Macro

For our next Webinar, we are delighted to welcome back Insight Provider Manu Bhaskaran. In the aftermath of the COVID crisis, Southeast Asia is back on a path to growth. As a keen, long-time observer of the region, Manu lays out the economic factors and key trends breeding new opportunities in ASEAN, which foreign investors need to know about.

The webinar will be hosted on Wednesday, 9 March 2022, 17:00 SGT/HKT.

Manu Bhaskaran is a leading Asia economist based in Singapore, with more than 30 years of experience in studying economic, political, and security issues that shape the business environment in Asia. He coordinates the Asian business of Washington DC-based strategic advisory firm, Centennial Group, directing its Asian economic research practice, which provides in-depth analysis of macro trends in Asia. He works extensively with investment institutions, government agencies, and corporations, and regularly presents his views on the economic, political, and business environment in Asia at business conferences and in-house briefings. He is a member of the Regional Advisory Group for Asia and the Pacific of the International Monetary Fund. 

• The quick rise in Oil now shows a market that is running out of steam in the short term and is at risk of correcting down
• This is unlikely to change the underlying trend of higher prices but instead create an opportunity down the line to establish longs
• Similarly, the rise in yields is likely to see a pullback before higher yields later. The trade idea at the end of related to this.

• There has been a worrisome sign brewing in the Korean bond market in the past several months which is the Bank of Korea (BOK) continuing to buy Korean government bonds.
• Three weeks after the BOK raised interest rates on 14 January, the BOK purchased 2 trillion won worth of additional Korean government bonds in early February. 
• The BOK buying more Korean government bonds is like an owl devouring a rat without vomiting the bones. 

• In less than a month, development goals and government priorities for the year will be announced at the annual session of the National People’s Congress (NPC)
• Almost all provincial-level governments lowered their GDP growth targets this year
• As China’s once breakneck growth slows, stabilizing the economy has become national policymakers’ top priority

• Chinese policymakers, now more worried about growth prospects and especially the health of the labour market, are likely to resort to innovative tools to stimulate the economy. 
• This, alongside a more flexible approach to property-related controls, makes us more optimistic about growth this year, but untested new tools could pose risks as well.
• Private consumption will remain the weak point of the economy; the current “dynamic zero-COVID-19” policy will be maintained while direct fiscal transfers to households are unlikely.

• Key commodity prices are up because of political tensions and supply bottlenecks.
• Central banks across the developed world, fearing unanchored inflationary expectations, might tighten monetary policy pre-emptively.
• But sustained inflationary pressures is not the base case for Asia

• Revenue raising measures take center stage: the GST will be hiked from 7% to 9%, carbon taxes will be raised in stages and a modest wealth tax will be announced.
• The government will offer substantial support measures to help the lower-income groups weather the impact of higher GST rates.
• Expect more measures to help businesses to scale up and move up the value chain by adopting new technologies and schemes to retrofit the city-state’s infrastructure for “greener” growth.

• Cover Story: State insurance boss’s capital games in Hong Kong

• BlackRock unit gets green light to join personal pension trial in China

• China’s sales of land-use rights plunge, squeezing local government budgets

• Active GEM managers are increasing allocations in Indonesian stocks, with all 4 of our measures of ownership increasing over the last 6-months
• Bank Central Asia (BBCA IJ) is far and away the most favoured stock, held by 46% of the active EM managers in our analysis
• However, active GEM funds are a long way from their maximum allocations in Indonesian stocks, there is plenty of headroom for allocations to grow further from here.

• First, the increase in capex is less impressive after accounting for special factors, specifically the Air India capital injectons.
• The assumption that massive public spending will crowd in private investments is questionable, and the bond market is poised for indigestion, given the deluge of borrowings amid tightening financial conditions.
• Furthermore, the dearth of details on a credible fiscal consolidation plan raises the risk of fiscal dominance by compromising the RBI’s reaction function.

• The downtrend in the UK unemployment rate paused in Dec-21 as employment flatlined, and the population shrank slightly for the first time. 
• Unemployment is unlikely to match the BoE’s forecast, which should help slow hikes beyond March. The other side of an ageing cycle is wages, where the latest impulse was strong.
• Inflation is more than eroding that, and the real-terms weakness will weigh on activity growth into 2022, ultimately preventing the Bank rate from going too high.

• In Depth: Will subsidized housing stabilize the real estate industry?

• Trending in China: Outpouring of affection for Japanese figure skating star

• Zhong Ou health-care fund falls out of Alipay top 10 after ranking No. 1