Tuesday, April 30 2024 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
HONG KONG - The global financial group Natixis says the spread of COVID-19 to emerging economies has brought to light a reality that had been mostly forgotten in an era of ample dollar liquidity, namely, their excessive dependence on external financing. Amid the COVID-19 shock, foreign investors have left these markets at an unprecedented speed, resulting in a sudden global dollar shortage in March, Natixis says.
HANOI -- As part of numerous measures to prevent the transmission of COVID-19 from other virus-hit nations, Vietnam is still imposing a general entry ban on foreign nationals. But there are exemptions including for those entering Vietnam for diplomatic or official duty purposes, or for those classified under "special circumstances".
SINGAPORE - ANZ Bank is expecting the Singapore economy to contract by 5.9% in 2020 -- but sees a stronger rebound taking hold over the early part of 2021, leading to GDP growth of 4.6% for 2021.
"This assumes there are no second-wave COVID-19 infections, either in Singapore or globally," the bank says.
HONG KONG - The global financial group Natixis says China's long-awaited and most important political gathering has been brief and crystal clear in its messaging -- flexibility is king in guiding expectations, because growth will be hard to achieve no matter how much China tries. Natixis says this new guidance from the 'Two Sessions' marks a major departure from traditional economic management in China, because China's leadership opted not to set a growth target.
TOKYO - Japan is significantly tightening foreign investment regulations, with implementation of the changes to begin on June 7. The changes include a new 1% prior notification threshold (lowered from 10%) for the acquisition of shares in a listed company engaged in a Designated Business Sector.
SINGAPORE -- China's decision not to set a GDP growth target for 2020 alleviates some risk of an excessive stimulus response to the COVID-19 economic shock, says global ratings agency Standard and Poors. However, China is still turning the dial on stimulus, and that stimulus could be swiftly withdrawn next year if the recovery continues.
SEOUL- Meeting with business leaders from key industries at the Korea International Trade Association in Seoul, South Korea's President, Moon Jae-in, has pledged to swiftly press ahead with his proposed "Korean New Deal" to minimise the economic impact of COVID-19 and secure future competitiveness.
HONG KONG - While much has been written about the growing dependence on Chinese-made products of consumers and national economies around the world, less attention is given to an examination of the dependence of the Chinese economy on offshore markets.
Nataxis, in a new analysis, makes the point that the importance of external markets for Chinese firms grew from 7% in 2013 to 11% in 2019 - and has since collapsed, especially for China's private-sector firms.
HO CHI MINH CITY-- In its monthly review, Vietnam Asset Management describes relaxation of the COVID-19 "lockdown" in late April as probably the most efficient measure to boost economic activities. Its initial observation is that, though caution remains, business activities are quickly regaining momentum.
HONG KONG - ANZ's Senior China Economist, Betty Wang, believes China's consolidated fiscal deficit could jump to as high as 9.0% of GDP due to fiscal repair measures likely in the wake of the COVID-19 pandemic.
SYDNEY - Strong commodity exports and a sharp fall in services imports supported a jump to a record trade surplus of AUD10.6 billion for Australia in March. HSBC says the closure of Australia's borders saw a larger fall in service imports than exports, boosting the trade surplus. Australia is typically a net importer of tourism services.
BEIJING - ANZ Bank says a surprising rise in exports from China in April was driven by electronic exports, which were up 5.6% y/y, based on ANZ calculations. Pending official numbers (at the time of writing), our calculation based on historical data suggests mechanical and electronic exports, which account for 58.8% of total exports, rose 5.6% y/y in April," ANZ says.
SYDNEY - Australia may see a 7.5% fall in GDP for the first half of 2020 followed by a U-shaped recovery, according to Paul Bloxham, HSBC's Chief Economist for Australia/New Zealand.
TAIPEI- Global ratings agency Standard and Poors has affirmed its ratings on Taiwan at AA-/A-1+ and says the outlook is stable. "A robust net external asset position, strong monetary flexibility, and competitive private sector will help anchor our ratings on Taiwan in the face of economic headwinds from the COVID-19 pandemic," it says.
HONG KONG - Asia will be hit twice in 2020 by both domestic and external demand shocks, according to the global financial group, Natixis, which says its "rather benign" scenario in terms of growth rebound in 2021 is subject to three key risks. The risks, it says, are:
* A protracted global recession in 2021 as stimulus measures fail, or a new wave for the pandemic;
* Rapid de-globalisation of trade and investment and, possibly an extension of barriers to the cross-border movement of people; and
* A spike in financial risk leading to a domino effect in defaults in the corporate and/or sovereign space.
SINGAPORE - Due to the severity of measures being taken to stop the spread of COVID-19 in the US and euro area, ANZ Bank is now estimating that GDP will probably run at 20% below normal for the next couple of months.