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Mirae-China: January data preview
January 7, 2013--The January real economic indicators (inflation and trade statistics) will be released on 8 February. We expect a slightly lower CPI than the market consensus of 2.1%, while our other January data projections are in line with what the market expects.
In summary, the January data will likely suggest that China is on track for a gradual recovery during the first half of the year, and is unlikely to shake the market with big surprises. We maintain our projection of China’s GDP growth of 8.2% and an average inflation of 3-3.5% for 2013. Monetary policy will stay neutral for most of the year, in our view. There is still room for an ambitious fiscal policy in 2013, although on a smaller scale than in 2012.
We do not see any immediate inflationary pressures
Headline CPI in December rose to 2.5%, but most of the increase was driven by rising vegetable prices due to an extremely cold winter in November/December 2012. Since 10 January, vegetable prices have mostly normalized. Prices of meat products have continued to rise, albeit at a gradual pace, while inflationary pressures from other food items are well contained.
view the China: January data preview report
Source: Mirae Asset Securities-Global Research Center
IMF Country Report-India
Outlook and Risks: The economy has slowed markedly due to a confluence of
structural, external and other factors. Recent measures taken by the authorities have boosted confidence, but the near-term outlook is for a subdued recovery with stillelevated
inflation as investment has been significantly hit and supply bottlenecks will ease only slowly.
Structural Reform: Building on recent progress is crucial, especially to address supply constraints in energy and move the pricing of various natural resources toward a market basis. Progress on taxation, land acquisition, and labor market reform, along with 12th
Plan goals on infrastructure, skills mismatches, and social outcomes, are necessary to return to a rapid rate of growth and poverty reduction.
view the IMF report-India: 2013 Article IV Consultation
Source: IMF
FTSE Publishes a New Research Report: Classifying South Korea as a Developed Market
February 6, 2013--The success of FTSE's market indices is founded on a combination of expert research and analysis, clear methodology, and its unique ability to reflect the perceptions and real-world experience of its clients and investors worldwide.
FTSE’s attention to the views of market practitioners was an important factor in the 2009 decision by its external governing committees to reclassify South Korea as a Developed Market. It remains a key reason for maintaining this classification today. FTSE believes that to include South Korea in an Emerging Market index creates distortions that fail to reflect the intentions of investors.
FTSE has published a new research report that outlines our approach to classifying South Korea as a developed market.
view report
Source: FTSE
ETFs and ETPs in Asia Pacific (ex Japan) reach a new all-time high of $94.6 billion US dollars at the end of January 2013
February 6, 2013--Assets invested in Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) listed in Asia Pacific (ex-Japan) reached a new all-time high of $94.1 billion at the end of January 2013.
ETF and ETP assets have increased by 6.6% from $88 billion in December 2012 to $94.1 billion at the end of January, according to figures from ETFGI’s monthly Asia Pacific (ex-Japan) ETF and ETP industry insights.
Market performance contributed to the increase in the value of assets held in ETFs and ETPs as 18 of the top 20 markets globally showed gains in January. Four of these indices were located in Asia Pacific (ex-Japan); the CSI 300 was up 6.5%, the S&P/ASX 200 was up 4.9%, the BSE Sensex 30 was up 2.4% and the Hang Seng was up 4.7%. Two other markets with strong gains were in the US and the UK where history has shown that a strong January tends to be a good predictor for the rest of the year. A review of history in both markets shows that strong January performance is typically followed by positive returns in the subsequent 11 months.
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Source: ETFGI
Indonesia's 2012 growth hits 6.2%
February 5, 2013--Demand for everything from cement to instant noodles has continued to drive robust economic growth in Indonesia, defying the global uncertainty and domestic concern about resurgent economic nationalism and a widening trade deficit.
Gross domestic product expanded 6.1 per cent in the fourth quarter of last year, compared with a year earlier. GDP grew 6.2 per cent last year, slightly below 2011’s 6.5 per cent, as the slowdown in China hit demand for Indonesian commodities such as coal and palm oil.
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Source: FT.com
Mirae-China Macro-A New PMI for China
February 1, 2013--Since January 2013, the National Bureau of Statistics (NBS) has expanded the PMI sample size from 820 enterprises to 3000 enterprises, with its original 31 industries being consolidated into 21 industries.
Bearing in mind this structural breakdown in the PMI series, the January PMI of 50.4 suggests that the economic recovery in China is on track - despite the reading coming in slightly weaker than the December figure of 50.6. Most of the components point to an encouraging picture, as China will likely benefit from restocking of its finished goods inventory as well as an improved outlook in major advanced countries. Furthermore, the HSBC PMI for other key export-oriented Asian economies (HK, Taiwan, and Korea) has also improved.
January PMI survey has started to include more enterprises
The size of the survey has been expanded from 820 enterprises to 3000 enterprises. Meanwhile, the 31 industries in the old survey have been consolidated into 21 industries only. The NBS will also start to publish PMI by region. The new PMI survey is expected to provide a better picture of the manufacturing sector while over the short term it also causes a structural breakdown in the time series. Therefore, we need to be cautious when comparing PMI readings across time.
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Source: Mirae Asset Securities (HK) - Global Research Center
TSE-Commencement of ETF Leaflet Publication
February 1, 2013--Tokyo Stock Exchange, Inc ("TSE") will begin publicizing "ETF Leaflet" on all ETFs and ETNs listed on TSE and Osaka Securities Exchange Co., Ltd.("OSE") in order to expand investment information on ETFs.
The Leaflet provides a variety of useful investment information such as dividend distribution, historical data for market value, and underlying indices.
The Leaflet is available in both Japanese and English, and is scheduled to be publicized monthly after April 2013.
Upon commencement of ETF Leaflet publication, TSE will stop further publicizing of ETF Weekly Report.
Source: Tokyo Stock Exchange (TSE)
China ETFs struggle to meet demand
February 1, 2013--An exchange traded fund tracking mainland Chinese equities became the most traded security on the Hong Kong exchange in January, the latest sign of international appetite for exposure to China and the growing interest in Asia for passive investments.
The iShares A50 ETF, which aims to mirror the performance of China’s top 50 listed companies, last month recorded a higher turnover value than any listed stock in Hong Kong, including index heavyweights such as China Mobile, HSBC, and ICBC.
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Source: FT.com
IMF Working paper-Chronicle of a Decline Foretold: Has China Reached the Lewis Turning Point?
January 31, 2013--Summary: China is on the eve of a demographic shift that will have profound consequences on its economic and social landscape. Within a few years the working age population will reach a historical peak, and then begin a precipitous decline. This fact, along with anecdotes of rapidly rising migrant wages and episodic labor shortages, has raised questions about whether China is poised to cross the Lewis Turning Point, a point at which it would move from a vast supply of low-cost workers to a labor shortage economy.
Crossing this threshold will have far-reaching implications for both China and the rest of the world. This paper empirically assesses when the transition to a labor shortage economy is likely to occur. Our central result is that on current trends, the Lewis Turning Point will emerge between 2020 and 2025. Alternative scenarios—with higher fertility, greater labor participation rates, financial reform or higher productivity—may peripherally delay or accelerate the onset of the turning point, but demographics will be the dominant force driving the depletion of surplus labor.
view the IMF Working paper-Chronicle of a Decline Foretold: Has China Reached the Lewis Turning Point?
Source: IMF
EU 'better than North America' for China firms: survey
January 31, 2013--Chinese firms consider the European Union as good or better an investment destination than North America, the EU chamber of commerce in China said Thursday, despite the eurozone's debt crisis and recessionary woes.
Even more preferred to put money into the European Union than nearby Southeast Asia, where some countries have significant Chinese minorities.
The European Union "is perceived as welcoming to foreign investment; with few market access barriers and little history of opposition to Chinese investment on national security grounds", the report said.
The survey of 74 Chinese companies that have already established themselves in the European Union found 33 percent considered it more favourable for investment than North America, with 45 percent saying it was the same and 21 percent less favourable.
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Source: EUbusiness