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IMF Staff Completes 2019 Article IV Mission to Singapore
May 14, 2019--Following a period of above-potential economic expansion, Singapore's economic growth is expected to moderate to 2.3 percent in 2019. Risks are tilted to the downside and mainly stem from external sources.
The IMF team concurs with MAS's decision to keep monetary policy on hold for now.
Going forward, monetary policy should continue to be data dependent, and the authorities should remain ready to provide fiscal stimulus as a first line of defense if downside risks materialize.
The IMF team welcomes the authorities' concerted efforts to promote a more innovation-based growth model with targeted policies to facilitate the structural transition by mitigating disruption from technology and aging.
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Source: IMF
Hang Seng Indexes Launches Two ESG Indexes and Expands Hang Seng Stock Connect Greater Bay Area Index Series
May 14, 2019--Hang Seng Indexes Company Limited ("Hang Seng Indexes") today launched the HSI ESG Index and the HSCEI ESG Index, expanding its portfolio of benchmarks for
investors interested in socially responsible investment strategies. The company also added the Hang Seng Stock Connect Greater Bay Area Innovation Top 50 Index to its Hang Seng Stock Connect Greater Bay Area Index Series.
The HSI ESG Index and the HSCEI ESG Index have the same list of constituents as the Hang Seng Index ("HSI") and the Hang Seng China Enterprises Index ("HSCEI") respectively, but adopt different constituent weightings. The weighting of each constituent in the two new indexes is adjusted according to its environmental, social and corporate governance ("ESG") score. The weightings of constituents with relatively high ESG scores will be increased, while weightings of those with relatively low ESG Scores will be decreased.
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Source: Hang Seng Indexes
IMF Staff Country Report-Republic of Korea: Selected Issues
May 13, 2019-EVOLUTION OF MACROPRUDENTIAL POLICIES IN
KOREA
1. The primary aim of macroprudential policy is to secure financial stability by leaning
against excess financial conditions. FSB, IMF, and BIS (2011) define macroprudential policy as "a
policy that uses primarily prudential tools to limit systemic or system-wide financial risk, thereby
limiting the incidence of disruptions in the provision of key financial services that can have serious
consequences for the real economy.
Rather than managing inflation or the business cycle, as monetary policy aims to do, macroprudential policy tries to strengthen the financial system's defenses in the face of economic and financial shocks.
2. This Selected Issues chapter looks at (i) monetary policy and financial cycles; (ii) the evolution of macroprudential policies in Korea; (iii) the efficacy in prudential policies in taming financial excess and building financial resilience and; (iv) the interaction between monetary policy and macroprudential policies
view the IMF Staff Country Report-Republic of Korea: Selected Issues
Source: IMF
Key measure points to 1st Japan economic downturn in 6 years
May 13, 2019--'Worsening' composite index of economic indicators reinforces fears of recession
The government said Monday its key composite index of economic indicators shows Japan's economy "worsening" for the first time in more than six years, reinforcing the view that the world's third-largest economy may have entered a recession.
The Cabinet Office's coincident index of business conditions for March fell 0.9 point from the previous month to 99.6 against the 2015 base of 100, according to a government survey.
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Source: asia.nikkei.com
FTSE Russell China Bond Research Report Q1 2019
May 13, 2019--Highlights from the May report:
Total holdings of Chinese bonds by offshore investors rose in Q1 of 2019. Offshore investors held 1.76 trillion RMB (US$263 billion) worth of bonds at the end of March, according to data released by Shanghai Clearing House and China Central Depository and Clearing Co, marking a 34.3 billion RMB (US$5.1 billion USD) rise compared to end-December 2018.
Some of China's largest companies have defaulted on their debt in Q1. Three large Chinese borrowers-Qinghai Provincial Investment Group Co., China Minsheng Investment Group Corp. and Beijing Orient Landscape & Environment Co.-missed repayment deadlines.
Against this backdrop, interest in China's small convertible bond market is growing – driven for the desire among investors for higher returns. Citic Bank Corp’s offering in March saw orders eclipse supply by 5,500 times, according to Bloomberg. Convertible bond issuers have raised US$13 billion via convertible bonds in 2019, more than four times the value of Chinese IPOs during the same time period.
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Source: FTSE Russell
BetaShares Market Trends: May 2019 Asset Class Performance-global equities power on
May 8, 2019--Global equities were the best performing of our seven major asset classes* in April, while Australian equities also posted good returns.
Supporting stocks was a better than feared US earnings reporting season, persistent low inflation and continued gradual improvement in the global economic outlook. Higher bond yields, however, constrained fixed-income returns and contributed to a pull-back in listed property after several months of strong performance. Gold eased due to the still firm $US and renewed "risk-on" sentiment.
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Source: BetaShares
Why is the white hot Chinese tech sector cooling down?
May 7, 2019--China's once scorching tech sector is cooling off.
"Winter is coming," laughs Lin Liu, a 29-year-old Shanghai tech worker.
Electric vehicles, industrial robots, and microchip production all slowed recently.
Big firms like Alibaba, Tencent, and search engine Baidu have slashed jobs.
Overall, one in five Chinese tech companies plans to cut recruitment, says jobs site Liepin.com.
"And I think this slowing down will continue," says Ms Liu, who's run a tech start-up and the Slush start-up conferences in Shanghai, Shenzhen, and Nanjing.
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Source: BBC.com
Hong Kong exchange, Euroclear launch ETF tie-up
May 7, 2019-- Hong Kong's stock exchange operator will partner with Euroclear, Europe's largest settlement house for securities, on new arrangements to help bring European Exchange Traded Funds (ETF) to Hong Kong, the companies said on Tuesday.
Earlier this year, Hong Kong Exchanges and Clearing (HKEX) said it planned to become an ETF hub in Asia as part of its broader three-year strategic plan to make the exchange more relevant to global investors.
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Source: Reuters
HKEX selects Euroclear's international ETF structure
May 7, 2019--Euroclear Bank, the Brussels based international central securities depository (ICSD), and Hong Kong Exchanges and Clearing Limited (HKEX) have collaborated to enhance the distribution of European ETFs in Asia.
HKEX has become the first stock exchange in Asia to adopt the ICSD ETF settlement model in Euroclear Bank.
European ETF issuers will now be able to expand their distribution network to Asia and grow ETF liquidity. Investors will benefit from improved settlement efficiencies and a reduction of costs and risks.
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Source: Euroclear Bank
IMF Working Papers-The Turning Tide: How Vulnerable are Asian Corporates?
May 6, 2019--Summary:
Using a new firm-level dataset with comprehensive information on Asian firms' FX liabilities, we show that Asia's nonfinancial corporate sector is vulnerable to a tightening of global financial conditions. Higher global interest rates and exchange rate depreciation increase the probability of default of Asian firms.
A 30 percent currency depreciation is associated with a two-notch downgrade in the corporate credit rating (e.g., from A to BBB+), resulting in 7 percent of Asian firms falling into bankruptcy. But the impact is nonlinear-as the firms' FX liability increases, the balance sheet channel of exchange rate offsets, then dominates, the competitiveness channel. The balance sheet channel offsets the competitiveness channel when the share of U.S. dollar debt is between 10 and 20 percent. We also find that currency depreciation increases firm-level investment on average, but for firms with the share of FX liabilities above 20 percent, investment contracts with depreciation.
view the IMF Working Papers-The Turning Tide: How Vulnerable are Asian Corporates?
Source: IMF
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