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Thailand to allow five foreign commercial banks to enter market

August 2, 2013

BANGKOK – Thailand’s Ministry of Finance has announced that it will allow up to five foreign commercial banks to establish a subsidiary in Thailand. A foreign commercial bank subsidiary is defined as a commercial bank where at least 95 per cent of its total shares are held directly or indirectly by a foreign commercial bank. The subsidiary must have paid-up registered capital of at least Baht20 billion and can apply to open as many as 20 branches and 20 off-premises ATMs in Thailand.

Official China PMI lifts in July, but HSBC numbers beg to differ

August 2, 2013

HONG KONG – Sharp conflict has emerged between official and private sector figures making up China’s Purchasing Managers’ Index (PMI) for July. The official National Bureau of Statistics PMI rose to 50.3, maintaining a +50 reading for a 10th consecutive month. The increase was broad-based, as readings for both large and small firms rose, reflecting an improvement in both domestic and external demand. However, the HSBC PM released almost simultaneously fell to 47.7 (exactly in line with last week’s HSBC PMI Flash estimate) from 48.2 in June, recording a sub-50 reading for a third month in a row.

US, ASEAN demand sees rebound in South Korean exports

August 2, 2013

SEOUL – South Korean exports grew 2.6% y/y in July, turning around from a 1.0% contraction in June. Imports also rose 2.7% y/y, surprising market expectations of -1.2%. As a result, the trade balance declined from June’s US$5.5 billion to US$2.7 billion in July. ANZ Bank says the outlook for the rest of 2013 appears brighter. Exports to the US have picked up in recent months (Q2 +9% y/y vs Q1 -4.7%), reflecting a general recovery of the US consumer market, and demand from both China and ASEAN registered positive growth in the first half.

South Korean investors target Australia in offshore push

August 2, 2013

SYDNEY – The foreign direct investment flow from South Korea into Australia is set to hit a record high in 2013, with institutional investors in Australia’s fourth largest trade market buoyed by a desire for core property and infrastructure assets, according to Andrew Cannane, GM-Corporte Clients with The Trust Company. He is tipping South Korean investment in foreign infrastructure and property offshore to exceed $5 billion in 2013,  including more than $1 billion to Australia.

Budget deficit likely dampener on Japan's stimulus policy: Atradius

August 1, 2013

TOKYO – In a new Country Report on Japan, export credit insurer Atradius says an immediate drawback of the Japanese Government’s stimulus policy is that the budget deficit is likely to exceed 10% of GDP in 2013, and that this could prove detrimental to Japans already record high public debt-to-DP ratio of more than 200 per cent.

Air Freight volumes begin to show signs of life as confidence improves

July 31, 2013

GENEVA - The International Air Transport Association (IATA)  has released June figures showing a 1.2% on-year expansion in global air freight demand. Although weak, this is an improvement when compared to 0.9% on-year demand growth recorded in May and just 0.1% growth realised over the first half of the year. IATA says while previously the global economic trend has been defined by robust emerging economies and stagnant growth in developed markets, the strongest improvements in business confidence are now occurring in some developed economies. Nevertheless, overall business confidence, a key indicator for air freight, continues to be weak.

 

From May to June, global freight volumes increased by 0.8%. A quarter of that improvement was captured by European airlines, which saw a 0.9% improvement in demand compared to May, and 2.6% up compared to June 2012. In contrast, Asia-Pacific carriers (the biggest players in global air freight) and North American airlines recorded year-on-year declines of 1.8% and 1.2% respectively.

Mixed readings on the Japanese economy

July 30, 2013

TOKYO - Retail sales in Japan in June surprised to the downside, contracting by 0.2% m/m sa (consensus: +0.8% m/m) after gains of 1.5% m/m in May, mainly due to a drop in fuel sales on rising oil prices. On a year-over-year basis, retail sales growth still managed to record a positive 1.6% y/y in June after growth of 0.8% in May. Separately, June CPI data released last Friday registered positive inflation of 0.2% y/y (consensus: 0.1%) for the first time since June 2012, on signs that the aggressive monetary easing and yen weakness are working to end deflation, albeit still well short of the Bank of Japan’s 2% target.

Vietnam formalises new Customs regime

July 29, 2013

HO CHI MINH CITY – Vietnam’s Ministry of Finance has issued a new Circular expected to take effect from August 11 which in effect formalises a pilot programme introduced two years ago to speed up and simplify Customs procedures for ‘prioritised enterprises’, usually referred to as Authorised Economic Operators (AEOs). In a Client Alert, lawyers Baker & McKenzie say that while the new Circular will be useful for import and export businesses, these businesses must fully satisfy all the requirements listed in the new Circular to be considered an AEO.

S&P reaffirms ratings on Malaysia, with stable outlook

July 27, 2013

SINGAPORE - Standard & Poor's has affirmed its 'A-' long-term and 'A-2' short-term foreign currency sovereign credit rating on Malaysia, together with its 'A' long-term and 'A-1' short-term local currency sovereign credit ratings. The outlook on the long-term rating remains stable. S&P also affirmed its ASEAN regional scale rating on Malaysia at 'axAAA/axA-1+'. S&P said the sovereign credit rating reflects Malaysia’s strong external balance sheet, open and competitive middle-income economy, and considerable monetary flexibility.

South Korea’s second quarter GDP growth beats expectations

July 27, 2013

SEOUL – Second quarter GDP growth in South Korea has increased for a third consecutive quarter, rising to 1.1% q/q, (2.3% y/y) from 0.8 q/q (1.5% y/y) in the first quarter, and beating market expectations. The better-than-expected performance was led by a pickup in private and Government consumption, most likely due to fiscal stimulus measures adopted in April, with support from May’s interest rate cut. Investment and exports also performed reasonably well, although moderating from the previous quarter.

HKMA moves to strengthen RMB liquidity as China tightens

July 27, 2013

HONG KONG - The Hong Kong Monetary Authority (HKMA) has announced two measures to facilitate RMB liquidity, including i) using its swap line with the People’s Bank of China (PBoC) to provide one-day (rather than only one-week) funds to banks, which will be available on the next day (T+1); and ii) using its own RMB funds to offer overnight RMB lending, available on the same day (T+0). Analysts see the measures as a response to tight RMB liquidity conditions that emerged in June during China’s interbank liquidity squeeze.

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