ATI Newswire - Subscriber Only

EIU RESEARCH TIPS INFLATION RETURNING TO JAPAN THIS YEAR

July 18, 2013

LONDON – In an update of its Global Outlook forecast, the Economist Intelligence Unit is predicting 0.1 per cent inflation in Japan for 2013, moving to 1.7% in 2014, drifting to 1.6% in 2015, and to 1.4% in both 2016 and 2017. Inflation (at 1.4%) was last recorded in Japan in 2008, with deflation of 1.3% in 2009, 0.7% in 2010, and 0.3% in 2011, and a zero result in 2012. A key target of the Abe Government’s current economic policy is to encourage a return to inflation.

AUSTRALIAN BUSINESS CONFIDENCE FRAGILE AHEAD OF FEDERAL ELECTION

July 17, 2013

SYDNEY - There has been a sharp decline in business confidence amongst Australia’s mid-market organisations in the June quarter, according to the Commonwealth Bank Future Business Index. It shows that business confidence has fallen to a six-month low of 5.2, following two quarters of increases in confidence. The sharp decline in sentiment across mid-market businesses reflects a range of factors including the impact of policy and government uncertainty in the lead up to the Federal election, rising energy and fuel costs and increased wage pressures.

INDIA: RBI TIGHTENS LIQUIDITY TO PROTECT THE RUPEE

July 17, 2013

NEW DELHI - The Reserve Bank of India (RBI) has taken the bold step of tightening interbank liquidity and raising the cost of shorting the Rupee (INR) in an effort to stem potentially destabilising INR weakness. The RBI has significantly limited banks’ access to funds at the policy repo rate of 7.25%. At the same time, it has raised the cost to banks of borrowing cash in excess of this limit by 200 basis points to 10.25%.

McDONALD’S TO OPEN FOR BUSINESS IN VIETNAM IN 2014

July 17, 2013

HO CHI MINH CITY – McDonald’s has appointed Henry Nguyen, a Vietnamese businessman and founder of Good Day Hospitality, as developmental licensee to build the McDonald’s brand in Vietnam. The first restaurant is planned to open in HCMC in early 2014. Vietnam will be one of more than 65 markets worldwide where the McDonald’s Development Licensee (DL) structure has been deployed.  wwwaboutmacdonalds.com (ATI).

CHINA GDP Q2 GROWTH SLOWS; GOVERNMENT RELUCTANT TO STIMULATE

July 15, 2013

HONG KONG - Second quarter GDP growth in China registered 7.5% y/y, continuing the gradual slowdown in place over the past four-to six-quarters. The out-turn brings growth for the first half of the year to 7.6% y/y, just above the official full-year target of 7.5%. China’s official news agency, Xinhua, over the weekend reiterated the 7.5% growth target after confusion over a reported quote by the Finance Minister on Friday suggesting the target may have been lowered.

S&P CONFIRMS AAA RATING AS TEMASEK UPSIZES GLOBAL NOTES TO US$15 BILLION

July 15, 2013

SINGAPORE - Standard & Poor's today affirmed its 'AAA' rating on the guaranteed global medium-term notes (MTN) programme of Temasek Financial (I) Limited. At the same time, it affirmed the 'AAA' rating on notes issued under the programme. Temasek Holdings (Private) Limited (Temasek; AAA/Stable/A-1+) unconditionally and irrevocably guarantees the programme. S&P says Temasek has increased the size of its MTN programme to US$15 billion from US$10 billion, and that, combined, about US$9.1 billion is outstanding under the programme.

REPORT SAYS ONE QUARTER OF PEARL RIVER DELTA SOIL IS POLLUTED

July 15, 2013

GUANGDONG - The Guangdong Land and Resources Bureau has reported that approximately 28% of soil in the Pearl River Delta is polluted by heavy metals. The Delta makes up 14% of the province and contains the urban centres of Guangzhou and Shenzhen. Much of the polluted soil was marked as Level III or worse, meaning it poses serious health hazards. Guangdong is the first province to release data on soil pollution, following a public outcry earlier this year when cadmium-tainted rice was discovered in Guangdong.

CHINA LIFTS TOURISM REVENUE BY 10.7% IN FIRST HALF

July 15, 2013

BEIJING - The National Tourism Administration has reported that the tourism industry raked in RMB1.4 trillion in revenue during the first six months of the year, up 10.7% on-year. Passenger air traffic totalled 170 million people in the first half, up 11% from a year ago, according to the Civil Aviation Administration of China. The domestic travel and outbound travel markets both expanded, although the inbound travel market shrank slightly due to weak global economic recovery.

NAB SIGNS MoU WITH CHINA’S LARGEST AGRICULTURAL ENTERPRISE

July 12, 2013

MELBOURNE - National Australia Bank (NAB) has signed a Memorandum of Understanding (MOU) with China’s largest agricultural enterprise, the China National Agricultural Development Group Corporation (CNADC), under which it will help CNADC enhance its knowledge and understanding of international banking markets and debt capital markets. CNADC will have access to NAB’s financial services capabilities - ranging from acquisition funding, working capital facilities, term loans and trade finance, to wealth management and transaction banking.

BANK OF JAPAN TO STAY THE COURSE TO SLAY DEFLATION

July 12, 2013

TOKYO - As expected, the Bank of Japan is to maintain its aggressive monetary easing policy, saying the economy “is starting to recover moderately”. It is the first time the BoJ has made such a positive evaluation since 2011. Its aim is to end deflation, and it has adopted an inflation target of 2%. In April, the BoJ launched an aggressive monetary policy easing campaign to double the monetary base in two years, equivalent to US$700 billion per year.

BANK INDONESIA DELIVERS STRONG MESSAGE WITH RATE HIKE

July 11, 2013

JAKARTA - Bank Indonesia (BI) has delivered an upside surprise, raising rates by 50 basis points to 6.50%. Economists were expecting +25bps. BI also tightened loan-to-value ratio for some houses and apartments, effective from September, and banks have been banned from financing down payments for property (so prospective buyers must find other ways to finance a deposit). ANZ Bank says the aggressive stance of BI and its hawkish tone signal that the tightening cycle may extend beyond original forecasts.

BANK OF KOREA HOLDS RATES, BUT LIFTS GROWTH OUTLOOK

July 11, 2013

SEOUL - In line with expectations, the Bank of Korea (BoK) has kept rates unchanged at 2.50% for a second straight month after a 25 basis points cut in May. The BoK flagged slowing growth in emerging markets such as China, but said it expects “the global economy to sustain its modest recovery going forward”. The BoK raised its growth outlook for South Korea for 2013 and 2014 to 2.8% (from 2.6%) and 4.0% (from 3.8%) respectively, on improved domestic demand.

CHINA, US OPEN ANNUAL DIALOGUE ON BILATERAL TIES

July 11, 2013

WASHINGTON -The fifth round of the China-U.S. Strategic and Economic Dialogue has begun in Washington, with US Vice President Joe Biden emphasising the importance of mutual trust in his opening address. During the two-day event, leaders are expected to discuss North Korea’s nuclear programme, trade and investment, climate change, and reform in China. In addition, due to China’s recent hacking scandal and the controversial US PRISM programme, cyber security is likely to be a dominant issue.

INFLATION TAMED, IS VIETNAM SET FOR STIMULUS?

July 11, 2013

HO CHI MINH CITY – In its monthly economic assessment, Vietnam Asset Management (VAM) says Government success in the first half of 2013 in curbing inflation has helped stabilise Vietnam’s macro environment, and that this leaves room to consider more drastic measures to boost growth. “The interest rate is now at its lowest, and unlikely to face more cuts while Dong devaluation is essential in order to reduce tension in the FX market,” VAM says.

WEAK EXPORT OUT-TURN IN CHINA ADDS TO GROWTH CONCERNS

July 10, 2013

BEIJING - China’s exports fell by 3.1% y/y in June, adding to pessimism about near-term growth prospects. Exports fell across all main developed markets: US (-5.4% y/y), the EU (-8.3% y/y), and Japan (-5.1% y/y), while exports to the ASEAN region were robust (+10.2% y/y). bbva Bank points out that, notably, exports to Hong Kong fell by 7.0% y/y, suggesting further effects on the data from the Government’s crackdown of over-invoicing, implying that the actual overall export data may not be as bad as the headline figures suggest.

CHINA PROMOTES FURTHER CAPITAL ACCOUNT CONVERTIBILITY

July 10, 2013

BEIJING - The People’s Bank of Chine has issued a detailed notification to simplify the rules on RMB cross-border settlement business to promote RMB cross-border transactions. The notification broadly covers five major areas - RMB cross border settlement under the current account; Bank card RMB account clearing business; Onshore non-financial institution outbound RMB lending; Onshore non-financial institutions issuance of offshore RMB denominated bonds; and Onshore agency banks’ RMB account management with offshore participation banks.

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