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India Q2 GDP disappoints at 4.4% y/y, slowest in more than four years

September 3, 2013

NEW DELHI - Adding to the dismal mood amid slowing growth and currency depreciation,  India’s GDP growth has slowed to a disappointing 4.4% y/y in the second wuarter from 4.8% in 1Q13, weighed by a contraction in investment and a pullback in private consumption, offsetting higher public spending.  The GDP outturn is the slowest since Q1 2009.

Indonesia announces record trade deficit for July

September 3, 2013

JAKARTA - Inflation was better than expected, but any sense of relief dissipated when Indonesia announced a very large trade deficit. With the market so focussed on deficits, reaction in currency markets was, not surprisingly, negative. Indonesia’s July trade deficit was the largest on record at USD2.31 billion, widening from a deficit of US$857 million in June. Exports were weaker and imports much stronger than expected.

China the key market for international Australian SMEs: HSBC

September 2, 2013

SYDNEY - China is set to overtake the US as the key overseas trading partner for the Australian SME sector, with the majority importing from China rather than exporting to it, according to a survey by HSBC Australia. With China’s middle class expected to reach more than a billion people by 2030, HSBC says Australian SMEs should consider the consumer market opportunities in China rather than just seeing China purely as a manufacturing hub.

AMP Capital enters China funds management with China Life JV

September 2, 2013

HONG KONG – Australia’s AMP Capital is to establish a funds management company in China with China Life Asset Management Company, a subsidiary of China Life Insurance (Group) Company, China's largest insurance group, institutional investor and corporate pension manager. China Life AMP Asset Management Company Limited will offer retail and institutional investors in China access to leading investment solutions initially in domestic listed equities and fixed income.

Japan inflation and activity indicators are moving in the right direction

August 31, 2013

TOKYO - In a positive sign that deflation is ending, Japanese CPI inflation picked up in line with expectations to 0.7% y/y in July, its highest rate since end-2008, although still well short of the official 2% target. In addition, after a dip in June, July activity indicators picked up, providing further evidence that expansionary monetary and fiscal policies are working in the right direction.

China’s official PMI suggests that growth momentum has accelerated

August 31, 2013

BEIJING - China’s August official Purchasing Manager’s Index (PMI) has risen for a second consecutive month to 51.0, up from July’s 50.3, indicating that growth momentum has accelerated thanks to faster implementation of the fiscal programme and “mini stimulus” initiated by the new Government. ANZ Bank says its calculations show that 58% of China’s full-year budget will be spent in the second half.

China court issues first preliminary injunction in trade secrets case

August 30, 2013

SHANGHAI - The Shanghai No. 1 Intermediate People’s Court - before a trial on the merits of the case - has issued a preliminary injunction order against a former employee of the Chinese subsidiary of a US-based pharmaceutical company. Lawyers Baker & McKenzie say the injunction restrains him from disclosing, using, or allowing others to use certain documents containing trade secrets that he downloaded from the company’s database without authorisation. In addition, the court issued an asset preservation order to freeze the ex-employee’s real property and bank account pending the trial.

Bank Indonesia lifts interest rates to stem currency depreciation

August 29, 2013

JAKARTA - Amid further downward currency pressures, Indonesia’s central bank has lifted interest rates by 50 basis points to 7%, the highest level since June 2009. The move comes exactly two weeks after BI kept rates on hold at its regular scheduled policy meeting on August 15. BI has now lifted rates by a cumulative 125 basis points since June in response to both a surge in inflation (8.6% y/y in July) from an administered fuel price increase on June 24, and currency pressures.

India expands measures to stem currency pressures

August 29, 2013

NEW DELHI - In a bid to curb the downward currency spiral – the rupee this week reached a fresh low of 68.8 to the US$ - the Reserve Bank of India has opened a special window to supply dollars to public sector oil companies. The latest measure comes on top of steps taken in recent weeks that include tightening short term rupee liquidity, curbs on gold imports, restrictions on residents’ capital outflows, easier norms for overseas borrowing, and higher foreign investment limits across key sectors including multi-brand retail.

China set to overtake US in e-commerce

August 29, 2013

BEIJING - E-commerce in China reached a value of RMB4.35 trillion in the first half of the year, up 24.3% from a year earlier, according to the China e-Business Research Centre, and is expected to overtake that of the US later this year. Total spending by Chinese consumers through online shopping reached US$212.4 billion in 2012, compared to US$228.7 billion in the US, according to Bain & Company. The market has grown at an average rate of 71% from 2009 to 2012, versus 13% in the US, and its total size is expected to reach RMB3.3 trillion by 2015.

Market-driven consolidation likely in China banking sector: S&P

August 29, 2013

HONG KONG – As China's economic growth decelerates and some industry sectors face growing oversupply issues, the risks from China's recent credit boom appear to be rising to the surface for the country's banks, according to ratings agency Standard & Poor's, which has examined the credit profiles of China's top 50 banks by asset size. "Rising credit costs, compressing interest margins, and growing pressures on non-interest incomes are likely to constitute a triple-hit to bank earnings," said S&P Senior Director, Qiang Liao. "In particular, we think it is highly likely that the banks could incur substantially higher credit losses in coming years."

S&P affirms Taiwan ratings at AA-/A-1+ with GDP growth to come

August 29, 2013

SINGAPORE - Standard & Poor's today affirmed its 'AA-' long-term and 'A-1+' short-term unsolicited issuer credit ratings on Taiwan, with the outlook is stable. Taiwan’s transfer and convertibility assessment remains 'AA+', and S&P’s 'cnAAA/cnA-1+' Greater China regional scale ratings on Taiwan were affirmed. The ratings agency said Taiwan's extremely strong external position, sound monetary management, and dynamic information technology (IT) companies in the private sector support the ratings. “Tempering these strengths are moderately high Government debt and a small, open economy that is vulnerable to global economic conditions.”

Philippines GDP growth at 7.2% in second quarter

August 29, 2013

MANILA - The Philippine economy grew by 7.5% y/y in Q2, higher than market expectations of 7.2%. Growth moderated from downwardly-revised 7.7% expansion in Q1, previously at 7.8%. ANZ Bank says it is maintaining its 2013 GDP growth forecast of 7.1%. Sources of growth are now more balanced, ANZ says. “We continue to expect domestic growth to be underpinned by public and private investment.”

Food Security Bill in India aggravates fiscal concerns

August 28, 2013

NEW DELHI – India’s lower house of Parliament has approved new food subsidies – bringing a range of budget concerns into play. “Notwithstanding its admirable goals of poverty alleviation and more equitable growth, the initiative poses upside risks to the overall food subsidy bill (budgeted at 0.8% of GDP for FY14), at a time when fiscal concerns are adding to weak investor sentiment and contributing to a further weakening of the rupee,” says BBVA Bank.

More signs of a bounce back in regional exports?

August 27, 2013

HONG KONG - Hong Kong’s July exports  beat market expectation, jumping by 10.6% y/y (consensus: 3.5% y/y), after declining by 0.2% y/y in June. The result reflects improving exports to China, the US, and Europe.  A number of other Asian economies have recently seen improving export trends, including China, Japan, Korea, Singapore, and the Philippines. However, commodity exporters such as Indonesia and Malaysia have seen weaker trends, reflecting the commodity composition of their exports.

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