Monetary Policy and Interest Rate Reform
|
|
- Leona James
- 5 years ago
- Views:
Transcription
1 Thomas Shik Senior Economist Monetary Policy and Interest Rate Reform The benchmark lending rate set by the People s Bank of China (PBOC) has remained the key reference for banks in determining their own lending rates. But with the Mainland continuing to open up its financial markets, competition is likely to become more intense and banks are likely to see their net interest margin fall. In loosening its grip on interest rates, the PBOC may have to shift to a new target rate to achieve its policy objectives. The implementation of interest rate liberalisation is not only crucial to the banking sector but also to the Mainland s plan for reforming its financial markets. April/May 2015
2 Is the lending benchmark important? On May 10 this year, the People s Bank of China (PBOC) lowered its benchmark interest rates by 25 basis points and granted commercial banks greater freedom to set their own deposit rates. In reflecting on this development, a number of financial market observers focused more on whether the PBOC s easing which came on the heels of a cut in the required reserve ratio (RRR) and an interest rate reduction in February could counter the Mainland s economic slowdown and less on the central bank s latest efforts to liberalise the economy s tightly controlled commercial bank interest rates. Following this move, the official one-year deposit and lending rates stand at 2.25% and 5.10% respectively. In addition, banks can set their deposit rates up to 50% above the benchmark rate of 2.25%, compared with the previous ceiling of 30%. This means that, although the PBOC cut the deposit benchmark by 25 basis points, the effective ceiling on the deposit rate was actually 12.5 basis points higher (Exhibit 1). Exhibit 1: PBOC February 2015 Rate Cut Before May cut After May cut Deposit rate: 1-year benchmark 2.50% 2.25% Rate cap 30% above benchmark 50% above benchmark Effective 1-year benchmark 3.25% 3.375% Lending rate: 1-year benchmark 5.35% 5.10% Source: PBOC, Hang Seng Bank According to some observers, the PBOC s interest rate reduction is unlikely to result in dramatic change as the 1) effective deposit rate ceiling has been higher and 2) banks were already free to set their own lending rates before this latest development. From this point of view, competition should push banks to lower lending rates, which will in turn put downward pressure on their net interest margin. Therefore, what is important is the effective deposit rate ceiling, as it represents the lowest possible cost of borrowing. April/May
3 The reality, however, is more complex. The PBOC s lending benchmark has remained the primary reference indicator for banks in setting their own rates. According to the PBOC, the proportion of renminbi (RMB) loans that commercial banks offered at a rate below the benchmark was just 11.3% in March Of even greater note, the majority of loans were actually priced at a rate above the benchmark a trend which has been on an upward trajectory in recent years (Exhibit 2). Exhibit 2: RMB Loans (by lending rates, % share) In our view, there are several reasons behind this phenomenon. First, competition among banks is rising, but not as fast as many may think. The Mainland s four largest banks still own about 42% of the country s deposits and make about 39% of loans, although these figures are down from about 50% and 43% respectively in early 2010 (Exhibit 3). This high concentration has prevented a rapid drop in bank lending rates. Second, the Mainland economy is slowing and the housing market is facing a correction. With gross domestic product (GDP) growth falling to a six-year low of 7% in the first quarter of 2015 and housing inventory remaining elevated, it is not surprising that banks are becoming more prudent regarding lending especially to property projects and are asking for a higher premium over the lending benchmark which has been cut twice by the PBOC since the start of the year (Exhibit 4). Third, the global financial crisis has led to a tightening up of banking regulations around the world. This may also have contributed to a rise in the cost of funding for banks on the Mainland. April/May
4 Exhibit 3: Market Share of Big Four Banks Exhibit 4: PBOC Benchmark Rates Adapting to change In any event, the fact that the PBOC s lending benchmark has remained a key reference for banks suggests that the banking sector is still in a transition period from highly regulated interest rates to complete interest rate freedom. However, there are now reasons to believe that the pace of change will gradually accelerate. First, the Mainland is continuing to open its financial markets to domestic and international capital. In March 2014, the China Banking Regulatory Commission indicated that it would grant more banking licences to private companies. Since then, it has approved the launch of several privately owned local commercial banks 1. Last year also saw the Mainland government decide to shorten the waiting period between foreign banks establishing operations in the country and being able to apply to conduct RMB business in order to ease market access. 2 These developments suggest that banks are likely to compete more aggressively with each other for deposits and loans. 1 Financial Times, Alibaba affiliate wins approval for bank licence, 29 September Financial Times, China eases rules for foreign banks, 21 December The Mainland government also loosened other restrictions, including dropping requirements that a bank should be profitable for two years in a row before applying a RMB licence and that foreign banks should transfer a minimum amount of operating funds from their head office in the Mainland to each new bank branch opened in the country. While foreign banks share in the Mainland s retail banking market remains small, less than 2% in terms of total assets which has been little changed over the past decade, the loosening of rules suggest that the Mainland government remains committed to the opening of the banking sector. April/May
5 Second, the authorities are taking steps to help banks to better price credit risk. With tightly controlled interest rates, banks have tended to lend money to large businesses as they cannot manage higher-risk customers through the use of higher interest rates. With the dismantling of lending rate restrictions, banks should be free to set borrowing costs which appropriately reflect the probability of default. In 2006, the PBOC established a credit reference centre. Since 2013, this centre has been piloting a system that allows banks to access credit data on companies and individuals. 3 The Mainland s ongoing reform of state-owned enterprises (SOEs) should also support the move towards interest rate differentiation as banks should be able to more easily distinguish between stronger and weaker SOEs as regards economic performance. PBOC toolkit The effective deposit rate ceiling will become the lowest possible cost of borrowing if banks start to set their own lending rates. But even this ceiling can be scrapped as the PBOC proceeds with further interest rate liberalisation. Following the PBOC s announcement in May, banks can now set their own deposit rates up to 50% above the benchmark rate, compared with the previous ceiling of 30%. Before November last year, the cap was just 10%. Many are expecting that, for the shortterm future at least, the PBOC will continue to raise the deposit rate ceiling with every subsequent interest rate move. In a recent press conference, PBOC governor Zhou Xiaochuan hinted at an even more aggressive implementation of reforms, saying that the final step to liberalise deposit rates is very close and that the ceiling could be lifted once and for all if there is an opportunity this year. 4 In such a case, the PBOC would no longer control the deposit and lending rates that are applicable to transactions between banks and their customers. This development would see the markets play a decisive role in allocating resources, as pledged by the authorities following the Mainland s Third Plenum meeting in November April/May
6 However, the central bank still has to set a target level for the short-term interest rate in the wholesale interbank market through which it can effect a range of other interest rates in the retail banking market and hence the state of the economy in order to meet its policy objectives such as inflation or employment. The target level of the short-term interest rate, be it the seven-day reverse repo rate or some alternative, would be the PBOC s policy rate and akin to the US Federal Reserve s fed funds target rate or the European Central Bank s policy rate on its main refinancing operations. Generally speaking, central banks determine the quantity of money supply and one of the primary means for doing this is to set the price of base money, which in practice is usually the short-term interbank interest rate. Exhibit 5: Possible Change in PBOC Policy Framework PBOC Interest rate determined by PBOC to meet its objectives Interbank market Retail banking market Interest rate freely determined by banks to attract deposits and meet loan demand Source: Hang Seng Bank Setting a target interest rate in the interbank market would mean that the PBOC has to change its monetary policy framework from adjusting deposit and lending rates to exerting direct influence over the price of base money (Exhibit 5). The PBOC must also reduce its use of direct credit policies such as loan quotas and window guidance if its objective is to stop intervening in the retail banking market. Despite these challenges, the central bank has been trying to make use of interbank rates to shape its policy. In early 2013, it created a new tool called the Standing Lending Facility (SLF) which is comparable to the Fed s discount window for the purpose of meeting banks short-term liquidity needs and thereby acting as a cap to the interbank rate. In September 2014, it launched the Mediumterm Lending Facility (MLF), another new tool offering three-month loans to banks and through which it intends to guide the interbank rate for the medium term. April/May
7 Broader financial reform Interest rate liberalisation, in terms of allowing banks to freely set their own deposit and lending rates and changing the PBOC s toolkit, is only part of broader financial reforms on the Mainland, which also include exchange rate flexibility and capital account opening. However, all these developments are interconnected. Increased freedom for banks to determine retail market interest rates, together with increased flexibility in the exchange rate of the RMB, should help financial markets to discover the real market price of derivatives and structured products. This should allow investors to better hedge their exchange rate risk and, in turn, enable the PBOC to further widen the RMB s trading band. As the Mainland speeds up the opening of its capital account, cross-border capital flows will increase, making it increasingly difficult for the PBOC to continue to control interest rates at the retail banking level. It therefore makes sense for the central bank to shift its focus to targeting interbank rates before lifting all capital controls so that it can continue to make use of its policy tools to achieve its economic objectives. Concluding remarks The PBOC has taken a gradual approach to interest rate liberalisation at the retail banking level. This process should culminate in banks being free to determine the interest rates that they offer to customers. During the transition phase, the central bank must shift its focus from control of benchmark deposit and lending rates towards a target rate in the interbank market. The implementation of interest rate liberalisation is not only crucial to the banking sector, but also to the Mainland s plan for reforming the financial markets. April/May
8 China Economic Monitor Statistics April 2015 GDP Industrial output Fixed asset investment Retail sales Nominal Real Real Nominal Nominal Foreign trade Consumer prices Exports Imports Trade balance Food Non-food RMB bn yoy (%) yoy (%) ytd (%) yoy (%) yoy (%) yoy (%) USD bn yoy (%) yoy (%) yoy (%) , , , , , F NA Q , Q4 18, Q , Q2 14, Q3 15, Q4 21, Q , Dec 2014 NA NA Jan 2015 NA NA Feb NA NA Mar NA NA Apr NA NA NA NA NA YTD 14, Deposits (domestic currency) Loans (domestic currency) New loans Lending rate 1-year Money supply (M2) Forex reserves Foreign direct investment CNY per USD (period end) Total social financing RMB bn yoy (%) RMB bn yoy (%) RMB bn % yoy (%) USD bn ytd (%) RMB bn , , , , , , , , , , , , , , , , , , , , , , , , , F 122, , , , ,000 Q , , , , ,808 Q4 104, , , , ,322 Q , , , , ,600 Q2 113, , , , ,920 Q3 112, , , , ,280 Q4 113, , , , ,503 Q , , , , ,602 Dec , , , ,695 Jan , , , , ,063 Feb 122, , , , ,357 Mar 124, , , , ,182 Apr NA NA NA NA NA 5.4 NA NA NA NA YTD 124, , , , ,602 NA: not available; (A)= actual; (F)= HASE forecast; yoy= year-on-year; ytd= year-to-date Source: State Statistical Bureau, China Statistical Yearbook, Macrobond, CEIC, Bloomberg, Hang Seng Bank April/May
9 GDP Growth Consumer Price Inflation Urban Fixed Asset Investment Retail Sales Loan & Deposit Money Supply (M2) Benchmark Interest Rates Exports & Imports April/May
10 Disclaimer This document has been issued by Hang Seng Bank Limited ( HASE ) and the information herein is based on sources believed to be reliable and the opinions contained herein are for reference only and may not necessarily represent the view of HASE. The research analyst(s) who prepared this report certifies(y) that the views expressed herein accurately reflect the research analyst s(s ) personal views about the financial instrument or investments and that no part of his/her/their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report. Nothing herein shall constitute as offers or solicitation of offers to buy or sell foreign exchange contracts, securities, financial instruments or other investments. Re-distribution of any part of this document by any means is strictly prohibited. The information contained in this document may be indicative only and has not been independently verified and no guarantee, representation, warranty or undertaking, expressed or implied is made as to the fairness, accuracy, completeness or correctness of any information, projections or opinions contained in this document or the basis upon which any such projections or opinions have been based and no responsibility or liability is accepted in relation to the use of or reliance on any information, projections or opinions whatsoever contained in this document. Investors must make their own assessment of the relevance, accuracy and adequacy of the information and opinions contained in this document and make such independent investigations as they may consider necessary or appropriate for the purpose of such assessment. All such information, projections and opinions are subject to change without notice. HASE and its affiliates may trade for their own account in, may have underwritten, or may have a position in, all or any of the securities or investments mentioned in this document. Brokerage or fees may be earned by HASE or its affiliates in respect of any business transacted by them in all or any of the securities or investments referred to in this document. The investments mentioned in this document may not be suitable for all investors. Investors must make investment decisions based on their own investment objectives, financial position and particular needs and consult their own professional advisers where necessary. This document is not intended to provide professional advice and should not be relied upon in that regard. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. Investment involves risk. Investors should note that value of investments can go down as well as up and past performance is not necessarily indicative of future performance. This document does not purport to identify all the risks that may be involved in the securities or investments referred to in this document. April/May
China GDP grows 6.8% in Q4 2016
Thomas Shik Acting Chief Economist thomasshik@hangseng.com The 2017 Outlook The mainland China economy expanded by an annual rate of 6.8% in the fourth quarter of 2016, up from 6.7% in the third quarter,
More informationInflation Outlook and Monetary Easing
Thomas Shik Acting Chief Economist thomasshik@hangseng.com Inflation Outlook and Monetary Easing Although annual consumer price inflation rose for a second consecutive month in July, the underlying trend
More informationChina Economic Growth Slows in 1Q
Yao Shaohua, PhD Senior Economist shaohuayao@hangseng.com China Economic Growth Slows in 1Q 15 April 2015 Mainland China s economic growth continued to lose momentum in the first quarter, due largely to
More informationUpside Risk to Inflation and Downside Risk to Growth
Irina Fan Senior Economist irinafan@hangseng.com Joanne Yim Chief Economist joanneyim@hangseng.com July 28 Upside Risk to Inflation and Downside Risk to Growth The economic landscape has changed significantly
More information2015 Government Work Report Preview
Thomas Shik Senior Economist thomasshik@hangseng.com 2015 Government Work Report Preview Mainland China s Premier Li Keqiang will deliver his annual government work report to the National People s Congress
More informationHong Kong Economy: Recovering from Recession?
Irina Fan Senior Economist irinafan@hangseng.com Joanne Yim Chief Economist joanneyim@hangseng.com September 29 Hong Kong Economy: Recovering from Recession? Hong Kong staged a strong rebound in the second
More informationHong Kong Economic Update
Irina Fan Senior Economist irinafan@hangseng.com Joanne Yim Chief Economist joanneyim@hangseng.com May 28 Hong Kong Economic Update Hong Kong s March export growth stayed low at 7.6 yoy, as exports to
More informationHong Kong First Quarter GDP Preview Nearing Full Capacity and a Wary Inflation Outlook
Irina Fan Senior Economist irinafan@hangseng.com Joanne Yim Chief Economist joanneyim@hangseng.com May 11 Hong Kong First Quarter GDP Preview Nearing Full Capacity and a Wary Inflation Outlook The Hong
More informationThe Hong Kong Economy in Contraction Mode
Irina Fan Senior Economist irinafan@hangseng.com Joanne Yim Chief Economist joanneyim@hangseng.com 22 December 08 The Hong Kong Economy in Contraction Mode Hong Kong is in recession and leading economic
More informationHong Kong: Will service exports shine again?
Jackit Wong Senior Economist jackitwswong@hangseng.com Thomas Shik Acting Chief Economist thomasshik@hangseng.com Hong Kong: Will service exports shine again? Since the end of the global financial crisis,
More informationA Challenging Start To The Year
Ryan Lam, CFA Senior Economist ryancwlam@hangseng.com A Challenging Start To The Year Hong Kong s real GDP rose 2.1% in the first quarter of 2015, down from 2.4% in the fourth quarter of last year and
More informationAddressing Three Questions About The Hong Kong Economy
Ryan Lam, CFA Senior Economist ryancwlam@hangseng.com Addressing Three Questions About The Hong Kong Economy In this note, we address what we believe are some of the most important questions in assessing
More informationAugust Ryan Lam, CFA
Ryan Lam, CFA Senior Economist ryancwlam@hangseng.com Advance estimates of Hong Kong s GDP for the second quarter are due on August 15. The GDP report is likely to feature a decline in growth, with economic
More informationGlobal FX 3 Jan 2012
Global FX Jan The euro area s sovereign debt crisis has been dominating trading in financial markets over the past year and the currency market was no exception. The region s debt problems spread from
More informationSinology KEY QUESTIONS FOR CHINA INVESTORS IN by Andy Rothman. Q: Will Falling Oil Prices Have a Big Impact on China?
Sinology by Andy Rothman 5 February 215 a In the first of a three-part series, Sinology answers some of the key questions investors should be asking about China in 215. a Coal remains king, so falling
More informationRenminbi Internationalisation The Journey Begins
Treasury Division Renminbi Monitor January 2013 Joanne Yim Chief Economist joanneyim@hangseng.com Renminbi Internationalisation The Journey Begins After decades of rapid growth, mainland China has become
More informationChina Financial Reforms: In need of further deregulation
China Financial Reforms: In need of further deregulation Mingchun Sun 1 Summary Over the past decade, the Chinese government has implemented a series of financial reforms and transformed its financial
More informationGlobal FX 2 Apr 2012
Global FX 2 Apr 2012 Uncertainty reigned in the currency market over the past two weeks, with the dollar fluctuating in rather tight ranges against most other major currencies. The greenback initially
More information28 Feb Executive Summary. Analyst Hillary Ho Li Ling
Analyst Hillary Ho Li Ling +6565311517 hillaryho@phillip.com.sg Executive Summary Singapore: With reference to Budget 2011, we think that there is a general absence of positive catalysts to spur the economy
More informationGlobal FX 10 May 2010
Global FX 1 May 1 Fear gripped financial markets in the past week as market feared that Europe s inability to resolve its sovereign credit crisis will turn into a global financial crisis. Despite the fact
More informationKey Questions for China Investors in 2015
Key Questions for China Investors in 2015 February 6, 2015 by Andy Rothman of Matthews Asia Andy Rothman Investment Strategist Andy Rothman lived and worked in China for more than 20 years, analyzing the
More informationChina s growth to remain above 6% in September Tuuli Koivu, Senior Analyst
China s growth to remain above 6% in 2017-2019 8 September 2017 Tuuli Koivu, Senior Analyst Executive summary Nordea s new China forecast expects GDP growth at 6.7% in 2017, 6.3% in 2018 and 6.1% in 2019.
More informationKey Insights. China Macro Pulse
MACRO REPORT China Economy Update March 2015 Key Insights Monica Defend Head of Global Asset Allocation Research Qinwei Wang Economist Global Asset Allocation Research Economic Conditions: China s macro
More informationImplementation of Pheu Thai Party Policy Key to Thailand s Success
Analyst Tan Xuan +6631179 tanx@phillip.com.sg 14 Jul 211 Implementation of Pheu Thai Party Policy Key to Thailand s Success Executive Summary Bright spot in private consumption to be supported by rising
More informationMarket Summaries. People s Republic of China. Yield Movements. Size and Composition
Market Summaries People s Republic of China Yield Movements The government bond yield curve of the People s Republic of China (PRC) shifted upward for all tenors between 1 September and 31 October (Figure
More informationGlobal FX 24 May 2010
Global FX May The decline of the euro accelerated in the past two weeks. It hit a four-year low of. on May 9 as the sovereign debt crisis spread from Greece to other eurozone countries, undermining confidence
More information2013 The year of the renminbi
2013 The year of the renminbi Economic and regulatory conditions affecting the renminbi are unfolding quickly. This document reflects HSBC s views on how the development of the renminbi will unfold as
More informationInstant Thoughts. Ryan Lam, CFA. 18 April PBoC s Ambush Rattled the Market. Head of Research
Ryan Lam, CFA Head of Research ryan.lam@shacombank.com.hk +852 2841 5283 Instant Thoughts 18 April 2018 PBoC s Ambush Rattled the Market The People s Bank of China announced a reduction of 1ppt in required
More informationDaily FX Focus 19/3/2015
Important Risk Warning Daily FX Focus 19/3/215 The investment decision is yours but you should not invest in this product unless the intermediary who sells it to you has explained to you that the product
More informationTargeted RRR cut. Targeted RRR cut not signifying a reversal in neutral monetary policy. Equity Research Investment Strategy.
Equity Research Investment Strategy Targeted RRR cut Targeted RRR cut not signifying a reversal in neutral monetary policy Ou Yafei SFC CE No. BFN410 oyf@gf.com.cn +86 20 8757 3009 GF Securities (Hong
More informationStatistics for RMB OTC Closing Values in 2006
Bracing For More RMB Volatility Summary n Post IMF/G7 meetings, RMB continued to maintain a steady strengthening trend but in rising volatility, as talks of a one-off move gave way. We expect such RMB
More informationNorges Bank Review 24 September 2015
Norges Bank Review 24 September 2015 A 25bp rate cut and an easing bias Frank Jullum Chief Analyst fju@danskebank.dk www.danskebank.com/research Arne Lohmann Rasmussen Chief Analyst klom@danskebank.dk
More informationChina: Beyond the headlines. Bill Maldonado HSBC Global Asset Management
China: Beyond the headlines Bill Maldonado HSBC Global Asset Management Are you a China Bull or a Bear? Source: Various news publications 2 Bear myth #1: Hard landing? GDP: Growth is slowing, but it s
More informationGDP Forecast Revised Due to Weak Global Outlook
5 July 2016 MONTHLY ECONOMIC REVIEW Jun 2016 GDP Forecast Revised Due to Weak Global Outlook Exports were down by 0.9%yoy in May, while trade balance moderated to RM3.2 billion. This was largely due to
More informationChinese Banking Sector
Equity Research Financials Jan 17, 218 Chinese Banking Sector Positive (maintained) Strong loan demand expected; intensified competition in deposits Wang Wen SFC CE No. BGL298 wangwen@gfgroup.com.hk +86
More informationMarket Summaries. People s Republic of China. Yield Movements. Size and Composition
Market Summaries People s Republic of China Yield Movements The entire government bond yield curve of the People s Republic of China (PRC) shifted downward between 1 March and 15 May (Figure 1). The yield
More information2,500 2,000 1,500 1, , ,000-1,500-2,000-2,500. May-13. Jun-13. Apr-13. Feb-13. Mar-13
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 QUARTERLY REVIEW June 213 ECONOMIC REPORT The End of Euphoria Perception vs.
More information2013 OVERVIEW: There are mainly 3 reasons for the rebound;
2013 OVERVIEW: The China market has rebounded since end of June; the upward move has been about 15% from the bottom and it is the first significant move for China Markets, which have been in a range since
More informationOpportunities emerge as China slows
Professional clients/institutional investors only. Opportunities emerge as China slows Why China s mini-cyclical slowdown is creating attractive fixed income opportunities UBS Asset Management Hayden Briscoe
More informationASF Hong Kong Market Report
HONG KONG ECONOMY ASF 2016 - Hong Kong Market Report Background As everyone knows, Hong Kong has a very good geographic location, it is surround by sea and backup by a huge China market. HK has taken a
More information2012 6 http://www.bochk.com 2 3 4 ECONOMIC REVIEW(A Monthly Issue) June, 2012 Economics & Strategic Planning Department http://www.bochk.com An Analysis on the Plunge in Hong Kong s GDP Growth and Prospects
More informationLuk Fook (590 HK) Strong 1Q gem-set SSS in China. Core profit (HK$ m) Net profit (HK$ m) Turnover (HK$ m)
Equity Research Consumer Discretionary Luk Fook (590 HK) Hold (maintained) Target price: HK$23.10 Strong 1Q gem-set SSS in China China gem-set SSS outperformed CTF SSS in China improved from -5% in 1QFY15
More informationLuk Fook (590 HK) Hold Target price: HK$ Downgrade to Hold on more challenging HK & Macau market outlook. Equity Research Consumer Discretionary
Equity Research Consumer Discretionary Luk Fook (590 HK) Hold Target price: HK$24.60 Albert Yip, CFA SFC CE No. ADT599 albertyip@gfgroup.com.hk +852 3719 1010 GF Securities (Hong Kong) Brokerage Limited
More informationLuk Fook (590 HK) Hold (downgraded) Target price: HK$ HFY18 results beat, but downgrade from Accumulate to Hold on rich valuation
Equity Research Consumer Discretionary Luk Fook (590 HK) Hold (downgraded) Target price: HK$34.80 Albert Yip, CFA SFC CE No. ADT599 albertyip@gfgroup.com.hk +852 3719 1010 GF Securities (Hong Kong) Brokerage
More informationFlash Comment China drafts plan for Tobin tax on FX transactions implications and recommendations
Investment Research General Market Conditions 16 March 2016 Flash Comment China drafts plan for Tobin tax on FX transactions implications and recommendations What s the plan? According to sources close
More informationOffshore CNH Market
Offshore CNH Market 2015.09.17 RMB Internationalization Gathers Pace China continues to accelerate regulatory reforms towards RMB internationalization The global major currency club is refining itself
More informationChina and Hong Kong Forex Market Developments One-way appreciation carrying into the new year
China and Hong Kong Forex Market Developments One-way appreciation carrying into the new year January 218 Monthly publication Alicia Garcia Herrero Chief Economist Asia Pacific +852 39-868 alicia.garciaherrero@natixis.com
More informationFlash Comment China takes more steps to fight financial risks
Investment Research General Market Conditions 20 November 2017 Flash Comment China takes more steps to fight financial risks China stepped up the fight against the risks of shadow banking on Friday, announcing
More informationChina and Hong Kong Forex Market Developments RMB made the nine-month peak and FX reserves further expanded
China and Hong Kong Forex Market Developments RMB made the nine-month peak and FX reserves further expanded August 217 Monthly publication Alicia Garcia Herrero Chief Economist Asia Pacific +852 39-868
More informationEconomic activity gathers pace
Produced by the Economic Research Unit October 2014 A quarterly analysis of trends in the Irish economy Economic activity gathers pace Positive data flow Recovery broadening out GDP growth revised up to
More informationChi on China. RMB Internationalisation (part 1 of 2): Short-term Tactics May have Changed SUMMARY. For professional investors 24 February
For professional investors 24 February 2016 1 Chi on China RMB Internationalisation (part 1 of 2): Short-term Tactics May have Changed Change will not come if we wait for some other person or some other
More information26 Nov Executive Summary. Analyst Hillary Ho Li Ling
Analyst Hillary Ho Li Ling +6565311517 hillaryho@phillip.com.sg Executive Summary United States: We maintain our stance that QE2 will not make a huge difference to economic conditions. Growth will continue
More informationGlobal Investment Outlook for 2H 2016
Global Investment Outlook for 2H 2016 Major central banks apart the Fed may stay in easing mode due to heightened economic and political risks. China s economy in 2H 2016 may continue to stabilize but
More informationCHINA S ECONOMY AT A GLANCE
CHINA S ECONOMY AT A GLANCE APRIL 218 CONTENTS Key points 2 Gross Domestic Product 3 Industrial Production 4 Investment 5 International trade - trade balance and imports International trade - exports 6
More informationEfficacy of China s capital controls
Efficacy of China s capital controls RIETI/BIS/BOC conference Globalisation of financial servceis in China: implications for capital flows, supervision and monetary policy Beijing, 19 March 2005 Guonan
More informationQ Outlook and Strategy Income Funds
Q3 Outlook and Strategy Income Funds Industry Recognitions for Asian Fixed Income Capabilities Organiser Award Asia Asset Management Best of the Best Performance Awards 2015: Asian Bonds (3 years) 1 Best
More informationGreater China Week in Review Monday, 22 January, 2018
01/2014 03/2014 05/2014 07/2014 09/2014 11/2014 01/2015 03/2015 05/2015 07/2015 09/2015 11/2015 01/2016 03/2016 05/2016 07/2016 09/2016 11/2016 01/2017 03/2017 05/2017 07/2017 09/2017 11/2017 % Highlights:
More informationThe Renminbi: Why + How = Now
Excerpt from Insights 2013 The Renminbi: Why + How = Now Sridhar Kanthadai, Regional Head of Transaction Banking, North Asia Michael Vrontamitis, Regional Head of Product Management, Transaction Banking,
More informationUpdated macroeconomic forecast
Prepare for landing: Updated macroeconomic forecast 217-219 26 January 218 Íslandsbanki Research Executive summary The Icelandic economy has been buoyant in the past few years, after the deep recession
More informationCRRC (1766 HK) Accumulate (maintained) Target price: HK$8.20. Weak 1H17 results, but management s optimistic view on EMU orders eases market concern
Equity Research Rail Equipment CRRC (1766 HK) Accumulate (maintained) Target price: HK$8.2 Dominic Chan, CFA, FRM SFC CE No. APP69 dominicchan@gfgroup.com.hk +852 3719 1218 GF Securities (Hong Kong) Brokerage
More informationMonitor Chinese credit crunch
Investment Research General Market Conditions 15 September 2014 Monitor Chinese credit crunch Credit growth continued to slow in August. The broad credit measure total social finance (TSF) slowed to 15.3%
More informationOutlook and Strategy Hong Kong China Funds
Q 208 Outlook and Strategy Hong Kong China Funds Investment Theme Mainland Stock Market Stabilises after Policy Impact Absorbed Mainland China s property sector rebounded as home prices stabilised. The
More informationMain Economic & Financial Indicators Hungary
Main Economic & Financial Indicators Hungary 6 AUGUST 2015 NAOKO ISHIHARA ECONOMIST ECONOMIC RESEARCH OFFICE (LONDON) T +44-(0)20-7577-2179 E naoko.ishihara@uk.mufg.jp The Bank of Tokyo-Mitsubishi UFJ,
More informationEurozone. Economic Watch FEBRUARY 2017
Eurozone Economic Watch FEBRUARY 2017 EUROZONE WATCH FEBRUARY 2017 Eurozone: A slight upward revision to our GDP growth projections The recovery proceeded at a steady and solid pace in, resulting in an
More informationAsian Insights Third quarter 2016 Asia s commitment in policies and reforms
Asian Insights Third quarter 2016 Asia s commitment in policies and reforms One of the commonalities between most Asian governments is the dedicated commitment they have in using policies and initiatives
More informationChow Tai Fook (1929 HK)
Equity Research Consumer Discretionary Chow Tai Fook (1929 HK) Accumulate Target price: HK$11.60 3QFY15 sales disappoint SSS plunge 21% YoY in HK and Macau The sluggish sales was attributable to protest
More informationAustralian Dollar Outlook
Tuesday, 31 March 015 Australian Dollar Outlook Still Under Pressure We have revised our AUD forecasts for this year down slightly to reflect developments over recent months. We now expect the AUD to end
More informationSGX China Equity Index Derivatives Monthly Commentary
5:: PM 5:3: PM 6:: PM 6:3: PM 7:: PM 7:3: PM 8:: PM 8:3: PM 9:: PM 9:3: PM 1:: PM 1:3: PM 11:: PM 11:3: PM 12:: AM 12:3: AM 1:: AM 1:3: AM Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14
More informationNorges Bank Review. Unchanged but September cut still in store. 23 June Follow us on
Norges Bank Review Unchanged but September cut still in store Frank Jullum Chief Economist +47 85 40 65 40 fju@danskebank.dk Kristoffer Kjær Lomholt Analyst +45 45 12 85 29 klom@danskebank.dk 23 June 2016
More informationJewelry Sector. YTD HK market stronger-than-expected; FY18 results could beat. Equity Research Consumer Discretionary. Mar 12, 2018.
Equity Research Consumer Discretionary Jewelry Sector YTD HK market stronger-than-expected; FY18 results could beat Albert Yip, CFA SFC CE No. ADT599 albertyip@gfgroup.com.hk +852 3719 1010 GF Securities
More informationChi on China. RMB Internationalisation (part 1 of 2): Short-term Tactics May Have Changed SUMMARY. For professional investors 23 February
For professional investors 23 February 2016 1 Chi on China RMB Internationalisation (part 1 of 2): Short-term Tactics May Have Changed Change will not come if we wait for some other person or some other
More informationGold - key charts, price outlook
13 October, 2017 www.icbcstandard.com This is a marketing communication which has been prepared by a trader, sales person or analyst of ICBC Standard Bank Plc, or its affiliates ( ICBCS ) and is provided
More informationEmerging Markets Debt: Outlook for the Asset Class
Emerging Markets Debt: Outlook for the Asset Class By Steffen Reichold Emerging Markets Economist May 2, 211 Emerging market debt has been one of the best performing asset classes in recent years due to
More informationChi on China Up or Down? The Knowns and Unknowns of the RMB New Normal
For professional investors 28 January 2015 1 Chi on China Up or Down? The Knowns and Unknowns of the RMB New Normal SUMMARY The knowns: China s renminbi (RMB) has entered a new normal environment characterised
More information2018 Insurance Sector Outlook
Equity Research Financials 2018 Insurance Sector Outlook Positive (maintained) Felix Luo SFC CE No. AQF573 felixluo@gfgroup.com.hk +852 3719 1048 GF Securities (Hong Kong) Brokerage Limited 29-30/F, Li
More informationMain Economic & Financial Indicators The Czech Republic
Main Economic & Financial Indicators The Czech Republic 15 OCTOBER 215 NAOKO ISHIHARA ECONOMIST ECONOMIC RESEARCH OFFICE (LONDON) T +44-()2-7577-2179 E naoko.ishihara@uk.mufg.jp The Bank of Tokyo-Mitsubishi
More informationGreater China Week in Review
Highlights: The Chinese economy decelerated in August with all three key economic indicators missed forecast. We think the recent slowdown was mainly self-engineered as a result of tighter policy in local
More information2016 May Financial Market Update
Charles Sherry Director, Institutional Education Group Blue Ocean Global Wealth 51 Monroe St., Plaza West 06 Rockville, MD 20850 Tel: 720.308.4560 csherry@blueoceanglobalwealth.com 2016 May Financial Market
More informationMarket Bulletin. Chinese yuan: Walking on a tight rope. 16 August 2016 MARKET INSIGHTS. In brief
MARKET INSIGHTS Market Bulletin 16 August 2016 Chinese yuan: Walking on a tight rope In brief Recent trends suggest the Chinese authorities are allowing the Chinese yuan to depreciate against a basket
More informationASIAN WEEKLY ECONOMIC INSIGHTS
ASIAN WEEKLY ECONOMIC INSIGHTS Global Economic Research May 25, 2007 Anthony Chan Asian Sovereign Strategist Global Economic Research + 852 2918 7846 This document reflects the views of AllianceBernstein
More informationAUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN GENERAL
Bank Indonesia cut its reference rate by 25bps to 6.5% This was in tandem with slower global growth and Fed pause on rate Bank Indonesia (BI) unexpectedly cut BI reference rate by 25bps to 6.5% on the
More informationChina TCM (570 HK) Buy (maintained) Target price: HK$ H17 earnings beat, 2017 growth guidance reaffirmed; TP raised to HK$5.
Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Equity Research Healthcare China TCM (570 HK) Buy (maintained) Target price: HK$5.40
More informationHAS THE CHINA COLLAPSE FINALLY ARRIVED?
Sinology by Andy Rothman January 22, 2019 a Macro data in the last quarter of 2018 didn t slow sharply. The growth rates of household consumption and private investment actually accelerated. a This year,
More informationFX Strategy. Is CNY Strength Over?
Global Economics & Markets Research Email: GlobalEcoMktResearch@uobgroup.com URL: www.uob.com.sg/research FX Strategy Is CNY Strength Over? Friday, 09 February 2018 Heng Koon How, CAIA Head of Markets
More information2018 A-Share Market Strategy
Equity Research 2018 A-Share Market Strategy Favor high growth mid-caps that are improving their product offerings Alex Fan, CFA SFC CE No. ADJ672 alexfan@gfgroup.com.hk +852 3719 1047 With contribution
More informationCountry Risk Analytics
Emerging Markets Country Risk Analytics MacroFinance Research Quarterly - 2018 Q2 www.taceconomics.com www.taceconomics.com 2 Country Risk Analytics EM Quarterly MacroFinance Research 2018 Q2 Description
More informationNordic Companies in China less optimistic - But they continue to expand their presence
Nordic Companies in China less optimistic - But they continue to expand their presence THE SEB CHINA FINANCIAL INDEX AT 63.4, down from 70 in March. All indicators are falling in the September survey.
More informationChi on China RMB Undervaluation, Déjà vu
For professional investors 26 February 2014 1 Chi on China RMB Undervaluation, Déjà vu SUMMARY The fall in China s current account surplus in recent years has not resulted from a genuine change in the
More informationImproved Macroeconomic Conditions Boost Consumer Sentiment to Its Highest Level in 3½-Year
ECONOMIC REPORT Business & Consumer Confidence 17 April 2018 Improved Macroeconomic Conditions Boost Consumer Sentiment to Its Highest Level in 3½-Year MIER s CSI rebounded to 3.5-year high. Underpin by
More informationAsia Bond Monitor November 2018
January 9 asianbondsonline.adb.org Key Developments in Asian Local Currency Markets L ast week, the Philippines raised USD. billion from the sale of -year global bonds priced at basis points above benchmark
More informationCESC Index Report for September
CESC Index Report for September China Exchanges Services Co Ltd (CESC) Highlights CES SCHK100, which represents large cap stocks eligible for Southbound trading under Stock Connect, rose 1.4 per cent and
More informationGlobal Equities PUTTING RECENT MARKET VOLATILITY IN PERSPECTIVE
PRICE POINT February 2018 Timely intelligence and analysis for our clients. Global Equities PUTTING RECENT MARKET VOLATILITY IN PERSPECTIVE KEY POINTS The upswing in equity market volatility can be attributed
More informationMarket Bulletin. China: Still sneezing hard. January 20, 2016 MARKET INSIGHTS. In brief
MARKET INSIGHTS Market Bulletin January 20, 2016 China: Still sneezing hard In brief Slower 4Q15 GDP growth and soft December data add to concerns about China s economic health. On a more encouraging note,
More informationEurozone Economic Watch. November 2017
Eurozone Economic Watch November 2017 Eurozone: improved outlook, still subdued inflation Our MICA-BBVA model for growth estimates for the moment a quarterly GDP figure of around -0.7% in, after % QoQ
More informationFlash Comment China holiday wrap-up: sentiment improving
Investment Research General Market Conditions 9 August 2016 Flash Comment China holiday wrap-up: sentiment improving Below is a brief summary of developments in China over the summer Chinese offshore stocks
More informationMarket Bulletin. Chinese yuan: Walking on a tight rope. August 16, In brief
Market Bulletin August 16, 2016 Chinese yuan: Walking on a tight rope In brief Recent trends suggest the Chinese authorities are allowing the Chinese yuan to depreciate against a basket of currencies in
More informationSummary. Chinese equities remained mired in a bear market, with the Shanghai composite losing nearly
Summary Editor: Tristan Zhuo Senior Economist Phone: +852 2826 6193 Email: tristanzhuo@bochk.com In spite of fixed asset investment, industrial production, and exports all missing their targets, China
More informationChi on China Up or Down? The Knowns and Unknowns of the RMB New Normal
For professional investors 28 January 2015 1 Chi on China Up or Down? The Knowns and Unknowns of the RMB New Normal SUMMARY The knowns: China s renminbi (RMB) has entered a new normal environment characterised
More informationSEP OCT NOV DEC JAN FEB MAR APR MAY JUN GENERAL
IMF upgraded ASEAN GDP growth forecast for ASEAN economies to benefit from strong economic growth in China The International Monetary Fund (IMF) recently upgraded ASEAN GDP growth projection for in its
More informationECB Research ECB cutting through the lower bound Danish experiences
Investment Research General Market Conditions 03 November 2015 ECB Research ECB cutting through the lower bound Danish experiences Given the turnaround in the ECB s view on deposit rate cuts, we expect
More information