SEP OCT NOV DEC JAN FEB MAR APR MAY JUN GENERAL

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1 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 latest World Economic Outlook (WEO) update. The GDP growth for ASEAN-5 is currently expected to grow by 5.1% in, higher than its previous forecast in the April WEO at 5.0%. The projection for economic growth in the region for year 2018 was maintained at 5.2%, higher than reflecting a stronger global economic momentum in The upward projection was attributed to the pickup in global trade activity and strengthening domestic demand, including stronger numbers seen in the first quarter this year. Similaly, forecast of GDP growth for the emerging market and developing economies in was revised upward from 4.5% to 4.6% in July WEO. Economic Update ASEAN Weekly Wrap The overall global growth was maintained at 3.5% and 3.6% respectively for year and The revised projection for the emerging market economies was offset by a slower US economic growth, in which the IMF is now projecting that the world largest economy to grow by 2.1% in both and 2018, significantly lower from their initial projection for the US to expand by 2.3% in and 2.5% respectively in 2018 due to the less expansionary fiscal policy than previously assumed. As a result, the overall growth for advanced economies in 2018 was revised downward from 2.0% to 1.9% while the projected growh for this year was kept at 2.0% due to a stronger economy in the Euro Area, which was revised upward from 1.7% to 1.9% for year. In the US, the US Federal Reserve in its latest FOMC statement mentioned that they are planning to begin its balance sheet normalization program relatively soon, in which we expect they may be looking at the September FOMC meeting, while at the same time maintaining their interest rate hikes in a gradual manner. In an effort to stabilise portfolio movement, we believe some ASEAN central banks may be looking for some normalisation and possible rate hikes into The strength of global trade activity, if sustained, which spill over into regional domestic economy, is likely to put some inflationary pressure, possibly into next year. Separately, Thailand had its second consecutive double digit exports growth in June, growing by 11.8% yoy after its 53-months high in May at 13.2% yoy. The strong exports numbers was mainly supported by the manufacturing sector, which had also experienced its consecutive double digit growth at 11.7% yoy in June after 12.8% yoy in May. Like other central banks in the region, the strong trade numbers as well as a healthy domestic demand may add to domestic inflationary pressure, where likelihood for Bank of Thailand (BOT) to tighten gradually its monetary policy in Economic Research (603) alan.tan@affinhwang.com izzuddin.yussof@affinhwang.com maisarah.razali@affinhwang.com Fig 1: ASEAN economic releases (21 27 July ) AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN GENERAL CONSENSUS Thailand Exports (%yoy) Imports (%yoy) Singapore CPI (%yoy) Core CPI (%yoy) IPI (%yoy) Source: All data from Bloomberg and CEIC, consensus from Bloomberg Page 1 of 6

2 Appendix I: ASEAN economic charts (21 27 July ) Chart 1: Singapore s inflation Chart 2: Singapore s CPI Chart 3: Thailand s trade Chart 4: Thailand s exports breakdown Chart 5: Singapore s production breakdown Chart 6: Singapore s production Source: All data for charts sourced from CEIC and Bloomberg Page 2 of 6

3 Appendix II: Upcoming ASEAN economic releases charts Chart 7: Regional Money Chart 8: Indonesia s CPI Chart 9: Thailand s PMI Chart 10: Thailand s CPI Chart 11: Indonesia s GDP Chart 12: Phillipines s CPI breakdown Page 3 of 6

4 Source: All data for charts sourced from CEIC and Bloomberg Appendix III: Monthly ASEAN economic data trend AUG SEP OCT NOV MALAYSIA CPI (%yoy) Core CPI (%yoy) IPI (%yoy) Exports (%yoy) Imports (%yoy) Trade balance (US$bn) Foreign reserves (US$bn) INDONESIA CPI (%yoy) Core CPI (%yoy) IPI (%yoy) Exports (%yoy) Imports (%yoy) Trade balance (US$bn) Foreign reserves (US$bn) PHILIPPINES CPI (%yoy) Core CPI (%yoy) IPI (%yoy) Exports (%yoy) Imports (%yoy) Trade balance (US$bn) Foreign reserves (US$bn) SINGAPORE CPI (%yoy) IPI (%yoy) Non-oil domestic exports (%yoy) Electronic exports Imports (%yoy) Trade balance (US$bn) Foreign reserves (US$bn) THAILAND CPI (%yoy) Core CPI (%yoy) IPI (%yoy) Exports (%yoy) Imports (%yoy) Trade balance (US$bn) Foreign reserves (US$bn) REAL GDP (%yoy) 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 MALAYSIA INDONESIA PHILIPPINES SINGAPORE THAILAND Source: Bloomberg, CEIC DEC JAN FEB MAR APR MAY JUN Page 4 of 6

5 Appendix IV: ASEAN Economic Calendar for July July Monday Tuesday Wednesday Thursday Friday MY June Nikkei PMI ID May money supply SG June Nikkei PMI TH June consumer confidence MY May trade TH June Nikkei PMI PH June CPI MY June 30 Reserves TH June CPI TH MPC Meeting TH June 30 Reserves PH June Nikkei PMI SG June Reserves ID June Nikkei PMI PH June Reserves ID June CPI ID June Reserves June consumer PH May trade ID MY MPC Meeting TH Jul. 7 Reserves confidence MY May IPI SG 2Q17 GDP SG May Retail Sales SG June NODX MY June CPI ID MPC meeting TH Jul. 14 Reserves ID June trade SG June CPI SG June IPI TH Jul. 21 Reserves TH June trade MY ID PH SG. 31 ID=Indonesia, MY=Malaysia, PH=Philippines, SG=Singapore, TH=Thailand Dates for indicators are subject to change Source: Bloomberg Page 5 of 6

6 Equity Rating Structure and Definitions BUY Total return is expected to exceed +10% over a 12-month period HOLD Total return is expected to be between -5% and +10% over a 12-month period SELL Total return is expected to be below -5% over a 12-month period NOT RATED Affin Hwang Investment Bank Berhad does not provide research coverage or rating for this company. Report is intended as information only and not as a recommendation The total expected return is defined as the percentage upside/downside to our target price plus the net dividend yield over the next 12 months. OVERWEIGHT Industry, as defined by the analyst s coverage universe, is expected to outperform the KLCI benchmark over the next 12 months NEUTRAL Industry, as defined by the analyst s coverage universe, is expected to perform inline with the KLCI benchmark over the next 12 months UNDERWEIGHT Industry, as defined by the analyst s coverage universe is expected to under-perform the KLCI benchmark over the next 12 months This report is intended for information purposes only and has been prepared by Affin Hwang Investment Bank Berhad (14389-U) ( the Company ) based on sources believed to be reliable. However, such sources have not been independently verified by the Company, and as such the Company does not give any guarantee, representation or warranty (express or implied) as to the adequacy, accuracy, reliability or completeness of the information and/or opinion provided or rendered in this report. Facts, information, views and/or opinion presented in this report have not been reviewed by, may not reflect information known to, and may present a differing view expressed by other business units within the Company, including investment banking personnel. Reports issued by the Company, are prepared in accordance with the Company s policies for managing conflicts of interest arising as a result of publication and distribution of investment research reports. Under no circumstances shall the Company, its associates and/or any person related to it be liable in any manner whatsoever for any consequences (including but are not limited to any direct, indirect or consequential losses, loss of profit and damages) arising from the use of or reliance on the information and/or opinion provided or rendered in this report. Any opinions or estimates in this report are that of the Company, as of this date and subject to change without prior notice. Under no circumstances shall this report be construed as an offer to sell or a solicitation of an offer to buy any securities. The Company and/or any of its directors and/or employees may have an interest in the securities mentioned therein. The Company may also make investment decisions or take proprietary positions that are inconsistent with the recommendations or views in this report. Comments and recommendations stated here rely on the individual opinions of the ones providing these comments and recommendations. These opinions may not fit to your financial status, risk and return preferences and hence an independent evaluation is essential. Investors are advised to independently evaluate particular investments and strategies and to seek independent financial, legal and other advice on the information and/or opinion contained in this report before investing or participating in any of the securities or investment strategies or transactions discussed in this report. Third-party data providers make no warranties or representations of any kind relating to the accuracy, completeness, or timeliness of the data they provide and shall not have liability for any damages of any kind relating to such data. The Company s research, or any portion thereof may not be reprinted, sold or redistributed without the consent of the Company. The Company, is a participant of the Capital Market Development Fund-Bursa Research Scheme, and will receive compensation for the participation. This report is printed and published by: Affin Hwang Investment Bank Berhad (14389-U) A Participating Organisation of Bursa Malaysia Securities Berhad 22nd Floor, Menara Boustead, 69, Jalan Raja Chulan, Kuala Lumpur, Malaysia. T : F : research@affinhwang.com Page 6 of 6