federal spending cuts that includes tax increases Republicans already say they won’t accept. The plan announced yesterday would postpone the March 1 start of more than $1 trillion in cuts until 2014. The automatic reductions, known as sequestration, would be replaced with defense spending cuts, a halt in direct payments to farmers and a tax increase imposing a minimum 30 percent rate on top earners.

•

Weidmann Says ECB Won’t Cut Interest Rates to Weaken Euro. European Central Bank council member Jens Weidmann said an appreciating euro alone won’t trigger a cut in interest rates and the exchange rate’s gains are justified by the economic outlook. The strength of the euro “is one factor among many in determining future inflation rates” and “we will certainly not justify any monetary policy decision with one single factor,” Weidmann, who heads Germany’s Bundesbank, said in a Feb. 13 interview. “I believe that the exchange rate of the euro is broadly in line with fundamentals. You cannot

really say that the euro is seriously overvalued.” His comments come as central bankers and finance ministers from the Group of 20 nations meet in Moscow today amid speculation of a currency war. Looser monetary policy in the U.S. and Japan combined with mounting optimism in Europe drove the euro to 14-month and three-year highs against the dollar and the yen earlier this month. The currency has dropped two cents since ECB President Mario Draghi said on Feb. 7 that its appreciation poses a downside risk for inflation, signalling he may consider cutting rates. •

G-20 Head Russia Pushes for Currency Manipulation Stance. Russia wants to head off a global currency war by pushing policy makers to make stronger commitments against exchange-rate manipulation as Group of 20 officials search for common ground in Moscow this week. The G-20 should have more “specific” language opposing exchangerate interference in the communique that will be issued after the two-day talks among finance chiefs that end Feb. 16, Russian Finance Minister Anton Siluanov said yesterday. Russia holds the G-20’s rotating presidency this year.

REGIONAL •

Sharp Joins Panasonic in Surge of China Air-Purifier Sales. Sharp Corp. and Panasonic Corp., the Japanese electronics makers struggling to recover from record losses, are boosting sales of air purifiers in China as pollution worsens in the world’s most populous country. Sharp’s sales of the products, built mainly in Shanghai, tripled last month from a year earlier, Miyuki Nakayama, a company spokeswoman in Tokyo, said by phone yesterday. That’s spurring the Osaka-based manufacturer to increase output, she said. Panasonic’s production of air purifiers for the Chinese market in January were 50 percent above average monthly levels, Chieko Gyobu, a spokeswoman, said yesterday.

•

Abe Ally Yamamoto Says Currency Devaluation Spurs Growth. Japanese ruling party lawmaker Kozo Yamamoto said a race to devalue currencies would spark global growth, dismissing German criticism of Prime MinisterShinzo Abe’s plans for monetary easing which have weakened the yen. Yamamoto, a member of the Liberal Democratic Party who is close to Abe, said in an interview yesterday that an exchange rate of 95-100 yen to the dollar would be appropriate. The yen has fallen almost 10 percent against its U.S. counterpart since Abe’s LDP won a landslide victory on Dec. 16. Abe has pushed the Bank of Japan to increase monetary stimulus to overcome more than a decade of deflation. While his administration argues the yen’s fall is a consequence, not a target of his policies, the decline has sparked criticism from German officials including Michael Meister, the parliamentary finance spokesman for Chancellor Angela Merkel’s party.

•

Hong Kong’s Bankruptcy Requests Climb to Almost Two-Year High. Hong Kong’s number of bankruptcy petitions filed last month rose to the highest in almost two years after economic growth slowed to what the government predicted would be the weakest since 2009. The number of bankruptcy requests submitted in January increased 62 percent from a year earlier to 837, according to data posted on the website of the Official Receiver’s Office today. That was the highest number since March 2011 when 866 were filed, the data showed. Hong Kong officials are balancing the need to stoke growth with efforts to cool a housing market that the International Monetary Fund said last year is at risk of an abrupt correction. The city’s economy may have expanded about 1 percent last year, K.C. Chan, the financial services secretary, said yesterday.

•

Park May Face Prolonged Korea Growth Underperformance. South Korea’s incoming President Park Geun Hye may be saddled with an economy that underperforms for a Page 2 of 6

prolonged period, increasing the allure of stimulus spending that could undermine the nation’s fiscal strength. Growth may stay below potential for a “considerable time,” the Bank of Korea said yesterday after officials voted to keep interest rates on hold. Policy makers are concerned about the need to regain momentum after last year’s 2 percent expansion, the weakest since 2009. Governor Kim Choong Soo sees a potential rate of 3.8 percent. •

Singapore Home Sales Rise as Buyers Rush Sales Ahead of Curbs. Singapore home sales rose 43 percent in January from the previous month as buyers rushed to buy homes right after the government announced cooling measures to ease residential prices. Home sales increased to 2,013 units in January from 1,410 units in December, according to data released by the Urban Redevelopment Authority today. Sales reached 22,699 units in 2012, according to calculation by Bloomberg News based on the government data, which dates back to 1996.

IFIs NEWS (compiled from their websites) G20 – Press Release: The Reinventing Bretton Woods Committee’s seminar was held in Moscow •

The seminar "Investment and Investment Finance: the Supply and Demand of Long Term Finance", organized by the Reinventing Bretton Woods Committee together with the Ministry of Finance of Russia, was held on February 13-14 at the Marriott Royal Aurora Hotel in Moscow. The participants discussed the role of long term investments to support global economic growth as well as main sources of long term finance, including the significant contribution of institutional investors, MDBs, national development banks, LCBMs, sovereign wealth funds, PPP. http://www.g20.org/news/20130214/781194702.html

IFC – Press Release: IFC $1 Billion Green Bond Marks Largest Climate-Friendly Issuance •

The IFC has issued a $1 billion green bond that will be used to support IFC climatefriendly projects in developing countries. The bond sets a precedent as the largest green bond issue to date and was principally allocated to socially responsible investment portfolios. By making the three-year bond a benchmark issue available to investors globally, IFC aims to strengthen this growing asset class. The bond, which was heavily oversubscribed, was sized to address the demand from an increasing number of investors interested in climate-related opportunities. http://www.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/F9E346765F24CB3085257B1 200776829

World Bank – Publication: 22-country study of universal health coverage •

As a growing number of countries tackle the fiscal challenge of providing universal health coverage (UHC) for their citizens, today the World Bank released a set of 22 case studies of countries that have significantly expanded access to health care in the last decade, with the aim of helping countries make more informed health policy and program choices. Researchers looked systematically at countries’ experiences with a set of parameters related to achieving UHC, including designing and managing benefits packages, expanding coverage to the poorest and excluded populations, providing quality care, and health financing. The 22 countries studied included China, Indonesia, Page 3 of 6

Philippines, Thailand, and Vietnam. The Bank also released an analysis of the impact of UHC efforts in the developing world. http://www.worldbank.org/en/news/press-release/2013/02/14/World-Bank-Groupreleases-22-country-study-of-universal-health-coverage FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 14-Feb 15-Feb close China 6.23 6.24 6.23 6.24 Hong Kong 7.75 7.76 7.75 7.75 Indonesia 9,793.00 9,657.00 9,656.00 9,670.00 Japan 86.75 92.68 92.88 92.37 Korea 1,064.40 1,095.80 1,083.59 1,078.20 Malaysia 3.06 3.10 3.09 3.09 Philippines 41.01 40.70 40.63 40.61 Singapore 1.22 1.24 1.23 1.24 Thailand 30.59 29.80 29.83 29.85 Vietnam 20,840.00 20,845.00 20,835.00 20,840.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.07 -0.01 -0.14 0.55 0.50 -0.11 0.05 -0.07 -0.07 -0.02

2013 YTD (%chg) -0.1 -0.1 -0.2 -5.4 -1.4 -1.8 0.6 -1.2 1.6 0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,432.4 23,215.2 4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

14-Feb 2,432.4 23,413.3 4,588.7 11,307.3 1,979.6 1,630.9 6,513.4 3,290.5 1,526.7 494.0

OVERNIGHT LENDING RATE (%) 14-Feb 15-Feb bps change 2.410 2.410 0.00 0.095 0.093 -0.21 4.176 4.176 0.00 0.100 0.093 -0.75 2.750 2.750 0.00 3.000 3.000 0.00 0.763 1.436 67.30 0.092 0.092 0.00 2.750 2.750 0.00 4.350 4.350 0.00

CREDIT DEFAULT SWAP (IN BPS) 13-Feb China 65.85 Hong Kong 43.36 Indonesia 141.61 Japan 72.75 Korea 67.57 Malaysia 91.80 Philippines 102.55 Thailand 96.82 Vietnam 218.14

14-Feb 63.49 42.36 138.43 72.27 65.70 89.97 100.97 94.53 214.16

15-Feb 2,432.4 23,444.6 4,609.8 11,173.8 1,981.2 1,627.9 6,521.6 3,278.9 1,523.1 494.0

% change 0.00 0.13 0.46 -1.18 0.08 -0.18 0.13 -0.35 -0.24 0.00

2013 YTD (%chg) 7.2 0.6 6.1 7.5 -2.5 -2.8 11.3 2.4 8.2 18.1

3-MONTH INTERBANK LENDING RATE (%) 14-Feb 15-Feb bps change 3.892 3.892 0.00 0.386 0.385 -0.07 4.914 4.904 -1.00 0.280 0.277 -0.33 2.800 2.800 0.00 3.210 3.210 0.00 0.594 0.251 -34.30 0.376 0.377 0.08 2.864 2.864 0.00 6.500 6.500 0.00

bps change -2.36 -0.99 -3.18 -0.48 -1.87 -1.83 -1.58 -2.30 -3.97

Page 4 of 6

Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 14-Feb Gold Spot (in US$ per ounce)

15-Feb

1,634.9

% change

1,630.5

-0.26

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

(US$bn) 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn) 504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6 711.2 2.2 38.3 2.2 2,255.1 18.0 132.6 2.2 32.4 2.4 8.0 4.4 924.3 2.2 57.2 2.7 10.0 -

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

Reserves over short-term debt 5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

THAILAND JAPAN JAPAN SINGAPORE PHILIPPINES

Indicators

Foreign Reserves (USD bn) Capacity Utilization (MoM)% Industrial Production YOY% Retail Sales (YoY)% Overseas Remittances (YoY)%

Period

Last

Previous

Feb 8 Dec F Dec F Dec Dec

180.9 2.9 -7.9 -1.5

181.6 -0.2 -7.8 -1.2

9.7

7.6

Page 5 of 6

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013) Expected released date

2/13/2013

2/14/2013

2/15/2013

Country

Indicators

Period

SOUTH KOREA

Unemployment Rate (SA)%

Jan

SOUTH KOREA

Bank Lending to HH (KRW Tln)

Jan

SOUTH KOREA

South Korea 7-Day Repo Rate %

Feb 14

JAPAN

Gross Domestic Product (QoQ)%

4Q P

JAPAN

GDP Annualized %

4Q P

JAPAN

Nominal GDP (QoQ)%

4Q P

THAILAND

Foreign Reserves (USD bn)

Feb 8

JAPAN

Capacity Utilization (MoM)%

Dec F

JAPAN

Industrial Production YOY%

Dec F

SINGAPORE

Retail Sales (YoY)%

Dec

PHILIPPINES

Overseas Remittances (YoY)%

Dec

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 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Climb as Japan Shares Jump on G-20. Asian stocks rose, with the regional benchmark index near an 18-month high, as Japanese shares rallied after the Group of 20 nations refrained from censuring the nation’s policies that have weakened the yen. Nikkei 225 rose by 2.1%, Philippine and Thailand markets advanced by 0.7% and 0.2% respectively.

•

Malaysia’s Ringgit and South Korea’s Won lead declines, after G-20 leaders signal that Japan has scope to stimulate economy so long as policy makers don’t advocate weaker Yen. Yen, Won and Ringgit declined by 0.52%, 0.36% and 0.20% respectively. Meanwhile, Yuan touches two-month low as PBOC lowers Yuan’s reference rate.

•

WTI Oil Drops a Second Day; Saudi Exports Fall to 15-Month Low. West Texas Intermediate oil fell for a second day, extending the biggest drop in two weeks, while Brent futures advanced. Saudi Arabia’s crude shipments slid to a 15-month low in December. New York crude declined as much as 0.4 percent. Data from the Federal Reserve showed U.S. industrial production unexpectedly shrank in January. Saudi Arabia exported 7.06 million barrels of crude a day in December, the least since September 2011, according to the Joint Organisations Data Initiative. Gasoline futures climbed a third day and Brent’s premium to WTI widened as the London-traded contract rose.

BREAKING NEWS GLOBAL •

G-20 Signals Support for Japan Easing Without Yen Loose Talk. Global finance chiefs signaled Japan has scope to keep stimulating its stagnant economy as long as policy makers cease publicly advocating a sliding yen. The message was delivered at weekend talks of finance ministers and central bankers from the Group of 20 in Moscow. While they pledged not “to target our exchange rates for competitive purposes,” Japan wasn’t singled out for allowing the yen to drop and won backing for its push to beat deflation. “There was no censure of the Japanese attitude, which was considered a policy to develop its economy and not to intentionally devalue,” Brazilian Finance Minister Guido Mantega told reporters after the meeting.

•

Spain Risks Market Indigestion in Bond-Selling Race. Spain’s bumper debt sales risk saturating the market as the nation’s government, agencies and companies vie for investors’ cash. Spain’s Treasury is fast-tracking funding to take advantage of yields that fell to a 10-month low in January, as UBS AG calculates it faces its highest borrowing needs since 2005. Public bodies including a government bank and an agency that guarantees energy market loans may also try to capitalize on improved investor appetite for Spanish debt as financial institutions repay emergency European Central Bank loans.

•

U.K. House Prices Increase to Five-Year High. U.K. home sellers raised their asking prices to the most in five years in February as inquiries from potential buyers increased, Rightmove Plc said. Prices sought rose 2.8 percent from January to 235,741 pounds ($365,000), the property-website operator said in a report published today. They

increased 1.1 percent from a year earlier. In London, prices gained 1.2 percent, the smallest increase for a February in four years. •

Poland Needs Revamp to Get Euro Not Deadline, Rostowski Says. Poland won’t set a deadline to join the euro because the European Union’s biggest eastern economy first needs revamping to avoid “unpleasant consequences” from adopting the currency, Finance Minister Jacek Rostowski said. Poland’s euro-entry preparations, which have been revived amid a lull in the currency region’s debt crisis, will be the focus of talks today between central bank Governor Marek Belka and Prime Minister Donald Tusk’s economic advisory council that begin at 4 p.m. in Warsaw, said three government officials, who asked not to be named as the information isn’t yet public.

REGIONAL •

Xi Frugality Drive Damps China New Year Retail-Sales Growth. Retail sales in China during the week-long Lunar New Year festival rose at the slowest pace in four years as a crackdown on extravagant spending by officials and state-owned companies limited outlays on food and drink. Sales at shops and restaurants monitored by the Ministry of Commerce increased 14.7 percent in the Feb. 9 to Feb. 15 period from the year-earlier break to 539 billion yuan ($86 billion), the ministry said. That was down from a 16.2 percent pace in 2012 and the least since a 13.8 percent gain in 2009, according to previously released figures.

•

S&P Leaves Japan Rating Unchanged as Abe’s Task Seen Critical. Standard & Poor’s reaffirmed Japan’s credit rating, in the first verdict by an international ratings company on Prime Minister Shinzo Abe’s economic policies that have weakened the yen. The sovereign, long-term credit rating was kept at AA-, the fourth highest level, with a negative outlook, S&P said in an emailed statement today. The company cut Japan’s rating in January 2011 and applied the outlook in the following month. “We believe the measures adopted by the new Shinzo Abe administration at the beginning of its term will be critical if it is to arrest what we see as a prolonged decline in Japan’s sovereign credit standing,” S&P said in the statement.

•

South Korea’s New Finance Chief Hyun Seen Capping Stimulus. South Korea’s newlynamed finance minister, Hyun Oh Seok, may set limits on the scale of fiscal stimulus to spur growth even as a rising won adds to drags on Asia’s fourth-largest economy. Hyun cautioned last year against letting the nation’s financial health deteriorate, while seeing room for additional fiscal and monetary measures, according to local media reports. The 62-year-old will also be deputy prime minister for the economy under President-elect Park Geun Hye, her transition team said in Seoul yesterday.

•

Singapore’s January Exports Rise Less Than Estimated on Drugs. Singapore’s exports rose less than estimated in January as manufacturers shipped fewer electronics and pharmaceutical goods. Non-oil domestic exports gained 0.5 percent from a year earlier, after a 16.3 percent drop in December, the trade promotion agency said in a statement today. The median of 11 estimates in a Bloomberg News survey was for a 3 percent increase.

•

Thai Growth Beating Estimates Signals Asian Resilience. Thailand’s fourth-quarter growth accelerated more than economists estimated, joining Asian nations from Indonesia to the Philippines in showing resilience to the faltering global economy as local demand rises. Gross domestic product increased 18.9 percent in the three months Page 2 of 7

through December from a year earlier, after expanding a revised 3.1 percent in the previous quarter, the National Economic and Social Development Board said in Bangkok today. That beat the median estimate of 15.3 percent in a Bloomberg News survey and is the fastest since Thailand began compiling data in 1993. The economy grew 6.4 percent in 2012 from 0.1 percent in 2011, when floods swamped most of the country. IFIs NEWS (compiled from their websites) ADBI – Publication: “Financing Development Cooperation in Northeast Asia” •

The ADBI has published the captioned working paper. “Infrastructure connectivity in Northeast Asia—comprising the northeastern People's Republic of China, Japan, the Democratic People's Republic of Korea, the Republic of Korea, Mongolia, and the Russian Far East—has been hindered by limited intergovernmental cooperation. The paper finds that total infrastructure investment needs for Northeast Asia excluding Japan and the Republic of Korea (in transport, energy, information and communication technology, and the environment) could be $63 billion per year over the next 10 years.” http://www.adbi.org/files/2013.02.15.wp407.financing.dev.cooperation.northeast.asia.pd f

Basel Committee & IOSCO – Consultative Paper: “Margin requirements for non-centrally cleared derivatives - Second Consultative Document” •

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) have published a second consultative paper which represents a near-final proposal on margin requirements for non-centrally-cleared derivatives. Comments on these four issues which are discussed in greater detail in today's consultative paper should be submitted by Friday 15 March 2013 by e-mail to: baselcommittee@bis.org and/or wgmr@iosco.org. http://www.bis.org/press/p130215a.htm (Press Release) http://www.bis.org/publ/bcbs242.pdf (Paper)

Basel Committee – Press Release: Supervisory guidance for managing risks associated with the settlement of foreign exchange transactions •

The Basel Committee on Banking Supervision has issued its guidance for managing risks associated with the settlement of foreign exchange transactions, which updates the earlier guidance in 2000. The document provides a more comprehensive and detailed view on governance arrangements and the management of principal risk, replacement cost risk and all other FX settlement-related risks. In addition, it promotes the use of payment-versus-payment arrangements, where practicable, to reduce principal risk. http://www.bis.org/press/p130215.htm (Press Release) http://www.bis.org/publ/bcbs241.htm (Paper)

FSB – Press Release: FSB publishes progress reports to the G20 on the financial regulatory reform programme •

The FSB published on 16 February a letter from the Chairman to the G20 Finance Ministers and Central Bank Governors describing progress on the financial regulatory reform programme; an assessment of the effect of financial reforms on the availability Page 3 of 7

of long-term investment finance, and a joint report from the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board on their progress in converging their standards. http://www.financialstabilityboard.org/press/pr_130216.pdf G20 – Press Release: G20 Finance Ministers and Central Bank Governors' Meeting •

The first G20 Finance Ministers and Central Bank Governors' Meeting within Russia's Presidency was held on February 15-16 in Moscow. Main events took place on the 16th of February. Delegates discussed traditional G20 agenda, such as global economy outlook, implementation of the G20 Framework agreement for strong, sustainable and balanced growth, as well as further implementation of the IFA's reform and financial regulation reforms. According to the Agenda delegates continued developing Russia's priority issues - the financing for investment and government borrowing and public debt management. At the close of the meeting Finance Ministers and Central Banks Governors approved and signed off the Communiqué. http://www.g20.org/news/20130216/781212902.html (Press Release) http://en.g20russia.ru/load/781209773 (Communiqué)

IMF – Publication: “Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas—Status of Acceptances and Consents” •

The IMF has publicised the captioned policy paper. “This status report reviews progress toward implementation of the 2010 Quota and Governance Reforms. It updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment” or “Seventh Amendment”) as set out in the Board of Governors Resolution No. 66-2.” http://www.imf.org/external/np/pp/eng/2013/021313.pdf

IMF – Publication: “List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months” •

The IMF has publicised the table lists of the IMF members for which the Article IV consultation or the mandatory financial stability assessment has been delayed by more than 18 months. The delay is counted past the scheduled expected date, plus any applicable grace period. http://www.imf.org/external/np/pp/eng/2013/021113.pdf

IMF – Speech: Statement by IMF Managing Director Christine Lagarde on G-20 Ministerial Meeting in Moscow •

The IMF has publicised the statement by Ms. Christine Lagarde, Managing Director of the IMF issued after the conclusion of the Group of 20 Finance Ministers and Central Bank Governors meeting in Moscow. http://www.imf.org/external/np/sec/pr/2013/pr1353.htm

IMF – Working Paper: “Structural Transformation and the Volatility of Aggregate Output in OECD Countries” •

The IMF has publicised the captioned working paper. “This paper finds a negative relationship between the employment share of the service sector and the volatility of Page 4 of 7

aggregate output in the OECD—after controlling for the level of financial development. This result reflects volatility differentials across sectors: labor productivity is more volatile in agriculture and manufacturing than in services. Aggregate output would therefore become less volatile as labor moves away from agriculture and manufacturing and toward the service sector. http://www.imf.org/external/pubs/ft/wp/2013/wp1343.pdf OECD – Publication: “Going for Growth” •

The OECD has publicised the latest edition of the captioned report. According to the report, “Structural reforms offer governments a powerful tool to boost growth, create jobs and bring about a strong and balanced economic recovery.” http://www.oecd.org/newsroom/structuralreformsmoreimportantthaneverforastrongandba lancedeconomicrecovery.htm

World Bank – Speech: Transcript of President Jim Kim at G20 Meeting: Climate Change Represents Real, Present Danger •

The World Bank has publicised the statement by World Bank President Jim Kim at G20 Meeting. http://www.worldbank.org/en/news/speech/2013/02/16/world-bank-president-jim-kimat-g20-meeting-climate-change-represents-real-present-danger

FOREIGN CURRRENCY EXCHANGE RATES Previous wk's 2012 close 15-Feb 18-Feb close China 6.23 6.24 6.24 6.24 Hong Kong 7.75 7.76 7.75 7.76 Indonesia 9,793.00 9,657.00 9,670.00 9,685.00 Japan 86.75 92.68 93.50 93.99 Korea 1,064.40 1,095.80 1,078.20 1,082.10 Malaysia 3.06 3.10 3.09 3.10 Philippines 41.01 40.70 40.61 40.64 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.87 29.89 Vietnam 20,840.00 20,845.00 20,835.00 20,850.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.08 -0.01 -0.15 -0.52 -0.36 -0.20 -0.07 -0.19 -0.07 -0.07

2013 YTD (%chg) -0.2 -0.1 -0.3 -7.1 -1.7 -2.0 0.5 -1.5 1.5 0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,432.4 23,215.2 4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

15-Feb 2,432.4 23,444.6 4,609.8 11,173.8 1,981.2 1,627.9 6,521.6 3,283.1 1,521.5 494.0

OVERNIGHT LENDING RATE (%) 15-Feb 18-Feb bps change 2.410 1.750 -66.00

18-Feb 2,421.6 23,381.9 4,612.0 11,407.9 1,981.9 1,620.9 6,565.2 3,285.6 1,524.5 494.0

% change -0.45 -0.27 0.05 2.09 0.04 -0.43 0.67 0.08 0.19 -0.02

2013 YTD (%chg) 6.7 0.3 6.1 9.7 -2.4 -3.2 12.0 2.6 8.3 18.1

3-MONTH INTERBANK LENDING RATE (%) 15-Feb 18-Feb bps change 3.892 3.886 -0.56

Page 5 of 7

Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

0.093 4.176 0.093 2.750 3.000 1.436 0.099 2.750 4.350

0.094 4.177 0.095 2.750 3.000 1.460 0.099 2.750 4.175

0.14 0.14 0.25 0.00 0.00 2.40 0.00 0.00 -17.50

0.385 4.904 0.277 2.800 3.210 0.251 0.377 2.864 6.500

0.385 4.906 0.276 2.800 3.210 0.469 0.377 2.860 6.500

0.00 0.21 -0.08 0.00 0.00 21.80 0.00 -0.39 0.00

CREDIT DEFAULT SWAP (IN BPS) 14-Feb 15-Feb bps change China 63.49 64.93 1.44 Hong Kong 42.36 42.79 0.43 Indonesia 138.43 140.79 2.36 newJapan 72.27 73.25 0.98 Korea 65.70 66.00 0.30 Malaysia 89.97 86.00 -3.97 Philippines 100.97 102.61 1.64 Thailand 94.53 96.03 1.50 Vietnam 214.16 214.56 0.40 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 15-Feb Gold Spot (in US$ per ounce)

18-Feb

1,610.2

% change

1,613.7

0.22

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

3 months imports of goods/serv (US$bn)

Short-term external debt (US$bn)

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

Import cover (Qtrs of imports covered by reserves)

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

Reserves over short-term debt

Page 6 of 7

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

Country

SINGAPORE SINGAPORE SOUTH KOREA THAILAND THAILAND Expected Release Date 2/18/2013

3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

572.8 711.2 38.3 2,255.1 132.6 32.4 8.0 924.3 57.2 10.0

DATA RELEASES FOR THE DAY Indicators Period

Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Producer Price Index (YoY)% Gross Domestic Product (YoY)% Gross Domestic Product SA (QoQ)%

Jan Jan Jan 4Q 4Q

6.6 2.2 2.2 18.0 2.2 2.4 4.4 2.2 2.7 -

5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

Last

Previous

0.5 -5.6 -1.6 18.9 3.6

-16.3 -19.1 -1.2 3.0 1.2

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013)

Country SINGAPORE SINGAPORE SOUTH KOREA THAILAND THAILAND CHINA MALAYSIA JAPAN JAPAN JAPAN SOUTH KOREA MALAYSIA

Indicators Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)%

Period Jan Jan

Producer Price Index (YoY)% Gross Domestic Product (YoY)% Gross Domestic Product SA (QoQ)% Actual FDI (YoY)% Current Account Balance (MYR mn) All Industry Activity Index (MoM) % Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn)

Jan 4Q 4Q Jan 4Q Dec Jan Jan

External Short-Term Debt (USD bn) CPI YoY %

2/21/2013

THAILAND MALAYSIA HONG KONG

Benchmark Interest Rate GDP YoY% Unemployment Rate SA%

2/22/2013

THAILAND

Foreign Reserves (USD bn)

MALAYSIA SINGAPORE SINGAPORE HONG KONG

Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% CPI - Composite Index (YoY)%

4Q Jan Feb 20 4Q Jan Feb 15 Feb 15 4Q F 4Q F Jan

2/19/2013 2/20/2013

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 19 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

The MSCI Asia Pacific Index Heads for 18-Month High. Asian stocks rose, with the regional benchmark index headed for its highest close in 18 months. The MSCI Asia Pacific Index rose 0.2 percent to 134.01 as of 5:23 p.m. in Tokyo, with seven of 10 industry groups climbing. The measure is headed for the highest close since Aug.2, 2011. On the other hand, Shanghai Composite index and Hang Seng index down by 1.6% and 1.0% respectively.

•

Japan’s yen and Singapore’s dollar advance as Asian stocks rise for second day. Yen snaps two-day losses against dollar and euro as Japanese Finance Minister Taro Aso says government has no intention to buy foreign bonds or change law governing BOJ. Japanese Yen and Singapore dollar advanced by 0.6% and 0.2% respectively, while Indonesia rupiah down by 0.3%.

•

WTI Drops a Second Day. West Texas Intermediate crude fell, extending the biggest drop in two weeks, while Brent slid for a fourth day. London-traded oil may be capped at $140 a barrel this year, according to Bank of America Merrill Lynch. Futures lost as much as 0.6 percent, after sliding 1.5 percent Feb. 15, the most since Feb. 4. Floor trading in New York was closed yesterday because of a holiday in the U.S. Brent will trade in a range of $100 to $130 a barrel through to 2015.

BREAKING NEWS GLOBAL •

Obama Clashes With Yield Showing Bonds Below Growth Outlook. As President Barack Obama starts his second term, the bond market is already telling him that the administration’s forecasts for economic growth over the next four years are too optimistic. The Office of Management and Budget predicts yields on 10-year Treasury notes will rise to average 4.1 percent in 2015 and 4.9 percent in 2017 as the economy expands at about a 4 percent rate in the second half of Obama’s term. Bond prices suggest the yield, now at about 2 percent, will average below 3 percent two years from now, implying that gross domestic product will fall short of OMB projections, according to data compiled by Bloomberg.

•

Merkel Cites East German Lessons for Crisis-Hurt Euro States. Chancellor Angela Merkel said that European countries burdened by the fallout of the euro-area debt crisis can learn from East Germany’s experiences of economic overhaul after the fall of the Berlin Wall. Merkel, Germany’s first chancellor from the former communist east, said in a speech to regional professionals and trade-chambers representatives yesterday that her East German background had taught her there is no way around enacting reforms to become more competitive.

•

Euro Breakup Risk Falls to 5-Year Low in Butterfly. The options market is signalling that the threat of a breakup in the 17-nation euro bloc is disappearing as the price of insurance against wild swings in the region’s single currency fall to a five-year low. Butterfly options that protect against both gains and declines slid to the lowest since

March 2008 on Feb. 4. Implied volatility on three-month options on the euro-dollar exchange rate has risen about half as much as a broader gauge of currency volatility this year. •

RBA Saw Signs Lower Rates Are Working, Retains Scope to Ease. The Reserve Bank of Australia said there are indications that lower interest rates are starting to spur the economy and reiterated that tame prices provide scope to ease further if needed. “Interest rate sensitive parts of the economy had shown some signs of responding to these lower rates, which were well below their longer-run averages, and further effects could be expected over time,” minutes of the Feb. 5 meeting released today in Sydney showed. The inflation outlook gives “scope to ease policy further, should that be necessary,” it said.

•

India Cuts Borrowing Program as Chidambaram Curbs Spending. India cut its annual borrowing program as Finance Minister Palaniappan Chidambaram reined in spending and raised as much as 220 billion rupees ($4 billion) selling stakes in state companies. The finance ministry cancelled a 120 billion rupee bond sale previously scheduled for Feb. 22, the last for the year ending March 31, “on review of the government’s cash position and funding requirement,” it said in a statement yesterday. Prime Minister Manmohan Singh’s administration planned to borrow a record 5.69 trillion rupees this fiscal year before scrapping this week’s debt auction, according to budget documents.

REGIONAL •

China Services Job Gains Key for Shift to Consumption. Services employment has climbed for four years, according to surveys by HSBC Holdings Plc and Markit Economics, while official data show manufacturing jobs shrinking for the past eight months. Creating more jobs in services will be key to limiting unemployment and meeting the Communist Party’s goal of an economy driven more by consumer demand and less by exports and investment. The country estimated its proportion of workers in services industries at 35.7 percent in 2011, less than Japan’s level in 1955, according to International Monetary Fund data.

•

Aso Says Japanese Government Not Planning Foreign Bond Buys. Japanese Finance Minister Taro Aso said the government has no intention of buying foreign bonds through a fund with the Bank of Japan, comments that caused the yen to strengthen. “We don’t intend to buy foreign bonds,” Aso told reporters in Tokyo, when asked if such a fund is planned. He also said that the government is not considering any immediate change to the law governing the BOJ. Aso’s remarks contrast with those of Prime Minister Shinzo Abe, who told parliament yesterday that buying foreign bonds “exists as one idea” for monetary policy and the BOJ law may be revised if the central bank fails to get results. Investors are trying to assess Abe’s commitment to ending deflation and reviving economic growth as he prepares to choose a new BOJ governor next week.

•

South Korea Says G-20 Didn’t Endorse Japan Quantitative Easing. South Korea denied that the Group of 20 nations endorsed Japan’s quantitative easing, an indication that tensions remain after a gathering in Moscow where finance chiefs discussed the weakening yen. “The message from Moscow should not be understood as that the leaders endorsed Japan’s quantitative easing,” Choi Hee Nam, a director general at the

Page 2 of 6

finance ministry, said at a briefing in Sejong. “The G-20 also didn’t officially oppose Japan’s policies, but the topic was very controversial.” •

Indonesia May Keep Palm Export Tax at 9% in March. Indonesia, the largest palm oil producer, may keep the duty on shipments of the crude variety unchanged at 9 percent in March, double the rate in Malaysia. The March rate will probably be kept unchanged as the reference price is still about $849 a metric ton, Steaven Halim, an official at the Indonesian Palm Oil Association, said in an e-mailed statement. The base price for calculating the levy exporters must pay may climb to $777 a ton from $744, he said.

•

Singapore, Malaysia Set 2020 Target for High-Speed Rail Link. A high-speed rail link between Singapore and the Malaysian capital of Kuala Lumpur may be completed by 2020, leaders of the two countries said today. The rail network will be a “huge game changer” and transform the way the two countries do business, Malaysian Prime Minister Najib Razak told reporters in Singapore today at a joint press conference with his counterpart. Prime Minister Lee Hsien Loong said the journey may take 90 minutes.

IFIs NEWS (compiled from their websites) IMF – Press Release: Transcript of a Press Briefing by MD at the Conclusion of the Group of 20 Finance Ministers and Central Bank Governors Meeting •

The IMF has publicised the transcript of a Press Briefing by Christine Lagarde, Managing Director, International Monetary Fund, at the Conclusion of the Group of 20 Finance Ministers and Central Bank Governors Meeting in Moscow on 16 February 2013. http://www.imf.org/external/np/tr/2013/tr021613.htm

WTO – Press Release: Items proposed for consideration at the next meeting of Dispute Settlement Body •

The WTO Secretariat has circulated a meeting notice and list of items proposed for the next meeting, on 27 February 2013, of the Dispute Settlement Body, which consists of all WTO members and oversees legal disputes among them. The meeting notice is circulated in the form of a document officially called an “airgram”. http://www.wto.org/english/news_e/news13_e/dsb_agenda_18feb13_e.htm

WTO – Press Release: WTO launches 2013 Essay Award for Young Economists •

The WTO launched the 2013 WTO Essay Award for Young Economists on 18 February 2013. Young economists are invited to submit their papers by 1 June 2013. http://www.wto.org/english/news_e/news13_e/rese_18feb13_e.htm

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close close China 6.23 6.24 Hong Kong 7.75 7.76 Indonesia 9,793.00 9,657.00 Japan 86.75 92.68 Korea 1,064.40 1,095.80 Malaysia 3.06 3.10 Philippines 41.01 40.70 Singapore 1.22 1.24 Thailand 30.59 29.80

18-Feb 6.24 7.75 9,685.00 93.96 1,082.10 3.10 40.64 1.24 29.90

19-Feb 6.24 7.75 9,713.00 93.39 1,081.05 3.10 40.63 1.24 29.88

% change -0.03 -0.01 -0.29 0.61 0.10 -0.03 0.02 0.16 0.07

2013 YTD (%chg) -0.2 -0.1 -0.6 -6.5 -1.6 -2.1 0.5 -1.4 1.5

Page 3 of 6

Vietnam 20,840.00 20,845.00 20,830.00 20,838.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

-0.04

0.0

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,432.4 23,215.2 4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

18-Feb 2,421.6 23,381.9 4,612.0 11,407.9 1,981.9 1,620.9 6,565.2 3,288.1 1,523.3 494.0

OVERNIGHT LENDING RATE (%) 18-Feb 19-Feb bps change 1.750 2.300 55.00 0.094 0.094 -0.07 4.177 4.175 -0.21 0.100 0.095 -0.50 2.750 2.750 0.00 3.000 3.000 0.00 1.460 1.574 11.40 0.042 0.042 0.00 2.750 2.750 0.00 4.175 3.171 -100.40

19-Feb

% change

2,382.9 23,143.9 4,588.1 11,372.3 1,985.8 1,613.7 6,620.7 3,292.7 1,527.4 490.8

-1.60 -1.02 -0.52 -0.31 0.20 -0.45 0.85 0.14 0.27 -0.64

2013 YTD (%chg) 5.0 -0.7 5.6 9.4 -2.2 -3.6 13.0 2.8 8.5 17.3

3-MONTH INTERBANK LENDING RATE (%) 18-Feb 19-Feb bps change 3.886 3.882 -0.43 0.385 0.385 0.00 4.906 4.901 -0.57 0.276 0.273 -0.33 2.790 2.790 0.00 3.210 3.210 0.00 0.469 0.327 -14.20 0.377 0.377 0.00 2.860 2.860 0.00 6.500 7.000 50.00

CREDIT DEFAULT SWAP (IN BPS) 15-Feb 18-Feb bps change China 64.93 64.59 -0.34 Hong Kong 42.79 42.50 -0.29 Indonesia 140.79 140.70 -0.09 Japan 73.25 72.67 -0.58 Korea 66.00 66.19 0.19 Malaysia 86.00 84.74 -1.26 Philippines 102.61 101.76 -0.85 Thailand 96.03 94.70 -1.33 Vietnam 214.56 211.22 -3.34 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. Gold Spot (in US$ per ounce)

18-Feb 1,609.8

19-Feb

% change

1,614.0

0.26

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

Page 4 of 6

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn) China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

3 months imports of goods & services (US$bn)

Short-term external debt (US$bn)

504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

572.8 711.2 38.3 2,255.1 132.6 32.4 8.0 924.3 57.2 10.0

3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

Import cover (Qtrs of imports covered by reserves)

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

Reserves over short-term debt

6.6 2.2 2.2 18.0 2.2 2.4 4.4 2.2 2.7 -

5.8 0.4 2.9 0.6 2.5 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

CHINA Expected Release Date 2/19/2013 2/20/2013

Indicators

Actual FDI (YoY)%

Period

Jan

Last

Previous

-4.2(survey)

-4.5

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013)

Country CHINA MALAYSIA MALAYSIA JAPAN JAPAN JAPAN SOUTH KOREA

Indicators Actual FDI (YoY)% Current Account Balance (MYR mn) GDP YoY% All Industry Activity Index (MoM) % Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn)

Period Jan 4Q 4Q Dec Jan Jan

External Short-Term Debt (USD bn)

THAILAND

Benchmark Interest Rate

4Q Feb 20

2/21/2013

HONG KONG

Unemployment Rate SA%

2/22/2013

THAILAND

Foreign Reserves (USD bn)

MALAYSIA SINGAPORE

Foreign Reserves (USD bn) GDP (YoY)%

Jan Feb 15 Feb 15 4Q F

Page 5 of 6

SINGAPORE HONG KONG

GDP (QoQ)% CPI - Composite Index (YoY)%

4Q F Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 6 of 6

MARKET UPDATE FOR ASEAN+3 20 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Extend 18-Month High on Global Outlook. Asian stocks rose for a third day, with the regional benchmark index extending an 18-month high, amid signs the global economy is recovering. Japan’s Nikkei 225 Stock Average gained 0.8 percent even after the government reported a record trade deficit in January. South Korea’s Kospi Index added 2 percent as Kim said the improving world economy boosts the odds of the nation exceeding this year’s growth forecast. Hong Kong’s Hang Seng Index rose 0.7 percent, while China’s Shanghai Composite Index gained 0.6 percent. Singapore’s Straits Times Index climbed 0.3 percent.

•

Oil Inventories Climb for Fifth Week. U.S. oil supplies probably rose for a fifth week, the longest streak of advances since May, as output climbed to a 20-year high and limits to the Seaway pipeline curbed the flow out of a key storage hub, a Bloomberg survey showed. Stockpiles advanced by 2 million barrels, or 0.5 percent, to 374.2 million in the seven days ended Feb. 15, the highest level since Nov. 16.

BREAKING NEWS GLOBAL •

Home Construction in U.S. Probably Cooled From Four-Year High. New residential construction in the U.S. probably cooled in January from a four-year high, signalling the industry’s momentum paused at the start of 2013, economists said before a report today. Builders broke ground on houses at a 920,000 annual rate, down from December’s 954,000 pace that was the fastest since June 2008, according to the median estimate of 85 economists surveyed by Bloomberg. Housing permits, a proxy for future construction, probably rose.

•

French Factory Confidence Climbs on Outlook for Global Recovery. French industrial confidence climbed in February as executives looked to improving global demand to lift orders in the months ahead. Sentiment among factory executives rose to 90 from 87 in January, national statistics office Insee said today in a statement from Paris. The increase suggests conditions may be improving for businesses after the French economy dipped into recession last year and shrank more in the fourth quarter than in any other since 2009. Even so, the industrial confidence index remains below the average reading of 96 set over the past six years as President Francois Hollande struggles to cut the budget deficit and revive growth in the wake of Europe’s financial crisis.

•

Greek Labor Unions Strike as Samaras Implements Austerity. Greek labor unions are holding their first general strike this year as Prime Minister Antonis Samaras’s coalition government implements a new round of austerity measures amid record unemployment. Schools, ferries, trains and government services are shut today with midday protests planned in central Athens by the country’s public and private-sector trade unions. Greek civil aviation workers are holding an eight-hour work stoppage prompting delays and cancellations at the country’s airports.

•

India Said to Plan About 6 Trillion Rupees Gross Borrowing. India plans gross market borrowing of about 6 trillion rupees ($111 billion) in the year through March 2014, a record high, according to three Finance Ministry officials with direct knowledge of preliminary estimates. The increase from 2012-2013’s level will provide funds for government spending and debt repurchases as existing sovereign bonds near maturity, the officials said, asking not to be identified as the details aren’t public. Another official said borrowings will climb next fiscal year, without giving a figure. Exact numbers have yet to be finalized, all four said.

REGIONAL •

China’s Foreign Direct Investment Declines for Eighth Month. China’s foreign direct investment fell for an eighth month in January, a sign that the recovery in the world’s second-largest economy has yet to revive confidence among overseas companies. Inbound investment dropped 7.3 percent from a year earlier to $9.27 billion, the Ministry of Commerce said in a statement today in Beijing. Non-financial outbound investment rose 12.3 percent to $4.91 billion, the ministry data showed. China’s economic data in the first two months are distorted by the timing of the weeklong Lunar New Year holiday, which fell in January last year and February this year.

•

Japan Trade Deficit Hits Record as Yen Inflates Imports. Japan’s trade deficit swelled to a record 1.63 trillion yen ($17.4 billion) on energy imports and a weaker yen, highlighting one cost of Prime Minister Shinzo Abe’s policies that are driving down the currency. Exports climbed 6.4 percent in January from a year earlier, the first rise in eight months, exceeding the median 5.6 percent estimate in a Bloomberg News survey of 24 economists. Imports increased 7.3 percent, the Finance Ministry said in Tokyo today.

•

Abe Says No Need for Foreign Bond Buys Under New BOJ Chief. Japanese Prime Minister Shinzo Abe said that buying foreign bonds will be unnecessary under a new central bank chief, backing away from a policy proposal that may be seen by other nations as an attempt to weaken the yen. “We decided to consider this in November last year,” Abe said in parliament today, referring to a ruling party proposal to set up a fund to buy foreign bonds. “The need for this will basically disappear once we get the new BOJ governor and deputies in March.”

•

BOK’s Kim Signals No Rate Cut Needed Now as Outlook Improves. Bank of Korea Governor Kim Choong Soo said an improved global outlook increases the odds of South Korea exceeding this year’s growth forecast, signaling that further monetary easing isn’t necessary for now. Asia’s fourth-largest economy is likely to achieve 2.8 percent growth, Kim, 65, said in an interview in Seoul yesterday. “I bet a little bit more on the upside than the downside,” Kim said, adding that domestic liquidity is “abundant.”

•

Malaysia January Inflation Accelerates to 1.3%. Consumer prices rose 1.3 percent from a year earlier, after climbing a previously reported 1.2 percent in December, according to data released by the Putrajaya-based Statistics Department today. The median of 18 estimates in a Bloomberg News survey was for a 1.2 percent gain.

•

Thai Central Bank Rebuffs Government Pressure as Rate Held. Thailand’s central bank kept its policy interest rate unchanged for a third straight meeting as economic growth quickened, resisting the government’s calls for monetary easing to cool the baht’s gains. Page 2 of 5

The Bank of Thailand held its one-day bond repurchase rate at 2.75 percent, with the monetary policy committee voting six to one to hold, it said in Bangkok today. IFIs NEWS (compiled from their websites) ADBI – Publication: “Economic Stability and Choice of Exchange Rate Regimes” •

The ADBI has published the captioned working paper. This paper emphasizes the importance of Europe's structural problems and governance as the cause of the current euro area crisis. The paper discusses the relationship between the single currency and economic stability in Europe and also confirms the asymmetries that remained after the introduction of the euro before touching on the governance overhaul taking place in Europe today. Finally, the paper will touch upon the implications for Asia and Japan, from the point of view of the choice of exchange rate regime as a method to advance necessary reforms.

http://www.adbi.org/files/2013.02.19.wp408.economic.stability.exchange.rate.regimes.pdf WTO – Press Release: Trade Policy Review: Japan •

The eleventh review of the trade policies and practices of Japan takes place on 19 and 21 February 2013. The basis for the review is a report by the WTO Secretariat and a report by the Government of Japan.

http://www.wto.org/english/tratop_e/tpr_e/tp376_e.htm FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 19-Feb 20-Feb close China 6.23 6.24 6.24 6.24 Hong Kong 7.75 7.76 7.75 7.75 Indonesia 9,793.00 9,657.00 9,709.00 9,684.00 Japan 86.75 92.68 93.57 93.43 Korea 1,064.40 1,095.80 1,081.05 1,078.30 Malaysia 3.06 3.10 3.10 3.10 Philippines 41.01 40.70 40.63 40.63 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.87 29.85 Vietnam 20,840.00 20,845.00 20,850.00 20,880.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change 0.11 -0.01 0.26 0.15 0.26 0.13 0.00 0.04 0.07 -0.14

2013 YTD (%chg) -0.1 -0.1 -0.3 -6.5 -1.4 -1.9 0.5 -1.2 1.6 -0.2

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,432.4 23,215.2 4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

19-Feb 2,382.9 23,143.9 4,602.1 11,372.3 1,985.8 1,615.1 6,620.7 3,295.8 1,532.1 490.8

OVERNIGHT LENDING RATE (%) 19-Feb 20-Feb bps change 2.300 1.890 -41.00

20-Feb 2,397.2 23,307.4 4,626.2 11,468.3 2,024.6 1,611.3 6,648.6 3,305.7 1,543.1 494.8

% change 0.60 0.71 0.53 0.84 1.95 -0.23 0.42 0.30 0.72 0.83

2013 YTD (%chg) 5.6 0.0 6.4 10.3 -0.3 -3.8 13.4 3.2 9.6 18.3

3-MONTH INTERBANK LENDING RATE (%) 19-Feb 20-Feb bps change 3.882 3.880 -0.17

Page 3 of 5

Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

0.094 4.175 0.095 2.750 3.000 1.574 0.040 2.750 3.171

0.094 4.176 0.098 2.750 3.000 2.858 0.040 2.750 2.625

0.00 0.07 0.25 0.00 0.00 128.40 0.00 0.00 -54.60

0.385 4.901 0.273 2.780 3.210 0.327 0.377 2.860 7.000

0.384 4.900 0.270 2.780 3.210 0.244 0.377 2.860 6.313

-0.07 -0.07 -0.25 0.00 0.00 -8.30 0.00 0.00 -68.70

CREDIT DEFAULT SWAP (IN BPS) 18-Feb 19-Feb bps change China 64.59 64.00 -0.59 Hong Kong 42.50 42.50 0.00 Indonesia 140.70 138.33 -2.37 Japan 72.67 71.30 -1.37 Korea 66.19 65.00 -1.19 Malaysia 84.74 79.17 -5.57 Philippines 101.76 100.00 -1.76 Thailand 94.70 92.67 -2.03 Vietnam 211.22 209.30 -1.92 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 19-Feb Gold Spot (in US$ per ounce)

20-Feb

1,605.1

% change

1,605.5

0.03

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1 237.7 172.6 19.9

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1 243.4 174.7 19.7

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8 244.1 175.3 20.0

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0 246.2 252.1 179.2 183.6 n.a n.a

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2 259.3 182.0 n.a

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8 258.8 181.6 n.a

EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn)

3 months imports of goods & services (US$bn)

Short-term external debt (US$bn)

Import cover (Qtrs of imports covered by reserves)

Reserves over short-term debt

Page 4 of 5

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

572.8 711.2 38.3 2,255.1 126.7 32.4 8.0 924.3 57.2 10.0

6.6 2.2 2.2 18.0 2.2 2.4 4.4 2.2 2.7 -

DATA RELEASES FOR THE DAY Indicators Period

Country

JAPAN JAPAN JAPAN SOUTH KOREA THAILAND

504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

All Industry Activity Index (MoM) % Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn) External Short-Term Debt (USD bn) Benchmark Interest Rate

Dec Jan Jan 4Q Feb 20

5.8 0.4 2.9 0.6 2.6 4.3 10.5 0.3 3.2 -

Last

Previous

1.8 6.4 7.3 126.7 2.75

-0.3 -5.8 1.9 132.6 2.75

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013)

Expected Release Date 2/20/2013

Country JAPAN JAPAN JAPAN SOUTH KOREA

Indicators All Industry Activity Index (MoM) % Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn) External Short-Term Debt (USD bn)

2/21/2013

THAILAND HONG KONG

Benchmark Interest Rate Unemployment Rate SA%

2/22/2013

THAILAND

Foreign Reserves (USD bn)

MALAYSIA SINGAPORE SINGAPORE HONG KONG

Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% CPI - Composite Index (YoY)%

Period Dec Jan Jan 4Q Feb 20 Jan Feb 15 Feb 15 4Q F 4Q F Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 5 of 5

MARKET UPDATE FOR ASEAN+3 21 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asia Stocks Tumble, Led by China Shares, Amid Tightening Concern. Asian stocks plunged, with a gauge of Chinese companies in Hong Kong erasing the year’s gains, amid concern the Federal Reserve may scale back U.S. economic stimulus and as China ordered increased property curbs. Hong Kong’s Hang Seng Index declined 1.9 percent, while China’s Shanghai Composite Index lost 3 percent, the biggest drop since November 2011. Japan’s Nikkei 225 Stock Average fell 1.4 percent. South Korea’s Kospi Index lost 0.5 percent after yesterday rising the most since September.

•

South Korea Won, Indonesia Rupiah and Malaysia Ringgit Lead Regional Currencies Lower, on concern the U.S. will scale back an asset-buying program that has been fueling fund flows into emerging markets. On the other hand, the Dollar Index rose to a three-month high before the release of U.S. leading indicators and a regional manufacturing gauge that may add to evidence a recovery in the world’s largest economy is gathering pace.

•

WTI Drops a Second Day, Extending Biggest Slide in Three Months. West Texas Intermediate oil dropped for a second day, extending the biggest decline in three months. U.S. crude stockpiles gained for the sixth week in seven, according to the American Petroleum Institute. March futures, which expired yesterday, fell 2.3 percent, the most since Nov. 20, amid speculation a commodity fund was selling positions. U.S. crude inventories gained 2.96 million barrels last week to 372 million, the highest level since December.

BREAKING NEWS GLOBAL •

Fed Signals Possible Slowing of QE Amid Debate Over Policy Risks. The Federal Reserve signaled it may consider slowing the pace of asset purchases as officials extended a debate over whether record monetary easing risks unleashing inflation or fueling assetprice bubbles. Several participants at the Federal Open Market Committee’s Jan. 29-30 meeting “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved,” according to the minutes of the gathering released yesterday.

•

Americans in Poll See Housing Market Boosting Economic Growth. Americans, by a margin of more than 3 to 1, expect the housing market to improve over the next 12 months, part of a broader brightening in their outlook for the economy, according to a Bloomberg National Poll. Fifty percent of poll respondents say the market will continue to get better in 2013 compared with only 16 percent who say they expect it to decline. An additional 31 percent say the market will stay about the same.

•

Russia Says Central Banks Remaking Policy Rule Book After Lehman. Central banks are pivoting away from accepted tools of monetary policy, embracing strategies that include asset purchases and capital controls, according to a top economic adviser to Russian

President Vladimir Putin. The Group of 20, whose finance chiefs met in Moscow last week, discussed a broad rethinking of monetary tools, including the possibility of targeting a level of nominal gross domestic product, said Russia’s G-20 sherpa, Ksenia Yudaeva. “There’s a very strong process of reconsideration of what appropriate monetary policy means for central banks,” Yudaeva said in an interview in Moscow. “If in the 2000s inflation targeting was considered the best policy, leaving interest rates as the only tool, now new instruments have emerged.” •

King Pulls Out Stops to Make Economy Stronger in Carney Handover. Bank of England Governor Mervyn King is trying to pull out all the stops to avoid handing over a failing economy to his successor Mark Carney. As Carney’s arrival in four months fuels the debate about potential new measures to help the U.K., King is pressing for more bond purchases and leading a debate on what can be done to encourage lending, boost exports and bolster the recovery. He is even calling for the government to take more action, saying it needs to work with the central bank to spur economic growth.

REGIONAL •

China Extending Zhou Stay Seen as Aid to Financial Overhaul. China’s plans to make its financial system more market-based and expand the yuan’s role as a global currency are incentives to extend the tenure of the nation’s longest-serving central bank governor, analysts said. Zhou Xiaochuan, who turned 65 last month, will probably become a vice chairman of parliament’s top advisory body, an appointment that exempts him from mandatory retirement, Reuters reported yesterday, citing two people with partyleadership ties and two people in the financial industry who weren’t identified. Zhou will remain governor for an indefinite time to help enact changes including easing restraints on the yuan, Reuters said.

•

China Leading Index Rises at Faster Pace. A leading index for China’s economy rose at a faster pace in January, suggesting the nation’s growth rebound is maintaining momentum. The gauge increased 1 percent from December to 253.4, the Conference Board, a New York-based research group, said in a statement today, citing a preliminary reading. That compared with a gain of 0.4 percent the previous month and 1.1 percent in November. Today’s report adds to signs that economic growth may accelerate for a second quarter after exports rose more than estimated last month and a broad measure of credit increased to a record. The nation’s growth momentum is “relatively strong,” the central bank said in a report released Feb. 6.

•

Abe’s Yen Rocket Sends Popularity to 2009 High. Japanese Prime Minister Shinzo Abe’s popularity is surging as stimulus efforts aimed to drive the nation out of deflation ripple through the nation’s equity and currency markets. The CHART OF THE DAY shows the Cabinet’s approval rating climbing six percentage points in six weeks to 71 percent in Yomiuri newspaper survey taken through Feb. 11, a level unseen since October 2009 under Yukio Hatoyama. The chart also shows the yen touching the weakest in almost three years against the dollar and the Nikkei 225 Stock Average Index closing at the highest level since September 2008.

•

Indonesian Short-Term Bonds Rally as Inflation Seen Quickening. Indonesia’s shortterm bonds rallied, pushing the two-year yield to a one-year low, on speculation investors are favoring the notes to guard against accelerating inflation. Rupiah forwards Page 2 of 6

declined. Consumer prices will increase 5.2 percent this year from 4.3 percent in 2012, according to the median estimate of 22 analysts surveyed by Bloomberg, as the government raises electricity tariffs by 15 percent. Global funds added 2.07 trillion rupiah ($213 million) to their local-currency sovereign debt holdings in the first two days of this week, finance ministry data show. •

Singapore Companies Brace for Labor Curbs After Protest. Singapore will probably force companies to further reduce their reliance on foreign labor in the 2013 budget, after a public backlash against the influx of workers led to the biggest demonstration in more than a decade. Finance Minister Tharman Shanmugaratnam may cut the ratio of overseas workers companies are allowed to hire, according to Credit Suisse Group AG. To counter any labor shortfall, there may also be incentives to boost productivity, economists at Citigroup Inc. and Oversea-Chinese Banking Corp. said ahead of the Feb. 25 budget presentation.

•

Thailand Beating China With Toyota Means Shipping Boom. Toyota Motor Corp.’s success in selling Thai-made vehicles to the Middle East and Latin America is fueling a boom for car carriers. Exports of Hilux pickup trucks and Fortuner SUVs helped the Southeast Asian nation overtake China as Toyota’s third-biggest global production hub last year. That growth helped spur Nippon Yusen K.K., the world’s biggest operator of the roll-on, roll- off ships, to forecast it will carry 3.45 million vehicles this fiscal year, the most in five years.

IFIs NEWS (compiled from their websites) •

G20 – Press Release: The list of countries and international organizations invited to take part in the 2013 G20 Summit Presidential Press Secretary Dmitry Peskov has announced that Vladimir Putin signed invitations for heads of state and government of the Group of Twenty nations and the heads of a number of other countries and international organizations to take part in the G20 summit in St. Petersburg. As the country currently holding the G20 presidency, Russia has extended an invitation to Brunei Darussalam (as the country holding the presidency of ASEAN in 2013) and Singapore (as the country presiding over the IMF's International Monetary and Financial Committee and president of the Global Governance Group (3G)) to participate in the Summit too. This is in addition to the participation of the G20 member countries and seven international organisations. http://www.g20.org/news/20130220/781222158.html

•

IMF – Press Release: IMF Executive Board Completes First Review Under the ECF Arrangement for Bangladesh and Approves US$139.4 Million Disbursement The Executive Board of the IMF has completed the first review of Bangladesh’s economic program under a three-year arrangement supported by the Extended Credit Facility (ECF). The completion of the review enables an immediate disbursement of an amount equivalent to SDR 91.423 million (about US$139.4 million), bringing the total amount disbursed equivalent to SDR 182.846 million (about US$278.8 million). http://www.imf.org/external/np/sec/pr/2013/pr1357.htm

Page 3 of 6

•

IMF – Press Release: IMF Management and Staff Welcome Independent Evaluation Office’s Report on the Role of IMF as Trusted Advisor The IMF’s management and staff welcomed the report released by the Independent Evaluation Office (IEO) on the Role of the IMF as a Trusted Advisor, which focuses on the quality and traction of the IMF’s advice to its members. The IEO report includes a myriad of recommendations to improve the work of the IMF and its interactions with the membership. IMF staff agreed with a number of suggestions by the IEO, notably enhancing the value of Article IV consultations by drawing on relevant cross-country experiences, and improving the medium-term focus of the relationship between the Fund and member countries by lengthening country assignments and enhancing the dialogue with country authorities. IMF staff had reservations regarding some other recommendations—such as providing country authorities with draft policy recommendations ahead of staff missions—which they believed would not necessarily solve the difficulties identified and could raise potential policy implementation problems. http://www.imf.org/external/np/sec/pr/2013/pr1354.htm (Press Release) http://www.ieo-imf.org/ieo/files/completedevaluations/RITA_-_Main_Report.pdf (Report)

•

IMF – Working Paper: “Dealing with Private Debt Distress in the Wake of the European Financial Crisis A Review of the Economics and Legal Toolbox” The IMF has publicised the captioned working paper. “The private non-financial sector in Europe is facing increased challenges in meeting its debt servicing obligation. In response, governments are revisiting legal tools and—in some cases—institutional arrangements to deal with over-indebtedness.“ http://www.imf.org/external/pubs/ft/wp/2013/wp1344.pdf

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 20-Feb 21-Feb close China 6.23 6.24 6.24 6.24 Hong Kong 7.75 7.76 7.75 7.76 Indonesia 9,793.00 9,657.00 9,684.00 9,714.00 Japan 86.75 92.68 93.57 93.35 Korea 1,064.40 1,095.80 1,078.30 1,086.24 Malaysia 3.06 3.10 3.10 3.11 Philippines 41.01 40.70 40.62 40.74 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.85 29.87 Vietnam 20,840.00 20,845.00 20,870.00 20,890.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change -0.03 -0.02 -0.31 0.24 -0.73 -0.32 -0.30 -0.07 -0.07 -0.10

2013 YTD (%chg) -0.1 -0.1 -0.6 -6.4 -2.1 -2.3 0.3 -1.6 1.5 -0.2

STOCK MARKET INDEX 2012 close China Hong Kong Indonesia Japan Korea Malaysia

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0

Previous wk's close 2,432.4 23,215.2 4,491.3 11,153.2 1,950.9 1,623.8

20-Feb 2,397.2 23,307.4 4,634.5 11,468.3 2,024.6 1,613.3

21-Feb 2,326.0 22,906.7 4,627.9 11,309.1 2,015.2 1,610.3

% change -2.97 -1.72 -0.14 -1.39 -0.47 -0.19

2013 YTD (%chg) 2.5 -1.7 6.5 8.8 -0.8 -3.8

Page 4 of 6

Philippines Singapore Thailand Vietnam

5,812.7 3,167.1 1,391.9 413.7

6,458.7 3,270.3 1,497.3 494.0

6,648.6 3,308.9 1,546.6 494.8

OVERNIGHT LENDING RATE (%) 20-Feb 21-Feb bps change 1.890 2.030 14.00 0.094 0.091 -0.29 4.176 4.175 -0.07 0.100 0.103 0.25 2.750 2.750 0.00 3.000 3.000 0.00 2.858 1.672 -118.60 0.020 0.020 0.00 2.750 2.750 0.00 2.625 1.975 -65.00

China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

6,667.4 3,284.2 1,536.0 476.7

0.28 -0.75 -0.69 -3.66

13.8 2.6 9.1 14.0

3-MONTH INTERBANK LENDING RATE (%) 20-Feb 21-Feb bps change 3.880 3.880 0.00 0.384 0.384 -0.07 4.900 4.900 0.00 0.270 0.270 0.00 2.780 2.780 0.00 3.210 3.210 0.00 0.244 0.293 4.90 0.377 0.377 0.00 2.860 2.864 0.39 6.313 6.063 -25.00

CREDIT DEFAULT SWAP (IN BPS) 19-Feb 20-Feb bps change China 64.00 64.55 0.55 Hong Kong 42.50 42.34 -0.16 Indonesia 138.33 138.21 -0.12 Japan 71.30 70.17 -1.13 Korea 65.00 65.38 0.38 Malaysia 79.17 75.36 -3.81 Philippines 100.00 102.50 2.50 Thailand 92.67 90.40 -2.27 Vietnam 209.30 207.50 -1.80 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 20-Feb Gold Spot (in US$ per ounce)

21-Feb

1,564.6

% change

1,566.8

0.15

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong Indonesia Japan Korea Malaysia Philippines

31-May 3,206.1 291.9 111.5 1,277.7 310.9 136.0 76.1

30-Jun 3,240.0 295.0 106.5 1,270.5 312.4 134.2 76.1

31-Jul 3,240.0 296.3 106.6 1,272.8 314.4 134.5 79.8

2012 31-Aug 30-Sep 3,272.9 3,285.1 298.2 301.2 109.0 110.2 1,273.2 1,277.0 316.9 322.0 134.9 137.5 80.7 82.0

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3 81.7

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1 83.9

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 84.2

2013 31-Jan n.a 321.0 108.8 1,267.3 328.9 140.0 85.8

Page 5 of 6

Singapore Thailand Vietnam

237.7 172.6 19.9

243.4 174.7 19.7

244.1 175.3 20.0

246.2 179.2 n.a

252.1 183.6 n.a

254.2 181.5 n.a

255.8 181.6 n.a

259.3 182.0 n.a

258.8 181.6 n.a

EXTERNAL LIQUIDITY RATIOS Reserves - latest (US$bn) China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

3 months imports of goods & services (US$bn)

Short-term external debt (US$bn)

504.3 144.7 50.5 70.3 150.9 59.2 19.3 116.7 68.0 25.4

572.8 711.2 38.3 2,255.1 126.7 32.4 8.0 924.3 57.2 10.0

3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

Import cover (Qtrs of imports covered by reserves)

Reserves over short-term debt

6.6 2.2 2.2 18.0 2.2 2.4 4.4 2.2 2.7 -

5.8 0.4 2.9 0.6 2.6 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

HONG KONG SAR

Indicators

Unemployment Rate SA%

Period

Jan

Last

3.4

Previous

3.3

SELECTED ECONOMIC RELEASES CALENDAR (4-8 Feb 2013)

Expected Release Date 2/21/2013 2/22/2013

Country HONG KONG SAR THAILAND MALAYSIA SINGAPORE SINGAPORE HONG KONG

Indicators

Period

Unemployment Rate SA% Foreign Reserves (USD bn) Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% CPI - Composite Index (YoY)%

Jan Feb 15 Feb 15 4Q F 4Q F Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 6 of 6

MARKET UPDATE FOR ASEAN+3 25 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asia Stocks Rise, Led by Japan Shares. Asian stocks rose, extending last week’s advance, as Japanese shares led gains. Hong Kong developers fell after the city doubled taxes on some property transactions. The Asia-Pacific gauge rose 0.3 percent to 134 as of 3:44 p.m. in Tokyo after adding 0.5 percent last week. About five stocks gained for every three that fell on the measure. Shares pared increases in Shanghai after a private survey showed China’s manufacturing may expand this month at a slower pace. Investors also are awaiting Italian election results today. The MSCI Asia Pacific Index gained 9.5 percent from the end of October through Feb. 22. Asia’s benchmark traded at 14.8 times estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600, according to data compiled by Bloomberg.

•

Yen Falls to Lowest Since 2010. The yen fell to the lowest level in almost three years, Japanese bond yields slid and the nation’s stocks rallied. European stock index futures rose, while the Australian dollar weakened. The yen dropped 0.9 percent to 94.24 per dollar at 3:18 p.m. in Tokyo, after touching its lowest level since May 2010.

BREAKING NEWS GLOBAL •

Monti Braces for Popular Test of Investor-Backed Austerity. Mario Monti, the university president appointed to run Italy at the height of Europe’s financial crisis 15 months ago, gets his final grade from voters today. He already won a stamp of approval from investors. Monti’s legacy is in doubt in the first popular test of his program. A resurgent Berlusconi and former comedian Beppe Grillo have promised to roll back his austerity if elected. Their campaigns gathered momentum in the final month as recession- scarred voters turned away from Pier Luigi Bersani, the union- backed frontrunner who endorsed Monti’s rigor. Monti was running fourth in opinion surveys when a polling blackout began two weeks ago. Turnout at 10 p.m. yesterday was 55.2 percent, down from 62.6 percent at the same time five years ago, according to the Interior Ministry. Initial estimates will be released by pollsters shortly after voting stations close at 3 p.m. The Interior Ministry will start its count with the Senate today and then move on to the Chamber of Deputies.

•

European Companies Stockpile $475 Billion as Outlook Dims. European companies are hoarding more than three times the cash they held a decade ago as the region heads for a second year of recession, putting them at risk of losing out to U.S. rivals boosting acquisitions and investment. Cash holdings at the 265 European companies in the Stoxx Europe 600 Index, excluding banks and insurers, to have reported 2012 results totalled $475 billion at the end of last year, according to data compiled by Bloomberg. That compares with $136 billion in 2002 and is 14 percent more than in 2011. Siemens AG (SIE), Vodafone Group Plc (VOD) and Total SA (FP) are among nine companies that each held more than $10 billion. The euro area will shrink for two straight years for the first time since the common currency was introduced, the European Commission predicted

on Feb. 22, scrapping an earlier growth forecast. Western European companies have announced $50 billion of acquisitions so far this year, almost half the total of the yearago period, while purchases by U.S. companies almost doubled to $184 billion, Bloomberg data show. REGIONAL •

China’s Slower Manufacturing Casts Shadow Over Recovery. China’s manufacturing is expanding at the slowest pace in four months, a private survey showed, underscoring the headwinds faced by policy makers in the world’s second-biggest economy. The preliminary reading of a Purchasing Managers’ Index was 50.4 in February, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 52.3 final reading for January. A number above 50 indicates expansion. Today’s report may damp optimism that an economic rebound is gaining traction following a seven-quarter slowdown and the weakest annual expansion in 13 years.

•

Singapore’s January Inflation Slows More Than Estimated on Food. Singapore’s inflation slowed more than economists estimated in January as gains in food and housing costs eased. The consumer price index rose 3.6 percent from a year earlier, after climbing 4.3 percent in December, the Department of Statistics said in a statement today. The city-state’s policy makers have sought to contain price gains by allowing a gradual appreciation in the currency and introducing property-cooling measures. Overall inflation will remain elevated, with month-to-month fluctuations as a result of car prices and home rentals, the central bank and Trade Ministry said today. The Monetary Authority of Singapore is maintaining its inflation forecast for 2013 at 3.5 percent to 4.5 percent, Edward Robinson, assistant managing director of the economic policy department, said last week. Price gains averaged 4.6 percent last year. “Given the subdued conditions in the global economy, imported inflation will be broadly benign,” the central bank and Trade Ministry said today. “However, the persistent tightness in the domestic labor market will support wage increases in 2013, some of which will continue to pass through to consumer prices.”

•

Hong Kong Weekend Property Sales Fall on Doubled Stamp Duty. Residential property sales in Hong Kong fell after the government doubled a sales tax, saying bubble risks are spreading in the world’s most expensive place to buy an apartment. Secondary sales for the 15 most popular housing estates fell 15 percent at the weekend from the previous weekend, according to Buggle Lau, chief analyst at Midland Holdings Ltd., the city’s biggest publicly traded realtor. The stamp duty on all properties above HK$2 million ($258,000) was raised to as much as 8.5 percent of the purchase price. Chief Executive Leung Chun-ying’s latest attempt to cool the city’s real estate market sent shares of developers and realtors lower amid concerns that transactions will dry up and prices will decline. Since taking office in July, Leung has added extra property taxes, favored local permanent residents, tightened mortgages and increased supply after home prices doubled in the past four years on near-record low mortgage rates, an influx of mainland Chinese buyers and a lack of new units. The Hang Seng Property Index (HSP), which tracks the shares of the city’s nine biggest developers, fell for a seventh consecutive session, the longest losing streak since the seven sessions to May 14. It fell 1.5 percent as of 10:02 a.m. local time to the lowest in two months. The index has

Page 2 of 7

outperformed the Hang Seng Index in the past 12 months, gaining 13 percent compared to the benchmark’s 7.5 percent. IFIs NEWS (compiled from their websites) ADBI – Publication: “New Paradigms for Financial Regulation: Emerging Market Perspectives” •

The ADBI and the Brookings Institution have published a new book, providing new perspectives on financial market regulation and macroeconomic policies. “The main objective of this book is to develop analytical frameworks and policy prescriptions for emerging markets for balancing the goals of financial development and broader financial inclusion, with the imperative of strengthening macroeconomic and financial stability in these economies.” http://www.adbi.org/book/2013/02/22/5526.financial.regulation.emerging.market/

ADBI – Working Paper: “Impact of the ASEAN Economic Community on ASEAN Production Networks” •

The ADBI has publicised the captioned working paper. “Empirical evidence suggests that the emergence of international production networks in East Asia results from market-driven forces such as vertical specialization and higher production costs in the home countries and institutional-led reasons such as free trade agreements. This paper examines two industries—autos and auto parts, and hard disk drives (HDDs)— to understand international production networks. The study also points out the importance of the People's Republic of China and Thailand as assembly bases. Finally, the study concludes that investment promotion policies contributed more to the emergence of international production networks than free trade agreements.” http://www.adbi.org/files/2013.02.21.wp409.impact.asean.production.networks.pdf

WTO – Press Release: WTO strengthens contact with the business community •

The WTO has launched a dedicated web area for business on the WTO website (www.wto.org/business), and also launched an electronic newsletter targeted specifically at the private sector. The aim of the web page for business is to make key information for the private sector, such as trade statistics and trade monitoring news, easily accessible in one dedicated area. The newsletter, which will be issued on a regular basis, includes the latest business-focused trade news from the WTO. It will be circulated electronically to all business representatives who have registered on the WTO online Database. http://www.wto.org/english/news_e/news13_e/bus_21feb13_e.htm

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close close China 6.23 6.24 Hong Kong 7.75 7.76 SAR Indonesia 9,793.00 9,707.00 Japan 86.75 93.42 Korea 1,064.40 1,084.68 Malaysia 3.06 3.10

22-Feb

25-Feb

% change

2013 YTD (%chg)

6.24

6.23

0.09

0.0

7.76

7.76

0.00

-0.1

9,707.00 93.42 1,084.68 3.10

9,703.00 93.95 1,086.36 3.10

0.04 -0.56 -0.15 0.12

-0.5 -7.0 -2.1 -2.0

Page 3 of 7

Philippines 41.01 40.72 40.72 40.68 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.83 29.83 29.85 Vietnam 20,840.00 20,890.00 20,890.00 20,875.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

0.10 -0.06 -0.07 0.07

0.4 -1.4 1.6 -0.2

STOCK MARKET INDEX

2,269.1

Previous wk's close 2,314.2

22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,314.2

2,325.8

0.50

2013 YTD (%chg) 2.5

22,782.4

22,782.4

22,820.1

0.17

-2.1

4,651.1 11,385.9 2,018.9 1,622.1 6,665.1 3,288.1 1,540.1 477.7

4,651.1 11,385.9 2,018.9 1,622.1 6,665.1 3,288.1 1,540.1 477.7

4,677.1 11,662.5 2,009.5 1,625.8 6,721.3 3,289.9 1,540.1 483.7

0.56 2.43 -0.46 0.23 0.84 0.05 0.00 1.26

7.6 12.2 -1.1 -2.9 14.7 2.8 9.4 15.6

22-Feb

25-Feb

OVERNIGHT LENDING RATE (%) 22-Feb 25-Feb bps change 2.200 2.510 31.00

% change

3-MONTH INTERBANK LENDING RATE (%) 22-Feb 25-Feb bps change 3.880 3.880 0.02

0.091

0.091

0.00

0.383

0.383

0.00

4.175 0.090 2.750 3.000 1.400 0.041 2.750 1.938

4.176 0.088 2.750 3.000 1.579 0.041 2.750 2.027

0.14 -0.25 0.00 0.00 17.90 0.00 0.00 8.90

4.900 0.270 2.780 3.210 0.469 0.376 2.864 5.813

4.900 0.270 2.780 3.210 0.312 0.376 2.864 6.500

0.00 0.00 0.00 0.00 -15.70 0.00 0.00 68.70

CREDIT DEFAULT SWAP (IN BPS) 21-Feb 22-Feb bps change China 65.58 65.58 0.00 Hong Kong 43.33 43.33 0.00 SAR Indonesia 137.49 137.49 0.00 Japan 69.96 69.96 0.00 Korea 67.30 67.30 0.00 Malaysia 76.35 76.35 0.00 Philippines 99.45 99.45 0.00 Thailand 92.02 92.02 0.00 Vietnam 209.76 210.61 0.86 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 22-Feb Gold Spot (in US$ per ounce)

1,581.2

25-Feb

% change

1,589.3

0.52

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan

S&P AAAAA BB+ AA-

Moody's Aa3 Aa1 Baa3 --

Fitch A+ AA+ BBBAA

Page 4 of 7

Korea Malaysia Philippines Singapore Thailand Vietnam

A ABB+ AAA BBB+ BB-

Aa3 A3 Ba1 -Baa1 B1

A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 2012 31-May 30-Jun 31-Jul 31-Aug China 3,206.1 3,240.0 3,240.0 3,272.9 Hong Kong 291.9 295.0 296.3 298.2 SAR Indonesia 111.5 106.5 106.6 109.0 Japan 1,277.7 1,270.5 1,272.8 1,273.2 310.9 312.4 314.4 316.9 Korea Malaysia 136.0 134.2 134.5 134.9 Philippines 76.1 76.1 79.8 80.7 Singapore 237.7 243.4 244.1 246.2 Thailand 172.6 174.7 175.3 179.2 19.9 19.7 20.0 20.8 Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Reserves - latest

3 months imports of goods/serv (US$bn) 504.3

30-Sep 3,285.1

31-Oct 3,287.4

30-Nov 3,297.7

31-Dec 3,311.6

2013 31-Jan n.a

301.2

301.7

305.2

317.3

321.0

110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3

110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6

Reserves over short-term debt

(US$bn) China 3,311.6 Hong Kong 321.0 144.7 711.2 2.2 SAR Indonesia 108.8 50.3 43.9 2.2 Japan 1,267.3 70.4 2,255.1 18.0 Korea 327.0 150.9 126.7 2.2 Malaysia 139.7 59.2 32.4 2.4 Philippines 83.8 19.3 8.0 4.4 Singapore 259.3 118.6 924.3 2.2 Thailand 181.6 68.0 57.2 2.7 Vietnam n.a 25.4 10.0 Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.

Country

CHINA SINGAPORE HONG KONG HONG KONG HONG KONG

Expected Release Date 2/25/2013

DATA RELEASES FOR THE DAY Indicators Period

HSBC Flash China Manufacturing PMI CPI (YoY)% Imports YoY% Exports YoY% Trade Balance (HKD bn)

Feb Jan Jan Jan Jan

Last

50.4 3.6 23.9 17.6 -27.5

5.8 0.5 2.5 0.6 2.6 4.3 10.5 0.3 3.2 -

Previous

52.3 4.3 11.9 14.4 48.0

SELECTED ECONOMIC RELEASES CALENDAR (25 Feb â&#x20AC;&#x201C; 1 Mar 2013)

Country CHINA SINGAPORE

Indicators HSBC Flash China Manufacturing PMI CPI (YoY)%

Period Feb Jan

Page 5 of 7

2/26/2013

2/27/2013

2/28/2013

3/1/2013

HONG KONG HONG KONG HONG KONG VIETNAM VIETNAM VIETNAM VIETNAM PHILIPPINES PHILIPPINES SINGAPORE THAILAND THAILAND KOREA KOREA HONG KONG HONG KONG JAPAN KOREA KOREA KOREA KOREA MALAYSIA HONG KONG THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND INDONESIA JAPAN INDONESIA JAPAN JAPAN THAILAND THAILAND JAPAN JAPAN CHINA KOREA KOREA CHINA INDONESIA INDONESIA INDONESIA INDONESIA

Imports YoY% Exports YoY% Trade Balance (HKD bn) Imports YTD (YoY)% Exports YTD (YoY)% Industrial Production Index YoY % Retail Sales YTD (YoY)% Total Imports (YoY)% Trade Balance (USD mn) Industrial Production YoY% Customs Imports (YoY)% Customs Exports (YoY)% SK Consumer Confidence Current Account in (USD mn) GDP (YoY)% GDP sa (QoQ)% Industrial Production YOY% Business Survey- Non-Manufacturing Business Survey- Manufacturing Industrial Production (YoY)% Industrial Production (MoM)% Unemployment Rate % Govt Mthly Budget Surp/Def (HKD bn) Total Trade Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index Foreign Reserves (USD bn) Consumer Confidence Index Official Reserve Assets (USD bn) Money Supply - M2 (YoY)% National CPI YoY % National CPI Ex Food, Energy YoY % Consumer Price Index (YoY)% Core CPI (YoY)% Jobless Rate % Job-To-Applicant Ratio PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% HSBC Manufacturing PMI Total Imports (YoY)% Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)%

Jan Jan Jan Feb Feb Feb Feb Dec Dec Jan Jan Jan Feb Jan 4Q 4Q Jan P Mar Mar Jan Jan 4Q Jan Jan Jan Jan Jan Jan Feb 22 Feb Feb Jan Jan Jan Feb Feb Jan Jan Feb Feb Feb Feb Jan Feb Jan Feb

Page 6 of 7

INDONESIA INDONESIA

Inflation NSA (MoM)% Total Trade Balance (USD mn)

Feb Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7

MARKET UPDATE FOR ASEAN+3 26 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks fell, with the regional benchmark index poised to slide for the first time in three days, on concern Italy’s elections may reignite Europe’s debt crisis. The MSCI Asia Pacific Index fell 0.6 to 133.47 as of 5:10 p.m. in Tokyo with more than five shares dropping for each that increased. The gauge has climbed 0.2 percent in February, headed for a fourth month of gains, the longest such streak since September 2009. Italy may be left with a hung parliament after partial election results suggested former Prime Minister Silvio Berlusconi may have garnered enough support to deny victory to Pier Luigi Bersani, who campaigned to maintain the austerity program of outgoing Prime Minister Mario Monti.

•

West Texas Intermediate (WTI) oil fell to a seven-week low before a report that may show U.S. crude stockpiles rose. WTI for April delivery was down 90 cents, or 1 percent, at $92.21 a barrel in electronic trading on the New York Mercantile Exchange at 3:37 p.m. Singapore time. The volume of all futures traded was 10 percent higher than the 100-day average. Brent oil for April settlement on the London-based ICE Futures Europe exchange decreased as much as $1.14, or 1 percent, to $113.30 a barrel. The volume was 70 percent higher than the 100-day average. The European benchmark crude was at a premium of $21.31 to WTI contracts, from $21.33 yesterday.

BREAKING NEWS GLOBAL •

The European Union’s tax commissioner urged U.S. supporters of a financial transaction tax to keep up their efforts and said a global tax should be a reality at some time. So far, 11 countries have signed up to work toward the EU’s tax. The plan would impose a wide-ranging levy on trades of stocks, bonds, derivatives and other financial instruments, to raise revenue and discourage speculative trading. The U.S. Treasury Department opposes the EU tax, warning about the effects on U.S. investors. Payson Peabody, managing director and tax counsel at the Securities Industry and Financial Markets Association in Washington, said his group agreed a tax could harm U.S. investors.

•

EU eyes March 22 deadline for Basel Law to avoid delays. If the measures aren’t finalized next month, the EU may run out of time to hit its January 1, 2014, target date to implement the so-called Basel III accord, according to the document obtained by Bloomberg News. This would force the EU either to shorten its transition period, putting undue strain on lenders to adjust by the start of next year, or delay starting the new bank rules on July 1, 2014, or January 1, 2015. Lawmakers are pushing the EU to include in the capital rules a requirement for country-by-country reports on profits, losses and taxes, according to the document. Lawmakers and EU negotiators will meet tomorrow to try to break logjams over banker bonuses, financial reporting requirements and the amount of power retained by national regulators.

•

President Barack Obama urged the nation’s governors to pressure Congress for a deal to avoid automatic spending cuts scheduled to begin March 1. With the National Governors Association meeting in Washington, the White House distributed a state-bystate list of programs that would be affected by the across-the-board reduction in this fiscal year. This includes spending on defense, education and public health. The acrossthe-board cuts would shrink federal spending by $85 billion for fiscal 2013, which ends September 30, and total $1.2 trillion over nine years, out of an annual federal budget of about $4 trillion. Congress mandated the reductions as part of a 2011 deal to increase the U.S. debt limit. They would be split almost evenly between defense and non-defense spending.

REGIONAL •

Denmark to seek new opportunities in Indonesia. Danish Trade and Investment Minister Pia Olsen Dyhr is slated to lead a business delegation to Indonesia at the end of this week, aiming to explore business opportunities and tighten commercial links with local counterparts. Exports from Denmark to Indonesia have been traditionally lower than similar European countries like Sweden and Germany. In 2011, Indonesia was the 60th biggest export destination for Danish firms. According to Danish statistics, exports expanded substantially by 70 percent to US$180 million last year, which is a positive sign for achievable growth in the future. In terms of investment, Denmark also still lags behind other European countries, investing only $100 million in three projects last year, according to data at the Investment Coordinating Board (BKPM).

•

US firms feel left behind in Myanmar. US business leaders are complaining that Washington's remaining sanctions on Myanmar are stopping them from investing in the world's hottest frontier economy, limiting them from whom they can do business with and requiring mountains of compliance paperwork, while European and Asian rivals are getting an edge in opening up the country. Executives of major American companies— including Chevron, General Motors, Yum Brands, Conoco Phillips and Caterpillar—are on a five-day business mission in Myanmar in what is the most significant gathering of US businesses since President Barack Obama's visit in November. The delegation was organized by the US Chamber of Commerce and Myanmar's equivalent organization. The thorniest issue for many remains the Treasury Department's Specially Designated Nationals list of more than 100 Myanmar nationals whose assets are blocked by Washington and are prevented from business dealings with Americans.

•

Singapore plans to raise property levies for luxury homeowners. The higher tax will apply to the top 1 percent of homeowners who live in their own residences, or 12,000 properties, Singapore Finance Minister Tharman Shanmugaratnam said in his budget speech yesterday. The government will also raise tax rates for vacant investment properties or those that are rented out, he said. For a condominium occupied by the owner in Singapore’s central region with an assessed annual rental value of S$70,000 ($56,547), the tax will rise 5 percent to S$2,780, according to the budget statement. If that home is rented out, the tax will climb 21 percent to S$8,500, according to an example highlighted in the statement. For a house with an assessed rental value of S$150,000, worth S$5 million based on the same yield assumption, the tax will rise 60 percent to S$24,000. The revised taxes will take full effect from January 2015.

Page 2 of 8

•

Vietnam’s trade surplus widened in February as exports increased. Exports exceeded imports in February by $900 million, based on preliminary figures released yesterday by the General Statistics Office in Hanoi. January’s trade balance was revised to a surplus of $776 million, the report showed. For the first two months of the year, shipments rose 23.9 percent to $18.97 billion. Exports fell to $7.5 billion in February from a revised $11.47 billion in January, the Statistics Office said. The week-long Tet Lunar New Year celebration, during which most factories are closed, was in February this year and in January in 2012. Imports fell to $6.6 billion from a revised $10.7 billion in January. For the first two months of 2013, they climbed 10.2 percent to $17.3 billion, the data showed.

IFIs NEWS (compiled from their websites) ADBI – Speech: Opening Remarks by Nobumitsu Hayashi at Fiscal Rule or Fiscal Crisis? Challenges to Fiscal Consolidation from a Global Perspective

•

The ADBI has publicised the opening remarks by Mr Nobumitsu Hayashi, President, Policy Research Institute, at the “Fiscal Rule or Fiscal Crisis? Challenges to Fiscal Consolidation from a Global Perspective” held in ADBI, Tokyo on 17 January 2013. http://www.adbi.org/files/speech.2013.01.17.opening.remarks.hayashi.fiscal.rule.fis cal.crisis.pdf

Basel Committee – Speech: “Simplicity, risk sensitivity and comparability: the regulatory balancing act”

•

The BIS has publicised the speech made by Mr.Wayne Byres, Secretary General, Basel Committee on Banking Supervision at BCBS-EMEAP-FSI High-Level Meeting on 25–26 February 2013 in Seoul, Korea. http://www.bis.org/speeches/sp130226.pdf

BIS – Working Paper: “Benign neglect of the long-term interest rate”

•

The BIS has publicised the captioned working paper. “Large-scale central bank purchases of government bonds have made the long-term interest rate key in the monetary policy debate. Interest rate risk in the banking system has grown, and some institutional investors face significant exposures. Central banks in the advanced economies now hold a high proportion of bonds issued by their governments, most of which have so far failed to arrest the rise in the ratio of government debt to GDP. Implementing an effective exit strategy will be difficult. Current policy frameworks should be reconsidered, with a view to clarifying the importance of the long-term interest rate for monetary policy, for financial stability and for government debt management.” http://www.bis.org/publ/work403.htm

IMF – Working Papers •

Taxation, Bank Leverage, and Financial Crises – “That most corporate tax systems favor debt over equity finance is now widely recognized as, potentially, amplifying risks to financial stability. This paper makes a first attempt to explore, empirically, the link between this tax bias and the probability of financial crisis. The implication is that tax bias makes crises much more likely, and, conversely, that the welfare gains from policies to alleviate it can be substantial—far greater than previous studies, which have ignored financial stability considerations, suggest.”

Page 3 of 8

http://www.imf.org/external/pubs/ft/wp/2013/wp1348.pdf

•

Financial Stability In An Evolving Regulatory And Supervisory Landscape – “This paper runs qualitative and quantitative analyses of the financial soundness of Danish banks. Helped by a series of Denmark’s financial policy initiatives, banks have made progress in improving financial stability. However, vulnerabilities remain. To mitigate risks, banks should continue to build more robust capital and liquidity buffers, and enhance further the transparency of disclosures. The flexibility embedded in EU regulations should be used to design strong prudential policies, treating Basel III and the CRD IV regulations as floors. Crisis prevention and management could be further strengthened by phasing out gradually deferred-amortization mortgage loans and introducing risk-adjusted deposit insurance premia. http://www.imf.org/external/pubs/ft/wp/2013/wp1347.pdf

•

Too Small to Fail? Subnational Spending Pressures in Europe – “The purpose of this paper is to assess whether expenditure decentralization has contributed to weakening fiscal performance in Europe. Our results indicate that current decentralization models may have some shortcomings and efforts to achieve fiscal consolidation would require improvements in three areas: better matching subnational spending and revenues; reshaping some expenditure assignments to reduce overlap; and improving the effectiveness of institutional arrangements at the subnational level. http://www.imf.org/external/pubs/ft/wp/2013/wp1346.pdf

OECD – Publication: “Recommendation of the Council on the Governance of Clinical Trials”

•

The OECD has issued the captioned Recommendation. Increasingly complex and inconsistent clinical trial regulations are causing delays, raising costs and leading to less international trials conducted by academics for non-commercial purposes. To boost medical research and help regulators overcome this problem, the OECD is calling on its member governments to harmonise their clinical trial approval processes. The aim is to encourage international collaboration in clinical research and streamline procedures for conducting clinical trials. http://www.oecd.org/newsroom/oecdcountriestoharmoniseclinicaltrialregulationsbo ostmedicalresearchandsavelives.htm (Press Release) http://www.oecd.org/sti/sci-tech/oecd-recommendation-governance-of-clinicaltrials.pdf (Recommendation)

WTO – Press Release: Lamy urges members to accelerate work on Bali package

•

Director-General Pascal Lamy reported to the General Council on 25 February 2013 that negotiators are focusing on the Doha Round elements that are being developed as part of the deliverables for the Ninth Ministerial Conference in Bali: trade facilitation, agriculture and development/least developed-countries issues. He encouraged members “to step up your engagement, listen to each other and accelerate work on all fronts. “ http://www.wto.org/english/news_e/news13_e/gc_rpt_25feb13_e.htm

Page 4 of 8

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 25-Feb 26-Feb close China 6.23 6.24 6.23 6.23 Hong Kong 7.75 7.76 7.76 7.76 SAR Indonesia 9,793.00 9,657.00 9,703.00 9,707.00 Japan 86.75 92.68 91.82 92.00 Korea 1,064.40 1,095.80 1,086.36 1,088.00 Malaysia 3.06 3.10 3.10 3.10 Philippines 41.01 40.70 40.68 40.76 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.83 29.85 Vietnam 20,840.00 20,845.00 20,885.00 20,890.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change 0.06

2013 YTD (%chg)

0.1

-0.03

-0.1

-0.04 -0.20 -0.15 -0.16 -0.18 0.06 -0.07 -0.02

-0.6 -5.1 -2.2 -2.2 0.2 -1.5 1.6 -0.2

STOCK MARKET INDEX

2,269.1

Previous wk's close 2,432.4

22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,325.8

2,293.3

-1.40

2013 YTD (%chg) 1.1

23,215.2

22,820.1

22,519.7

-1.32

-3.4

4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

4,696.1 11,662.5 2,009.5 1,627.4 6,721.3 3,288.8 1,540.1 483.7

4,663.0 11,398.8 2,000.0 1,624.2 6,630.7 3,255.2 1,525.6 465.1

-0.70 -2.26 -0.47 -0.19 -1.35 -1.02 -0.95 -3.85

7.3 9.7 -1.5 -3.0 13.1 1.7 8.4 11.2

25-Feb

26-Feb

OVERNIGHT LENDING RATE (%) 25-Feb 26-Feb bps change 2.510 4.800 229.00

% change

3-MONTH INTERBANK LENDING RATE (%) 25-Feb 26-Feb bps change 3.880 3.884 0.42

0.091

0.091

0.00

0.383

0.383

0.00

4.176 0.100 2.750 3.000 1.579 0.031 2.750 2.027

4.176 0.088 2.750 3.000 1.613 0.031 2.750 1.700

-0.07 -1.25 0.00 0.00 3.40 0.00 0.00 -32.70

4.900 0.270 2.770 3.210 0.312 0.376 2.864 6.500

4.900 0.270 2.770 3.210 0.463 0.375 2.864 5.938

0.00 0.00 0.00 0.00 15.10 -0.08 0.00 -56.20

CREDIT DEFAULT SWAP (IN BPS) 22-Feb 25-Feb bps change China 65.11 65.11 0.00 Hong Kong 44.34 44.34 0.00 SAR Indonesia 137.52 137.52 0.00 Japan 70.97 70.97 0.00 Korea 66.57 66.57 0.00 Malaysia 79.35 79.35 0.00 Philippines 99.51 99.51 0.00 Thailand 90.56 90.56 0.00 Vietnam 210.61 207.51 -3.10 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag.

Page 5 of 8

25-Feb Gold Spot (in US$ per ounce)

26-Feb

1,593.5

% change

1,598.3

0.30

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 31-May 3,206.1

30-Jun 3,240.0

31-Jul 3,240.0

2012 31-Aug 30-Sep 3,272.9 3,285.1

31-Oct 3,287.4

30-Nov 3,297.7

31-Dec 3,311.6

2013 31-Jan n.a

301.2

301.7

305.2

317.3

321.0

110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3

110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

China Hong Kong 291.9 295.0 296.3 298.2 SAR Indonesia 111.5 106.5 106.6 109.0 Japan 1,277.7 1,270.5 1,272.8 1,273.2 310.9 312.4 314.4 316.9 Korea Malaysia 136.0 134.2 134.5 134.9 Philippines 76.1 76.1 79.8 80.7 Singapore 237.7 243.4 244.1 246.2 Thailand 172.6 174.7 175.3 179.2 19.9 19.7 20.0 20.8 Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Reserves - latest

3 months imports of goods/serv (US$bn) 504.3

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6

Reserves over short-term debt

(US$bn) China 3,311.6 Hong Kong 321.0 144.7 711.2 2.2 SAR Indonesia 108.8 50.3 43.9 2.2 Japan 1,267.3 70.4 2,255.1 18.0 Korea 327.0 150.9 126.7 2.2 Malaysia 139.7 59.2 32.4 2.4 Philippines 83.8 19.3 8.0 4.4 Singapore 259.3 118.6 924.3 2.2 Thailand 181.6 68.0 57.2 2.7 Vietnam n.a 25.4 10.0 Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.

Page 6 of 8

5.8 0.5 2.5 0.6 2.6 4.3 10.5 0.3 3.2 -

Country

PHILIPPINES PHILIPPINES SINGAPORE VIETNAM VIETNAM

Expected Release Date 2/25/2013

2/26/2013

2/27/2013

2/28/2013

3/1/2013

DATA RELEASES FOR THE DAY Indicators Period

Total Imports (YoY)% Trade Balance (USD mn) Industrial Production YoY% Industrial Production Index YoY % Retail Sales YTD (YoY)%

Dec Dec Jan Feb Feb

Last

13.2 -1275 -0.4 -10.1 10.9

Previous

2.2 -1589 1.3 21.1 8.1

SELECTED ECONOMIC RELEASES CALENDAR (25 Feb – 1 Mar 2013)

Country CHINA SINGAPORE HONG KONG HONG KONG HONG KONG VIETNAM VIETNAM VIETNAM VIETNAM PHILIPPINES PHILIPPINES SINGAPORE THAILAND THAILAND KOREA KOREA HONG KONG HONG KONG JAPAN KOREA KOREA KOREA KOREA MALAYSIA HONG KONG THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND INDONESIA JAPAN INDONESIA JAPAN

Indicators HSBC Flash China Manufacturing PMI CPI (YoY)% Imports YoY% Exports YoY% Trade Balance (HKD bn) Imports YTD (YoY)% Exports YTD (YoY)% Industrial Production Index YoY % Retail Sales YTD (YoY)% Total Imports (YoY)% Trade Balance (USD mn) Industrial Production YoY% Customs Imports (YoY)% Customs Exports (YoY)% SK Consumer Confidence Current Account in (USD mn) GDP (YoY)% GDP sa (QoQ)% Industrial Production YOY% Business Survey- Non-Manufacturing Business Survey- Manufacturing Industrial Production (YoY)% Industrial Production (MoM)% Unemployment Rate % Govt Mthly Budget Surp/Def (HKD bn) Total Trade Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index Foreign Reserves (USD bn) Consumer Confidence Index Official Reserve Assets (USD bn) Money Supply - M2 (YoY)% National CPI YoY %

Period Feb Jan Jan Jan Jan Feb Feb Feb Feb Dec Dec Jan Jan Jan Feb Jan 4Q 4Q Jan P Mar Mar Jan Jan 4Q Jan Jan Jan Jan Jan Jan Feb 22 Feb Feb Jan Jan

Page 7 of 8

JAPAN THAILAND THAILAND JAPAN JAPAN CHINA KOREA KOREA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA

National CPI Ex Food, Energy YoY % Consumer Price Index (YoY)% Core CPI (YoY)% Jobless Rate % Job-To-Applicant Ratio PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% HSBC Manufacturing PMI Total Imports (YoY)% Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn)

Jan Feb Feb Jan Jan Feb Feb Feb Feb Jan Feb Jan Feb Feb Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 8 of 8

MARKET UPDATE FOR ASEAN+3 27 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks outside Japan gained after U.S. housing and consumer confidence data beat estimates. The MSCI Asia Pacific Excluding Japan Index gained 0.6 percent to 475.72 as of 5:14 p.m. in Tokyo, with about two stocks rising for each that fell. Japan’s Nikkei 225 Stock Average dropped 1.3 percent, capping the biggest two-day loss since November 2011. The broader MSCI Asia Pacific Index (MXAP) fell 0.2 percent to 133.20. From the end of October through yesterday, the MSCI Asia Pacific Index gained 9.4 percent. According to data compiled by Bloomberg, Asia’s benchmark traded at 14.7 times estimated earnings compared with 13.5 for the Standard & Poor’s 500 Index (SPXL1) and 12.4 for the Stoxx Europe 600.

•

Euro strengthens against dollar as Italy prepares to sell bonds. The 17-nation currency climbed after dropping to a seven-week low yesterday as Pier Luigi Bersani, leader of the winning coalition in Italy’s elections, appealed to populist Beppe Grillo to show he is willing to help govern after the inconclusive vote forced leaders into coalition building. Italy will seek to sell as much as 4 billion euros ($5.23 billion) of 10-year bonds and 2.5 billion euros of five-year notes.

•

Gold heads for fifth monthly drop as investor holdings plummet. Gold headed for the worst run of monthly losses since 1997 as a 3.2 percent rally in four days spurred sales and investor holdings extended their decline on concern that the metal’s 12-year bull run was coming to an end. According to data compiled by Bloomberg, gold holdings in ETPs, which stood at 2,529.994 metric tons yesterday, have shrunk 3.15 percent this month, the biggest fall in almost five years. The cycle for gold prices has probably turned as the U.S. recovery gathers momentum and investment holdings drop, Goldman Sachs Group Inc. said in a Feb. 25 report.

BREAKING NEWS GLOBAL •

Purchases of new homes in the US surged in January by the most in two decades and consumer confidence jumped this month. Home sales surged 15.6 percent to a 437,000 annual pace, figures from the Commerce Department showed yesterday in Washington. Meanwhile, the Conference Board’s consumer sentiment index climbed to 69.6. The figures bolster Federal Reserve Chairman Ben S. Bernanke’s view that the fourth-quarter slump in growth will prove temporary as the central bank’s efforts to keep interest rates low help households repair finances. Rising property values may underpin consumer spending, benefiting retailers even as an increase in the payroll tax reduces take-home pay and gasoline prices climb.

•

European Union leaders tell Italy there is no alternative to austerity. In a message that resonated in Rome, EU President Herman Van Rompuy warned in Tallinn, Estonia, that backsliding on budget discipline and economic reforms would shatter market confidence in the 17-nation currency union’s crisis management. Italy’s stalemate shook European bond markets, with investors moving money from crisis-hit Spain, Portugal,

Greece and Italy itself to the perceived haven of Germany. Ten-year Italian yields rose by the most in 14 months, rising 41 basis points to 4.9 percent; the risk premium against German debt jumped 51 basis points to 343 basis points. •

Global regulators moving soon on principles to replace Libor. An International Organization of Securities Commissions task force on financial benchmarks, including the London interbank offered rate, plans to publish a final document on principles for improving oversight of rates in the late spring or summer, Jacqueline Mesa, director of the international affairs office at the U.S. Commodity Futures Trading Commission (CFTC), said at a roundtable meeting in Washington. The roundtable meeting was part of a task force run by the CFTC and U.K. Financial Services Authority that published an initial consultative paper on benchmark rates on January 11.

REGIONAL •

Bilateral trade between Cambodia and neighbouring Vietnam increased by more than 10 per cent last year on the previous year. Data from the Vietnam Trade Office in Cambodia showed that total trade volume was $3.3 billion between January and the end of December, compared with $2.836 billion in the same period of 2011 – an increase of 17 per cent. The figures reveal that Cambodia’s total exports to Vietnam rose by 13.19 per cent to $486 million in 2012, up from $430 million in 2011, while total imports from Vietnam increased by about 18 per cent from $2.4 billion to $2.8 billion. Cambodia’s main export products to Vietnam were sea and freshwater foods, corn, dried tobacco, latex, paddy rice and cashew nuts. The majority of Vietnamese products imported into the Kingdom were steel and made-from-steel products, confectionery and cereal products, garments, rubber products, fruit and vegetables, paper, metal products, machinery, and vehicles and spare parts.

•

Hong Kong SAR’s economic growth accelerated last quarter to the fastest pace in a year. The city’s economy expanded 2.5 percent in the three months through December from a year earlier, the Census and Statistics Department said on its website today. That’s up from 1.4 percent in the third quarter. Financial Secretary John Tsang today projected annual growth of 1.5 percent to 3.5 percent this year following 2012’s 1.4 percent. To bolster long-term economic growth, Mr. Tsang said the government will look to expand the city’s logistics and fund- management industries. It is studying the building of a new container terminal, and will provide land for the construction of logistics facilities.

•

Asian Development Bank President Haruhiko Kuroda is set for parliamentary confirmation as Japan’s next central bank chief following his nomination. As reported by Bloomberg, Prime Minister Shinzo Abe is aiming to present his nominations for Bank of Japan governor and two deputies tomorrow, Chief Cabinet Secretary Yoshihide Suga said. Members of the main opposition Democratic Party of Japan said they will back Kuroda, easing his passage through a split parliament.

•

Myanmar's President Thein Sein is in Oslo to seek deeper ties with Europe. He arrived in Oslo on Tuesday, kicking off his first trip to Europe. The President landed at Oslo's international airport for a three-day stay in the Scandinavian country, to be followed by visits to Finland, Austria, Belgium and Italy before he returns to Myanmar on March 8. President Thein Sein has impressed the international community with a string of Page 2 of 8

reforms since coming to power in early 2011, including welcoming long-detained opposition leader Aung San Suu Kyi into parliament and freeing hundreds of political prisoners. IFIs NEWS (compiled from their websites) ADB – Press Release: ADB to Help Conserve Threatened Forests of Borneo •

The ADB is providing financial support of nearly $4.5 million to help conserve one of the world’s most critical but threatened forest areas in the Indonesian portion of the island of Borneo. The technical assistance for the Government of Indonesia includes grants from the ADB’s Climate Change Fund and the Regional Cooperation and Integration Fund. It also includes over $2.5 million from the Global Environment Facility, which ADB will administer. The project, which will be carried out by Indonesia’s Ministry of Forestry is expected to run from September 2013 to August 2016. http://www.adb.org/news/adb-help-conserve-threatened-forests-borneo

G20 – Press Release: Development agenda is one of the priorities of the Russian Presidency in the G20 •

The first Development Working Group Meeting opened in Moscow. Ksenia Yudaeva, Chief of the Presidential Experts' Directorate and the Russian G20 Sherpa addressed the delegates with welcoming remarks. She admitted that the G20 objective to achieve steady and balanced growth globally cannot be reached without assisting developing and least-developed countries in strengthening their own capacities for growth and establishing solid foundation to make such growth sustainable. Narrowing the development gap and reducing poverty can facilitate a more robust global economy for all. That is why the development agenda is one of the priorities of the Russian Presidency in the G20, and the work of the Development Working Group is central in delivering specific actions in this area. http://www.g20.org/news/20130226/781239408.html

G20 – Press Release: Ksenia Yudaeva: Economic recovery is impossible without fighting corruption •

The G20 Anti-Corruption Working Group Meeting (ACWG) is held in Moscow on February 25-26, 2013. On the second day of the meeting, it was addressed by Ksenia Yudaeva, Chief of the Presidential Experts Directorate and the Russian G20 Sherpa. Ms. Yudaeva reminded that fighting corruption has been an issue for the G20 for a long time. "Although the working group was only established in 2010, corruption issues were raised in different forms at the very first G20 summits because they are directly linked with the G20 mandate, which is to restore balanced and sustainable economic growth. But this cannot be accomplished without fighting corruption," Ms. Yudaeva said. http://www.g20.org/news/20130226/781239850.html

Page 3 of 8

IFC – Press Release: IFC Launches New Financial Instrument to Expand Availability of Renminbi Finance •

IFC has introduced an innovative financial instrument to help China internationalize its currency, issuing the first renminbi-denominated note under its Global Discount Note Program. The program is the first of its kind, enabling the regular issuance of discount notes in the offshore renminbi market and expanding the availability of short-term local-currency finance for private enterprises in the region. The discount note—equivalent to about $50 million—is denominated in CNH, the deliverable form of the Chinese currency that is traded outside mainland China. The fast-growing CNH bond market was introduced as an offshore investment alternative to encourage greater renminbi-denominated trade between China and other countries. IFC is the first institution to launch a CNH discount note program to eligible institutional investors globally. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/286E5C5373CF8A9F8525 7B1E0030AEDB

IMF – Working Paper •

Outward Foreign Direct Investment and Domestic Investment: the Case of Developing Countries – “Over the past two decades, the growth rate of outward foreign direct investment (FDI) from developing and transition economies has increased significantly. Given the role of physical capital accumulation in determining the economic growth rate, it is important to assess how domestic investment responds to such outflows. This study empirically examines the effects of outward FDI on domestic investment in developing countries. Using data from 121 developing and transition economies over the period 1990–2010, the results suggest that FDI outflows negatively impact the rate of domestic investment.” http://www.imf.org/external/pubs/ft/wp/2013/wp1352.pdf

•

The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries – “This paper draws on existing empirical literature and an original theoretical model to argue that globalization and skill supply affect the extent to which technology adoption in developing countries favors skilled workers. Developing countries are experiencing technical change that is skill-biased because skill-biased technologies are becoming relatively cheaper.” http://www.imf.org/external/pubs/ft/wp/2013/wp1350.pdf

OECD – Press Release: The Global Forum on Tax Transparency welcomes Azerbaijan and the Kingdom of Lesotho as new members •

Azerbaijan and the Kingdom of Lesotho have joined the Global Forum on Transparency and Exchange of Information for Tax Purposes. As the 119th and 120th members of the Global Forum, they will participate in the peer review process which encourages all countries to adopt effective exchange of information in tax matters. The Global Forum’s aim is to ensure that all jurisdictions adhere to the same high standard of international co-operation in tax matters and governments come together to fight and prevent tax evasion. http://www.oecd.org/newsroom/global-forum-on-tax-transparency-welcomesazerbaijan-and-kingdom-of-lesotho-as-new-members.htm

Page 4 of 8

World Bank â&#x20AC;&#x201C; Press Release: International Financial Institutions Call for More Coordination on Global Development â&#x20AC;˘

Leaders of the African Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Monetary Fund, and the World Bank Group have pledged close collaboration to support development and growth. The leaders emphasized the need for coordinated efforts to achieve the Millennium Development Goals by 2015, which aim to end poverty and hunger, increase access to education and health care, improve gender equality, and ensure environmental sustainability. http://www.worldbank.org/en/news/press-release/2013/02/26/internationalfinancial-institutions-call-more-coordination-global-development

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 26-Feb 27-Feb close China 6.23 6.24 6.23 6.23 Hong Kong 7.75 7.76 7.76 7.76 SAR Indonesia 9,793.00 9,657.00 9,707.00 9,680.00 Japan 86.75 92.68 91.98 91.71 Korea 1,064.40 1,095.80 1,088.00 1,084.48 Malaysia 3.06 3.10 3.10 3.10 Philippines 41.01 40.70 40.76 40.74 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.82 29.82 Vietnam 20,840.00 20,845.00 20,890.00 20,918.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change

2013 YTD (%chg)

0.04

0.1

0.01

-0.1

0.28 0.29 0.32 0.07 0.04 -0.06 0.00 -0.13

-0.3 -4.8 -1.9 -2.1 0.3 -1.5 1.7 -0.4

STOCK MARKET INDEX

2,269.1

Previous wk's close 2,432.4

22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,293.3

2,313.2

0.87

2013 YTD (%chg) 1.9

23,215.2

22,519.7

22,577.0

0.25

-3.2

4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

4,663.0 11,398.8 2,000.0 1,624.2 6,630.7 3,254.3 1,530.3 465.1

4,716.4 11,254.0 2,004.0 1,624.1 6,616.3 3,263.5 1,529.7 465.7

1.14 -1.27 0.20 0.00 -0.22 0.28 -0.04 0.14

8.5 8.3 -1.3 -3.0 12.9 1.9 8.7 11.3

26-Feb

27-Feb

OVERNIGHT LENDING RATE (%) 26-Feb 27-Feb bps change 4.800 3.960 -84.00

% change

3-MONTH INTERBANK LENDING RATE (%) 26-Feb 27-Feb bps change 3.884 3.887 0.24

0.091

0.091

0.00

0.383

0.383

0.00

4.176 0.095 2.750 3.000 1.613 0.039 2.750 1.700

4.176 0.098 2.750 3.000 1.673 0.039 2.750 1.900

0.00 0.25 0.00 0.00 6.00 0.00 0.00 20.00

4.900 0.270 2.770 3.210 0.463 0.375 2.864 5.938

4.900 0.270 2.770 3.210 0.492 0.375 2.864 6.500

0.00 0.00 0.00 0.00 2.90 0.00 0.00 56.20

Page 5 of 8

CREDIT DEFAULT SWAP (IN BPS) 25-Feb 26-Feb bps change China 64.66 66.14 1.48 Hong Kong 44.32 45.27 0.95 SAR Indonesia 137.17 138.65 1.49 Japan 71.01 72.50 1.49 Korea 66.13 68.86 2.74 Malaysia 78.92 80.40 1.49 Philippines 98.72 100.72 2.00 Thailand 90.15 92.13 1.99 Vietnam 207.51 212.94 5.43 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 26-Feb Gold Spot (in US$ per ounce)

27-Feb

1,613.8

% change

1,609.3

-0.28

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 31-May 3,206.1

30-Jun 3,240.0

31-Jul 3,240.0

2012 31-Aug 30-Sep 3,272.9 3,285.1

31-Oct 3,287.4

30-Nov 3,297.7

31-Dec 3,311.6

2013 31-Jan n.a

301.2

301.7

305.2

317.3

321.0

110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3

110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

China Hong Kong 291.9 295.0 296.3 298.2 SAR Indonesia 111.5 106.5 106.6 109.0 Japan 1,277.7 1,270.5 1,272.8 1,273.2 310.9 312.4 314.4 316.9 Korea Malaysia 136.0 134.2 134.5 134.9 Philippines 76.1 76.1 79.8 80.7 Singapore 237.7 243.4 244.1 246.2 Thailand 172.6 174.7 175.3 179.2 19.9 19.7 20.0 20.8 Vietnam Note: Data for China and Vietnam refer to FX reserves

Page 6 of 8

EXTERNAL LIQUIDITY RATIOS Reserves - latest

3 months imports of goods/serv (US$bn) 504.3

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6

Reserves over short-term debt

(US$bn) China 3,311.6 Hong Kong 321.0 144.7 711.2 2.2 SAR Indonesia 108.8 50.3 43.9 2.2 Japan 1,267.3 70.4 2,255.1 18.0 Korea 327.0 150.9 126.7 2.2 Malaysia 139.7 59.2 32.4 2.4 Philippines 83.8 19.3 8.0 4.4 Singapore 259.3 118.6 924.3 2.2 Thailand 181.6 68.0 57.2 2.7 Vietnam n.a 25.4 10.0 Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.

5.8 0.5 2.5 0.6 2.6 4.3 10.5 0.3 3.2 -

DATA RELEASES FOR THE DAY Country

THAILAND THAILAND KOREA KOREA HONG KONG HONG KONG

Expected Release Date 2/25/2013

2/26/2013

2/27/2013

2/28/2013

Indicators

Customs Imports (YoY)% Customs Exports (YoY)% SK Consumer Confidence Current Account in (USD mn) GDP (YoY)% GDP sa (QoQ)%

Period

Jan Jan Feb Jan 4Q 4Q

Last

40.87 16.09 102 2253.6 2.5 1.2

Previous

4.67 13.45 102 2140.2 1.3 0.6

SELECTED ECONOMIC RELEASES CALENDAR (25 Feb â&#x20AC;&#x201C; 1 Mar 2013)

Country CHINA SINGAPORE HONG KONG HONG KONG HONG KONG VIETNAM VIETNAM VIETNAM VIETNAM PHILIPPINES PHILIPPINES SINGAPORE THAILAND THAILAND KOREA KOREA HONG KONG HONG KONG JAPAN KOREA

Indicators HSBC Flash China Manufacturing PMI CPI (YoY)% Imports YoY% Exports YoY% Trade Balance (HKD bn) Imports YTD (YoY)% Exports YTD (YoY)% Industrial Production Index YoY % Retail Sales YTD (YoY)% Total Imports (YoY)% Trade Balance (USD mn) Industrial Production YoY% Customs Imports (YoY)% Customs Exports (YoY)% SK Consumer Confidence Current Account in (USD mn) GDP (YoY)% GDP sa (QoQ)% Industrial Production YOY% Business Survey- Non-Manufacturing

Period Feb Jan Jan Jan Jan Feb Feb Feb Feb Dec Dec Jan Jan Jan Feb Jan 4Q 4Q Jan P Mar

Page 7 of 8

3/1/2013

KOREA KOREA KOREA MALAYSIA HONG KONG THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND INDONESIA JAPAN INDONESIA JAPAN JAPAN THAILAND THAILAND JAPAN JAPAN CHINA KOREA KOREA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA

Business Survey- Manufacturing Industrial Production (YoY)% Industrial Production (MoM)% Unemployment Rate % 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 Foreign Reserves (USD bn) Consumer Confidence Index Official Reserve Assets (USD bn) Money Supply - M2 (YoY)% National CPI YoY % National CPI Ex Food, Energy YoY % Consumer Price Index (YoY)% Core CPI (YoY)% Jobless Rate % Job-To-Applicant Ratio PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% HSBC Manufacturing PMI Total Imports (YoY)% Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn)

Mar Jan Jan 4Q Jan Jan Jan Jan Jan Jan Feb 22 Feb Feb Jan Jan Jan Feb Feb Jan Jan Feb Feb Feb Feb Jan Feb Jan Feb Feb Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

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MARKET UPDATE FOR ASEAN+3 28 February 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asia stocks poise for biggest advance since September. Japan’s Nikkei 225 posted its longest monthly winning streak since 2006 amid speculation Abe’s nominee, Asian Development Bank President Haruhiko Kuroda, will push for more monetary stimulus. The MSCI Asia Pacific Index climbed 1.4 percent to 135.07 as of 3:30 p.m. in Tokyo, poised for the biggest increase since Sept. 14. About six stocks rose for each that fell on the measure. The gauge is heading for a 1.4 percent advance in February, a fourth month of gains and the longest such streak since September 2009, amid signs the U.S. and Chinese economies are improving and on bets Prime Minister Abe will step up efforts to boost Japan’s economy.

•

The yen fell for a third day against the dollar as ADB President Haruhiko Kuroda is nominated as Bank of Japan governor, raising the prospect of more stimulus this year. As reported by Bloomberg, Mr. Kuroda said in a February 11 interview that he favors additional stimulus this year and the central bank has “really substantial room for monetary easing.” The yen fell 0.2 percent to 92.38 per dollar at 8:32 a.m. in London extending this month’s decline to 0.7 percent. Japan’s currency dropped 0.2 percent to 121.35 per euro. The euro was little changed at $1.3137. The dollar was poised for a monthly gain versus most of its major peers before data forecast to show the U.S. economy expanded last quarter.

•

West Texas Intermediate crude oil was poised for its first monthly decline since October. U.S. crude stockpiles rose less than forecast, and fuel demand increased in the world’s biggest oil consumer. WTI for April delivery was down 16 cents at $92.60 a barrel in electronic trading on the New York Mercantile Exchange as of 3:18 p.m. in Singapore. The volume of all futures traded was 41 percent below the 100-day average. The price rose 13 cents to $92.76 yesterday, the highest close since February 25. The contract is down 4.8 percent this month, the first time since 2006 it fell in February. Oil supplies climbed 1.1 million barrels last week, data from the Energy Information Administration showed. U.S. fuel consumption averaged 18.5 million barrels a day over the past four weeks, up 2 percent from 2012, according to the report.

BREAKING NEWS GLOBAL •

Federal Reserve Chairman Ben S. Bernanke said the central bank may decide to hold bonds on its $3.1 trillion balance sheet to maturity. This is part of a review of its strategy for an exit from record monetary easing. Bernanke told lawmakers in Washington today that he expects to revisit “sometime soon” an exit plan that policy makers outlined in June 2011. Under that plan, the Fed would cease reinvesting some or all principal payments from its securities, revise its interest-rate outlook, raise the federal funds rate and then start selling housing debt to eliminate it from the central bank’s portfolio in three to five years.

•

European Central Bank President Mario Draghi signalled the bank has no intention of tightening monetary policy anytime soon with inflation projected to significantly undershoot its 2 percent target next year. While the ECB’s balance sheet may shrink naturally as confidence returns to financial markets and banks repay emergency loans, policy makers are far from considering an exit from monetary stimulus, Draghi said at an event in Munich late yesterday. The ECB has cut its benchmark interest rate to a record low of 0.75 percent, extended over 1 trillion euros ($1.3 trillion) in cheap loans to banks and pledged to buy the bonds of debt-strapped nations if they agree to economic reforms.

•

Banker bonuses face toughest curbs in EU Basel Law deal. European Parliament lawmakers and national government officials agreed to ban bonuses that are worth more than twice bankers’ fixed pay, in a tentative deal that may end more than 18 months of wrangling over how the EU will apply global bank rules drawn up by the Basel Committee on Banking Supervision. EU Legislators demanded that the law implementing the so-called Basel III pact include curbs on variable pay as part of a quest to reshape lenders as utilities rather than money-making machines. The bonus restrictions comes as some of Europe’s largest banks take steps to reduce variable pay awards in response to trading scandals or dips in performance. Under today’s agreement, banks would have to seek shareholder approval to grant a bonus award that is more than fixed pay. Shareholders would have to approve the award by a 66 percent vote, rising to a 75 percent vote if less than half the bank’s ownership is represented.

REGIONAL •

Almost half of China’s provinces are setting their growth sights lower in the wake of the central government’s emphasis on the quality of expansion over speed. Fourteen provinces have set lower targets for gross domestic product expansion this year than in 2012 and the other 17 left their goals unchanged, according to Nomura Holdings Inc. Meanwhile, Citigroup Inc. calculates that the weighted average target has dropped to 9.9 percent from 10.3 percent. According to Bloomberg, Premier Wen Jiabao will formally announce this year’s country-wide economic targets when he delivers his final annual work report next week to the national legislature, which is set to approve appointments of Xi as president and Li Keqiang as Wen’s successor.

•

Motorcycle imports in Cambodia jump 55 percent. Imports of motorcycle reached 264,085 units, with a total value of $139 million in the first 11 months of last year – a 55 per cent jump from 170,380 units worth $86.5 million in the corresponding period of 2011, according to data from the Cambodia’s Ministry of Economy and Finance. The absence of public transport and the economic development of Cambodian rural areas, along with improved roads, are prompting more people to buy motorcycles to get around.

•

Indonesia plans to crackdown on tax evaders to boost state revenue. The country’s tax office will conduct a large scale inspection of labor-intensive companies in the first half of this year, said Ahmad Fuad Rahmany, the director general of tax at theFinance Ministry. The potential additional revenue from this operation may be as much as 30 trillion rupiah ($3.1 billion), he said in an interview on February 26. President Susilo Bambang Yudhoyono aims to boost tax revenue by more than 24 percent this year to 1,042 trillion rupiah to help fund more roads, bridges and ports in the world’s biggest Page 2 of 9

archipelago. Below-target state income in recent years has constrained the government’s scope to spend on infrastructure needed to spur growth, which cooled to the slowest pace in more than two years last quarter. •

Japanese Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda to lead the nation’s central bank. In the meantime Kikuo Iwata, a professor at Tokyo’s Gakushuin University who advocates greater government oversight of the Bank of Japan (8301), and BOJ Executive Director Hiroshi Nakaso were nominated for the two deputy governor positions, the nation’s parliament said in a statement today. Current Governor Masaaki Shirakawa and his deputies will step down on March 19. The deputy governors leaving are Kiyohiko Nishimura and Hirohide Yamaguchi. The first policy meeting for the new leadership is scheduled for April 3-4, after Shirakawa’s last meeting as governor on March 6-7.

•

Malaysia said to tighten fixing onshore rates. According to a draft statement from the Financial Markets Association of Malaysia obtained by Bloomberg, contributor banks will need to update the bid and ask prices continuously from 10:55 a.m. to 11 a.m. local time and the rates can be used for transactions among lenders and the central bank for a minimum offering of $5 million,. The spread for the currency pair will be reduced to a maximum of 10 pips from 20, it said. A pip is the smallest unit of a currency’s price, which in U.S. dollar terms equals one-hundredth of a cent. The move by Malaysia comes after its central bank held talks with other Southeast Asian regulators this month to discuss ways to overhaul the reference rates for offshore non-deliverable currency forwards (NDFs), which are said to undermine foreign exchange controls.

IFIs NEWS (compiled from their websites) ADB – Press Release: ADB President Kuroda to Step Down on 18 March •

As a result of the nomination by the Cabinet of Japanese Prime Minister Shinzo Abe of ADB President Haruhiko Kuroda as governor of the Bank of Japan, ADB announced today that Mr. Kuroda has submitted his resignation from ADB, effective March 18, 2013. An election of a successor to complete Mr. Kuroda’s term will be held by the Board of Governors of ADB in accordance with ADB’s Charter. http://www.adb.org/news/adb-president-kuroda-step-down-18-march

BIS – Speech: Ben S Bernanke: Semiannual Monetary Policy Report to the Congress •

The BIS has publicised the speech made by Mr Ben S Bernanke, Chairman of the Board of Governors of the Federal Reserve System, before the Committee on Banking, Housing, and Urban Affairs, US Senate, Washington DC, 26 February 2013. http://www.bis.org/review/r130227a.pdf

BIS – Working Paper: “Rethinking potential output: Embedding information about the financial cycle” •

The BIS has publicised the captioned working paper. “This paper argues that incorporating information about the financial cycle is important to improve measures of potential output and output gaps. Within a simple and transparent framework, we show that including information about the financial cycle can yield measures of potential output and output gaps that are not only estimated more precisely, but also Page 3 of 9

much more robust in real time. In the context of policy applications, such "financeneutral" output gaps are shown to yield more reliable estimates of cyclically adjusted budget balances and to serve as complementary guides for monetary policy.” http://www.bis.org/publ/work404.htm IFC – Press Release: “IFC Appoints Ethiopis Tafara as Vice President and General Counsel” •

IFC has appointed Ethiopis Tafara as Vice President and General Counsel, with the goal of helping the organization build on its innovative work to create opportunity in the poorest countries and regions. Tafara, whose appointment is effective April 1, has been Director of International Affairs at the U.S. Securities and Exchange Commission for the past decade. He comes to IFC with significant legal experience, and a record of success in promoting regulatory cooperation in international capital markets. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/28AE3084DDA862268525 7B1F0052B134

IMF – Press Release: International Financial Institutions Call for More Coordination on Global Development •

Leaders of the African Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Monetary Fund, and the World Bank Group pledged on February 26, 2013 close collaboration to support development and growth. The leaders emphasized the need for coordinated efforts to achieve the Millennium Development Goals by 2015, which aim to end poverty and hunger, increase access to education and health care, improve gender equality, and ensure environmental sustainability.” http://www.imf.org/external/np/sec/pr/2013/pr1360.htm

IMF – Working Papers •

Getting to Know GMIF: The Simulation Properties of the Global Integrated Monetary and Fiscal Model – “The Global Integrated Monetary and Fiscal model (GIMF) is a multiregion, forward-looking, DSGE model developed by the Economic Modeling Division of the IMF for policy analysis and international economic research. Using a 5-region version of the GIMF, this paper illustrates the model’s macroeconomic properties by presenting its responses under a wide range of experiments, including fiscal, monetary, financial, demand, supply, and international shocks.” http://www.imf.org/external/pubs/ft/wp/2013/wp1355.pdf

•

Information Rigidities in Economic Growth Forecasts: Evidence from a Large International Panel – “We examine the behavior of forecasts for real GDP growth using a large panel of individual forecasts from 30 advanced and emerging economies during 1989–2010. Our main findings are as follows. First, our evidence does not support the validity of the sticky information model (Mankiw and Reis, 2002) for describing the dynamics of professional growth forecasts. Instead, the empirical evidence is more in line with implications of "noisy" information models (Woodford, 2002; Sims, 2003). Second, we find that information rigidities are more pronounced in emerging economies than advanced economies. Third, there is evidence of nonlinearities in forecast smoothing.

Page 4 of 9

It is less pronounced in the tails of the distribution of individual forecast revisions than in the central part of the distribution.” http://www.imf.org/external/pubs/ft/wp/2013/wp1356.pdf •

Systemic Contingent Claims Analysis – Estimating Market-Implied Systemic Risk – “The recent global financial crisis has forced a re-examination of risk transmission in the financial sector and how it affects financial stability. Current macroprudential policy and surveillance (MPS) efforts are aimed establishing a regulatory framework that helps mitigate the risk from systemic linkages with a view towards enhancing the resilience of the financial sector. This paper presents a forward-looking framework ("Systemic CCA") to measure systemic solvency risk based on market-implied expected losses of financial institutions with practical applications for the financial sector risk management and the system-wide capital assessment in top-down stress testing.” http://www.imf.org/external/pubs/ft/wp/2013/wp1354.pdf

OECD – Press Release: OECD government borrowing set to rise slightly in 2013 • The gross borrowing needs of OECD governments are projected to increase slightly to around USD 10.9 trillion in 2013, up from the already high level of USD 10.8 trillion in 2012, according to a new OECD report. The OECD Sovereign Borrowing Outlook 2013 expects that ratings agencies will continue to keep the pressure on governments in 2013. Given their poor track record of sovereign risk pricing over the past twenty years, the report suggests that any downgrades should be carefully scrutinized, and not taken at face value. http://www.oecd.org/newsroom/oecdgovernmentborrowingsettoriseslightlyin2013. htm UNCTAD – Publication: Transnational corporations dominate ‘value chains,’ report says • Goods and services increasingly cross international borders multiple times as they become finished products – links in ‘value chains’ usually managed by transnational corporations, a new UNCTAD study notes. The published report is a launch publication for a new UNCTAD database that maps the distribution of value added in global trade. The UNCTAD-EORA GVC Database – part of UNCTAD’s FDI-TNCs-GVC Information System – provides new perspectives on trade links between economies in the trade–investment nexus. Among other things, the database focuses on the distribution of value added, on income and employment resulting from trade, and on how global investment drives patterns of value-added trade. The database covers 187 countries, including nearly all developing economies. It provides statistics on a broad range of industries of relevance to developing countries. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=411&Sitemap_x002 0_Taxonom y=Investment%20and%20Enterprise;#20;#UNCTAD Home

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FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 27-Feb 28-Feb close China 6.23 6.24 6.23 6.22 Hong Kong 7.75 7.76 7.76 7.76 SAR Indonesia 9,793.00 9,657.00 9,680.00 9,669.00 Japan 86.75 92.68 92.24 92.40 Korea 1,064.40 1,095.80 1,084.48 1,082.90 Malaysia 3.06 3.10 3.10 3.09 Philippines 41.01 40.70 40.74 40.66 Singapore 1.22 1.24 1.24 1.24 Thailand 30.59 29.80 29.83 29.72 Vietnam 20,840.00 20,845.00 20,918.00 20,949.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change 0.09

2013 YTD (%chg)

0.2

0.01

-0.1

0.11 -0.17 0.15 0.33 0.20 0.11 0.37 -0.15

-0.2 -5.5 -1.8 -1.8 0.5 -1.2 2.1 -0.5

STOCK MARKET INDEX

2,269.1

Previous wk's close 2,432.4

22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,313.2

2,365.6

2.26

2013 YTD (%chg) 4.3

23,215.2

22,577.0

23,020.3

1.96

-1.3

4,491.3 11,153.2 1,950.9 1,623.8 6,458.7 3,270.3 1,497.3 494.0

4,716.4 11,254.0 2,004.0 1,624.1 6,616.3 3,261.1 1,518.1 465.7

4,795.8 11,559.4 2,026.5 1,634.9 6,721.5 3,264.5 1,532.2 474.6

1.68 2.71 1.12 0.66 1.59 0.10 0.93 1.90

10.3 11.2 -0.2 -2.4 14.7 2.0 8.9 13.4

27-Feb

28-Feb

OVERNIGHT LENDING RATE (%) 27-Feb 28-Feb bps change 3.960 4.000 4.00

% change

3-MONTH INTERBANK LENDING RATE (%) 27-Feb 28-Feb bps change 3.887 3.895 0.80

0.091

0.091

0.00

0.383

0.383

0.00

4.176 0.100 2.750 3.000 1.673 0.055 2.750 1.900

4.179 0.090 2.750 3.000 1.977 0.055 2.750 1.500

0.36 -1.00 0.00 0.00 30.40 0.00 0.00 -40.00

4.900 0.270 2.770 3.210 0.492 0.375 2.864 6.500

4.900 0.270 2.770 3.210 0.290 0.375 2.864 6.167

0.00 0.00 0.00 0.00 -20.20 0.00 0.00 -33.30

CREDIT DEFAULT SWAP (IN BPS) 26-Feb 27-Feb bps change China 66.14 65.20 -0.93 Hong Kong 45.27 45.35 0.07 SAR Indonesia 138.65 137.69 -0.96 Japan 72.50 72.03 -0.47 Korea 68.86 67.17 -1.70 Malaysia 80.40 78.48 -1.93 Philippines 100.72 99.80 -0.91 Thailand 92.13 90.69 -1.44 Vietnam 212.94 211.74 -1.21 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag.

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27-Feb Gold Spot (in US$ per ounce)

28-Feb

1,597.1

% change

1,596.6

-0.03

Sources: Bloomberg & Datastream

CREDIT RATINGS China Hong Kong Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P AAAAA BB+ AAA ABB+ AAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 -Aa3 A3 Ba1 -Baa1 B1

Fitch A+ AA+ BBBAA A+ ABB+ AAA BBB B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION) 31-May 3,206.1

30-Jun 3,240.0

31-Jul 3,240.0

2012 31-Aug 30-Sep 3,272.9 3,285.1

31-Oct 3,287.4

30-Nov 3,297.7

31-Dec 3,311.6

2013 31-Jan n.a

301.2

301.7

305.2

317.3

321.0

110.2 1,277.0 322.0 137.5 82.0 252.1 183.6 21.3

110.3 1,274.2 323.5 138.3 81.7 254.2 181.5 n.a

111.3 1,270.9 326.1 139.1 83.9 255.8 181.6 n.a

112.8 1,268.1 327.0 139.7 83.8 259.3 181.6 n.a

108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

China Hong Kong 291.9 295.0 296.3 298.2 SAR Indonesia 111.5 106.5 106.6 109.0 Japan 1,277.7 1,270.5 1,272.8 1,273.2 310.9 312.4 314.4 316.9 Korea Malaysia 136.0 134.2 134.5 134.9 Philippines 76.1 76.1 79.8 80.7 Singapore 237.7 243.4 244.1 246.2 Thailand 172.6 174.7 175.3 179.2 19.9 19.7 20.0 20.8 Vietnam Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS Reserves - latest

3 months imports of goods/serv (US$bn) 504.3

Short-term external Import cover (Qtrs of debt imports covered (US$bn) by reserves) 572.8 6.6

Reserves over short-term debt

(US$bn) China 3,311.6 Hong Kong 321.0 144.7 711.2 2.2 SAR Indonesia 108.8 50.3 43.9 2.2 Japan 1,267.3 70.4 2,255.1 18.0 Korea 327.0 150.9 126.7 2.2 Malaysia 139.7 59.2 32.4 2.4 Philippines 83.8 19.3 8.0 4.4 Singapore 259.3 118.6 924.3 2.2 Thailand 181.6 68.0 57.2 2.7 Vietnam n.a 25.4 10.0 Notes: Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less. For Vietnam, the figure refers to Private Creditor and not Short-term debt, and are released quarterly.

Page 7 of 9

5.8 0.5 2.5 0.6 2.6 4.3 10.5 0.3 3.2 -

Country

JAPAN KOREA KOREA KOREA KOREA THAILAND THAILAND THAILAND THAILAND THAILAND

Expected Release Date 2/25/2013

2/26/2013

2/27/2013

2/28/2013

3/1/2013

DATA RELEASES FOR THE DAY Indicators Period

Industrial Production YOY% Business Survey- Non-Manufacturing Business Survey- Manufacturing Industrial Production (YoY)% Industrial Production (MoM)% Total Trade Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index

Jan P Mar Mar Jan Jan Jan Jan Jan Jan Jan

Last

-5.1 69 76 7.3 -1.5 -2821 38.4 15.6 -2237 51.1

Previous

-7.9 70 72 0.8 1.0 283 1.3 13.6 730 50.6

SELECTED ECONOMIC RELEASES CALENDAR (25 Feb – 1 Mar 2013)

Country CHINA SINGAPORE HONG KONG HONG KONG HONG KONG VIETNAM VIETNAM VIETNAM VIETNAM PHILIPPINES PHILIPPINES SINGAPORE THAILAND THAILAND KOREA KOREA HONG KONG HONG KONG JAPAN KOREA KOREA KOREA KOREA MALAYSIA HONG KONG THAILAND THAILAND THAILAND THAILAND THAILAND THAILAND

Indicators HSBC Flash China Manufacturing PMI CPI (YoY)% Imports YoY% Exports YoY% Trade Balance (HKD bn) Imports YTD (YoY)% Exports YTD (YoY)% Industrial Production Index YoY % Retail Sales YTD (YoY)% Total Imports (YoY)% Trade Balance (USD mn) Industrial Production YoY% Customs Imports (YoY)% Customs Exports (YoY)% SK Consumer Confidence Current Account in (USD mn) GDP (YoY)% GDP sa (QoQ)% Industrial Production YOY% Business Survey- Non-Manufacturing Business Survey- Manufacturing Industrial Production (YoY)% Industrial Production (MoM)% Unemployment Rate % Govt Mthly Budget Surp/Def (HKD bn) Total Trade Balance (USD mn) Total Imports YOY% Total Exports YOY% Current Account Balance (USD mn) Business Sentiment Index Foreign Reserves (USD bn)

Period Feb Jan Jan Jan Jan Feb Feb Feb Feb Dec Dec Jan Jan Jan Feb Jan 4Q 4Q Jan P Mar Mar Jan Jan 4Q Jan Jan Jan Jan Jan Jan Feb 22

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INDONESIA JAPAN INDONESIA JAPAN JAPAN THAILAND THAILAND JAPAN JAPAN CHINA KOREA KOREA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA

Consumer Confidence Index Official Reserve Assets (USD bn) Money Supply - M2 (YoY)% National CPI YoY % National CPI Ex Food, Energy YoY % Consumer Price Index (YoY)% Core CPI (YoY)% Jobless Rate % Job-To-Applicant Ratio PMI Manufacturing Ext Trade - Imports (YoY)% Ext Trade - Export (YoY)% HSBC Manufacturing PMI Total Imports (YoY)% Core Inflation (YoY)% Exports (YoY)% Inflation (YoY)% Inflation NSA (MoM)% Total Trade Balance (USD mn)

Feb Feb Jan Jan Jan Feb Feb Jan Jan Feb Feb Feb Feb Jan Feb Jan Feb Feb Jan

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

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