MARKET UPDATE FOR ASEAN+3 September 2013
MARKET UPDATE FOR ASEAN+3 02 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Yen Drops as Abe Gets Sales Backing (Bloomberg) -- The yen slipped to 99.27 per dollar after speculators added to bearish bets on the currency and on signs Japan’s prime minister is making progress on policies that have helped weaken the currency. The won climbed 0.86 percent to the highest level in more than three months after South Korea reported a trade surplus that was double what economists predicted. The currency touched 1,100.59, the strongest level since May 10. Indonesia’s rupiah fells 1.64 percent to 11,371.00 per dollar. Meanwhile, Malaysian ringgit, Philippine peso, Singapore dollar and Thai Baht gained by 0.33 percent, 0.36 percent, 0.14 percent and 0.27 percent respectively.
Asian Stocks Rise Third Day on China Manufacturing (Bloomberg) – The MSCI Asia Pacific Index climbed 0.7 percent. Japan’s Nikkei Index rose 1.37 percent, Hong Kong’s Hang Seng Index climbed 2.04 percent. Indonesia’s Jakarta Composite Index slumped 2.24 percent after the nation reported a bigger-than-expected trade deficit. Meanwhile, China’s Shanghai Composite Index was unchanged, Singapore’s Straits Times Index added 0.88 percent and South Korea’s Kospi index slid 0.08 percent. Malaysia’s FBMKLCI Index and the Philippines’s PSEi slid by 0.58 percent and 0.22 percent.
WTI Drops for Third Day as Obama Seeks Approval on Syria (Bloomberg) --West Texas Intermediate fell a third day after President Barack Obama said he’ll seek approval from Congress before taking military action in Syria, easing concern that an imminent strike may disrupt Middle East oil exports. Futures dropped as much as 3.2 percent, the most in more than two months. Gold drop slightly by 0.19 percent to $1,392.6 an ounce in London.
BREAKING NEWS GLOBAL NEWS
Employment Probably Picked Up in August: U.S. Economy Preview (Bloomberg) -- Employers probably added more workers in August and the jobless rate held at a more than four-year low, signaling a strengthening U.S. labor market that will help sustain growth, economists said before a report this week. Payrolls rose by 180,000 following a 162,000 gain the prior month, according to the median forecast of 71 economists surveyed by Bloomberg ahead of Labor Department figures Sept. 6. Manufacturing probably cooled after expanding in July at the fastest pace in two years, other data may show. Federal Reserve policy makers are watching the job market as they debate scaling back monthly bond purchases meant to stimulate growth and cut unemployment.
Euro-Area Factory Output Expands Faster Than Estimated (Bloomberg) -- Euro-area factory output expanded at a faster pace than initially estimated in August as the 17-nation currency bloc’s recovery began to build momentum. An index based on a survey of purchasing managers in the manufacturing industry increased to 51.4 from 50.3 in July, London-based Markit Economics said today. That’s above an estimate of 51.3 published on Aug. 22. Economic
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confidence soared to a two-year high in August. Encouraging indicators have begun to accumulate since the euro area returned to growth in the second quarter, ending a record-long recession. Economic confidence soared to a two-year high in August.
U.K. Manufacturing Index Rises to the Highest in 2 1/2 Years (Bloomberg) -- A U.K. factory index increased to its highest level in 2 1/2 years in August as the recovery gathered pace in the third quarter. The gauge climbed to 57.2 from a revised 54.8 in July, Markit Economics and the Chartered Institute of Purchasing and Supply said today in London. The Bank of England will probably maintain the size of its bond-purchase program on Sept. 5 as Governor Mark Carney and officials assess the impact of the central bank’s forward guidance policy. Output and new orders gained at their fastest pace since 1994, while cost pressures built amid rising raw material prices, Markit said. The overall PMI index has risen for five consecutive months.
REGIONAL NEWS
Abe Gets Ammunition for Sales-Tax Rise With G-20 Meeting (Bloomberg) -- Japanese Prime Minister Shinzo Abe got ammunition to raise a sales tax, as capital-spending data pointed to faster economic growth than initially estimated and government panels backed an increased levy. The consultation exercise and signs of strength in the economy may help Abe justify raising the sales tax to 8 percent in April from 5 percent now. While the move would shore up Japan’s finances, the blow to consumption could return the economy to contraction. Capital spending was unchanged from a year earlier in the second quarter after a 3.9 percent drop in the first three months of the year, the finance ministry said today in Tokyo. Preliminary data showed GDP expanded an annualized 2.6 percent in the second quarter from the prior period.
China Rebound Signaled in Rising Manufacturing Gauges: Economy (Bloomberg) -- China’s manufacturing strengthened in August, with one index posting its biggest jump in three years, as improving demand abroad and at home underpins a recovery in the world’s second-largest economy. An official Purchasing Managers’ Index jumped more than estimated to a 16-month high of 51.0, a government report showed yesterday in Beijing. A separate PMI released today by HSBC Holdings Plc and Markit Economics advanced to 50.1 last month from 47.7 in July, the largest gain since 2010.
Malaysia Seeks to Deport Almost Half Million Illegal Workers (Bloomberg) -- Malaysia arrested thousands of undocumented immigrants as the country began a nationwide operation to track down and deport almost half a million illegal workers from countries including Indonesia and Bangladesh. Malaysia, Southeast Asia’s third-largest economy, is clamping down on cheap illegal labor as it strives to move up the value chain from its agricultural base into more high-end manufacturing and services. Malaysia has 30.1 million people and had an unemployment rate of 3.1 percent at the end of last year.
Indonesia Trade Gap Widens to $2.3 Billion; Inflation Quickens (Bloomberg) -- Indonesia unexpectedly reported the biggest trade deficit since at least 2007 while inflation accelerated further, renewing pressure on policy makers as they grapple with a slumping currency. The trade gap in July reached $2.3 billion. Consumer prices climbed 8.79 percent last month from a year earlier after a previously reported 8.61 percent gain in July, the Statistics Bureau said in Jakarta. Bank Indonesia raised its reference rate by half a percentage point at an unscheduled
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meeting last week, while the government said Aug. 23 it will allow more mineral exports this year and increase a luxury-goods tax to narrow the trade gap. IFIs NEWS (compiled from their websites) FSB – Publication: “Progress Report: Credit Rating Agencies (CRAs) - Reducing reliance and strengthening oversight” The FSB has published a summary progress report on reducing reliance on, and strengthening the oversight of CRAs. Alongside with this progress report, an interim peer review report on national implementation of the FSB Principles for Reducing Reliance on Credit Rating Agency (CRA) Ratings has been published too. http://www.financialstabilityboard.org/press/pr_130829b.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130829d.pdf (Progress Report: “Credit Rating Agencies (CRAs) - Reducing reliance and strengthening oversight”) http://www.financialstabilityboard.org/publications/r_130829e.pdf (Interim Report: “Thematic Review on FSB Principles for Reducing Reliance on Credit Rating Agency Ratings”) http://www.financialstabilityboard.org/publications/r_101027.pdf (Report published on October 27, 2010: “Principles for Reducing Reliance on CRA Ratings”)
FSB – Publication: “Progress report on the oversight and governance framework for financial benchmark reform” The FSB has established an Official Sector Steering Group of regulators and central banks to coordinate reviews of existing interest rate benchmarks and to guide the work of a Market Participants Group which will examine the feasiblity and viability of adopting additional reference rates and potential transition issues. The published report describes the initial progress and outlines the future work programme. http://www.financialstabilityboard.org/publications/r_130829f.pdf (Report)
FSB – Publication: “Update on financial regulatory factors affecting the supply of long-term investment finance” The FSB has published an update pertaining to the report entitled Financial regulatory factors affecting the availability of long-term investment finance which was submitted to the G20 Finance Ministers and Central Bank Governors in February 2013. The FSB is monitoring the effect of financial regulation on the provision of long-term finance. http://www.financialstabilityboard.org/publications/r_130829g.pdf (Update Report)
IMF – Press Release: Statement at the Conclusion of the 2013 Article IV Consultation Mission to Indonesia An IMF team, led by Mr David Cowen, Advisor for the Asia and Pacific Department, visited Jakarta during August 19−30, 2013 to conduct the 2013 Article IV Consultation discussions. The team exchanged views with the Government and Bank Indonesia (BI) on the impact of recent global developments and spillovers on Indonesia’s economy and the near-term outlook. It also met with a wide range of private sector representatives. Based on the visit, a staff report will be prepared and presented to the IMF's Executive Board in early November. http://www.imf.org/external/np/sec/pr/2013/pr13319.htm
WTO – Press Release: Roberto Azevêdo takes over as the new Director-General of WTO Ambassador Roberto Azevêdo of Brazil took the helm of the WTO on September 1, 2013 as the sixth Director-General. Director-General Azevêdo was appointed to a four-year term by the General Council on 14 May 2013. http://www.wto.org/english/news_e/news13_e/dgra_13aug13_e.htm
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FOREIGN CURRENCY EXCHANGE RATES Previous 30-Aug 2-Sep wk's close 6.23 6.12 6.12 6.12 China 7.75 7.76 7.76 7.75 Hong Kong SAR 9,793.00 11,184.00 11,184.00 11,371.00 Indonesia 86.75 98.17 98.17 99.27 Japan 1,064.40 1,110.04 1,110.04 1,100.59 Korea 3.06 3.28 3.28 3.27 Malaysia 41.01 44.58 44.58 44.42 Philippines 1.22 1.27 1.27 1.27 Singapore 30.59 32.15 32.15 32.07 Thailand 20,840.00 21,155.00 21,155.00 21,155.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.00 0.01 -1.64 -1.11 0.86 0.33 0.36 0.14 0.27 0.00
2013 YTD (%chg) 1.8 0.0 -15.1 -12.0 -3.4 -7.3 -8.0 -4.1 -5.4 -1.5
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
30-Aug
2-Sep
2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
2,098.4 22,175.3 4,101.2 13,572.9 1,924.8 1,717.6 6,061.8 3,055.7 1,319.8 472.7
OVERNIGHT LENDING RATE (IN %) 30-Aug 2-Sep bps change 3.040 3.010 -3.00 0.084 0.083 -0.07 5.461 5.458 -0.24 0.095 0.071 -2.45 2.500 2.500 0.00 3.000 3.000 0.00 0.932 0.932 0.00 0.031 0.031 0.00 2.500 2.500 0.00 2.857 2.857 0.00
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Latest data are available on a one-day lag
29-Aug 4.010 2.447 8.810 0.714 3.580 4.015 3.760 2.722 4.410 8.918
% change 0.00 2.04 -2.24 1.37 -0.08 -0.58 -0.22 0.88 1.97 0.00
2013 YTD (%chg) -7.5 -4.9 -5.6 30.6 -5.2 2.6 3.4 -4.6 -6.2 13.0
3-MONTH INTERBANK LENDING RATE (IN %)
30-Aug 4.657 0.384 6.726 0.230 2.660 3.200 0.517 0.374 2.602 5.000
30-Aug 4.050 2.392 8.611 0.720 3.530 4.066 3.750 2.698 4.310 8.813
2-Sep 4.656 0.384 6.736 0.230 2.660 3.200 0.399 0.374 2.602 5.000
bps change -0.11 0.00 1.01 0.00 0.00 0.00 -11.80 0.00 0.00 0.00
bps change 4.000 -5.500 -19.900 0.600 -5.000 5.100 -1.000 -2.400 -10.000 -10.500
2013 YTD (bps) 83.000 199.600 380.500 53.500 55.000 88.100 -36.540 236.800 111.500 -83.700
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CREDIT DEFAULT SWAP (IN BPS) 29-Aug 30-Aug bps change 107.81 106.84 -0.97 China 53.34 52.86 -0.48 Hong Kong SAR 260.21 268.92 8.71 Indonesia 70.91 70.42 -0.49 Japan 83.80 83.80 0.00 Korea 151.94 150.48 -1.46 Malaysia 145.30 143.40 -1.90 Philippines 151.07 150.60 -0.47 Thailand 298.37 294.17 -4.20 Vietnam Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag 30-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
2-Sep
1,395.3
% change
1,392.6
-0.19
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 3,311.6 3,410.1 3,395.4 China 317.3 304.7 304.8 Hong Kong SAR 112.8 108.8 105.2 Indonesia 1,268.1 1,267.3 1,258.8 Japan 327.0 328.9 327.4 Korea 139.7 140.2 140.3 Malaysia 83.8 85.3 83.6 Philippines 259.3 258.8 259.1 Singapore 181.6 181.6 179.2 Thailand 25.2 27.8 28.2 Vietnam Note: Data for China and Vietnam refer to FX reserves
2013
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 28.0
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 27.2
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a n.a n.a n.a n.a 137.9 n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
(US$bn) 3,496.7 299.9 92.7 1,254.0 329.7 137.8 83.2
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2
Short-term external debt (US$bn) 565.7 745.6 46.3 2,147.9 119.6 32.9 9.8
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 4.2 8.5
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Singapore 261.1 126.5 968.3 2.1 0.3 Thailand 172.2 66.9 62.1 2.6 2.8 Vietnam 28.2 31.3 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
DATA RELEASES FOR THE DAY Economies
CHINA HONG KONG THAILAND SOUTH KOREA
INDONESIA
Indicators
Period
HSBC Manufacturing PMI Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Core CPI (YoY)% Consumer Price Index (YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% HSBC Manufacturing PMI Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)%
Last
Aug Jul Jul Aug Aug Aug Aug Aug Aug Jul Aug Jul Aug Jul Aug
Previous
50.1 8.9 9.5 0.75 1.59 1.3 0.3 1.3 47.5 -2,309 1.12 -6.1 4.48 6.5 8.79
47.7 13.3 14.7 0.85 2.00 1.4 0.2 1.5 47.2 -877 3.29 -4.5 4.44 -6.5 8.61
SELECTED ECONOMIC RELEASES CALENDAR (2-6 SEPT 2013) Expected Release Date
9/2/2013
9/3/2013 9/4/2013
9/5/2013
Economies
CHINA Thailand Thailand Hong Kong Hong Kong South Korea South Korea South Korea South Korea Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia South Korea CHINA HONG KONG Philippines Philippines
Indicators
HSBC Manufacturing PMI Core CPI (YoY)% Consumer Price Index (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% HSBC Manufacturing PMI Consumer Confidence Index Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) China HSBC Services PMI Purchasing Managers Index Budget Deficit/Surplus (PHP bn) Consumer Price Index (YoY)%
Period
Aug Aug Aug Jul Jul Aug Aug Aug Aug Aug Jul Aug Jul Aug Jul Aug Aug Aug Aug Aug Aug Jul Aug
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9/6/2013
Thailand Malaysia South Korea South Korea Thailand Malaysia Japan Malaysia Malaysia Hong Kong Philippines
Consumer Confidence Economic Overnight Rate % GDP (QoQ)% GDP (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Exports YoY% Imports YoY% Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn)
Aug Sep 5 2Q F 2Q F Aug 30 Aug 30 Aug Jul Jul Aug Aug
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 3 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Nikkei climbs to a three-week high on an upbeat global factory data (Reuters). Japan's Nikkei share average advanced by 3 percent to a near three-week high on Tuesday as fresh signs of a pickup in global manufacturing activity and a delay in potential U.S. military action against Syria helped boost risk appetite. The benchmark Nikkei gained 405.52 points to 13,978.44, a level not seen since 15 August 15, adding to a 1.4 percent rise on Monday. Other Asian stocks are also higher with the Korea’s KOSPI gaining 0.46 percent, Malaysia’s Bursa Malaysia KLCI advancing by 0.39 percent, Indonesia’s JCI adding 1.53 percent, Philippines PSE gaining 0.36 percent, and China’s Shanghai Composite gaining about 1.2 percent.
•
In the currencies market, the Japanese yen weakens to a one-month low on global growth signs (Bloomberg). Japan’s currency slid versus 14 of its 16 major peers after the Bank of Japan said today that the monetary base expanded by 42 percent in August from a year earlier, the biggest gain since November 1973, to JPY177 trillion. The yen gave back 0.2 percent to 99.53 against the USD. Other regional currencies were also lower, led by the Malaysian ringgit (-0.37 percent) and the Indonesia’s rupiah (-0.65 percent).
•
In the energy market, oil prices fluctuate as lawmakers urge military action on Syria (Bloomberg). Brent for October settlement stood at USD114.66 per barrel on the ICE Futures Europe exchange, up USD33 cents at 5.00 p.m. Singapore time. The WTI for October delivery fell by USD54 cents from 30 August settlement to USD107.11 per barrel on the NYMEX.
BREAKING NEWS GLOBAL NEWS •
Reserve Bank of Australia holds key rate at 2.5 percent (Bloomberg). Australia’s central bank left its benchmark interest rate unchanged and omitted a reference to scope for more easing, sending the nation’s currency higher. Governor Glenn Stevens and his board kept the overnight cash-rate target at a record-low 2.5 percent, saying in a statement that “the easing in monetary policy since late 2011 has supported interest-sensitive spending and asset values, and further effects can be expected over time.” According to traders, the market is pricing in about 50-50 chance of a rate cut by the end of the year.
•
Spanish jobless claims little changed amid the peak in tourism activities (Bloomberg). Spanish unemployment was little changed in August, stabilizing for the first time since 2000, as Prime Minister Mariano Rajoy predicts an economic recovery later this year. The number of people registering for jobless benefits fell by 31 from July, leaving claims at 4.7 million, according to the Labour Ministry in Madrid today.
•
OECD sees Europe joining the recovery in the U.S. (Reuters). According to the OECD, the weary Europe is at last joining the U.S. economic recovery. OECD chief economist Pier Carlo Padoan said that advanced economies are growing more and emerging economies are growing less. Europe, which has been a drag on growth in recent years as it struggled with its debt crisis, at last offered good news with recoveries underway in France and Germany prompting the OECD to raise its forecasts for them. France is seen on course for a growth of 0.3 percent this year, while Germany, Europe's biggest economy, is set to grow by 0.7 percent.
REGIONAL NEWS •
China services sector grows steadily as government measures kick in (Reuters). China's services sector grew steadily in August as domestic demand picked up, official data showed today, adding to signs that government measures have started to steer the world's second-
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largest economy out of its longest slowdown. According to the National Bureau of Statistics, the non-manufacturing PMI dipped slightly to 53.9 last month from July's 54.1 to be at the same level as in June. •
China home prices accelerate in August (Channel News Asia). The rate of increase in Chinese property prices picked up pace in August as some local governments eased market controls. According to independent China Index Academy (CIA), the average price of new homes in 100 major cities rose by 8.61 percent year-on-year to 10,442 yuan (US$1,700) per square metre (July: +7.94 percent year-on-year). On a month on month basis, prices were up by 0.92 percent, marking the 15th straight month of growth and accelerating from July's 0.87 percent. The academy added that the acceleration came on the back of looser policies in some cities, including Wenzhou in the eastern province of Zhejiang and Wuhu in neighbouring Anhui province, which helped release pent-up demand.
•
Japan to spend JPY47 billion to deal with water crisis at Fukushima No. 1 (Japan Times). The Japanese government will spend JPY47 billion in public funds to fight the radioactive water leaks at Fukushima No. 1 nuclear plant. According to officials, Prime Minister Abe gathered members of his nuclear disaster response team to decide on the government response to stop radioactive water from flowing into the Pacific from the crippled plant. The plan will total JPY50 billion including the costs to be shouldered by Tokyo Electric Power Co. Of the planned spending, JPY21 billion is expected to be covered by emergency funds in the current fiscal year’s budget.
•
Malaysian government to review public sector projects (The Star). The Malaysian Government has yet to decide which projects would be postponed, but maintained that the Mass Rapid Transit (MRT) project would proceed as planned, according to Prime Minister Datuk Seri Najib Tun Razak. The Prime Minister added that in addressing the narrowing of the country’s current account surplus on the balance of payments, the government would consider carefully the public sector projects to be undertaken. Projects with low import content and high-multiplier effects would be given priority, without jeopardising economic growth. However, projects with high import components would be sequenced accordingly. At a press conference yesterday on fuel subsidy rationalisation, the Prime Minister affirmed that the MRT lines 1, 2 and 3 would proceed as planned.
•
Automakers in Korea enjoy robust sales (Korea Times). Major automakers enjoyed robust sales growth in August, according to latest data. Korea's largest carmaker Hyundai Motor said that its sales jumped 29.1 percent in August from a year earlier despite partial strikes that cut the carmaker's vehicle output. Hyundai sold 381,429 vehicles in August, compared with 295,449 units in the same month in 2012. For the first eight months, Hyundai sold more than 3.13 million units, up 11.5 percent from a year ago.
•
Rice pledging prices approved in Thailand (Bangkok Post). Thailand’s cabinet has approved a total budget of THB270 billion for the government’s rice pledging scheme, according to Deputy Commerce Minister Yanyong Puangraj today. In addition, the cabinet approved rice pledging prices for 2013/14 harvest season as proposed by the National Rice Policy Committee. The pledging price for in-season normal paddy is set at 15,000 baht a tonne and the total value is capped at THB350,000 per household. The rice programme for in-season paddy runs from 1 October 2013 to 28 February 2014. The price for off-season paddy in the 2014 harvest season is set at THB13,000 per tonne, with the value capped at THB300,000 per household.
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FDI inflows into Vietnam are expected to increase sharply in 2014-15 (Vietnam News Agency). FDI inflows in Vietnam are expected to increase sharply in the 2014-15 period as the stable economy would create favourable conditions for the flow. According to the National Financial Supervisory Committee (NFSC), FDI would see a high growth rate because of world economic improvement. The NFSC added that FDI attractions would be higher as the Trans-Pacific Partnership Agreement (TPP) would be signed in 2015. Apart from FDI, domestic private investment would also be improved because supporting policies will be brought into play in the next few years amidst solutions to restructure the banking sector and resolve bad debts. Page 2 of 6
•
New workgroup formed to assist SMEs in Singapore (Channel News Asia). The Singapore government has formed a new workgroup to lead and coordinate efforts to assist SMEs. Led by Minister of State for Trade and Industry Teo Ser Luck, the SME Workgroup consists of 40 members, including members of parliament, government agencies and business representatives. A statement from the Trade and Industry Ministry said the workgroup aims to help SMEs overcome the challenges they face in restructuring and raising productivity. The workgroup will also oversee the implementation of the various government programmes and schemes related to SMEs.
IFIs NEWS (compiled from their websites) Basel Committee and International Organization of Securities Commissions (IOSCO)1 – Publication: “Margin requirements for non-centrally cleared derivatives” • The Basel Committee on Banking Supervision and the IOSCO has published its final framework for Margin requirements for non-centrally cleared derivatives. The framework has been designed to reduce systemic risks related to over-the-counter (OTC) derivatives markets, as well as to provide firms with appropriate incentives for central clearing while managing the overall liquidity impact of the requirements. It envisages a gradual phase-in period to provide market participants with sufficient time to adjust to the requirements. The requirement to collect and post initial margin on non-centrally cleared trades will be phased in over a four-year period, beginning in December 2015 with the largest, most active and most systemically important derivatives market participants. http://www.bis.org/press/p130902.htm (Press Release) http://www.bis.org/publ/bcbs261.pdf (Report) FSB– Publication: “Progress and Next Steps Towards Ending “Too-Big-To-Fail” (TBTF)” • The FSB has published a report entitled Progress and Next Steps Towards Ending “Too-Big-ToFail” prepared for the upcoming G-20 Summit to be held in St. Petersburg, Russia from September 5-6, 2013. The report takes stock of the progress made in implementing the FSB’s policy framework for reducing the moral hazard posed by systemically important financial institutions (SIFIs), which was endorsed by the G20 in November 2010. Good progress has been made and the report sets out the further actions that are required from the G-20, FSB and other international bodies to complete the policy initiative to end “too-big-to-fail”. http://www.financialstabilityboard.org/press/pr_130902.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130902.pdf (Report) FSB– Publications: “FSB Chairman’s Report and Progress Report pertaining to the Over-The Counter (OTC) Derivatives Market Reforms Progress” • The FSB has published the FSB Chairman’s Report and the September 2013 edition of the Progress Report pertaining to an implementation of the OTC Derivatives Market Reforms Progress. The former provides a summary of progress made in various workstreams to implement the G20 commitments to reform OTC derivatives markets while the latter is a detailed review of the progress made. A special focus of this latest progress report which is published on a twice-yearly basis is the market participants' practical readiness to meet the requirements of reforms as they are implemented. http://www.financialstabilityboard.org/press/pr_130902a.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130902a.pdf (Report from the FSB Chairman for the G20 Leaders’ Summit: “OTC Derivatives Reforms Progress”) http://www.financialstabilityboard.org/publications/r_130902b.pdf (Sixth Progress Report on Implementation: “OTC Derivatives Market Reforms”) _______________________________________________________________________________ 1
The IOSCO, established in 1983, is the acknowledged international body that brings together the world's securities regulators and is recognized as the global standard setter for the securities sector. IOSCO develops, implements, and promotes adherence to internationally recognized standards for securities regulation, and is working intensively with the G20 and the FSB on the global regulatory reform agenda. More information pertaining to the IOSCO can be found at this URL: http://www.iosco.org/
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FOREIGN CURRENCY EXCHANGE RATES Previous 2-Sep 3-Sep wk's close China 6.23 6.12 6.12 6.12 Hong Kong SAR 7.75 7.76 7.75 7.76 Indonesia 9,793.00 11,184.00 11,371.00 11,445.00 Japan 86.75 98.17 99.33 99.53 Korea 1,064.40 1,110.04 1,100.59 1,097.90 Malaysia 3.06 3.28 3.27 3.29 Philippines 41.01 44.58 44.42 44.48 Singapore 1.22 1.27 1.27 1.28 Thailand 30.59 32.15 32.05 32.12 Vietnam 20,840.00 21,155.00 21,150.00 21,150.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.01 -0.01 -0.65 -0.20 0.25 -0.37 -0.13 -0.15 -0.22 0.00
2013 YTD (%chg) 1.8 -0.1 -15.7 -12.2 -3.1 -7.6 -8.2 -4.3 -5.6 -1.5
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
2-Sep
3-Sep
2,098.4 22,175.3 4,101.2 13,572.9 1,924.8 1,717.6 6,061.8 3,055.7 1,323.7 472.7
2,123.1 22,394.6 4,164.0 13,978.4 1,933.7 1,724.2 6,083.9 3,054.8 1,318.0 472.2
OVERNIGHT LENDING RATE (IN %) 2-Sep 3-Sep bps change 3.010 3.000 -1.00 0.083 0.082 -0.07 5.458 5.400 -5.83 0.071 0.093 2.20 2.500 2.500 0.00 3.000 3.000 0.00 0.932 0.692 -24.00 0.038 0.038 0.00 2.500 2.500 0.00 2.857 3.500 64.30
% change 1.18 0.99 1.53 2.99 0.46 0.39 0.36 -0.03 -0.43 -0.11
2013 YTD (%chg) -6.4 -3.9 -4.2 34.5 -4.8 3.0 3.8 -4.6 -6.4 12.9
3-MONTH INTERBANK LENDING RATE (IN %)
2-Sep 4.656 0.384 6.736 0.230 2.660 3.200 0.399 0.374 2.601 5.000
3-Sep 4.656 0.383 6.766 0.230 2.660 3.200 0.532 0.374 2.601 5.033
bps change -0.03 -0.07 3.06 0.00 0.00 0.00 13.30 0.00 0.00 3.30
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close 3.220 China 0.396 Hong Kong SAR 4.806 Indonesia 0.185 Japan 2.980 Korea 3.185 Malaysia 4.115 Philippines 0.330 Singapore 3.195 Thailand 9.650 Vietnam Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
30-Aug 4.050 2.392 8.611 0.720 3.530 4.066 3.750 2.698 4.310 8.813
2-Sep 3.980 2.448 8.403 0.743 3.560 4.044 3.754 2.758 4.310 8.813
bps change -7.000 5.600 -20.800 2.300 3.000 -2.200 0.400 6.000 0.000 0.000
2013 YTD (bps) 76.000 205.200 359.700 55.800 58.000 85.900 -36.140 242.800 111.500 -83.700
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CREDIT DEFAULT SWAP (IN BPS) 30-Aug 106.84 52.86 268.92 70.42 83.80 150.48 143.40 150.60 294.17
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
2-Sep 105.87 55.84 274.43 70.43 83.31 149.51 143.38 149.63 297.36
bps change -0.97 2.98 5.51 0.01 -0.49 -0.97 -0.02 -0.97 3.19
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 (US$/ounce) Sources: Bloomberg & Datastream
2-Sep 1,389.8
3-Sep 1,391.7
% change 0.14
CREDIT RATINGS
S&P
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0 Note: Data for China and Vietnam refer to FX reserves
Fitch A+ AA+ BBBA+ AAABBBAAA BBB+ B+
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a n.a n.a n.a n.a 137.9 n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.2 28.2
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,147.9 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.7 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
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DATA RELEASES FOR THE DAY Economies
Indonesia China Japan Vietnam
Indicators
Period
Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Non-Manufacturing PMI (Points) Monetary Base (YoY)% HSBC/Markit Manufacturing PMI (Points)
Aug Aug Aug Aug Aug
Last
Pending Pending 53.9 42.0 49.4
Previous
917.35 92.67 54.1 38.0 48.5
SELECTED ECONOMIC RELEASES CALENDAR (2-6 SEPT 2013) Expected Release Date
9/2/2013
9/3/2013
9/4/2013
9/5/2013
9/6/2013
Economies
CHINA Thailand Thailand Hong Kong Hong Kong South Korea South Korea South Korea South Korea Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia China Japan Vietnam South Korea CHINA HONG KONG Philippines Philippines Thailand Malaysia South Korea South Korea Thailand Malaysia Japan Malaysia Malaysia Hong Kong Philippines
Indicators
Period
HSBC Manufacturing PMI Core CPI (YoY)% Consumer Price Index (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% HSBC Manufacturing PMI Consumer Confidence Index Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Non-Manufacturing PMI (Points) Monetary Base (YoY)% HSBC/Markit Manufacturing PMI (Points) Foreign Exchange Reserve (USD bn) China HSBC Services PMI Purchasing Managers Index Budget Deficit/Surplus (PHP bn) Consumer Price Index (YoY)% Consumer Confidence Economic Overnight Rate % GDP (QoQ)% GDP (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Exports YoY% Imports YoY% Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn)
Aug Aug Aug Jul Jul Aug Aug Aug Aug Aug Jul Aug Jul Aug Jul Aug Aug Aug Aug Aug Aug Aug Aug Aug Jul Aug Aug Sep 5 2Q F 2Q F Aug 30 Aug 30 Aug Jul Jul Aug Aug
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not 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 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • Asian stocks mixed, as profit-taking offsets upbeat outlook (Channel News Asia). Asian markets were mixed on Wednesday as profit-taking and renewed concern about a U.S. strike on Syria tempered buying sentiment, although Tokyo’s Nikkei recouped early losses as the USD approached 100 yen. Wall Street provided a positive lead after the U.S. followed China and Europe in posting upbeat manufacturing data that raised hopes for the global economic outlook. Tokyo ended 0.54 percent higher, adding 75.43 points to 14,053.87, following gains of more than four percent in the previous two sessions. Shanghai was up 0.21 percent, or 4.51 points, at 2,127.62. Hong Kong fell 0.31 percent, or 68.36 points, to 22,326.22, while the KOSPI in Seoul closed flat, edging down 0.71 points to 1,933.03. •
In the currencies market, Asian currencies are mostly higher (Bloomberg). The Malaysian ringgit and Indonesia rupiah gained 0.1 percent and 0.3 percent to 3.2845 and 11,411.0 at 6.00 p.m. Singapore time. The Philippine peso advanced by 0.2 percent to 44.41, while the Korean won climbed 0.3 percent to 1,094.65. The Japanese yen was little changed.
•
Crude oil declines as U.S. weighs intervention in Syria (Bloomberg). WTI for October delivery dropped as much as 72 cents to USD107.82 a barrel in electronic trading on the NYMEX and stood at USD108.11 as of 5:12 p.m. Singapore time. The contract climbed 89 cents from the 30 August close to settle at USD108.54 yesterday. Brent for October settlement was up 19 cents at USD115.87 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL NEWS •
Australian economy grew by 0.6 percent in the second quarter of 2013 (Bloomberg). Australia's economy expanded by a steady 0.6 percent in April-June from the previous quarter, according to official data. The figure was a slight improvement on the 0.5 percent in the first three months of 2013 and in line with forecasts of 0.6 percent, while the year-on-year 2.6 percent rate was ahead of market expectations of 2.5 percent. The Australian Bureau of Statistics (ABS) data thrust economic management back into the election debate as the commodities-powered economy undergoes a painful transition away from mining as a key driver of growth.
•
U.K. services growth accelerates to the fastest pace since 2006 (Reuters). U.K. services growth unexpectedly accelerated last month to the fastest pace since 2006 as companies reported a surge in demand. The gauge of activity increased to 60.5 from 60.2 in July, according to Markit Economics and the Chartered Institute of Purchasing and Supply today in London. New business rose to the highest in more than 16 years, suggesting that U.K.’s economic recovery that started in the second quarter is gaining momentum. Markit’s report also showed that manufacturing and construction also showing faster expansion in August.
•
U.S. Senators to vote on approval for U.S. strikes on Syria (Bloomberg). The U.S. Senate Foreign Relations Committee is scheduled to vote today on a use-of-force resolution that sets a 90-day limit on U.S. military action against Syria and explicitly does not authorize use of ground troops in combat. The draft Senate resolution supports use of force in a “limited and tailored manner against legitimate military targets” during a 60-day period following enactment, with a possible 30-day extension at President Barack Obama’s request. Earlier, President Obama gains ground with his drive for congressional backing, winning critical support from the top Republican in Washington.
Page 1 of 6
REGIONAL NEWS •
Japan’s Diet may discuss stimulus budget in early 2014 (Japan Times). According to Japanese Finance Minister, Taro Aso, the administration may submit an extra budget to the Diet early next year to stimulate the economy amid fears over the negative impact of the planned consumption tax hike in April. He added that the administration may draft a supplementary budget amid concerns the consumption tax increase may hamper efforts to beat the chronic deflation besetting Japan. The extra budget would finance measures to underpin economic growth by easing the possible negative impact the planned tax hike would have on business and household spending. Under legislation enacted last year, the 5 percent consumption tax will be raised to 8 percent in April and then to 10 percent in October 2015 to pay for the swelling welfare costs brought about by the aging population.
•
Korea selling first dollar bonds since 2009 as yields climb (Bloomberg). Korea is reportedly selling its first global bonds since 2009, seeking to raise US$1 billion at a time when developing nations are paying the highest borrowing costs in almost two years. According to Bloomberg, the government is offering 10-year notes at a yield of about 135 basis points. Finance Ministry Director General Choi Hee Nam said today that pricing is expected to be finalized soon in Seoul. The sale is taking place at least five months after arrangers were appointed, having been held up as tensions with North Korea and a possible tapering of U.S. monetary stimulus drove borrowing costs higher. The average yield on emerging-market sovereign dollar debt climbed to 6.42 percent yesterday, the highest since October 2011 according to JPMorgan Chase & Co.
•
Singapore’s electronics sector continues to recover (Channel News Asia). Singapore's electronics sector continues to recover in August, with its latest Purchasing Managers' Index (PMI) rising for the seventh straight month. The electronics PMI rose a significant 1 point to a 3month high of 51.3, on stronger orders. Electronics exports also grew at a faster pace, with a reading of 54 points – the highest since May 2011. However, the manufacturing economy grew slower than expected last month. The PMI for the manufacturing economy fell unexpectedly, dropping 1.3 points to 50.5 in August, its lowest reading since February this year. According to economists, the decline was partly due to fewer working days during the month as a result of the Hari Raya and National Day holidays.
•
Private sector economists raised Singapore’s growth forecast to 2.9 percent in 2013 (Channel News Asia). Private sector economists have raised their economic forecast for Singapore. According to the Monetary Authority of Singapore's (MAS) latest Survey of Professional Forecasters, economists expect the Singapore economy to grow by 2.9 percent this year, up from their previous median estimate of 2.3 percent in June. The upgrade comes after the Singapore economy expanded by a better-than-expected 3.8 per cent in the second quarter, compared to a year ago. This was much higher than the median forecast of 1.5 per cent reported in the June survey. The government also raised the country's growth outlook for the year to 2.5 to 3.5 percent from an earlier forecast of 1 to 3 percent. According to the quarterly poll, GDP growth in the July to September quarter is now estimated at 4 percent. This is higher than the 3.5 percent that was reported previously.
•
China promises further cooperation with Mekong Rover Convention (MRC) (Vientiane Times). China will continue to provide information on hydrological forecasts and data to countries in the Lower Mekong Basin (LMB) so floods can be mitigated in the lower stream region. This was highlighted at the conclusion of the 18th meeting of the MRC and its dialogue partners held in Vientiane, with the relevant delegation from China in attendance. According to the MRC official, China will organise this year's training course for MRC staff on flood prevention, and the management of sediment flows in relation to hydropower plant development. At the meeting, participants from Cambodia, Laos, Thailand, Vietnam and China discussed the progress made and outcomes of cooperation between the MRC and its dialogue partners in the period since the previous meeting. Page 2 of 6
•
Calls grow for cigarette tax in Cambodia (Phnom Penh Post). Anti-smoking advocates called on the Cambodian government to raise tariffs on cigarettes, touting the health and revenuegenerating benefits of a sin tax widely applied in other countries. The Southeast Asia Tobacco Control Alliance showed that Cambodia has one of the lowest tobacco tax rates in the region as a percentage of retail prices. The Director of the tobacco control alliance, Bungon Rithiphakdee has urged the Cambodian government to increase tobacco taxes to the same rate as other countries in Asia.
•
Malaysia government may bring back RON92 (News Straits Times). The Malaysian government is mulling the reintroduction of RON92 petrol to give motorists more options in getting affordable fuel. The move came following measures to be introduced by the government as it drew up strategies to ease the burden of the middle-income group in the 2014 Budget. Prime Minister Datuk Seri Najib Razak is expected to announce these measures on 25 October. RON92 was phased out in 2009 in favour of RON95, which has a higher research octane number (RON). RON92 was most commonly used by motorcycles, while RON97 was more suitable for luxury and high-performance vehicles. During the 2009 phase-out, fuel subsidies were revised to keep RON95 prices low for those in the lower- and middle-income group. Subsidy cuts, which came into effect on Monday, however, had raised the price of RON95 petrol and diesel by 20 sen (US$0.06) per litre.
IFIs NEWS (compiled from their websites) OECD – Publication: “Interim Economic Assessment” • According to OECD’s latest Interim Economic Assessment, a moderate recovery is underway in the major advanced economies. Growth is proceeding at encouraging rates in North America, Japan and the UK. The euro area as a whole is out of recession, although output remains weak in a number of countries. However, growth has slowed in some of the large emerging economies. One factor has been a rise in global bond yields – triggered in part by an expected scaling back of the United States Federal Reserve’s quantitative easing – which has fuelled market instability and capital outflows in a number of major emerging economies, such as India and Indonesia. http://www.oecd.org/newsroom/advanced-economies-growing-again-but-some-emergingeconomies-slowing.htm (Press Release) http://www.oecd.org/eco/outlook/Interim_Assessment_Handout_September_2013.pdf (Report) FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
3-Sep 6.12 7.75 11,445.00 99.57 1,097.90 3.29 44.48 1.28 32.17 21,150.00
4-Sep 6.12 7.76 11,411.00 99.57 1,094.65 3.28 44.41 1.28 32.22 21,165.00
% change 0.02 -0.01 0.30 0.00 0.30 0.05 0.16 0.23 -0.14 -0.07
2013 YTD (%chg) 1.9 -0.1 -15.4 -12.3 -2.8 -7.6 -8.0 -4.3 -5.9 -1.5
Note: Negative values indicate depreciation and positive values indicate appreciation.
Page 3 of 6
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
3-Sep
4-Sep
2,123.1 22,394.6 4,164.0 13,978.4 1,933.7 1,724.2 6,083.9 3,054.8 1,315.4 472.2
2,127.6 22,326.2 4,073.5 14,053.9 1,933.0 1,716.8 5,968.3 3,015.4 1,303.9 471.5
OVERNIGHT LENDING RATE (IN %) 3-Sep 4-Sep bps change 3.000 2.700 -30.00 0.082 0.083 0.07 5.400 5.400 0.00 0.093 0.093 0.00 2.500 2.500 0.00 3.000 3.000 0.00 0.692 0.924 23.20 0.035 0.035 0.00 2.500 2.500 0.00 3.500 3.500 0.00
% change 0.21 -0.31 -2.17 0.54 -0.04 -0.43 -1.90 -1.29 -0.87 -0.15
2013 YTD (%chg) -6.2 -4.2 -6.3 35.2 -4.8 2.5 1.8 -5.8 -7.4 12.7
3-MONTH INTERBANK LENDING RATE (IN %)
3-Sep 4.656 0.383 6.766 0.230 2.660 3.200 0.532 0.374 2.601 5.033
4-Sep 4.657 0.383 6.769 0.230 2.660 3.200 0.526 0.374 2.601 5.220
bps change 0.08 0.00 0.21 0.00 0.00 0.00 -0.60 0.00 0.00 18.70
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
2-Sep 3.980 2.448 8.403 0.743 3.560 4.044 3.754 2.758 4.310 8.813
3-Sep 4.010 2.461 8.520 0.774 3.600 4.005 3.773 2.704 4.310 8.859
bps change 3.000 1.300 11.700 3.100 4.000 -3.900 1.900 -5.400 0.000 4.600
2013 YTD (bps) 79.000 206.500 371.400 58.900 62.000 82.000 -34.240 237.400 111.500 -79.100
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
2-Sep 105.87 55.84 274.43 70.43 83.31 149.51 143.38 149.63 297.36
3-Sep 96.57 54.83 286.52 66.49 78.39 142.24 140.55 142.83 299.75
bps change -9.30 -1.01 12.09 -3.94 -4.92 -7.27 -2.83 -6.80 2.39
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 (US$/ounce) Sources: Bloomberg & Datastream
3-Sep 1,412.4
4-Sep 1,405.2
% change -0.51
Page 4 of 6
CREDIT RATINGS
S&P
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Moody's
Fitch
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
Note: Data for China and Vietnam refer to FX reserves
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a n.a n.a n.a 331.1 137.9 n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.2 28.2
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,147.9 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.7 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
DATA RELEASES FOR THE DAY Economies
South Korea CHINA HONG KONG
Indicators
Foreign Exchange Reserve (USD bn) China HSBC Services PMI Purchasing Managers Index
Period
Aug Aug Aug
Last
331.09 52.8 49.7
Previous
329.71 51.3 49.7
Page 5 of 6
SELECTED ECONOMIC RELEASES CALENDAR (2-6 SEPT 2013) Expected Release Date
9/2/2013
9/3/2013
9/4/2013
9/5/2013
9/6/2013
Economies
CHINA Thailand Thailand Hong Kong Hong Kong South Korea South Korea South Korea South Korea Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia China Japan Vietnam South Korea CHINA HONG KONG Philippines Philippines Thailand Malaysia South Korea South Korea Thailand Malaysia Japan Malaysia Malaysia Hong Kong Philippines
Indicators
Period
HSBC Manufacturing PMI Core CPI (YoY)% Consumer Price Index (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% HSBC Manufacturing PMI Consumer Confidence Index Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Non-Manufacturing PMI (Points) Monetary Base (YoY)% HSBC/Markit Manufacturing PMI (Points) Foreign Exchange Reserve (USD bn) China HSBC Services PMI Purchasing Managers Index Budget Deficit/Surplus (PHP bn) Consumer Price Index (YoY)% Consumer Confidence Economic Overnight Rate % GDP (QoQ)% GDP (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Exports YoY% Imports YoY% Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn)
Aug Aug Aug Jul Jul Aug Aug Aug Aug Aug Jul Aug Jul Aug Jul Aug Aug Aug Aug Aug Aug Aug Aug Aug Jul Aug Aug Sep 5 2Q F 2Q F Aug 30 Aug 30 Aug Jul Jul Aug Aug
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 6 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks are trading cautiously as investors await the monthly U.S. jobs report (Bloomberg & Reuters). Japan's Nikkei share has been in choppy trade as investors awaited key events this week, including U.S. jobs data and a decision on Tokyo's bid to host the 2020 Summer Olympics, losing 1.4 percent. As at 5.00 p.m. Singapore time, other regional stock indices traded relatively flat. Thailand’s SET and China’s Shanghai Composite however climbed about 1 percent.
•
In the currencies market, key regional currencies are mixed (Bloomberg). The Thai Baht erased 0.3 percent, while the Malaysian ringgit lost 0.6 percent after a report showing imports surged more than exports in July. Meanwhile, the Indonesia rupiah posted strong gains, rising by about 4 percent as at 5.00 p.m. Singapore time. The yen and the won gained 0.5 percent, advancing to 99.64 and 1,092.93, respectively.
•
In the oil market, the WTI heads for second weekly gain as U.S. stockpiles decline. The Texas Intermediate (WTI) oil swung between gains as losses as U.S. crude inventories shrank and President Barack Obama searched for diplomatic backing for a military strike on Syria while at the G-20 summit in Russia. Futures were little changed in New York and poised for a second weekly increase. WTI for October delivery was at US$108.30 a barrel in electronic trading on the NYMEX, down 7 cents at 2:45 p.m. Singapore time. The contract yesterday climbed 1.1 percent to US$108.37, the biggest gain since 27 August. The volume of all futures traded was about 54 percent below the 100-day average. Prices are up 0.6 percent this week.
BREAKING NEWS GLOBAL NEWS •
Emerging market pain dominates G20 economy talks (Reuters). Emerging and developed G20 powers struggled to find common ground over the turmoil unleashed by the prospect of the U.S. reducing a flood of dollars to the world economy. The Group of 20, which united in response to global crisis in 2009, now faces a U.S. economy picking up, Europe lagging and developing economies facing blowback from the looming 'taper' of the Federal Reserve's monetary stimulus. According to the Russian President Vladimir Putin, the main task is to return the global economy towards steady and balanced growth. He added that the task has unfortunately not been resolved.
•
U.S. jobless claims fall (Channel News Asia). Americans filed fewer claims for unemployment benefits in the last week of August as the pace of layoffs continued to slacken, according to official data. Initial jobless claims totalled 323,000 in the week ending 31 August, a decline of 9,000 from the prior week's revised reading of 332,000, according to the Labor Department. The decline in claims surprised analysts, who on average had penciled in an increase to 333,000. On a four-week moving average basis, claims fell by 3,000 from the prior week to 328,500. Claims have been trending recently at the lowest levels in nearly six years as the labour market slowly improves.
•
Germany’s exports unexpectedly dropped in July (Bloomberg). German exports unexpectedly fell in July, even as a recovery gathered pace in the 17-nation euro area. Exports, adjusted for working days and seasonal changes, fell by 1.1 percent from June according to the Federal Statistics Office in Wiesbaden today. Economists predicted an increase of 0.7 percent, according to the median forecast of 13 estimates in a Bloomberg News survey.
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U.K. home values rise as low rates boost demand (Bloomberg). U.K. home prices rose for a seventh month in August and will probably continue to increase through the rest of the year, Page 1 of 6
according to a report by Halifax. According to the mortgage unit of Lloyds Banking Group Plc, home values increased by 0.4 percent from the previous month to an average 170,231 pounds (US$265,700). From a year earlier, prices were up 6.2 percent. The strengthening economic recovery, the promise of low interest rates and government programs has revived prospective buyers’ confidence. REGIONAL NEWS •
Singapore’s Housing and Development Board (HDB) on track to deliver 13,600 new flats this year (Channel News Asia). Singapore’s Minister for National Development Khaw Boon Wan said that the HDB is on track to deliver 13,600 new flats to Singaporeans this year. Mr Khaw said that he witnessed the handover of keys from the main contractor to HDB at Floral Spring @ Yishun on Friday. The project marks the completion of 9,000 HDB flats this year. This is 50 percent more than in June, when 6,000 new flats were completed.
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Malaysia’s July exports climb the most (News Straits Times). Malaysia’s exports in July surged 4.5 percent from a year earlier, the strongest percentage rise since June 2012, as demand from China, Japan and most of Southeast Asia picked up, government data showed today. The tradereliant country’s export performance for the month beat economists’ expectations for zero growth and was also the best so far this year. Imports also rose strongly by 6.2 percent compared to the same month a year ago and narrowed Malaysia’s trade surplus to RM2.9 billion, according to official data.
•
Korea bans fishery imports from eight prefectures in Japan on radiation fears (Korea Times). Korea announced today that it has placed an import ban on all fisheries products from eight Japanese prefectures deemed effected by radiation from the Fukushima nuclear disaster. According to officials, all fishery products from radiation-affected regions in Japan will be banned from entering Korea regardless of the levels of contamination. The ban covers products from Fukushima, Aomori, Ibaraki, Gunma, Miyagi, Iwate, Tochigi, and Chiba prefectures.
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Consumers in Thailand still wary of spending (Bangkok Post). Thai consumer confidence hit a nine-month low in August as people became increasingly worried about the economic slowdown and political uncertainties. Meanwhile, the Bank of Thailand's Monetary Policy Committee will review its gross domestic product forecasts for 2013 and 2014 at next month’s meeting. A survey by the University of the Thai Chamber of Commerce (UTCC) reported that the consumer confidence index dipped for the fifth consecutive month in August to 79.3 points. It was 80.3 points in July.
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Inflation in the Philippines slows, proving policy leeway (Business World Online). Inflation eased to a four-year low in August last month, giving the Bangko Sentral ng Pilipinas (BSP) added leeway to bolster the economy from global volatility. Consumer prices inched up 2.1 percent in August, the lowest since the same month in 2009 from 2.5 percent in July. The yearto-date rate slowed to 2.8% percent below the central bank’s 3-5 percent target and 3.3 percent forecast for 2013. Core inflation, which excludes volatile items such as food and energy, dropped to a record low of 1.9 percent in August.
IFIs NEWS (compiled from their websites) BIS – Working Papers • The BIS has publicised the following working papers: • “Intraday dynamics of euro area sovereign CDS and bonds” http://www.bis.org/publ/work423.pdf • “The Response of Tail Risk Perceptions to Unconventional Monetary Policy” http://www.bis.org/publ/work425.pdf FSB – Publication: “Reports for Financial Regulatory Reform Progress” Page 2 of 6
• The FSB has published a letter from its Chairman, Mr Mark Carney to G20 Leaders highlighting the key financial reform issues for the Summit's attention, a narrative and an overview report on the progress made in developing and implementing global financial regulatory reforms since the G20 Los Cabos Summit in June 2012 and a scoreboard status report that provides a visual summary on implementation of the G20 recommendations on financial regulatory reform. Alongside with the reports, a report which contains the survey responses with regards to implementation progress of the G20 recommendations for each FSB member jurisdiction has been published too. http://www.financialstabilityboard.org/press/pr_130905.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130905.pdf (Chairman’s Letter) http://www.financialstabilityboard.org/publications/r_130905a.pdf (Narrative Progress Report) http://www.financialstabilityboard.org/publications/r_130905c.pdf (Overview Progress Report) http://www.financialstabilityboard.org/publications/r_130905b.pdf (Scoreboard Status Report) http://www.financialstabilityboard.org/implementation_monitoring/nr_02092013.htm (Survey Responses on Implementation Progress) G20 – Press Release: International monetary system reform remains focus of G20 • Mr Andrei Bokarev, Director of the Department of International Financial Relations at the Russian Ministry of Finance, spoke about the main results of the work on reforming the international financial architecture over the G20 Russia's Presidency. One of the key issues he addressed was Russia's proposal to begin a discussion on debt sustainability and government borrowing and public debt management. Other significant issues being tackled are the support of the development of local currency bond markets and the working out of responsible borrowing practices mainly for low-income countries to implement policies to attract loans. http://www.g20.org/news/20130905/782419806.html G20 – Press Release: Russian Finance Minister reviews results of G20 Leaders’ first session • Russian Finance Minister, Mr Anton Siluanov discussed the results of the first working session of the G20 Leaders' Summit at a press briefing. The focus on the session was on macroeconomic and financial issues. The G20 Leaders expressed support for the St.Petersburg Action Plan for Economic Growth and Job Creation which involves a number of specific steps to foster economic growth, reduce unemployment, stimulate investment and prevent volatility in capital flows. The session participants affirmed that the global economy is showing positive trends overall, with positive dynamics in the economies of developed countries. Discussions were also held on the topics pertaining to financial regulation, shadow banking and the role of fiscal consolidation. http://www.g20.org/news/20130905/782555210.html Bandung’s Institute of Technology1 and World Bank – Publication: “State of Logistics Indonesia 2013” • The Bandung’s Institute of Technology in West Java and World Bank have published a joint report which indicates that high logistics costs are a serious impediment to higher economic growth for Indonesia. http://www.worldbank.org/en/news/press-release/2013/09/06/high-logistics-costs-impedehigher-economic-growth-for-indonesia (Press Release) http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/09/04/000333037_201 30904115439/Rendered/PDF/808710WP0logis0Box0379822B00PUBLIC0.pdf (Report) _______________________________________________________________________________ 1
The Bandung’s Institute of Technology was founded by the Indonesian government in Year 1959 as an institution of higher learning of science, technology, and fine arts, with a mission of education, research, and service to the community. More information can be found at this URL: http://www.itb.ac.id/en/about-itb/
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FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
5-Sep 6.12 7.76 11,649.00 100.11 1,098.55 3.31 44.54 1.28 32.29 21,155.00
6-Sep 6.12 7.76 11,176.00 99.64 1,092.93 3.3268 44.48 1.28 32.39 21,154.00
% change -0.01 0.00 4.23 0.47 0.51 -0.60 0.13 0.16 -0.31 0.00
2013 YTD (%chg) 1.9 -0.1 -13.6 -12.3 -2.7 -8.8 -8.1 -4.6 -6.4 -1.5
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
5-Sep
6-Sep
2,122.4 22,598.0 4,050.9 14,064.8 1,951.7 1,721.0 5,959.2 3,039.5 1,313.5 477.6
2,140.0 22,621.2 4,057.2 13,860.8 1,955.3 1,725.3 5,974.6 3,048.2 1,327.5 480.0
OVERNIGHT LENDING RATE (IN %) 5-Sep 6-Sep bps change 2.800 2.950 15.00 0.084 0.081 -0.29 5.400 5.389 -1.06 0.093 0.093 0.00 2.500 2.500 0.00 3.000 3.000 0.00 1.255 1.174 -8.10 0.022 0.022 0.00 2.500 2.500 0.00 2.913 2.987 7.40
% change 0.83 0.10 0.16 -1.45 0.19 0.25 0.26 0.29 1.06 0.52
2013 YTD (%chg) -5.7 -3.0 -6.7 33.3 -3.7 3.0 1.9 -4.8 -5.7 14.7
3-MONTH INTERBANK LENDING RATE (IN %)
5-Sep 4.657 0.384 6.772 0.230 2.660 3.200 0.527 0.374 2.601 5.300
6-Sep 4.657 0.384 6.779 0.230 2.660 3.200 0.508 0.374 2.601 5.000
bps change 0.07 0.00 0.71 0.00 0.00 0.00 -1.90 0.00 0.00 -30.00
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
4-Sep 4.070 2.470 8.736 0.779 3.640 3.950 3.756 2.670 4.360 8.875
5-Sep 4.070 2.544 8.751 0.777 3.700 3.976 3.760 2.761 4.360 8.785
bps change 0.000 7.400 1.500 -0.200 6.000 2.600 0.400 9.100 0.000 -9.000
2013 YTD (bps) 85.000 214.800 394.500 59.200 72.000 79.100 -35.540 243.100 116.500 -86.500
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CREDIT DEFAULT SWAP (IN BPS) 4-Sep 97.54 54.32 288.92 66.46 79.62 146.15 141.49 145.77 303.70
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
5-Sep 90.68 53.84 279.50 65.50 75.66 140.84 136.71 141.41 300.59
bps change -6.86 -0.48 -9.42 -0.96 -3.96 -5.31 -4.78 -4.36 -3.11
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
5-Sep 1,367.5
Gold Spot (US$/ounce) Sources: Bloomberg & Datastream
6-Sep 1,370.2
% change 0.20
CREDIT RATINGS
S&P
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0 Note: Data for China and Vietnam refer to FX reserves
Fitch A+ AA+ BBBA+ AAABBBAAA BBB+ B+
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 n.a 1,254.2 331.1 137.9 83.2 n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 92.7 1,254.2 331.1 137.9 83.2 261.1 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,147.9 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.7 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
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DATA RELEASES FOR THE DAY Economies
Thailand Malaysia Japan Malaysia Malaysia Hong Kong Philippines
Indicators
Period
Foreign Reserves (USD bn) Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Exports YoY% Imports YoY% Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn)
Aug 30 Aug 30 Aug Jul Jul Aug Aug
Last
Previous
168.8 Pending 1,254.2 4.5 6.2 303.9 83.2
170.5 1,254.0 -6.9 1.3 299.9 83.2
SELECTED ECONOMIC RELEASES CALENDAR (2-6 SEPT 2013) Expected Release Date
9/2/2013
9/3/2013
9/4/2013
9/5/2013
9/6/2013
Economies
CHINA Thailand Thailand Hong Kong Hong Kong South Korea South Korea South Korea South Korea Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia China Japan Vietnam South Korea CHINA HONG KONG Philippines Malaysia South Korea South Korea Thailand Malaysia Japan Malaysia Malaysia Hong Kong Philippines
Indicators
Period
HSBC Manufacturing PMI Core CPI (YoY)% Consumer Price Index (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% HSBC Manufacturing PMI Consumer Confidence Index Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Non-Manufacturing PMI (Points) Monetary Base (YoY)% HSBC/Markit Manufacturing PMI (Points) Foreign Exchange Reserve (USD bn) China HSBC Services PMI Purchasing Managers Index Consumer Price Index (YoY)% Overnight Rate % GDP (QoQ)% GDP (YoY)% Foreign Reserves (USD bn) Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Exports YoY% Imports YoY% Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn)
Aug Aug Aug Jul Jul Aug Aug Aug Aug Aug Jul Aug Jul Aug Jul Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Sep 5 2Q F 2Q F Aug 30 Aug 30 Aug Jul Jul Aug Aug
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 9 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • Asian stocks advance on China. Asian shares rose on improving Chinese exports and easing concerns over a reduction in U.S. stimulus. Japanese stocks soared by 2.48 percent to a onemonth high as investors cheered Tokyo's successful bid to host the 2020 Olympics, while fresh data showed the economy grew more than expected in April-June. The Nikkei 225 index rose by 2.48 percent to 14,205.23. The Shanghai Composite also advanced by 3.4 percent to 2,212.52 at the close – the biggest gain since 14 December 2012, spearheaded by banking stocks. Likewise, the Jakarta Composite and Thailand’s SET increase by 2.5 percent, and 2.9 percent, respectively at 5.00 p.m. Singapore time. Malaysia’s KLCI and Singapore’s STI both gained closed to 1.1 percent. • In the currencies market, the yen dropped against the USD after positive trade data from China. The yen depreciated by 0.3 percent to 99.39 against the greenback as at 5.00 Singapore time. Other regional currencies are mostly higher, led by the won which climbed to a four-month high, advancing by 0.6 percent to 1,086.80 against the USD, and the Malaysian ringgit which posted strong gains of 1.1 percent to 3.2915. The Indonesia rupiah bucked the trend, erasing 1.83 percent to 11,384.00. • In the oil market, West Texas Intermediate (WTI) crude drops from two-year high as China’s oil imports fall. The WTI fell from the highest price in more than two years, as hedge funds reduced their bullish bets last week, and China’s net crude imports shrank in August from a record high. Futures slid as much as 0.7 percent in New York after two days of gains. WTI for October delivery dropped as much as 77 cents to USD109.76 a barrel in electronic trading on the NYMEX. Brent for October settlement declined as much as 56 cents, or 0.5 percent, to USD115.56 a barrel on the London-based ICE Futures Europe exchange. BREAKING NEWS GLOBAL NEWS • U.S. unemployment rate falls to 7.3 percent (Business Times). The U.S. economy created 169,000 jobs last month, up from the 162,000 tally for July, but missed economists’ expectations of 180,000. The jobless rate fell to 7.3 percent, the lowest since December 2008. However, it fell for the wrong reason. The labor force participation rate, which gauges the proportion of population in the labor force, fell to 63.2 percent from 63.4 percent in July, the lowest since August 1978. • New Australian government maintains AAA rating (Channel News Asia). International credit agencies Standard & Poor's and Moody's on kept Australia's sovereign rating at AAA after the conservatives won power, saying they expected little change to the fiscal framework. According to S&P, rating was not immediately affected by the change of government. The new government is expected to pursue a broadly similar fiscal strategy, targeting narrowing budget deficits over time. • Osborne to stick to austerity plan, cautioning against tightening of market conditions (Bloomberg). U.K.’s Chancellor of the Exchequer George Osborne promises to stick to his austerity plan. According to extracts of a speech released by the Treasury, Osborne said that global recovery is still fraught with risk. Avoiding an unintentional and premature tightening of financial conditions while staying the course with the deficit reduction plan will help counter domestic risks to growth.
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REGIONAL NEWS • Japan’s second quarter growth uptick clears way for tax hikes (Bloomberg). Japan’s economy grew faster than previously estimated in the second quarter, aiding Prime Minister Shinzo Abe’s reflation campaign as he considers whether the nation can withstand a sales-tax increase. GDP expanded by an annualized 3.8 percent from the first quarter, higher than an initial estimate of 2.6 percent, reflecting stronger private capital investment, according to the Cabinet Office. • China’s inflation falls, while exports surged in August (Reuters). China’s consumer prices rose 2.6 percent in August from a year earlier, the National Bureau of Statistics said today, in line with market expectations and July's 2.7 percent rise. Month-on-month, prices were up 0.5 percent, slightly stronger than a forecast rise of 0.4 percent. Meanwhile, exports data in August increased more than expected by 7.2 percent from a year earlier, beating consensus estimates. • Singapore’s Certificate of Entitlement (COE) system to include engine power for Category A (Cat A) cars (Channel News Asia). The COE system has been refined to include a new criterion for Cat A cars. Under the change, the engine power of Cat A cars should not exceed 97 kilowatts (kW). According to the Land Transport Authority (LTA), engine capacity of cars under Cat A which should not exceed 1600 cubic centimetres will be retained. Cars with engine power output exceeding 97kW will be classified under Category B in COE bidding exercises starting February 2014. • Lao UN representative takes office (Vientiane Times). The new Ambassador and Permanent Representative of Lao PDR to the United Nations has officially taken up his post in Geneva, Switzerland. Mr Thongphan Savanphet presented his credentials to UN Office Director General, Mr Kassym-Jomart Tokayev, last Monday in Geneva. The new Lao Ambassador conveyed the warm greetings of President Choummaly Sayasone to UN Secretary General Mr Ban Ki-moon through Mr Tokayev. He thanked the UN for the assistance it provides to Lao PDR, which significantly contributes to the country's socio-economic development. • Landmark USD100 million project gets underway in Cambodia (Phnom Penh Post). Hongkong Land broke ground on a USD100 million mixed-use development project in Phnom Penh’s financial district. Called Landmark, the building by the Hong Kong-based property group will be on a 10,700-square metre site on Street 106 near the capital’s Freedom Park. The growth in Cambodia’s economy and property market has attracted long-term institutional investors as well as foreign and domestic businesses. • Bill to allow foreign professionals filed at Senate in the Philippines (Business World Online). A measure to change the foreign investments law by scrapping restrictions on the practice of professions, and by lowering the workforce threshold of small and medium domestic businesses has been filed at the Senate in the Philippines. According to the proposed amendment, foreigners can invest as much as 100 percent outlay, except in areas under the foreign investment negative list. • Thai government to scrap luxury goods tax to lure travellers from China (Bloomberg). Thailand’s government said it will scrap import duties on luxury watches, clothes and cosmetics to help the country compete with Hong Kong and Singapore for wealthy travellers from markets including China. The duty on some luxury goods will be cut to zero from 30 percent by the end of the year. The government expects tourist arrivals to surge 18 percent to 26.4 million this year, helping to counter a slump in exports and domestic consumption. IFIs NEWS (compiled from their websites) BIS – Working Paper • The BIS has publicised the following working paper: • “Global and euro imbalances: China and Germany” http://www.bis.org/publ/work424.pdf
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G20 and OECD – Publication: “G20/OECD High-Level Principles of Long-Term Investment Financing by Institutional Investors” • The G20 Leaders have endorsed the above-stated initiative which is launched by OECD and prepared together with the G20 members. This initiative will encourage the flow of institutional investment towards longer-term assets, such as infrastructure and renewable energy projects, in order to strengthen the global economy. http://www.oecd.org/newsroom/leaders-endorse-new-g20oecd-principles-on-long-terminvestment-financing.htm (Press Release by OECD) http://en.g20russia.ru/load/782802644 (Report) http://en.g20russia.ru/load/782804292 (G20 Workplan on Financing for Investment, Study Group's Findings and Ways Forward) G20 – Publications • Following the conclusion of the G20 Summit in St Petersburg, Russia on September 6, 2013, the G20 Leaders’ Declaration alongside with other official materials pertaining to the Summit have been published: • Press Release and the Annexes http://www.g20.org/news/20130906/782776427.html • “G20 Leaders Declaration” http://en.g20russia.ru/load/782795034 IFC – Press Release: IFC and China's Fujian Province Join Forces in Promoting Sustainable SouthSouth Investment • IFC has signed a memorandum of understanding with the Foreign Trade and Economic Cooperation Department of China’s southeastern Fujian province to boost trade and help Fujian companies invest in developing countries. http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/CA61A3A86EC8928785257BE1002B59 27 OECD, WTO and UNCTAD – Publication: “Implications of Global Value Chains for Trade, Investment , Development and Jobs” • The OECD, WTO and UNCTAD have published the above-stated report on a joint basis which indicates that Global Value Chains (GVCs) have become a dominant feature of world trade and investment and are offering new prospects for growth, development and jobs. http://www.oecd.org/newsroom/global-value-chains-offer-major-opportunity-for-growth-andprogress-in-advanced-and-developing-economies-according-to-oecd-wto-unctad-report-tog20.htm (Press Release by OECD) http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=596&Sitemap_x0020_Taxonom y=UNCTAD%20Home;#1385;#International Trade and Commodities;#6;#Investment and Enterprise (Press Release by UNCTAD) http://www.oecd.org/trade/G20-Global-Value-Chains-2013.pdf (Report) World Bank – Press Release: World Bank and Vietnam Signs Credit to Support Pro-Poor Innovations • The World Bank and State Bank of Vietnam have signed a US$55 million credit to improve the quality of life for the poor by providing affordable technological solutions in traditional herbal medicine, information/communication technology applications and agriculture/aquaculture technologies. http://www.worldbank.org/en/news/press-release/2013/09/06/world-bank-vietnam-signscredit-to-support-pro-poor-innovations (Press Release) http://www.worldbank.org/projects/P121643/vietnam-inclusive-innovation-project?lang=en (Project’s Information)
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FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
6-Sep 6.12 7.76 11,176.00 99.11 1,092.93 3.33 44.48 1.27 32.24 21,155.00
9-Sep 6.12 7.76 11,384.00 99.39 1,086.80 3.29 44.24 1.27 32.21 21,130.00
% change -0.02 0.00 -1.83 -0.28 0.56 1.14 0.53 0.18 0.11 0.12
2013 YTD (%chg) 1.8 -0.1 -15.2 -12.1 -2.1 -7.8 -7.7 -4.0 -5.8 -1.4
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
6-Sep
9-Sep
2,140.0 22,621.2 4,072.4 13,860.8 1,955.3 1,723.8 5,974.6 3,048.4 1,336.3 480.0
2,212.5 22,750.7 4,173.6 14,205.2 1,974.7 1,743.6 5,997.0 3,083.0 1,374.5 470.2
OVERNIGHT LENDING RATE (IN %) 6-Sep 9-Sep bps change 2.950 2.920 -3.00 0.081 0.084 0.21 5.389 5.400 1.06 0.093 0.068 -2.45 2.500 2.500 0.00 3.000 3.000 0.00 1.174 1.010 -16.40 0.018 0.018 0.00 2.500 2.500 0.00 2.987 2.400 -58.70
% change 3.39 0.57 2.49 2.48 0.99 1.15 0.38 1.14 2.86 -2.06
2013 YTD (%chg) -2.5 -2.4 -4.0 36.7 -2.8 4.1 2.3 -3.7 -2.3 12.4
3-MONTH INTERBANK LENDING RATE (IN %)
6-Sep 4.657 0.384 6.779 0.230 2.660 3.200 0.508 0.374 2.601 5.000
9-Sep 4.656 0.384 6.791 0.230 2.660 3.200 0.486 0.374 2.601 5.320
bps change -0.09 0.00 1.14 0.00 0.00 0.00 -2.20 0.00 0.00 32.00
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
5-Sep 4.070 2.544 8.751 0.777 3.700 3.976 3.760 2.761 4.360 8.785
6-Sep 4.080 2.592 8.874 0.797 3.700 3.934 3.758 2.765 4.390 8.798
bps change 1.000 4.800 12.300 2.000 0.000 -4.200 -0.200 0.400 3.000 1.300
2013 YTD (bps) 86.000 219.600 406.800 61.200 72.000 74.900 -35.740 243.500 119.500 -85.200
Page 4 of 6
CREDIT DEFAULT SWAP (IN BPS) 5-Sep 90.68 53.84 279.50 65.50 75.66 140.84 136.71 141.41 300.59
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
6-Sep 90.19 53.79 274.57 65.49 74.97 136.93 133.79 137.50 300.93
bps change -0.49 -0.05 -4.93 -0.01 -0.69 -3.91 -2.92 -3.91 0.34
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag
6-Sep 1,391.8
Gold Spot (US$/ounce) Sources: Bloomberg & Datastream
9-Sep 1,387.4
% change -0.31
CREDIT RATINGS
S&P
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Moody's Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0 Note: Data for China and Vietnam refer to FX reserves
Fitch A+ AA+ BBBA+ AAABBBAAA BBB+ B+
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.1 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
Page 5 of 6
DATA RELEASES FOR THE DAY Economies
China China Japan Japan Japan Japan Singapore
Indicators
Period
Last
Previous
CPI (YoY)% PPI (YoY)% GDP, SA (QoQ)% GDP SA Annualised (QoQ)% Current Account Balance (JPY billion) Trade balance (BOP basis), (JPY billion) Foreign Reserves (USD bn)
Aug Aug 2Q F 2Q F Jul Jul Aug
2.6 -1.6 0.9 3.8 577.3 -943.3 Pending
2.7 -2.3 0.6 2.6 336.3 -139.2 261.1
SELECTED ECONOMIC RELEASES CALENDAR (9 - 13 SEPT 2013) Expected Release Date
9/9/2013
9/10/2013
9/11/2013
9/12/2013 9/13/2013
Economies
Indicators
China China Japan Japan Japan Japan Singapore Philippines Philippines China China Japan Philippines Korea Malaysia Malaysia Korea Japan Singapore Singapore Singapore Singapore Thailand
CPI (YoY)% PPI (YoY)% GDP, SA (QoQ)% GDP SA Annualised (QoQ)% Current Account Balance (JPY billion) Trade balance (BOP basis), (JPY billion) Foreign Reserves (USD bn) Unemployment Rate (%) Exports (YoY)% Industrial Production (YoY)% Retail Sales (YoY)% Machine Tool Orders (YoY)% BSP Overnight Borrowing Rate (%) Unemployment Rate, SA (%) Industrial Production (YoY)% Manufacturing Sales (YoY)% Bank of Korea Base Rate (%) Machinery Orders (YoY)% Unemployment Rate, SA (%) Retail Sales Ex-Auto (YoY)% Retail Sales (YoY)% Retail Sales (MoM)% Foreign Reserves (USD bn)
Japan
Industrial Production (YoY)%
Period
Aug Aug 2Q F 2Q F Jul Jul Aug Jul Jul Aug Aug Aug P 12 Sep Aug Jul Jul 12 Sep Jul 2Q F Jul Jul Jul 6 Sep Jul F
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 10 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • Asian stocks rose, extending the longest rally in the benchmark index this year, as China’s industrial production and retail sales beat estimates, adding to signs the second-largest economy is rebounding. The MSCI Asia Pacific Index advanced 1.1 percent to 137.11 as of 3:30 p.m. in Tokyo, heading for a ninth day of gains and the highest close since July 23. Japan’s Nikkei 225 rose 1.5 percent while China’s Shanghai Composite Index gained 1.15 percent. The Hang Seng Index and South Korea’s Kospi index both climbed 1.0 percent. Meanwhile, at 5.00pm Singapore time, Jakarta Composite recorded strong gains of 4.0 percent, followed by Philippine’s PSE index and Thailand’s SET index which added 1.6 percent and 1.5 percent respectively. • In the currencies market, the yen declined versus all its 16 major counterparts as minutes of the Bank of Japan’s meeting last month showed policy makers agreed the effects of monetary easing were taking hold. Japan’s currency fell 0.4 percent to 100.02 per dollar as at 5.00pm Singapore time. Other regional currencies were mostly higher, led by the Indonesian rupiah which advanced by 1.3 percent to 11,235 against the USD, followed by the Philippine peso which gained 1.0 percent. The Thai baht and Singapore dollar bucked the trend, declining by 0.2 and 0.1 percent respectively. • WTI Drops a Second Day as Obama Seeks Syria’s Weapons Surrender (Bloomberg). West Texas Intermediate fell for a second day after the U.S. said Russia’s bid to get Syria to surrender its chemical weapons may avert a strike, damping speculation that conflict will threaten Middle East oil exports. Futures dropped as much as 1.2 percent in New York, extending a 0.9 percent loss yesterday. WTI for October delivery slid as much as $1.32 to $108.20 a barrel in electronic trading on the New York Mercantile Exchange. Brent for October settlement decreased as much as $1.11, or 1 percent, to $112.61 a barrel on the London-based ICE Futures Europe exchange. BREAKING NEWS GLOBAL NEWS •
OECD Flags Shift in Growth to Developed Economies (AWSJ). Economic growth is set to slow in Brazil, India and some other developing economies in the months ahead, while momentum in developed economies will continue to pick up, according to the OECD. The leading indicator for China suggested growth is stabilizing, having previously pointed to a slowdown. Elsewhere in Asia, the OECD said growth prospects in Thailand and Indonesia are weakening, while in Malaysia and Vietnam, activity is likely to be "subdued."
•
WTO cuts 2013 world trade forecast to 2.5 percent. World trade is expected to grow by 2.5 percent this year and 4.5 percent in 2014, the World Trade Organisation's new chief, Roberto Azevedo, said on Monday, revising down previous estimates of 3.3 percent and 5 percent. He said the forecasts had been cut because the European economy had not recovered in the second quarter of this year as expected, but gave no further details.
•
U.K. House-Price Index Rises to Highest Since 2006 (Bloomberg). A U.K. house-price gauge rose to the highest in almost seven years in August as the economic recovery gathered pace and government measures boosted demand, the Royal Institution of Chartered Surveyors said. The index increased to 40 from a revised 37 in July, the highest since November 2006, London-based RICS said in a report today. A proxy measure of demand rose to a record, while the outlook for prices advanced to the highest since 2002. Page 1 of 5
•
Australia Business Sentiment Surges to Highest Since ‘11 on Vote (Bloomberg). Australian business confidence surged to the highest level since May 2011 as prospects of a change of government lifted sentiment in all industries, a private survey showed. The confidence index for August jumped to 6 from minus 3, according to a National Australia Bank Ltd. survey released today. The business conditions gauge, a measure of hiring, sales and profits, was minus 6 compared with minus 7 in July.
REGIONAL NEWS •
•
•
•
•
•
Japan Prepares Stimulus to Cushion Impact of Sales-Tax Increase (Bloomberg). Japan will prepare a stimulus package to counter the blow to the world’s third biggest economy from a planned sales-tax increase, Finance Minister Taro Aso said today. “Prime Minister Shinzo Abe ordered that an economic package be compiled by the end of September,” Aso told reporters in Tokyo. “Sufficient stimulus is needed so that if the tax is increased as planned, it doesn’t break the economy.” China August Industrial Output Rises 10.4% (Bloomberg). China’s industrial output grew at the fastest pace in 17 months in August, adding to signs of a rebound this quarter that include a pickup in export gains. Factory production rose 10.4 percent from a year earlier, the National Bureau of Statistics said in a statement in Beijing today, compared with a median forecast of 9.9 percent in a Bloomberg News survey. Retail sales advanced 13.4 percent, while fixed-asset investment excluding rural households increased 20.3 percent in the January-August period, both topping estimates. Indonesia Seeks Bilateral Swap Deals With Two More Central Banks (Bloomberg). Indonesia said it is seeking bilateral swap agreements with two more central banks to protect its sliding currency. The country may sign accords this quarter that will allow it access to more than $30 billion from new and existing swap lines, Finance Minister Chatib Basri told reporters in Jakarta today, declining to name the central banks. Indonesia may extend a bilateral swap agreement with China, Bambang Brodjonegoro, head of fiscal policy at the Finance Ministry, said today. Thai Government to Double Rubber Subsidy to Appease Farmers (AWSJ). Thailand's national rubber policy committee agreed Monday to double its rubber subsidy within a budget of 21.2 billion baht ($659 million), in an effort to quell the threat of protests by rubber farmers.. Slowing growth in China and other major economies has sapped demand for rubber, resulting in a 50% decline in prices since February 2011. The government-appointed committee recommended paying a fixed subsidy of 2,520 baht ($78) per rai, or slightly more than one third of an acre, to each rubber farmer who owns no more than 25 rai, or about 10 acres. Philippine Incentives Bill Refilled (Business World Online). A bill rationalizing the grant of fiscal incentives -- a priority of the Cabinet economic cluster -- has been filed at the House of Representatives. The proposed law limits the grant of incentives to registered export enterprises, strategic activities and micro and small enterprises (MSEs) for a period not exceeding 25 years. “This bill will help us trim waste from government spending and will help us free up fiscal space to invest in our people and our infrastructure,” Finance Secretary Mr. Purisima Laos’ 2012-13 revenue target in doubt (Vientiane Times). Laos could face rising debt if it fails to achieve the revenue collection target for fiscal year 2012-13 which ends this month, according to a recent report from the Ministry of Finance. Revenue collection over the past 11 months has fallen considerably short of the target, attaining only 78.38 percent of the plan for the year, which was set at more than 19,500 billion kip. The ministry attributes the failure to unfavourable global economic circumstances and an overly-optimistic target, which was 27.15 percent higher than last year's figure.
Page 2 of 5
IFIs NEWS (compiled from their websites) IMF – Working Paper: “Shock from Graying: Is the Demographic Shift Weakening Monetary Policy Effectiveness” • The IMF has publicised the captioned working paper. “Abstract Empirical evidence is mounting that, in advanced economies, changes in monetary policy have a more benign impact on the economy—given better anchored inflation expectations and inflation being less responsive to variation in unemployment—compared to the past. The paper first clarifies potential transmission channels that could explain why monetary policy effectiveness may moderate in graying societies and then uses the Bayesian estimation techniques for the U.S., Canada, Japan, U.K., and Germany to confirm a weakening of monetary policy effectiveness over time with regards to unemployment and inflation. It concludes with the policy implications.” http://www.imf.org/external/pubs/ft/wp/2013/wp13191.pdf FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
9-Sep 6.12 7.75 11,384.00 99.58 1,086.80 3.29 44.24 1.27 32.10 21,140.00
10-Sep 6.12 7.75 11,235.00 100.02 1,084.13 3.28 43.82 1.27 32.16 21,115.00
% change 0.01 0.00 1.33 -0.44 0.25 0.44 0.96 -0.06 -0.20 0.12
2013 YTD (%chg) 1.8 -0.1 -14.1 -12.7 -1.9 -7.4 -6.8 -3.9 -5.7 -1.3
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
9-Sep 2,212.5 22,750.7 4,191.3 14,205.2 1,974.7 1,747.0 5,997.0 3,088.2 1,384.3 470.2
OVERNIGHT LENDING RATE (IN %) 9-Sep 10-Sep bps change 2.920 2.910 -1.00 0.084 0.086 0.29 5.400 5.400 0.00 0.093 0.095 0.25 2.500 2.500 0.00 3.000 3.000 0.00 1.010 0.274 -73.60 0.034 0.034 0.00 2.500 2.500 0.00 2.400 2.100 -30.00
10-Sep 2,238.0 22,976.7 4,358.1 14,423.4 1,994.1 1,765.0 6,089.7 3,121.8 1,405.4 474.5
% change 1.15 0.99 3.98 1.54 0.98 1.03 1.55 1.09 1.52 0.93
2013 YTD (%chg) -1.4 -1.4 0.3 38.8 -1.8 5.4 3.9 -2.5 -0.1 13.4
3-MONTH INTERBANK LENDING RATE (IN %)
9-Sep 4.656 0.384 6.791 0.230 2.660 3.200 0.486 0.374 2.601 5.320
10-Sep 4.655 0.385 6.788 0.230 2.660 3.200 0.308 0.374 2.601 4.767
bps change -0.15 0.14 -0.28 0.00 0.00 0.00 -17.80 0.00 0.00 -55.30
Page 3 of 5
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
6-Sep 4.080 2.592 8.874 0.797 3.700 3.934 3.758 2.765 4.390 8.798
9-Sep
2013 YTD (bps) 84.000 213.000 409.700 57.100 61.000 73.600 -33.640 236.100 119.500 -85.700
bps change
4.060 2.526 8.903 0.756 3.590 3.921 3.779 2.691 4.390 8.793
-2.000 -6.600 2.900 -4.100 -11.000 -1.300 2.100 -7.400 0.000 -0.500
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
6-Sep 90.19 53.79 274.57 65.49 74.97 136.93 133.79 137.50 300.93
9-Sep 83.32 53.55 258.33 65.19 70.98 128.22 124.18 129.28 296.49
bps change -6.87 -0.24 -16.24 -0.30 -3.99 -8.71 -9.61 -8.22 -4.44
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag
9-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
1,387.0
10-Sep 1,375.2
% change -0.85
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
Page 4 of 5
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
DATA RELEASES FOR THE DAY
Economies Philippines Philippines Indonesia China China China
Indicators Total Exports (YoY)% Unemployment Rate% Consumer Confidence Index New Yuan Loans (RMB bn) Retail Sales (YoY)% Industrial Production (YoY)%
Period Jul Jul Aug Aug Aug Aug
Last 2.3 7.3 107.8 711.3 13.4 10.4
Previous 4.1 7.5 108.4 699.9 13.2 9.7
SELECTED ECONOMIC RELEASES CALENDAR (9 - 13 SEPT 2013) Expected Release Date 9/9/2013
9/10/2013
9/11/2013
9/12/2013 9/13/2013
Economies
Indicators
China China Japan Japan Japan Japan Singapore Philippines Philippines China China Japan Philippines Korea Malaysia Malaysia Korea Japan Singapore Singapore Singapore Singapore Thailand
CPI (YoY)% PPI (YoY)% GDP, SA (QoQ)% GDP SA Annualised (QoQ)% Current Account Balance (JPY billion) Trade balance (BOP basis), (JPY billion) Foreign Reserves (USD bn) Unemployment Rate (%) Exports (YoY)% Industrial Production (YoY)% Retail Sales (YoY)% Machine Tool Orders (YoY)% BSP Overnight Borrowing Rate (%) Unemployment Rate, SA (%) Industrial Production (YoY)% Manufacturing Sales (YoY)% Bank of Korea Base Rate (%) Machinery Orders (YoY)% Unemployment Rate, SA (%) Retail Sales Ex-Auto (YoY)% Retail Sales (YoY)% Retail Sales (MoM)% Foreign Reserves (USD bn)
Japan
Industrial Production (YoY)%
Period Aug Aug 2Q F 2Q F Jul Jul Aug Jul Jul Aug Aug Aug P 12 Sep Aug Jul Jul 12 Sep Jul 2Q F Jul Jul Jul 6 Sep Jul F
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 5 of 5
MARKET UPDATE FOR ASEAN+3 11 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • Asian Stocks Swing Between Gains, Losses on Syria Outlook. Asian stocks swung between gains and losses after President Barack Obama pulled the U.S. from the brink of a military strike against Syria. Energy producers led declines. The MSCI Asia Pacific Index was little changed at 137.11 as of 3:33 p.m. in Tokyo, having swung between gains of as much as 0.4 percent and losses of 0.2 percent. Gainers include Philippines’s PSE index and South Korea’s Kospi index which advanced 2.1 percent and 0.5 percent respectively at 5.00pm Singapore time. China’s Shanghai Composite Index climbed 0.15 percent while Japan’s Nikkei 225 remained mostly flat. Singapore’s STI and Thailand’s SET led declines, falling 0.7 percent and 0.5 percent respectively. This was followed by a 0.2 percent decline in Indonesia’s JCI and the Hang Seng Index. • In the currencies market, the yen rose 0.1 percent to 100.27 per dollar at 5.00pm Singapore time. Other regional currencies were generally higher, led by the Thai baht which advanced by 0.5 percent to 31.96 against the USD, followed by the Malaysian ringgit which gained 0.4 percent. Indonesian rupiah, Korean won and Vietnam dong however declined by 1 percent, 0.2 percent and 0.05 percent respectively. • WTI Oil Drops a Third Day as Obama Delays Syria Strike Decision. West Texas Intermediate crude fell for a third day after President Barack Obama postponed a decision on military strikes against Syria, easing concern that a conflict will disrupt Middle East oil exports. WTI for October delivery declined as much as 86 cents to $106.53 a barrel in electronic trading on the New York Mercantile Exchange. Brent for October settlement was up 45 cents at $111.70 a barrel on the London-based ICE Futures Europe exchange. BREAKING NEWS GLOBAL NEWS •
•
•
U.K. Unemployment Rate Unexpectedly Declines to 7.7% (Bloomberg). U.K. unemployment unexpectedly fell in the quarter through July, moving a step closer to the threshold at which Bank of England Governor Mark Carney has said officials will reassess their policy stance. The unemployment rate measured by International Labour Organization methods declined to 7.7 percent from 7.8 percent in the second quarter, the Office for National Statistics said in London today. The median forecast of 28 economists was for 7.8 percent. In August, jobless claims fell 32,600, more than economists had forecast. The pound rose to a seven-month high. Swedes Face Forced Deleveraging as Debt Loads Swell to Record (Bloomberg). Sweden is looking into the option of forcing households to start amortizing their mortgages in an effort to prevent debt loads rising from a record, Martin Andersson, director-general at the Swedish Financial Supervisory Authority, told reporters. Swedish apartment prices have more than doubled since 2000, sparking concern a housing bubble may be brewing after private debt hit a record last year. A report from the Financial Supervisory Authority showed that, at the current pace of amortization, it takes Swedish households 140 years on average to repay their home loans. Argentina’s Rating Cut to CCC+ by S&P on Appeals Court Ruling (Bloomberg). Argentina’s credit rating was cut one level by Standard & Poor’s, which cited a U.S. Appeals Court ruling that prevents the country from honoring its debt without also paying holders of defaulted bonds in full. “The lawsuit could result in the interruption of payments on bonds currently under New Page 1 of 5
York jurisdiction, or it could prompt Argentina to undertake a debt exchange that we could view as distressed,” S&P said in the statement. “There is at least a one-in-three chance of either occurring within the coming 12 months.” REGIONAL NEWS •
•
•
•
•
China Shadow Banking Returns as Growth Rebound Adds Risks (Bloomberg). China’s broadest measure of new credit almost doubled in August from the previous month. Aggregate financing was 1.57 trillion yuan ($257 billion), the People’s Bank of China said yesterday, topping the 950 billion yuan median estimate of 10 analysts surveyed by Bloomberg News. New yuan loans from banks accounted for about 45 percent of the total, down from July’s 87 percent, as nontraditional credit played a bigger role. Indonesia Sells $1.5 Billion of Sukuk at Top Rate Since 2009 (Bloomberg). Indonesia sold $1.5 billion of dollar-denominated Islamic bonds at the highest yield since 2009. The nation issued the notes due in 5.5 years to yield 6.125 percent, according to Dahlan Siamat, Islamic financing director at the debt management office. That was the highest rate for global Shariah-compliant securities since Indonesia paid 8.8 percent on its debut dollar sukuk in 2009. The country last offered global Islamic paper in November, selling $1 billion of 10-year securities at a record-low yield of 3.3 percent. Thailand’s Fiscal Policy Office (FPO) set to trim growth forecast to 4% (Bangkok Post).The Finance Ministry has estimated economic growth will be in a range of 3.8% to 4%, down from its earlier projection of 4.5%. Ekniti Nitithanprapas, deputy director-general of the Fiscal Policy Office (FPO), said since exports and tourism account for 73% of gross domestic product (GDP), the global economic slowdown could take a toll on the Thai economy. Mr Ekniti, however, believes the country's economy will pick up next year on the back of the global economic recovery. Asia Pacific CPO plantation companies face potential slowdown (Jakarta Post). Fitch Ratings said crude palm oil (CPO) plantation companies in Asia are facing potentially slower demand from the two largest import markets, China and India, with performance over the next 12 to 18 months likely to be subject to the worst of the decline. “Despite some deterioration in the average selling price and operating profit per ton, CPO plantation companies' funds from operations [FFO]-adjusted net leverage remains compatible with their rating levels,” Fitch said in an official release made available to The Jakarta Post today. Laos, Timor-Leste hold talks on bilateral ties (Vientiane Times). Prime Minister Thongsing Thammavong and his visiting Timor-Leste counterpart Kay Rala Xanana Gusmão yesterday held talks on bilateral ties, pledging mutual support and assistance through bilateral and multilateral frameworks. The two premiers discussed ways to broaden the friendly relations and cooperation between Laos and Timor-Leste and signed an agreement on cooperation in economics, trade and technology between Laos and Timor-Leste, which lays out a foundation conducive for future cooperation.
IFIs NEWS (compiled from their websites) FSB - Publication: “Review Report: Peer Review of the United Kingdom” • The FSB has published a review report on the peer review of the United Kingdom. This forms part of a regular programme of peer reviews of FSB jurisdictions that began in 2010. The report examines three topics that are vital for financial stability and relevant for the broader FSB membership that are namely (i) macro-prudential policy framework; (ii) micro-prudential supervisory approach and (iii) supervision and oversight of central counterparties. The draft report for discussion was prepared by a team of experts drawn from FSB member institutions. http://www.financialstabilityboard.org/press/pr_130910.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130910.pdf (Review Report) Page 2 of 5
FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
10-Sep
11-Sep
6.12 7.75 11,235.00 100.39 1,084.13 3.28 43.82 1.27 32.13 21,115.00
6.12 7.75 11,346.00 100.27 1,086.55 3.26 43.80 1.27 31.96 21,125.00
% change 0.02 0.00 -0.98 0.12 -0.22 0.42 0.05 0.04 0.52 -0.05
2013 YTD (%chg) 1.9 -0.1 -14.9 -12.9 -2.1 -7.0 -6.7 -3.8 -5.1 -1.3
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
10-Sep 2,238.0 22,976.7 4,358.1 14,423.4 1,994.1 1,765.0 6,089.7 3,123.9 1,393.2 474.5
OVERNIGHT LENDING RATE (IN %) 10-Sep 11-Sep bps change 2.910 3.020 11.00 0.086 0.092 0.57 5.400 5.396 -0.36 0.095 0.066 -2.95 2.500 2.500 0.00 3.000 3.000 0.00 0.274 -0.241 -51.50 0.027 0.027 0.00 2.500 2.500 0.00 2.100 2.500 40.00
11-Sep 2,241.3 22,937.1 4,349.4 14,425.1 2,003.9 1,764.6 6,214.9 3,102.2 1,385.9 476.4
% change 0.15 -0.17 -0.20 0.01 0.49 -0.02 2.06 -0.69 -0.52 0.39
2013 YTD (%chg) -1.2 -1.6 0.1 38.8 -1.3 5.4 6.0 -3.1 -1.5 13.9
3-MONTH INTERBANK LENDING RATE (IN %)
10-Sep 4.655 0.385 6.788 0.230 2.660 3.200 0.308 0.374 2.601 4.767
11-Sep 4.656 0.386 6.788 0.230 2.660 3.200 0.466 0.374 2.601 4.683
bps change 0.10 0.07 0.00 0.00 0.00 0.00 15.80 0.00 0.00 -8.40
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
9-Sep 4.060 2.526 8.903 0.756 3.590 3.921 3.779 2.691 4.390 8.793
10-Sep 4.020 2.594 8.874 0.742 3.610 3.889 3.755 2.706 4.390 8.782
bps change -4.000 6.800 -2.900 -1.400 2.000 -3.200 -2.400 1.500 0.000 -1.100
2013 YTD (bps) 80.000 219.800 406.800 55.700 63.000 70.400 -36.040 237.600 119.500 -86.800
Page 3 of 5
CREDIT DEFAULT SWAP (IN BPS) 9-Sep 83.32 53.55 258.33 65.19 70.98 128.22 124.18 129.28 296.49
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
10-Sep 80.86 53.06 246.52 64.74 69.75 123.42 119.34 124.42 291.62
bps change -2.46 -0.49 -11.81 -0.45 -1.23 -4.80 -4.84 -4.86 -4.87
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag
10-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,363.9
11-Sep 1,367.3
% change 0.25
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
Page 4 of 5
DATA RELEASES FOR THE DAY Economies South Korea South Korea Malaysia Malaysia
Indicators Unemployment Rate (SA)% Bank Lending to HH (KRW Tln) Industrial Production (YoY)% Manufacturing Sales (YoY)%
Period Aug Aug Jul Jul
Last 3.1 471.8 7.6 3.8
Previous 3.2 470.0 3.3 -2.2
SELECTED ECONOMIC RELEASES CALENDAR (9 - 13 SEPT 2013) Expected Release Date 9/9/2013
9/10/2013
9/11/2013
9/12/2013 9/13/2013
Economies
Indicators
China China Japan Japan Japan Japan Singapore Philippines Philippines China China Japan Philippines Korea Malaysia Malaysia Korea Japan Singapore Singapore Singapore Singapore Thailand
CPI (YoY)% PPI (YoY)% GDP, SA (QoQ)% GDP SA Annualised (QoQ)% Current Account Balance (JPY billion) Trade balance (BOP basis), (JPY billion) Foreign Reserves (USD bn) Unemployment Rate (%) Exports (YoY)% Industrial Production (YoY)% Retail Sales (YoY)% Machine Tool Orders (YoY)% BSP Overnight Borrowing Rate (%) Unemployment Rate, SA (%) Industrial Production (YoY)% Manufacturing Sales (YoY)% Bank of Korea Base Rate (%) Machinery Orders (YoY)% Unemployment Rate, SA (%) Retail Sales Ex-Auto (YoY)% Retail Sales (YoY)% Retail Sales (MoM)% Foreign Reserves (USD bn)
Japan
Industrial Production (YoY)%
Period Aug Aug 2Q F 2Q F Jul Jul Aug Jul Jul Aug Aug Aug P 12 Sep Aug Jul Jul 12 Sep Jul 2Q F Jul Jul Jul 6 Sep Jul F
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 5 of 5
MARKET UPDATE FOR ASEAN+3 12 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • Asian Stocks Fall From 3-Month High Before FOMC Meeting. Asia’s benchmark stock index retreated from a three-month high as investors await the outcome of the Federal Reserve’s meeting next week. The MSCI Asia Pacific Index fell less than 0.2 percent to 137.39 as of 5:37 p.m. in Tokyo, heading for its first decline in 11 days. About four shares rose for every five that fell on the measure, which climbed 6.6 percent in the past 10 days. Tokyo stocks eased 0.26 per cent as the benchmark Nikkei 225 index closed 37.80 points lower at 14,387.27. South Korean shares ended nearly unchanged in volatile trade as foreign net inflows were offset by repositioning among some investors seeking to lock in gains following the market's recent rise. Hong Kong shares also ended flat, giving up most of the morning gains as profit-taking offset a positive lead from Wall Street, as Chinese shares rose 0.64 per cent. • Yen Advances for Second Day as Machinery Orders Stagnate. Japan’s currency rose from near a seven-week low against the greenback as traders speculated whether the U.S. economy is strong enough for the Federal Reserve to reduce monetary stimulus. South Korea’s won touched the strongest level in more than six months. The baht advanced for a fifth day, the longest winning streak in almost eight months, after global funds boosted holdings of Thai stocks by more than $100 million on each of the last two days. Meanwhile Rupiah drops a little amid Bank Indonesia’s rate hike. • WTI Crude Fluctuates as Saudi Arabia Sees Ample Oil Supply. Futures fluctuated in New York after Ali Al-Naimi, Saudi Arabia’s oil minister, said the nation will meet additional demand as geopolitical concerns dominate the market. WTI for October delivery was at $107.38 a barrel in electronic trading on the New York Mercantile Exchange, down 18 cents, at 3:11 p.m. Singapore time. The contract climbed 17 cents to $107.56 yesterday. The volume of all futures traded was about 55 percent less than the 100-day average. BREAKING NEWS GLOBAL NEWS •
•
•
Europe Gaining Confidence Among Investors in Global Poll (Bloomberg). Forty percent of the responding investors, analysts and traders who are Bloomberg subscribers said the euro-area economy is improving, more than four times the number in May and a signal the region’s 3 ½year debt crisis is ending. With sentiment also rising in the U.S. and Japan, 40 percent said the world economy is strengthening, the most since January 2011. Reflecting a shift in mood, the prospects of a Chinese slowdown and U.S. fiscal fight displaced Europe’s woes as the biggest global economic threats. Five years after Lehman US bank regulation reform remains incomplete (AFP). Dodd-Frank reforms, totalling 2,300 pages of new regulation, were adopted in July 2010 by Congress. But its entry into force still awaits a broad range of rulemaking and interpretation, and faces resistance from banks still reticent to admit their faults. At the beginning of September, just 40 per cent of the Dodd-Frank provisions had been finalised and integrated into law, according to a report by the law firm Davis Polk. India's growth, deficit problems not structural, according to RBI chief Rajan (Reuters). India’s slowing economy and its massive current account and fiscal deficits are not structural problems and can be fixed with modest reforms, newly appointed central bank Governor Raghuram Rajan Page 1 of 6
said on Wednesday. Mr Rajan acknowledged the economy will expand at a pace that will be its slowest in a decade, with annual growth this year likely to be between 5 and 5.5 per cent. REGIONAL NEWS •
•
•
•
•
•
Indonesia Raises Rate to Four-Year High as Korea and Philippines hold (Bloomberg). Bank Indonesia raised its key interest rate for the fourth time since early June to support a weakening currency and cool inflation expectations. The reference rate was increased by a quarter of a percentage point to 7.25 percent, the highest in more than four years. The central bank also raised the deposit facility rate. Meanwhile the Bank of Korea held rates steady as economy shows resilience, with inflation near its lowest since 1999. The Philippines held its benchmark rate at a record low as easing inflation gave policy makers room to support the region’s fastestgrowing economy. HK property tycoons scramble to meet targets as cooling measures bite (Reuters). Hong Kong's powerful property developers are locked in a price war as measures to cool one of the world's most expensive real estate markets force them to impose steep discounts to hit sales targets, with many turning to mainland China to fill the gap. Real estate agents have also taken to the streets to urge the government to relax cooling measures that they say could cost them their jobs, although market watchers say the government is unlikely to budge any time soon. Singapore tightens rules on unsecured loans to rein in debt (Business Times). Singapore announced new rules to cap the amount of credit card and other unsecured loans that banks can extend to individuals in a bid to rein in borrowing and prevent people from falling deeper into debt. The changes, to be implemented in stages from Dec 1, include a limit on the total amount of unsecured loans an individual can take to 12 times that person's monthly income. Malaysia Petronas proposes new Asian crude benchmark (Reuters). Malaysia state energy firm Petronas is in talks with producers, buyers and traders on setting up a new mechanism to price oil produced in the Asia-Pacific to better reflect regional supply and demand. Petronas is studying several options including working with an exchange in Singapore to start a futures contract based on four Malaysian crude grades - Labuan, Miri, Kikeh and Kimanis. Satisfied by government subsidy, Thai rubber farmers call off protest (Bangkok Post). Thai rubber farmers have called off demonstrations planned for the weekend after the government doubled its subsidy for production and offered help for people arrested in protests last week, a farmers' leader said on Wednesday. The government has promised a subsidy that should lift farmers' income to around 90 baht (US$2.80) per kg, versus a market price of around 80 baht. Insurance sector in Cambodia sees growth in first 6 months (Cambodia Daily). Revenue generated by Cambodia’s insurance firms increased 25 percent to $22 million in the first six months of this year compared to the same period last year. Engineering insurance has become the sector’s backbone, with a 102 percent increase in premiums to $2.4 million between January and July, while the second-largest jump was fire insurance, which grew 35 percent to about $7 million. Health and vehicle insurance premiums grew only slightly, with a combined total of 11 percent to $3.22 million and $3.8 million, respectively. For years, insurance firms have found it difficult to gain a foothold in the market, as Cambodians are still unaccustomed to the idea of having insurance.
IFIs NEWS (compiled from their websites) IMF – Working Papers • The IMF has publicised the following working papers: • Inflation and Output Comovement in the Euro Area: Love at Second Sight? – “This paper discusses comovement between inflation and output in the euro area. The strength of the comovement may not be apparent at first sight, but is clear at business cycle frequencies. Our results suggest that at business cycle frequency, the output and core inflation comovement is Page 2 of 6
high and stable, and that inflation lags the cycle in output with roughly half of its variance. The strong relationship of output and inflation hints at the importance of demand shocks for the euro area business cycle.” http://www.imf.org/external/pubs/ft/wp/2013/wp13192.pdf • Procyclical Behavior of Institutional Investors During the Recent Financial Crisis: Causes, Impacts, and Challenges – “This paper focuses on the following four points: (i) provides evidence on the procyclical investment behavior of major institutional investors during the global financial crisis; (ii) identifies the main factors that could account for such behavior; (iii) discusses the implications of procyclical behavior and (iv) proposes a framework for sound investment practices for long-term investors. However, our main conclusion is that behaving in a manner consistent with long-term investing would lead to better long-term, risk-adjusted return. Most importantly, it could lessen the potential adverse effects of the procyclical investment behavior of institutional investors on global financial stability.” http://www.imf.org/external/pubs/ft/wp/2013/wp13193.pdf • Cross-Country Linkages in Europe: A Global VAR Analysis - “This paper uses the Global VAR (GVAR) model proposed by Pesaran et al. (2004) to study cross-country linkages among euro area countries, other advanced European countries (including the Nordics, the UK, etc.), and the Central, Eastern and Southeastern European (CESEE) countries. The results show strong comovements in output growth and interest rates but weaker linkages bewteen inflation and real credit growth within Europe. While the euro area is the dominant source of economic influences, there are also interesting subregional linkages, e.g. between the Nordic and the Baltic countries, and a small but notable impact of CESEE countries on the rest of the Europe.” http://www.imf.org/external/pubs/ft/wp/2013/wp13194.pdf FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
11-Sep
12-Sep
6.12 7.75 11,346.00 99.89 1,086.55 3.26 43.80 1.27 31.92 21,113.00
6.12 7.75 11,350.00 99.49 1,084.91 3.28 43.87 1.27 31.76 21,114.00
% change 0.02 0.01 -0.04 0.40 0.15 -0.42 -0.16 -0.19 0.50 0.00
2013 YTD (%chg) 1.9 0.0 -15.0 -12.2 -2.0 -7.4 -6.9 -3.8 -4.5 -1.3
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia
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 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
11-Sep 2,241.3 22,937.1 4,349.4 14,425.1 2,003.9 1,768.5 6,214.9 3,108.2 1,411.2 476.4
OVERNIGHT LENDING RATE (IN %) 11-Sep 12-Sep bps change 3.020 2.970 -5.00 0.092 0.095 0.29 5.396 5.389 -0.71
12-Sep 2,255.6 22,953.7 4,356.6 14,387.3 2,004.1 1,771.5 6,195.6 3,123.3 1,403.7 475.6
% change 0.640 0.07 0.17 -0.26 0.01 0.17 -0.31 0.49 -0.53 -0.17
2013 YTD (%chg) -0.6 -1.5 0.2 38.4 -1.3 5.8 5.7 -2.4 -0.3 13.7
3-MONTH INTERBANK LENDING RATE (IN %)
11-Sep 4.656 0.386 6.788
12-Sep 4.656 0.386 6.795
bps change 0.04 0.00 0.71
Page 3 of 6
Japan Korea Malaysia Philippines Singapore Thailand Vietnam
0.093 2.500 3.000 -0.241 0.037 2.500 2.500
0.066 2.500 3.000 0.386 0.037 2.500 3.067
-2.70 0.00 0.00 62.70 0.00 0.00 56.70
0.230 2.660 3.200 0.466 0.374 2.601 4.683
0.230 2.660 3.200 0.187 0.374 2.601 4.843
0.00 0.00 0.00 -27.90 0.00 0.00 16.00
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
10-Sep 4.020 2.594 8.874 0.742 3.610 3.889 3.755 2.706 4.390 8.782
11-Sep 4.050 2.486 8.707 0.745 3.570 3.899 3.735 2.669 4.350 8.892
bps change 3.000 -10.800 -16.700 0.300 -4.000 1.000 -2.000 -3.700 -4.000 11.000
2013 YTD (bps) 83.000 209.000 390.100 56.000 59.000 71.400 -38.040 233.900 115.500 -75.800
Page 4 of 6
CREDIT DEFAULT SWAP (IN BPS) 10-Sep 80.86 53.06 246.52 64.74 69.75 123.42 119.34 124.42 291.62
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
11-Sep 84.80 53.03 247.33 63.27 73.46 123.39 122.24 125.36 290.43
bps change 3.94 -0.03 0.81 -1.47 3.71 -0.03 2.90 0.94 -1.19
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag
11-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,365.3
12-Sep 1,340.4
% change -1.83
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
Page 5 of 6
DATA RELEASES FOR THE DAY Economies Korea Japan Japan Indonesia
Indicators Bank of Korea Base Rate (%) Machinery Orders (YoY)% Tokyo Avg Office Vacancies BI Reference Rate
Period 12 Sep Jul Aug 12 Sep
Last 2.5 6.5 8.16 7.25
Previous 2.5 4.9 8.29 7.00
SELECTED ECONOMIC RELEASES CALENDAR (9 - 13 SEPT 2013) Expected Release Date 9/9/2013
9/10/2013
9/11/2013
9/12/2013 9/13/2013
Economies
Indicators
China China Japan Japan Japan Japan Singapore Philippines Philippines China China Japan Philippines Korea Malaysia Malaysia Korea Japan Singapore Singapore Singapore Singapore Thailand
CPI (YoY)% PPI (YoY)% GDP, SA (QoQ)% GDP SA Annualised (QoQ)% Current Account Balance (JPY billion) Trade balance (BOP basis), (JPY billion) Foreign Reserves (USD bn) Unemployment Rate (%) Exports (YoY)% Industrial Production (YoY)% Retail Sales (YoY)% Machine Tool Orders (YoY)% BSP Overnight Borrowing Rate (%) Unemployment Rate, SA (%) Industrial Production (YoY)% Manufacturing Sales (YoY)% Bank of Korea Base Rate (%) Machinery Orders (YoY)% Unemployment Rate, SA (%) Retail Sales Ex-Auto (YoY)% Retail Sales (YoY)% Retail Sales (MoM)% Foreign Reserves (USD bn)
Japan
Industrial Production (YoY)%
Period Aug Aug 2Q F 2Q F Jul Jul Aug Jul Jul Aug Aug Aug P 12 Sep Aug Jul Jul 12 Sep Jul 2Q F Jul Jul Jul 6 Sep Jul F
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 13 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Shares Pause After Rally. Asian stocks achieved strong gains for the week, especially in Southeast Asia, though regional markets were mostly lower on Friday ahead of next week’s key Federal Reserve policy meeting. The MSCI Asia Pacific Index fell 0.6 percent to 136.90 as of 5:17 p.m. in Tokyo, halting its longest stretch of gains this year, as three shares fell for every two that rose. China’s Shanghai Composite Index (SHCOMP) slipped 0.9 percent and Hong Kong’s Hang Seng Index dropped 0.2 percent today at 5.00pm Singapore time. South Korea’s Kospi index dropped 0.5 percent. Japan’s Nikkei 225 Index and Singapore’s Straits Times Index were little changed. Meanwhile, Thailand’s SET gained the most, 0.9 percent, followed by Indonesia’s JCI which added 0.4 percent.
• Rupee Leads Advance in Asian Currencies as Fed Taper Bets Ease. Asian currencies had their best week in two months, led by India’s rupee, after U.S. jobs data tempered speculation the Federal Reserve will cut stimulus that’s buoyed emerging markets. The rupee rallied 2.5 percent to 63.63 per dollar, according to prices from local banks compiled by Bloomberg. Thailand’s baht rose 1.1 percent to 31.88, the Philippine peso gained 1.4 percent to 43.87 and Malaysia’s ringgit appreciated 1.2 percent to 3.289. Elsewhere in Asia, South Korea’s won strengthened 0.6 percent this week to 1,086.88. China’s yuan was little changed at 6.1188, Indonesia’s rupiah dropped for a fifth week, falling 2.1 percent to 11,413, and Vietnam’s dong climbed 0.2 percent to 21,115. BREAKING NEWS GLOBAL NEWS •
U.S. Budget Gap Narrows as Stronger Growth Boosts Revenue (Bloomberg). The U.S. budget deficit narrowed in August from a year earlier as a stronger job market boosted revenue, propelling the world’s largest economy toward its smallest annual shortfall since 2008. Outlays exceeded receipts by $147.9 billion last month, compared with a $190.5 billion gap in August 2012, the Treasury Department said today in Washington. In the 11 months through the fiscal year that ends Sept. 30, the deficit was $755.3 billion, the narrowest for that period in five years.
•
Euro-Area Industrial Output Declines More Than Forecast (Bloomberg). Euro-area industrial output contracted more than economists forecast in July as manufacturers struggled to shake off the legacy of a record-long recession. Factory production in the 17-nation euro area fell 1.5 percent from June, when it gained 0.6 percent, the European Union’s statistics office in Luxembourg said today. That’s more than the 0.3 percent contraction forecast by economists, according to the median of 33 estimates in a Bloomberg News survey.
•
Australia Unemployment Hits 5.8%, Near Post-Crisis Peak of 5.9% (Bloomberg). Australian unemployment edged closer to a post-financial-crisis high, underscoring the challenge for Tony Abbott's new government as the economy continues to slow. The jobless rate climbed to 5.8% in August from 5.7% a month earlier, government data Thursday showed.
•
BRIC Markets Sink to Worst Place for Investors in Poll (Bloomberg). The largest developing nations for the first time have the worst market opportunities as optimism for stronger growth shifts to the U.S. and Europe, according to a Bloomberg Global Poll. India fared the poorest, Page 1 of 6
followed by Brazil, Russia and China, a worldwide poll of investors, analysts and traders showed this week. The number of respondents who see the EU as one of the two best opportunities rose to 34 percent, its best showing in the poll dating to 2009, with the U.S. at 51 percent. REGIONAL NEWS •
Japan Said to Consider Corporate Tax Cut in Stimulus Package (Bloomberg). Japan is considering a reduction in corporate income taxes as part of a stimulus package to cushion the economy from the planned increase in the sales levy, according to three people briefed on the matter. Lowering the effective corporate tax rate that is more than double that of Singapore would boost Japan’s competitiveness, while helping to offset the economic blow from a sales-tax increase.
•
Korea’s Job Creation Drive Gains Momentum (The Korea Times). The number of employed people rose by 432,000 in August from a year earlier ㅡ the highest growth in 11 months ㅡ thanks to the government’s job creation drive, Statistics Korea said Wednesday. In June, the government vowed to create 480,000 jobs every year until 2017 to reach its stated goal of achieving a 70 percent employment rate by introducing job sharing programs. The plan is centered on creating part-time jobs in public firms and municipal government offices. The unemployment rate inched down to 3 percent in August from 3.1 percent in July.
•
BI, Jakarta administration discuss inflation (Jakarta Post). Bank Indonesia Governor Agus Martowardojo and Jakarta Governor Joko “Jokowi” Widodo on Friday attended a coordination meeting to discuss strategic measures to stabilize inflation in DKI Jakarta. The measures were developing a Strategic Food Prices Information Center (PIHPS); strengthening trade partnerships with strategic food commodity-supplying regions; improving infrastructure to support trade and logistics; and supporting the small-, medium- and micro-business (UMKM) sector development.
•
Malaysia’s EPF buying stocks as foreigners sell (Business Times). Malaysia’s largest pension fund said it was a net buyer of the nation’s stocks during recent declines as foreign investors cut their holdings. The Employees Provident Fund, which manages more than US$170 billion of assets, bought good quality and fundamentally sound shares, Mohamad Nasir Ab Latif, deputy chief executive officer of the fund, said in an e-mail interview yesterday. The FTSE Bursa Malaysia KLCI Index fell 6.8 per cent from its July 24 record through August 28 before rebounding 4.8 per cent.
•
Philippine Monetary Board holds fire (Business World Online). Monetary authorities yesterday held off from adjusting key interest rates, joining other central banks -- with Indonesia the sole exception -- in maintaining policy ahead of a US Federal Reserve meeting next week. The Bangko Sentral ng Pilipinas’ (BSP) policy-setting Monetary Board kept overnight borrowing and lending rates at record lows of 3.5% and 5.5%, respectively, pointing to a benign inflation outlook.
IFIs NEWS (compiled from their websites) FSB – Publication: “Monitoring the effects of agreed regulatory reforms on Emerging Market and Developing Economies (EMDEs)” • The FSB has published a monitoring note on the effects of regulatory reforms on EMDEs. The note which has been prepared in collaboration with standard-setting bodies and international financial institutions provides an update of monitoring developments since the FSB's June 2012 study. http://www.financialstabilityboard.org/publications/r_130912.pdf (Monitoring Note) http://www.financialstabilityboard.org/publications/r_120619e.pdf (FSB June 2012’s Study) IFC – Press Release: IFC Invests Record $438m in Indonesia to Support Infrastructure Development, Expand Access to Finance Page 2 of 6
• IFC sees attractive investment opportunities in Indonesia in the long-term, despite investors recently withdrawing funds from Indonesia. IFC's own investments in Indonesian companies jumped almost 50 percent in fiscal year 2013, which ended in June, from a year earlier to support infrastructure upgrades and improve financial access in the country. http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/D02D82FA2F426F0B85257BE400261A2 A OECD – Publication: “Economic Survey of Ireland 2013” • OECD’s latest Economic Survey of Ireland indicated that the country’s economy is now showing encouraging signs of recovery from the financial crisis, but more must be done to reinvigorate growth and create the jobs that will get the country back to full health. Employment and social inclusion issues are identified as vital to Ireland’s continuing rebound from the crisis, its prospects of growth and the wellbeing of Irish people. http://www.oecd.org/newsroom/irish-recovery-underway-but-more-inclusive-growth-and-jobcreation-needed.htm (Press Release) http://www.oecd.org/economy/ireland-2013.htm (Economic Survey of Ireland 2013) http://www.oecd.org/cfe/leed/ljci.htm (Report: “Local Job Creation: How employment and training agencies can help – Ireland”) World Bank – Publication: “Philippine Development Report 2013: Creating More and Better Jobs” • The above-stated report specified that the elements working for the Philippines are now well in place: strong economic fundamentals (low and stable inflation rate, stronger government finances, and strong external position due to remittances, among others) that are yielding impressive growth rates, political stability and a popular president seen by most Filipinos as committed to good governance and eliminating poverty. The country also stands to gain from the continuing global economic rebalancing and the strong growth prospects in the East Asia region. The key policy challenge is to accelerate inclusive growth, the type that creates more and better jobs and reduces poverty. http://www.worldbank.org/en/news/press-release/2013/09/13/philippines-coalition-for-reformscould-speed-up-creation-of-more-and-better-jobs-world-bank (Press Release) http://www.worldbank.org/content/dam/Worldbank/document/EAP/Philippines/PDRFullReport. pdf (Report) http://www.worldbank.org/content/dam/Worldbank/document/EAP/Philippines/Highlights&Exec utiveSummary.pdf (Highlights and Executive Summary) http://www.worldbank.org/en/news/feature/2013/09/13/infographic--the-philippine-jobschallenge-creating-more-and-better-jobs (Infographic: “The Philippine Jobs Challenge: Creating More and Better Jobs”) FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
12-Sep
13-Sep
6.12 7.75 11,350.00 99.54 1,084.91 3.28 43.87 1.27 31.70 21,115.00
6.12 7.75 11,232.00 99.67 1,086.88 3.29 43.86 1.27 31.88 21,115.00
% change -0.01 0.00 1.05 -0.13 -0.18 -0.39 0.02 -0.20 -0.57 0.00
2013 YTD (%chg) 1.9 0.0 -14.1 -12.4 -2.1 -7.7 -6.9 -3.9 -4.9 -1.3
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close
Previous
12-Sep
13-Sep
% change
2013 YTD
Page 3 of 6
China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
2,255.6 22,953.7 4,356.6 14,387.3 2,004.1 1,772.4 6,195.6 3,121.1 1,397.9 475.6
OVERNIGHT LENDING RATE (IN %) 12-Sep 13-Sep bps change 2.970 2.980 1.00 0.095 0.094 -0.14 5.389 5.650 26.07 0.066 0.068 0.25 2.500 2.500 0.00 3.000 3.000 0.00 0.386 0.024 -36.20 0.027 0.027 0.00 2.500 2.500 0.00 3.067 2.880 -18.70
2,236.2 22,915.3 4,375.5 14,404.7 1,994.3 1,768.1 6,133.2 3,118.1 1,410.1 476.4
-0.859 -0.17 0.43 0.12 -0.49 -0.25 -1.01 -0.10 0.87 0.17
(%chg) -1.5 -1.7 0.7 38.6 -1.8 5.6 4.6 -2.6 0.2 13.9
3-MONTH INTERBANK LENDING RATE (IN %)
12-Sep 4.656 0.386 6.795 0.230 2.660 3.200 0.187 0.374 2.601 4.843
13-Sep 4.657 0.386 7.044 0.230 2.660 3.200 0.125 0.374 2.601 4.914
bps change 0.08 0.00 24.86 0.00 0.00 0.00 -6.20 0.00 0.00 7.10
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
11-Sep 4.050 2.486 8.707 0.745 3.570 3.899 3.735 2.669 4.350 8.892
12-Sep 4.070 2.392 8.661 0.729 3.540 3.792 3.742 2.577 4.350 8.814
bps change 2.000 -9.400 -4.600 -1.600 -3.000 -10.700 0.700 -9.200 0.000 -7.800
2013 YTD (bps) 85.000 199.600 385.500 54.400 56.000 60.700 -37.340 224.700 115.500 -83.600
Page 4 of 6
CREDIT DEFAULT SWAP (IN BPS) 11-Sep 84.80 53.03 247.33 63.27 73.46 123.39 122.24 125.36 290.43
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
12-Sep 81.35 53.07 231.99 62.27 71.73 122.42 120.31 123.90 279.58
bps change -3.45 0.04 -15.34 -1.00 -1.73 -0.97 -1.93 -1.46 -10.85
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag
12-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,321.7
13-Sep 1,310.3
% change -0.86
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
Page 5 of 6
DATA RELEASES FOR THE DAY Economies
Indicators
Period
Japan Japan Thailand Singapore
Industrial Production YOY% Capacity Utilization (MoM)% Foreign Reserves (USD bn) Retail Sales (YoY)%
Singapore Singapore
Retail Sales Ex-Auto (YoY)% Retail Sales (MoM)%
Singapore
Unemployment Rate (sa)%
Last
Jul F Jul Sep 6 Jul Jul Jul
2Q F
1.8 3.7 168.93 -7.8 2.5 -5.3 2.1
Previous
1.6 -2.3 168.8 -4.0 2.6 -6.9 2.1
SELECTED ECONOMIC RELEASES CALENDAR (9 - 13 SEPT 2013) Expected Release Date 9/9/2013
9/10/2013
9/11/2013
9/12/2013 9/13/2013
Economies
Indicators
China China Japan Japan Japan Japan Singapore Philippines Philippines China China Japan Philippines Korea Malaysia Malaysia Korea Japan Singapore Singapore Singapore Singapore Thailand
CPI (YoY)% PPI (YoY)% GDP, SA (QoQ)% GDP SA Annualised (QoQ)% Current Account Balance (JPY billion) Trade balance (BOP basis), (JPY billion) Foreign Reserves (USD bn) Unemployment Rate (%) Exports (YoY)% Industrial Production (YoY)% Retail Sales (YoY)% Machine Tool Orders (YoY)% BSP Overnight Borrowing Rate (%) Unemployment Rate, SA (%) Industrial Production (YoY)% Manufacturing Sales (YoY)% Bank of Korea Base Rate (%) Machinery Orders (YoY)% Unemployment Rate, SA (%) Retail Sales Ex-Auto (YoY)% Retail Sales (YoY)% Retail Sales (MoM)% Foreign Reserves (USD bn)
Japan
Industrial Production (YoY)%
Period Aug Aug 2Q F 2Q F Jul Jul Aug Jul Jul Aug Aug Aug P 12 Sep Aug Jul Jul 12 Sep Jul 2Q F Jul Jul Jul 6 Sep Jul F
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 16 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian stocks rose after Lawrence Summers withdrew from consideration to be the next Federal Reserve chairman, paving the way for Janet Yellen, who some investors say may favor a slower reduction in U.S. stimulus. The MSCI Asia Pacific excluding Japan Index increased 1.6 percent to 464.04 as of 2:32 p.m. in Hong Kong, heading for its highest close since May 30. ASEAN markets were the top gainers at 5.00pm Singapore time, led by Indonesia’s JCI (+3.4 percent) and followed by Philippines PSEi (+2.8 percent) and Thailand’s SET (+2.3 percent). Singapore’s Straits Times Index jumped 1.8 percent while Hong Kong’s Hang Seng Index climbed 1.5 percent and South Korea’s Kospi (KOSPI) index gained 1 percent. China’s Shanghai Composite Index slipped 0.2 percent. Japanese and Malaysian markets are closed for a holiday.
• South Korea’s won rose to the highest level in more than six months and bonds advanced after former U.S. Treasury Secretary Lawrence Summers withdrew his name from consideration to be the next Federal Reserve chief. The won climbed 0.4 percent to 1,082.23 per dollar in Seoul as of 5.00pm Singapore time. Other currencies in the region also rose, with the exception of the Indonesian rupiah, which fell 1.3 percent, and the Chinese yuan and Vietnamese dong which saw marginal declines. •
WTI Extends Biggest Weekly Drop Since July on Syria Arms Plan (Bloomberg). West Texas Intermediate crude fell for a second day amid speculation that the threat of imminent military strikes against Syria has eased as the U.S. pursues a plan to confiscate the nation’s chemical weapons. WTI for October delivery slid as much as $1.45 to $106.76 a barrel in electronic trading on the NYMEX and was at $107.38 at 3 p.m. Singapore time. Brent for November settlement decreased as much as $1.45, or 1.3 percent, to $110.25 a barrel on the Londonbased ICE Futures Europe exchange.
BREAKING NEWS GLOBAL NEWS •
U.S Retail Sales Rose 0.2% in August (AWSJ). U.S. consumers spent more cautiously at retail outlets in August, raising doubts about a long-expected acceleration in economic growth in the second half of the year. Retail sales rose a seasonally adjusted 0.2% in August from a month earlier, the Commerce Department said Friday, a smaller gain than the 0.5% rise forecast by economists and the weakest increase since April.
•
Euro-Zone Employment Falls Again in Second Quarter (AWSJ). The number of people with jobs in the 17 countries that share the euro fell again in the three months to June, as the currency area's economy returned to growth following 18 months of contraction. The European Union's official statistics agency said Friday the number of people in work fell 0.1% from the first quarter to stand at 145 million—1% lower than in the second quarter of 2012. That marked a slowdown in the rate of decline, which was 0.4% in the first quarter.
•
With Summers Withdrawal, Fed More Likely to Stay the Course (AWSJ). Lawrence Summers's withdrawal from the running to become the next Federal Reserve chairman increases the likelihood of continuity in central-bank policy for the next few years—meaning any Fed winddown of its easy-money programs will be slow and gradual. The two other top contenders for the Fed job are Janet Yellen and Donald Kohn, the Fed's current vice chairwoman and past vice Page 1 of 5
chairman, respectively. Both were architects of the central bank's programs since the 2008 financial crisis and supporters of the policies laid out by the current Fed chief, Ben Bernanke. REGIONAL NEWS •
Shutdown of Japan’s Last Nuclear Reactor Raises Power Concerns (Bloomberg). Japan’s last operating nuclear reactor was halted for maintenance yesterday, leaving the country nuclear free for the first time since July 2012 and prompting concerns about power availability this winter. Premiums for oil burned in power stations are forecast to extend a three-month advance as the shutdown leaves utilities little choice but to increase use of the fuel.
•
Singapore Home Sales Rebounded in August as New Projects Sold (Bloomberg). Singapore’s home sales rose in August as developers marketed more projects, rebounding from July when they slumped to the lowest since December 2009. Home sales increased 54 percent to 742 units last month, compared with 482 in July, according to data from the Urban Redevelopment Authority released today. Sales in August last year were 1,949 units. Sales are recovering after the government in June unveiled new rules governing how financial institutions grant property loans to individuals.
•
Malaysian Leader Bolsters Race-Based Programs (AWSJ). Malaysian Prime Minister Najib Razak reinforced preferential-race programs over the weekend. Mr. Najib announced $9.4 billion in new measures to help ethnic Malays, which include loans for entrepreneurs, job quotas at businesses linked to the government and new housing for the poor. Malaysia introduced race-based preference for ethnic Malays in the early 1970s, policies which the prime minister had vowed to dismantle and replace with assistance to citizens based on need.
•
HSBC cuts Thai GDP growth forecast to 2.8% for 2013 (Bangkok Post). HSBC has slashed its expansion forecasts for Thailand to 2.8% this year and 4.4% next year after downbeat economic growth in the first half. The government should allocate more of its budget to ensuring more sustainable growth, said HSBC's Asean economist Su Sian Lim. HSBC previously projected that Thailand's gross domestic product (GDP) would expand by 5% this year and by 6.2% in 2014. The economy shrank by 0.3% quarter-on-quarter in the second quarter, sending the country into a mild recession, following a revised 1.7% contraction in the first three months.
•
Vietnamese Central bank eases debt hurdle. The State Bank of Viet Nam (SBV) recently set up the Viet Nam Asset Management Company (VAMC) to buy banks bad debts, but there was scepticism about its effectiveness since the VAMC was only expected to buy debts backed by collateral. But the central bank has done away with the requirement in a circular that took effect on September 15. The SBV in fact issued two circulars taking effect yesterday, requiring all lenders whose non-performing loans are in excess of 3 per cent to compulsorily sell the debts to the VAMC. Failure to do so will attract penal measures from the central bank.
IFIs NEWS (compiled from their websites) BIS – Publication: “September 2013 Quarterly Review: Markets precipitate tightening” • The BIS has publicised its Quarterly Review for September 2013. It features: (a) Higher yields in advanced economies generated serious tremors in emerging markets; (b) Cross-border claims of BIS reporting banks were broadly stable in the first quarter of 2013. Banks redirected lending from the advanced economies to emerging markets, especially to China, Brazil and Russia; (c) Japanese banks returned as the world's largest providers of cross-border credit, a position they had lost in the aftermath of the crisis in the 1990s and (d) Corporations from emerging markets have overtaken firms from the advanced economies as the largest group of issuers of corporate debt securities in offshore financial centres. Page 2 of 5
http://www.bis.org/press/p130915.htm (Press Release and Summary of Individual Chapters) http://www.bis.org/publ/qtrpdf/r_qt1309.pdf (Report) http://www.bis.org/publ/qtrpdf/r_qt1309.htm (Statistical Tables, International Banking and Financial Market Developments, Special Features and Quarterly Review Boxes) IFC – Press Release: IFC CEO Urges Vietnam to Accelerate Reforms of State-Owned Enterprises to Support Economic Growth • IFC calls on Vietnam to speed up reforms in its banking system and state-owned enterprises to achieve sustained economic growth, said IFC Executive Vice President and Chief Executive Officer Jin-Yong Cai. “In the current global environment, Vietnam’s banking sector and its state-owned enterprises must make better use of capital to help the country attain high levels of growth and realize its full potential,” Cai said during a visit to Vietnam this week. IFC has invested around $805 million in Vietnam during fiscal year 2013, which ended on June 30, to help expand lending to small and medium enterprises, create jobs, and spur growth as the country’s economy slowed and companies found it challenging to obtain financing. http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/FE14924B282E13F185257BE500407F CD FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
13-Sep
16-Sep
6.12 7.75 11,232.00 99.38 1,086.88 3.29 43.86 1.27 31.85 21,115.00
6.12 7.75 11,380.00 98.87 1,082.23 3.23 43.61 1.26 31.71 21,125.00
% change -0.02 0.00 -1.30 0.52 0.43 1.71 0.57 0.68 0.44 -0.05
2013 YTD (%chg) 1.8 0.0 -15.2 -11.7 -1.7 -6.2 -6.3 -3.2 -4.4 -1.3
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
13-Sep 2,236.2 22,915.3 4,375.5 14,404.7 1,994.3 1,770.8 6,133.2 3,120.3 1,401.1 476.4
OVERNIGHT LENDING RATE (IN %) 13-Sep 16-Sep bps change 2.980 3.100 12.00 0.094 0.090 -0.36 5.650 5.650 0.00 0.095 0.095 0.00 2.500 2.500 0.00 3.000 3.000 0.00 0.024 -0.019 -4.30 0.042 0.042 0.00 2.500 2.500 0.00
16-Sep 2,231.4 23,252.4 4,522.2 14,404.7 2,013.4 1,770.8 6,302.7 3,176.1 1,437.6 475.6
% change -0.215 1.47 3.35 0.00 0.96 0.00 2.76 1.79 2.60 -0.18
2013 YTD (%chg) -1.7 -0.3 4.0 38.6 -0.9 5.7 7.5 -0.8 2.1 13.7
3-MONTH INTERBANK LENDING RATE (IN %)
13-Sep 4.657 0.386 7.044 0.230 2.660 3.200 0.125 0.374 2.601
16-Sep 4.657 0.386 7.078 0.230 2.660 3.200 -0.103 0.374 2.601
bps change -0.02 0.00 3.43 0.00 0.00 0.00 -22.80 0.00 0.00
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Vietnam
2.880
2.733
-14.70
4.914
4.943
2.90
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
12-Sep 4.070 2.392 8.661 0.729 3.540 3.792 3.742 2.577 4.350 8.814
13-Sep
2013 YTD (bps) 92.000 201.300 361.200 54.300 60.000 63.300 -35.040 226.200 119.500 -88.100
bps change
4.140 2.409 8.418 0.728 3.580 3.818 3.765 2.592 4.390 8.769
7.000 1.700 -24.300 -0.100 4.000 2.600 2.300 1.500 4.000 -4.500
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
12-Sep 81.35 53.07 231.99 62.27 71.73 122.42 120.31 123.90 279.58
13-Sep 84.78 52.56 246.51 62.12 75.41 123.89 122.26 125.37 279.55
bps change 3.43 -0.51 14.52 -0.15 3.68 1.47 1.95 1.47 -0.03
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag
13-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,326.2
16-Sep 1,318.3
% change -0.59
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
EXTERNAL LIQUIDITY RATIOS*
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Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
DATA RELEASES FOR THE DAY
Economies Philippines
Indicators Overseas Remittances (YoY)%
Period Jul
Last 6.6
Previous 5.8
SELECTED ECONOMIC RELEASES CALENDAR (16 - 20 SEPT 2013) Expected Release Date
Country
Indicators
Period
9/16/2013
China Philippines
Actual FDI (YoY)% Overseas Remittances (YoY)%
Aug Jul
9/17/2013
Singapore Singapore Hong Kong South Korea
Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Unemployment Rate SA% Producer Price Index (YoY)%
Aug Aug Aug Aug
9/18/2013 9/19/2013
Malaysia Japan Japan Japan
CPI YoY % All Industry Activity Index (MoM) % Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn)
Aug Jul Aug Aug
9/20/2013
Philippines Thailand
Budget Deficit/Surplus (PHP bn) Foreign Reserves (USD bn)
Aug Sep 13
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 5 of 5
MARKET UPDATE FOR ASEAN+3 17 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asia Stocks Fall From Four-Month High Before Fed Meeting. Asian stocks fell, with the benchmark regional index declining from a four-month high, as the U.S. Federal Reserve begins a two-day policy meeting at which it’s forecast to reduce the pace of bond buying. The MSCI Asia Pacific Index slipped 0.5 percent to 138.05 as of 4:20 p.m. in Hong Kong. The drop was led by China’s Shanghai Composite Index which slid by 2 percent, followed by Japan’s Nikkei and Korea’s KOSPI, which dropped by 0.65 and 0.39 percent, respectively. Only Philippine’s PSEi had marginal gains of 0.66 percent while others indexes were relatively flat.
Indonesia’s rupiah rose the most during the day among regional currencies, appreciating by 1.77 percent as other currencies either depreciated or remained stable. Currencies in the region are seen as being affected by the impending Fed tapering, as most market participants are still on a wait and see attitude as the extent of tapering will be decided in the next two days. Economists expect the U.S. central bank to reduce its $85 billion in monthly bond-buying by $10 billion this week, according to the median forecast in a Bloomberg News survey.
WTI Drops Third Day on Syria Talks; Libya Output Recovers. West Texas Intermediate slid for a third day as a U.S. agreement with Russia on disarming Syria’s chemical weapons eased the threat of an imminent attack and as Libya’s oil production recovered. WTI for October delivery dropped as much as $1 to $105.59 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.13 as of 9:14 a.m. London time. The volume of all futures traded was about 35 percent more than the 100-day average.
BREAKING NEWS GLOBAL NEWS
Obama says will not negotiate with Congress on debt ceiling (Reuters). President Barack Obama warned Republicans in Congress that he will not negotiate over an extension of the US debt ceiling as part of a budget battle that will soon dominate Washington, with a deadline fast approaching. Obama faces yet another budget showdown as Republicans in Congress attempt to force more spending cuts and remove funding for Obama's signature achievement, the 2010 healthcare law that is facing a rocky rollout. The US Treasury is expected to exhaust measures to avoid exceeding the US$16.7 trillion debt limit as soon as mid-October.
US industrial output up as manufacturing rebounds (Reuters). US industrial production rose in August as a bounce back in motor vehicle assembly lifted manufacturing output, a hopeful sign for the economy after growth got off to a slow start in the third quarter. Industrial output increased 0.4 per cent last month after being flat in July, the Federal Reserve said on Monday. The rise was in line with economists' expectations. Manufacturing production advanced 0.7 per cent, reversing the prior month's 0.4 per cent drop, as automobile assembly rebounded 5.2 per cent after slumping 4.5 per cent in July.
ECB's Draghi says eurozone recovery fragile (AFP). European Central Bank President Mario Draghi said that the eurozone's economy remained "fragile", unemployment was "still far too high" and reiterated that the eurozone's central bank would keep rates low. Speaking at a German industry event in Berlin, Mr Draghi said while eurozone economic growth of 0.3 per cent in the second quarter was welcome, "the recovery is only in its infancy". In July the ECB abandoned its tradition of never pre-committing on future moves by using so-called "forward Page 1 of 6
guidance" to say it would keep its interest rates at current or lower levels for an extended period, a message Mr Draghi reiterated. REGIONAL NEWS
Singapore's non-oil domestic exports fall 6.2% in Aug (Business Times). Singapore's non-oil domestic exports (NODX) fell 6.2 per cent from a year ago in August, following a 1.9 per cent drop in July. Shipments to all of Singapore's 10 biggest markets decline except China and Hong Kong. The three top contributors to the fall last month were the European Union, South Korea and Taiwan. Month-on-month, the NODX tumbled by a seasonally-adjusted 6.0 per cent in August, extending the 1.8 per cent decline in July. The year-on-year and month-on-month declines were due to contraction in the electronic and non-electronic shipments.
China details plans for urban infrastructure projects (Xinhua). China's cabinet detailed plans to speed construction of urban infrastructure projects, in the latest move in Beijing's plan to boost domestic demand by swelling the ranks of city dwellers. China has an ambitious plan to increase the numbers of urban residents as it seeks to restructure its economy away from credit and export growth to one where consumers provide the main impetus. The government will focus on projects ranging from underground sewage and household waste treatment to gas pipes and heating systems as well as public transport and power grid upgrades, to spur high quality urbanisation, the cabinet said on its website.
Inter-Korean industrial zone reopens (Korea Times). South Korean factory owners crossed into North Korea as the joint Kaesong industrial zone reopened five months after it was shut down by threats of war. The optimistic mood at the border checkpoint contrasted sharply with the sense of impending disaster that had loomed over the closure of Kaesong back in April. Months of heightened military tensions, with Pyongyang issuing apocalyptic threats of nuclear strikes, saw North Korea withdraw its 53,000-strong workforce from the joint industrial zone. As military tensions eased, the two Koreas agreed last month to work together to resume operations. As part of the deal, the North accepted the South's demand that efforts be made to encourage foreign investment in Kaesong. Seoul believes having vested interests outside the Korean peninsula involved in Kaesong will make it harder for Pyongyang to shut down the complex the next time North-South relations go into freefall.
Remittances to Philippines improve to $1.92B in July (Business World). Remittances coursed through banks increased by 6.52% to $1.927 billion -- a seven-month high -- from $1.809 billion a year ago, the central bank said in a statement. It brought the year-to-date tally to $12.627 billion, 5.79% higher than the $11.936 billion recorded in the same period last year. The steady deployment of overseas Filipino workers remained the key driver of the growth in remittance flows. Efforts of bank and non-bank remittance service providers to expand their international and domestic market coverage and to introduce innovations in their remittance products continue to provide support to the sustained flow of remittances into the country.
Indonesian budget deficit in 2014 estimated to reach 2.02 percent (The Jakarta Post). Finance Minister Chatib Basri has said Indonesia’s budget deficit in 2014 is estimated to reach Rp 209.5 trillion (US$18.44 billion) or 2.02 percent to the Gross Domestic Product (GDP) due to state spending increases. Chatib said the estimated budget deficit of 2.02 percent to the GDP was higher than projections in the 2014 draft state budget, which reached Rp154.2 trillion or 1.49 percent to the GDP. The minister, however, said that he was optimistic that such a budget deficit could be pushed down. Vietnam Banks cut interest rates to ease lender pressure (Vietnam News). The Bank for Investment and Development of Viet Nam (BIDV) yesterday cut its monthly deposit interest rate for the Vietnamese dong to 5 per cent, as much as a 1.5 percentage point lower than its old
Page 2 of 6
rate. The bank, which is the third bank to reduce their monthly interest rate to 5 per cent after Vietcombank and Agribank, is applying an interest rate of 6 per cent for loans with the twomonth term. In addition, Vietinbank also reduced their rate from 6.5 to 6 per cent for loans with one and two month terms. According to the banks, the reduction aims to ease the pressure of interest payments to lenders during difficult economic times when loans are harder to secure. During the first six months of this year, many banks have reportedly tightened their lending. IFIs NEWS (compiled from their websites) IMF – Press Release: IMF Completes First Review Under Extended Fund Facility (EFF) Arrangement for Cyprus and Approves €84.7 Million Disbursement
The Executive Board of the IMF has completed the first review of Cyprus’s performance under an economic program supported by a three-year, SDR 891 million (about €1 billion, or US$1.3 billion) EFF arrangement. The completion of this review enables the disbursement of SDR 74.2 million (about €84.7 million, or US$113.1 million). The following is an excerpt of the statement made by Ms Christine Lagarde, Managing Director and Chair of IMF at the conclusion of the Executive Board’s discussion: “The Cypriot authorities have made commendable progress in implementing near-term stabilization policies. They remain committed to taking further steps to restore financial stability and the sustainability of public finances to support long-run growth.” http://www.imf.org/external/np/sec/pr/2013/pr13344.htm (Main Press Release) http://www.imf.org/external/np/sec/pr/2013/pr13175.htm (Press Release No. 13/175 dated May 15, 2013: IMF Executive Board Approves €1 Billion Arrangement Under Extended Fund Facility for Cyprus)
IMF – Publication: “Key Aspects of Macroprudential Policy”
On July 1, 2013, the Executive Board of the IMF concluded discussions of the above-stated Staff Paper. Directors broadly considered the definition of macroprudential policy and its objectives as appropriate. They stressed that macroprudential policy should be used to contain systemic risk, including systemic vulnerabilities from pro-cyclical feedback between credit growth and asset prices and from interconnectedness within the system but that it should not be overburdened with other objectives. Directors also emphasized that macroprudential policy cannot substitute for sound macroeconomic policies. http://www.imf.org/external/np/sec/pr/2013/pr13342.htm (Press Release) http://www.imf.org/external/np/pp/eng/2013/061013b.pdf (Executive Summary) http://www.imf.org/external/np/pp/eng/2013/061013c.pdf (Background Paper: “Key Aspects of Macroprudential Policy”) http://www.imf.org/external/np/pp/eng/2013/061713.pdf (Selected Legal Issues Paper: “Implementing Macroprudential Policy”) http://www.imf.org/external/np/speeches/2013/091613.htm (Speech entitled “Making Macroprudential Policy Work” delivered by Mr Jose Vinals, Financial Counsellor and Director of the Monetary and Capital Markets Department of IMF at the Brookings Event, Brookings Institution on September 16, 2013)
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FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
16-Sep
17-Sep
6.12 7.75 11,380.00 99.08 1,082.23 3.23 43.61 1.26 31.73 21,125.00
6.12 7.75 11,182.00 99.22 1,084.30 3.25 43.66 1.26 31.77 21,118.00
% change -0.01 0.00 1.77 -0.14 -0.19 -0.47 -0.10 0.02 -0.13 0.03
2013 YTD (%chg) 1.8 0.0 -13.7 -12.0 -1.9 -6.6 -6.4 -3.3 -4.5 -1.3
Note: Negative values indicate depreciation and positive values indicate appreciation.
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
16-Sep 2,231.4 23,252.4 4,522.2 14,404.7 2,013.4 1,770.8 6,302.7 3,179.5 1,445.1 475.6
OVERNIGHT LENDING RATE (IN %) 16-Sep 17-Sep bps change 3.100 3.510 41.00 0.090 0.089 -0.07 5.650 5.650 0.00 0.095 0.068 -2.70 2.500 2.500 0.00 3.000 3.000 0.00 -0.019 -0.044 -2.50 0.023 0.023 0.00 2.500 2.500 0.00 2.733 2.460 -27.30
17-Sep 2,185.6 23,180.5 4,517.6 14,311.7 2,005.6 1,771.0 6,344.1 3,181.5 1,439.4 477.7
% change -2.054 -0.31 -0.10 -0.65 -0.39 0.01 0.66 0.06 -0.40 0.45
2013 YTD (%chg) -3.7 -0.6 3.9 37.7 -1.3 5.7 8.2 -0.6 2.3 14.2
3-MONTH INTERBANK LENDING RATE (IN %)
16-Sep 4.657 0.386 7.078 0.230 2.650 3.200 -0.103 0.374 2.601 4.943
17-Sep 4.658 0.386 7.080 0.230 2.650 3.200 -0.198 0.374 2.602 5.050
bps change 0.10 0.00 0.21 0.00 0.00 0.00 -9.50 0.00 0.08 10.70
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
13-Sep 4.140 2.409 8.418 0.728 3.580 3.818 3.765 2.592 4.390 8.769
16-Sep 4.100 2.257 8.173 0.728 3.500 3.758 3.748 2.499 4.320 8.915
bps change -4.000 -15.200 -24.500 0.000 -8.000 -6.000 -1.700 -9.300 -7.000 14.600
2013 YTD (bps) 88.000 186.100 336.700 54.300 52.000 57.300 -36.740 216.900 112.500 -73.500
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CREDIT DEFAULT SWAP (IN BPS) 13-Sep 84.78 52.56 246.51 62.12 75.41 123.89 122.26 125.37 279.55
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
16-Sep 80.39 50.38 227.30 62.17 71.01 118.53 114.49 119.04 272.45
bps change -4.39 -2.18 -19.21 0.05 -4.40 -5.36 -7.77 -6.33 -7.10
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
16-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,312.8
17-Sep 1,319.0
% change 0.48
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Page 5 of 6
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
DATA RELEASES FOR THE DAY Economies Singapore Singapore Hong Kong South Korea
Indicators Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Unemployment Rate SA% Producer Price Index (YoY)%
Period Aug Aug Aug Aug
Last -6.2 -9.2 3.3 -1.3
Previous -1.9 -11.1 3.3 -1.0
SELECTED ECONOMIC RELEASES CALENDAR (16 - 20 SEPT 2013) Expected Release Date 9/16/2013 9/17/2013
9/18/2013 9/19/2013
9/20/2013
Country China Philippines Singapore Singapore Hong Kong South Korea Malaysia
Indicators Actual FDI (YoY)% Overseas Remittances (YoY)% Non-oil Domestic Exports (YoY)% Electronic Exports (YoY)% Unemployment Rate SA% Producer Price Index (YoY)% CPI YoY %
Period Aug Jul Aug Aug Aug Aug Aug
Japan Japan Japan Philippines Thailand
All Industry Activity Index (MoM) % Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn) Budget Deficit/Surplus (PHP bn) Foreign Reserves (USD bn)
Jul Aug Aug Aug Sep 13
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not 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 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Major Asian Stocks Rise to Ahead of Fed but ASEAN stocks ended lower. The MSCI Asia Pacific Index gained 0.5 percent to 138.80 as of 4:23 p.m. as eight of the 10 industry groups on the gauge advanced. Japan’s Nikkei 225 index climbed 1.4 percent to an eight-week high as of 5.00pm Singapore time. China’s Shanghai Composite Index added 0.3 percent while Hong Kong’s Hang Seng Index slipped 0.3 percent and percent. ASEAN stock markets however mainly saw declines except for Singapore’s Straits Times Index which climbed 0.6 percent. South Korea’s equity market is closed today for a holiday.
In the currencies market, Malaysia’s ringgit, South Korea’s won and Japan’s yen strengthen among Asian currencies as investors await outcome of Fed meeting. The ringgit rose 0.5 percent to 3.23 to the dollar while the won and yen both gained 0.3 percent. The rupiah fell 1.25 percent to 11,324.
WTI Crude Rises for First Time in Four Days Before Fed Decision. West Texas Intermediate advanced for the first time in four days before a Federal Reserve decision on bond purchases and U.S. government data forecast to show crude inventories fell to the lowest in a year. Futures gained as much as 1.1 percent. WTI for October delivery rose as much as $1.15 to $106.57 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $106.40 at 9:25 a.m. London time. Brent for November settlement rose 20 cents to $108.39 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL NEWS
U.S Deficit to Improve Before Getting Much, Much Worse (AWSJ). The Congressional Budget Office (CBO) warned policy makers not to become too comfortable with shrinking budget deficits. The aging U.S. population, federal health-care costs, and expanded subsidies for health care will push government spending to a much larger level as a share of the economy than any period since World War II. CBO, said currently, federal debt is roughly 73% of gross domestic product and is expected to fall to 68% by 2018 but will steadily increase to reach 100% by 2038.
BOE Officials See No Case for Stimulus as Economy Strengthens. Bank of England policy makers voted unanimously to keep policy unchanged this month as an improving economic outlook prompted agreement that no more stimulus was needed. In a switch from August, when some Monetary Policy Committee members saw a “compelling” case for a loosening of policy, the minutes of the Sept. 3-4 meeting showed that “no member judged that further stimulus was appropriate at present.” The pound rose.
Cyprus Plans to End Capital Controls in January, President Says (Bloomberg). Cyprus plans to lift all restrictions on the movement of money in January, almost a year after becoming the first euro member to seize bank deposits and impose capital controls to avert a financial collapse. President Nicos Anastasiades said in an interview that his country will be “the best” at implementing its agreement with international creditors as it tries to claw back to growth after forcing losses on uninsured depositors in the Mediterranean island’s two largest banks. Page 1 of 6
REGIONAL NEWS
Chinese Home-Price Increases Pick Up Steam (AWSJ). Average new-home prices in 70 Chinese cities rose faster in August than at any time since January 2011 despite government measures to keep property prices in check, spurred by strong home-buying in major cities. Prices in August rose an average 7.5% from a year earlier, compared with 6.7% in July. Prices were up an average 0.79% month-over-month in August after a 0.68% gain in July.
Korea’s government likely to overhaul welfare funding scheme (The Korea Times). Concerns over a possible tax increase are likely to gain momentum as President Park Geun-hye hinted that she is willing to increase them to support her welfare policies if the move is supported by public opinion. The remark is widely seen as an indication of the possibility of her walking away from her initial principle of “welfare expansion without an increase in taxation.” It is also seen as a desperate effort to tackle the worsening tax revenue shortfall amid the economic slump.
Asia business sentiment drops sharply in Q3 (Singapore Business Times). Business sentiment among Asia's top companies deteriorated in the third quarter, led by businesses in export engines such as China and South Korea, ending three consecutive quarters of improving sentiment. The Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 66 in the third quarter from 71 in the second quarter when it reached the highest level in more than a year. An index reading above 50 indicates an overall positive outlook.
Austerity measures overshadow Malaysia's outlook (The Star). Although Malaysia’s economic growth is expected to improve in the second half of the year on the strength of private investment and consumption, measures tailored to reduce the national debt and Government deficit may still weigh on the outlook. CIMB Investment Bank Bhd economic research head Lee Heng Guie said in a report that growth for Asian emerging markets, including Malaysia, was in an “untested transition”, as policymakers struggled to calibrate response to balance growth and stability in bond and currency markets even as fund outflows continued.
New finance offices created for the Philippines (Business World). Two offices have been created under the Department of Finance to improve revenue-generating agencies by order of President Aquino III. The Office of the Revenue Agency Modernization (ORAM) will be responsible for formulating and implementing the necessary improvements to bring the concerned agencies up to global best practices and standards. The Customs Policy Research Office (CPRO) is tasked to review the customs administration policies, rules, and procedures and provide recommendations for its improvement.
Property Prices Keep the Locks on Myanmar (AWSJ). Top-quality office space in prime locations in Yangon, the commercial capital of the poorest country in Southeast Asia, is now the most expensive in the region at $78 a square meter ($7.33 a square foot) per month, according to research from real-estate firm Colliers International. By comparison, office rentals in a booming market like Jakarta are $24 a square meter. Even in Manhattan, the average asking rent is lower, at $49.95.
Viet Nam wood exports surpass regional rivals (Vietnam News). With estimated exports of US$5.5 billion this year Viet Nam is set to become Southeast Asia's biggest wood and wood products exporter, according to the Ministry of Agriculture and Rural Development. In the first eight months, exports jumped 11.6 per cent to over $3.3 billion after strong growth in shipments to most markets including South Korea, Japan, China, and the US. with orders increasing by 20-30 per cent this year.
Page 2 of 6
IFIs NEWS (compiled from their websites) BIS – Working Papers The BIS has publicised the following working papers: “Order Flow and the Real: Indirect Evidence of the Effectiveness of Sterilized Interventions” http://www.bis.org/publ/work426.pdf “Interventions and inflation expectations in an inflation targeting economy” http://www.bis.org/publ/work427.pdf “The impact of pre-announced day-to-day interventions on the Colombian exchange rate” http://www.bis.org/publ/work428.pdf “On central bank interventions in the Mexican peso/dollar foreign exchange market” http://www.bis.org/publ/work429.pdf “Asymmetric effects of FOREX intervention using intraday data: evidence from Peru” http://www.bis.org/publ/work430.pdf IMF – Policy Paper: “Reassessing the Role and Modalities of Fiscal Policy in Advanced Economies” The IMF has publicised the captioned policy paper. “This paper investigates how developments during and after the 2008-09 crisis have changed economists’ and policymakers’ views on: (i) fiscal risks and fiscal sustainability; (ii) the effectiveness of fiscal policy as a countercyclical tool; (iii) the appropriate design of fiscal adjustment programs; and (iv) the role of fiscal institutions.” http://www.imf.org/external/np/pp/eng/2013/072113.pdf WTO – Publication: “Trade Policy Review: Viet Nam” The first review of the trade policies and practices of Viet Nam takes place on September 17 and 19, 2013. The basis for the review is a report by the WTO Secretariat and a report by the Government of Viet Nam. http://www.wto.org/english/tratop_e/tpr_e/tp387_e.htm (Press Release) http://www.wto.org/english/tratop_e/tpr_e/s287_e.pdf (Report publicised by the WTO Secretariat) http://www.wto.org/english/tratop_e/tpr_e/s287_sum_e.pdf (Executive Summary of the Report publicised by the WTO Secretariat) http://www.wto.org/english/tratop_e/tpr_e/g287_e.pdf (Report publicised by the Government of Viet Nam) FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
17-Sep
18-Sep
6.12 7.75 11,182.00 99.13 1,084.30 3.25 43.66 1.26 31.72 21,118.00
6.12 7.75 11,324.00 98.87 1,081.46 3.23 43.53 1.26 31.68 21,145.00
% change 0.00 -0.01 -1.25 0.26 0.26 0.49 0.29 0.01 0.11 -0.13
2013 YTD (%chg) 1.8 0.0 -14.8 -11.7 -1.7 -6.1 -6.2 -3.1 -4.3 -1.4
Note: Negative values indicate depreciation and positive values indicate appreciation.
Page 3 of 6
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
17-Sep 2,185.6 23,180.5 4,517.6 14,311.7 2,005.6 1,774.9 6,344.1 3,180.9 1,443.8 477.7
OVERNIGHT LENDING RATE (IN %) 17-Sep 18-Sep bps change 3.510 3.570 6.00 0.089 0.091 0.14 5.650 5.650 0.00 0.093 0.070 -2.25 2.500 2.500 0.00 3.000 3.000 0.00 -0.044 -0.018 2.60 0.034 0.034 0.00 2.500 2.500 0.00 2.460 2.500 4.00
18-Sep 2,191.9 23,117.5 4,463.3 14,505.4 2,005.6 1,771.4 6,334.0 3,199.7 1,434.8 474.3
% change 0.288 -0.27 -1.20 1.35 0.00 -0.20 -0.16 0.59 -0.62 -0.73
2013 YTD (%chg) -3.4 -0.8 2.7 39.5 -1.3 5.8 8.1 -0.1 1.9 13.4
3-MONTH INTERBANK LENDING RATE (IN %)
17-Sep 4.658 0.386 7.080 0.230 2.650 3.200 -0.198 0.374 2.602 5.050
18-Sep 4.658 0.386 7.102 0.230 2.650 3.200 -0.199 0.374 2.602 5.100
bps change 0.05 0.00 2.21 0.00 0.00 0.00 -0.10 0.00 0.00 5.00
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
16-Sep 4.100 2.257 8.173 0.728 3.500 3.758 3.748 2.499 4.320 8.915
17-Sep 4.130 2.307 8.107 0.723 3.480 3.758 3.735 2.449 4.295 8.846
bps change 3.000 5.000 -6.600 -0.500 -2.000 0.000 -1.300 -5.000 -2.500 -6.900
2013 YTD (bps) 91.000 191.100 330.100 53.800 50.000 57.300 -38.040 211.900 110.000 -80.400
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
16-Sep 80.39 50.38 227.30 62.17 71.01 118.53 114.49 119.04 272.45
17-Sep 82.34 50.34 239.21 61.16 72.97 121.45 118.38 122.44 270.28
bps change 1.95 -0.04 11.91 -1.01 1.96 2.92 3.89 3.40 -2.17
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
17-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,310.6
18-Sep 1,303.3
% change -0.55
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CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
DATA RELEASES FOR THE DAY Economies Malaysia
Indicators CPI YoY %
Period Aug
Last
Previous 1.9
2.0
Page 5 of 6
SELECTED ECONOMIC RELEASES CALENDAR (16 - 20 SEPT 2013) Expected Release Date
Country
Indicators
Period
9/16/2013
China
Actual FDI (YoY)%
Aug
Philippines
Overseas Remittances (YoY)%
Jul
Singapore
Non-oil Domestic Exports (YoY)%
Aug
Singapore
Electronic Exports (YoY)%
Aug
Hong Kong
Unemployment Rate SA%
Aug
South Korea
Producer Price Index (YoY)%
Aug
9/18/2013
Malaysia
CPI YoY %
Aug
9/19/2013
Japan
All Industry Activity Index (MoM) %
Jul
Japan
Merchnds Trade Exports YoY %
Aug
Japan
Merchnds Trade Balance Total (JPY bn)
Aug
Philippines
Budget Deficit/Surplus (PHP bn)
Aug
Thailand
Foreign Reserves (USD bn)
Sep 13
9/17/2013
9/20/2013
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 19 September 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Surge Most in a Year as Fed Keeps Stimulus. Asian stocks rose, with the benchmark regional index on course for its biggest gain in a year, after the Federal Reserve unexpectedly refrained from cutting U.S. economic stimulus. The MSCI Asia Pacific Index climbed 2.2 percent to 141.83 as of 4:14 p.m. in Hong Kong, poised for the highest close since May 22 and biggest daily advance since Sept. 7, 2012. All stock markets in the region registered gains, led by Indonesia’s JCI which climbed by 4.65 percent. Markets in China and South Korea were closed for holidays.
Rupiah and Ringgit Leads Jump in Asian Currencies as Fed Maintains Stimulus. The Indonesian rupiah and Malaysian ringgit led a surge in Asian currencies, climbing 4.4 and 2.7 percent vis-àvis the US dollar. The dollar weakened to a seven-month low against the euro and the yen slumped as the Federal Reserve’s unexpected hold in monetary policy sent stocks higher and damped demand for haven currencies.
WTI Rises to One-Week High as Fed Maintains Economic Stimulus. West Texas Intermediate climbed to the highest level in a week after the Federal Reserve said it will maintain monthly bond purchases to stimulate economic growth in the U.S., the world’s biggest oil consumer. WTI for October delivery, which expires tomorrow, gained as much as 75 cents to $108.82 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Sept. 12, and was at $108.61 as of 9:22 a.m. London time.
BREAKING NEWS GLOBAL NEWS
Fed Refrains From QE Taper, Keeps Bond Buying at $85 Billion (Bloomberg). The Federal Reserve unexpectedly refrained from reducing the $85 billion pace of monthly bond buying, saying it needs more evidence of lasting improvement in the economy and warning that an increase in interest rates threatened to curb the expansion. The central bank, in a statement, left unchanged its outlook that its target interest rate will remain near zero at least as long as unemployment exceeds 6.5 percent, so long as the outlook for inflation is no higher than 2.5 percent.
Merkel Rejects Joint Euro Debt, Promises to Stay Hard Course (Bloomberg). German Chancellor Angela Merkel told supporters she’ll stand as a bulwark against joint debt in the euro area if she’s re-elected in four days and continue to extract conditions from indebted nations. Speaking at an election rally of several thousand at a portside warehouse in Hamburg yesterday, Merkel denounced plans that have been supported by the opposition Social Democrats, such as a debtredemption fund and jointly issued euro bonds to overcome the nearly four-year-old European debt crisis.
ECB Policy Makers Say Stress Tests Risk Market Confusion (Bloomberg). The European Central Bank is concerned that investors could be spooked by next year’s bank balance-sheet reviews and stress tests unless their results are carefully timed. As the ECB prepares to take over supervision of all euro-area lenders in 2014, it will begin a three-phased analysis of the institutions coming under its umbrella. Central bankers are wrestling with how to move through Page 1 of 6
the exercise without releasing conflicting numbers at different times, particularly for banks that aren’t in good health.
REGIONAL NEWS
Japan Exports Rise Most Since (Bloomberg). Japan’s exports rose the most since 2010 in August, boosting Prime Minister Shinzo Abe’s growth drive even as rising energy costs extended the streak of trade deficits to the longest since 1980. Exports rose 14.7 percent from a year earlier, the sixth straight increase. Imports climbed 16 percent, leaving an unadjusted trade shortfall of 960.3 billion yen ($9.8 billion). The yen’s 12 percent slide against the dollar this year and a pick-up in overseas markets has supported export growth, boosting profits of manufacturers.
China bankers see improved sentiment over economy in Q4 according to the central bank survey (Reuters). A growing number of Chinese bankers expect economic conditions will improve in the fourth quarter compared to the previous quarter, according to the results of a central bank survey published on Wednesday. The survey's index measuring sentiment towards the economic climate in the next quarter increased to 36.2 per cent from 31.3 per cent in the third quarter, according to a statement on the central bank's website.
China state firms' profit growth picks up to 9.7% in Jan-Aug (Reuters). Annual profit growth of China's state firms gathered speed in the first eight months of 2013, official data showed on Wednesday, reinforcing views that the world's second-largest economy is regaining some traction. State-owned non-financial companies made combined profits of 1.5 trillion yuan (S$308.9 billion) for January-August, up 9.7 per cent from the same period a year ago, the Ministry of Finance said in a statement on its website. Profit growth quickened from an annual rise of 7.6 per cent in the first seven months and 7 per cent in the first six months.
Consolidated Public Sector Deficit for the Philippines to remain low next year (Business World). The Philippines consolidated public sector deficit (CPSD) is projected to fall to P100.8 billion next year, revised government data showed. It will account for just 0.8% of gross domestic product (GDP) -- remaining “significantly low” -- based on the Budget of Expenditures and Sources of Financing for next year’s proposed P2.268-trillion national budget, even as the GDP growth goal is a higher 6.5-7.5%. The country grew by 6.8% in 2012 and the government is targeting 6-7% growth for this year.
Seoul sets up office to cope with non-tariff trade barriers (Korea Times). Seoul has set up a new office specifically tasked with dealing with non-tariff trade barriers raised by other countries. The move comes as the government is expected to announce a list of plans for dealing with non-tariff trade barriers at the end of this month. A recent survey showed nearly three out of every 10 small- and medium-sized enterprises here that export their goods and services to Japan or China have experienced some type of non-tariff barriers to their exports.
Developers object to Bank Indonesia’s planned mortgage rule (Jakarta Post). The Association of Indonesian Real Estate Companies (REI) is lamenting the central bank’s plan to introduce a new mortgage rule late this month, arguing the regulation will not be effective to curb property speculation and will kill local industry instead. REI’s response came a few days after BI announced its plan, which the central bank claimed would help ease speculation and reduce fraud in the property market. Under the new rule, BI would jack up the down payment requirement — higher than 30 percent of a house’s value — for purchases of additional houses beyond a first home.
Page 2 of 6
IFIs NEWS (compiled from their websites) IFC – Press Release: China Pledges $3 Billion to IFC for Joint Investments in Emerging Markets IFC has announced that China has pledged $3 billion for joint investments to support private sector development in emerging markets. The funds will be committed over six years in senior loans in a portfolio of future, IFC-originated loans to businesses in emerging markets. http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/54E947DE6E6C5BF085257BEA002E65A 6 IMF – Press Release: Cyprus: First Review Under the Extended Arrangement Under the Extended Fund Facility (EFF) and Request for Modification of Performance Criteria The IMF has publicised the following reports pertaining to its completion of the first review of Cyprus’ performance with relevance to a three-year Extended Arrangement under the EFF in the equivalent of SDR 891 million (563 percent of quota: €1 billion). A purchase of SDR 74.25 million (about €86 million) was made in May 2013 and another equal purchase (SDR 74.25million, or about €86 million) will be released upon completion of the first review. “Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Cyprus” http://www.imf.org/external/pubs/ft/scr/2013/cr13293.pdf “Letter of Intent, Memorandum of Economic and Financial Policies, Technical Memorandum of Understanding and Memorandum of Understanding on Specific Economic Policy Conditionality (European Commission)” http://www.imf.org/External/NP/LOI/2013/CYP/082913.pdf IMF – Working Paper: “Is Labor Market Mismatch a Big Deal in Japan?” The IMF has publicised the captioned working paper. “Despite its low unemployment rate, the recent shift in the Japanese Beveridge curve indicates increased labor mismatch. This paper quantifies the age, employment-type (full or part-time), and occupational mismatch in the Japanese labor market following Sahin and others (2013). Occupational mismatch accounted for approximtely 20-40 percent of the recent rise in the unemployment rate in Japan. The magnitude was comparable to that of the U.K. and the U.S.” http://www.imf.org/external/pubs/ft/wp/2013/wp13196.pdf FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59 20,840.00
Previous wk's close 6.12 7.76 11,184.00 98.17 1,110.04 3.28 44.58 1.27 32.15 21,155.00
18-Sep
19-Sep
6.12 7.75 11,324.00 97.94 1,081.46 3.23 43.53 1.25 31.28 21,145.00
6.12 7.75 10,847.00 98.84 1,070.62 3.15 43.06 1.24 30.96 21,125.00
% change 0.00 0.00 4.40 -0.91 1.01 2.69 1.10 0.18 1.06 0.09
2013 YTD (%chg) 1.8 0.0 -11.0 -11.6 -0.7 -3.6 -5.1 -1.9 -2.0 -1.3
Note: Negative values indicate depreciation and positive values indicate appreciation.
Page 3 of 6
STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7
Previous wk's close 2,098.4 21,731.4 4,195.1 13,388.9 1,926.4 1,727.6 6,075.2 3,028.9 1,294.3 472.7
18-Sep 2,191.9 23,117.5 4,463.3 14,505.4 2,005.6 1,771.4 6,334.0 3,193.9 1,439.1 474.3
OVERNIGHT LENDING RATE (IN %) 18-Sep 19-Sep bps change 3.570 3.570 0.00 0.091 0.094 0.36 5.650 5.654 0.36 0.093 0.090 -0.25 2.500 2.500 0.00 3.000 3.000 0.00 -0.018 -0.199 -18.10 0.026 0.026 0.00 2.500 2.500 0.00 2.500 2.500 0.00
19-Sep 2,191.9 23,502.5 4,670.7 14,766.2 2,005.6 1,793.8 6,511.7 3,250.1 1,487.1 476.1
% change 0.000 1.67 4.65 1.80 0.00 1.26 2.81 1.76 3.33 0.39
2013 YTD (%chg) -3.4 0.8 7.5 42.0 -1.3 7.1 11.1 1.5 5.7 13.8
3-MONTH INTERBANK LENDING RATE (IN %)
18-Sep 4.658 0.386 7.102 0.230 2.650 3.200 -0.199 0.374 2.602 5.100
19-Sep 4.658 0.386 7.118 0.230 2.650 3.200 -0.295 0.374 2.602 5.100
bps change 0.00 0.00 1.57 0.00 0.00 0.00 -9.60 0.00 0.00 0.00
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) 2012 close China 3.220 Hong Kong SAR 0.396 Indonesia 4.806 Japan 0.185 Korea 2.980 Malaysia 3.185 Philippines 4.115 Singapore 0.330 Thailand 3.195 Vietnam 9.650 Latest data are available on a one-day lag
Previous wk's close 3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
17-Sep 4.130 2.307 8.107 0.723 3.480 3.758 3.735 2.449 4.295 8.846
18-Sep 4.050 2.329 8.247 0.717 3.480 3.758 3.767 2.373 4.220 8.872
bps change -8.000 2.200 14.000 -0.600 0.000 0.000 3.200 -7.600 -7.500 2.600
2013 YTD (bps) 83.000 193.300 344.100 53.200 50.000 57.300 -34.840 204.300 102.500 -77.800
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand Vietnam
17-Sep 82.34 50.34 239.21 61.16 72.97 121.45 118.38 122.44 270.28
18-Sep 80.37 50.35 224.94 61.16 70.49 117.57 115.49 118.56 265.86
bps change -1.97 0.01 -14.27 0.00 -2.48 -3.88 -2.89 -3.88 -4.42
Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag
18-Sep Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,363.8
19-Sep 1,365.9
% change 0.16
Page 4 of 6
CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+ BB-
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2
A+ AA+ BBBA+ AAABBBAAA BBB+ B+
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012 31-Dec 31-Jan 28-Feb 31-Mar China 3,311.6 3,410.1 3,395.4 3,442.7 Hong Kong SAR 317.3 304.7 304.8 303.8 Indonesia 112.8 108.8 105.2 104.8 Japan 1,268.1 1,267.3 1,258.8 1,254.4 Korea 327.0 328.9 327.4 327.4 Malaysia 139.7 140.2 140.3 139.7 Philippines 83.8 85.3 83.6 84.0 Singapore 259.3 258.8 259.1 258.2 Thailand 181.6 181.6 179.2 177.8 Vietnam 25.2 27.8 28.2 28.0
2013 30-Apr 31-May 3,534.5 3,514.8 306.5 305.7 107.3 105.1 1,258.0 1,250.2 328.8 328.1 140.3 141.4 83.2 82.0 261.7 258.4 177.8 175.3 27.2 26.6
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
31-Aug n.a 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 n.a
Note: Data for China and Vietnam refer to FX reserves
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
(US$bn) 3,496.7 303.9 93.0 1,254.2 331.1 134.8 83.2 261.9 172.2 26.6
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt (US$bn) 565.7 745.6 46.3 2,052.2 119.6 37.3 9.8 968.3 62.1 10.0
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.3 4.8 2.1 2.6 -
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 3.6 8.5 0.3 2.8 -
Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.
DATA RELEASES FOR THE DAY Economies Japan Japan Japan
Indicators All Industry Activity Index (MoM) % Merchnds Trade Exports YoY % Merchnds Trade Balance Total (JPY bn)
Period Jul Aug Aug
Last 0.5 14.7 -791.4
Previous -0.6 12.2 -944.0
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SELECTED ECONOMIC RELEASES CALENDAR (16 - 20 SEPT 2013) Expected Release Date
Country
Indicators
Period
9/16/2013
China
Actual FDI (YoY)%
Aug
Philippines
Overseas Remittances (YoY)%
Jul
Singapore
Non-oil Domestic Exports (YoY)%
Aug
Singapore
Electronic Exports (YoY)%
Aug
Hong Kong
Unemployment Rate SA%
Aug
South Korea
Producer Price Index (YoY)%
Aug
9/18/2013
Malaysia
CPI YoY %
Aug
9/19/2013
Japan
All Industry Activity Index (MoM) %
Jul
Japan
Merchnds Trade Exports YoY %
Aug
Japan
Merchnds Trade Balance Total (JPY bn)
Aug
Philippines
Budget Deficit/Surplus (PHP bn)
Aug
Thailand
Foreign Reserves (USD bn)
Sep 13
9/17/2013
9/20/2013
The ASEAN+3 Market Update is compiled based on publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to in the document and the consequences which might be caused by such interpretation are not the responsibility of AMRO. The information in this document is provided for information purposes only.
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