ATI Newswire - Subscriber Only

BEIJING AND SHANGHAI DETAIL NEW PROPERTY REGULATIONS

April 1, 2013

BEIJING – Both the Beijing and Shanghai governments have announced further details of their new property regulations. A 20% capital gains tax on property sellers, in comparison to previous tax rates of 1% – 2% on the final sale price, will be strictly levied in Shanghai and Beijing if the original value of the house can be verified. The 20% tax will be incurred by sellers if a house owner sells the property within five years after purchase and the apartment is not the only one owned by the family.

CHINA MANUFACTURING SECTOR CONTINUING A MODEST IMPROVEMENT

April 1, 2013

HONG KONG - After adjusting for seasonal factors, the HSBC Purchasing Managers’ Index™ for China – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – posted 51.6 in March, up from 50.4 in February, signalling a modest improvement. Operating conditions in the Chinese manufacturing sector have now improved for five consecutive months. Production levels increased for the fifth month in a row in March, with the rate of expansion accelerating from February to a solid pace, the second-fastest in two years.

CHINA CURBS WEALTH MANAGEMENT PRODUCTS IN SHADOW BANKING CRACKDOWN

March 29, 2013

BEIJING - The China Banking Regulatory Commission (CBRC) has reportedly introduced new measures to rein in banks’ issuance of wealth management products (WMPs), which have fuelled the growth of lending in the non-bank financial sector. In particular, the CBRC is reported to have imposed limits on WMPs used to fund trust loans, bank acceptances, and entrust loans. For WMPs beyond the established limits (4% of total assets and 35% of total WMPs), banks are instructed to move them back onto their balance sheets by end-2013.

CHINA STATE COUNCIL SIGNALS FISCAL, TAXATION REFORMS

March 29, 2013

BEIJING – China’s State Council, chaired by Premier Li Keqiang,has stepped up its rhetoric on fiscal and taxation reforms, with State media reporting that the Council announced it would "actively advance reforms in major sectors, trying to make substantial progress". Fiscal and taxation reform are seen as central to tangible Government reform, and a rebalancing of the economy away from State investment towards the private sector.

CHINA WARNS VIETNAM OVER FISHING INCURSIONS NEAR XISHA ISLANDS

March 29, 2013

BEIJING - In a move indicative of recent military brinksmanship, China has warned Vietnam to stop vessels ‘illegally’ fishing near the Chinese-claimed Xisha Islands in the South China Sea. In the third week of March, Vietnam claimed that a fishing vessel was fired at and chased by a Chinese military vessel, a claim China has not denied and instead branded ‘necessary and legitimate’. Chinese claims to ownership of island groups in the South China Sea has led to a deterioration of relations with ASEAN, in particular with Vietnam.

SOUTH KOREA LOWERS 2013 GROWTH FORECAST, ANNOUNCES STIMULUS

March 29, 2013

SEOUL – South Korea’s Ministry of Strategy and Finance has lowered its growth forecast for 2013 to 2.3%, from 3.0% previously as the new Government of President Park Guen-hye announces a stimulus package to counteract weak growth. Estimates of the size of the package are around 1% of GDP, with expectations it will focus on job growth and stimulation of the property market. www.bbva.com (ATI).

SHADOW BANKING RISK FILE BETTER THAN FORMAL BANKING IN CHINA: S&P

March 28, 2013

HONG KONG - Contrary to perceptions of high risk, ratings agency Standard & Poor's says China's shadow banking system is "yet to destabilise" China’s banking system. S&P released a report today (Thursday) showing the sector has grown to around RMB22.9 trillion yuan (US$3.7 trillion),accounting for 34% of total loans in the Chinese banking system at end-2012. The sector has enjoyed compound annual growth of 34% since end-2010 and is expected to continue to grow in coming years, according to S&P analysts.

CHINA BANKING REGULATOR WARNS OF RISKS IN NINE SECTORS

March 27, 2013

BEIJING - The China Securities Journal has published a report warning of the risks of loans to industries in sectors which are closely related to cyclical economic growth, or have struggled to deal with overcapacity issues. The sectors mentioned in the report included property, steel, and PV. The report warns the nation’s financial institutions about major industry’s exposure to excessive debts, high leverage and overcapacity.

CHINA SMART-PHONE EXPORTS TO GROW 40% IN 2013

March 27, 2013

TAIPEI - Global smartphone shipments from China in 2013 will grow by an estimated 40% to 304 million because of stronger demand, Taiwanese market research firm Digitimes Research, has forecast. The assessment is in line with an earlier prediction by the Taiwan Industrial Economics and Knowledge Research Centre. With dramatic price cuts and quality gains in white box smartphones - unbranded phones that clone more popular models - the smartphone market will continue to expand substantially, the research centre said. As for Chinese smartphone brands, shipments of Huawei Technologies Co.

VIETNAM’S DOMESTIC DEMAND WOES CONTINUE

March 27, 2013

HANOI - GDP growth for Q1 has come in at 4.9% y/y, below market expectations of 5.2% and lower than the Q4 figure of 5.5%. Industry and construction growth slowed to 4.9% in Q1 from 6.7%, while services growth fell to 5.7% from 6.9%. Agriculture, fishery and forestry grew 2.2% compared to a fall of 0.5% previously. Domestic activity continued to give weak signals, particularly retail sales, but March exports and (surprisingly) imports performed well.

CHINA, BRAZIL SIGN OFF ON CURRENCY SWAP ARRANGEMENT

March 27, 2013

BEIJING – The People’s Bank of China has announced a China-Brazil currency swap agreement worth RMB190 billion / BRL 60 billion. China is Brazil’s largest trading partner, having taken over from the US in 2009. The currency agreement is intended to enhance bilateral financial co-operation and trade flows, although in practice its significance is quite limited (in contrast to the swap arrangements for offshore RMB centres such as Hong Kong and Singapore). The latest swap arrangement adds to 19 already in existence, and is part of efforts to further RMB internationalisation.

FITCH RATINGS LIFTS PHILIPPINES TO INVESTMENT GRADE

March 27, 2013

MANILA - The Philippines’ sovereign rating has upgraded by one notch to investment grade (BBB-) by ratings agency Fitch, citing a persistent current account surplus and strong net external creditor position, the economy’s growth resilience over the past five years, and improvements in governance and fiscal management. The Philippines economy grew 6.6% in 2012, surpassing neighbouring Indonesia’s 6.2%.

RISKS BACK ON RADAR IN EMERGING COUNTRIES, SAYS COFACE

March 26, 2013

PARIS - Despite resilient growth, estimated at 5.1% in 2013, and improved sovereign and external fundamentals, emerging country risks have not disappeared altogether, but have changed form, according to credit insurer Coface. “Three major risks now weigh on emerging markets,” Coface says. “Politically, tensions have sharpened, illustrated by protests in North Africa and the Middle East, and now also in Russia and India. Economically, we are seeing a rise in protectionist measures.

HTC TO LAUNCH SECOND-GENERATION ‘BUTTERFLY’ PHONE

March 25, 2013

TAIPEI - Taiwan's HTC Corp. plans to launch a second generation "Butterfly" customised smartphone to capitalize on growing consumer interest in the large-screen phone segment. Ben Ho, chief marketing officer of HTC, said the 5-inch Butterfly was originally customised for certain mobile carriers in Japan and has since been introduced in other markets, such as the US and Taiwan, where consumers have been attracted by its large screen.

CHINA ANTI-DUMPING DUTIES PLACED ON MORE CHEMICALS

March 25, 2013

BEIJING – China’s Ministry of Commerce has announced it will start to collect anti-dumping levies on the chemical resorcinol, currently imported from the US and Japan. The tariff is the latest in a list of levies introduced on imported chemicals, such as a recent tariff placed on toluene diisocyanate from the EU, a chemical used in manufacturing rubber, dyes and plastics. Japanese companies will face 40.5% import duty on resorcinol, and US companies 30.1% tariff. The move is seen by observers as indicative of a deterioration of trade relations between China, and the US and EU.

STATE BANK OF VIETNAM CUTS RATES BY ANOTHER 1%

March 25, 2013

HANOI - The State Bank of Vietnam (SBV) has cut its policy rate by another 100 basis points to 8%. This follows a cumulative 600 basis points of cuts in 2012 - the most recent cut was 100 basis points in late December. The SBV also reduced the cap on dong deposit rates by 50 basis points, to 7.50% from 8%, with the hope of incentivising banks to reduce their lending rates. ANZ Bank says it believes this will be the last cut for the year - but says there are risks of another cut if economic data deteriorates further.

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