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S&P affirms Taiwan ratings at AA-/A-1+ with GDP growth to come

August 29, 2013

SINGAPORE - Standard & Poor's today affirmed its 'AA-' long-term and 'A-1+' short-term unsolicited issuer credit ratings on Taiwan, with the outlook is stable. Taiwan’s transfer and convertibility assessment remains 'AA+', and S&P’s 'cnAAA/cnA-1+' Greater China regional scale ratings on Taiwan were affirmed. The ratings agency said Taiwan's extremely strong external position, sound monetary management, and dynamic information technology (IT) companies in the private sector support the ratings. “Tempering these strengths are moderately high Government debt and a small, open economy that is vulnerable to global economic conditions.”

Philippines GDP growth at 7.2% in second quarter

August 29, 2013

MANILA - The Philippine economy grew by 7.5% y/y in Q2, higher than market expectations of 7.2%. Growth moderated from downwardly-revised 7.7% expansion in Q1, previously at 7.8%. ANZ Bank says it is maintaining its 2013 GDP growth forecast of 7.1%. Sources of growth are now more balanced, ANZ says. “We continue to expect domestic growth to be underpinned by public and private investment.”

Food Security Bill in India aggravates fiscal concerns

August 28, 2013

NEW DELHI – India’s lower house of Parliament has approved new food subsidies – bringing a range of budget concerns into play. “Notwithstanding its admirable goals of poverty alleviation and more equitable growth, the initiative poses upside risks to the overall food subsidy bill (budgeted at 0.8% of GDP for FY14), at a time when fiscal concerns are adding to weak investor sentiment and contributing to a further weakening of the rupee,” says BBVA Bank.

More signs of a bounce back in regional exports?

August 27, 2013

HONG KONG - Hong Kong’s July exports  beat market expectation, jumping by 10.6% y/y (consensus: 3.5% y/y), after declining by 0.2% y/y in June. The result reflects improving exports to China, the US, and Europe.  A number of other Asian economies have recently seen improving export trends, including China, Japan, Korea, Singapore, and the Philippines. However, commodity exporters such as Indonesia and Malaysia have seen weaker trends, reflecting the commodity composition of their exports.

Official: China economy showing signs of stabilisation

August 27, 2013

BEIJING – China’s National Bureau of Statistics (NBS) has announced that the country’s economy is showing clear signs of stabilisation and is on track to meet the Government's 2013 growth target of 7.5%. A pickup in industrial output, better-than-expected global market conditions and the Government’s pro-growth mini-stimulus each have contributed to faster growth. At the same time, the NBS suspended release of industry-specific data from a purchasing managers’ index for manufacturing because of accuracy concerns.

Vietnam’s inflation still edging up, activity indicators soft

August 26, 2013

SINGAPORE – ANZ Bank says it expects the State Bank of Vietnam (SBV) to keep interest rates on hold despite ongoing weakness in retail and external trade – because of continued upside pressure on inflation. ANZ says the Vietnam data dump for August confirms the reality of deteriorating activity and inflation fundamentals: “Vietnam’s CPI inflation increased in August more than expected, while retail sales remained tepid, led by a moderation in trade-related sales. External trade surprised with a deficit.

Taiwan upgrades bird flu alert: More cases in China

August 24, 2013

TAIPEI – Taiwan’s Department of Health has designated infections of the avian influenza strain H7N9 as a notifiable disease after four more cases of a bird flu virus new to humans were reported in China. "We have decided to list the H7N9 infection as a fifth-category notifiable disease," Health Minister Chiu Wen-da said. The DOH also raised the quarantine alert against H7N9 from Grade 2 to Grade 3.

India and Indonesia seek to calm investor jitters

August 23, 2013

HONG KONG - India and Indonesia are the region’s two economies most affected so far by the global Emerging Markets selloff, with the currencies of each country depreciating by 7-8% against the USS so far this month. BBVA Banks says outflows have been exacerbated by country-specific factors, including widening current account deficits, lagging structural reforms and, in the case of India, recent policy missteps.

AUSTRALIA: Can non-mining sectors become the growth engines?

August 27, 2013

SYDNEY – In an update of its Country Report on Australia released today, Atradius Trade Credit Insurance asks whether Australia’s non-mining sectors will be able to assume the role of growth engines. Atradius forecasts that growth in Australia will slow in 2013 to 2.4% - but will increase to 2.7% in 2014. It says mining investment has reached its peak, that depreciation of the Australian dollar should help rebalance the economy, and that there are still many insolvency cases in the construction and retail sectors.

Taiwan will continue to buy US-made weapons, says President

August 23, 2013

TAIPEI - Taiwan’s President, Ma Ying-jeou said today his Administration will continue to procure weapons from the United States to safeguard national security. "Although tensions across the Taiwan Strait have gradually eased and cross-strait relations are now the most peaceful in more than six decades, we still cannot afford to be lax in terms of combat readiness," Ma said at a ceremony on the outlying island of Kinmen to mark the 55th anniversary of an artillery battle between the Taiwanese and mainland Chineseforces.

Shanghai Free Trade Pilot Zone receives official approval

August 23, 2013

HONG KONG – China’s State Council has formally approved the Shanghai Free Trade Pilot Zone, whose creation was announced in June. Policies within the Zone aim to relax regulations on foreign investment (for example, the introduction of a negative list); open the service sector to foreign investors; and advance financial liberalisation, including the streamlined opening of foreign bank branches. But observers say plans are still sketchy and could encounter some resistance from vested interest groups.

Malaysia stays in surplus with GDP growth stable

August 23, 2013

KUALA LUMPUR - Though growth disappointed, Malaysia has avoided joining the twin deficit club in the second quarter.  The current account surplus narrowed sharply from MYR8.7bn in Q1 to just MYR2.55bn in Q2.  ANZ Bank believes this will prove to be the trough in the current account balance, which it expects to rise in the second half of the year. GDP growth was relatively stable at 4.3% y/y (4.1% in the previous quarter)driven by domestic demand.

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.