MARKET UPDATE FOR ASEAN+3 August 2013
MARKET UPDATE FOR ASEAN+3 05 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Decline as Bonds Climb With European Futures. Asian stocks fell for the first time in three days led by Japanese shares after U.S. jobs data missed estimates. The MSCI Asia Pacific Index lost 0.3 percent by 7:04 a.m. in London. Japan’s Nikkei 225 Index dropped 1.44 percent, snapping the biggest two-day advance since June 28. Korea’s Kospi fell 0.37 percent after climbing 0.7 percent last week. Hong Kong’s Hang Seng Index rose 0.14 percent, China’s SSE Composite Index added 1.04 percent and Malaysia’s FBMKLCI index rose by 0.29 percent.
Most Asian currencies appreciated, except for Thai Baht. The yen added 0.45 percent to 98.50 per dollar today, South Korea’s won climbed 0.9 percent to 1,113.82 per dollar, while Malaysia’s ringgit strengthened 0.81 percent, the most since July 9, after touching 3.26 on Aug. 2, the weakest level since July 2010. Meanwhile, Indonesian’s rupiah gained by 0.82 percent to 10,249 per dollar, Singapore dollar rose by 0.31 percent and the Philippines’s peso added 0.37 percent. Thai Baht weakened 0.29 percent against the dollar.
Gold Advances for Second Day on Outlook for Stimulus, Demand. Gold gained for a second day as U.S. jobs data backed the case for the Federal Reserve to maintain stimulus, and on signs of increased demand after prices fell to the lowest level in two weeks. Spot gold rose as much as 0.7 percent to $1,321.20 an ounce and was at $1,313.1 at 5:49 p.m. in Singapore. Meanwhile, WTI Oil Fluctuates as China Data Counters Faltering U.S. Growth. WTI for September delivery was at $107.17 a barrel in electronic trading on the New York Mercantile Exchange, up 23 cents at 2:30 p.m. Singapore time. Brent for September settlement climbed 10 cents to $109.05 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL NEWS
European Stocks Rise for Sixth Day as Veolia Climbs. European stocks advanced for a sixth day, the longest winning streak this year as insurers and energy companies climbed. Veolia (VIE) Environnement SA added 2.1 percent after Europe’s biggest water company reported results. PostNL NV declined 3.7 percent after second-quarter sales missed analysts’ estimates. The Stoxx Europe 600 Index advanced 0.4 percent to 305.2 at 8:06 a.m. in London. European shares gained even as a report on Aug. 2 showed U.S. employers added fewer workers than forecast to payrolls in July.
London Recruiter Says City Job Vacancies Fell 12% Last Month. Job vacancies at London’s financial-services companies fell 12 percent last month, as tougher rules on capital deter banks from hiring, recruitment firm Astbury Marsden said. New job openings in the British capital’s City and Canary Wharf financial districts fell to 2,172 in July from 2,462 in June, the Londonbased recruiter said in a statement today. The figure is down 27 percent from July last year. Hiring across financial services remains “patchy” as companies grapple with tighter rules on capital, the recruiter said.
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REGIONAL NEWS
China Services to Manufacturing Suggest Slowdown Stabilizing. China’s economy is showing signs of stabilizing after slowing for two straight quarters, with official manufacturing and services indexes rising and gains in gauges of business expectations. The nonmanufacturing Purchasing Managers’ Index rose to 54.1 in July from 53.9, the first acceleration since March, government data showed Aug. 3, following last week’s unexpected gain in a manufacturing PMI. A services index from HSBC Holdings Plc and Markit Economics was unchanged at 51.3, a separate report showed today.
Stagnant South Korea Property Drags on Growth Rebound: Economy. South Korea’s worst property-market slowdown since 2004 threatens to limit the economy’s rebound, as the government’s stop-go policies to stimulate the housing market fail to secure any sustained revival. Apartment transactions in Seoul plunged 80 percent in July from June, when temporary acquisition tax cuts expired, according to data on the city’s website. National home prices were flat or fell for 14 straight months through July, according to Kookmin Bank. A construction downturn is adding to the risk of the nation missing the government’s 2.7 percent growth forecast for this year amid patchy demand for exports and near-record household debt.
Toyota $37 Billion Cash Program Shows Effect of Abenomics. Prime Minister Shinzo Abe has been urging Japan’s companies to spend their growing piles of money to bolster the country’s economy. Toyota Motor Corp., with cash swelling to about $37 billion, is beginning to comply. The carmaker said on Aug. 2 that net income almost doubled to 562.2 billion yen ($5.7 billion) last quarter -- more than General Motors Co. (GM) and Volkswagen AG (VOW) combined -- as U.S. sales rose and the weaker yen boosted overseas profit. Cash and marketable securities rose 11 percent and totaled the most of any non-bank in Japan. The companies’ cash reached a record 225 trillion yen in the first quarter of this year, exceeding the size of Italy’s economy.
Laos, China hold talks on bilateral ties. Foreign Minister Dr Thongloun Sisoulith and his visiting Chinese counterpart Mr Wang Yi held talks on Saturday seeking ways to deepen bilateral ties and cooperation between the two neighbours. Beijing pledged to work with Laos to realise the US$7 billion Laos-China rail project that will link the Lao capital with the Chinese border. The two ministers had an in-depth discussion about joining efforts to draw up an action plan to realise the comprehensive strategic cooperative partnership between Laos and China. On this occasion, the Chinese government agreed to provide loans amounting to more than 725 billion kip (573 million yuan) for the expansion of the Dongmarkkhai water supply project. In addition, Beijing will also provide financial assistance amounting to more than 1.5 billion kip (US$200,000) to fight dengue fever, which is a serious public health issue in Laos at present.
Thailand: Thousands join city rally on first day. Thousands of anti-government groups launched a rally Sunday to oppose deliberation of an amnesty bill and to wipe out the Thaksin regime. The amnesty bill, proposed by Pheu Thai MP for Samut Prakan Worachai Hema, is set to be deliberated by the House of Representatives on Wednesday and Thursday. Police said about 4,000 people joined a rally at Lumpini Park, many wearing white masks, the symbol of the antigovernment movement. The first day of the demonstration went off without any violence.
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IFIs NEWS (compiled from their websites) ADB – Press Release: ADB, Australia and Korea To Support New Transport Link in Mekong Delta The ADB will lend $410 million to Viet Nam to build sections of a second arterial highway connecting Ho Chi Minh City to the Mekong Delta and southern coastal regions. http://www.adb.org/news/adb-australia-korea-support-new-transport-link-mekong-delta (Press Release) http://www.adb.org/projects/40255-033/main (Project’s Details)
IMF – Policy Papers: “The Functions and Impact of Fiscal Councils” The IMF has publicised the captioned policy paper and a supplement to the paper which presents case studies of seven fiscal councils and examines how each council performs its core functions and if and how it impacts on the fiscal policy debate. http://www.imf.org/external/np/pp/eng/2013/071613.pdf (Main Policy Paper) http://www.imf.org/external/np/pp/eng/2013/071613a.pdf (Supplement to Main Policy Paper: “Case Studies of Fiscal Councils - Functions and Impact”)
IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with Myanmar On June 28, 2013, the Executive Board of the IMF concluded the Article IV consultation with Myanmar. Executive Directors commended the authorities for the impressive progress in liberalizing the economy, which had facilitated development and poverty reduction. They welcomed in particular the advancement toward medium-term macroeconomic stability and institutional development objectives outlined in the government’s economic program. However, they noted that the challenges ahead are daunting, requiring stronger institutions and prudent policies to preserve macroeconomic and financial stability during the economic transformation. Accordingly, they stressed the importance of proceeding with needed reforms in a carefully sequenced manner and at a pace consistent with administrative capabilities. http://www.imf.org/external/np/sec/pr/2013/pr13287.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13250.pdf (Staff Report: Myanmar - 2013 Article IV Consultation and First Review under the Staff-Monitored Program) http://www.imf.org/External/NP/LOI/2013/MMR/061213.pdf (Staff Report: Staff-Monitored Program: Letter of Intent and Memorandum of Economic and Financial Policies
IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with Spain On July 26, 2013, the Executive Board of the IMF concluded the Article IV consultation with Spain. Executive Directors commended the authorities for strong progress on critical reforms amid challenging conditions, which is helping to stabilize the economy. They stressed the need for decisive further action to generate growth and jobs, both by Spain and Europe, and continued strong commitment to the reform effort. http://www.imf.org/external/np/sec/pr/2013/pr13292.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13244.pdf (Staff Report: Spain – Article 2013 IV Consultation) http://www.imf.org/external/pubs/ft/scr/2013/cr13245.pdf (Staff Report: Spain – Selected Issues Paper)
IMF – Publication: “Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas - Status of Acceptances and Consents” The IMF has publicised the above-stated report. This status report reviews progress toward implementation of the 2010 Quota and Governance Reforms. http://www.imf.org/external/np/pp/eng/2013/071713.pdf FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR Indonesia Japan
6.23 7.75 9,793.00 86.75
Previous wk's close 6.13 7.76 10,333.00 99.63
2-Aug
5-Aug
6.13 7.76 10,333.00 98.94
6.12 7.76 10,249.00 98.50
% change 0.08 0.00 0.82 0.45
2013 YTD (%chg) 1.8 -0.1 -5.8 -11.3
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1,064.40 1,123.79 1,123.79 1,113.82 Korea 3.06 3.26 3.26 3.23 Malaysia 41.01 43.63 43.63 43.47 Philippines 1.22 1.28 1.27 1.27 Singapore 30.59 31.40 31.26 31.35 Thailand 20,840.00 21,135.00 21,135.00 21,120.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation.
0.90 0.81 0.37 0.31 -0.29 0.07
-4.5 -6.1 -6.0 -3.7 -3.3 -1.3
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 2,029.4 22,191.0 4,638.6 14,466.2 1,923.4 1,780.5 6,534.0 3,251.3 1,415.9 494.7
2-Aug
5-Aug
2,029.4 22,191.0 4,640.8 14,466.2 1,923.4 1,782.5 6,534.0 3,254.1 1,420.9 494.7
2,050.5 22,222.0 4,640.8 14,258.0 1,916.2 1,787.8 6,509.7 3,233.9 1,418.1 493.7
OVERNIGHT LENDING RATE (IN %) 2-Aug 5-Aug bps change 3.000 3.450 45.00 0.083 0.083 0.00 4.868 4.880 1.21 0.071 0.071 0.00 2.500 2.500 0.00 3.000 3.000 0.00 0.386 0.247 -13.90 0.029 0.029 0.00 2.500 2.500 0.00 4.200 4.418 21.80
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
1-Aug 3.720 2.338 7.699 0.798 3.490 4.143 3.608 2.479 4.000 8.869
% change 1.04 0.14 0.00 -1.44 -0.37 0.29 -0.37 -0.62 -0.20 -0.20
2013 YTD (%chg) -9.6 -4.7 6.8 37.2 -5.7 6.7 11.1 1.0 0.8 18.0
3-MONTH INTERBANK LENDING RATE (IN %)
2-Aug 4.660 0.383 6.123 0.230 2.660 3.200 0.457 0.375 2.598 5.467
2-Aug 3.600 2.444 7.629 0.814 3.580 4.052 3.625 2.550 4.030 8.968
5-Aug 4.655 0.383 6.127 0.230 2.660 3.200 0.385 0.374 2.598 5.350
bps change -0.45 0.04 0.43 0.00 0.00 0.00 -7.20 -0.05 -0.08 -11.70
bps change -12.000 10.600 -7.000 1.600 9.000 -9.100 1.700 7.100 3.000 9.900
2013 YTD (bps) 38.000 204.800 282.300 62.900 60.000 86.700 -49.040 222.000 83.500 -68.200
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia
1-Aug 114.16 53.32 213.14 64.25 85.77 124.36
2-Aug 113.66 53.32 213.51 63.02 85.29 123.87
bps change -0.50 0.00 0.37 -1.23 -0.48 -0.49
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121.28 121.28 0.00 Philippines 118.10 117.10 -1.00 Thailand 246.23 250.97 4.74 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 2-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,312.0
5-Aug 1,313.1
% change 0.08
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
2013
31-Oct 30-Nov 31-Dec 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul China 3,287.4 3,297.7 3,311.6 3,395.4 3,442.7 3,534.5 3,514.8 3,496.7 n.a Hong Kong SAR 301.7 305.2 317.3 304.8 303.8 306.5 305.7 303.5 n.a Indonesia 110.3 111.3 112.8 105.2 104.8 107.3 105.1 98.1 n.a Japan 1,274.2 1,270.9 1,268.1 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 n.a Korea 323.5 326.1 327.0 327.4 327.4 328.8 328.1 326.4 329.7 Malaysia 138.3 139.1 139.7 140.3 139.7 140.3 141.4 136.1 137.9 Philippines 81.7 83.9 83.8 83.6 84.0 83.2 82.0 81.3 n.a Singapore 254.2 255.8 259.3 259.1 258.2 261.7 258.4 259.8 n.a Thailand 181.5 181.6 181.6 179.2 177.8 177.8 175.3 170.8 172.9 Vietnam 21.4 23.2 n.a 28.2 n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS* 3 months imports Import cover (Qtrs Short-term Int'l Reserves of goods & of imports Reserves over external debt services covered by short-term debt (US$bn) (US$bn) (US$bn) reserves) China 3,496.7 523.3 565.7 6.7 6.2 Hong Kong SAR 303.5 149.7 745.6 2.0 0.4 Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,238.7 80.1 2,147.9 15.5 0.6 Korea 329.7 155.1 122.2 2.1 2.7 Malaysia 137.9 57.1 32.9 2.4 4.2 Philippines 81.3 17.2 9.8 4.7 8.3 Singapore 259.8 118.2 968.3 2.2 0.3 Thailand 172.9 66.9 62.1 2.6 2.8 Vietnam n.a 30.8 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 latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 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
SOUTH KOREA CHINA HONG KONG MALAYSIA
Indicators
Foreign Exchange Reserve (USD bn) China HSBC Services PMI HSBC/Markit PMI Exports YoY% Imports YoY% Trade Balance (USD bn)
Period
Jul Jul Jul Jun Jun Jun
Last
Previous
329.71 51.3 49.7 -6.9 1.3 4.23
326.44 51.3 48.7 -5.1 -2.3 2.88
SELECTED ECONOMIC RELEASES CALENDAR (05-09 AUG 2013) Expected Release Date
8/05/2013
8/6/2013
8/7/2013
8/8/2013
8/9/2013
Economies
INDONESIA INDONESIA INDONESIA INDONESIA SOUTH KOREA CHINA HONG KONG MALAYSIA MALAYSIA MALAYSIA PHILIPPINES THAILAND THAILAND SOUTH KOREA MALAYSIA SINGAPORE JAPAN HONG KONG PHILIPPINES CHINA CHINA CHINA SOUTH KOREA JAPAN JAPAN THAILAND JAPAN CHINA CHINA CHINA CHINA
Indicators
Consumer Confidence Index Money Supply - M2 (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) China HSBC Services PMI HSBC/Markit PMI Exports YoY% Imports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Consumer Confidence Economic Consumer Confidence Bank Lending to HH (KRW Tln) Foreign Reserves (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn) Trade Balance (USD bn) Exports YoY% Imports YoY% South Korea 7-Day Repo Rate % Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD bn) Consumer Confidence Industrial Production (YoY)% Retail Sales (YoY)% Consumer Price Index (YoY)% Producer Price Index (YoY)%
Period
Jul Jun Jul Jul Jul Jul Jul Jun Jun Jun Jul Jul Jul Jul Jul 31 Jul Jul Jul Jul Jul Jul Jul Aug 8 Jun Jun Aug 2 Jul Jul Jul Jul Jul
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 06 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asia Stocks Outside Japan Drop on Stimulus Cut Concern. Asian stocks outside Japan fell as stronger growth in U.S. service industries fueled speculation the Federal Reserve will soon be able to reduce economic stimulus. The MSCI Asia Pacific excluding Japan Index sank 0.4 percent to 441.38 as of 2:11 p.m. in Hong Kong, with more than two stocks falling for every one that rose. The Nikkei 225 Stock Average climbed 1.0 percent to 14,401.1, after Reuters reported the pension fund for Japan’s civil servants is considering investing more of its $80 billion in stocks and less in domestic government bonds. South Korea’s Kospi index dropped 0.5 percent to 1,906.6 and Singapore’s Straits Times Index slid 0.78 percent to 3,216.4. Hong Kong’s Hang Seng Index declined 1.34 percent, followed by the Philippines’ PSEi Index fell further by 1.37 percent, while China’s Shanghai Composite and Thailand’s SET index added 0.49 percent and 0.75 percent respectively.
•
Most Asian currencies depreciated. The yen fell 0.13 percent to 98.43 per dollar today, South Korea’s won declined by 0.15 percent to 1,115.51 per dollar, while Malaysia’s ringgit weakened 0.39 percent. Meanwhile, Indonesian’s rupiah lost 0.29 percent to 10,279 per dollar, Singapore dollar rose slightly by 0.05 percent and the Philippines’s peso fell 0.16 percent. Thai Baht weakened 0.06 percent against the dollar.
•
Gold and crude oil. Gold fell 0.91 percent. West Texas Intermediate (WTI) crude oil dropped 0.2 percent to $106.42 a barrel, after falling 0.4 percent yesterday in New York. Natural gas was little changed after slipping over the previous three days. WTI for September delivery was at $106.50 a barrel, down 6 cents in electronic trading on the New York Mercantile Exchange at 1:21 p.m. Singapore time.
BREAKING NEWS GLOBAL NEWS •
Americans With Best Credit in Decades Drive U.S. Economy. Americans have made progress putting their finances in order and are ready to borrow again. Household net worth soared to a record high in the first quarter, Federal Reserve data show, and the financial-obligations ratio relating consumer debt to income matched the lowest in 33 years. Consumer loans are rising, and the American Bankers Association reports the share of delinquencies on bank cards is the smallest since 1990. Credit is thawing gradually for residential mortgages, one reason newhome purchases in June reached the highest since 2008. Lenders also are easing standards for auto loans to expand the pool of buyers and drum up more business.
•
Credit Agricole Profit Surges After Disposal of Greek Unit. Credit Agricole SA (ACA), France’s third-largest bank by market value, said profit surged in the second quarter after the sale of its unprofitable Greek unit. Net income jumped to 696 million euros ($922 million) from a restated 56 million euros a year earlier. Credit Agricole is emerging from two consecutive annual losses after selling its Athens-based Emporiki unit, a business that cut earnings by about
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370 million euros in the second quarter of 2012. The bank also sold its brokerage units and boosted profit at its corporate and investment bank. REGIONAL NEWS •
Singapore Land Bids ‘Suicidal’ With Rules, Billionaire Kwek Says. Buying land in Singapore at current high prices would be “suicidal” given the government’s requirement that new homes must be sold within two years of completion, City Developments Ltd. (CIT) Chairman Kwek Leng Beng said. Developers of land for high-end residential projects are subject to conditions of a socalled qualifying certificate, which includes the two-year deadline, according to the city-state’s rules. Developers can apply for an extension after paying a fee.
•
Thai Public Spending Delay Adds to Growth Risks. Thailand’s economic growth may slow further this year as the government’s attempt to push through an amnesty bill for political protesters risks delaying its $64 billion infrastructure spending plan. The infrastructure bill hasn’t been scheduled during the three-month parliament session that began last week. The Bank of Thailand last month cut its expansion forecast for this year to 4.2 percent from 5.1 percent and its export growth estimate to 4 percent from 7.5 percent, citing cooling global and local demand. Gross domestic product increased 5.3 percent in the first quarter from a year earlier.
•
China’s Debt Surge Pressures Xi-Li to Avert Lost Decade. A Chinese lending spree of the magnitude that tipped Asian nations into crisis in the late 1990s and preceded Japan’s lost decades is putting pressure on top leaders to map out a strategy to tackle the threat. Half of the economists in a Bloomberg News survey say non-performing local-government and corporate debt will probably have a “significant impact” on China’s credit and economic growth. The central government will deal with bad loans at local governments in the next 18 months by expanding the municipal-bond market and letting localities refinance with direct bond sales, respondents said. There is a high risk that this debt issue will have significant downside pressure on Chinese growth in the next few years.
•
Investors Turn Hong Kong’s Red Taxis Into New Bubble Market. Allan Shek, the owner of a Hong Kong shop selling gold and jade jewelry, says he’s made millions on the side by riding wild swings in the stock market and by buying into the city’s property boom. No more. Last month, he bought five Hong Kong taxis and the licenses to operate them. Seven or eight of his friends have bought taxis too, he says. The price of a license combined with a taxi reached a record HK$7.66 million ($987,600) on June 6, the highest since 2000. Prices have surged more than 80 percent since taking off in September 2009, as cheap financing and expectations of continued gains draw investors. Ten taxis sold Aug. 5 for HK$7.1 million each. Investors feel that there aren’t many good investment tools in the market, as there are restrictions on the property market, and the stock market is not performing that well.
•
Laos PDR’s New economic zone under consideration. A new specific economic zone (SEZ) in 4,500 hectares in Pakkading district of Borikhamxay province will be developed soon to attract investors and speed up economic growth once it is approved by the government. The SEZ is 90 km from the provincial capital and is located at the three junctions of Viengkham village. Most
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of the area is state owned with over 7,300 people living there in eight adjacent villages. The area is to be called Viengkham-Thasa-ard SEZ. •
Myanmar’s Adjustment in Organizational set-up of enterprises. Organizational set-up of enterprises under ministry of National Planning and Economic Development depends on costto-income ratio to ensure a healthy financial measure. In terms of staffing, employment of more staff is allowed, if necessary, in accordance with production cost and budget balance. However, implementation of such adjustments remains challenges due to lack of staff and their tight schedule and security guards as well as general workers are not operational staff.
IFIs NEWS (compiled from their websites) IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with France • On July 29, 2013, the Executive Board of the IMF concluded the Article IV consultation with France. Executive Directors were encouraged by recent improvements in economic indicators, supporting the expectation of a gradual recovery during the second half of the year. Given remaining risks, including from uncertain euro area prospects, Directors underscored the importance of pursuing structural reforms to support the recovery of private demand and strengthen competitiveness, while continuing efforts to ensure fiscal sustainability and safeguard financial stability. http://www.imf.org/external/np/sec/pr/2013/pr13295.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13251.pdf (Staff Report: France – Article 2013 IV Consultation) http://www.imf.org/external/pubs/ft/scr/2013/cr13252.pdf (Staff Report: France – Selected Issues Paper)
IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with Japan • On July 31, 2013, the Executive Board of the IMF concluded the Article IV consultation discussions with Japan. Executive Directors noted that Japan’s near-term economic prospects have improved with the adoption of vigorous macroeconomic policies combining fiscal stimulus with unprecedented monetary easing. Directors agreed, however, that the growth outlook is subject to significant risks, primarily stemming from incomplete domestic reforms and a weaker external environment, and that sustained implementation of the authorities’ reform program is the best way to minimize these risks. http://www.imf.org/external/np/sec/pr/2013/pr13296.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13253.pdf (Staff Report: Japan – Article 2013 IV Consultation) http://www.imf.org/external/pubs/ft/scr/2013/cr13254.pdf (Staff Report: Japan – Selected Issues Paper) http://www.imf.org/external/np/tr/2013/tr080513.htm (Transcript of a Conference Call on Japan – 2013 Article IV Consultation)
FOREIGN CURRENCY EXCHANGE RATES Previous 5-Aug 6-Aug wk's close 6.23 6.13 6.12 6.12 China 7.75 7.76 7.76 7.76 Hong Kong SAR 9,793.00 10,333.00 10,249.00 10,279.00 Indonesia 86.75 99.63 98.30 98.43 Japan 1,064.40 1,123.79 1,113.82 1,115.51 Korea 3.06 3.26 3.23 3.24 Malaysia 41.01 43.63 43.47 43.54 Philippines 1.22 1.28 1.27 1.27 Singapore 30.59 31.40 31.38 31.40 Thailand 20,840.00 21,135.00 21,120.00 21,095.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.05 0.01 -0.29 -0.13 -0.15 -0.39 -0.16 0.05 -0.06 0.12
2013 YTD (%chg) 1.8 -0.1 -6.1 -11.3 -4.7 -6.4 -6.2 -3.8 -3.4 -1.2
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STOCK MARKET INDEX 5-Aug
6-Aug
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
Previous wk's close 2,029.4 22,191.0 4,638.6 14,466.2 1,923.4 1,780.5 6,534.0 3,251.3 1,415.9
2,050.5 22,222.0 4,640.8 14,258.0 1,916.2 1,785.1 6,509.7 3,241.8 1,424.3
2,060.5 21,923.7 4,640.8 14,401.1 1,906.6 1,782.5 6,420.8 3,216.2 1,433.7
0.49 -1.34 0.00 1.00 -0.50 -0.15 -1.37 -0.79 0.66
2013 YTD (%chg) -9.2 -6.0 6.8 38.5 -6.1 6.4 9.6 0.5 1.9
413.7
494.7
493.7
496.6
0.59
18.7
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
OVERNIGHT LENDING RATE (IN %) 5-Aug 6-Aug bps change 3.450 2.900 -55.00 0.083 0.081 -0.22 4.880 5.007 12.71 0.071 0.095 2.45 2.500 2.500 0.00 3.000 3.000 0.00 0.247 0.138 -10.90 0.032 0.032 0.00 2.500 2.500 0.00 4.418 3.980 -43.80
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
2-Aug 3.600 2.444 7.629 0.814 3.580 4.052 3.625 2.550 4.030 8.968
% change
3-MONTH INTERBANK LENDING RATE (IN %)
5-Aug 4.655 0.383 6.127 0.230 2.650 3.200 0.385 0.374 2.598 5.350
5-Aug 3.720 2.296 7.657 0.779 3.510 4.053 3.681 2.461 3.970 8.812
6-Aug 4.654 0.384 6.134 0.230 2.650 3.200 0.360 0.375 2.598 5.175
bps change -0.12 0.04 0.72 0.00 0.00 0.00 -2.50 0.10 0.00 -17.50
bps change 12.000 -14.800 2.800 -3.500 -7.000 0.100 5.600 -8.900 -6.000 -15.600
2013 YTD (bps) 50.000 190.000 285.100 59.400 53.000 86.800 -43.440 213.100 77.500 -83.800
CREDIT DEFAULT SWAP (IN BPS) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Thailand
2-Aug 113.66 53.32 213.51 63.02 85.29 123.87 121.28 117.10
5-Aug 111.74 53.28 211.57 62.98 82.56 122.45 118.38 117.62
bps change -1.92 -0.04 -1.94 -0.04 -2.73 -1.42 -2.90 0.52
250.97 246.50 -4.47 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
Page 4 of 6
5-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
6-Aug
1,303.0
1,291.2
% change -0.91
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
2013
31-Oct 30-Nov 31-Dec 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul China 3,287.4 3,297.7 3,311.6 3,395.4 3,442.7 3,534.5 3,514.8 3,496.7 n.a Hong Kong SAR 301.7 305.2 317.3 304.8 303.8 306.5 305.7 303.5 n.a Indonesia 110.3 111.3 112.8 105.2 104.8 107.3 105.1 98.1 n.a Japan 1,274.2 1,270.9 1,268.1 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 n.a Korea 323.5 326.1 327.0 327.4 327.4 328.8 328.1 326.4 329.7 Malaysia 138.3 139.1 139.7 140.3 139.7 140.3 141.4 136.1 137.9 Philippines 81.7 83.9 83.8 83.6 84.0 83.2 82.0 81.3 n.a Singapore 254.2 255.8 259.3 259.1 258.2 261.7 258.4 259.8 n.a Thailand 181.5 181.6 181.6 179.2 177.8 177.8 175.3 170.8 172.9 Vietnam 21.4 23.2 n.a 28.2 n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS* 3 months imports Import cover (Qtrs Short-term Int'l Reserves of goods & of imports Reserves over external debt services covered by short-term debt (US$bn) (US$bn) (US$bn) reserves) China 3,496.7 523.3 565.7 6.7 6.2 Hong Kong SAR 303.5 149.7 745.6 2.0 0.4 Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,238.7 80.1 2,147.9 15.5 0.6 Korea 329.7 155.1 122.2 2.1 2.7 Malaysia 137.9 57.1 32.9 2.4 4.2 Philippines 81.3 17.2 9.8 4.7 8.3 Singapore 259.8 118.2 968.3 2.2 0.3 Thailand 172.9 66.9 62.1 2.6 2.8 Vietnam n.a 30.8 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 latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 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 THAILAND
Indicators
Consumer Price Index (YoY)% Core Consumer Price Index (YoY)% Consumer Confidence Economic Consumer Confidence
Period
Jul Jul Jul Jul
Last
Previous
2.5 2.3 70.6 80.3
2.7 2.8 71.8 81.3
Page 5 of 6
Expected Release Date
8/05/2013
8/6/2013
8/7/2013
8/8/2013
8/9/2013
SELECTED ECONOMIC RELEASES CALENDAR (05-09 AUG 2013) Economies
INDONESIA INDONESIA INDONESIA INDONESIA SOUTH KOREA CHINA HONG KONG MALAYSIA MALAYSIA MALAYSIA PHILIPPINES PHILIPPINES THAILAND THAILAND SOUTH KOREA MALAYSIA SINGAPORE JAPAN HONG KONG PHILIPPINES CHINA CHINA CHINA SOUTH KOREA JAPAN JAPAN THAILAND JAPAN CHINA CHINA CHINA CHINA
Indicators
Period
Consumer Confidence Index Money Supply - M2 (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) China HSBC Services PMI HSBC/Markit PMI Exports YoY% Imports YoY% Trade Balance (USD bn)
Jul Jun Jul Jul Jul Jul Jul Jun Jun Jun
Consumer Price Index (YoY)% Consumer Price Index (YoY)% Consumer Confidence Economic Consumer Confidence Bank Lending to HH (KRW Tln) Foreign Reserves (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn) Trade Balance (USD bn) Exports YoY% Imports YoY% South Korea 7-Day Repo Rate % Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD bn) Consumer Confidence Industrial Production (YoY)% Retail Sales (YoY)% Consumer Price Index (YoY)% Producer Price Index (YoY)%
Jul Jul Jul Jul Jul Jul 31 Jul Jul Jul Jul Jul Jul Jul Aug 8 Jun Jun Aug 2 Jul Jul Jul Jul Jul
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 07 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Most Asian currencies depreciated, except for Yen, Yuan and Hong Kong dollar. The yen rose to the highest in almost seven weeks against the dollar as the Bank of Japan started a two-day meeting amid speculation it will refrain from adding to stimulus that’s helped weaken the currency 11 percent this year. The Yen rose 0.79 percent to 96.97 per dollar at 4:55 PM in Singapore, the strongest level since June 20. South Korea’s won fell 0.27 percent to 1,118.58 per dollar in Seoul, the most in a week as global investors sold local shares on concern the Federal Reserve will rein in stimulus. China’s Yuan rose 0.03 percent to 6.12 per dollar, while the Philippines’ peso and Indonesia’s rupiah lost 0.51 percent and 0.47 percent respectively.
Asian Stocks Fall on Japan as Yen Climbs for Fourth Day. Asian stocks fell, with the regional benchmark index heading for its biggest drop since June 20, as Japanese shares led declines across the region after the yen gained for a fourth day. The MSCI Asia Pacific Index decreased 2 percent to 133.08 as of 5:09 p.m. in Tokyo, with more than five shares falling for each that rose. Japan’s Nikkei 225 Stock Average tumbled by 4.0 percent, the most in almost two months at the Tokyo close. Hong Kong’s Hang Seng Index decreased 1.53 percent and Korea’s Kospi Index declined by 1.48 percent. China’s Shanghai Composite Index slipped 0.67 percent, Singapore’s Straits Times Index decreased 0.06 percent. Meanwhile, Vietnam’s VNINDEX rose by 0.71 percent to 500.1.
Gold fell for the third day by 0.62 percent to 1,275.5 dollar an ounce, while WTI Crude Fluctuates Amid Signs U.S. Fuel Stockpiles Fell. West Texas Intermediate (WTI) swung between gains and losses before government data forecast to show U.S. crude inventories fell to a sixmonth low. London-traded Brent slid for a fourth day. WTI for September delivery was at $105.31 a barrel in electronic trading on the New York Mercantile Exchange, up 1 cent, or less than 0.1 percent, at 2:54 p.m. Singapore time. Brent for September settlement slid 28 cents to $107.90 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL NEWS
U.S. accuses Bank of America of mortgage-backed securities fraud. The U.S. government on Tuesday filed two civil lawsuits against Bank of America that accuse the bank of investor fraud in its sale of $850 million of residential mortgage-backed securities. The lawsuits are the latest legal headache for the second-largest U.S. bank, which has already agreed to pay in excess of $45 billion to settle disputes stemming from the 2008 financial crisis. The Justice Department and the U.S. Securities and Exchange Commission filed parallel lawsuits in U.S. District Court in Charlotte, North Carolina, accusing Bank of America of making misleading statements and failing to disclose important facts about the pool of mortgages underlying a sale of securities to investors in early 2008.
Page 1 of 6
Europe Stocks Drop as Investors Watch BOE After Fed Talk. European stocks fell for a second day as investors turned to the Bank of England for its interest-rate guidance and widening of stimulus measures after Federal Reserve officials signaled they may pare bond purchases. The Stoxx Europe 600 Index declined 0.5 percent to 302.02 at 8:35 a.m. in London. The benchmark has rallied 9.5 percent from a low on June 24 as central banks in Europe and the U.S. pledged to keep interest rates low. Standard & Poor’s 500 Index futures retreated 0.4 percent. The BOE’s Monetary Policy Committee will release its inflation and output projections.
REGIONAL NEWS
Japan government to take bigger role in Fukushima clean-up. The Japanese government will get directly involved in containing rising levels of radioactive water at the crippled Fukushima nuclear plant instead of relying solely on the operator, Prime Minister Shinzo Abe said on Wednesday, calling it an "urgent issue". The Fukushima disaster is the world's worst nuclear crisis since Chernobyl, and the delays in getting to grips with the clean-up have caused global concern. The Nikkei newspaper said the funds would be used to freeze the soil to prevent groundwater from leaking into the reactor buildings - a project with an estimated cost of up to 40 billion yen ($410 million).
China fines milk powder makers $110 million for price fixing. China fined six companies including Mead Johnson Nutrition Co, Danone and New Zealand dairy giant Fonterra a total of $110 million following an investigation into price fixing and anti-competitive practices by foreign baby formula makers. The other three penalized were Abbott Laboratories, Dutch dairy cooperative FrieslandCampina and Hong Kong-listed Biostime International Holdings, the National Development and Reform Commission (NDRC) said on Wednesday. The fines, announced just over a month after the NDRC said it was conducting the antitrust review, coincide with separate pricing investigations into foreign and local pharmaceutical firms as well as companies involved in gold trading. Those probes have yet to conclude.
Malaysia listed as 10th most visited country. Malaysia is 10th on the United Nations World Tourism Organisation’s (UNWTO) list of most-visited countries. The country recorded 25 million tourist arrivals in 2012. Out of the figure, 74 percent or 18.5 million tourists were from Singapore, Indonesia, Thailand, Brunei and the Philippines. Market and political stability are among contributing factors, while Malaysia’s service industry is one of the best and friendliest in the world. Besides this, Malaysia had a good mix of heritage sites, beautiful beaches, diverse cultural attractions and good infrastructure. Thailand led this growth with a 16 percent increase in tourists over 2011, while Cambodia and Vietnam recorded double-digit growth in 2012, with 24 percent and 14 percent respectively.
Vietnam Bank Fix Starts With $474 Million Debt. Vietnam’s state asset management company (VAMC), tasked with cleaning up bad loans, said it will acquire as much as 10 trillion dong ($474 million) of spoiled debt over the next two months as it considers possible foreign funding. VAMC will issue special bonds to about 10 banks in exchange for as much as 10 trillion dong of NPLs in the next two months, CEO Nguyen Huu Thuy said. VAMC will start buying the first batch of bad debt in the next two weeks. This will send a positive signal to the market and investors.
Page 2 of 6
Lao Ministry vows to address labour shortage. State owned vocational schools around the country will accept more students in this academic year amid a rising demand for skilled labour. The vocational courses provide skills to suit the needs of the labour market and give young students the expertise needed for the development of their communities. To meet market demand the vocational schools have introduced new courses including mining, electrical engineering, construction, electronics, auto mechanics, hospitality and other related subjects, for which Laos is currently facing a shortage. Demand for skilled labour saw a rapid increase over the past few years thanks to the government policy to promote foreign investment. Although student numbers entering vocational education have gradually increased over the past few years, Laos is still suffering from a lack of skilled labour.
IFIs NEWS (compiled from their websites) IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with Germany On August 1, 2013, the Executive Board of the IMF concluded the Article IV consultation with Germany. Executive Directors commended the German authorities for prudent economic management, preserving strong domestic fundamentals, healthy balance sheets, and financial system soundness. Directors noted that these positive developments have provided an important anchor of regional stability. Meanwhile, uncertainty surrounding policies and prospects for the euro area is weighing on business investment and exports to the region. Directors stressed that policy priorities in the near term should aim at reducing this uncertainty to rebuild confidence and managing downside risks to the outlook. They also emphasized that, given the size of Germany’s economy and its large external imbalances, stronger and more balanced growth in Germany is critical to a lasting recovery in the euro area and global rebalancing. http://www.imf.org/external/np/sec/pr/2013/pr13299.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13255.pdf (Staff Report: Germany – Article 2013 IV Consultation) FOREIGN CURRENCY EXCHANGE RATES Previous 6-Aug 7-Aug wk's close 6.23 6.13 6.12 6.12 China 7.75 7.76 7.76 7.76 Hong Kong SAR 9,793.00 10,333.00 10,286.00 10,335.00 Indonesia 86.75 99.63 97.74 96.97 Japan 1,064.40 1,123.79 1,115.51 1,118.58 Korea 3.06 3.26 3.25 3.25 Malaysia 41.01 43.63 43.54 43.76 Philippines 1.22 1.28 1.27 1.27 Singapore 30.59 31.40 31.40 31.42 Thailand 20,840.00 21,135.00 21,095.00 21,120.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.03 0.00 -0.47 0.79 -0.27 -0.22 -0.51 -0.11 -0.06 -0.12
2013 YTD (%chg) 1.9 -0.1 -6.6 -9.9 -4.9 -6.7 -6.6 -3.8 -3.5 -1.3
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)
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 2,029.4 22,191.0 4,638.6 14,466.2 1,923.4 1,780.5 6,534.0 3,251.3 1,415.9 494.7
6-Aug
7-Aug
2,060.5 21,923.7 4,640.8 14,401.1 1,906.6 1,784.6 6,420.8 3,224.9 1,429.4 496.6
2,046.8 21,588.8 4,640.8 13,824.9 1,878.3 1,779.3 6,420.8 3,223.1 1,428.5 500.1
% change -0.67 -1.53 0.00 -4.00 -1.48 -0.30 0.00 -0.06 -0.06 0.71
2013 YTD (%chg) -9.8 -7.4 6.8 33.0 -7.5 6.2 9.6 0.7 1.5 19.5
Page 3 of 6
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (IN %) 6-Aug 7-Aug bps change 2.900 3.300 40.00 0.081 0.080 -0.07 5.007 5.007 0.00 0.095 0.093 -0.25 2.500 2.500 0.00 3.000 3.000 0.00 0.138 -0.125 -26.30 0.050 0.050 0.00 2.500 2.500 0.00 3.980 3.987 0.70
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
5-Aug
3-MONTH INTERBANK LENDING RATE (IN %)
6-Aug 4.654 0.384 6.134 0.230 2.650 3.200 0.360 0.375 2.598 5.175
6-Aug
3.720 2.296 7.657 0.779 3.510 4.053 3.681 2.461 3.970 8.812
3.750 2.315 7.669 0.787 3.510 3.972 3.735 2.436 3.970 8.825
7-Aug 4.652 0.383 6.134 0.230 2.650 3.200 0.405 0.375 2.597 5.450
bps change -0.23 -0.07 0.00 0.00 0.00 0.00 4.50 -0.05 -0.08 27.50
bps change 3.000 1.900 1.200 0.800 0.000 -8.100 5.400 -2.500 0.000 1.300
2013 YTD (bps) 53.000 191.900 286.300 60.200 53.000 78.700 -38.040 210.600 77.500 -82.500
CREDIT DEFAULT SWAP (IN BPS) 5-Aug 6-Aug bps change 111.74 108.79 -2.95 China 53.28 53.32 0.04 Hong Kong SAR 211.57 209.73 -1.84 Indonesia 62.98 63.15 0.17 Japan 82.56 79.38 -3.18 Korea 122.45 119.49 -2.96 Malaysia 118.38 116.45 -1.93 Philippines 117.62 113.69 -3.93 Thailand 246.50 248.67 2.17 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 6-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,283.2
7-Aug 1,275.3
% change -0.62
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+
Page 4 of 6
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)
2012
2013
31-Oct 30-Nov 31-Dec 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul China 3,287.4 3,297.7 3,311.6 3,395.4 3,442.7 3,534.5 3,514.8 3,496.7 n.a Hong Kong SAR 301.7 305.2 317.3 304.8 303.8 306.5 305.7 303.6 299.9 Indonesia 110.3 111.3 112.8 105.2 104.8 107.3 105.1 98.1 n.a Japan 1,274.2 1,270.9 1,268.1 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 1,254.0 Korea 323.5 326.1 327.0 327.4 327.4 328.8 328.1 326.4 329.7 Malaysia 138.3 139.1 139.7 140.3 139.7 140.3 141.4 136.1 137.8 Philippines 81.7 83.9 83.8 83.6 84.0 83.2 82.0 81.3 82.9 Singapore 254.2 255.8 259.3 259.1 258.2 261.7 258.4 259.8 261.1 Thailand 181.5 181.6 181.6 179.2 177.8 177.8 175.3 170.8 172.9 Vietnam 21.4 23.2 n.a 28.2 n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS* 3 months imports Import cover (Qtrs Short-term Int'l Reserves of goods & of imports Reserves over external debt services covered by short-term debt (US$bn) (US$bn) (US$bn) reserves) China 3,496.7 523.3 565.7 6.7 6.2 Hong Kong SAR 299.9 149.7 745.6 2.0 0.4 Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,254.0 80.1 2,147.9 15.7 0.6 Korea 329.7 155.1 122.2 2.1 2.7 Malaysia 137.8 57.1 32.9 2.4 4.2 Philippines 82.9 17.2 9.8 4.8 8.5 Singapore 261.1 118.2 968.3 2.2 0.3 Thailand 172.9 66.9 62.1 2.6 2.8 Vietnam n.a 30.8 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 latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 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
MALYASIA SOUTH KOREA SINGAPORE JAPAN HONG KONG PHILIPPINES
Indicators
Foreign Reserves (USD bn) Industrial Production (YoY)% Manufacturing Sales Values (YoY)% Bank Lending to HH (KRW tn) Money Supply M2 SA (MoM)% Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD bn)
Period
Jul 31 Jun Jun Jul Jun Jul Jul Jul Jul
Last
Previous
137.8 3.3 -2.2 470.0 0.6 261.10 1,254.0 299.9 82.9
137.9 3.3 -2.4 469.9 0.1 259.82 1,238.7 303.6 81.6
SELECTED ECONOMIC RELEASES CALENDAR (05-09 AUG 2013) Expected Release Date
8/05/2013
Economies
INDONESIA INDONESIA INDONESIA INDONESIA SOUTH KOREA CHINA
Indicators
Consumer Confidence Index Money Supply - M2 (YoY)% Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Foreign Exchange Reserve (USD bn) China HSBC Services PMI
Period
Jul Jun Jul Jul Jul Jul
Page 5 of 6
8/6/2013
8/7/2013
8/8/2013
8/9/2013
HONG KONG MALAYSIA MALAYSIA MALAYSIA PHILIPPINES PHILIPPINES THAILAND THAILAND SOUTH KOREA SOUTH KOREA MALAYSIA MALAYSIA MALAYSIA SINGAPORE JAPAN HONG KONG PHILIPPINES CHINA CHINA CHINA SOUTH KOREA JAPAN JAPAN THAILAND JAPAN CHINA CHINA CHINA CHINA
HSBC/Markit PMI Exports YoY% Imports YoY% Trade Balance (USD bn) Consumer Price Index (YoY)% Consumer Price Index (YoY)% Consumer Confidence Economic Consumer Confidence Bank Lending to HH (KRW Tln) Money Supply M2 SA (MoM)% Foreign Reserves (USD bn) Industrial Production (YoY)% Manufacturing Sales Values (YoY)% Foreign Reserves (USD bn) Official Reserve Assets (USD bn) Foreign Currency Reserves (USD bn) Foreign Reserves (USD bn) Trade Balance (USD bn) Exports YoY% Imports YoY% South Korea 7-Day Repo Rate % Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD bn) Consumer Confidence Industrial Production (YoY)% Retail Sales (YoY)% Consumer Price Index (YoY)% Producer Price Index (YoY)%
Jul Jun Jun Jun Jul Jul Jul Jul Jul Jun Jul 31 Jun Jun Jul Jul Jul Jul Jul Jul Jul Aug 8 Jun Jun Aug 2 Jul Jul Jul Jul Jul
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 12 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Yen Weakens as Japan’s Growth Slows More Than Forecast. The yen weakened after a government report showed Japan’s economy slowed more in the second quarter than analysts forecast. The yen declined 0.56 percent to 96.75 per dollar as of 5:10 PM in Singapore time. South Korea’s won fell 0.11 percent to 1,113.53 per dollar in Seoul, while Singapore’s dollar lost 0.34 percent. Thailand’s baht added 0.13 percent, whereas Malaysia’s ringgit fell 0.31 percent. Meanwhile, the Philippines’ peso and Indonesia’s rupiah lost 0.46 percent and 0.25 percent.
Asian Stocks Outside Japan Rise as China Developers Gain. Asian stocks outside Japan rose as Chinese property developers and commodities companies climbed. The MSCI Asia Pacific excluding Japan Index advanced 0.9 percent to 444.13 as of 4:26 p.m. in Hong Kong. Japanese shares fell 0.70 percent to 13,519.4 after growth slowed more than forecast. China’s Shanghai Composite Index added 2.39 percent, closing at its highest level since June 19. Hong Kong’s Hang Seng Index climbed 2.13 percent, closing at its highest level since June 4. South Korea’s Kospi Index advanced 0.22 percent and Singapore’s Straits Times Index gained 0.07 percent. On the contrary, Indonesia’s JCI and Vietnam’s VNINDEX declined 0.93 percent and 0.23 percent.
Gold climbed to the highest level this month to $1,327.7 an ounce, after holdings in the biggest bullion-backed exchange-traded product expanded for the first time since June. While, WTI crude swung between gains and losses after the biggest rally in more than a week as hedge funds cut bullish bets. WTI for September delivery was at $106.07 a barrel in electronic trading on the New York Mercantile Exchange, up 10 cents at 2:40 p.m. Singapore time. Brent for September settlement slid 14 cents to $108.08 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL NEWS
Euro Area’s Recession Seen Over as Champagne Kept on Ice. The euro-area economy probably edged back to growth last quarter for the first time since 2011, ending the longest recession since the single currency union started 14 years ago. GDP in the 17-nation region expanded 0.2 percent in Q2 after shrinking for the previous six quarters. The German economy probably expanded about 0.75 percent, exceeding the 0.6 percent economists predict. A year of relative calm on financial markets, budget cuts and economic reforms from Spain to Italy, and accelerating growth in the U.S. has helped the euro area start to recover from a downturn. At the same time, ECB President Mario Draghi has described progress as “tentative” and said further growth may depend on repairing banks’ balance-sheets to spur lending.
European stocks fell from a 10-week high as a report showed Japan’s economy grew less than estimated last quarter. Telekom Austria AG dropped 1.3 percent after reporting secondquarter earnings that missed analysts’ projections. Ladbrokes Plc (LAD) slid 3 percent as JPMorgan Chase & Co. downgraded the U.K. gambling operator. Bilfinger SE rose 2.4 percent
Page 1 of 6
afterGermany’s second-biggest builder predicted a “significantly” stronger second half. The Stoxx Europe 600 Index slipped 0.3 percent to 305.07 at 9:32 a.m. in London, erasing an earlier advance of as much as 0.2 percent. REGIONAL NEWS
Japan growth slows in second quarter, adds to sales tax uncertainty. Japan's economy grew at a slower-than-expected rate in the second quarter, offering ammunition to those seeking to delay a scheduled sales tax increase even as government debt has risen past 1,000 trillion yen ($10.4 trillion). Capital expenditure unexpectedly fell for a sixth straight quarter, a sign that companies are yet to boost spending despite the feel-good mood generated by Prime Minister Shinzo Abe's reflationary policies over the first half of 2013. The world's third-largest economy grew an annualized 2.6 percent in April-June, a third straight quarter of expansion but below both a forecast of 3.6 percent growth and a downwardly revised 3.8 percent rate in the first quarter.
China to spend more to tackle dire pollution. China plans to accelerate investment in technology to save energy and tackle the dire pollution blamed for a series of health crises that have generated widespread public anger. The government has been increasingly alarmed by social unrest caused by environmental disasters and threats to public health, often the result of the country's breakneck industrial expansion and mass migration to new cities. China is already investing 2.3 trillion yuan ($375 billion) in energy savings and emissions reduction in the five years through 2015, state media have said.
Singapore Cuts Trade Outlook as China Slowdown Caps Recovery. Singapore lowered its forecast for exports this year as a slowing expansion in China crimps demand for the nation’s goods, even as services helped the economy grow more than initially estimated last quarter. Non-oil domestic exports may be unchanged or rise 1 percent this year, compared with a previous forecast of 2 percent to 4 percent, the trade promotion agency said in a statement today. Singapore’s exports in June extended the longest run of declines since the global financial crisis as electronics dropped for an 11th month. Further, Singapore’s exports to the US also fell for a second month in June.
IFIs NEWS (compiled from their websites) BIS - Publication: “Sovereign risk: a world without risk-free assets?” The BIS has publicised the above-stated paper which presents and summarises the proceedings of a one-and-a-half-day seminar on sovereign risk hosted by the BIS in Basel from January 8-9, 2013. http://www.bis.org/publ/bppdf/bispap72.pdf (Publication) http://www.bis.org/publ/bppdf/bispap72.htm (Table of Contents)
IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with Vietnam On June, 24, 2013, the Executive Board of the IMF concluded the Article IV consultation with Vietnam. Executive Directors commended the authorities for significant progress in stabilizing the economy over the past two years, but cautioned that Vietnam faces important internal and external risks in the period ahead. Accordingly, Directors underscored the need to avoid loosening the policy stance at this juncture, and to accelerate structural reforms. http://www.imf.org/external/np/sec/pr/2013/pr13304.htm
IMF – Working Papers
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The IMF has publicised the following working papers:
“Credibility and Crisis Stress Testing” http://www.imf.org/external/pubs/ft/wp/2013/wp13178.pdf “HEAT! A Bank Health Assessment Tool” http://www.imf.org/external/pubs/ft/wp/2013/wp13177.pdf
World Bank – Press Release: World Bank supports Participatory Sustainable Forest Management in Lao PDR On August 8, 2013, the Government of Lao PDR and the World Bank signed a grant agreement of US$ 31.83 million for the Scaling-Up Participatory Sustainable Forest Management (SUPSFM) Project. http://www.worldbank.org/en/news/press-release/2013/08/08/world-bank-supports-participatorysustainable-forest-management-in-lao-pdr (Press Release) http://www.worldbank.org/projects/P130222/la-scaling-up-participatory-sustainable-forestmanagement?lang=en (Project’s Information) FOREIGN CURRENCY EXCHANGE RATES Previous 9-Aug 12-Aug wk's close 6.23 6.12 6.12 6.12 China 7.75 7.76 7.76 7.76 Hong Kong SAR 9,793.00 10,267.00 10,267.00 10,293.00 Indonesia 86.75 96.21 96.21 96.75 Japan 1,064.40 1,112.30 1,112.30 1,113.53 Korea 3.06 3.24 3.24 3.25 Malaysia 41.01 43.48 43.48 43.68 Philippines 1.22 1.26 1.26 1.26 Singapore 30.59 31.24 31.24 31.20 Thailand 20,840.00 21,100.00 21,100.00 21,103.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.00 0.01 -0.25 -0.56 -0.11 -0.31 -0.46 -0.34 0.13 -0.01
2013 YTD (%chg) 1.8 -0.1 -6.2 -9.7 -4.5 -6.6 -6.5 -3.3 -2.8 -1.2
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 2,052.2 21,807.6 4,640.8 13,615.2 1,880.7 1,779.3 6,404.2 3,229.9 1,432.3 500.6
9-Aug 2,052.2 21,807.6 4,640.8 13,615.2 1,880.7 1,779.3 6,404.2 3,229.9 1,432.3 500.6
OVERNIGHT LENDING RATE (IN %) 9-Aug 12-Aug bps change 2.920 3.000 8.00 0.081 0.081 -0.07 5.007 4.899 -10.86 0.068 0.093 2.45 2.500 2.500 0.00 3.000 3.000 0.00 0.214 0.547 33.30 0.050 0.050 0.00 2.500 2.500 0.00 3.600 3.500 -10.00
12-Aug 2,101.3 22,271.3 4,597.8 13,519.4 1,884.8 1,784.6 6,443.8 3,232.2 1,432.3 499.5
% change 2.39 2.13 -0.93 -0.70 0.22 0.30 0.62 0.07 0.00 -0.23
2013 YTD (%chg) -7.4 -4.5 5.8 30.1 -7.2 6.6 9.9 1.0 1.8 19.4
3-MONTH INTERBANK LENDING RATE (IN %)
9-Aug 4.650 0.383 6.134 0.230 2.650 3.200 0.468 0.375 2.598 5.000
12-Aug 4.650 0.383 6.124 0.230 2.650 3.200 0.397 0.374 2.598 5.167
bps change -0.01 0.00 -1.07 0.00 0.00 0.00 -7.10 -0.07 0.00 16.70
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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
8-Aug
bps change -0.900 2.900 0.000 0.000 0.000 0.000 0.000 0.000 0.000 15.500
9-Aug
3.849 2.275 7.649 0.758 3.580 3.940 3.685 2.354 3.890 8.772
3.840 2.304 7.649 0.758 3.580 3.940 3.685 2.354 3.890 8.927
2013 YTD (bps) 62.000 190.800 284.300 57.300 60.000 75.500 -43.040 202.400 69.500 -72.300
CREDIT DEFAULT SWAP (IN BPS) 8-Aug 9-Aug bps change 110.25 107.33 -2.92 China 53.35 53.33 -0.02 Hong Kong SAR 216.40 215.47 -0.93 Indonesia 63.15 62.15 -1.00 Japan 81.35 79.38 -1.97 Korea 121.43 120.47 -0.96 Malaysia 120.30 119.35 -0.95 Philippines 118.57 118.09 -0.48 Thailand 253.38 251.53 -1.85 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 9-Aug 12-Aug % change Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,314.5
1,327.7
1.01
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-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves
2013 28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 28.2
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a
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 n.a 1,254.0 329.7 137.8 82.9 261.1 172.9 n.a
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EXTERNAL LIQUIDITY RATIOS* 3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.8
Int'l Reserves
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.0 1.9 15.7 2.1 2.4 4.8 2.2 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,254.0 2,147.9 0.6 Korea 329.7 122.2 2.7 Malaysia 137.8 32.9 4.2 Philippines 82.9 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 172.9 62.1 2.8 Vietnam n.a 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 latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 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
SINGAPORE
SOUTH KOREA
Indicators
Industrial Production YOY% Capacity Utilization (MoM)% Gross Domestic Product SA (QoQ)% Nominal GDP SA (QoQ)% GDP Annualized SA (QoQ) % GDP (YoY)% GDP SAAR (QoQ)% Export Price Index (MoM)% Export Price Index (YoY)% Import Price Index (MoM)% Import Price Index (YoY)%
Period
Jun F Jun 2Q P 2Q P 2Q P 2Q F 2Q F Jul Jul Jul Jul
Last
Previous
-4.6 -2.3 0.6 0.7 2.6 3.8 15.5 -0.8 -1.5 -0.8 -4.3
-4.8 2.3 1.9 0.6 3.8 3.7 15.2 2.6 -2.0 2.2 -4.3
SELECTED ECONOMIC RELEASES CALENDAR (12-16 AUG 2013) Expected Release Date
8/12/2013
8/13/2013 8/14/2013
Economies
Indicators
Period
JAPAN JAPAN JAPAN JAPAN JAPAN SINGAPORE SINGAPORE SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA PHILIPPINES JAPAN
Industrial Production YOY% Capacity Utilization (MoM)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % GDP (YoY)% GDP (QoQ)% Export Price Index (MoM)% Export Price Index (YoY)% Import Price Index (MoM)% Import Price Index (YoY)% Total Exports (YoY)% Machine Orders YOY%
Jun F Jun 2Q P 2Q P 2Q P 2Q F 2Q F Jul Jul Jul Jul Jun Jun
SOUTH KOREA CHINA PHILIPPINES SINGAPORE
Unemployment Rate (SA)% Actual FDI (YoY)% Overseas Remittances (YoY)% Retail Sales (YoY)%
Jul Jul Jun Jun
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8/15/2013 8/16/2013
INDONESIA PHILIPPINES SOUTH KOREA SINGAPORE SINGAPORE HONG KONG HONG KONG THAILAND
Reference Interest Rate Overseas Remittances (YoY)% Producer Price Index (YoY)% Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% GDP sa (QoQ)% GDP (YoY)% Foreign Reserves (USD bn)
Aug 15 Jun Jul Jul Jul 2Q 2Q Aug 9
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 13 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Most Asian Currencies Declined except for RMB and HKD (Bloomberg) -- The yen declined at 1 percent versus USD after a news report saying the Japanese government is weighing a corporate-tax cut boosted stocks and damped demand for safer assets. Ringgit, Rupiah and Peso also declined by 0.34, 0.26 and 0.21 percent respectively. For RMB and HKD, on the other hand, they slightly advanced by 0.01 percent.
•
Asia Stocks Rise for Fourth Day as Japan’s Topix Advances on Yen (Bloomberg) -- Asian stocks rose for a fourth day, with Japanese shares gaining as the yen weakened after a report Prime Minister Shinzo Abe is considering a corporate-tax cut and data showed machinery orders beat estimates. Hong Kong’s Hang Seng Index rose 1.1 percent, while the Hang Seng China Enterprises Index advanced 2.6 percent to cap its biggest four-day advance since December 2011. China’s Shanghai Composite Index added 0.2 percent. South Korea’s Kospi index jumped 1.5 percent. Singapore’s Straits Times Index gained 0.3 percent.
•
WTI Trades Near One-Week High on Speculation U.S. Supplies Fell (Bloomberg) -- West Texas Intermediate crude traded near the highest price in five days amid speculation that U.S. stockpiles fell for the sixth time in seven weeks as summer driving buoyed demand. Futures fluctuated in New York after rising to the highest close since Aug. 5. U.S. crude inventories dropped by 1.55 million barrels last week, according to a Bloomberg News survey of analysts before an Energy Information Administration report tomorrow.
BREAKING NEWS GLOBAL NEWS •
Europe Growing Again Means Euro Bloc Stimulating Global Economy (Bloomberg) -- The euro area is turning into more of a help than a hindrance for the world economy. With data this week predicted to show the 17-nation bloc is growing again after an unprecedented six quarters of crisis-driven contraction, economists from Barclays Plc to JPMorgan Chase & Co. say such stabilization will restore the region as a prop, if not a powerhouse, for international demand and financial markets.
•
Germany Trims Planned Bond Sales Amid Spending Cuts, Draft Shows (Bloomberg) -- German Chancellor Angela Merkel’s government expects to cut planned 2014 bond sales, predicting increased tax collections and reduced spending will help keep its budget balanced, a draft federal spending plan shows. Germany plans to sell 216.5 billion euros ($287 billion) of bonds in 2014 compared with 240 billion euros this year, the 3,358-page document shows. That includes 107.6 billion euros of bonds with a maturity of at least four years, compared with 114.5 billion euros this year, the provisional plan shows.
•
Singh Taps Curbs as Rupee Drop Fuels Stagflation Danger (Bloomberg) -- India’s latest economic data and a renewed bid to pare a record current-account deficit that’s spurred a
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rupee slide show stagflation conditions persist almost a year after the government started a drive to spur investment. The nation plans to curb imports of gold, silver and some nonessential items, as well as demand for crude oil, Finance Minister Palaniappan Chidambaram said in New Delhi yesterday. It will also make another push for capital inflows, including allowing state-owned financial companies to issue “quasi-sovereign” bonds to finance long-term infrastructure investment. REGIONAL NEWS •
Japan April-June Machinery Orders up at Sharpest Pace in 5 Years (Kyodo) -- Japan's core private-sector machinery orders in the April-June quarter grew at their quickest pace of 6.8 percent in around five years as the yen's slide improved the profitability of exporters and encouraged companies to beef up investment, the government said Tuesday. But the orders, which exclude those for ships as well as those from utilities because of their volatility, were down in June and are expected to dive in the July-September quarter, the Cabinet Office said, suggesting uncertainty over whether capital spending will get on a full-fledged recovery path.
•
China Fines Shanghai-based Gold Shops for Price Manipulation (Bloomberg) -- China has fined five Shanghai-based gold retailers and a local trade association for manipulating jewelery prices, as the government steps up scrutiny of business practices. Shanghai Laofengxiang Co., Shanghai Yuyuan Tourist Mart Co.’s two units and an industry body were among those given a combined fine of 10.59 million yuan ($1.7 million), the National Development and Reform Commission said in a statement. Chow Tai Fook Jewelery Group Ltd., the world’s largest listed jewelry chain, and Chow Sang Sang Holdings International Ltd., which were listed by People’s Daily last month as among companies under investigation, weren’t included in the statement.
•
Hong Kong Office Shortage Spurs Factory Makeovers (Bloomberg) -- Hong Kong investors are turning run-down factories and warehouses into offices to fill a space shortage in the city with the world’s second-highest rents. Redevelopment of vacant industrial spaces has accelerated since 2009 as investors lured by surging office rents seek to exploit the gap between the cost of acquiring the buildings and the potential return from converting them for use by banks, insurers and other business tenants. The government has implemented policy changes since the 1980s to encourage the transformation of unused properties after manufacturing shifted to cheaper locations in mainland China and Southeast Asia.
•
Thai Government to Present Budget Bill to Parliament This Month (Bloomberg) -- Government expects draft bill for fiscal 2014 budget and a bill to finance 2T baht of infrastructure projects will be presented in parliament this month, says Varathep Ratanakorn, minister to the Prime Minister Office. 2014 budget draft bill is expected to be on agenda for second and third readings Aug. 14-15. Infrastructure bill has been submitted to parliament and is awaiting inclusion on the agenda.
IFIs NEWS (compiled from their websites) ADB – Press Release: ADB President Affirms Support for Green, Inclusive Growth in People's Republic of China
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• ADB President Takehiko Nakao agreed with senior government officials of the People’s Republic of China on the need to further deepen their partnership to support green and inclusive growth during a three-day visit to the country. http://www.adb.org/news/adb-president-affirms-support-green-inclusive-growth-peoplesrepublic-china BIS - Consultation: “Recovery of financial market infrastructures” • On August 12, 2013, The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) have published a joint consultative report and a cover note on the Recovery of financial market infrastructures. Comments on the report should be submitted to both the CPSS secretariat (cpss@bis.org) and the IOSCO secretariat (fmirecovery@iosco.org) by Friday, October 11, 2013 http://www.bis.org/press/p130812.htm (Press Release) http://www.bis.org/publ/cpss109.pdf (Consultative Report) http://www.bis.org/publ/cpss109covernote.pdf (Cover Note) BIS – Publications • The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) have published the following joint reports on August 12, 2013. • “Authorities' access to trade repository data” http://www.bis.org/press/p130812a.htm (Press Release) http://www.bis.org/publ/cpss110.pdf (Report) • “Implementation monitoring of Principles for Financial Market Infrastructures (PFMIs) Level 1 assessment report” http://www.bis.org/press/p130812b.htm (Press Release) http://www.bis.org/publ/cpss111.pdf (Report) FSB – Consultation: “Implementation Guidance for the Key Attributes of Effective Resolution Regimes” • On August 12, 2013, the FSB has launched a public consultation on its draft Application of the Key Attributes of Effective Resolution Regimes for Financial Institutions (‘the Key Attributes’) to non-bank financial institutions and on principles governing Information sharing for resolution purposes. Comments on the consultative documents should be submitted to fsb@bis.org by Tuesday, October 15, 2013. http://www.financialstabilityboard.org/press/pr_130812.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130812a.pdf (Consultative Document: “Application of the Key Attributes of Effective Resolution Regimes to Non-Bank Financial Institutions”) http://www.financialstabilityboard.org/publications/r_130812b.pdf (Consultative Document: “Information sharing for resolution purposes”) IFC – Press Release: IFC Invests $50 Million in Indonesian Telecom Tower Company to Improve Mobile Coverage • IFC is investing $50 million in PT Profesional Telekomunikasi Indonesia (Protelindo), the largest independent telecom tower owner and operator in Indonesia, which is expected to improve mobile coverage and power the country’s economic growth. http://ifcext.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/11C012565727163185257BC5002799 D7
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FOREIGN CURRENCY EXCHANGE RATES Previous 12-Aug 13-Aug wk's close 6.23 6.12 6.12 6.12 China 7.75 7.76 7.76 7.76 Hong Kong SAR 9,793.00 10,267.00 10,293.00 10,320.00 Indonesia 86.75 96.21 96.90 97.86 Japan 1,064.40 1,112.30 1,113.53 1,115.08 Korea 3.06 3.24 3.25 3.26 Malaysia 41.01 43.48 43.68 43.77 Philippines 1.22 1.26 1.26 1.26 Singapore 30.59 31.24 31.26 31.27 Thailand 20,840.00 21,100.00 21,105.00 21,095.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.01 0.01 -0.26 -0.98 -0.14 -0.34 -0.21 -0.13 -0.03 0.05
2013 YTD (%chg) 1.8 -0.1 -6.5 -10.8 -4.6 -6.9 -6.7 -3.5 -3.0 -1.2
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 2,052.2 21,807.6 4,640.8 13,615.2 1,880.7 1,779.3 6,404.2 3,229.9 1,432.3 500.6
12-Aug 2,101.3 22,271.3 4,597.8 13,519.4 1,884.8 1,784.6 6,443.8 3,232.2 1,432.3 499.5
OVERNIGHT LENDING RATE (IN %) 12-Aug 13-Aug bps change 3.000 3.240 24.00 0.081 0.081 0.00 4.899 4.900 0.14 0.093 0.095 0.25 2.500 2.500 0.00 3.000 3.000 0.00 0.547 0.314 -23.30 0.051 0.051 0.00 2.500 2.500 0.00 3.500 3.900 40.00
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
9-Aug 3.840 2.304 7.649 0.758 3.580 3.940 3.685 2.354 3.890 8.927
13-Aug 2,106.2 22,541.1 4,634.0 13,867.0 1,913.0 1,793.8 6,554.6 3,242.5 1,447.3 497.7
% change 0.23 1.21 0.79 2.57 1.50 0.52 1.72 0.32 1.05 -0.35
2013 YTD (%chg) -7.2 -3.3 6.6 33.4 -5.8 7.1 11.8 1.3 2.8 19.0
3-MONTH INTERBANK LENDING RATE (IN %)
12-Aug 4.650 0.383 6.124 0.230 2.650 3.200 0.397 0.374 2.598 5.167
12-Aug 3.840 2.286 7.730 0.750 3.530 3.933 3.694 2.376 3.890 8.840
13-Aug 4.650 0.383 6.128 0.230 2.650 3.200 0.315 0.374 2.599 5.200
bps change 0.00 0.00 0.43 0.00 0.00 0.00 -8.20 0.00 0.15 3.30
bps change 0.000 -1.800 8.100 -0.800 -5.000 -0.700 0.900 2.200 0.000 -8.700
2013 YTD (bps) 62.000 189.000 292.400 56.500 55.000 74.800 -42.140 204.600 69.500 -81.000
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CREDIT DEFAULT SWAP (IN BPS) 9-Aug 12-Aug bps change 107.33 105.87 -1.46 China 53.33 52.83 -0.50 Hong Kong SAR 215.47 214.55 -0.92 Indonesia 62.15 61.77 -0.38 Japan 79.38 78.40 -0.98 Korea 120.47 119.99 -0.48 Malaysia 119.35 118.38 -0.97 Philippines 118.09 116.63 -1.46 Thailand 251.53 250.62 -0.91 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 12-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,338.4
13-Aug 1,337.0
% change -0.10
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
2013
31-Oct 30-Nov 31-Dec 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul China 3,287.4 3,297.7 3,311.6 3,395.4 3,442.7 3,534.5 3,514.8 3,496.7 n.a Hong Kong SAR 301.7 305.2 317.3 304.8 303.8 306.5 305.7 303.6 299.9 Indonesia 110.3 111.3 112.8 105.2 104.8 107.3 105.1 98.1 n.a Japan 1,274.2 1,270.9 1,268.1 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 1,254.0 Korea 323.5 326.1 327.0 327.4 327.4 328.8 328.1 326.4 329.7 Malaysia 138.3 139.1 139.7 140.3 139.7 140.3 141.4 136.1 137.8 Philippines 81.7 83.9 83.8 83.6 84.0 83.2 82.0 81.3 82.9 Singapore 254.2 255.8 259.3 259.1 258.2 261.7 258.4 259.8 261.1 Thailand 181.5 181.6 181.6 179.2 177.8 177.8 175.3 170.8 172.9 Vietnam 21.4 23.2 n.a 28.2 n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS* 3 months imports Import cover (Qtrs Short-term Int'l Reserves of goods & of imports Reserves over external debt services covered by short-term debt (US$bn) (US$bn) (US$bn) reserves) China 3,496.7 523.3 565.7 6.7 6.2 Hong Kong SAR 299.9 149.7 745.6 2.0 0.4 Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,254.0 80.1 2,147.9 15.7 0.6 Korea 329.7 155.1 122.2 2.1 2.7 Malaysia 137.8 57.1 32.9 2.4 4.2 Philippines 82.9 17.2 9.8 4.8 8.5 Singapore 261.1 118.2 968.3 2.2 0.3 Thailand 171.3 66.9 62.1 2.6 2.8 Vietnam n.a 30.8 10.0 Notes: * Based on latest available data
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Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 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 JAPAN
Indicators
Total Exports (YoY)% Machine Orders YOY%
Period
Jun Jun
Last
Previous
4.1 4.9
-0.8 16.5
SELECTED ECONOMIC RELEASES CALENDAR (12-16 AUG 2013) Expected Release Date
8/12/2013
8/13/2013 8/14/2013
8/15/2013 8/16/2013
Economies
Indicators
Period
JAPAN JAPAN JAPAN JAPAN JAPAN SINGAPORE SINGAPORE SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA PHILIPPINES JAPAN
Industrial Production YOY% Capacity Utilization (MoM)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % GDP (YoY)% GDP (QoQ)% Export Price Index (MoM)% Export Price Index (YoY)% Import Price Index (MoM)% Import Price Index (YoY)% Total Exports (YoY)% Machine Orders YOY%
Jun F Jun 2Q P 2Q P 2Q P 2Q F 2Q F Jul Jul Jul Jul Jun Jun
SOUTH KOREA CHINA PHILIPPINES SINGAPORE INDONESIA PHILIPPINES SOUTH KOREA SINGAPORE SINGAPORE HONG KONG HONG KONG THAILAND
Unemployment Rate (SA)% Actual FDI (YoY)% Overseas Remittances (YoY)% Retail Sales (YoY)% Reference Interest Rate Overseas Remittances (YoY)% Producer Price Index (YoY)% Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% GDP sa (QoQ)% GDP (YoY)% Foreign Reserves (USD bn)
Jul Jul Jun Jun Aug 15 Jun Jul Jul Jul 2Q 2Q Aug 9
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
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MARKET UPDATE FOR ASEAN+3 14 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Rise a Fifth Day as Typhoon Shuts Hong Kong Market (Bloomberg) -- Asian stocks rose for a fifth day, on course for the longest streak of gains in six weeks, amid low trading volumes after trading in Hong Kong was cancelled due to a typhoon and earnings surged at Tata Steel Ltd. Japan’s Nikkei 225 index rose 1.32 percent. Stock indices in the Philippine and Vietnam gained 1.6 and 1.2 percent respectively. South Korea’s Kospi index rose 0.6 percent. On the other hand, the Shanghai Composite Index retreated 0.3 percent to 2,100.14 at the close.
US Treasuries Little Changed Following 2-Day Drop Before Europe GDP (Bloomberg) -Treasuries were little changed, with 10-year yields four basis points from a two-year high, before a report economists said will show the euro region returned to growth last quarter, damping demand for safer assets. The yield climbed the most in more than a week yesterday after data showed U.S. retail sales increased in July for a fourth month, adding to speculation the economy is strengthening enough for the Federal Reserve to reduce the stimulus program it uses to keep borrowing costs low.
WTI Crude Snaps Three-Day Gain Amid Signs Stockpiles Increased (Bloomberg) -- West Texas Intermediate snapped a three-day rising streak after an industry report showed inventories rose in the U.S., the world’s biggest oil consumer. Brent crude fell from the highest close since April. Futures slid as much as 0.6 percent after advancing 3.3 percent in the past three days. Gasoline stockpiles climbed by 1.7 million barrels, while distillate supplies gained 1.1 million, data from the American Petroleum Institute showed yesterday.
BREAKING NEWS GLOBAL NEWS
Euro Zone Exits Recession in Second Quarter Slightly Faster than Expected (Reuters) -- The 17 countries sharing the euro needed seven quarters to return to growth of 0.3 percent, on a seasonally adjusted basis, in the three months to June, data from the European Union's statistics office Eurostat showed. Confirming a fragmented picture of the rebound, Spain's economy fell by 0.1 percent on the quarter, while Italy and the Netherlands both dropped by 0.2 percent. Bailed euro zone peer Portugal posted a 1.1 percent expansion, showing the fastest growth in the euro zone in the three months to June, data showed.
US Fed Seen Tapering QE Next Month by 65% of Surveyed Economists (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke next month will probably reduce the central bank’s $85 billion in monthly bond purchases, according to 65 percent of economists surveyed by Bloomberg. The Federal Open Market Committee’s first step may be small, with monthly purchases tapered by $10 billion to a $75 billion pace, according to the median estimate in a survey of 48 economists conducted Aug. 9-13. The Fed will end the buying by mid-2014, they said. In a survey last month, half of economists predicted a Fed reduction in bond buying at the next scheduled FOMC meeting Sept. 17-18.
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India Inflation Tops Estimates as Rupee Fans Costs in Rajan Test (Bloomberg) -- Indian inflation accelerated more than economists estimated in July as a plunge in the rupee stoked import costs, adding pressure on the central bank to stay focused on steadying the currency. The wholesale-price index rose 5.79 percent from a year earlier, compared with June’s 4.86 percent climb, the Commerce Ministry said in New Delhi today. The median estimate in a Bloomberg News survey of 34 analysts was for a 5 percent gain.
REGIONAL NEWS
China Plans Faster Capacity Cuts Even as Growth Slows (Bloomberg) -- China will push ahead with efforts to cull excess industrial capacity a year earlier than planned even as economic expansion slows, and will promote spending on information products to stabilize growth, an official said. The government will complete by the end of 2014 its overcapacity reduction plan for the five years through 2015, and will seek to cut further outdated capacity, China National Radio said yesterday, citing Industry Minister Miao Wei.
Japan Regulators OK Plan on Safety Measures for Crippled Fukushima Plant (Kyodo) -- The Nuclear Regulation Authority on Wednesday approved Tokyo Electric Power Co.'s plan on ways to ensure the safety of the Fukushima Daiichi nuclear power plant as the utility moves ahead to decommission the crippled reactors. The approval of the plan is part of the procedures to tighten regulators' oversight of the complex, which was hit by a huge earthquake and tsunami on March 11, 2011, and is still leaking radioactive substances into the outside environment.
Korea Tax increase plan to be rolled back (Korea Times) -- The government has scaled down its plan to collect more taxes from the middle class by overhauling the country’s tax code after its original plan triggered a strong public backlash. Finance Minister Hyun Oh-seok submitted a revised plan to the ruling Saenuri Party Tuesday. The ruling camp will finalize the plan before putting it to a vote at the National Assembly.
Malaysian Palm Output Jumps as Reserves Hold Near 2-Year Low (Bloomberg) -- Palm oil output in Malaysia surged by the most in 10 months in July, beating analysts’ expectations, while reserves in the world’s second-largest supplier stayed near a two-year low, official data showed. Futures declined. Output gained 18 percent to 1.67 million metric tons, the biggest jump since September, according to data from the Malaysian Palm Oil Board. That’s more than the median estimate in a Bloomberg survey for 1.56 million tons.
Myanmar Union Government has made allocation of funds (MNA) – The Ministry of Finance has already made the plan in accordance with the Union Budget Law 2013. The Government prepared to give loans setting aside K 410.972 billion to lend to ministries (Ministry of Information, Ministry of Livestock, Fisheries and Rural Development, Ministry of Electric Power and Ministry of Industry) through the Myanmar Economic Bank with the interest rate of 4 % by Pyidaungsu Hluttaw (parliament) approval. However, ministries would give it back at the end of the budget year.
IFIs NEWS (compiled from their websites) ADB – Publication: “ADB Perceptions Survey – Multinational Survey of Stakeholders 2012” The ADB continues to have a positive impact on the lives of the poor in the Asia and Pacific region, according to a new independent perceptions survey titled “ADB Perceptions Survey –
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Multinational Survey of Stakeholders 2012” commissioned by the organization. Key findings reveal that stakeholders continue to strongly acknowledge ADB’s impact on development. A considerable majority of stakeholders view ADB as a trusted, reliable, and competent organization with excellent knowledge of the region. ADB also receives high marks for its work in improving infrastructure and supporting regional economic cooperation and integration, both above 2009 levels. http://www.adb.org/news/survey-shows-adb-continues-positive-impact-regions-poor (Press Release) http://www.adb.org/sites/default/files/pub/2013/perceptions-survey-2012.pdf (Survey’s Findings) http://www.adb.org/publications/adb-perceptions-survey-2012 (Table of Contents) http://www.adb.org/sites/default/files/perceptions-survey-fact-sheet-2012.pdf (Fact Sheet)
FOREIGN CURRENCY EXCHANGE RATES Previous 13-Aug 14-Aug wk's close 6.23 6.12 6.12 6.12 China 7.75 7.76 7.76 7.76 Hong Kong SAR 9,793.00 10,267.00 10,307.00 10,298.00 Indonesia 86.75 96.21 98.20 98.34 Japan 1,064.40 1,112.30 1,115.08 1,118.74 Korea 3.06 3.24 3.26 3.27 Malaysia 41.01 43.48 43.74 43.77 Philippines 1.22 1.26 1.27 1.27 Singapore 30.59 31.24 31.26 31.33 Thailand 20,840.00 21,100.00 21,100.00 21,090.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.04 0.00 0.09 -0.14 -0.33 -0.45 -0.06 -0.20 -0.22 0.05
2013 YTD (%chg) 1.9 -0.1 -6.3 -11.2 -4.9 -7.3 -6.7 -3.9 -3.2 -1.2
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 2,052.2 21,807.6 4,640.8 13,615.2 1,880.7 1,779.3 6,404.2 3,229.9 1,432.3 500.6
13-Aug 2,106.2 22,541.1 4,652.4 13,867.0 1,913.0 1,795.1 6,554.6 3,244.1 1,459.1 497.7
OVERNIGHT LENDING RATE (IN %) 13-Aug 14-Aug bps change 3.240 3.000 -24.00 0.081 0.081 0.00 4.900 4.936 3.57 0.095 0.093 -0.25 2.500 2.500 0.00 3.000 3.000 0.00 0.314 -0.182 -49.60 0.027 0.027 0.00 2.500 2.500 0.00 3.900 3.925 2.50
14-Aug 2,100.1 22,541.1 4,683.2 14,050.2 1,923.9 1,793.7 6,656.6 3,247.7 1,457.5 503.6
% change -0.29 0.00 0.66 1.32 0.57 -0.08 1.56 0.11 -0.11 1.17
2013 YTD (%chg) -7.4 -3.3 7.7 35.2 -5.3 7.1 13.6 1.4 3.6 20.4
3-MONTH INTERBANK LENDING RATE (IN %)
13-Aug 4.650 0.383 6.128 0.230 2.650 3.200 0.315 0.374 2.599 5.200
14-Aug 4.650 0.383 6.136 0.230 2.650 3.200 0.350 0.374 2.598 5.100
bps change 0.00 0.00 0.78 0.00 0.00 0.00 3.50 0.00 -0.15 -10.00
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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
12-Aug
bps change 11.900 6.900 7.200 -0.500 3.000 -7.600 -2.100 5.200 4.000 -11.500
13-Aug
3.840 2.286 7.730 0.750 3.530 3.933 3.694 2.376 3.890 8.840
3.959 2.355 7.802 0.745 3.560 3.857 3.673 2.428 3.930 8.725
2013 YTD (bps) 73.900 195.900 299.600 56.000 58.000 67.200 -44.240 209.800 73.500 -92.500
CREDIT DEFAULT SWAP (IN BPS) 12-Aug 13-Aug bps change 105.87 101.96 -3.91 China 52.83 52.83 0.00 Hong Kong SAR 214.55 209.82 -4.73 Indonesia 61.77 61.77 0.00 Japan 78.40 76.92 -1.48 Korea 119.99 117.07 -2.92 Malaysia 118.38 116.46 -1.92 Philippines 116.63 115.17 -1.46 Thailand 250.62 251.12 0.50 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 13-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,321.7
14-Aug
% change
1,323.5
0.14
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-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves
2013 28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 28.2
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a
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 n.a 1,254.0 329.7 137.8 82.9 261.1 172.9 n.a
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EXTERNAL LIQUIDITY RATIOS* 3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.8
Int'l Reserves
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.0 1.9 15.7 2.1 2.4 4.8 2.2 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,254.0 2,147.9 0.6 Korea 329.7 122.2 2.7 Malaysia 137.8 32.9 4.2 Philippines 82.9 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 171.3 62.1 2.8 Vietnam n.a 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 latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 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 SOUTH KOREA PHILIPPINES SINGAPORE
Indicators
Actual FDI (YoY)% Unemployment Rate (SA)% Overseas Remittances (YoY)% Retail Sales (YoY)%
Period
Jul Jul Jun Jun
Last
14.0(survey) 3.2 5.6(survey) 3.3(survey)
Previous
20.1 3.2 5.3 3.1
SELECTED ECONOMIC RELEASES CALENDAR (12-16 AUG 2013) Expected Release Date
8/12/2013
8/13/2013 8/14/2013
8/15/2013 8/16/2013
Economies
Indicators
Period
JAPAN JAPAN JAPAN JAPAN JAPAN SINGAPORE SINGAPORE SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA PHILIPPINES JAPAN
Industrial Production YOY% Capacity Utilization (MoM)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % GDP (YoY)% GDP (QoQ)% Export Price Index (MoM)% Export Price Index (YoY)% Import Price Index (MoM)% Import Price Index (YoY)% Total Exports (YoY)% Machine Orders YOY%
Jun F Jun 2Q P 2Q P 2Q P 2Q F 2Q F Jul Jul Jul Jul Jun Jun
SOUTH KOREA CHINA PHILIPPINES SINGAPORE INDONESIA PHILIPPINES SOUTH KOREA SINGAPORE SINGAPORE HONG KONG
Unemployment Rate (SA)% Actual FDI (YoY)% Overseas Remittances (YoY)% Retail Sales (YoY)% Reference Interest Rate Overseas Remittances (YoY)% Producer Price Index (YoY)% Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% GDP sa (QoQ)%
Jul Jul Jun Jun Aug 15 Jun Jul Jul Jul 2Q
Page 5 of 6
HONG KONG THAILAND
GDP (YoY)% Foreign Reserves (USD bn)
2Q Aug 9
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 15 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Decline Amid Mixed Earnings, Fed Stimulus Concern (Bloomberg) -- Asian stocks fell, snapping the regional benchmark’s longest winning streak in six weeks, amid mixed corporate earnings across the region and after economists predicted the Federal Reserve will reduce stimulus next month. Japan’s Nikkei 225 Stock Average dropped 2.1 percent. China’s Shanghai Composite Index dropped 0.9 percent. Both Singapore and the Philippines’s Indices declined 1.1 percent.
Most Asian Currencies Showed Strong against Dollar After Fed’s Bullard Cautions on Optimism (Bloomberg) -- The dollar weakened for a second day against the yen after a U.S. central bank official cautioned against excessive optimism over the economy. Yen appreciated 0.2 percent and both RMB and Won appreciated 0.1 percent. On the other hand, Rupiah weakened 0.8 percent.
WTI Rises for Fifth Day on Egypt Crackdown, U.S. Oil Stockpiles (Bloomberg) -- West Texas Intermediate rose for a fifth day as worsening violence in Egypt fanned concern that Middle East oil supplies may be disrupted and as U.S. crude stockpiles declined for a second week. Futures climbed as much as 0.5 percent in New York, extending the longest rising streak since April. Crude inventories fell by 2.8 million barrels last week.
BREAKING NEWS GLOBAL NEWS
US Fed’s Bullard Urges Caution With Too-Optimistic Forecasts (Bloomberg) -- Federal Reserve Bank of St. Louis President James Bullard, who has backed continued bond purchases by the Fed, said policy makers should be careful in changing course based solely on their economic forecasts, which have proven in the past to be too rosy. Federal Open Market Committee forecasts “have tended to be too optimistic over the last several years,” Bullard, who votes on monetary policy this year, said today in the text of prepared slides for a speech in Paducah, Kentucky. “Given this experience, I think caution is warranted in taking policy action based on forecasts alone.”
Europe Banks Shape Up Five Years After Lehman as ECB Taking Over (Bloomberg) -- Europe’s biggest banks are stepping up efforts to boost capital and trim assets as pressure from regulators and investors increases, half a decade after the global financial crisis began. While the Federal Reserve forced the biggest U.S. banks to clean up their balance sheets eight months after the September 2008 collapse of Lehman Brothers Holdings Inc., European regulators tolerated lower capital levels to keep loans flowing during the sovereign-debt crisis. For Emmanuel Hauptmann, who helps oversee more than $3 billion at Reyl Asset Management SA, steps to bolster reserves and cut leverage are overdue.
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India Fighting Worst Crisis Since ’91 Limits Capital Flows (Bloomberg) -- India increased efforts to stem the rupee’s plunge and stop capital outflows that are pushing the economy toward its biggest crisis in more than two decades. The Reserve Bank of India, whose Governor Duvvuri Subbarao steps down next month, cut the amount local companies can invest overseas without seeking approval to 100 percent of their net worth, from 400 percent, according to a statement late yesterday. Residents can remit $75,000 a year versus the previous $200,000 limit. Rupee forwards rose for the first time this week.
REGIONAL NEWS
China Could Target Oil Firms, Telcos, Banks in Price Probe (Reuters) -- China's powerful price regulator could target the petroleum, telecommunications, banking and auto sectors next in its investigations into violations of the country's anti-trust laws, state media quoted a senior official as saying. The National Development and Reform Commission (NDRC) would look at industries that have an impact on the lives of ordinary Chinese, China Central Television (CCTV) quoted Xu Kunlin, head of the anti-monopoly bureau at the NDRC, as saying on one of its programmes. The NDRC has launched nearly 20 pricing-related probes into domestic and foreign firms in the last three years, according to official media reports and research published by law firms.
Japan’s Government Acknowledges Japan's Prolonged Deflation on Verge of Ending (Kyodo) -The government acknowledges that Japan's prolonged deflation is on the verge of ending while maintaining its upbeat assessment on the overall economy for the second straight month in a monthly economic report for August released Thursday. "Recent price developments indicate that the deflation is ending," the Cabinet Office says in the report, noting that the country's economy is "picking up steadily and shows some movements on the way to recovery." Last month, the government of Prime Minister Shinzo Abe upgraded its view on the Japanese economy for the third straight month, using the word "recovery" for the first time in 10 months and claiming that deflation is "easing."
Korea Finance Plans Bonds as Credit Risk Rises From 3-Week Low (Bloomberg) -- Korea Finance Corp. is marketing dollar-denominated bonds, the sixth South Korean company to borrow overseas in the U.S. currency since May. Credit risk in Asia climbed from a three-week low. The state-owned policy bank plans to sell five-year notes at a spread of about 165 basis points more than Treasuries, according to a person familiar with the matter, who asked not to be named because the terms aren’t set. The cost of insuring corporate and sovereign bonds in the region from non-payment is poised to rise from 134.5 basis points yesterday, the lowest since July 23.
Singapore July Home Sales Drop to Lowest Since December 2009 (Bloomberg) -- Singapore’s home sales in July slid to the lowest since December 2009 as investors balked at new curbs on property loans and developers marketed fewer projects. Home sales fell to 481 units last month, 73 percent lower from a month earlier, according to data from the Urban Redevelopment Authority released today. Sales rose to a record 2,793 units in March.
IFIs NEWS (compiled from their websites) BIS – Working Paper: “Evaluating early warning indicators (EWIs) of banking crises: Satisfying policy requirements”
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The BIS has publicised the captioned working paper. “EWIs of banking crises should ideally be evaluated on the basis of their performance relative to the macro prudential policy maker's decision problem. We translate several practical aspects of this problem - such as difficulties in assessing the costs and benefits of various policy measures as well as requirements for the timing and stability of EWIs - into statistical evaluation criteria. Applying the criteria to a set of potential EWIs, we find that the credit-to-GDP gap and a new indicator, the debt service ratio (DSR), consistently outperform other measures. The credit-to-GDP gap is the best indicator at longer horizons, whereas the DSR dominates at shorter horizons.” http://www.bis.org/publ/work421.pdf IMF – Policy Papers: “Framework Administered Account for Selected Fund Activities” The IMF has publicised the main policy paper which requires the Executive Board’s approval for the establishment of the Financial Access Survey Subaccount (“the Subaccount”) under the terms of the Selected Fund Activities (SFA) Instrument and three accompanying policy papers pertaining to the approval to be obtained for an establishment of the Subaccount in Africa and Australia. http://www.imf.org/external/np/pp/eng/2013/061013a.pdf (Main Policy Paper) http://www.imf.org/external/np/pp/eng/2013/061213a.pdf (Africa Regional Technical Assistance Center West 2 Subaccount) http://www.imf.org/external/np/pp/eng/2013/042213.pdf (Africa Training Institute Subaccount for Selected Fund Activities) http://www.imf.org/external/np/pp/eng/2013/061213.pdf (Government of Australia Subaccount)
FOREIGN CURRENCY EXCHANGE RATES Previous 14-Aug 15-Aug wk's close 6.23 6.12 6.12 6.11 China 7.75 7.76 7.76 7.75 Hong Kong SAR 9,793.00 10,267.00 10,297.00 10,375.00 Indonesia 86.75 96.21 98.14 97.94 Japan 1,064.40 1,112.30 1,118.74 1,117.43 Korea 3.06 3.24 3.27 3.27 Malaysia 41.01 43.48 43.77 43.75 Philippines 1.22 1.26 1.27 1.27 Singapore 30.59 31.24 31.26 31.26 Thailand 20,840.00 21,100.00 21,093.00 21,093.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.11 0.01 -0.75 0.20 0.12 -0.04 0.05 0.05 0.00 0.00
2013 YTD (%chg) 2.0 0.0 -7.0 -10.8 -4.8 -7.3 -6.6 -3.8 -3.0 -1.2
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)
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 2,052.2 21,807.6 4,640.8 13,615.2 1,880.7 1,779.3 6,404.2 3,229.9 1,432.3 500.6
14-Aug 2,100.1 22,541.1 4,699.7 14,050.2 1,923.9 1,793.7 6,656.6 3,248.7 1,460.6 503.6
15-Aug 2,081.9 22,539.3 4,679.6 13,752.9 1,923.9 1,793.8 6,580.7 3,213.3 1,452.3 508.2
% change -0.87 -0.01 -0.43 -2.12 0.00 0.01 -1.14 -1.09 -0.57 0.92
2013 YTD (%chg) -8.3 -3.3 7.7 32.3 -5.3 7.1 12.3 0.4 3.2 21.5
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3-MONTH INTERBANK LENDING RATE (IN %)
OVERNIGHT LENDING RATE (IN %) 14-Aug 3.000 0.081 4.936 0.093 2.500 3.000 -0.182 0.034 2.500 3.925
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
15-Aug 3.310 0.081 4.950 0.093 2.500 3.000 -2.104 0.034 2.500 4.040
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
bps change 31.00 0.00 1.43 0.00 0.00 0.00 -192.20 0.00 0.00 11.50
13-Aug
14-Aug 4.650 0.383 6.136 0.230 2.650 3.200 0.350 0.374 2.598 5.100
14-Aug
3.959 2.355 7.802 0.745 3.560 3.857 3.673 2.428 3.930 8.725
3.950 2.423 7.847 0.756 3.660 3.860 3.683 2.461 3.950 8.917
15-Aug 4.650 0.383 6.151 0.230 2.650 3.200 0.179 0.374 2.598 5.300
bps change 0.02 -0.04 1.57 0.00 0.00 0.00 -17.10 0.00 0.00 20.00
bps change -0.900 6.800 4.500 1.100 10.000 0.300 1.000 3.300 2.000 19.200
2013 YTD (bps) 73.000 202.700 304.100 57.100 68.000 67.500 -43.240 213.100 75.500 -73.300
CREDIT DEFAULT SWAP (IN BPS) 13-Aug 14-Aug bps change 101.96 100.99 -0.97 China 52.83 52.82 -0.01 Hong Kong SAR 209.82 210.28 0.46 Indonesia 61.77 61.27 -0.50 Japan 76.92 75.45 -1.47 Korea 117.07 116.10 -0.97 Malaysia 116.46 115.49 -0.97 Philippines 115.17 114.19 -0.98 Thailand 251.12 250.67 -0.45 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 14-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,336.2
15-Aug 1,339.4
% change 0.24
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+
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INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)
2012
2013
31-Oct 30-Nov 31-Dec 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul China 3,287.4 3,297.7 3,311.6 3,395.4 3,442.7 3,534.5 3,514.8 3,496.7 n.a Hong Kong SAR 301.7 305.2 317.3 304.8 303.8 306.5 305.7 303.6 299.9 Indonesia 110.3 111.3 112.8 105.2 104.8 107.3 105.1 98.1 n.a Japan 1,274.2 1,270.9 1,268.1 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 1,254.0 Korea 323.5 326.1 327.0 327.4 327.4 328.8 328.1 326.4 329.7 Malaysia 138.3 139.1 139.7 140.3 139.7 140.3 141.4 136.1 137.8 Philippines 81.7 83.9 83.8 83.6 84.0 83.2 82.0 81.3 82.9 Singapore 254.2 255.8 259.3 259.1 258.2 261.7 258.4 259.8 261.1 Thailand 181.5 181.6 181.6 179.2 177.8 177.8 175.3 170.8 172.9 Vietnam 21.4 23.2 n.a 28.2 n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS* 3 months imports Import cover (Qtrs Short-term Int'l Reserves of goods & of imports Reserves over external debt services covered by short-term debt (US$bn) (US$bn) (US$bn) reserves) China 3,496.7 523.3 565.7 6.7 6.2 Hong Kong SAR 299.9 149.7 745.6 2.0 0.4 Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,254.0 80.1 2,147.9 15.7 0.6 Korea 329.7 155.1 122.2 2.1 2.7 Malaysia 137.8 57.1 32.9 2.4 4.2 Philippines 82.9 17.2 9.8 4.8 8.5 Singapore 261.1 118.2 968.3 2.2 0.3 Thailand 171.3 66.9 62.1 2.6 2.8 Vietnam n.a 30.8 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 latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 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
INDONESIA PHILIPPINES
Indicators
Reference Interest Rate Overseas Remittances (YoY)%
Period
Aug 15 Jun
Last
6.5 5.8
Previous
6.5 5.3
SELECTED ECONOMIC RELEASES CALENDAR (12-16 AUG 2013) Expected Release Date
8/12/2013
8/13/2013
Economies
JAPAN JAPAN JAPAN JAPAN JAPAN SINGAPORE SINGAPORE SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA PHILIPPINES JAPAN
Indicators
Industrial Production YOY% Capacity Utilization (MoM)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % GDP (YoY)% GDP (QoQ)% Export Price Index (MoM)% Export Price Index (YoY)% Import Price Index (MoM)% Import Price Index (YoY)% Total Exports (YoY)% Machine Orders YOY%
Period
Jun F Jun 2Q P 2Q P 2Q P 2Q F 2Q F Jul Jul Jul Jul Jun Jun
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8/14/2013
8/15/2013 8/16/2013
SOUTH KOREA CHINA PHILIPPINES SINGAPORE INDONESIA PHILIPPINES SOUTH KOREA SINGAPORE SINGAPORE HONG KONG HONG KONG THAILAND
Unemployment Rate (SA)% Actual FDI (YoY)% Overseas Remittances (YoY)% Retail Sales (YoY)% Reference Interest Rate Overseas Remittances (YoY)% Producer Price Index (YoY)% Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% GDP sa (QoQ)% GDP (YoY)% Foreign Reserves (USD bn)
Jul Jul Jun Jun Aug 15 Jun Jul Jul Jul 2Q 2Q Aug 9
The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.
Page 6 of 6
MARKET UPDATE FOR ASEAN+3 16 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Fall as U.S. Jobs Data Spurs Fed Stimulus Concern (Bloomberg) -- Asian stocks fell as investors shied away from riskier assets after an unexpected drop in U.S. jobless claims fueled speculation the Federal Reserve will cut stimulus next month. Chinese shares reversed the biggest intraday surge since March 2009. Indonesia JCI led the decline and registered at -2.3 percent. Both Philippines and Singapore’s indices weakened 0.8 percent. China SSE Composite and Japan Nikkei 225 declined 0.6 and 0.7 percent respectively.
•
WTI Oil Trades Near Two-Week High as Egypt Unrest Fans Concern (Bloomberg) -- West Texas Intermediate crude traded near the highest price in two weeks as an escalating conflict in Egypt fanned concern that oil shipments through the country may be disrupted. Futures were little changed in New York after rising for a fifth day yesterday, capping the longest stretch of gains since April. A government installation near Cairo was attacked and 11 security personnel were gunned down in the latest episode of violence that has killed more than 600 people. U.S. jobless-benefit claims unexpectedly fell last week, bolstering speculation the country may taper economic stimulus.
•
Gold Trades Near Two-Month High as Investors Weigh Demand, Fed (Bloomberg) -- Gold traded near the highest in almost two months in London as investors weighed better physical demand against prospects for less U.S. stimulus. Silver headed for the best week since 2011 after entering a bull market. Gold is set for the biggest weekly gain in five even as signs the U.S. economy is improving fuelled speculation the Federal Reserve will start reducing stimulus. Silver rallied more than 20 percent since June 27 through yesterday’s close, the common definition of a bull market.
BREAKING NEWS GLOBAL NEWS •
Fewer Americans Applied for Unemployment Benefits Last Week in the U.S. (Bloomberg) -According to a Labor Department report, Jobless claims in the week ended Aug. 10 fell to 320,000 from a revised 335,000 a week earlier. The median forecast of economists surveyed by Bloomberg had called for a reading of 335,000. “We got a fantastic jobless claims figure, which really should be a boost to the markets but instead it’s having the opposite effect,” Craig Erlam, a market analyst at Alpari U.K. Ltd. in London, said by telephone. “Tapering is really at the forefront of everyone’s minds.”
•
Germany Chancellor Merkel Says EU Debt Crisis Isn’t Over in Election Rally Speech (Bloomberg) -- Chancellor Angela Merkel said the European debt crisis hasn’t been overcome as she repeated in a speech in northern Germany that governments should cut debt. Speaking at a rally yesterday in the Baltic port city of Luebeck, Merkel at one point referred to the “grave” debt crisis in the past tense. That prompted a man in the back of the crowd in the city’s market square to shout that the crisis is still on. “Right, the euro crisis is not over,” Merkel said after
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pausing and peering into the crowd of about 3,000. “But we’ve already done a few things so that we’ll get through the crisis.” •
Brazil Central Bank to Roll Over Currency Swaps on Real Plunge (Bloomberg) -- Brazil’s central bank will start to roll over more than $5 billion in currency swap contracts after the country’s real touched a 4 1/2-year low. The rollover of 100,800 contracts due Sept. 2 will begin today, the central bank said in a statement posted on its website yesterday. Policy makers will also continue to intervene in the currency futures market, the bank said.
REGIONAL NEWS •
Extreme Poverty Persists in Asia Despite Rapid Growth: ADB Study (Kyodo) -- More than 660 million people in Asia continue to wallow in abject poverty, suffering from hunger and other forms of deprivations despite a dramatic reduction in income poverty amid the region's rapid economic growth, according to a new Asian Development Bank study. The study, titled "Ending Asian Deprivations: Compulsions for a Fair, Prosperous and Equitable Asia" says millions of Asians still earn less than $1.25 per day and are considered "extremely poor." The picture is even bleaker if the nearly poor, or those who earn less than $2 per day, are also counted, according to the study, which would swell the number of poverty-stricken people to more than 1.5 billion, or nearly one in every two Asians.
•
China’s Treasury Holdings Fall Amid Fed Talk on Taper Timing (Bloomberg) -- Holdings of Treasuries in China, the largest foreign lender to the U.S., fell in June for the first time in five months amid discussion by Federal Reserve officials about slowing the pace their bond purchases. China’s stake dropped by 21.5 billion in June, or 1.7 percent, to $1.276 trillion, according to Treasury Department data released yesterday. Yields climbed after June 19 when Fed Chairman Ben S. Bernanke said policy makers might reduce the size of their $85 billion a month in purchases of Treasuries and mortgage securities in coming months.
•
Japan Finance Minister Aso Expresses Reluctance to Cut Corporate Tax Rate (Kyodo) -- Finance Minister Taro Aso expressed reluctance Thursday to cut the effective corporate tax rate, brushing aside speculation that Japan's government may take the measure to cushion the negative impact of a planned sales tax hike on the economy. "Even if we cut the corporate tax rate, it would have little effect" on the economy, Aso said at a press conference, emphasizing that only around 30 percent of companies currently pay the tax while the rest are exempt on the grounds of poor business performance. Aso added he is considering a tax reduction aimed at stimulating private-sector investment.
•
Indonesian Leader Defends Economic Record as Term Winds Down (Bloomberg) -- Indonesian President Susilo Bambang Yudhoyono offered a favorable assessment of his record even as growth slowed before the 2014 elections, saying the government has expanded the middle class and kept the budget deficit low. The budget shortfall has stayed under 3 percent of gross domestic product, unemployment and poverty rates have fallen and the country has achieved an investment-grade rating, Yudhoyono said in an annual speech in Jakarta today ahead of the country’s Independence Day.
•
Thailand’s Rice Eating Hole in Budget Swells Thai Bank Spread (Bloomberg) -- The rising burden of Thailand’s rice-buying program, which incurred estimated losses of more than $4 billion in its
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first year, has undermined demand for bonds of the state-owned bank for farmers. Bank for Agriculture and Agricultural Cooperatives has sold $3 billion of debt this year, the biggest localcurrency issuer in Southeast Asia, with most of the funds used to buy rice at above-market rates to boost rural incomes. The lender’s last four auctions haven’t been fully sold and the spread between its government-guaranteed notes due February 2016 and sovereign paper maturing December 2015 widened eight basis points this year to an unprecedented 34 basis points on Aug. 13. The government lost 137 billion baht ($4.4 billion) in the first year of the program through September 2012 as it sold the grain, government estimates show. •
Thailand Government Supports Revamp of Phonhong Hospital in Lao PDR (Vientiane Times). The government of the Kingdom of Thailand has injected more than LAK9.2 billion (USD1.2 million) for the construction of new facilities at Phonhong district hospital in Vientiane province. The governments of Lao PDR and Thailand yesterday signed a MoU for the hospital development project at the Lao Ministry of Foreign Affairs in Vientiane. If completed on schedule in 2015, the hospital will contribute significantly to the delivery of better healthcare services to local people and those in surrounding districts. The relevant officials from Laos and Thailand will follow up on work progress regularly and report back to their governments.
IFIs NEWS (compiled from their websites) • The ADBI has publicised the following working papers: • “Multilateralizing Asian Regionalism” http://www.adbi.org/files/2013.08.15.wp431.multilateralizing.asian.regionalism.pdf • “Long-term Issues for Fiscal Sustainability in Emerging Asia” http://www.adbi.org/files/2013.08.16.wp432.issues.fiscal.sustainability.emerging.asia.pdf Joint Forum of Basel Committee1 – Consultations • On August 15, 2013, the Joint Forum of Basel Committee has published two documents for public consultation namely Longevity risk transfer markets: market structure, growth drivers and impediments, and potential risks and Point of Sale disclosure in the insurance, banking and securities sectors. Comments on the two consultative documents should be submitted by email to baselcommittee@bis.org by Friday, October 18, 2013. http://www.bis.org/press/p130815.htm (Main Press Release) • “Longevity risk transfer markets: market structure, growth drivers and impediments, and potential” http://www.bis.org/publ/joint31.htm (Press Release) http://www.bis.org/publ/joint31.pdf (Consultative Document) • “Point of Sale disclosure in the insurance, banking and securities sectors” http://www.bis.org/publ/joint32.htm (Press Release) http://www.bis.org/publ/joint32.pdf (Consultative Document) IFC – Press Release: IFC Invests $805 Million in Vietnam in 2013 Fiscal Year to Help Create Jobs and Spur Economic Growth • IFC has invested around $805 million in Vietnam during the 2013 fiscal year 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/0/37E63E81BE275E4F85257BC8002B73 85 IMF – Working Paper: “Dismal Employment Growth in EU Countries: The Role of Corporate Balance Sheet Repair and Dual Labor Markets” • The IMF has publicised the above-stated working paper.
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http://www.imf.org/external/pubs/ft/wp/2013/wp13179.pdf FOREIGN CURRENCY EXCHANGE RATES Previous 15-Aug 16-Aug wk's close 6.23 6.12 6.11 6.11 China 7.75 7.76 7.75 7.75 Hong Kong SAR 9,793.00 10,267.00 10,409.00 10,414.00 Indonesia 86.75 96.21 97.37 97.40 Japan 1,064.40 1,112.30 1,117.43 1,113.59 Korea 3.06 3.24 3.28 3.27 Malaysia 41.01 43.48 43.80 43.70 Philippines 1.22 1.26 1.27 1.27 Singapore 30.59 31.24 31.27 31.28 Thailand 20,840.00 21,100.00 21,093.00 21,098.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.02 0.00 -0.05 -0.03 0.34 0.07 0.22 -0.05 -0.03 -0.02
2013 YTD (%chg) 1.9 0.0 -7.3 -10.3 -4.5 -7.3 -6.5 -3.9 -3.0 -1.2
STOCK MARKET INDEX 2012 close
Previous wk's close 2,052.2 21,807.6 4,640.8 13,615.2 1,880.7 1,779.3 6,404.2 3,229.9 1,432.3 500.6
15-Aug
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)
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
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (IN %) 15-Aug 16-Aug bps change 3.310 3.260 -5.00 0.081 0.082 0.14 4.950 4.950 0.00 0.093 0.093 0.00 2.500 2.500 0.00 3.000 3.000 0.00 -2.104 -0.197 190.70 0.049 0.049 0.00 2.500 2.500 0.00 4.040 4.200 16.00
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
2,081.9 22,539.3 4,685.1 13,752.9 1,923.9 1,792.2 6,580.7 3,220.9 1,453.1 508.2
14-Aug 3.950 2.423 7.847 0.756 3.660 3.860 3.683 2.461 3.950 8.917
16-Aug 2,068.5 22,517.8 4,577.5 13,650.1 1,920.1 1,790.5 6,526.0 3,193.3 1,451.3 507.8
% change -0.64 -0.10 -2.30 -0.75 -0.20 -0.10 -0.83 -0.86 -0.12 -0.08
2013 YTD (%chg) -8.8 -3.4 5.3 31.3 -5.5 6.9 11.3 -0.3 3.1 21.4
3-MONTH INTERBANK LENDING RATE (IN %)
15-Aug 4.650 0.383 6.151 0.230 2.650 3.200 0.179 0.374 2.598 5.300
15-Aug 4.000 2.432 7.996 0.750 3.660 3.867 3.544 2.445 3.960 8.880
16-Aug 4.650 0.384 6.181 0.230 2.650 3.200 0.267 0.374 2.598 5.157
bps change 0.01 0.18 2.93 0.00 0.00 0.00 8.80 0.00 0.00 -14.30
bps change 5.000 0.900 14.900 -0.600 0.000 0.700 -13.900 -1.600 1.000 -3.700
2013 YTD (bps) 78.000 203.600 319.000 56.500 68.000 68.200 -57.140 211.500 76.500 -77.000
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CREDIT DEFAULT SWAP (IN BPS) 14-Aug 15-Aug bps change 100.99 100.48 -0.51 China 52.82 52.35 -0.47 Hong Kong SAR 210.28 215.48 5.20 Indonesia 61.27 61.29 0.02 Japan 75.45 75.94 0.49 Korea 116.10 114.62 -1.48 Malaysia 115.49 116.45 0.96 Philippines 114.19 113.20 -0.99 Thailand 250.67 250.10 -0.57 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 15-Aug Gold Spot 1,366.2 (in US$ per ounce) Sources: Bloomberg & Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
16-Aug
% change
1,364.2
-0.14
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
2013
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 82.9 261.1
Thailand
181.6
181.6
179.2
177.8
177.8
175.3
170.8
172.9
n.a
n.a
n.a
n.a
n.a
25.2 27.8 28.2 Vietnam Note: Data for China and Vietnam refer to FX reserves
31-Aug n.a n.a n.a n.a n.a n.a n.a n.a 172.2 (Aug. 9) n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
(US$bn) 3,496.7 299.9 92.7 1,254.0 329.7 137.8 82.9
3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2
Short-term external debt (US$bn) 565.7 745.6 44.6 2,147.9 122.2 32.9 9.8
Import cover (Qtrs of imports covered by reserves) 6.7 2.0 1.8 15.7 2.1 2.4 4.8
Reserves over short-term debt 6.2 0.4 2.1 0.6 2.7 4.2 8.5
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Singapore 261.1 118.2 968.3 2.2 0.3 Thailand 172.2 66.9 62.1 2.6 2.8 Vietnam 28.2 30.8 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 4Q 2012, except for Indonesia and Korea, which are as of 1Q 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 SINGAPORE SINGAPORE HONG KONG HONG KONG THAILAND
Indicators
Producer Price Index (YoY)% Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% GDP sa (QoQ)% GDP (YoY)% Foreign Reserves (USD bn)
Period
Last
Previous
Jul Jul Jul 2Q 2Q Aug 9
-0.9 -7.6 -0.7 0.8 3.3 172.2
-1.4 -12.4 -8.8 0.2 2.8 172.9
SELECTED ECONOMIC RELEASES CALENDAR (12-16 AUG 2013) Expected Release Date
8/12/2013
8/13/2013 8/14/2013
8/15/2013 8/16/2013
Economies
Indicators
Period
JAPAN JAPAN JAPAN JAPAN JAPAN SINGAPORE SINGAPORE SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA PHILIPPINES JAPAN
Industrial Production YOY% Capacity Utilization (MoM)% Gross Domestic Product (QoQ)% Nominal GDP (QoQ)% GDP Annualized % GDP (YoY)% GDP (QoQ)% Export Price Index (MoM)% Export Price Index (YoY)% Import Price Index (MoM)% Import Price Index (YoY)% Total Exports (YoY)% Machine Orders YOY%
Jun F Jun 2Q P 2Q P 2Q P 2Q F 2Q F Jul Jul Jul Jul Jun Jun
SOUTH KOREA CHINA PHILIPPINES SINGAPORE INDONESIA PHILIPPINES SOUTH KOREA SINGAPORE SINGAPORE HONG KONG HONG KONG THAILAND
Unemployment Rate (SA)% Actual FDI (YoY)% Overseas Remittances (YoY)% Retail Sales (YoY)% Reference Interest Rate Overseas Remittances (YoY)% Producer Price Index (YoY)% Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% GDP sa (QoQ)% GDP (YoY)% Foreign Reserves (USD bn)
Jul Jul Jun Jun Aug 15 Jun Jul Jul Jul 2Q 2Q Aug 9
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 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Indonesia Leads Asian Shares Lower With Stoxx as Grains Advance (Bloomberg) -- Asian shares fell, with losses in emerging markets outweighing gains in Japan, as economies and currencies showed signs of weakening from Indonesia to India. European stocks declined while grains advanced. The Jakarta Composite Index led equities gauges lower, falling 4.7 percent, while the Bangkok SET Index slid 2.1 percent. On the other hand, both China SSE Composite and Japan Nikkei 225 stock indices rose 0.8 percent.
•
Euro Approaches Two-Week High Versus Yen Amid Growth Optimism (Bloomberg) -- The euro approached a two-week high against the yen before German reports this week that analysts say will show the region’s largest economy is gaining momentum. The euro rose 0.1 percent to 130.12 yen at 8:34 a.m. in London after advancing to 130.72 on Aug. 15, the highest level since Aug. 6. The common currency was little changed at $1.3331.
•
WTI Crude Fluctuates as Goldman Raises Brent Forecasts on Supply (Bloomberg) -- West Texas Intermediate oil swung between gains and losses near a two-week high. Goldman Sachs Group Inc. raised its price forecasts for Brent, citing supply disruptions in Libya and Iraq. Futures fluctuated in New York after capping the longest rising streak since April last week as unrest in Egypt fanned concern that Middle East shipments may be at risk. Defense Minister Abdelfatah al-Seesi said yesterday the military won’t allow the country to be destroyed after a week of violence left hundreds dead.
BREAKING NEWS GLOBAL NEWS •
U.S. Home Sales Seen Rising to Three-Year High: U.S. Economy Preview (Bloomberg) -- Home sales probably increased in July to the highest level in more than three years as growing demand for residential real estate bolsters the expansion, economists said before reports this week. Combined purchases of existing and new homes climbed to a 5.64 million annualized pace last month, the fastest clip since November 2009, according to the median forecasts of economists in a Bloomberg survey. Another report may show the world’s largest economy is poised to strengthen.
•
U.K. Growth Forecasts Raised by CBI as Recovery Builds Momentum (Bloomberg) -- The Confederation of British Industry raised its forecasts for U.K. economic growth this year and next as business and consumer confidence strengthens and credit conditions improve. The business lobby’s quarterly forecasts see the economy expanding 1.2 percent this year and 2.3 percent in 2014. That’s up from 1 percent and 2 percent projected in May. The London-based group also said today that unemployment -- which the Bank of England has set as the key indicator for its guidance on policy -- will fall to 7.6 percent next year after staying at its current 7.8 percent in 2013.
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•
India Markets Plunge Pressures Singh as Economic Crisis Deepens (Bloomberg) -- India’s biggest stock market slide in almost two years, surging bond yields and an unprecedented plunge in the rupee are pressuring officials for fresh steps to stem capital outflows and revive a struggling economy. The S&P BSE Sensex Index sank 0.8 percent as of 9:43 a.m. in Mumbai, extending the 4 percent loss on Aug. 16, while the rupee touched an all-time low of 62.46 per dollar. The yield on the government bond due May 2023 rose 8 basis points to 8.98 percent, the highest on a 10-year note since 2008. The market rout underscores the failure of months of measures to contain outflows, from higher interest rates to gold import curbs. Foreigners sold a net $3 billion of Indian stocks and bonds in July as the slowest growth in a decade made Asia’s third-largest economy vulnerable to a pullout of funds from emerging markets.
REGIONAL NEWS •
China’s July Home Prices Rise as Nation Seeks Long-Term Measures (Bloomberg) -- China’s new home prices rose for a third month in all but one city in July, led by gains in the biggest metropolitan centers on anticipation the government will focus on a longer-term housing plan than immediate curbs. Prices climbed in 69 of the 70 cities the government tracked last month from a year earlier, the National Bureau of Statistics said in a statement yesterday, matching the data for May and June. The southern business center of Guangzhou posted the biggest advance, rising 17 percent from a year earlier, while those in Beijing and Shanghai both increased 14 percent. All three cities had their biggest gains since the government changed its methodology for the data in January 2011.
•
Japan, U.S. Pledge Cooperation toward Concluding TPP （Kyodo） -- Japanese economic and fiscal policy minister Akira Amari and U.S. Trade Representative Michael Froman agreed Monday to work together toward a successful conclusion of the Trans-Pacific Partnership free trade talks by the end of the year. Amari, who doubles as the TPP minister, and Froman are scheduled to attend the ministerial meeting on the first two days of the upcoming Brunei round from Aug. 22 through 30. Aiming to forge one of the largest free trade areas in the world, the two sides reaffirmed their commitment to working side by side with 10 other members toward the conclusion.
•
Japan Weak Exports, Higher Imports Show Growth Constraints (Bloomberg) -- Japan’s exports grew at a slower- than-forecast pace while imports swelled in July, highlighting limits on the economy’s growth that could fuel opposition to a planned sales-tax increase. Exports rose 12.2 percent from a year earlier, the Ministry of Finance said in Tokyo today, compared with the 12.8 percent median estimate of 23 economists surveyed by Bloomberg News. Imports climbed 19.6 percent, leaving a trade deficit of 1.024 trillion yen ($10.5 billion). The seasonally adjusted deficit expanded from June to 944.0 billion yen. “The effects of the weaker yen have started boosting export volume,” Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo, said before the release. “A challenge is whether Japan will be able to overcome deflation and achieve a sustainable recovery after a planned sales-tax increase.”
•
Singapore’s Lee to Enhance Housing to Health Care Affordability (Bloomberg) -- Singapore will improve housing affordability and revamp its health-care system as the country strengthens its social safety net, Prime Minister Lee Hsien Loong said. In his annual National Day Rally policy address yesterday, Lee also announced changes to the education system and unveiled long-
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term plans to free up space near the central business district for housing, offices and recreation. The government will provide help to companies struggling as it tightens the intake of foreign labor, he said. •
Thailand Cuts Growth Outlook as Economy Enters Recession (Bloomberg) -- Thailand cut its 2013 growth forecast as the country entered recession for the first time since the global financial crisis, with rising household debt limiting central bank scope to support the economy. Stocks fell. Gross domestic product unexpectedly shrank 0.3 percent in the three months through June from the previous quarter, when it contracted a revised 1.7 percent, the National Economic and Social Development Board said in Bangkok today. Only one of 11 analysts surveyed had predicted a decline. The economy rose a less-than-estimated 2.8 percent from a year earlier.
•
IMF Recommends Vietnam Commit Money to Bank Recapitalization (Bloomberg) -- IMF recommends Vietnam recapitalize its banks as an additional measure to current approach to resolving non-performing loans at country’s banks, says resident representative Sanjay Kalra in Aug. 16 interview. IMF believes “at the end of the day some money should be put in" Kalra said. Vietnam authorities have not told IMF of any decisions regarding recapitalization recommended by agency, Kalra added.
IFIs NEWS (compiled from their websites) IMF – International Conference: Call For Papers—International Conference on Food Price Volatility: Causes and Challenges • From February 27 to 28, 2014, the Research Department of the IMF jointly with the OCP Policy Center and the Center for Technology and Economic Development at New York University will sponsor an international conference on “Food Price Volatility: Causes and Challenges", which will take place in Rabat, Morocco. The organizers invite detailed proposals and preferably draft research papers. Proposals should be submitted by email to HAhir@imf.org and to attention to Mr Hites Ahir no later than Monday, November 18, 2013. http://www.imf.org/external/np/seminars/eng/2013/rabat/index.htm IMF – International Conference: Sixteenth Annual International Banking Conference • In collaboration with the IMF, the Federal Reserve Bank of Chicago will hold its sixteenth annual International Banking Conference from November 7–8, 2013, at the Bank. The purpose of the annual conference is to address current issues affecting international financial markets. The Conference will focus on the theme of “shadow banking” which is a phenomenon that has become widespread internationally and an examination of its implications. Registration for the Conference is to be submitted online and it will be closed as on Wednesday, November 6, 2013. http://www.chicagofed.org/webpages/events/2013/international_conference.cfm (Press Release) http://www.cvent.com/events/sixteenth-annual-international-banking-conference/eventsummary-39c50074967b4785a92b69444be7b0f9.aspx (Registration Portal) https://custom.cvent.com/FAEFFF2A52AD4604952FF81E1F7992AE/files/53e0f181be1b46a9b44 54719ba754960.docx (Conference’s Agenda) IMF – Policy Paper: “Stocktaking the Fund’s Engagement with Regional Financing Arrangements (RFAs)” • The IMF has publicised the captioned policy paper. “Following the global financial crisis of 200809, RFAs have been recognized as an important layer of the global financial safety net. This paper summarizes the current landscape of RFAs and discusses IMF-RFA coordination to date and
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options for enhancing cooperation going forward. In so doing, it intends to contribute to discussions underway at international fora and solicit views from the Fund and RFA memberships on how to enhance cooperation. http://www.imf.org/external/np/pp/eng/2013/041113b.pdf IMF – Working Paper: “Testing the Prebisch-Singer Hypothesis since 1650: Evidence from Panel Techniques that Allow for Multiple Breaks” • The IMF has publicised the above-stated working paper. http://www.imf.org/external/pubs/ft/wp/2013/wp13180.pdf FOREIGN CURRENCY EXCHANGE RATES Previous 16-Aug 19-Aug wk's close 6.23 6.11 6.11 6.12 China 7.75 7.75 7.75 7.75 Hong Kong SAR 9,793.00 10,430.00 10,430.00 10,578.00 Indonesia 86.75 97.53 97.53 97.63 Japan 1,064.40 1,113.59 1,113.59 1,115.68 Korea 3.06 3.28 3.28 3.29 Malaysia 41.01 43.63 43.63 43.78 Philippines 1.22 1.27 1.27 1.27 Singapore 30.59 31.27 31.27 31.37 Thailand 20,840.00 21,098.00 21,098.00 21,095.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.14 0.00 -1.40 -0.10 -0.19 -0.26 -0.34 -0.30 -0.32 0.01
2013 YTD (%chg) 1.8 0.0 -8.7 -10.5 -4.7 -7.6 -6.7 -4.2 -3.3 -1.2
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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
16-Aug 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
OVERNIGHT LENDING RATE (IN %) 16-Aug 19-Aug bps change 3.260 3.470 21.00 0.082 0.082 0.00 4.950 4.950 0.00 0.093 0.093 0.00 2.500 2.500 0.00 3.000 3.000 0.00 -0.197 -0.197 0.00 0.040 0.040 0.00 2.500 2.500 0.00 4.200 4.000 -20.00
SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR
15-Aug 4.000 2.432
19-Aug 2,085.6 22,463.7 4,317.4 13,758.1 1,917.6 1,779.6 6,526.0 3,172.5 1,411.8 511.0
% change 0.83 -0.24 -5.50 0.79 -0.13 -0.48 0.00 -0.78 -2.35 0.64
2013 YTD (%chg) -8.1 -3.6 -0.7 32.4 -5.6 6.3 11.3 -0.9 0.3 22.2
3-MONTH INTERBANK LENDING RATE (IN %)
16-Aug 4.650 0.384 6.181 0.230 2.660 3.200 0.267 0.374 2.598 5.157
16-Aug 3.950 2.474
19-Aug 4.657 0.384 6.189 0.230 2.660 3.200 0.267 0.374 2.598 5.400
bps change 0.70 -0.07 0.79 0.00 0.00 0.00 0.00 0.00 0.00 24.30
bps change -5.000 4.200
2013 YTD (bps) 73.000 207.800
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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
7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971
7.996 0.750 3.660 3.867 3.544 2.445 3.960 8.880
8.130 0.764 3.700 3.832 3.567 2.492 3.990 8.731
13.400 1.400 4.000 -3.500 2.300 4.700 3.000 -14.900
332.400 57.900 72.000 64.700 -54.840 216.200 79.500 -91.900
CREDIT DEFAULT SWAP (IN BPS) 15-Aug 16-Aug bps change 100.48 102.43 1.95 China 52.35 52.34 -0.01 Hong Kong SAR 215.48 228.83 13.35 Indonesia 61.29 61.53 0.24 Japan 75.94 80.36 4.42 Korea 114.62 118.52 3.90 Malaysia 116.45 119.35 2.90 Philippines 113.20 117.60 4.40 Thailand 250.10 260.58 10.48 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 16-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
19-Aug
1,376.6
% change
1,373.7
-0.21
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
2013
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 82.9 261.1
Thailand
181.6
181.6
179.2
177.8
177.8
175.3
170.8
172.9
n.a
n.a
n.a
n.a
n.a
25.2 27.8 28.2 Vietnam Note: Data for China and Vietnam refer to FX reserves
31-Aug n.a n.a n.a n.a n.a n.a n.a n.a 172.2 (Aug. 9) n.a
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EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.8
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.0 1.8 15.7 2.1 2.4 4.8 2.2 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 92.7 44.6 2.1 Japan 1,254.0 2,147.9 0.6 Korea 329.7 122.2 2.7 Malaysia 137.8 32.9 4.2 Philippines 82.9 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 172.2 62.1 2.8 Vietnam 28.2 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 4Q 2012, except for Indonesia and Korea, which are as of 1Q 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
Indicators
CHINA HONG KONG JAPAN JAPAN THAILAND THAILAND
Period
Actual FDI (YoY)% Unemployment Rate SA% Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)%
Jul Jul Jul Jul 2Q 2Q
Last
Previous
14 (survey) 3.3 -1024 12.2 -0.3 2.8
20.1 3.3 -181 7.4 -2.2 5.3
SELECTED ECONOMIC RELEASES CALENDAR (19-23 AUG 2013) Expected Release Date
8/19/2013
8/20/2013 8/21/2013
8/22/2013 8/23/2013
Economies
CHINA HONG KONG JAPAN JAPAN THAILAND THAILAND JAPAN HONG KONG THAILAND MALAYSIA SOUTH KOREA MALAYSIA CHINA MALAYSIA THAILAND SINGAPORE
Indicators
Actual FDI (YoY)% Unemployment Rate SA% Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% All Industry Activity Index (MoM) % CPI - Composite Index (YoY)% Benchmark Interest Rate CPI YoY % External Short-Term Debt (USD bn) Current Account Balance (MYR mn) HSBC Flash China Manufacturing PMI Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI (YoY)%
Period
Jul Jul Jul Jul 2Q 2Q Jun Jul Aug 21 Jul 2Q 2Q Aug Aug 15 Aug 16 Jul
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 20 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Decrease as Rupee and Ringgit Decline (Bloomberg). Asian stocks fell for a fourth day after U.S. Treasury yields reached a two-year high. Nikkei Index, Hong Kong’s Hang Seng Index, Korea’s Kospi Index and Singapore’s STI Index fell by 2.61 percent, 2.20 percent, 1.55 percent, and 1.40 percent, respectively. Meanwhile, the Philippines’ PSEi index remained unchanged at 6,526.0. In the meantime, most Asian currencies lost today. Indonesia’s rupiah lost the most by 1.77 percent, followed by Thailand’s baht by 0.63 percent and Korea’s won by 0.46 percent.
WTI Crude Drops for a Second Day as U.S. Stockpiles Seen Declining (Bloomberg). WTI fell for a second day after snapping the longest advance in almost four months. U.S. government data tomorrow is forecast to show crude stockpiles dropped to the lowest level since September.
Gold Swings Below Two-Month High on Stimulus (Bloomberg). Demand Prospects Gold fluctuated between gains and losses after dropping from a two-month high as investors weighed the prospect of reduced stimulus in the U.S. against increased demand for an alternative investment. Spot gold fell 0.01 percent, and traded at $1,365.9 an ounce at 5:10 p.m. in Singapore.
BREAKING NEWS GLOBAL NEWS
Fed Finds 18 Large Banks Weak in at Least One Capital Area (Bloomberg) -- Five years after one of the most costly financial crises in U.S. history, the 18 largest banks still fall short in at least one of five areas critical to risk management and capital planning, the Federal Reserve said. While many banking companies have improved capital planning techniques and raised capital levels, “there is still considerable room for advancement across a number of dimensions,” central bank supervisors said in a 41-page paper released today in Washington outlining weaknesses and successes in recent stress tests. The Fed didn’t cite any banks by name.
ECB Guidance Doesn’t Rule Out Rate Increase, Bundesbank Says (Bloomberg). The European Central Bank may raise rates if inflation pressure increases, even after it pledged to keep borrowing costs low, according to Germany’s Bundesbank. The ECB’s commitment “is not an imperative statement, and it doesn’t represent a change” in the monetary policy stance, the German central bank said today in its monthly report. “Forward guidance doesn’t rule out an increase in the benchmark rate if greater inflation pressure emerges.” ECB President Mario Draghi said in July for the first time that the ECB will keep interest rates at current levels or lower for an extended period of time. He reiterated his statement this month, trying to assure investors that the Frankfurt-based central bank won’t tighten policy too soon after it cut its benchmark rate to a record low of 0.5 percent in May.
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RBA Signals Rate Cuts Remain on Table as Currency (Bloomberg). Australia’s central bank said the currency’s direction will be important in setting policy and signaled further interest-rate cuts remain a possibility, according to minutes of its Aug. 6 meeting at which it reduced its benchmark rate to a record-low 2.5 percent. “Regarding the communication of this decision, members agreed that the bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further,” the Reserve Bank of Australia said in minutes of the meeting released in Sydney today.
REGIONAL NEWS
Capital Flowing Back to Advanced Economies as Asia Markets Slump (Bloomberg). Asia’s role as the world’s growth engine is waning as economies across the region weaken and investors pull out billions of dollars. The Indian rupee fell to a record low yesterday, Thailand is in recession and Indonesia’s widest current-account deficit pushed the rupiah to the lowest level since 2009. Chinese banks’ bad loans are rising and economists forecast Malaysia will post its second straight quarter of sub-5 percent growth this week. The clouds forming in Asia as liquidity tightens and China’s slowdown curbs demand for commodities and goods are fueling a selloff of emerging-market stocks, reversing a flow of money into the region in favor of nascent recoveries in the U.S. and Europe. Emerging markets from Brazil to Indonesia have raised borrowing costs in 2013 to try to aid their currencies as the prospect of reduced U.S. monetary stimulus curbs demand for assets in developing nations.
Indonesia Stocks Fall 20% From Peak as Outflows Spur Rupiah Drop (Bloomberg). Indonesian stocks headed for the biggest four-day plunge since 2008, sending the benchmark index down more than 20 percent from its peak, amid growing concern that capital outflows will accelerate. The rupiah tumbled. The Jakarta Composite Index declined 5 percent to 4,097.18 as of 11:36 a.m. local time, extending its four-day slide to 13 percent. The gauge has dropped 21 percent from its record closing high on May 20. The rupiah fell 2 percent to 10,704 per dollar, the weakest level since April 2009, prices from local banks show. The cost to insure Indonesian debt against default surged to an almost two-year high yesterday, according to CMA.
Vietnam Sends Plan for Relaxing Foreign Ownership Limits to Dung (Bloomberg). Vietnam moved closer to relaxing restrictions on foreign investors as the Finance Ministry submitted a plan to Prime Minister Nguyen Tan Dung for raising the cap on overseas ownership at some companies. The proposal would allow foreigners to increase holdings of voting shares in “nonconditional” industries to a maximum 60 percent from the current cap of 49 percent. For restricted industries, overseas investors would be able to buy an additional 10 percent of nonvoting shares, on top of the 49 percent limit for voting stock, Son said, without providing details on which companies are restricted.
1st ministerial meeting for 16-nation free trade pact begins (Kyodo). Sixteen Asia-Pacific nations including Japan and China on Monday began their first minister-level negotiations toward the creation of one of the world's largest free trade blocs. In the meeting in Brunei, ministers of the 10 members of the Association of Southeast Asian Nations and their six regional partners discussed ways to proceed with negotiations on lowering and eliminating tariffs for the envisioned Regional Comprehensive Economic Partnership. Japanese trade minister Toshimitsu
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Motegi told reporters after the meeting that the countries will start "substantive negotiations" on market access, dealing with tariffs, from the next round. IFIs NEWS (compiled from their websites) ADBI and Routledge – “Ending Asian Deprivations: Compulsions for a Fair, Prosperous and Equitable Asia”
The ADBI and Routledge have co-published the above-stated book which is a joint study undertaken by ADBI and Lee Kuan Yew School of Public Policy of National University of Singapore (NUS). “This book begins with a discussion of the massive dimensions of deprivations that continue to exist in Asia and emphasizes the crucial role of determined, target driven public action if Asia’s deprived populations are to see substantial improvement in their lives. The problems of the urban poor and migrants who continue to flock to Asia’s cities are highlighted. The book also accentuates the need for an appropriate environment for public action to succeed including strong participatory institutions, effective governance, social protection and regional cooperation.” http://www.adb.org/news/growth-not-enough-end-poverty-and-deprivation-study (Press Release) http://www.adb.org/publications/ending-asian-deprivations-compulsions-fair-prosperous-and-equitableasia (Table of Contents) http://www.adb.org/sites/default/files/ending-asian-deprivations-chapter1.pdf (Chapter 1: Asia’s burden of human’s deprivations – How can they be removed?) http://www.routledge.com/books/details/9780415828666/ (Link for making online purchase of the book) FOREIGN CURRENCY EXCHANGE RATES Previous 19-Aug 20-Aug wk's close 6.23 6.11 6.12 6.12 China 7.75 7.75 7.75 7.75 Hong Kong SAR 9,793.00 10,430.00 10,533.00 10,723.00 Indonesia 86.75 97.53 97.55 97.33 Japan 1,064.40 1,113.59 1,115.68 1,120.85 Korea 3.06 3.28 3.29 3.29 Malaysia 41.01 43.63 43.81 43.88 Philippines 1.22 1.27 1.28 1.28 Singapore 30.59 31.27 31.42 31.62 Thailand 20,840.00 21,098.00 21,095.00 21,095.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.03 0.00 -1.77 0.23 -0.46 -0.02 -0.16 0.13 -0.63 0.00
2013 YTD (%chg) 1.8 -0.1 -10.0 -10.3 -5.1 -7.7 -6.9 -4.3 -4.1 -1.2
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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
19-Aug 2,085.6 22,463.7 4,313.5 13,758.1 1,917.6 1,778.4 6,526.0 3,173.3 1,398.5 511.0
OVERNIGHT LENDING RATE (IN %) 19-Aug 20-Aug bps change 3.470 3.920 45.00 0.082 0.083 0.07 4.950 4.950 0.00
20-Aug 2,072.6 21,970.3 4,175.0 13,396.4 1,887.9 1,745.4 6,526.0 3,128.8 1,363.4 504.8
% change -0.62 -2.20 -3.21 -2.63 -1.55 -1.85 0.00 -1.40 -2.51 -1.22
2013 YTD (%chg) -8.7 -5.8 -3.9 28.9 -7.1 4.2 11.3 -2.3 -3.1 20.7
3-MONTH INTERBANK LENDING RATE (IN %)
19-Aug 4.657 0.384 6.189
20-Aug 4.664 0.384 6.196
bps change 0.63 0.07 0.79
Page 3 of 6
0.093 2.500 3.000 -0.197 0.031 2.500 4.000
Japan Korea Malaysia Philippines Singapore Thailand Vietnam
0.093 2.500 3.000 -0.197 0.031 2.500 4.033
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
0.00 0.00 0.00 0.00 0.00 0.00 3.30
16-Aug
0.230 2.660 3.200 0.267 0.374 2.598 5.400
19-Aug
3.950 2.474 8.130 0.764 3.700 3.832 3.567 2.492 3.990 8.731
4.000 2.582 8.376 0.771 3.750 3.845 3.567 2.480 3.980 8.859
0.230 2.660 3.200 0.267 0.374 2.598 5.320
0.00 0.00 0.00 0.00 0.00 0.00 -8.00
bps change 5.000 10.800 24.600 0.700 5.000 1.300 0.000 -1.200 -1.000 12.800
2013 YTD (bps) 78.000 218.600 357.000 58.600 77.000 66.000 -54.840 215.000 78.500 -79.100
CREDIT DEFAULT SWAP (IN BPS) 16-Aug 19-Aug bps change 102.43 108.30 5.87 China 52.34 52.35 0.01 Hong Kong SAR 228.83 263.06 34.23 Indonesia 61.53 62.02 0.49 Japan 80.36 86.74 6.38 Korea 118.52 126.07 7.55 Malaysia 119.35 128.04 8.69 Philippines 117.60 124.91 7.31 Thailand 260.58 272.35 11.77 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 19-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,366.0
20-Aug 1,365.9
% change -0.01
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+
Page 4 of 6
INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2012
2013
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7 83.8 259.3
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8
31-Jul n.a 299.9 92.7 1,254.0 329.7 137.8 82.9 261.1
Thailand
181.6
181.6
179.2
177.8
177.8
175.3
170.8
172.9
n.a
n.a
n.a
n.a
n.a
25.2 27.8 28.2 Vietnam Note: Data for China and Vietnam refer to FX reserves
31-Aug n.a n.a n.a n.a n.a n.a n.a n.a 172.2 (Aug. 9) n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.8
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.0 1.8 15.7 2.1 2.4 4.8 2.2 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 92.7 44.6 2.1 Japan 1,254.0 2,147.9 0.6 Korea 329.7 122.2 2.7 Malaysia 137.8 32.9 4.2 Philippines 82.9 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 172.2 62.1 2.8 Vietnam 28.2 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 4Q 2012, except for Indonesia and Korea, which are as of 1Q 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
Indicators
JAPAN HONG KONG
Period
All Industry Activity Index (MoM) % CPI - Composite Index (YoY)%
Jun Jul
Last
Previous
-0.6 6.9
1.2 4.1
SELECTED ECONOMIC RELEASES CALENDAR (19-23 AUG 2013) Expected Release Date
8/19/2013
8/20/2013 8/21/2013
Economies
CHINA HONG KONG JAPAN JAPAN THAILAND THAILAND JAPAN HONG KONG THAILAND MALAYSIA SOUTH KOREA MALAYSIA
Indicators
Actual FDI (YoY)% Unemployment Rate SA% Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% All Industry Activity Index (MoM) % CPI - Composite Index (YoY)% Benchmark Interest Rate CPI YoY % External Short-Term Debt (USD bn) Current Account Balance (MYR mn)
Period
Jul Jul Jul Jul 2Q 2Q Jun Jul Aug 21 Jul 2Q 2Q
Page 5 of 6
8/22/2013 8/23/2013
CHINA MALAYSIA THAILAND SINGAPORE
HSBC Flash China Manufacturing PMI Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI (YoY)%
Aug Aug 15 Aug 16 Jul
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 21 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Decline for Fifth Day Ahead of Fed Minutes (Bloomberg) -- Asia’s benchmark stock index fell for a fifth day to trade at the lowest level in six weeks before the release of minutes of the Federal Reserve’s July meeting. Japan’s Topix index fell 0.3 percent, while South Korea’s Kospi index lost 1.1 percent. Singapore’s Straits Times Index slipped 0.6 percent. Hong Kong’s Hang Seng Index dropped 0.7 percent and China’s Shanghai Composite gained less than 0.1 percent.
•
Dollar Strengthens as Investors Await Fed Minutes (Bloomberg) -- The dollar rose the most in a week against the yen as investors awaited the release of minutes from the Federal Reserve’s July meeting for signals on when policy makers may curtail monetary stimulus. Indonesia’s rupiah slumped to a four-year low as emerging-market assets declined. The Fed will publish today its July 30-31 meeting minutes that may offer clues on whether policy makers will start reducing their $85 billion of monthly bond purchases known as quantitative easing.
•
WTI Drops to One-Week Low on Fed Speculation, Libya Start (Bloomberg) -- West Texas Intermediate crude declined to its lowest in more than a week amid speculation the Federal Reserve will reduce economic stimulus and as Libya prepared to open some oil ports closed by labor unrest. The Federal Open Market Committee will publish minutes of a July meeting today, with 65 percent of economists surveyed by Bloomberg News predicting the Fed will taper bond purchases in September. Libya’s Zueitina and Hariga terminals are ready to resume exports, the Oil Ministry said yesterday.
BREAKING NEWS GLOBAL NEWS •
NYSE Said to Choose JPMorgan, Societe Generale for Euronext IPO (Bloomberg) -- NYSE Euronext, the bourse operator being acquired by IntercontinentalExchange Group Inc., has tapped JPMorgan Chase & Co. and Societe Generale SA (GLE) to help arrange the initial public offering of its European equity operations. A stake in the Euronext unit may be sold next year, said four people with knowledge of the matter, asking not to be named because the information isn’t public.
•
Goldman Sachs Said to Send Stock-Option Orders by Mistake (Bloomberg) -- A programming error at Goldman Sachs Group Inc. caused unintended stock-option orders to flood American exchanges yesterday, roiling markets and shaking confidence in electronic trading infrastructure. The size of the losses depends on which trades are canceled.
•
Aussie, Kiwi Fall for Third Day Versus Dollar Before Fed Minutes (Bloomberg) -- The Australian and New Zealand dollars fell for a third day before the Federal Reserve publishes minutes of its last meeting, which may provide clues on when U.S. policy makers plan to slow stimulus that has inflated asset prices around the world. The Aussie extended losses that have made it the
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worst performing Group of 10 currency this year after the Reserve Bank signaled yesterday that more interest rate cuts are possible. New Zealand’s dollar slid to the lowest level in a week as the country’s central bank said new lending curbs could reduce house-price inflation in half. •
Mexico Economy Grows Less Than Expected as Industry Contracts (Bloomberg) -- Mexico’s economy grew less than forecast by any of the analysts surveyed by Bloomberg in the second quarter as industrial production declined on a sluggish U.S. recovery. Gross domestic product expanded 1.5 percent from the year earlier, rebounding from a revised 0.6 percent growth rate in the previous three months. The central bank cut its growth forecast for this year to between 2 and 3 percent this month from 3 to 4 percent on stagnant exports to the U.S. and muted public spending. Growth will accelerate in both the third and fourth quarters, rising to 4 percent next year as the U.S. recovery strengthens and the government passes key economic reforms, according to the median estimate in a Bloomberg survey.
REGIONAL NEWS •
China 7.5% Target Seen in Reach as U.S. Demand Picks Up (Bloomberg) -- China will achieve the government’s 7.5 percent growth target this year as the world’s second-biggest economy stabilizes after a two-quarter slowdown, a Bloomberg News survey of economists indicates. The poll of 52 analysts, conducted from Aug. 15 to Aug. 20, points to China maintaining that pace of expansion in 2014. The survey also suggested that the central bank will widen the yuan’s trading band before year end. A strengthening U.S. economy and Europe’s nascent recovery are improving the outlook for demand for goods from China, as Premier Li Keqiang grapples with containing financial risks.
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Indonesian Stocks Climb First Time in Five Days as Pension Buys (Bloomberg) -- Indonesian stocks rose for the first time in five days after valuations sank to a 14-month low and the nation’s biggest pension fund said it’s buying. The rupiah slid to the weakest level in four years and bonds fell. PT Jamsostek, which oversees about $13 billion, is increasing purchases of the largest Indonesian stocks, President Director Elvyn Masassya said yesterday. The Jakarta index has tumbled at the fastest pace worldwide this quarter amid concern the rupiah’s retreat will fuel the quickest inflation in four years and lead to tighter monetary policy.
•
Thailand Holds Rate as Household Debt Curbs Room to Aid Economy (Bloomberg) -- Thailand kept its benchmark interest rate unchanged for a second straight meeting as rising household debt and capital outflows reduce scope for monetary easing to revive an economy in recession. The Bank of Thailand held its one-day bond repurchase rate at 2.5 percent, with policy committee members voting six to one for the decision, it said in Bangkok today. Nineteen of 20 economists in a Bloomberg News survey predicted the outcome, while one saw a reduction to 2.25 percent as an economic contraction last quarter added to signs of a regional weakening. Bank of Thailand Governor Prasarn Trairatvorakul yesterday said the baht was moving in line with fundamentals and the overall economic situation is “still OK.”
•
Ministries team up to save nation's farmland (Vientiane Times) -- The ministries of Agriculture and Forestry and Public Works and Transport will partner more closely to manage agricultural production areas, aiming to ensure the best farmland is not lost to development projects. The move comes after thousands of hectares of farmland have been appropriated for housing, other
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developments and construction projects in recent years, especially in areas surrounding Vientiane. To better manage agricultural development, ensure domestic food security and promote exports, the two ministries have agreed to allocate priority focal areas for agriculture, by constructing irrigation systems and rural road access to those areas. Many irrigation projects are currently being developed.
IFIs NEWS (compiled from their websites) ADB – Publication: “Key Indicators for Asia and the Pacific 2013” •
Industrialization must be an essential part of the growth formula if Asian countries want to prosper and avoid the middle income trap, as mentioned in the above-stated report published by the ADB. In a special chapter of the report titled “Asia’s Economic Transformation: Where to, How, and How Fast?”, ADB emphasizes that manufacturing is essential to a high productivity service sector, technological innovation, and modernizing agriculture. A special supplement entitled “Framework of Inclusive Growth Indicators 2013” which was published alongside the main report finds that progress toward more inclusive growth has been positive in the 1990s and 2000s on most indicators for the majority of developing economies in Asia. http://www.adb.org/news/asia-cannot-bypass-manufacturing-path-prosperity-adb-report (Press Release) http://www.adb.org/publications/key-indicators-asia-and-pacific-2013 (Table of Contents of the Main Report) http://www.adb.org/sites/default/files/pub/2013/ki2013.pdf (Main Report) http://www.adb.org/sites/default/files/pub/2013/ki2013-special-chapter.pdf (Special Chapter: “Asia’s Economic Transformation: Where to, How, and How Fast?”) http://www.adb.org/sites/default/files/pub/2013/ki2013-special-supplement.pdf (Special Supplement: “Framework of Inclusive Growth Indicators 2013”)
Joint Forum of Basel Committee1 – Publication: “Mortgage insurance: market structure, underwriting cycle and policy implications” • On August 20, 2013, the Joint Forum of Basel Committee has published its final report entitled “Mortgage insurance: market structure, underwriting cycle and policy implications”. The events of the last few years, particularly those in the global financial crisis that began in 2007, demonstrate that mortgage insurance is subject to significant stress in the worst tail events. This report examines the interaction of mortgage insurers with mortgage originators and underwriters. It also implements a set of recommendations directed at policymakers and supervisors which aim at reducing the likelihood of mortgage insurance stress and failure in such tail events. http://www.bis.org/press/p130820.htm (Press Release) http://www.bis.org/publ/joint33.pdf (Report)
1
The Joint Forum was established in 1996 under the aegis of the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) to deal with issues common to the banking, securities and insurance sectors, including the regulation of financial conglomerates. The Joint Forum is comprised of an equal number of senior bank, insurance and securities supervisors representing each supervisory constituency. More information pertaining to the membership details can be found at this URL: http://www.bis.org/bcbs/jointforum.htm
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FOREIGN CURRENCY EXCHANGE RATES
6.12 7.75 10,775.00 97.47 1,117.30 3.29 43.97 1.28 31.82
0.01 0.00 -0.48 -0.21 0.32 -0.20 -0.20 -0.34 -0.57
2013 YTD (%chg) 1.8 -0.1 -10.4 -10.4 -4.8 -7.9 -7.1 -4.5 -4.7
20,840.00 21,098.00 21,100.00 21,095.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation.
0.02
-1.2
2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59
Previous wk's close 6.11 7.75 10,430.00 97.53 1,113.59 3.28 43.63 1.27 31.27
20-Aug 6.12 7.75 10,723.00 97.27 1,120.85 3.29 43.88 1.27 31.64
21-Aug
% change
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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
20-Aug 2,072.6 21,970.3 4,175.0 13,396.4 1,887.9 1,745.4 6,526.0 3,128.8 1,370.9 504.8
OVERNIGHT LENDING RATE (IN %) 20-Aug 21-Aug bps change 3.920 3.900 -2.00 0.083 0.081 -0.14 4.950 4.907 -4.29 0.093 0.093 0.00 2.500 2.500 0.00 3.000 3.000 0.00 -0.197 -0.197 0.00 0.035 0.035 0.00 2.500 2.500 0.00 4.033 4.150 11.70
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 Vietnam Latest data are available on a one-day lag
8.971
21-Aug 2,073.0 21,817.7 4,218.4 13,424.3 1,867.5 1,745.9 6,526.0 3,110.0 1,366.1 502.7
% change 0.02 -0.69 1.04 0.21 -1.08 0.03 0.00 -0.60 -0.34 -0.42
3-MONTH INTERBANK LENDING RATE (IN %)
20-Aug 4.664 0.384 6.196 0.230 2.660 3.200 0.267 0.374 2.598 5.320
21-Aug 4.658 0.384 6.208 0.230 2.660 3.200 0.267 0.374 2.598 5.320
bps change -0.56 0.00 1.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2013 YTD (bps) 81.000 217.000 362.100 56.400 66.000 66.300 -54.840 228.900 78.500 -80.100
4.000 2.582 8.376 0.771 3.750 3.845 3.567 2.480 3.980
4.030 2.566 8.427 0.749 3.640 3.848 3.567 2.619 3.980
bps change 3.000 -1.600 5.100 -2.200 -11.000 0.300 0.000 13.900 0.000
8.859
8.849
-1.000
19-Aug
2013 YTD (%chg) -8.6 -6.4 -2.9 29.1 -8.1 4.3 11.3 -2.9 -2.9 20.2
20-Aug
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CREDIT DEFAULT SWAP (IN BPS) 19-Aug 108.30 China 52.35 Hong Kong SAR 263.06 Indonesia 62.02 Japan 86.74 Korea 126.07 Malaysia 128.04 Philippines 124.91 Thailand
20-Aug 116.60 52.82 277.34 64.49 88.71 138.89 139.55 139.96
bps change 8.30 0.47 14.28 2.47 1.97 12.82 11.51 15.05
272.35 284.22 11.87 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 20-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
21-Aug
1,371.2
% change
1,360.9
-0.76
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 3,395.4 317.3 304.7 304.8 112.8 108.8 105.2 1,268.1 1,267.3 1,258.8 327.0 328.9 327.4 139.7 140.2 140.3 83.8 85.3 83.6 259.3 258.8 259.1 181.6 181.6 179.2 25.2 27.8 28.2 Vietnam Note: Data for China and Vietnam refer to FX reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand
2013
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a
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 82.9 261.1 172.9 n.a
31-Aug n.a n.a n.a n.a n.a n.a n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
(US$bn) 3,496.7 299.9 92.7 1,254.0 329.7 137.8 82.9
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 57.1 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.
Economies
THAILAND MALAYSIA SOUTH KOREA
Expected Release Date
8/19/2013
8/20/2013 8/21/2013
8/22/2013 8/23/2013
DATA RELEASES FOR THE DAY
Indicators
Period
Benchmark Interest Rate CPI YoY % External Short-Term Debt (USD bn)
Aug 21 Jul 2Q
Last
Previous
2.50% 2.0% 119.6
2.50% 2.0% 122.2
SELECTED ECONOMIC RELEASES CALENDAR (19-23 AUG 2013) Economies
CHINA HONG KONG JAPAN JAPAN THAILAND THAILAND JAPAN HONG KONG THAILAND MALAYSIA SOUTH KOREA MALAYSIA CHINA MALAYSIA THAILAND SINGAPORE
Indicators
Actual FDI (YoY)% Unemployment Rate SA% Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% All Industry Activity Index (MoM) % CPI - Composite Index (YoY)% Benchmark Interest Rate CPI YoY % External Short-Term Debt (USD bn) Current Account Balance (MYR mn) HSBC Flash China Manufacturing PMI Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI (YoY)%
Period
Jul Jul Jul Jul 2Q 2Q Jun Jul Aug 21 Jul 2Q 2Q Aug Aug 15 Aug 16 Jul
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 22 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Drop as Fed Minutes Signal Tapering Support (Bloomberg) -- Asian stocks fell, with the regional gauge close to wiping out this year’s gains as it heads for its longest losing streak since November, after Federal Reserve minutes broad support for stimulus cuts. The MSCI Asia Pacific Index dropped 0.7 percent to 129.67 as of 5:11 p.m. in Tokyo. All but one of 10 industry groups fell on the measure. The index pared losses in late trading after German manufacturing grew at a faster-than-expected pace, adding to optimism of global recovery following China’s data.
Philippine Peso Drops to Two-Month Low as Markets Play Catch-Up (Bloomberg) -- The Philippine peso fell the most in two months as stocks and bonds tumbled after local markets reopened following floods and a holiday. The benchmark equities gauge dropped the most since 2008, tracking declines in other Asian markets this week, on signs the Federal Reserve will taper stimulus this year. Bangko Sentral ng Pilipinas will assess whether the peso’s movement is excessive and authorities will “act accordingly” to curb volatility, Governor Amando Tetangco said in an e-mail yesterday. Local financial markets have been shut all week.
Gold Rout Seen Bottoming by Analysts as China Buys: Commodities (Bloomberg) -- The rout in gold that wiped out $56 billion of value this year is spurring consumer demand in China and India, the biggest buyers, and leading JPMorgan Chase & Co. and Bank of America Corp. to say prices are bottoming. While investors from John Paulson to George Soros sold after the bear market began in April as some investors lost their faith in gold as a store of value, the slump boosted sales in Asia.
BREAKING NEWS GLOBAL NEWS
FOMC Minutes Show Broad Support for Tapering Timeline (Bloomberg)-- Federal Reserve policy makers considering when to reduce bond buying were “broadly comfortable” with Chairman Ben S. Bernanke’s plan to taper this year if the economy strengthens, with a few saying a reduction may be needed soon, minutes of their last meeting show. “Almost all committee members agreed that a change in the purchase program was not yet appropriate,” and a few said “it might soon be time to slow somewhat the pace of purchases as outlined in that plan,” according to the record of the Federal Open Market Committee’s July 30-31 gathering released yesterday in Washington.
Aussie Dollar Rallies Against Peers on China Production Recovery (Bloomberg) -- Australia’s dollar rallied against most of its 16 major peers after a private report showed China’s manufacturing expanded for the first time in four months, boosting trade prospects. Australia’s 10-year bond yields climbed to the most in more than a year following advances by U.S. Treasury yields after minutes of the Federal Reserve’s July meeting showed policy makers were “broadly comfortable” with a plan to curtail bond purchases. In China, a preliminary reading on
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the Purchasing Managers’ Index of manufacturing rose to 50.1 in August from 47.7 in July, HSBC Holdings Plc and Markit Economics said today.
India Rupee Drops to Record as Fed Minutes Signal Stimulus Taper (Bloomberg) -- India’s rupee slumped to an all-time low after Federal Reserve minutes showed the U.S. is getting closer to reducing stimulus that has fueled demand for emerging-market assets. Global funds have cut holdings of Indian debt by $10.1 billion since Bernanke first flagged the paring on May 22, leaving the rupee vulnerable to the nation’s current-account deficit.
REGIONAL NEWS
China’s Manufacturing Gains on Stronger Domestic Demand (Bloomberg) -- A Chinese manufacturing index unexpectedly expanded in August from an 11-month low, adding to signs the world’s second-biggest economy is strengthening after a two-quarter slowdown. The preliminary reading of 50.1 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with a final figure of 47.7 in July. The number exceeded all 16 estimates in a Bloomberg News survey and was the first reading since April above the 50 mark that divides contraction from expansion.
Indonesia Cuts Palm Oil Export-Tax to Boost Sales as Prices Drop (Bloomberg) -- Indonesia, the world’s largest palm oil producer, reduced the duty on shipments of the crude variety for the first time in four months to increase sales after prices tumbled to a three-year low. The tax will be cut to 9 percent in September from 10.5 percent this month, Faiz Achmad, director of food and fishery at the Industry Ministry, said in a text message today. The rate will match that of June when it was kept unchanged from May, according to data compiled by Bloomberg.
Labour shortage a major challenge for investors (Vientiane Times) -- Both local and foreign investors operating businesses in Laos have been encountering problems stemming from the chronic labour shortage. Lao PDR is experiencing an annual shortfall of labours in excess of 31,000 people in the garment industry, processing industry, tourism, steel rod production, furniture production association, construction groups, KP industry group, and the companies such as Nikon and Essiloz in the Savannakhet economic zone.
Singapore’s GIC Said to Buy Blackstone’s Broadgate Stake (Bloomberg) -- GIC Pte, the Singapore sovereign-wealth fund, is the buyer of Blackstone Group LP (BX)’s stake in London’s Broadgate office complex, according to two people with knowledge of the transaction. GIC is buying 50 percent of Broadgate, a cluster of 16 office buildings, shops and restaurants on 30 acres (12 hectares) in London’s main financial district, according to the people, who asked not to be named because the deal is private. The purchase is the latest trophy acquisition for GIC, formerly known as Government of Singapore Investment Corp. The fund last year invested in 101 California St., an office tower in San Francisco’s financial district, and in March acquired the Grand Wailea in Maui and four other resorts from a group including Paulson & Co. for $1.5 billion.
IFIs NEWS (compiled from their websites) ADBI – Working Paper: “An Asian Perspective on Global Financial Reforms”
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The ADBI has publicised the captioned working paper. “The purpose of this study is to better understand the likely impact on Asian economies and financial institutions of various recent global financial reforms, including Basel III capital adequacy and liquidity rules. Overall, the authors find that the Basel III capital adequacy rules are likely to have limited impacts on economic growth in Asia, but other financial regulations, including liquidity standards and rules for over-the-counter (OTC) derivatives, could have stunting effects on financial development in the region.” http://www.adbi.org/files/2013.08.21.wp433.asian.perspective.global.financial.reforms.pdf
Enhanced Disclosure Task Force (EDTF) of FSB1 – Publication: “Implementation Progress Report”
On August 21, 2013, the EDTF, a private sector task force formed at the initiative of the FSB on May 10, 2012 published the above-stated report on major banks' actions to improve risk disclosures in their 2012 annual reports in line with the EDTF's October 2012 report. The EDTF's principles and recommendations for improved bank risk disclosures and leading disclosure practices are designed to provide timely information, which can contribute, over time, to improved market confidence in financial institutions. http://www.financialstabilityboard.org/press/pr_130821.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130821a.pdf (Report) http://www.financialstabilityboard.org/publications/r_130821c.pdf (Appendix to Progress Report)
IMF – Publication: “German-Central European Supply Chain - Cluster Report: Staff Report, First Background Note, Second Background Note and Third Background Note”
The IMF has publicised the above-stated reports pertaining to the German-Central European Supply Chain (GCESC). The background notes examine the trade linkages, the evolution of financial linkages and the role of fundamentals and policies observed in the GCESC. http://www.imf.org/external/pubs/ft/scr/2013/cr13263.pdf
1
More information relating to the EDTF can be found at this URL: http://www.financialstabilityboard.org/press/pr_120510.pdf
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FOREIGN CURRENCY EXCHANGE RATES Previous 21-Aug 22-Aug wk's close 6.23 6.11 6.12 6.12 China 7.75 7.75 7.75 7.76 Hong Kong SAR 9,793.00 10,430.00 10,775.00 10,875.00 Indonesia 86.75 97.53 97.68 98.52 Japan 1,064.40 1,113.59 1,117.30 1,122.78 Korea 3.06 3.28 3.29 3.31 Malaysia 41.01 43.63 43.97 44.17 Philippines 1.22 1.27 1.28 1.28 Singapore 30.59 31.27 31.91 32.05 Thailand 20,840.00 21,098.00 21,100.00 21,113.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.04 -0.02 -0.92 -0.85 -0.49 -0.45 -0.44 0.01 -0.44 -0.06
2013 YTD (%chg) 1.8 -0.1 -11.2 -11.3 -5.3 -8.3 -7.5 -4.9 -5.4 -1.3
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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
21-Aug 2,073.0 21,817.7 4,218.4 13,424.3 1,867.5 1,744.9 6,526.0 3,109.0 1,355.1 502.7
OVERNIGHT LENDING RATE (IN %) 21-Aug 22-Aug bps change 3.900 3.400 -50.00 0.081 0.081 0.00 4.907 4.879 -2.86 0.093 0.095 0.25 2.500 2.500 0.00 3.000 3.000 0.00 -0.197 -1.479 -128.20 0.073 0.073 0.00 2.500 2.500 0.00 4.150 4.000 -15.00
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
20-Aug 4.030 2.566 8.427 0.749 3.640 3.848 3.567 2.618 3.980 8.849
22-Aug 2,067.1 21,895.4 4,171.4 13,365.2 1,849.1 1,720.4 6,136.7 3,090.9 1,352.8 496.1
% change -0.28 0.36 -1.11 -0.44 -0.98 -1.40 -5.96 -0.58 -0.17 -1.31
2013 YTD (%chg) -8.9 -6.1 -4.0 28.6 -9.0 2.7 4.7 -3.5 -3.9 18.6
3-MONTH INTERBANK LENDING RATE (IN %)
21-Aug 4.658 0.384 6.208 0.230 2.660 3.200 0.267 0.374 2.598 5.320
21-Aug 4.090 2.534 8.450 0.737 3.670 3.935 3.567 2.611 4.000 8.733
22-Aug 4.662 0.384 6.208 0.230 2.660 3.200 0.251 0.374 2.598 5.050
bps change 0.40 -0.07 0.00 0.00 0.00 0.00 -1.60 0.00 0.00 -27.00
bps change 6.000 -3.200 2.300 -1.200 3.000 8.700 0.000 -0.700 2.000 -11.600
2013 YTD (bps) 87.000 213.800 364.400 55.200 69.000 75.000 -54.840 228.100 80.500 -91.700
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CREDIT DEFAULT SWAP (IN BPS) 20-Aug 21-Aug bps change 116.60 117.57 0.97 China 52.82 52.88 0.06 Hong Kong SAR 277.34 274.79 -2.55 Indonesia 64.49 64.78 0.29 Japan 88.71 87.24 -1.47 Korea 138.89 144.67 5.78 Malaysia 139.55 144.36 4.81 Philippines 139.96 142.84 2.88 Thailand 284.22 291.13 6.91 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 21-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
22-Aug
1,366.7
% change
1,370.0
0.24
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 Philippines 83.8 85.3 83.6 Singapore 259.3 258.8 259.1 Thailand 181.6 181.6 179.2 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 n.a
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a
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 82.9 261.1 172.9 n.a
31-Aug n.a n.a n.a n.a n.a n.a n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines
(US$bn) 3,496.7 299.9 92.7 1,254.0 329.7 137.8 82.9
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 57.1 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
Indicators
MALAYSIA MALAYSIA CHINA
Period
GDP YoY % Current Account Balance (MYR BN) HSBC Flash China Manufacturing PMI
Last
2Q 2Q Aug
4.3% 2.6Bn 50.1
Previous
4.1% 8.7Bn 47.7
SELECTED ECONOMIC RELEASES CALENDAR (19-23 AUG 2013) Expected Release Date
8/19/2013
8/20/2013 8/21/2013
8/22/2013 8/23/2013
Economies
CHINA HONG KONG JAPAN JAPAN THAILAND THAILAND JAPAN HONG KONG THAILAND MALAYSIA SOUTH KOREA MALAYSIA MALAYSIA CHINA MALAYSIA THAILAND SINGAPORE
Indicators
Actual FDI (YoY)% Unemployment Rate SA% Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% All Industry Activity Index (MoM) % CPI - Composite Index (YoY)% Benchmark Interest Rate CPI YoY % External Short-Term Debt (USD bn) GDP YoY % Current Account Balance (MYR BN) HSBC Flash China Manufacturing PMI Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI (YoY)%
Period
Jul Jul Jul Jul 2Q 2Q Jun Jul Aug 21 Jul 2Q 2Q 2Q Aug Aug 15 Aug 16 Jul
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 23 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Rise, Paring Weekly Slide, on Economic Data (Bloomberg) -- Asian stocks rose, paring the benchmark equity gauge’s biggest weekly decline in two months, after reports from Europe to the U.S. boosted confidence in the economic recovery and the yen weakened against the dollar. The MSCI Asia Pacific Index advanced 1.1 percent to 131.02 as of 4:18 p.m. in Hong Kong as nine of the 10 industry groups on the gauge climbed. About five shares rose for every two that fell. The measure dropped 2.5 percent this week amid concern emerging-market economies are slowing and that the Federal Reserve will reduce its unprecedented stimulus program.
Rupiah, Rupee Lead Drop in Asia Currencies as Fed Spurs Outflows (Bloomberg) -- Indonesia’s rupiah and India’s rupee led a drop in Asian currencies this week as foreign funds pulled money from regional assets on speculation the U.S. will soon start tapering stimulus. Thailand entered a recession in the second quarter and Malaysia’s current-account surplus shrank 70 percent, reports showed, prompting the baht and the ringgit to reach the weakest levels since 2010.
Gold Bears Take Over as Fed Members Back Taper Plan: Commodities (Bloomberg) -- Gold traders are the most bearish in nine weeks after Federal Reserve policy makers backed plans to taper stimulus if the economy strengthens, eclipsing a surge in demand for physical metal that drove prices to a two-month high. Twelve analysts surveyed by Bloomberg expect prices to fall next week, eight were bullish and two neutral.
BREAKING NEWS GLOBAL NEWS
Germany’s Second-Quarter Growth Led by Investment Rebound (Bloomberg) -- Germany’s economic growth in the second quarter was driven by consumption and a rebound in investment as a recovery in the 17-nation euro area, its biggest trading partner, bolstered confidence. Capital investment rose 1.9 percent from the three months through March, the first expansion in three quarters, and consumption increased 0.5 percent, data from the Federal Statistics Office in Wiesbaden showed today. Gross domestic product climbed 0.7 percent in the period, the office said, confirming an Aug. 14 estimate. The economy grew 0.5 percent from a year earlier when adjusted for working days.
Nowotny Says Europe’s ‘Good News’ Removes Need for ECB Cut (Bloomberg) -- European Central Bank Governing Council Member Ewald Nowotny said the recent “stream of good news” from the euro-area economy has removed any need to cut interest rates to a fresh record low. “I would not see many arguments now for a rate cut,” Nowotny, who heads Austria’s central bank, said in an interview with Bloomberg Television in Jackson Hole, Wyoming. At the same time, he ruled out an early monetary tightening, saying “the most recent developments will have no immediate effects on the policy of the European Central Bank.” With the euro area emerging from its longest-ever recession last quarter, ECB officials are seeking to quell any
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speculation that they will shift to tighter policy prematurely. President Mario Draghi has pledged to keep the ECB’s benchmark rate at a record low of 0.5 percent for an “extended period,” and board member Peter Praet said on Aug. 6 that “further cuts in policy rates remain an option.”
Jackson Hole Without Bernanke Focuses on Global Policy (Bloomberg) -- The Federal Reserve’s annual monetary conference in Jackson Hole, Wyoming, will probably focus on global central banks as Ben S. Bernanke becomes the first Fed chairman to pass up the meeting since 1988. Bank of Japan Governor Haruhiko Kuroda and Bank of Mexico Governor Agustin Carstens are among the speakers at the three-day symposium held by the Kansas City Fed, entitled “Global Dimensions of Unconventional Monetary Policy.” With Bernanke staying away, there will be no keynote address.
REGIONAL NEWS
ICBC to Lead China’s Big Banks in Posting Slower Profit Gain (Bloomberg) -- Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its three largest local rivals are set to post the slowest earnings growth since 2010 as China’s economy falters and bad loans jump. The four banks will probably report combined second-quarter net income of 207 billion yuan ($34 billion), an increase of 10 percent from a year earlier, according to the median estimate of 11 analysts surveyed by Bloomberg News. Profit at the four largest U.S. banks climbed 35 percent to $20.2 billion. Premier Li Keqiang triggered higher funding costs for banks this year with a crackdown on off-balance-sheet lending aimed at containing risks from an unprecedented credit boom.
Cambodia's rating constrained by narrow economic base and policy limitations (Xinhua) -Moody's Investors Service says that despite rapid growth, the small size and the narrow diversification of Cambodia's economy constrain its B2 rating. The limited effectiveness of monetary policy due to a high rate of dollarization is also a rating constraint.
Lao PDR’s Ministry of Education and Sports spells out education standards required for colleges (Vientiane Times) -- About half of all public and private colleges around the country are likely to meet the standards, which cover various areas such as vision and curriculum, required by the Ministry of Education and Sports and will be allowed to resume their degree courses, although about 80 are yet to be assessed. The ministry is expected to complete its review of the more than 100 institutions by the end of the year after it suspended their degree courses for this academic year.
IFIs NEWS (compiled from their websites) BIS – Working Paper: “Measuring bank competition in China: a comparison of new versus conventional approaches applied to loan markets”
The BIS has publicised the captioned working paper. “Since the 1980s, important and progressive reforms have profoundly reshaped the structure of the Chinese banking system. Many empirical studies suggest that financial reform promoted bank competition in most mature and emerging economies. However, some earlier studies that adopted conventional approaches to measure competition concluded that bank competition in China declined during
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the past decade, despite these reforms. This paper shows both empirically and theoretically that this apparent contradiction is the result of flawed measurement. All in all, our analysis suggests that bank lending markets in China have been more competitive than previously assumed.” http://www.bis.org/publ/work422.pdf IMF – Working Papers
Assessing the Impact and Phasing of Multi-year Fiscal Adjustment: A General Framework – “This paper provides a general framework to assess the output and debt dynamics of an economy undertaking multi-year fiscal adjustment. The framework is applied to stylized advanced and emerging economy examples. It suggests that for a highly-indebted economy undertaking large multi-year fiscal consolidation, high multipliers do not always argue against frontloaded adjustment. The case for more gradual or back-loaded adjustment is strongest when hysteresis effects are in play, but it needs to be balanced against implications for debt sustainability.” http://www.imf.org/external/pubs/ft/wp/2013/wp13182.pdf
Capital Flows are Fickle: Anytime, Anywhere – “Has the unprecedented financial globalization of recent years changed the behavior of capital flows across countries? Using a newly constructed database of gross and net capital flows since 1980 for a sample of nearly 150 countries, this paper finds that private capital flows are typically volatile for all countries, advanced or emerging, across all points in time. The findings suggest that fickle capital flows are an unavoidable fact of life to which policymakers across all countries need to continue to manage and adapt.” http://www.imf.org/external/pubs/ft/wp/2013/wp13183.pdf
OECD – Press Release: OECD appoints new Deputy Secretary-General
Mr William C. Danvers has been appointed Deputy Secretary-General of the OECD and he will take up his functions in early September. Mr Danvers, an American citizen, will focus on OECD’s regional initiatives in South East Asia, the MENA region, Latin America and Africa, as well as oversee the accession processes of candidate countries. He will also further develop OECD work on investment, competition and the fight against corruption; on innovation; science and technology; corporate affairs, and private sector development; as well as follow the standard setting activities linked to these themes. Prior to this appointment, he was the Deputy Chief of Staff for the Secretary of State of the United States. http://www.oecd.org/newsroom/oecd-appoints-new-deputy-secretary-general.htm
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FOREIGN CURRENCY EXCHANGE RATES Previous 22-Aug 23-Aug wk's close 6.23 6.11 6.12 6.12 China 7.75 7.75 7.76 7.76 Hong Kong SAR 9,793.00 10,430.00 10,875.00 11,058.00 Indonesia 86.75 97.53 98.72 98.83 Japan 1,064.40 1,113.59 1,122.78 1,117.00 Korea 3.06 3.28 3.31 3.30 Malaysia 41.01 43.63 44.17 44.20 Philippines 1.22 1.27 1.28 1.28 Singapore 30.59 31.27 32.04 31.94 Thailand 20,840.00 21,098.00 21,113.00 21,161.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.01 0.01 -1.65 -0.11 0.52 0.27 -0.08 0.23 0.31 -0.23
2013 YTD (%chg) 1.8 -0.1 -12.7 -11.6 -4.8 -8.0 -7.6 -4.6 -5.0 -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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
22-Aug 2,067.1 21,895.4 4,171.4 13,365.2 1,849.1 1,720.4 6,136.7 3,089.4 1,351.8 496.1
OVERNIGHT LENDING RATE (IN %) 22-Aug 23-Aug bps change 3.400 3.000 -40.00 0.081 0.083 0.14 4.879 4.871 -0.71 0.095 0.093 -0.25 2.500 2.500 0.00 3.000 3.000 0.00 -1.479 -0.112 136.70 0.066 0.066 0.00 2.500 2.500 0.00 4.000 3.900 -10.00
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
21-Aug 4.090 2.534 8.450 0.737 3.670 3.935 3.567 2.611 4.000 8.733
23-Aug 2,057.5 21,863.5 4,169.8 13,660.6 1,870.2 1,722.9 6,161.2 3,092.3 1,346.9 486.8
% change -0.47 -0.15 -0.04 2.21 1.14 0.15 0.40 0.09 -0.37 -1.87
2013 YTD (%chg) -9.3 -6.2 -4.1 31.4 -7.9 2.9 5.1 -3.4 -4.3 16.4
3-MONTH INTERBANK LENDING RATE (IN %)
22-Aug 4.662 0.384 6.208 0.230 2.660 3.200 0.251 0.374 2.598 5.050
22-Aug 4.060 2.646 8.443 0.754 3.730 3.935 3.638 2.710 4.260 8.712
23-Aug 4.662 0.384 6.210 0.230 2.660 3.200 0.222 0.374 2.598 5.133
bps change 0.00 0.00 0.21 0.00 0.00 0.00 -2.90 0.00 0.00 8.30
bps change -3.000 11.200 -0.700 1.700 6.000 0.000 7.100 9.900 26.000 -2.100
2013 YTD (bps) 84.000 225.000 363.700 56.900 75.000 75.000 -47.740 238.000 106.500 -93.800
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CREDIT DEFAULT SWAP (IN BPS) 21-Aug 22-Aug bps change 117.57 117.58 0.01 China 52.88 54.83 1.95 Hong Kong SAR 274.79 277.09 2.30 Indonesia 64.78 67.98 3.20 Japan 87.24 88.71 1.47 Korea 144.67 157.29 12.62 Malaysia 144.36 153.95 9.59 Philippines 142.84 158.36 15.52 Thailand 291.13 300.34 9.21 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 22-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
23-Aug
1,376.1
% change
1,376.5
0.02
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 n.a
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a
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 n.a n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore
(US$bn) 3,496.7 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5
Short-term external debt (US$bn) 565.7 745.6 46.3 2,147.9 119.6 32.9 9.8 968.3
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1
Reserves over short-term debt 6.2 0.4 2.0 0.6 2.8 4.2 8.5 0.3
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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
Indicators
MALAYSIA THAILAND SINGAPORE
Period
Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI (YoY)%
Aug 15 Aug 16 Jul
Last
$137.9B $172.0B 1.9%
Previous
$137.8B $172.2B 1.8%
SELECTED ECONOMIC RELEASES CALENDAR (19-23 AUG 2013) Expected Release Date
8/19/2013
8/20/2013 8/21/2013
8/22/2013 8/23/2013
Economies
CHINA HONG KONG JAPAN JAPAN THAILAND THAILAND JAPAN HONG KONG THAILAND MALAYSIA SOUTH KOREA MALAYSIA MALAYSIA CHINA MALAYSIA THAILAND SINGAPORE
Indicators
Actual FDI (YoY)% Unemployment Rate SA% Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % Gross Domestic Product SA (QoQ)% Gross Domestic Product (YoY)% All Industry Activity Index (MoM) % CPI - Composite Index (YoY)% Benchmark Interest Rate CPI YoY % External Short-Term Debt (USD bn) GDP YoY % Current Account Balance (MYR BN) HSBC Flash China Manufacturing PMI Foreign Reserves (USD bn) Foreign Reserves (USD bn) CPI (YoY)%
Period
Jul Jul Jul Jul 2Q 2Q Jun Jul Aug 21 Jul 2Q 2Q 2Q Aug Aug 15 Aug 16 Jul
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 26 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS
Asian Stocks Rise as U.S. Housing Data Eases Fed Concerns (Bloomberg) -- Asian stocks rose for a second day after a slump in U.S. home sales eased speculation the Federal Reserve will reduce economic stimulus next month. The MSCI Asia Pacific Index advanced 0.2 percent to 131.63 as of 5 p.m. in Singapore, with eight of the gauge’s 10 industry groups rising. “Any disappointing economic reading out of the U.S. will be interpreted as a sign that perhaps the economy is not ready for tapering in September and perhaps the Fed may hold off,” said Stan Shamu, a strategist at IG Ltd. in Melbourne.
Gold Swings as Investors Weigh Stimulus After Home Sales Decline (Bloomberg) -- Gold swung between gains and losses after climbing to the highest level since June as investors weighed the outlook for stimulus in the U.S., with a slump in new-home sales boosting the case for sustained debt-buying. Bullion for immediate delivery rose as much as 0.7 percent to $1,407.18 an ounce, the highest since June 7, before dropping as much as 0.5 percent. The metal was 0.2 percent lower at $1,394.88 at 16:20 a.m. in Singapore. Gold for December delivery rose as much as 0.8 percent to $1,407 on the Comex, also the highest since June 7.
Dollar Falls Versus Yen Before Durable-Goods Report (Bloomberg) -- The dollar weakened for the first time in four days against the yen before a U.S. government report that economists said will show durable goods orders declined in July. The Bloomberg U.S. Dollar Index was little changed as investors weigh whether the economy is strong enough to support a reduction in Federal Reserve stimulus next month. “The market’s perception on Fed tapering in September remains divided,” said Junichi Ishikawa, an analyst at IG Markets Securities Ltd. in Tokyo. “The dollar will continue to be swayed by economic data.”
BREAKING NEWS GLOBAL NEWS
Fed Officials Rebuff Coordination Calls as QE Taper Looms (Bloomberg) -- Federal Reserve officials rebuffed international calls to take the threat of fallout in emerging markets into account when tapering U.S. monetary stimulus. The risk that the Fed’s trimming of bond buying will hurt economies from India to Turkey by sparking an exodus of cash and higher borrowing costs was a dominant theme in Jackson Hole. Even as the Fed officials advised emerging markets to protect themselves, they were pressed by the International Monetary Fund and Mexican central banker Agustin Carstens to spell out their intentions better in the interest of safeguarding global growth.
ECB Council Members Split in Jackson Hole Over Room for Rate Cut (Bloomberg) -- European Central Bank Governing Council members split over whether scope remains for further interestrate cuts as evidence mounts that the euro-area economy is on the mend. Policy makers still can’t rule out lowering the benchmark rate from the record low of 0.5 percent, Bank of Cyprus Governor Panicos Demetriades said in an Aug. 24 interview. By contrast, Bank of Austria
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Governor Ewald Nowotny said on Aug. 22 that he doesn’t see “many arguments now for a rate cut” after the recent “stream of good news.” Meanwhile, the ECB still has “room to maneuver” after proving a “strong support” for the recovery, International Monetary Fund Managing Director Christine Lagarde told Bloomberg Television’s Sara Eisen in Jackson Hole. She urged efforts to “unclog” bank lending.
Germany Must Pay for Euro, Merkel Challenger Steinbrueck Says (Bloomberg) -- Chancellor Angela Merkel’s challenger in next month’s election said Germany will again have to pay the bill to save the euro and that the chancellor has failed to alert voters about a looming third Greek rescue. Social Democrat Peer Steinbrueck said Merkel should have been up front about the cost of rescuing the euro area since 2010, when the first bailout package was set up. Greece will “most likely” need new funds, Finance Minister Wolfgang Schaeuble said, adding that the amount will be “much lower” than previous packages and won’t be determined until next year. Greece moved to the center of the German election campaign four weeks before election day.
REGIONAL NEWS
China Growth Can Sink Closer to 6% on Waning Job Needs: Economy (Bloomberg) -- Chinese officials shifting the economy away from exports and investment can allow growth to sink closer to 6 percent within the next five years without triggering a destabilizing jump in unemployment. The pace of expansion needed to absorb new entrants to the labor force will slip to 6.4 percent in 2018 from 7.3 percent this year, according to the median forecast in a Bloomberg News survey of 12 economists last month. Premier Li Keqiang is targeting a 7.5 percent expansion in 2013.
Japan Sales-Tax Decision Due by Early October, Amari Says (Bloomberg) -- Japanese Prime Minister Shinzo Abe will make a decision on a sales-tax increase by early October, before a gathering of Asia-Pacific leaders in Indonesia, according to Economy Minister Akira Amari. Abe will decide “at the latest” before a summit of leaders from the Asia-Pacific Economic Cooperation forum, which starts in Indonesia on Oct. 7, Amari said yesterday on NHK television. The Bank of Japan will release a third-quarter Tankan survey of business sentiment on Oct. 1, and Abe may also consider those figures, Amari said.
US provides funding for UXO clearance (Vientiane Times)--The United States' Department of State's Office of Weapons Removal Abatement signed an MoU in Vientiane on Friday to provide more than US$1.8 million for the clearance of unexploded ordnance (UXO) in Lao PDR. Under the project, work has already begun to clear explosive devices on land required for development in the provinces of Xieng Khuang and Khammuan. Clearance in these areas started in the middle of last year, undertaken by the Mines Advisory Group (MAG). There is a great need for further UXO clearance in Lao PDR from now until 2015. Work needs to be carried out in more than 300 focal development points, which have been identified by the Lao government as priority areas.
IFIs NEWS (compiled from their websites) IMF – Speech: The Global Calculus of Unconventional Monetary Policies
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The IMF has publicised the speech made by Ms Christine Lagarde, Managing Director of the IMF pertaining to the above-stated topic at a symposium held at Jackson Hole, United States of Wyoming on August 23, 2013. http://www.imf.org/external/np/speeches/2013/082313.htm
OECD and Nature Publishing Group (NPG) – Publication: “Future Flood Losses in Major Coastal Cities”
With reference to the above-stated piece of news article published in the Nature Climate Change Magazine1 which is part of an ongoing OECD project to explore the policy implications of flood risks due to climate change and economic development, it has been noted that climate change combined with rapid population increases, economic growth and land subsidence could lead to a more than 9-fold increase in the global risk of floods in large port cities between now and 2050. http://www.oecd.org/newsroom/future-flood-losses-in-major-coastal-cities.htm (Press Release) http://www.nature.com/nclimate/journal/vaop/ncurrent/full/nclimate1979.html (News Article) FOREIGN CURRENCY EXCHANGE RATES Previous 23-Aug 26-Aug wk's close 6.23 6.11 6.12 6.12 China 7.75 7.75 7.75 7.76 Hong Kong SAR 9,793.00 10,430.00 11,058.00 10,848.00 Indonesia 86.75 97.53 98.72 98.49 Japan 1,064.40 1,113.59 1,117.00 1,112.64 Korea 3.06 3.28 3.30 3.31 Malaysia 41.01 43.63 44.20 44.24 Philippines 1.22 1.27 1.28 1.28 Singapore 30.59 31.27 31.85 31.97 Thailand 20,840.00 21,098.00 21,160.00 21,135.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.02 -0.01 1.94 0.23 0.39 -0.24 -0.09 -0.06 -0.38 0.12
2013 YTD (%chg) 1.8 -0.1 -11.0 -11.3 -4.4 -8.3 -7.7 -4.6 -5.1 -1.4
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
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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
23-Aug 2,057.5 21,863.5 4,169.8 13,660.6 1,870.2 1,721.1 6,161.2 3,088.9 1,338.1 486.8
OVERNIGHT LENDING RATE (IN %) 23-Aug 26-Aug bps change 3.000 3.050 5.00 0.083 0.082 -0.07
26-Aug 2,096.5 22,005.3 4,136.0 13,636.3 1,887.9 1,725.9 6,161.2 3,087.8 1,340.3 490.5
% change 1.90 0.65 -0.81 -0.18 0.95 0.28 0.00 -0.03 0.16 0.76
2013 YTD (%chg) -7.6 -5.6 -4.8 31.2 -7.1 3.1 5.1 -3.6 -4.8 17.3
3-MONTH INTERBANK LENDING RATE (IN %)
23-Aug 4.662 0.384
26-Aug 4.662 0.384
bps change -0.01 0.00
1
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4.871 0.093 2.500 3.000 -0.112 0.065 2.500 3.900
Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
4.867 0.093 2.500 3.000 -0.112 0.065 2.500 3.760
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
-0.43 0.00 0.00 0.00 0.00 0.00 0.00 -14.00
6.210 0.230 2.660 3.200 0.222 0.374 2.598 5.133
22-Aug
23-Aug
4.060 2.646 8.443 0.754 3.730 3.935 3.638 2.710 4.260 8.712
4.060 2.622 8.474 0.769 3.720 3.997 3.727 2.716 4.180 8.883
6.214 0.230 2.660 3.200 0.222 0.374 2.598 5.050
0.43 0.00 0.00 0.00 0.00 0.00 0.00 -8.30
bps change 0.000 -2.400 3.100 1.500 -1.000 6.200 8.900 0.600 -8.000 17.100
2013 YTD (bps) 84.000 222.600 366.800 58.400 74.000 81.200 -38.840 238.600 98.500 -76.700
CREDIT DEFAULT SWAP (IN BPS) 22-Aug 23-Aug bps change 117.58 113.18 -4.40 China 54.83 54.29 -0.54 Hong Kong SAR 277.09 270.88 -6.21 Indonesia 67.98 68.46 0.48 Japan 88.71 85.27 -3.44 Korea 157.29 151.48 -5.81 Malaysia 153.95 144.33 -9.62 Philippines 158.36 152.06 -6.30 Thailand 300.34 296.06 -4.28 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 23-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
26-Aug
1,397.7
% change
1,394.2
-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
2013 31-Jan
28-Feb
31-Mar
30-Apr
31-May
30-Jun
31-Jul
31-Aug
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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
3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a
3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a
3,496.7 303.6 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a
n.a 299.9 92.7 1,254.0 329.7 137.8 83.2 261.1 172.9 n.a
n.a n.a n.a n.a n.a n.a n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 92.7 46.3 2.0 Japan 1,254.0 2,147.9 0.6 Korea 329.7 119.6 2.8 Malaysia 137.8 32.9 4.2 Philippines 83.2 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 172.2 62.1 2.8 Vietnam 28.2 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
Indicators
VIETNM THAILAND SINGAPORE
CPI YoY Customs Trade Balance Industrial Production YoY
Period
Aug Jul Jul
Last
7.50% -2,281M 2.7%
Previous
7.29% -1,915M -5.9%
SELECTED ECONOMIC RELEASES CALENDAR (26-30 AUG 2013) Expected Release Date
8/26/2013 8/27/2013
8/28/2013 8/29/2013
8/30/2013
Economies
THAILAND SINGAPORE HONG KONG CHINA SOUTH KOREA PHILIPPINES THAILAND SOUTH KOREA JAPAN JAPAN PHILIPPINES HONG KONG SOUTH KOREA THAILAND
Indicators
Customs Trade Balance Industrial Production YoY Trade Balance Industrial Profits YTD YoY Consumer Confidence Trade Balance Mfg Production Index ISIC NSA Y BoP Current Account Balance Retail Trade YoY Retail Sales MoM GDP YoY Budget Balance HKD Industrial Production YoY Foreign Reserves
Period
Jul Jul Jul Jul Aug Jun Jul Jul Jul Jul 2Q Jul Jul Aug 23
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8/26-31/2013
THAILAND THAILAND THAILAND JAPAN JAPAN JAPAN JAPAN VIETNAM VIETNAM VIETNAM
Trade Balance BoP Current Account Balance Overall Balance Overall Household Spending YoY Jobless Rate National CPI Ex Fresh Food YoY Tokyo CPI Ex Fresh Food YoY Retail Sales YTD YoY Industrial Production YoY Trade Balance
Jul Jul Jul Jul Jul Jul Aug Aug 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 27 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Fall as U.S. Vows to Hold Syria Accountable (Bloomberg) -- Asian stocks fell, with the regional benchmark index poised to snap a two-day gain, as the U.S. vows to hold Syria’s government liable for deadly chemical weapons attacks on its people, damping investors’ risk appetite. The MSCI Asia Pacific Index fell 0.6 percent to 130.66 as of 3:40 p.m. in Tokyo, with more than three shares dropping for each that gained on the gauge. Japan’s Nikkei 225 index slid 0.7 percent and Australia’s S&P/ASX 200 added 0.1 percent. South Korea’s Kospi Index fell 0.1 percent as data showed the nation’s consumer confidence was unchanged in August. Hong Kong’s Hang Seng Index declined 0.6 percent. Taiwan’s Taiex Index slid 0.9 percent and Singapore’s Straits Times Index dropped 1.5 percent. China’s Shanghai Composite Index gained 0.3 percent as data showed July profit at industrial companies gained 11.6 percent from a year earlier. Indonesia’s JCI index fell 3.7 percent.
•
Gold Gains to 2-Month High on ETP Holdings, Syria Tension (Bloomberg) -- Gold climbed to the highest in more than two months in London as bullion exchange-traded product sales slowed and amid political tension over Syria. Bullion-backed exchange-traded product holdings increased for a second successive week last week, narrowing this year’s drop to 26 percent, data compiled by Bloomberg show. Crude oil futures rose for the third day in four in New York after the U.S. said it will hold Syria’s government accountable for the use of chemical weapons. WTI for October delivery climbed as much as 67 cents to $106.59 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.13 as of 9:33 a.m. London time. Brent for October settlement increased as much as 57 cents, or 0.5 percent, to $111.30 a barrel on the London-based ICE Futures Europe exchange.
•
Yen Rises on Safety Bid Amid Emerging-Market Slide; Aussie Falls (Bloomberg) -- The yen strengthened for a second day against the dollar and euro as a slide in emerging-market currencies boosted demand for safer investments. Japan’s currency rose at least 0.2 percent versus all 16 of its major counterparts as India’s rupee and Turkey’s lira dropped to records and stocks fell amid escalating tension in Syria. Australia’s dollar dropped toward a two-week low against the greenback as volatility increased. The Bloomberg U.S. Dollar Index approached the highest in three weeks amid speculation America’s economy is strong enough for the Federal Reserve to begin reducing stimulus. The rupee slumped 2.2 percent to 65.73 per dollar after weakening to 65.94, surpassing the previous low set on Aug. 22. Turkey’s lira fell as much as 1.4 percent to 2.0259. Japanese yen gained 0.6% to US Dollar while all other ASEAN+3 currencies weakened to the green back. Indonesia’s rupiah tumbled 4.3 percent to 11,337 per dollar.
BREAKING NEWS GLOBAL NEWS •
Lew Tells Congress Treasury to Hit Debt Limit in Mid-October (Bloomberg) -- The U.S. will hit the $16.7 trillion debt ceiling in mid-October, Treasury Secretary Jacob J. Lew said in a letter
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urging Congress to raise the limit “as soon as possible.” “Extraordinary measures are projected to be exhausted in the middle of October,” Lew said in the letter today to House Speaker John Boehner and other lawmakers. “At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day,” he said. The cash balance at that time is forecast to be about $50 billion, “insufficient to cover net expenditures for an extended period of time,” according to Lew. The Treasury Department had earlier said it probably will be able to finance government operations by using special accounting measures until after Congress returns Sept. 9 from its recess. •
Durable-Goods Drop Imperils Outlook for U.S. GDP Pickup (Bloomberg) -- Orders for durable goods dropped in July by the most in almost a year, calling into question the strength of the projected pickup in U.S. growth. The retreat was broad-based, with demand excluding the volatile transportation category unexpectedly falling. The figures signal business investment was off to a slow start in the third quarter just as housing, a mainstay of the expansion, shows signs of cooling. Demand for non-defense capital goods excluding aircraft, a proxy for future business investment in computers, electronics and other equipment, fell 3.3 percent in July, the biggest decrease in five months. One of the bright spots in the report was a gain in demand for motor vehicles. Orders for automobiles and parts increased 0.5 percent after a 0.2 percent gain in June.
•
Shrinking Yield Gap Masks Berlusconi Risks: Euro Credit (Bloomberg) -- Italian borrowing costs relative to Germany are shrinking as bund yields climb, in turn masking investor concern about the potential for political turmoil, credit-default swaps suggest. The cost of insuring Italian government securities against default has risen 8.5 percent since reaching a low for the year in May. The yield premium investors demand to own its 10-year bonds rather than German bunds dropped to a two-year low last week. The correlation between bonds and derivatives is at its lowest level since January. Evidence of an economic rebound in the euro region has pushed German yields higher while underpinning demand for Italian debt, even as former Prime Minister Silvio Berlusconi’s party threatens to withdraw from the coalition government. The increase in German rates was exacerbated by speculation that the U.S. Federal Reserve will soon scale back its bond purchases.
•
German Business Confidence Rises to Highest in 16 Months (Bloomberg) -- German business confidence rose to the highest level in 16 months in August, beating forecasts and indicating that the recovery in Europe’s largest economy is gathering pace. The Ifo business climate index, based on a survey of 7,000 executives, climbed to 107.5 from 106.2 in July, the Munich-based institute said today. That’s the highest since April 2012. German gross domestic product expanded 0.7 percent in the second quarter, rebounding from a colder-than-usual winter that curbed output and helping the 17-nation euro area shake off six quarters of economic contraction. The country’s growth was led by private consumption and included the first increase in plant and machinery investment since 2011, signaling the recovery may be sustained. The Bundesbank predicts German GDP will expand 0.3 percent this year and 1.5 percent in 2014. The ECB predicts the euro area, Germany’s biggest export market, will shrink 0.6 percent this year before growing 1.1. percent in 2014. The Frankfurt-based central bank will publish new projections on Sept. 5.
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REGIONAL NEWS •
China Profits Jump as Yi Sees Limited Effect From Fed (Bloomberg) -- China’s industrial-profit growth rebounded in July, adding to signs that the world’s second-biggest economy is stabilizing after a two-quarter slowdown and an interbank lending squeeze in June. Net income rose 12 percent from a year earlier after gaining 6.3 percent in June, the statistics bureau said in Beijing today. Power, telecommunications, and auto manufacturing contributed to the increase, while coal miners’ profits slid. Today’s data add to higher-than-forecast industrial production in July, a rebound in trade, and a stronger reading for a manufacturing index released last week. At a briefing in Beijing, Yi Gang, a deputy governor of the central bank, said today that a Federal Reserve exit from quantitative easing may have only a “limited” effect on China compared with other emerging economies. At a briefing ahead of a Group of 20 leaders meeting in St. Petersburg, Russia, next month, Chinese officials said that a key topic would be minimizing the negative effects on other nations from the Fed winding back stimulus.
•
Japan’s Quarterly Land Values Gain as Abe Pushes for Growth (Bloomberg) -- Japan land values rose at more sites than 2008, as Prime Minister Shinzo Abe’s policies to end deflation helped lift commercial and housing prices. Values rose at 99 locations monitored by the government in the three months ended July 1, a survey by the Ministry of Land, Infrastructure, Transport and Tourism showed today. Eighty land sites rose in the previous quarter. The Bank of Japan has pumped $278 billion into the financial system since April, pushing down the value of the yen and boosting both exports and the country’s banking industry. Sales of offices, warehouses and retail space in Japan surged 50 percent in the first half and Japan’s housing starts rose for a 10th month in June, the longest streak in 16 years. Expectations that property prices will start increasing pushed Japan’s housing starts up for a 10th month in June, the longest streak since the period ended December 1996, the land ministry said last month.
•
Korea decouples from emerging markets (Korea Times) -- Korea has been moving differently from other emerging Asian nations that have seen economic turmoil in recent weeks. While economic data of countries like India and Indonesia have turned negatively following outflow of foreign capital amid fears of the U.S.’ stimulus cut, those of Korea have shown only little fluctuation. Both the Indian rupee and the Indonesian rupiah fell against the U.S. dollar by more than seven percent for the past month, but the Korean won fell by less than 0.38 percent. In stocks, foreigners’ net purchase of Korean shares was worth $171 million during the past week, according to Hyundai Securities. But foreigners’ net stocks sold were worth $437 million and $513 million in the Indian and Indonesian stock markets, respectively. Experts say such decoupling has come as the market is distinguishing Korea from those emerging countries in terms of economic fundamentals, including a current account surplus.
•
Indonesia Government Sells $3b Deficit-Cut Plan (Jakarta Globe) -- Following criticism on Friday that its economic stimulus package lacked information, the national government on Monday revealed financial details on its plan to curb oil imports, saying it hopes it will help wipe $3 billion off the current account deficit. On Friday the government announced it would increase the mandatory content of the so-called fatty acid methyl ester made from crude palm oil in biodiesel products to 10 percent, from 7.5 percent. The policy aims reduce fuel imports, which stood at $5.8 billion in the first half of the year, according to the Central Statistics Agency (BPS).
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The program will require all users, including miners and plantation operators, to use the 10 percent biodiesel, under the threat of so-far unspecified penalties. •
Lao PDR’s Cabinet debates economic incentives, disaster response (Vientiane Times)--The government cabinet discussed incentives to drive economic growth and responses to the flooding and landslides that have ravaged several provinces, among other important issues raised at last week's cabinet meeting. Prime Minister Thongsing Thammavong chaired the twoday monthly meeting held at the Government Office from August 22-23. The premier instructed the relevant ministries to work in collaboration with local authorities and take urgent action to provide relief aid to people who have been devastated by recent extreme weather events. The instruction came days after heavy rain over the northern provinces caused fatal landslides in Baeng district, Oudomxay province, on Wednesday night, killing 15 people and burying several houses.
IFIs NEWS (compiled from their websites) BIS – Publication: “Macroeconomic impact assessment of Over-the-counter (OTC) derivatives regulatory reforms” • On August 26, 2013, the Macroeconomic Assessment Group on Derivatives (MAGD) 1 of the BIS has published its report on Macroeconomic impact assessment of OTC derivatives regulatory reforms. This report focuses on the effects of (i) mandatory central clearing of standardised OTC derivatives, (ii) margin requirements for non-centrally-cleared OTC derivatives and (iii) bank capital requirements for derivatives-related exposures. In its preferred scenario, the group found economic benefits worth 0.16% of GDP per year from avoiding financial crises and economic costs of 0.04% of GDP per year from institutions passing on the expense of holding more capital and collateral to the broader economy. This result in net benefits of 0.12% of GDP per year and are estimates of the long-run consequences of the reforms, which are expected to apply once they have been fully implemented and had their full economic effects. http://www.bis.org/press/p130826.htm (Press Release) http://www.bis.org/publ/othp20.pdf (Report) FSB– Publication: “Implementing the FSB Principles for Sound Compensation Practices and their Implementation Standards – Second Progress Report” • On August 26, 2013, the FSB published its second progress report on implementation of the FSB Principles and Standards for Sound Compensation Practices (P&S). The report focuses on remaining gaps and impediments to full implementation of the P&S and describes some of the key challenges and evolving practices in this area. http://www.financialstabilityboard.org/press/pr_130826.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130826.pdf (Second Progress Report) http://www.financialstabilityboard.org/activities/compensation/index.htm (Principles and Standards for Sound Compensation Practices) 1
The MAGD which was set up by the OTC Derivatives Coordination Group (ODCG), comprised of the Chairs of the Basel Committee on Banking Supervision (BCBS), the Committee on the Global Financial System (CGFS), the Committee on Payment and Settlement Systems (CPSS), the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO). It comprises financial and economic modelling experts from 29 central banks and other authorities and is chaired by Stephen Cecchetti, Economic Adviser of the Bank for International Settlements (BIS).
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IMF – Working Paper: “Cooperative and Islamic Banks: What Can They Learn from Each Other?” • The IMF has publicised the captioned working paper. “Islamic and cooperative banks such as credit unions are broadly similar in that they both share some risk with savers. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers and downside risk with depositors. Greater risk sharing among cooperative bank stakeholders, using mechanisms embedded in Islamic financial products, may strengthen cooperatives’ financial resilience.” http://www.imf.org/external/pubs/ft/wp/2013/wp13184.pdf
FOREIGN CURRENCY EXCHANGE RATES Previous 26-Aug 27-Aug wk's close 6.23 6.11 6.12 6.12 China 7.75 7.75 7.76 7.76 Hong Kong SAR 9,793.00 10,430.00 10,848.00 11,337.00 Indonesia 86.75 97.53 98.51 97.95 Japan 1,064.40 1,113.59 1,112.64 1,116.28 Korea 3.06 3.28 3.31 3.33 Malaysia 41.01 43.63 44.24 44.59 Philippines 1.22 1.27 1.28 1.28 Singapore 30.59 31.27 31.98 32.19 Thailand 20,840.00 21,098.00 21,150.00 21,165.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change -0.01 -0.01 -4.31 0.57 -0.33 -0.60 -0.77 -0.23 -0.65 -0.07
2013 YTD (%chg) 1.8 -0.1 -14.9 -10.8 -4.7 -8.8 -8.4 -4.9 -5.8 -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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
26-Aug 2,096.5 22,005.3 4,120.7 13,636.3 1,887.9 1,722.5 6,161.2 3,084.4 1,329.2 490.5
OVERNIGHT LENDING RATE (IN %) 26-Aug 27-Aug bps change 3.050 3.100 5.00 0.082 0.081 -0.07 4.867 4.857 -1.00 0.093 0.071 -2.20 2.500 2.500 0.00 3.000 3.000 0.00 -0.112 0.130 24.20 0.042 0.042 0.00 2.500 2.500 0.00 3.760 3.600 -16.00
27-Aug 2,103.6 21,874.8 3,967.8 13,542.4 1,885.8 1,701.2 5,917.0 3,032.6 1,297.3 485.6
% change 0.34 -0.59 -3.71 -0.69 -0.11 -1.23 -3.96 -1.68 -2.40 -1.01
2013 YTD (%chg) -7.3 -6.2 -8.7 30.3 -7.2 1.6 1.0 -5.3 -7.8 16.1
3-MONTH INTERBANK LENDING RATE (IN %)
26-Aug 4.662 0.384 6.214 0.230 2.660 3.200 0.222 0.374 2.598 5.050
27-Aug 4.661 0.384 6.214 0.230 2.660 3.200 0.423 0.374 2.598 5.150
bps change -0.10 0.00 -0.07 0.00 0.00 0.00 20.10 0.00 0.00 10.00
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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
23-Aug
26-Aug
4.060 2.622 8.474 0.769 3.720 3.997 3.727 2.716 4.180 8.883
3.960 2.524 8.480 0.767 3.660 3.987 3.727 2.669 4.160 8.841
bps change -10.000 -9.800 0.600 -0.200 -6.000 -1.000 0.000 -4.700 -2.000 -4.200
2013 YTD (bps) 74.000 212.800 367.400 58.200 68.000 80.200 -38.840 233.900 96.500 -80.900
CREDIT DEFAULT SWAP (IN BPS) 23-Aug 26-Aug bps change 113.18 109.29 -3.89 China 54.29 54.29 0.00 Hong Kong SAR 270.88 266.13 -4.75 Indonesia 68.46 67.94 -0.52 Japan 85.27 83.79 -1.48 Korea 151.48 147.64 -3.84 Malaysia 144.33 139.54 -4.79 Philippines 152.06 148.23 -3.83 Thailand 296.06 296.24 0.18 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
26-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,404.7
27-Aug
% change
1,410.8
0.43
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 China Hong Kong SAR Indonesia Japan Korea
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4
2013 30-Apr 3,534.5 306.5 107.3 1,258.0 328.8
31-May 3,514.8 305.7 105.1 1,250.2 328.1
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4
31-Jul n.a 299.9 92.7 1,254.0 329.7
31-Aug n.a n.a n.a n.a n.a
Page 6 of 8
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
139.7 84.0 258.2 177.8 n.a
140.3 83.2 261.7 177.8 n.a
141.4 82.0 258.4 175.3 n.a
136.1 81.3 259.8 170.8 n.a
137.8 83.2 261.1 172.9 n.a
n.a n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 92.7 46.3 2.0 Japan 1,254.0 2,147.9 0.6 Korea 329.7 119.6 2.8 Malaysia 137.8 32.9 4.2 Philippines 83.2 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 172.2 62.1 2.8 Vietnam 28.2 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
Indicators
HONG KONG CHINA SOUTH KOREA PHILIPPINES
Trade Balance Industrial Profits YTD YoY Consumer Confidence Trade Balance
Period
Jul Jul Aug Jun
Last
-45.0B 11.11% 105 -$370M
Previous
-49.7B 11.11% 105 -$364M
SELECTED ECONOMIC RELEASES CALENDAR (26-30 AUG 2013) Expected Release Date
8/26/2013 8/27/2013
8/28/2013 8/29/2013
8/30/2013
Economies
THAILAND SINGAPORE HONG KONG CHINA SOUTH KOREA PHILIPPINES THAILAND SOUTH KOREA JAPAN JAPAN PHILIPPINES HONG KONG SOUTH KOREA THAILAND THAILAND THAILAND THAILAND
Indicators
Customs Trade Balance Industrial Production YoY Trade Balance Industrial Profits YTD YoY Consumer Confidence Trade Balance Mfg Production Index ISIC NSA Y BoP Current Account Balance Retail Trade YoY Retail Sales MoM GDP YoY Budget Balance HKD Industrial Production YoY Foreign Reserves Trade Balance BoP Current Account Balance Overall Balance
Period
Jul Jul Jul Jul Aug Jun Jul Jul Jul Jul 2Q Jul Jul Aug 23 Jul Jul Jul
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JAPAN JAPAN JAPAN JAPAN VIETNAM VIETNAM VIETNAM
Overall Household Spending YoY Jobless Rate National CPI Ex Fresh Food YoY Tokyo CPI Ex Fresh Food YoY Retail Sales YTD YoY Industrial Production YoY Trade Balance
Jul Jul Jul Aug Aug 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 28 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Head for Two-Month Low Amid Syria Tensions (Bloomberg) -- Asian stocks slumped, with the regional benchmark index heading for the lowest close in two months, on concern the U.S. will take military action against Syria for using chemical weapons. The MSCI Asia Pacific Index dropped 1.5 percent to 129.20 as of 5:21 p.m. in Tokyo, heading for the lowest close since June 27, as about five shares fell for each that rose. For national composite indices in ASEAN+3 region, China (-0.11%), Hong Kong (-1.6%), Japan Nikkei (-1.51%), Korea (0.07%), Malaysia (-0.7%), Philippines (-3.02%), Singapore (-0.82%), Thailand (-0.06%), Vietnam (2.53%) fell with an exception of Indonesia (+1.48%).
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Dollar Gains as Emerging-Market Assets Slide Amid Syria Concern (Bloomberg) --The dollar strengthened against most of its 16 major counterparts as escalating tension in Syria exacerbated declines in developing-nation currencies. India’s rupee and Turkey’s lira both dropped to records as stocks around the world slumped. The yen fell for the first time this week against the dollar on speculation diverging monetary policy in Japan and the U.S. will spur weakness in the Asian nation’s currency. The pound slid to a three-week low versus the euro before a speech by Bank of England Governor Mark Carney today. With regard to the currencies in ASEAN+3 region, China (0.02%), Hong Kong (0.02%), Indonesia (0.64%), Korea (0.08%), Singapore (0.04%), and Vietnam (0.02%) currencies strengthened while Japan (-0.46%), Malaysia (-0.18%), Philippines (-0.32%), and Thailand (-0.28%) depreciated to the green back.
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Gold Nears Bull-Market Territory as Syrian Tensions Spur Demand (Bloomberg) -- Gold climbed to a three-month high in London, heading for a bull market, as speculation about an attack against Syria within days spurred demand for precious metals as a haven. Silver rose to fourmonth high. Surging demand for jewelry, coins and bars in Asia helped prices rally 19 percent since the end of June. Gold traded in Indian rupees advanced to a record as the currency sank to an all-time low. West Texas Intermediate crude surged to the highest price since May 2011 on concern that conflict in Syria may spread and threaten oil supplies from the Middle East. Brent for October settlement advanced as much as $2.98, or 2.6 percent, to $117.34 a barrel on the London-based ICE Futures Europe exchange.
BREAKING NEWS GLOBAL NEWS •
U.S. consumer confidence rises in August (Reuters) -- U.S. consumer confidence rose in August as consumers' outlook for the future improved, according to a private sector report released on Tuesday. The Conference Board, an industry group, said its index of consumer attitudes rose to 81.5 from 80.3 in July, beating economists' expectations for 79.0. The expectations index rose to 88.7 from an upwardly revised 86.0. Consumers, however, were less optimistic about their current standing, with the present situation index slipping to 70.7 from July's more than fiveyear high of 73.6.
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U.S. home prices rise but at slower pace, consumers optimistic (Reuters) -- U.S. home prices rose in June but the pace of gains cooled, suggesting higher mortgage rates may end up slowing momentum in the housing sector as the year winds down. Consumers were more upbeat about the future even though their assessment of their current standing fell. Home prices rose 0.9 percent on a seasonally adjusted basis, according to the S&P/Case Shiller composite index of 20 metropolitan areas. The data is not likely to alter economists' expectations that the housing recovery will continue, keeping it a sweet spot for an economy that grew just 1.7 percent in the second quarter. Analysts said that suggests gains in home price gains may continue to slow in the months ahead, particularly since the sharpest rise in rates came in late June and early July, likely after many June contracts were already signed.
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Merkel Blames SPD’s Schroeder for Letting Greece Into the Euro (Bloomberg) -- German Chancellor Angela Merkel sought to pin the blame for the euro-region’s debt turmoil on her Social Democratic predecessor, Gerhard Schroeder, saying he should never have let Greece into the single currency area. Merkel, addressing a campaign rally in the northern German town of Rendsburg yesterday, said the debt crisis that emerged in Greece in late 2009 and dominated her second term had been “brewing for many years” going back to the euro’s inception. While polls suggest voters approve of her crisis handling, Steinbrueck has ramped up his criticism in recent days that Merkel isn’t being straight over the full costs due to German taxpayers. Their opposing positions will be tested on Sept. 1 in Berlin during the only televised debate of the campaign.
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EU says China guilty of giving illegal aid to solar industry (Reuters) - The European Union has warned Beijing it has evidence Chinese solar companies benefit from illegal subsidies, people close to the issue said on Tuesday, but Brussels says it will not take action for now following a deal to defuse the row. European companies accuse Chinese rivals of benefiting from unfair state aid allowing them to dump about 21 billion euros ($28 billion) worth of solar panels at below cost in Europe last year, putting European firms out of business. The solar dispute, by far the biggest between China and the EU, threatened a wider trade war in goods from wine to steel until Brussels and Beijing agreed a minimum price for panels from China in late July and eased tensions. But a nine-month investigation by the European Commission into China's solar industry has found Beijing broke World Trade Organization rules by handing out cheap loans, land, interest-free credit lines and tax breaks to companies.
REGIONAL NEWS •
China Urban Migrants’ Cost Seen at Least $6.8 Trillion (Bloomberg) -- China must spend at least 41.6 trillion yuan ($6.8 trillion) over two decades to integrate rural workers living in cities and towns so the country realizes benefits of urbanization, a United Nations report said. Spending may exceed 75 trillion yuan in a scenario with a higher rate of investment to improve living conditions and housing quality. The study’s baseline assumptions are for the urban population to rise to 976 million in 2030 from 666 million in 2010 and integrate about 210 million migrant workers. A major question is how to pay for the urban shift while regional governments face rising debt burdens. Local-government debt may have surged to about 18 trillion yuan, according to Societe Generale SA, from an official estimate of 10.7 trillion yuan at the end of 2010.
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China to Place Consumption Tax on More Luxury Goods (Bloomberg) -- China will widen the scope of its consumption tax to include more luxury goods, the official Xinhua News Agency reported, a sign that some high-end brands may become more expensive for purchasers on the mainland. The Asian nation is also targeting goods that cause heavy pollution or use excessive levels of energy for consumption tax adjustments. The news agency cited a report by China’s finance minister Lou Jiweito the Standing Committee of the National People’s Congress.
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Ito Backs Japan Sales-Tax Plan as Hamada Calls for Gradual Rise (Bloomberg) -- Tokyo University Professor Takatoshi Ito said Japan’s sales tax should be increased as planned as a panel of economists and financial experts considering the levy split on the issue. “Economic indicators show the economy isn’t in a bad state and raising the sales tax wouldn’t slow the economy or the bid to end deflation,” Ito, a former finance ministry official, told reporters yesterday after the meeting in Tokyo. Not proceeding in line with the plan could lead to falling stocks, a stronger yen and a spike in bond yields, Ito wrote in a statement submitted to the panel. Ito was among five of the nine people on the panel to agree with the plan to increase the tax to 8 percent in April from the current 5 percent.
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Korea Development Bank to absorb state financing firm (Korea Times) -- The Korea Finance Corp, a state financing company that was spun off in 2009 from the Korea Development Bank (KDB), will be reintegrated into the state-run lender. The government has officially dropped a plan to privatize KDB. The privatization of KDB was one of the flagship projects undertaken by the previous Lee administration. In line with this policy change, the holding company of KDB will be abolished, and its consumer financing, asset management and insurance units, which were set up under the privatization plan, will be put up for sale soon. The government will also set up a “marine finance center” to support shipping and shipbuilding firms. The center will be tasked with providing loans to and buying ships from cash-strapped owners.
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Indonesian Finance Ministry issues four measures to stabilize economy (Jakarta Post) -- The Finance Ministry on Wednesday issued four regulations to mitigate currently volatile economic conditions. The measures consisted of a bonded zone policy relaxation, luxury goods sales tax adjustments, value-added tax facility adjustments on imports and the delaying of income tax payments for several industries. “The current global and national economic conditions can disrupt growth, therefore, the government decided to issue these four policies,” Finance Minister Chatib Basri said on Wednesday.
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Thai Pension Fund Buying Stocks After Bear Market Plunge (Bloomberg) -- Thailand’s Government Pension Funds boosting holdings of local equities after a bear market in the benchmark index sent valuations to the lowest levels in more than a year. The benchmark SET Index (SET) has fallen for 10 days, the longest losing streak since 1998. The gauge has declined more than 20 percent from this year’s high as data this month showed the nation entered a recession in the second quarter, while foreign investors sold more than $1 billion of local shares. The central bank won’t hesitate to contain excessive moves in markets if necessary, Bank of Thailand Governor Prasarn Trairatvorakul told a conference in Bangkok today. Southeast Asia’s second-biggest economy will probably post a current-account deficit of $550 million in July, according to a Bloomberg survey of economists.
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Opening of Attapeu bridge paves way for economic growth of Laos (Vientiane Times)--The Xekaman Bridge 2 development project linking Samakhixay and Xekaman villages in Samakkhixay district of Attapeu province is now complete after construction began in 2011. The bridge was officially opened at a handover ceremony held on August 26, 2013. Japan provided US$2.6 million from total cost of US$6.1 million, in grant aid through the Japan-ASEAN Integration. The construction of the bridge is part of Japan's contribution to the development of the economic corridor between Laos, Vietnam and Cambodia.
IFIs NEWS (compiled from their websites) ADB – Press Release: ADB's First BIMP-EAGA 1 Project to Bring Clean Energy to West Kalimantan • The ADB and Government of Indonesia will build a cross-border power transmission line linking West Kalimantan with Sarawak, Malaysia, bringing cleaner, greener hydroelectricity to West Kalimantan and adding 8,000 households to its power grid. http://www.adb.org/news/adbs-first-bimp-eaga-project-bring-clean-energy-west-kalimantan (Press Release) http://www.adb.org/projects/41074-013/main (Project’s Details) Basel Committee – Publication: “Report to G20 Leaders on monitoring implementation of Basel III regulatory reforms” • On August 27, 2013, the Basel Committee for Banking Supervision has published its Report to G20 Leaders on monitoring implementation of Basel III regulatory reforms. This fourth report covers the steps taken by Basel Committee member jurisdictions towards implementing the Basel III standards, the further harmonisation of capital regulations across member jurisdictions and the finalisation of remaining post-crisis reforms that form part of the Basel regulatory framework. It also includes the findings of the Committee's work on banks' calculation of riskweighted assets. http://www.bis.org/press/p130827.htm (Press Release) http://www.bis.org/publ/bcbs260.pdf (Fourth Report) FSB – Publication: “Review Report: Peer Review of the United States” • On August 27, 2013, the FSB published a review report on the peer review of the United States. This forms part of a regular programme of peer reviews of FSB jurisdictions that began in 2010. The report examines the progress made in the US on three topics that are important for financial stability and relevant for the broader FSB membership namely (i) systemic risk oversight arrangements; (ii) supervision and oversight of financial market infrastructures (FMIs) and (iii) insurance supervision. The draft report for discussion was prepared by a team of experts drawn from FSB member institutions. http://www.financialstabilityboard.org/press/pr_130827.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130827.pdf (Review Report)
1
The Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) initiative was launched in 1994 as a cooperation initiative by the four national governments to close the development gap across and within the EAGA member countries as well as across the ASEAN-6 member states. More information pertaining to this initiative can be found at the following two URLs: (1) http://www.adb.org/countries/subregional-programs/bimp-eaga and (2) http://www.bimp-eaga.org/Default.aspx
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IMF – Working Paper: “Two Sides of the Same Coin? Rebalancing and Inclusive Growth in China” • The IMF has publicised the captioned working paper. “This paper uses the Shapley Value decomposition technique to assess the factors behind the rise of inequality in China. It finds that, in many ways, inequality may have been an inevitable by-product of China’s investment and export-led growth model. Based on the results, policies that could help broaden the benefits of growth in China include maintaining prudent monetary and credit policies, a more progressive fiscal tax and expenditure system, higher public spending on health and education, deregulation and reforms to increase competition, measures to raise labor incomes and assist vulnerable workers, and better access to finance for both households and SMEs, including in rural areas.” http://www.imf.org/external/pubs/ft/wp/2013/wp13185.pdf
FOREIGN CURRENCY EXCHANGE RATES Previous 27-Aug 28-Aug wk's close 6.23 6.11 6.12 6.12 China 7.75 7.75 7.76 7.76 Hong Kong SAR 9,793.00 10,430.00 11,337.00 11,265.00 Indonesia 86.75 97.53 97.03 97.48 Japan 1,064.40 1,113.59 1,116.28 1,115.35 Korea 3.06 3.28 3.33 3.33 Malaysia 41.01 43.63 44.59 44.73 Philippines 1.22 1.27 1.28 1.28 Singapore 30.59 31.27 32.17 32.26 Thailand 20,840.00 21,098.00 21,170.00 21,165.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close
% change 0.02 0.02 0.64 -0.46 0.08 -0.18 -0.32 0.05 -0.28 0.02
2013 YTD (%chg) 1.9 -0.1 -14.3 -10.4 -4.6 -9.0 -8.7 -4.8 -6.0 -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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
27-Aug 2,103.6 21,874.8 3,967.8 13,542.4 1,885.8 1,701.2 5,917.0 3,034.0 1,294.0 485.6
OVERNIGHT LENDING RATE (IN %) 27-Aug 28-Aug bps change 3.100 3.100 0.00 0.081 0.082 0.07 4.857 4.854 -0.36 0.071 0.095 2.45 2.500 2.500 0.00 3.000 3.000 0.00 0.130 0.733 60.30 0.036 0.036 0.00 2.500 2.500 0.00 3.600 3.417 -18.30
28-Aug 2,101.3 21,524.7 4,026.5 13,338.5 1,884.5 1,689.4 5,738.1 3,009.2 1,293.1 473.3
% change -0.11 -1.60 1.48 -1.51 -0.07 -0.70 -3.02 -0.82 -0.06 -2.53
2013 YTD (%chg) -7.4 -7.7 -7.4 28.3 -7.2 0.9 -2.1 -6.0 -8.1 13.1
3-MONTH INTERBANK LENDING RATE (IN %)
27-Aug 4.661 0.384 6.214 0.230 2.660 3.200 0.423 0.374 2.598 5.150
28-Aug 4.659 0.384 6.213 0.230 2.660 3.200 0.353 0.374 2.598 5.200
bps change -0.23 0.00 -0.07 0.00 0.00 0.00 -7.00 0.00 0.08 5.00
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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
26-Aug
27-Aug
3.960 2.524 8.480 0.767 3.660 3.987 3.727 2.669 4.160 8.841
3.980 2.460 8.573 0.751 3.640 3.984 3.754 2.698 4.360 8.813
bps change 2.000 -6.400 9.300 -1.600 -2.000 -0.300 2.700 2.900 20.000 -2.800
2013 YTD (bps) 76.000 206.400 376.700 56.600 66.000 79.900 -36.140 236.800 116.500 -83.700
CREDIT DEFAULT SWAP (IN BPS) 26-Aug 27-Aug bps change 109.29 110.25 0.96 China 54.29 54.32 0.03 Hong Kong SAR 266.13 276.40 10.27 Indonesia 67.94 67.94 0.00 Japan 83.79 85.52 1.73 Korea 147.64 149.52 1.88 Malaysia 139.54 146.23 6.69 Philippines 148.23 149.62 1.39 Thailand 296.24 300.78 4.54 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
27-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream
1,415.2
28-Aug
% change
1,426.1
0.78
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 China Hong Kong SAR Indonesia Japan Korea
31-Dec 3,311.6 317.3 112.8 1,268.1 327.0
31-Jan 3,410.1 304.7 108.8 1,267.3 328.9
28-Feb 3,395.4 304.8 105.2 1,258.8 327.4
31-Mar 3,442.7 303.8 104.8 1,254.4 327.4
2013 30-Apr 3,534.5 306.5 107.3 1,258.0 328.8
31-May 3,514.8 305.7 105.1 1,250.2 328.1
30-Jun 3,496.7 303.6 98.1 1,238.7 326.4
31-Jul n.a 299.9 92.7 1,254.0 329.7
31-Aug n.a n.a n.a n.a n.a
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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
139.7 84.0 258.2 177.8 n.a
140.3 83.2 261.7 177.8 n.a
141.4 82.0 258.4 175.3 n.a
136.1 81.3 259.8 170.8 n.a
137.8 83.2 261.1 172.9 n.a
n.a n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 92.7 46.3 2.0 Japan 1,254.0 2,147.9 0.6 Korea 329.7 119.6 2.8 Malaysia 137.8 32.9 4.2 Philippines 83.2 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 172.2 62.1 2.8 Vietnam 28.2 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
Indicators
THAILAND
Period
Mfg Production Index ISIC NSA YoY
Last
Jul
Previous
-4.5
-3.5
SELECTED ECONOMIC RELEASES CALENDAR (26-30 AUG 2013) Expected Release Date
8/26/2013 8/27/2013
8/28/2013 8/29/2013
8/30/2013
Economies
THAILAND SINGAPORE HONG KONG CHINA SOUTH KOREA PHILIPPINES THAILAND SOUTH KOREA JAPAN JAPAN PHILIPPINES HONG KONG SOUTH KOREA THAILAND THAILAND THAILAND THAILAND JAPAN JAPAN JAPAN JAPAN
Indicators
Customs Trade Balance Industrial Production YoY Trade Balance Industrial Profits YTD YoY Consumer Confidence Trade Balance Mfg Production Index ISIC NSA Y BoP Current Account Balance Retail Trade YoY Retail Sales MoM GDP YoY Budget Balance HKD Industrial Production YoY Foreign Reserves Trade Balance BoP Current Account Balance Overall Balance Overall Household Spending YoY Jobless Rate National CPI Ex Fresh Food YoY Tokyo CPI Ex Fresh Food YoY
Period
Jul Jul Jul Jul Aug Jun Jul Jul Jul Jul 2Q Jul Jul Aug 23 Jul Jul Jul Jul Jul Jul Aug
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8/26-31/2013
VIETNAM VIETNAM VIETNAM
Retail Sales YTD YoY Industrial Production YoY Trade Balance
Aug 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 29 August 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •
Asian Stocks Rise From 2-Month Low as Oil Explorers Gain (Bloomberg) -- Asia’s benchmark stock index rose from a two-month low as energy shares increased after concern military action against Syria will disrupt global oil supplies fueled gains in crude prices this week. The MSCI Asia Pacific Index rose 0.6 percent to 129.85 as of 5:16 p.m. in Tokyo, with eight of the 10 industry groups gaining on the gauge. The measure lost 2.4 percent this month through yesterday, wiping out its 2013 advance. For national composite indices in ASEAN+3 region, Hong Kong (+0.84%), Indonesia (+1.92%), Japan Nikkei (+0.91%), Korea (+1.22%), Malaysia (+1.20%), Philippines (+3.59%), Singapore (+1.14%), and Thailand (+1.01%) rose with an exception of China (-0.19%) and Vietnam (-1.00%).
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Dollar Rises to 2-Week High Versus Euro Before GDP (Bloomberg) -- The dollar rose to a twoweek high against the euro before a U.S. report that analysts said will show economic growth accelerated in the second quarter, adding to the case for the Federal Reserve to trim stimulus. With regard to the currencies in ASEAN+3 region, Hong Kong (+0.01%), Indonesia (+3.02%), Korea (+0.50%), Malaysia (+0.64%), Philippines (+0.18%), and Vietnam (+0.06%) currencies strengthened while Japan (-0.51%), and China (-0.01%), Singapore (-0.09%), Thailand (-0.28%) depreciated to the greenback.
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Gold Snaps Five-Day Rally as Data May Increase Case for Tapering (Bloomberg) -- Gold retreated from a three-month high spurred by tensions over Syria as U.S. economic data may reinforce the case for the Federal Reserve to slow stimulus. Bullion for immediate delivery lost as much as 0.9 percent to $1,404.88 an ounce and was at $1,407.5 at 5:00 p.m. in Singapore, dropping for the first time in six days. Data today may show that U.S. gross domestic product expanded more than previously estimated, while applications for jobless benefits declined, adding to the case for the Fed to taper its bond-buying program.
BREAKING NEWS GLOBAL NEWS •
U.S., U.K. Pressure for Action on Syria Hits UN Hurdle (Bloomberg) -- The rift between Russia and western nations over Syria widened as the U.S. and the U.K. said they were ready to lead a military strike without United Nations approval. U.S. President Barack Obama and U.K. Prime Minister David Cameron confront a decision whether to attack Syria without a UN mandate amid Russian resistance, demands for consultation from lawmakers at home and domestic opposition to involvement in another conflict in the Middle East. The prospect of a military confrontation in the Middle East, a region that produces 35 percent of the world’s oil, has rumbled through markets. Stock markets in the region slumped for a second day yesterday as oil prices reached a two-year high.
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U.S., Swiss Said to Reach Deal in Offshore Tax Probe (Bloomberg) -- The U.S. and Switzerland agreed to resolve a long-running dispute over offshore tax evasion by letting some banks
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voluntarily disclose wrongdoing and turn over account information on American clients, a senior Justice Department official familiar with the matter said. The accord divides Swiss banks into four tiers: 14 banks under criminal investigation; those allowed to avoid prosecution by disclosing wrongdoing; those without wrongdoing to disclose; and those complying with U.S. anti-tax evasion law. Total penalties by banks making voluntary disclosures could exceed $1 billion, the person said. •
EU's Rehn says lenders to step up assessment of Greece next month (Reuters) -- Greece's international lenders will step up their assessment next month of how the sustainability of the country's finances can be ensured, the European Commission's economic chief said on Thursday. The European Union, European Central Bank and International Monetary Fund first need to establish the facts "and then conclude what kind of additional financing needs there are," Olli Rehn said. Ensuring debt sustainability through 2015 and 2016 was a priority, and the troika of lenders "will intensify our work (on this) from September onwards" and make concrete proposals soon after that, he said.
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Brazil Raises Rate to 9% as Real Undercuts Inflation Fight (Bloomberg) -- Brazil’s central bank raised the key rate by half a percentage point for a third straight meeting, as a plunge in the currency undermines efforts to slow inflation in the world’s second-largest emerging market. The bank’s board, led by President Alexandre Tombini, unanimously voted to raise the benchmark Selic rate to 9 percent from 8.5 percent, as forecast by 50 of 52 economists surveyed by Bloomberg.
REGIONAL NEWS •
Bank Indonesia raised benchmark rate by 50 bps to 7.0 pct (Reuters) -- Indonesia's central bank raised its benchmark reference rate 50 basis points to 7.0 percent on Thursday in a bid to stabilise the wilting rupiah and economy as the country battles high inflation and a stock market sell-off. It also raised its overnight deposit facility rate, FASBI, 50 bps to 5.25 percent and its lending facility rate by 25 bps to 7.0 percent. Bank Indonesia (BI) held rates steady at a board meeting on Aug. 15, and its next monthly meeting had not been scheduled until Sept. 12. But declines in the rupiah and local stocks began to accelerate over the last week, prompting the Thursday session. In June and July, BI raised the reference rate by a total of 75 basis points, to 6.50 percent. The statistics bureau is expected to release August inflation data on Monday. BI has estimated that August's annual rate would be above 8.9 percent.
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Philippines Defies Asia Slowdown as Growth Holds Above 7% (Bloomberg) -- The Philippine economy expanded above 7 percent for a fourth straight quarter, defying a regional slowdown to remain one of Asia’s best performers as President Benigno Aquino boosts spending. Stocks rose. Gross domestic product rose 7.5 percent in the three months through June from a year earlier, compared with a 7.7 percent gain in the previous quarter, the National Statistical Coordination Board said in Manila today. The median estimate in a Bloomberg News survey of 24 economists was 7.2 percent.
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China to Expand Asset-Backed Securities Trial (Bloomberg) -- China pledged to expand the packaging of loans into securities to dissipate financial risks, part of efforts to increase the use of markets and sustain economic growth. The trial will be expanded as a way to “activate” the
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use of credit, China’s State Council said in a statement late yesterday. The People’s Bank of China has told the country’s lenders to securitize their good-quality assets and to sell the resulting securities to investors in the interbank market and exchanges, according to a statement from the central bank today. Authorities will seek to prevent the securities from causing dangers in the financial system by excluding relatively risky assets in the trial, according to the State Council statement. The difficulty of assessing risk in bonds backed by loans was a major contributor to the global financial crisis. •
Xayaboury dam in Laos should proceed as scheduled, official says (Vientiane Times) -- A senior government official has encouraged the Xayaboury dam developers to further the progress of the US$3.5 billion project despite concerns raised by opponents of the dam. Deputy Minister of Planning and Investment Dr Bounthavy Sisouphanthong recently visited the project site in Xayaboury province. The deputy minister also called on the developer, Xayaburi Power Co. Ltd., (XPCL) to comply with agreements signed with the government and achieve the 2019 completion date to begin operation. The Xayaboury dam will play an important role in the future of the Lao economy. It will be the largest hydropower plant in Laos and will contribute to sustaining the continued growth of the country's economy in the years to come.
IFIs NEWS (compiled from their websites) FSB – Consultation: “Assessment Methodology for the Key Attributes of Effective Resolution Regimes for Financial Institutions” • On August 28, 2013, the FSB has launched a public consultation on its draft Assessment Methodology for the Key Attributes of Effective Resolution Regimes for Financial Institutions. This draft methodology is developed by the FSB together with the IMF, World Bank and the standard-setting bodies. As well as facilitating objective and consistent assessments of jurisdictions' compliance with the new international standard, the methodology can also assist jurisdictions in their legislative reforms to implement the Key Attributes. Comments on the consultative document should be submitted to fsb@bis.org by Thursday, October 31, 2013. http://www.financialstabilityboard.org/press/pr_130828.pdf (Press Release) http://www.financialstabilityboard.org/publications/r_130828.pdf (Consultative Document) IMF – Working Papers • The IMF has publicised the following working papers:
•
Collateral and Monetary Policy – “Financial lubrication in markets is indifferent to margin posting via money or collateral; the relative price(s) of money and collateral matter. Some central banks are now a major player in the collateral markets. Analogous to a coiled spring, the larger the quantitative easing (QE) efforts, the longer the central banks will impact the collateral market and associated repo rate. This may have monetary policy and financial stability implications since the repo rates map the financial landscape that straddles the bank/nonbank nexus.” http://www.imf.org/external/pubs/ft/wp/2013/wp13186.pdf
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•
Waste Not, Want Not: The Efficiency of Health Expenditure in Emerging and Developing Economies – “Public health spending is low in emerging and developing economies relative to advanced economies and health outputs and outcomes need to be substantially improved. This paper quantifies the inefficiency of public health expenditure and the associated potential gains for emerging and developing economies using a stochastic frontier model that controls for the socioeconomic determinants of health, and provides country-specific estimates. The results suggest that African economies have the lowest efficiency. At current spending levels, they could boost life expectancy up to about five years if they followed best practices.” http://www.imf.org/external/pubs/ft/wp/2013/wp13187.pdf
FOREIGN CURRENCY EXCHANGE RATES
6.12 7.76 10,935.00 98.14 1,109.80 3.31 44.65 1.28 32.19
-0.01 0.01 3.02 -0.51 0.50 0.64 0.18 -0.09 -0.03
2013 YTD (%chg) 1.8 -0.1 -11.7 -11.0 -4.2 -8.4 -8.5 -4.5 -5.8
20,840.00 21,098.00 21,168.00 21,155.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation.
0.06
-1.5
2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand
6.23 7.75 9,793.00 86.75 1,064.40 3.06 41.01 1.22 30.59
Previous wk's close 6.11 7.75 10,430.00 97.53 1,113.59 3.28 43.63 1.27 31.27
28-Aug 6.12 7.76 11,265.00 97.64 1,115.35 3.33 44.73 1.28 32.18
29-Aug
% change
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)
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 2,068.5 22,517.8 4,568.7 13,650.1 1,920.1 1,788.2 6,526.0 3,197.5 1,445.8 507.8
28-Aug 2,101.3 21,524.7 4,026.5 13,338.5 1,884.5 1,686.2 5,738.1 3,004.2 1,275.8 473.3
29-Aug 2,097.2 21,704.8 4,103.6 13,459.7 1,907.5 1,706.4 5,944.2 3,038.4 1,288.6 468.6
% change -0.19 0.84 1.92 0.91 1.22 1.20 3.59 1.14 1.01 -1.00
2013 YTD (%chg) -7.6 -6.9 -5.6 29.5 -6.1 1.9 1.4 -5.1 -8.4 12.0
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China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam
OVERNIGHT LENDING RATE (IN %) 28-Aug 29-Aug bps change 3.100 2.800 -30.00 0.082 0.082 0.00 4.854 4.868 1.43 0.095 0.071 -2.45 2.500 2.500 0.00 3.000 3.000 0.00 0.733 0.557 -17.60 0.056 0.056 0.00 2.500 2.500 0.00 3.417 2.900 -51.70
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 CREDIT DEFAULT SWAP (IN BPS) 27-Aug 110.25 China 54.32 Hong Kong SAR 276.40 Indonesia 67.94 Japan 85.52 Korea 149.52 Malaysia 146.23 Philippines 149.62 Thailand
28-Aug 110.74 54.79 287.22 70.43 86.00 155.85 150.08 155.97
27-Aug
3-MONTH INTERBANK LENDING RATE (IN %)
28-Aug 4.659 0.384 6.213 0.230 2.660 3.200 0.353 0.374 2.598 5.200
28-Aug
3.980 2.460 8.573 0.751 3.640 3.984 3.754 2.698 4.360 8.813
4.060 2.435 8.817 0.724 3.590 3.994 3.758 2.777 4.410 8.767
29-Aug 4.658 0.384 6.228 0.230 2.660 3.200 0.309 0.374 2.599 4.950
bps change -0.06 0.00 1.50 0.00 0.00 0.00 -4.40 0.00 0.08 -25.00
bps change 8.000 -2.500 24.400 -2.700 -5.000 1.000 0.400 7.900 5.000 -4.600
2013 YTD (bps) 84.000 203.900 401.100 53.900 61.000 80.900 -35.740 244.700 121.500 -88.300
bps change 0.49 0.47 10.82 2.49 0.48 6.33 3.85 6.35
300.78 305.59 4.81 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 28-Aug Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand
1,417.5
29-Aug 1,407.5
% change -0.71
S&P
Moody's
Fitch
AAAAA BB+ AAA+ ABBBAAA BBB+
Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1
A+ AA+ BBBA+ AAABBBAAA BBB+
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Vietnam
BB-
B2
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 n.a
30-Apr 3,534.5 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a
31-May 3,514.8 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a
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 n.a n.a n.a 172.2 n.a
EXTERNAL LIQUIDITY RATIOS* Int'l Reserves
3 months imports of goods & services (US$bn) 523.3 141.5 55.0 79.2 151.4 58.5 17.2 126.5 66.9 31.3
Short-term external debt
Import cover (Qtrs of imports covered by reserves) 6.7 2.1 1.7 15.8 2.2 2.4 4.8 2.1 2.6 -
Reserves over short-term debt
(US$bn) (US$bn) China 3,496.7 565.7 6.2 Hong Kong SAR 299.9 745.6 0.4 Indonesia 92.7 46.3 2.0 Japan 1,254.0 2,147.9 0.6 Korea 329.7 119.6 2.8 Malaysia 137.8 32.9 4.2 Philippines 83.2 9.8 8.5 Singapore 261.1 968.3 0.3 Thailand 172.2 62.1 2.8 Vietnam 28.2 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
SOUTH KOREA JAPAN JAPAN PHILIPPINES
Indicators
Period
BoP Current Account Balance Retail Trade YoY Retail Sales MoM GDP YoY
Jul Jul Jul 2Q
Last
$6771.2M -0.3% -1.8% 7.5%
Previous
$7237.3M 1.6% -0.2% 7.8%
SELECTED ECONOMIC RELEASES CALENDAR (26-30 AUG 2013) Expected Release Date
8/26/2013 8/27/2013
8/28/2013 8/29/2013
Economies
THAILAND SINGAPORE HONG KONG CHINA SOUTH KOREA PHILIPPINES THAILAND SOUTH KOREA JAPAN
Indicators
Customs Trade Balance Industrial Production YoY Trade Balance Industrial Profits YTD YoY Consumer Confidence Trade Balance Mfg Production Index ISIC NSA Y BoP Current Account Balance Retail Trade YoY
Period
Jul Jul Jul Jul Aug Jun Jul Jul Jul
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8/30/2013
8/26-31/2013
JAPAN PHILIPPINES HONG KONG SOUTH KOREA THAILAND THAILAND THAILAND THAILAND JAPAN JAPAN JAPAN JAPAN VIETNAM VIETNAM VIETNAM
Retail Sales MoM GDP YoY Budget Balance HKD Industrial Production YoY Foreign Reserves Trade Balance BoP Current Account Balance Overall Balance Overall Household Spending YoY Jobless Rate National CPI Ex Fresh Food YoY Tokyo CPI Ex Fresh Food YoY Retail Sales YTD YoY Industrial Production YoY Trade Balance
Jul 2Q Jul Jul Aug 23 Jul Jul Jul Jul Jul Jul Aug Aug 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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