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India’s capital outflows accelerate amid fears of capital controls

August 22, 2013

NEW DELHI - Investor sentiment towards India has weakened further due to a mix of slowing growth momentum, renewed inflation pressures, rising external risks and fears of capital control measures to stem the slide in the currency. The latest trigger was a set of measures announced by the central bank last week to reduce capital outflows through tighter restrictions on outward remittances of domestic companies and individuals.

Credit profiles of many top China corporates to weaken in slowdown: S&P

August 20, 2013

HONG KONG - China's current economic slowdown is likely to contribute to weakening credit profiles for many of the country's major companies, according to Standard & Poor's annual survey on China's top corporates. The report examines the credit profiles of 151 major Chinese companies from a pool of the largest domestic bond issuers and biggest revenue-earners, as well as companies that are representative of their industries. Three-quarters of these are State-owned enterprises (SOEs), a decline from 88% in the  2012 sample.

South Korean President proposes family reunions, co-operation with Pyongyang

August 19, 2013

SEOUL – South Korea’s President, Park Geun-hye, has extended an olive branch to Pyongyang, proposing that North and South Korea resume reunions for families separated between the two Koreas, from September. “I want to reduce the pain of separated families,” Park said in an address at the 68th anniversary of National Liberation Day. “I hope North Korea can open its mind and allow family reunions.”

Formosa Plastics buys into Australia/China iron ore JV

August 19, 2013

TAIPEI – Taiwan’s Formosa Plastics Group (FPG) has agreed to invest US$1.15 billion in a joint venture owned 88% by Australia-based Fortescue Metals Group (FMG), the world's fourth largest iron ore producer, and 12% by China’s Shanghai Baosteel Group Corp. Formosa Plastics will spend US$123 million to take a 31% stake in the JV and will provide US$527 million in capital expenditure for the first stage of development.

China to sell milk powder through pharmacies

August 19, 2013

BEIJING – Following a series of contamination scandals, China’s Ministry of Commerce has unveiled plans to sell milk powder at pharmaceutical stores from October. It will seek to establish a unified purchasing, distribution and sales system, and will be completed in three phrases, from 2013-2015. Purchase and distribution will be conducted by the Ministry and terminal sales will be done solely through vendor machines to guarantee the quality of the products.

Japan confident of ending deflation, talks down corporate tax cut

August 19, 2013

TOKYO - In its monthly economic report for August, Japan’s Cabinet has expressed confidence that the economy no longer facing chronic price declines. CPI inflation turned positive in June for the first time in a year, rising to 0.2% y/y.  Despite a slightly weaker-than-expected Q2 GDP outturn (2.6% saar), the Cabinet judged that the economy is, “picking up steadily and shows some movements on the way to recovery”, evidenced by rising exports, private consumption and industrial production. The Cabinet also expressed confidence that improving corporate earnings will help boost business investment, which contracted in Q2.

India intensifies measures to stem capital outflows, stabilise the rupee

August 19, 2013

NEW DELHI - The Reserve Bank of India has introduced new measures to stem capital outflows, including tighter restrictions on overseas direct investments (to 100% of companies’ net worth, down from 400% previously), capping outward remittances by individuals to US$75,000 per year from US$200,000 previously, and prohibiting outflows on acquisition of overseas property. The measures come after the Government measures announced just days ago to reduce the current account deficit through hikes in import duties and fuel price reforms, along with measures to boost capital inflows.

Inflation in India jumps on weak currency, rising food prices

August 19, 2013

NEW DELHI - India’s closely-watched wholesale price inflation has jumped in July to a higher-than-expected 5.8% y/y, led by upward energy price adjustments, rising food prices and the impact of a weakening rupee. Reassuringly, core inflation stayed benign at 2.3% y/y (from 2.1% y/y in June). The jump in headline WPI inflation, which reached a five-month high, was influenced by the import pass-through of a near 10% rupee depreciation during May-July, accentuated by a hike in regulated diesel prices (3% m/m) and a surge in prices of fruit and vegetables (10.5% m/m) amid temporary supply distortions from heavy rains.

Global economic outlook dims while US recovery continues: ICC-Ifo survey

August 15, 2013

 

PARIS  – The world economy has weakened slightly this quarter, mainly due to declining optimism in Asia and Latin America, while North America shows signs of continuing recovery, according to the latest World Economic Survey published by the International Chamber of Commerce (ICC) and the Munich-based economic research institute Ifo.

Bohai Bay likely to join Pearl, Yangtze Deltas as China’s third economic engine

August 14, 2013

BEIJING – China’s central government is considering plans to upgrade regional co-operation between the provinces of Beijing, Tianjin and Hebei to build a trilateral economic sphere in the Bohai Bay area. A draft for co-operation was completed in 2006, but eventually shelved. Since President Xi Jinping urged the three cities to push forward with co-operation in May, local governments have submitted proposals to restart the initiative.

E-commerce industry surges in China in first half

August 14, 2013

BEIJING – China’s e-commerce sector raked in revenue of RMB4.98 trillion in the first half, up 45.3% on-year, according to data from the Ministry of Industry and Information Technology (MIIT). Consumption of information products and services jumped 20.7% on-year to RMB2.07 trillion and the output of smartphones surged 120% to 214 million units, paralleling a rise in mobile e-commerce.

China to expand urban rail network in stimulus programme

August 14, 2013

BEIJING - A National Development and Reform Commission (NDRC) official has said China will expand city rail networks to 3,000 km by 2015 and to 6,000 km by 2020, with combined investment of RMB 3-4 trillion. Local bureaus in more than 10 cities have granted approvals to build or extend local urban rail networks in recent months, and 36 cities have approved plans to build subways. In 2013 alone, investment in China’s rail network will expand by RMB40 billion from last year to RMB220 billion.

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