BEIJING - Sinopec Group, China’s largest State-owned oil exploration enterprise, has confirmed it is in talks with Iceland over oil exploration in Iceland’s coastal waters. The talks involve Sinopec Star Petroleum Co Ltd, a clean energy subsidiary wholly-owned by the group, which has signed an agreement with the Icelandic company Orka Energy Holding. CNOOC Ltd, the biggest offshore oil producer in China, has already signed an agreement separately with Iceland-based Eykon Energy to bid for an exploration license.
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BEIJING - Following trends in China’s over-ground railway system Beijing’s underground subway has become the first in China to open up to private investment. Beijing’s subway lines 4 and 14 have previously had limited private investment, and the Government is looking to private investment for future planned subway lines in the capital, according to the National Development and Reform Commission (NDRC).
BEIJING - The Chinese Government says it will scrap a decade-long iron ore import licensing system that should see an increase in iron ore imports and improve access to raw materials for small and medium enterprises. Iron ore traders will now need only the same routine licenses that are issued to other importers and will no longer need approval by government-backed industry bodies such as the China Iron and Steel Association.
TAIPEI - Taiwan hopes to take part in more international affairs and become further integrated in the regional economy, ruling Kuomintang (KMT) Honorary Chairman, Wu Poh-hsiung, has told Chinese leader Xi Jinping at a meeting in Beijing. China was urged to fully understand Taiwan's bid to broaden its international space by actively participating in international affairs, Wu said at the high-level meeting, the first of its kind since Xi took the helm of the Communist Party of China (CPC) in November.
JAKARTA - In contrast to policy easing by other central banks in the past month (Australia, Korea, Thailand, and India), Bank Indonesia has raised its benchmark interest rate by 25 bps to 6.0%. The move follows a surprise 25bp hike in the overnight deposit rate (FASBI) announced last Tuesday, and marks the first rate move in more than a year, since BI cut rates to a record low in February 2012.
JAKARTA - Fitch ratings has raised India's outlook to stable from negative while affirming its BBB- credit rating (one notch above investment grade). Fitch said it in part based its decision on the improvement to its outlook on India’s fiscal consolidation measures and progress in addressing structural hurdles to investment).
CANBERRA – The Australian software maker Intelledox has signed strategic customers and channel partners in Singapore as it strengthens its focus on Asia. To drive growth in the region, Intelledox has appointed Jefrey Ng as Sales Director and Zac Leow as Technical Lead based out of its Singapore office. Intelledox delivers enterprise software solutions to a portfolio of large corporates and government organisations. www.intelledox.com (ATI).
HONG KONG — China’s days of investment-led double-digit GDP growth are over, according to Citibank. “Our economists expect the economy to adjust down to consumer-led 6-8% growth over the next decade. In lockstep, corporate earnings will also decelerate and quality, rather than quantity, of growth will increasingly dictate stock premiums and discounts,” the bank says.
BEIJING - China has opened an investigation into dumping allegations for wine and steep pipe imports from the European Union, reacting to EU enforcement of anti-dumping taxes of 11.8%, which will be in effect from now until August, after which they will be extended to 47.6% for another four months. The EU also plans to file a complaint with the WTO over China's tariffs on European steel tube exports, with the complaint aiming to overturn the tariffs on the tubes used in power plants, claiming that the Chinese duties are retaliatory and not based on evidence.
JAKARTA – Bank Indonesia (BI) has surprised the market with the timing of an increase in its deposit facility rate (FASBI) by 25 basis points to 4.25%, but ANZ Bank says a move was not unexpected given recent action in currency markets. “Bank Indonesia is worried about the potential for instability arising from outflows from Indonesian assets,” ANZ says. The bank expects additional FASBI hikes should IDR remain under pressure. It says the outflows from Indonesian assets that prompted BI to react have been significant. www.live.anz.com (ATI).
HONG KONG - Asia-Pacific's gaming industry is betting on good times ahead. Standard & Poor's expects the industry's revenue and earnings growth to remain relatively robust in the rest of 2013. It says casino operators have generated stronger cash flows from their existing assets so far this year, which is helping to underpin the sector's credit quality. “They are also seeking new opportunities to expand their gaming operations,” S&P says in a new report, adding that such expansion carries risks.
SINGAPORE - The Japanese yen decline of the past few months should be positive for the rest of Asia, at least at the macro level, according to ratings agency Standard & Poor's, which says that, because most of the economies in the region are net importers from Japan, a weaker yen means cheaper imports. Net exporters to Japan, however, will lose out. "Although the recent steep decline in the yen has negative connotations for neighbouring economies' export competitiveness, we view the recent weakness of the yen as retracing the sharp gains seen during the depths of the 2008 global financial crisis," says Paul Gruenwald, S&P Asia-Pacific Chief Economist. "During the financial crisis, the yen appreciated sharply due to its status as a safe haven currency."
TAIPEI – Taiwan’s Bureau of Foreign Trade has urged caution in response to an upturn in Taiwan's exports in May, which rose an anaemic 0.9% annually, despite the Board expecting continued growth in exports during the (northern) summer. The uptick in May exports was driven by 13.9% growth in shipments of cell phones and mobile devices, which had shrunk by between 11.9% and 20.5% in the three previous months, according to Ministry data. Total exports in May were 5.2% higher than in April, but officials called for caution amid uncertainties in the global economic recovery.
BEIJING – With China’s activity data in May indicating that growth has slowed further, ANZ Bank has revised its forecast for China’s GDP growth downwards - to 7.6% this year and 7.8% next year, from previous forecasts of 7.8% and 8.0%, respectively. “For this year specifically we think GDP will rebound somewhat to 7.9% in Q2 due to base effects, but moderate to 7.6% and 7.2% in Q3 and Q4 respectively,” ANZ says. “Meanwhile, tepid inflation in May also reflects a weak domestic demand. China’s CPI inflation was only 2.1% y/y in May, much lower than expected. For the whole year, we forecast CPI inflation could be at around 2.5%, which is 1ppt lower than this year’s 3.5% target.”
BEIJING - China’s export growth crashed to just one per cent in May, after an apparent surge in recent months which was boosted by over-invoicing and round-tripping to use trade to bring in hot money. ANZ Bank says the trade slowdown largely reflects Chinese Government efforts to crack down on trade activities that seek financial gains on large offshore and onshore interest rate differentials and RMB’s appreciation. The one per cent export increase in May compared with 14.7% in April and market expectations of a 7.4% increase.
KUALA LUMPUR - Malaysia’s export growth for April has surprised on the down side, with import growth stronger than expected, bringing the trade surplus to the lowest level since November 1997. Export growth fell 3.3% y/y from -2.9% y/y the previous month, the third consecutive month of contraction On a product basis, weakness was fairly broad-based, with manufactured goods down 1.5% y/y driven by reduced shipments of electrical and electronic products. Commodity shipments of crude and petroleum products, LNG, and palm oil were also notably weaker on a volume basis compounded by their decline in value.