Asia - Economic Data & News 01 (Jun 08 - Jun 16)

[winston]

Visa Asia card spending up 13.2 pct in year to March

SINGAPORE, June 9 (Reuters) - Spending on Visa cards in the Asia Pacific region rose 13.2 percent in the 12 months to March to top $1 trillion, helped by strong growth in Southeast Asia, Visa Inc said on Wednesday.

"The headwinds that many economies in Asia Pacific were facing 12 months ago have abated to the point where we are seeing solid payments growth across the region," Visa Group Executive for International Elizabeth Buse said in a statement.

"In particular, the Southeast Asian economies of Indonesia, Malaysia, Singapore and Thailand have delivered robust growth," she added.

[millionairemind]

Jun 9, 2010
Greek crisis may affect Asia
SINGAPORE - THE IMF warned Asia on Wednesday of the potential spillovers of the European debt crisis, saying it could dampen trade, make capital flows volatile and overheat economies in the region.

'Adverse developments in Europe could disrupt global trade, with implications for Asia given the still important role of external demand,' IMF deputy managing director Naoyuki Shinohara told a forum in Singapore. On the financial front, he said major credit problems could result in a 'significant spillover' through funding channels, especially where banks were dependent on wholesale funding.

There was also increased uncertainty and potential for volatility in the outlook for capital flows, Mr Shinohara said at the forum hosted by the Monetary Authority of Singapore, the de facto central bank of the island state. He said Asia's bright growth prospects, together with low interest rates in major economies, would likely attract more capital that could 'lead to risks of overheating in some economies if appropriate policy action is not taken.

'On the other hand, further increases in global risk aversion could see capital flows change direction quickly.' Mr Shinohara called on Asian governments to be wary of the potential risks and be prepared to take appropriate action.

'The key will be for policymakers to keep an eye on the bigger picture and be ready to act swiftly as developments unfold,' he said. 'With Asia's economic muscle growing, the policy choices made in this region will have an important impact on the global economy,' he said.

Greece is at the epicentre of a mounting debt crisis that threatens to spread across the euro zone and has pulled down the euro to four year lows. Asian markets have also been affected by the impact of the crisis. -- AFP

[winston]

Nice to be an Economist. Write BS reports. Talk long term so people cant verify what you say.

No KPI to fulfill except for maybe for the number of BS reports that you have to churn out per year.

[kennynah]

cant beat the ministars....

[iam802]

I guess it goes under 'Non-tradable' idea.

[kennynah]

cant even come under "do you know why you are buying or selling" ..

[winston]

Asia's Paradigm Shift
John Mauldin's Outside the Box

This week we turn our eyes to Asia as my friend Louis Gave of GaveKal gives us a very thought-provoking piece on the problems of investing in Asia, with a focus on China.

While there are real opportunities, Louis also sees some speed bumps. Those Asian ETFs may not be the winners a lot of people think for structural reasons.

Conclusion

These are not easy times for Asian investors, what with global concerns weighing on markets (US double dip?, EMU solvency?, etc...), unprecedented cyclical adjustments (Asia now leading the tightening cycle), and a very important paradigm shift (the end of cheap labor in China).

In the face of so many changes, one must remain nimble, and accept that being stubborn will not pay off. Instead, one has to remain very close to the market, identify where positive momentum is strongest--whether on earnings or share price performance--and question whether the momentum makes macro-sense before participating.

Having said this, for us, a few key trends are already emerging. These include:

Asian currencies will remain well bid for the coming year and likely thereafter.

Long-dated Asian government bonds are increasingly the best hedge against equity risk for any portfolio. After all, if the twin 'fat-tail' threats to equity markets today are:-
a) a double dip recession in the US and
b) a solvency crisis in Europe, then long-dated Asian bonds can immunize the risk from either of these events... at least, this is what has happened in the past quarter!

Asian indices and ETFs are likely to suffer as the markets adjust to the new realities reviewed above; realities that are all too often under-represented in benchmarks. Investors deploying capital in Asia should do so with managers willing to stray massively from any benchmark.

Within the Asian equity markets, we would favor high-dividend yield paying stocks, utility stocks and stable growth stocks, especially those linked to the consumer.

Stocks linked to the infrastructure roll-out (steel, commodities, etc...) should be seen as a trade at best, or simply avoided, even if valuations now appear attractive. Such stocks were the main driver of the past decade's Asian boom. They will not be the leaders of the next decade.

As Francois-Xavier argued in a recent ad hoc comment (see The New Export Champions), going forward, Europe's machine tool and capital good exporters may not be the top performers in a portfolio of exporter stocks. Instead, investors should focus on the Western world's service exporters.

http://www.investorsinsight.com/blogs/j ... shift.aspx

[winston]

Office rents seen rising in key Asian markets -JLL

HONG KONG, Aug 25 (Reuters) - Office rents in key Asian markets such as Shanghai and Singapore are expected to rise this year due to healthy economic growth and improving business sentiment, global property services firm Jones Lang LaSalle said.

Hong Kong, Shanghai and Singapore are seen leading the recovery in Asia, with rental increases of between 10 to 20 percent in 2010, while growth momentum will likely pick up in Tokyo and some Indian cities starting in 2011, it said in a statement on Wednesday.

"Rents are nearing or past the trough in most regional markets with residual declines in a few centres," Jane Murray, Jones Lang LaSalle's head of Asia Pacific research, said.

"With hiring activity now resuming in many markets, expansion demand is expected to strengthen as occupiers position for future growth," Murray said.

In the second quarter, net absorption of quality office space rose by 13 percent from the previous three months, with rental values rising as much as 8.3 percent quarterly in Hong Kong.

However, direct commercial property transaction volumes in Asia Pacific fell 32 percent in the second quarter from the previous quarter to $16 billion partly due to concerns over tightening measures in China, it said.


Source: Reuters

[millionairemind]

Banyan
An exercise in fertility
In Asia’s “little tigers”, big families went out of vogue decades ago, and have stayed there
Sep 16th 2010


THE Singapore dream, as commonly defined, comprises five Cs. The catalogue of cash, car, credit-card, condominium and country-club membership leaves some glaring alphabetical omissions. None more so than “children”. Singaporeans these days tend to have small families. In this as in much else they resemble Asia’s other “little tigers” (Hong Kong, South Korea, Taiwan), and tiny Macau. In one ranking of “total fertility rates” (TFR, a measure of the number of children a woman can expect to bear in her lifetime), these five places huddle together at the bottom of a list of all the world’s countries. Fearful of rapidly ageing populations and, in many cases, loth to contemplate the alternative—large-scale immigration—governments have tried to encourage child-bearing. They have failed.

The trend towards smaller families is a supercharged version of a pattern seen everywhere: as people get richer, live in cities and women are better educated, they have fewer children. And these places have seen economic growth at rates surpassed only in China, where fertility has also plunged, but growth has been accompanied by a coercive one-child policy. Even so, the tigers’ declines in fertility rates have been astonishingly quick.

In the developing world as a whole, fertility rates fell by half, to three, in the 50 years to 2000. In South Korea the TFR fell by two-thirds in 20 years from the early 1960s. In Taiwan it dropped from 6.5 in 1956 to 2.2 in 1983 and 1.7 in 1986. So for three decades, fertility rates have mostly been below the “replacement” level—of just over 2.0 in rich countries. Last year the TFR was 1.22 in Singapore, 1.15 in South Korea and 1.04 in Hong Kong. In Taiwan it was 1.03, and the government’s planning agency forecast a further decline, to 0.94% in 2010, as women defer having babies during the Year of the Tiger (inauspicious, oddly). These are unprecedented levels for places unaffected by war or famine.

On these trends, Taiwan will become rather geriatric. By 2060 less than half the population would be between 15 and 65 and more than two-fifths 65 or over. Alarmed, the government is promoting the joys of child-rearing. It has mandated generous parental leave (though many women are still scared of antagonising their bosses by taking their full entitlement), subsidising kindergartens for poorer families and so on. This month a prize was awarded to the winner of a government-sponsored competition for the best baby-promotion slogan. “Children are our most precious treasures” at least captures their growing scarcity value.

The other governments have also been encouraging their citizens to stay put and multiply. In keeping with its dirigiste traditions, South Korea actually has a five-year plan to encourage breeding, and a TFR target of 1.7 for 2030. Maternity pay is to be changed from a fixed, and low, rate to 40% of salaries. Employers are to be forced to allow mothers to work flexible hours, and the state will pay the school fees of second children. Hong Kong, of course, sets greater store by laissez-faire principles. So there was quite a fuss in 2005 when the chief executive, Donald Tsang, declared that families should have three children. The fertility rate, 0.97 in 2005, has barely budged since.

It is the efforts of Singapore’s government, however, that are most telling about the difficulty of reversing low fertility. Its people, after all, are famously malleable. In a generation they have been weaned off chewing-gum, learnt Mandarin and become models of courtesy. But they have not been persuaded to have more children. The fertility rate, 1.74 in 1980, climbed a bit later in that decade, but has fallen since.

This is despite the government’s best efforts. Its “stop at two” policy of the 1960s was ditched in 1983, when Lee Kuan Yew, then prime minister, now “minister mentor”, started promoting bigger families—with a distinctively Singaporean caveat. Mr Lee, believing that intelligence is inherited, wanted to encourage more graduate women to have children. He identified the problem as “the Asian man”, who “preferred to have a wife with less education than himself.” In response, two government matchmaking bodies were set up—one for university graduates, one for those with a secondary education. The number of graduate men marrying fellow graduates grew sharply. The fertility rate has not.

It is not just Asian countries that find it hard to boost birth rates once they are in decline. Economic incentives cannot always trump a shift in values. Nor is the self-centred consumerism of the “five C” dream exclusive to the newly industrialised tigers. Elsewhere, too, children, worse than merely not making the cut, actually get in the way. But the rock-bottom fertility rates in the tigers give the problem particular potency.


No huddled masses wanted

So too does the difficulty of the obvious alternative—large numbers of immigrants. For Taiwan and Hong Kong, where mainland China provides an inexhaustible supply of potential incomers, the fear of being swamped makes this a particularly touchy issue. In Taiwan legislation to open universities, which are short of students, to a mere 2,000 mainlanders provoked parliamentary brawls before being passed in August. In South Korea, where increasing numbers of men are finding brides in the Philippines and Vietnam, the metro in Seoul is plastered with a government campaign against the stigma on “multicultural families”.

Even in Singapore, a city of migrants, where more than a third of the population are foreigners, immigration is the hot political issue. On national day in August the prime minister, Lee Hsien Loong, devoted a chunk of his speech to allaying concerns about the influx of foreigners, and justifying the need for them in a small, crowded island. The final reason he listed was straightforward: “to make up for our shortfall in babies”. Even little tigers cannot have it both ways.

[winston]

TOL:-

You hear the Dr. Dooms and the Dr. Deaths talking about Double Dips, especially in Japan, the US and Europe.

Dr. Roach has also argues many times, that the Asian consumers cannot replace the Consumers of the US, Europe and Japan.

Yet, when you go around Asia, from China to Indonesia, do you really see a slowdown ? Do you really see projects being stopped ? Do you really see empty planes and hotels ?

As far as I can see, things are humming along very well. People are still going about their business of making money. Good restaurants are still full. Property prices are still sky high, relative to the earnings of the average salary worker. Share markets are also relatively high...

People are now talking about "Return on Capital" not "Return of Capital". They even say that they will "Buy & Hold" Blue Chips and if the market does crash, they will average down as it will always bounce back. Just look at sharp rebound from 2009...

Conclusion: Trust your eyes not what the Dr. Deaths are saying. Even Dr. Death Roubini is only saying that there's a 40% chance of a Double Dip. That means that there's a 60% chance that things will be rebounding ...