BEIJING - China's urban fixed asset investment growth slightly accelerated to 20.6% on-year to RMB9.13 trillion in the first four months of 2013, according to the National Bureau of Statistics (NBS). Production grew 9.3% in April from a year earlier, while retail sales climbed 12.8%. In addition, M2, a broad measure of money supply, rose 16.1% on-year to RMB103.26 trillion, up RMB 111.1 billion on-year, according to the central bank. The 16.1% raise is an increase of 0.4% and 3.3% from the end of March and the end of 2012 respectively.
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BEIJING - In a step towards deregulation and market reform, China’s State Administration of Foreign Exchange (SAFE) has announced that it will abolish 24 clauses of foreign exchange regulation in a bid to facilitate and promote foreign direct investment, following a fall in FDI in the first quarter. The move pushes the RMB closer to being convertible under the capital account by simplifying transactions of local financial assets into foreign financial assets, and follows a previous round of FDI-related deregulation by SAFE in November last year.
SINGAPORE -- Standard & Poor's Ratings Services says Pakistan's parliamentary election results set the stage for longer-term stability of its 'B-' sovereign credit rating. Partial results from the elections held May 11 indicate a strong lead for the Pakistan Muslim League-Nawaz party (PML-N). The elections were the first in Pakistan’s history in which an elected government handed power to another elected government.
HONG KONG – In its second quarter review of the China/Asian economic outlook, BBVA Bank says Asian economies are continuing to grow amidst a gradually improving external environment and accommodative policies. “While the pace of growth in early 2013 has been somewhat slower than expected, we are keeping most of our projections unchanged, except for a downgrade to India,” BBVA says. “In China, although Q1 GDP growth disappointed to the downside, we have maintained our 8.0% growth projection for 2013-14. External demand is improving, and subdued inflation provides room for policies to remain supportive.
TAIPEI - Taiwan will maintain a moderately loose monetary policy, according to Yang Chin-lung, Deputy Governor of Taiwan’s Central Bank. Yang was responding to comments by Eisuke Sakakibara, a Japanese economist, who suggested that Taiwan follow Japan by adopting a quantitative easing monetary policy to boost economic growth.
HANOI - The State Bank of Vietnam is to cut its policy rate by another 100 basis points from May 13, with the refinance rate to fall to 7.00% from 8.00%.This follows a cumulative 700 basis points of cuts since mid-2012, the most recent being 100 basis points in late March. The SBV’s discount rate will follow, falling to 5.00% from 6.00%. ANZ Bank says a lower inflation trajectory had given the SBV space to ease monetary policy further.
RANGOON - The Myanmar Ministry of Energy is auctioning 30 oil and gas blocks in the Myanmar offshore areas. The auction invites bids for 11 shallow water blocks and 19 deep water blocks, to be conducted on a production-sharing basis with the Myanmar Oil and Gas Enterprise (MOGE). In a Client Note, lawyers Baker & McKenzie say the auction follows an announcement that 59 bidders had been shortlisted for the second round of the Myanmar onshore oil and gas block auctions which commenced in January 2013.
BEIJING - April trade growth in China rebounded more than expected, resulting in a surplus of US$8.2 billion (vs.a deficit of US$0.9 billion in March). Apart from a lower base effect, the import rebound was led by commodities such as iron ore, suggesting that investments remain strong. China's total exports excluding Hong Kong also picked up strongly to 6.8% y-o-y, from a contraction of 4.7% March. However, sequential growth for both exports and imports softened in April, and lower global PMIs suggest bigger external headwinds for export growth in the coming quarters. The level of growth beat expectations, rising to 14.7% y-o-y in April, compared to 10% y-o-y in March (consensus 10%), but seasonally- adjusted growth eased to 7.7% m-o-m from 11.8% m-o-m in March.
HONG KONG - Reinforcing expectations that China’s new leadership will press ahead with reforms, the State Council has laid out plans for implementation of planned reforms over he balance of this year. In addition to spurring private investment by streamlining the approvals process, the authorities are emphasising their plans to press ahead with reforms on the financial and fiscal fronts. They have vowed to push ahead with interest rate liberalisation, increase the flexibility of the exchange rate, and further open the capital account by allowing individuals to invest overseas.
BEIJING - The State Administration of Foreign Exchange (SAFE), China’s foreign exchange regulator, is introducing new rules to curb currency speculation as a part of efforts to control hot money inflows which have helped pushed the RMB to record highs. The regulations are intended to rein in excessive cross-border capital inflows through exporters and banks by tightening limits on long RMB positions that banks can hold for their own accounts.
SINGAPORE - Standard & Poor's Ratings Services today affirmed its unsolicited 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on Singapore. The outlook remains stable, and the transfer and convertibility assessment remains 'AAA'. Also affirmed were Singapore’s 'axAAA' long-term and 'axA-1+' short-term ASEAN regional scale credit ratings.
NEW DELHI – The Reserve Bank of India (RBI) today cut its repo rate by 25 basis points to 7.25%, in line with market forecasts. The reverse repo rate automatically follows, decreasing to 6.25% from 6.50%. The RBI has now cut by 75 basis points in 2013. Also in line with expectations, the cash reserve ratio (CRR) remained unchanged at 4%. The CRR has remained unchanged since a 25bps reduction in January, designed to infuse liquidity into the banking system. The RBI set out three challenges for monetary policy going forward: to lift growth, prevent upward pressure on inflation expectations; and ensure liquidity allows adequate credit flow to the productive sectors of the economy.
SEOUL - Export growth for South Korea April – the region’s first monthly export numbers release - registered a disappointing 0.4% y/y (consensus: 2.0% y/y; prior 0.2%). BBVA Bank says the out-turn may be a harbinger of external headwinds for the rest of the region and, despite a better-than-expected Q1 GDP outturn (1.5% y/y), it could raise the likelihood of a rate cut by the Bank of Korea in coming months (the BoK has stayed on hold since October). Headline inflation in South Korea slowed to 1.2% y/y for April (consensus: 1.5%), well below the target range of 2.5-3.5%. www.bbva.com (ATI).
SINGAPORE – Ratings agency Standard & Poor’s has lifted its ratings for the Philippines, but at the same time effectively downgraded its assessment of Indonesia, saying that a stalling of reform momentum and a weaker external profile in Indonesia have diminished the potential for a rating upgrade over the next 12 months (Indonesia also faces an election next year).
SYDNEY - The relationship between Australian business and the Federal Government has further deteriorated, with a survey of Company Directors finding that only 8% of Directors (down from 12%) agree with the statement ‘the Federal Government understands business’. Conversely, 50% of Directors believe the Federal Opposition understands business.
SINGAPORE - Japan's latest effort to escape deflation and revive economic growth is a drastic departure from the policies of previous governments, but Standard & Poor's says there is more than one-third chance that it will lower its 'AA-' long-term sovereign ratings on the nation. The continuing prospect of a downgrade arises from risks associated with recent Government initiatives and uncertainty of their success, S&P says.