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Vietnam's Economy Expanded by 6.8 Percent in 2019 but Reforms are Needed to Unleash the Potential of Capital Markets
December 17, 2019-Vietnam's economy has performed well in 2019, with GDP expanding by an estimated 6.8 percent, public debt reduced by almost 8 percentage point of GDP since 2016, and a trade balance surplus for the fourth year in a row. These results are remarkable in the context of a slowing global economy.
The latest Taking Stock, the World Bank's bi-annual economic report on Vietnam released today, emphasizes the resilience of the Vietnamese economy. GDP growth has continued to be driven by a strong external sector with exports expanding by about 8 percent in 2019-nearly 4 times faster than the world average. The country has also remained an attractive destination for foreign investors, with foreign direct investment (FDI) inflows averaging US$3 billion per month. In addition, private consumption has emerged as an important contributor to GDP growth as the result of an expanding middle-income class and rising wages. Private firms also increased investment by 17 percent during the same period.
view theFinance in Transition: Unlocking Capital Markets for Vietnam's Future Development report
Source: World Bank
Malaysia Economic Monitor: Making Ends Meet
December 9, 2019--Malaysia's economy continues to see growth, but its pace of expansion has moderated.
In the third quarter of 2019, growth slowed to 4.4% as a result of subdued global growth and heightened uncertainty.
Private consumption remained the highest contributor to growth.
Due to weaker-than-expected business and public investment, gross fixed capital formation continued to contract.
On the supply side, growth in key sectors such as services, manufacturing and agriculture, mining and construction decelerated.
Export demand softened in line with weak global demand.
Looking ahead, Malaysia's economy is projected to expand at a relatively moderate pace of 4.5% in 2020, amid continued uncertainty and external headwinds.
Short-term policies should focus on measures to boost resilience and protect the vulnerable.
Building fiscal buffers by raising government revenue without affecting low-income households is necessary to mitigate against potential shocks. This will help create fiscal space for development and social spending to boost shared prosperity.
view the World Bank Malaysia Economic Monitor, December 2019 : Making Ends Meet
Source: World Bank
December 2019 Indonesia Economic Quarterly: Investing in People
December 9, 2019--In light of challenging global economic conditions and a substantial deterioration of its terms-of-trade, Indonesia's economic growth decelerated to 5.0 percent in the third quarter of 2019, from 5.1 percent in the second quarter.
Domestic drivers of growth slowed. Fixed investment growth weakened further in the third quarter, given the significant decline in commodity prices and political uncertainty.
Total consumption growth also slowed, with government consumption decelerating markedly. The weakness in domestic demand was mirrored by a large contraction of import volumes, which together with flat exports meant that net exports made a large contribution to growth.
The current account deficit narrowed to 2.9 percent of GDP for the four quarters through Q3 2019, compared to 3.1 percent in the first two quarters. Capital inflows rose, leading to a larger surplus in the financial account.
view the World Bank December 2019 Indonesia Economic Quarterly: Investing in People report
Source: World Bank
India: step up reform efforts to increase quality jobs and incomes
December 5, 2019--India is set for a modest recovery after a loss of momentum, as reforms to simplify taxation, lighten business regulations and upgrade infrastructure start to bear fruit. Further reforms to modernise the economy are now needed to drive the creation of high-quality jobs, as well as measures to improve public services and welfare, according to a new OECD report.
The latest OECD Economic Survey of India notes that while India has greatly expanded its participation in global trade in recent years, private investment remains relatively weak, the employment rate has declined amid a shortage of quality jobs, rural incomes are stagnating, and per-capita income varies considerably across states.
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Source: OECD
World's largest pension fund halts stock lending to short sellers
December 3, 2019--Japan's Government Pension Investment Fund (GPIF), the world's largest pension fund, has suspended stock lending for short selling, calling the practice inconsistent with its responsibilities as a long-term investor.
The move, announced by the GPIF on Tuesday, is a blow for short sellers, who rely on securities lending to bet against companies and who are facing renewed moves in a number of countries to curb their activities.
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Source: Reuters
India's GDP Growth Slips To 4.5% In July-September, Lowest In 6 Years
November 29, 201--The RBI had lowered the GDP growth projection for 2019-20 to 6.1 per cent from earlier forecast of 6.9 per cent.
India's economic growth slipped further to hit an over six-year low of 4.5 per cent in July-September, according to official data released on Friday.
The previous low was recorded at 4.3 per cent in the January-March period of 2012-13. The Gross Domestic Product (GDP) growth was registered at 7 per cent in the corresponding quarter of 2018-19.
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Source: outlookindia.com
Hong Kong's Economy is in Danger of Further Contraction
November 21, 2019--Approaching the end of a volatile year, Hong Kong continues to face the triple whammy of slower growth in mainland China, the trade war uncertainty and social unrest.
While the former two external risks are not in the hands of Hong Kong and are subject to global development, the escalated social unrest and the lack of fiscal stimulus are bringing a higher downside risk to economic growth (Chart 1).
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Source: bruegel.org
BetaShares-Global ETF Review Q3 2019: Bursting Burry's bubble
November 21, 2019--The global ETF industry ended the third quarter of 2019 at a record high, with US$5.8T1 in assets under management -reflecting growth of 20% YTD.
According to BetaShares' Global ETF Review Q3 2019, another significant milestone was passed during the quarter, with assets in U.S. passive managed funds and index ETFs topping those in U.S. active managed funds for the first time.
Continuing the trend from previous quarters, the fixed income asset class received the highest inflows with 48% of total inflows which, although solid, was significantly less than the 61% of flows that were received last quarter.
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Source: BetaShares
SZSE Pushes forward CSI 300 ETF Option Listing in a Steady and Orderly Manner
November 12, 2019--On November 8, CSRC announced the launch of pilot expansion of stock index option. The CSI 300 ETF option listed on SZSE will be approved according to procedures. Under the guidance of CSRC, SZSE will comprehensively start the pilot work of stock option to ensure smooth release of CSI 300 ETF option (subject matter of Harvest 300 ETF, 159919).
The launch of SZSE-listed pilot stock option and diversifying futures and option varieties are important moves for the capital market to support building Shenzhen into a pilot demonstration area of socialism with Chinese characteristics and push forward comprehensive deepening of capital market reform. They are also the intrinsic requirements for further perfecting basic market rules, guiding medium and long-term fund flow into market, and improve internal market stability and financial services for real economy.
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Source: Shenzhen Stock Exchange
IMF Working Paper-The Drivers, Implications and Outlook for China's Shrinking Current Account Surplus
November 8, 2019--Summary:
China's current account surplus has declined significantly from its peak in 2008 and the external position in 2018 was in line with medium-term fundamentals and desirable policies. While cyclical factors and expansionary credit and fiscal policies contributed, the trend decline has been largely structural, driven by economic rebalancing from investment to consumption, appreciation of the real effective exchange rate (REER) towards equilibrium, increase in outbound tourism, and moderation in goods surplus reflecting market saturation and China's faster growth compared with trading partners.
Policies should focus on continued rebalancing and opening up to ensure excessive surpluses do not return, and to prepare the economy and the financial system to handle more volatile capital flows. From a global perspective, the decline in China's surplus has lowered global imbalances, but with different impact across countries. The analysis is based on data as of July 2019.