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

[kennynah]

China has been the inflow leader by far. Data from EPFR Global shows that net global
fund inflows into China equities reached US$11.9 billion, year to date to Dec 2.

i think this is not a large impactful figure, although all mighty oceans are formed by small streams...

[winston]

Yes. And if the inflow into China is small, the inflow into the rest of Asia must be pathetic.

And why would the Asian markets go up from here with such bad inflow ?

[winston]

ADB raises Asian growth forecasts

Developing Asia's economy is forecast to grow 4.5 percent this year and 6.6 percent in 2010 thanks to a better-than-expected recovery in the September quarter, the Asian Development Bank said Tuesday.

The revised forecasts are higher than the 3.9 percent and 6.4 percent growth figures made in the bank's Asian Development Outlook in September, it added.

"The prospects for much of the region look rosier than they did in September when we last did a full study of the region," Asian Development Bank (ADB) chief economist Jong-Wha Lee told a news briefing.

He noted that there was "a moderate improvement" in the economies of Europe, Japan and the United States that had helped the region recover.

Forecasts for China remain unchanged from its September forecast of 8.2 percent this year, and 8.9 percent next year. But while China's growth would continue to steam ahead next year "the speed of that upturn will depend on the performance of the global economy," Lee said.

"The recovery in the G3 (Europe, Japan and US) is still soft and there are a number of downside risks," he said. "Asia is now leading the recovery from the global recession, but the big question is if this kind of rebound will lead to sustained recovery in 2010," Lee said.

He said the "V-shaped recovery was due to swift policy responses" but also because of the resilience of China and India. India is expected to grow 7.0 percent this year, a percentage point higher than previously forecast. Lee said governments must sustain the recovery by continuing with stimulus packages they have put in place.

"Timing is very important," he said, stressing that "mis-timed exits" may derail the recovery process.

http://sg.biz.yahoo.com/091215/1/4s8bt.html

[millionairemind]

Courtesy of DOL

Q+A-Asia's potential property bubbles? 16 Dec 2009 13:06

By Lee Chyen Yee

HONG KONG, Dec 16 (Reuters) - Property prices in parts of Asia have risen sharply, sparking worries that bubbles are forming and prompting policymakers to rein in the sector.

Investors fear any real estate bubble burst could derail the region's nascent economic recovery in the way the U.S. housing sector slump brought on the worst global downturn in decades.

Here are some questions and answers on where potential bubbles are, their impact on shares, where prices are headed and policies that governments might implement next year:

BUBBLE THREAT: WHERE DOES IT LOOM LARGEST?

China and Hong Kong face the highest risks in Asia, followed by Singapore, as property prices have risen strongly, especially in the second half, due to ample liquidity, low interest rates and a rally in stock markets.

"If it (the China bubble) does burst, is that going to suddenly be a big burst? In this case, it's got a big impact on the rest of Asia," said Jeremy Helsby, group CEO of UK-based property firm Savills <SVS.L>.

Some cities in China and Hong Kong's mass market have seen residential prices rise by about a third this year, while in Singapore, private home prices soared 16 percent in the third quarter from the previous quarter,
the biggest jump this decade. [ID:nSIN466451]

"Singapore and Hong Kong are held up as examples of the effects of excess liquidity and credit in Asia. The residential property data certainly raise cause for concern," said Alaistair Chan, an economist at Moody's economy.com.

China's aggressive stimulus measures and developers halting some projects late last year due to the economic downturn helped push up prices this year, while Hong Kong's limited land, coupled with a government land sales hiatus boosted prices. [ID:nTOE5B604I]

The bubble threat also surfaced in Australia and South Korea earlier this year though various government policies have allayed those fears.

WHAT IS THE IMPACT OF POTENTIAL BUBBLES ON SHARES?

Property shares have been outpacing main indexes in China <.SSEC>, Hong Kong <.HSI> and Singapore <.FTSTI>, with the sector sub-indices <.SSEP> <.HSNP> <.FTFSTAS8730> up by 70 percent to more than doubling.

Shares of top Chinese developer China Overseas Land and Investment <0688.HK> and Singapore's CapitaLand <CATL.SI>, Southeast Asia's largest developer, have signifcantly outpaced their local market indexes.

While some real estate stocks are likely to continue to outperform the broad markets in 2010, gains will be muted due to wariness over governments' tightening policies as they act to fight off the potential of
a property market meltdown.

"Next year, we won't see the exceptional returns we've seen in either financials or property shares. But I do think we will see some further but moderate growth in a number of property shares," said Rod Cornish, division director at Macquarie Capital Advisors.

If a bubble does burst, it could hamper developers and real estate agents exposed to the markets affected. For instance, if a bubble bursts in China, major developers in the market, such as Shimao Property <0813.HK>, could see their earnings and share prices hurt, analysts said.

WHERE ARE PROPERTY PRICES HEADED FOR NEXT YEAR?

Most of the huge price rises in Asia are in the residential sector as reluctance by companies to hire kept demand for office space relatively weak in the region.

Residential prices in most markets are set to stabilise next year, with rises seen gradual compared to the huge swings this year. Prices from Japan to Singapore are expected to either remain stable or rise by nearly 10 percent. [ID:nHKG125452] [ID:nTOE5B90AV]

Residential prices in China are expected to rise by as much as 5 percent by the end of next year from now, a Reuters poll showed, less than gains logged for this year. [ID:nTOE5B90AV]

Comparatively, commercial prices will likely be steady or rise marginally in China, but might see a more significant increase in Singapore, analysts and industry executives say.

WHAT KIND OF POLICIES WILL GOVERNMENTS COME UP WITH?

Some countries have already reacted with monetary and property-related policies to allay fears over speculation.

In December, Australia raised interest rates for a third straight time [ID:nSYC002301], while South Korea in September imposed mortgage lending in Seoul and nearby areas to stem a housing boom. [ID:nSEO144752]

In the months ahead, governments in the rest of Asia will likely resort to releasing land supply, taxes and bank lending measures to stablise property prices, instead of using monetary tools, since inflation is still benign. "Governments are nevertheless unlikely to crack down on speculation too harshly. One worry is that this could deter legitimate investment, causing the market to slump," said Chan at Moody's economy.com.

[millionairemind]

I become very skeptical when I read politicians sprouting "GOLDEN AGE" stuff again. ....

Jan 18, 2010
Asia set for 'Golden Age'
Related Link
SPEECH BY DR TONY TAN KENG YAM AT THE COMMONWEALTH ECONOMIC FORUM IN TAIPEI

THE next decade could well be a 'Golden Age' for Asia if the region can adapt and innovate, and learn lessons from the financial crisis, said Dr Tony Tan, Deputy Chairman and Executive Director of the Government of Singapore Investment Corporation (GIC) on Monday.

He also sees emerging markets becoming a leading source of investment and credit as Western economies take longer to recover from the financial crisis.

'The rise of emerging markets is not a new trend but over the next decade we are going to hit a tipping point where the influence of emerging markets in economic, financial, and geopolitical issues will be important, if not dominant,' said Dr Tan at the Commonwealth Economic Forum in Taipei on Monday morning.

Dr Tan said given Asia's strengths, it could become a new source of global stability and prosperity if it could overcome some difficult challenges. He listed these as finding the right balance between the private sector and public management in the development and running of the financial sector, dealing with short-term economic and financial risks particularly avoiding destabilising asset bubbles, rebalancing domestic versus external demand in growth models and developing broader, deeper and more efficient financial systems.

On the global outlook, he said the recovery should be sustained over this year, after which growth should settle to its long-term trend in 2011. Global growth could hit 3 to 4 per cent this year, up from a contraction of close to 2 per cent last year.

'The global recovery has generally been stronger than most analysts' expectations and could further surprise on the upside, at least for the next few quarters,' he added. 'Growth, however, will be uneven with the strongest performance coming from the emerging market economies, especially Asia.

'Asia will benefit from an expected pick-up in global trade and manufacturing; additionally, strong balance sheet fundamentals remain supportive of domestic demand. Economies at the centre of this crisis - the US and Europe - should continue to grow over the coming year. In the US, growth could be moderately strong in the first half of 2010 before slowing down to a below-average pace.'

Although prospects for the US economy have improved, Dr Tan said it is unlikely the US will enjoy the growth spurt that typically follows from a deep contraction. Europe too, should benefit from the pickup in global trade although a muted response in consumption tempers the likelihood of a strong bounce. Growth in Europe is likely to be weak. he added.

[kennynah]

"Golden Age" always precedes the death of an era... it is the peak of a civilization....

I'll be interested to hear when it is the Golden Age of the ruling party...then, i know, it is the beginning of the end for them...

[winston]

Financial crisis hurting millions: ADB, UN

Seventeen million Asians have fallen into extreme poverty due to the global financial crisis, the Asian Development Bank and the United Nations said on Wednesday. And another four million could this year slip into the same situation due to the effects of the slump, officials from the two organisations said at the launch of a joint report on poverty alleviation in Manila. This is on top of the 900 million people in Asia who are already living in extreme poverty, defined as living on less than 1.25 dollars a day.

Asia had shown great progress in bringing people out of poverty in recent years, ADB vice-president Ursula Schaefer-Preuss told reporters. "But gains are being reversed due to the economic crisis," she said. UN under-secretary General Noeleen Heyzer said that people in the export and tourism sectors in Asia had lost and were still losing their jobs due to the crisis, which swept across the globe in late 2008.

Less foreign investment, aid and remittances from overseas workers were further hurting Asia's poor, Heyzer said. The report said more women, who form the majority of Asia's low-skilled and temporary workforce, than men had been forced back into extreme poverty due to the crisis.

UN assistant secretary-general Ajay Chhibber said the Asia-Pacific was doing quite well in areas such as infrastructure in achieving the UN's Millennium Development Goals that are aimed at bringing people out of poverty. "But it lags woefully behind in social issues," he said.

Even Latin America and Eastern Europe had better "social protections" than Asia such as pensions and unemployment insurance, Chhibber said. Only two to three percent of gross domestic product in Asia goes to such social protections, he said, adding that this figure should ideally be four to six percent. This meant large numbers of Asians could fall back into poverty during the crisis or even during natural disasters, he said.

http://sg.biz.yahoo.com/100217/1/4sssj.html

[millionairemind]

Published April 13, 2010

Bubbles in Asia, but severe crash unlikely: DBS CEO

By CONRAD TAN

(SINGAPORE) Asset bubbles have already formed in Singapore, Hong Kong and mainland China, but any correction in prices should be manageable and won't precipitate a severe crash that derails Asia's economic recovery, DBS Group chief executive Piyush Gupta said yesterday.

Mr Gupta: Rate hikes in Asia will come sooner than expected this year

'There are asset bubbles in Asia. That's true of Singapore property, of Hong Kong property, of Shanghai property - there's no question,' Mr Gupta said at the annual general meeting of the American Chamber of Commerce in Singapore, where he was the keynote speaker.

'But the nature of the bubble is not very different from previous cyclical bubbles we've seen around Asia. So I think there will be a correction - markets will level off - but I don't think we'll see a crash which brings everything back down on its knees.'

Asian central banks are likely to tighten monetary policy by raising borrowing costs more quickly than expected this year, partly in response to the asset bubbles, he told reporters afterwards.

'Most Asian central banks might be a little bit behind the curve on raising rates, but I think we'll start seeing that pretty quickly. I think you'll see more tightening this year than people expect.'

On average, DBS analysts expect interest rates across most of Asia to rise by 1-1.25 percentage points by the end of this year, he said.

But he stopped short of criticising governments and central banks for not acting sooner to cool the property market in Singapore and elsewhere in Asia.

'In hindsight it's easy to say that we could have done more. Given where the economies are coming from, being prudent about withdrawing monetary easing and stimulus was the right thing, but I think now is when you might want to see a faster pace of tightening.'

Here, analysts are split over whether the Monetary Authority of Singapore (MAS) will shift its neutral stance on the Singapore dollar in its monetary policy statement tomorrow by nudging the currency higher, or keep it unchanged.

But many economists believe that Singapore's economic output surged in the first quarter - by as much as 14 per cent - compared to the same period last year, making it likely that MAS will tighten monetary policy later this year, if not this week, to cool inflationary pressures stemming from the rapid growth.

'Asia, in particular, has rebounded in a convincing manner,' Mr Gupta said, citing anecdotal evidence from DBS's operations across the region.

Credit-card spending is rising for various goods and services, including luxury items - signalling genuine optimism among consumers in Asia, he said. 'This is not about people who've been able to get some money from a government voucher programme and are going out to buy groceries. People have confidence that things are good around here.'

[winston]

Bubbles in Asia, but severe crash unlikely: DBS CEO

(SINGAPORE) Asset bubbles have already formed in Singapore, Hong Kong and mainland China, but any correction in prices should be manageable and won't precipitate a severe crash that derails Asia's economic recovery, DBS Group chief executive Piyush Gupta said yesterday.

Mr Gupta: Rate hikes in Asia will come sooner than expected this year

It would be interesting to see his track record, on what he said about the Sub-prime

[millionairemind]

Published May 19, 2010

Many Asian markets near their peaks, warns ADB

It suggests capital controls to temper volatile fund inflows into region

By ANTHONY ROWLEY
IN TOKYO

THE Asian Development Bank took the unusual step yesterday of warning investors that many Asian stock and bond markets may be near their top following 'massive' inflows of capital into the region in the wake of the global financial crisis that erupted at the end of 2008.

Capital controls could be among the policy options needed to temper volatile capital inflows that could lead to instability and promote asset bubbles as well as creating more general inflationary pressure, the ADB suggested.

Emerging Asian equities yielded a stunning 73 per cent return overall in US dollar terms in 2009, the ADB said in its latest Asia Capital Markets Monitor. However, this strong performance 'limits the room for further gains', it added.

The report covers the 11 markets of China, Hong Kong, India, Indonesia, South Korea, Malaysia, the Philippines, Singapore,Taiwan, Thailand and Vietnam.

Asian local-currency bonds as well as equities have found favour with foreign investors over the past year or more, leading to a 41 per cent jump in the amount of such bond issuance (mainly by governments) in 2009.

'The yield curve in local government bonds has steepened and that may continue on rising inflationary expectations and as monetary authorities increase official interest rates,' the ADB said.

'Foreign investors have rushed back into emerging Asian markets, attracted by the region's swift recovery from the global crisis, a return of risk appetite and very low returns on assets in developed economies.'

Following the Lehman Brothers crisis in September 2008 there were fears that Asia, along with other developing regions of the world, would suffer a serious capital drought. The reverse has proved to be true and instead Asia has enjoyed a capital glut.

Asia appears to have escaped relatively unscathed from the Greek crisis with few signs that buoyant capital inflows into the region are being adversely affected, the ADB said. However, it warned that there are downside threats posed by this windfall for Asia.

'While the return of capital flows is welcome, surges in short-term capital inflows could potentially leave countries vulnerable to a sudden reversal in portfolio investment and to sharp currency movements,' said Srinivasa Madhur, senior director of the ADB's Office of Regional Economic Integration.

Emerging Asian currencies have also strengthened against the US dollar under the impact of surging capital inflows. 'Appreciation pressures are likely to intensify as capital inflows continue, which may fuel volatility in some currencies,' the ADB report said.

'The use of capital controls may be appropriate in circumstances where capital inflows are transitory and are adding undue pressure on exchange rates and where effectiveness of macroeconomic policy measures to counter the inflows and the exchange rate movements is uncertain.

'Managing capital flows requires a wide array of policy measures; sound macroeconomic management, a flexible exchange rate regime, a resilient financial system and sometimes the use of temporary and targeted capital controls.'