Category: Trading

Stock markets edged higher, European bond yields dropped and the dollar remained firm in light trading on Monday amid warnings from the International Monetary

Fund’s managing director that a third of the world will fall into recession in 2023.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan

 

.MIAPJ0000PUS rose 0.06%, just short of an index of global shares, which climbed 0.16%.

 

The pan-European STOXX 600 index .STOXX climbed 0.6%, retracing little of the nearly 12% it lost in 2022, bludgeoned by central banks’ aggressive monetary policy tightening.

 

However, traders were reticent to trust early-year starts in stock and bond moves with many markets closed for a holiday and ahead of a host of economic numbers due this week.

 

Inflation data from Europe, minutes from the December U.S. Federal Reserve meeting and U.S. labour market numbers were some of the highlights that Danske Bank chief analyst Piet Haines Christiansen said would be worth watching.

 

“I would be cautious over interpreting any moves this morning,” said Christiansen.

 

Markets in the United States, Britain, Ireland, Singapore, Japan, Hong Kong and Australia were shut.

 

Christiansen expected the new year to kick off with a renewed focus on central banks and inflation. Traders would be vigilant for any signs of an approaching recession, he said.

 

Buoyant stock prices in Europe might be due, he said, to survey results published on Monday, which pointed towards a rebound in optimism among euro zone factory managers.

 

S&P Global’s final manufacturing Purchasing Managers’ Index (PMI) bounced to 47.8 in December from November’s 47.1, matching a preliminary reading but still below the 50 mark separating growth from contraction.

 

Elsewhere, the dollar =USD edged almost 0.2% higher against a basket of major currencies, while the pound and euro fell 0.4% and 0.2% respectively.

“There is an attempt by the dollar index to pull higher today but we do see that it is losing a good part of the strength it gained last year,” said Ulrich Leuchtmann, head of forex research at Commerzbank.

“After the last Fed meeting, the market was not convinced that the Fed won’t cut rates later in 2023. It’s going to be an interesting year.”

 

U.S. Treasuries will resume trading on Tuesday after a public holiday on Monday. The benchmark 10-year yield climbed around 27 basis points (bps) last week and over 200 bps last year, ending 2022 around 3.88%.

German government bond yields on Monday tumbled from their highest levels in more than a decade amid more hawkish signals from the European Central Bank (ECB).

ECB President Christine Lagarde said euro zone wages were growing quicker than earlier thought, and the central bank must prevent this from adding to already-high inflation.

Germany’s 10-year bond yield DE10YT=RR fell 8.4 bps to 2.47%, after hitting its highest since 2011 at 2.57% on Friday.

Oil markets were closed but prices in 2023 are set for small gains, as a darkening economic backdrop and COVID-19 flare-ups in China threaten demand growth and offset the impact of supply

shortfalls caused by sanctions on Russia, a Reuters poll showed on Friday.

 

The new year is going to be “tougher than the year we leave behind,” IMF Managing Director Kristalina Georgieva said on Sunday on the CBS Sunday morning news program “Face the Nation.”

“Why? Because the three big economies – the U.S., EU and China – are all slowing down simultaneously,” she said.

 

 

Source: ASEAN Exchanges

KUALA LUMPUR, In 2022, Malaysia’s economy recovers steadily, thanks to improved labour conditions, increasing trade with foreign countries, etc. However, according to some research agencies, Malaysia faces such challenges as a sluggish economy and weaker exports in 2023.

 

The Bank Negara Malaysia, Malaysia’s central bank, said, the Malaysian economy expanded by 9.3 percent in the first three quarters of 2022. It projected the overall GDP growth will be between 6.5 percent and seven percent for the year, compared with 3.1 percent for 2021.

 

In Sept, the World Bank raised Malaysia’s 2022 economic growth forecast to 6.4 percent from 5.5 percent. The World Bank said in its report, Malaysia’s economic growth will be supported by strong domestic demand, which is underpinned by continued improvements in labour market conditions and tourism-related activities, by domestic and international travellers.

 

In terms of foreign trade, statistics from the Ministry of International Trade and Industry showed that, for the period of Jan to Nov, 2022, trade expanded by 29.9 percent compared to the same period last year. Exports increased by 27.2 percent, imports rose by 33.3 percent, and trade surplus edged up by 2.6 percent.

 

On the other hand, due to the spillover effects of the U.S. Fed raising interest rates, Malaysia suffered from high inflation. In the third quarter, the inflation rate was 4.5 percent. In Sept, the ringgit slid against the U.S. dollar, breaching the all-time low that was recorded during the Asian Financial Crisis period in 1998.

 

Looking ahead, several research agencies worry that an expected world economic slowdown and weaker global demand will bring challenges to the recovery of the economy in 2023.

 

A recent statement of S&P Global Market Intelligence showed, the seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) posted at 47.9 in Nov, down from 48.7 in Oct.

 

According to Malaysia’s central bank, the country’s economy is expected to expand by four percent to five percent in 2023.

 

Analysts pointed out that, China is an important trading partner of Malaysia, and China-Malaysian economic and trade cooperation will continue to play an important role in the development and transformation of the Malaysian economy.

 

The Malaysian Investment Development Authority showed, for the first three quarters of 2022, Malaysia attracted approved foreign direct investments of 130.7 billion ringgit (29.7 billion U.S. dollars), among which China dominated with 49.2 billion ringgit (11.17 billion dollars).

 

Malaysian Transport Minister, Anthony Loke Siew Fook, recently said that, Malaysia looks forward to further strengthening economic cooperation with China. Chinese enterprises contribute a lot to the economic and trade prosperity between Malaysia and China. Under the Belt and Road Initiative, a large number of high-end and cutting-edge Chinese enterprises entered Malaysia, injecting vitality and hope into the prosperity and development of Malaysia.

 

He also said, Malaysia encourages and welcomes more high-tech, energy-saving and eco-friendly Chinese enterprises to come to Malaysia, to help with industrial transformation and upgrading. It is expected that Chinese enterprises will make more contributions to Malaysia’s economic development in terms of technology transfer and job creation.

 

Source: Nam News Network

COLOMBO– Maldivian President, Ibrahim Mohamed Solih, said, the island country’s economy, guided by the government’s sound economic policies and recovery measures, has successfully recovered to pre-pandemic levels, this year.

 

The president expressed these views yesterday, while briefing the media at the President’s Office, about the progress of the administration’s socio-economic plans.

 

Noting that the financial burden of the COVID-19 pandemic and the conflict in eastern Europe, on the Maldives’ economy had been heavy, Solih stated that, his government’s sound economic policies and measures had led to substantial economic recovery.

 

The Maldives’ economy is forecast to grow 12.3 percent this year, while economic growth is expected to be at 7.6 percent next year.

 

The president described the tourism industry’s recovery as the main reason behind the development, saying that, tourist arrivals had also reached pre-pandemic levels this year.

 

The Maldives is also one of the 10 fastest-growing economies after the pandemic, while in 2021 and 2022, it was listed among the top five across the globe, according to the statement of the President’s Office.

 

The International Monetary Fund (IMF) said, Maldives’ economic activity rebounded strongly from the pandemic-induced contraction, supported by the authorities’ policy measures.

 

However, the IMF warned that, the Indian Ocean island nation remains at a high risk of external debt distress and a high overall risk of debt distress.

 

 

Source: NAM NEWS NETWORK

​ Nationwide residential property prices rise by 6.5%, YoY, and 4.6%, QoQ, in Q3 2022

 

The residential real estate prices of various types of new housing units in the Philippines rose faster in Q3 2022 by 6.5 percent year-on-year (YoY) and 4.6 percent quarter-on-quarter (QoQ) (Figure 1).

By area, residential property prices increase YoY in the National Capital Region (NCR) and Areas Outside the NCR (AONCR), but decline QoQ in the AONCR

 

On a YoY basis, residential property prices in the NCR and AONCR increased by 17.5 percent and 2.3 percent, respectively, primarily driven by the increase in the prices of condominium units and single-detached/attached houses, which outweighed the decrease in the prices of townhouses.

 

On a QoQ basis, residential property prices rose by 14.6 percent in the NCR, but contracted by 0.4 percent in the AONCR (Figure 1).

 

Likewise, prices rise across housing types, except townhouses

 

In Q3 2022, prices of duplex housing units, condominium units, and single-detached/attached houses contributed to the YoY growth in the nationwide RREPI as these prices increased by 26.7 percent, 19.2 percent, and 9.8 percent, respectively. Meanwhile, prices of townhouses declined by 16.3 percent (Figure 2).

Similarly, the 4.6 percent QoQ growth in the RREPI may be attributed to the higher prices of condominium units (by 12.0 percent), duplex housing units (by 3.4 percent), and single-detached/attached houses (by 2.7 percent). Meanwhile, prices of townhouses declined (by -2.1 percent), QoQ (Figure 2).

 

Nationwide residential real estate loan availments for new housing units fall YoY, but grow QoQ

 

In Q3 2022, the number of residential real estate loans (RRELs) granted for all types of new housing units in the Philippines fell by 4.2 percent YoY as RRELs in the NCR and AONCR contracted by 2.0 percent and 5.7 percent, respectively. By contrast, the nationwide availment of housing loans rose by 19 percent QoQ, following the 32.0 percent and 11.5 percent growth in RRELs in the NCR and AONCR, respectively (Figure 3).

The average appraised value of new housing units in the country stood at Php84,589 per square meter (sqm) in Q3 2022. The average appraised value per sqm in the NCR was at Php139,283, higher than both the national average and the average appraised value in the AONCR at Php47,129 (Figure 4).

The weight of each type of housing unit in the RREPI is determined by dividing the total floor area (in sqm) of a specific type of housing unit over the total floor area of all housing types. In Q3 2022, single-detached/attached houses in the RREPI continued to constitute the largest weight at 58.0 percent. Meanwhile, condominium units, townhouses, and duplex housing units accounted for 24.5 percent, 17.0 percent, and 0.4 percent, respectively (Figure 5).

Profile of residential real estate loans in Q3 2022

 

In Q3 2022, 82.2 percent of residential real estate loans (RRELs) were used to purchase new housing units.1 Meanwhile, by type of housing unit, most of the residential property loans were used for the acquisition of single-detached/attached houses (47.5 percent), followed by condominium units (39.0 percent) and townhouses (13.0 percent) as seen in Figure 6.

Most of the RRELs granted in the NCR were for the purchase of condominium units, while RRELs granted in the AONCR were for the purchase of single-detached/attached houses. By region, 37.1 percent of the total number of RRELs granted were from the NCR, while the balance was from the AONCR as follows: CALABARZON (32.3 percent), Central Luzon (11.1 percent), Central Visayas (6.7 percent), Western Visayas (4.8 percent), Davao Region (2.8 percent), and Northern Mindanao (1.5 percent). NCR and the said six regions combined accounted for 96.3 percent of total housing loans granted by banks (Figure 6).

 

Source: Bangko Sentral ng Pilipinas (BSP)

 

​Outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks stood at US$15.67 billion as of end-September 2022, recording a decrease of US$44 million or by 0.3 percent from the end-June 2022 level of US$15.71 billion. The decrease in FCDU loans may be attributed to: (a) gradual move in easing credit parameters and net tightening of overall credit standards of lender banks resulting in an unchanged or deliberate lending operations and credit activity amid uncertainty in the economic outlook; and (b) borrowers’ reduced demand for FCDU loans in light of foreign exchange volatility and rising borrowing costs.

 

Year-on-year, outstanding FCDU loans decreased by US$164 million (or by 1.0 percent) from the end-September 2021 level of US$15.8 billion.

 

As of end-September 2022, the maturity profile of the FCDU loan portfolio remained predominantly medium- to long-term debt [or those payable over a term of more than one (1) year], which comprised 78.5 percent of total.

 

FCDU loans granted to residents comprised 63.7 percent of total outstanding FCDU loans. Of the US$10.0 billion outstanding loans to residents, majority went to the following sector/industries: power generation companies (US$2.7 billion or 27.4 percent); merchandise and service exporters (US$2.4 billion or 24.4 percent); and management/holding and stock brokerage (US$1.2 billion or 12.3 percent).

 

Gross disbursements in the third quarter of 2022 reached US$14.6 billion and were 6.6 percent lower than the previous quarter’s figure mainly due to decrease in funding requirements of a foreign bank branch affiliate. Similarly, loan repayments in the same quarter totaled US$14.6 billion, an 8.0 percent decrease from the previous quarter’s figure. These resulted in overall net disbursement.

 

FCDU deposit liabilities stood at US$45.8 billion as of end-September 2022, lower by US$838 million (or by 1.8 percent) from the end-June 2022 level of US$46.6 billion. The bulk of these deposits (97.3 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves. Year-on-year, FCDU deposit liabilities decreased by US$102 million (or by 0.2 percent) from the end-September 2021 level of US$45.9 billion.

 

 

Source: Bangko Sentral ng Pilipinas (BSP)

As the United States and China compete for influence worldwide, tension is rising between the superpowers in Southeast Asia over economic policies, territorial disputes in the South China Sea and Taiwanese independence.

 

The Regional Comprehensive Economic Partnership (RCEP) came into effect on January 1. RCEP is a China-led free-trade agreement among 15 Asia Pacific nations including all 10 members of the Association of Southeast Asian Nations (ASEAN), as well as Australia, Japan, South Korea and New Zealand. It is the largest free trade agreement in the world.

 

At the 25th China-ASEAN summit last month in Cambodia, China’s Premier Li Keqiang said in a speech that trade volume between China and ASEAN had reached a new high of $798.4 billion in the first 10 months of 2022.

 

“We have worked together for the Regional Comprehensive Economic Partnership (RCEP) to be signed and implemented, and hence built the world’s largest free trade area, taking our open and interconnected development to a new level,” he said in the speech.

 

However, it might be too early to determine whether RCEP has delivered significant economic benefits to ASEAN, according to Hunter Marston, a doctoral candidate at Australian National University (ANU) studying great power competition in Southeast Asia.

 

“ASEAN-China trade hit a record high in [the first 10 months of] 2022, which is something to watch, but it’s hard to say whether its trade growth will come mainly from RCEP,” he told VOA Mandarin. “RCEP just lowers barriers and makes trade more efficient, but so far, it is difficult to say that it has brought immediate and clear benefits.”

 

To counter RCEP, U.S. President Joe Biden launched the Indo-Pacific Economic Framework (IPEF) in May.

 

With 14 members, including Australia, India, Indonesia, South Korea and Japan, the IPEF is intended to reaffirm U.S. economic engagement in the region and provide a Washington-led alternative to Beijing’s RCEP.

 

“The future of the 21st century economy is going to largely be written in the Indo-Pacific — in our region,” Biden said during IPEF’s launch event in Tokyo. “We’re writing the new rules.”

 

Ian Chen, a professor at the Institute of Political Science at Taiwan’s National Sun Yat-sen University, questions whether IPEF will be able to have an impact on Southeast Asia’s economic dependence on China anytime soon.

 

“I think it is unlikely in the short term,” he told VOA Mandarin. “IPEF doesn’t require very strict commitments, so participating countries can actually determine how involved they want to be. With such loose requirements, it can be difficult to achieve the goals you want to achieve.”

Josh Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations, disagrees that Biden’s IPEF was purely in response to China’s RCEP.

 

“The Indo-Pacific Economic Framework is in some ways in response to China’s economic actions in the region, but it’s more generally in response to complaints that the U.S. had no trade policy in the region,” Kurlantzick told VOA Mandarin. “I don’t think the U.S. is just reacting to China.

 

“The U.S. has abandoned trade leadership and trade participation in Asia for a long time,” Kurlantzick added. But “the Indo-Pacific Economic Framework, a pseudo economic cooperation thing, doesn’t really do much.”

 

A lot of IPEF’s details have still not been made public, but ANU’s Marston predicts Biden will announce more about the economic initiative in 2023.

 

“Although IPEF is more symbolic than substantive, I think seven of the 10 ASEAN countries have been invited and agreed to join, which shows that U.S. economic engagement in the region is still attractive,” Marston said.

 

Washington still leads in investment in the region — U.S. investments rose by 41% in 2021 to $40 billion — but Beijing’s investments rose by 96% to nearly $14 billion, according to the 2022 ASEAN Investment Report.

 

“Although the United States still leads in investment, I think ASEAN is becoming a more multipolar competition region,” Marston added.

 

Economic rivalry between Washington and Beijing has taken center stage this year, analysts told VOA Mandarin, but other flashpoints have arisen, too.

 

Some Southeast Asian countries worried that U.S. House of Representatives Speaker Nancy Pelosi’s August visit to Taiwan might make China more likely to take military action, according to Alan Yang, a professor at National Chengchi University in Taiwan.

 

“From the United States, to China, to the Taiwan Sea, to the South China Sea, it is difficult to separate these issues,” Yang told VOA Mandarin. “There was no major South China Sea action this year. To some extent, it is still subject to two major external forces. One is the U.S.-China rivalry, and the other is the impact of the pandemic.”

 

Kurlantzick also pointed to China’s ongoing militarization of the South China Sea, as well as Washington’s escalating efforts to block China’s access to highly coveted advanced semiconductor chips. Still, looking ahead to 2023, he added that conflict over Taiwan is perhaps of greatest concern.

 

“The U.S. and China are engaging in a dance with Taiwan, getting closer and closer to possible conflict,” Kurlantzick said.

 

Source: Voice of America