The document summarizes economic forecasts for various Asian countries from 2015-2019 from BMI Research. It finds that overall growth in Asia will slow slightly to an average of 4.8% compared to 5.4% in the past five years, as China experiences a structural slowdown and Japan sees weak growth. However, some countries like Indonesia, Vietnam, and India will see faster growth. Private consumption in Asia is forecast to increase strongly, outpacing the global rate, as countries rebalance away from exports. Remittances are also expected to rise due to dollar strengthening and developed market growth. Individual country sections forecast slower Chinese growth, weak recovery in Japan, continued rebalancing and stronger growth in Indonesia, and rising political risks hampering
Asia Frontier Capital - AFC Vietnam Fund presentation 2015.08.09Thomas Hugger
The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invest in a diversified portfolio of 60-70 attractively valued companies to carefully control concentration risk. This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger, Andreas Karall and Andreas Vogelsanger who have more than 75 years combined experience managing investments in frontier markets, Asia and around the world.
Asia Frontier Capital - AFC Vietnam Fund presentation 2015.08.09Thomas Hugger
The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invest in a diversified portfolio of 60-70 attractively valued companies to carefully control concentration risk. This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger, Andreas Karall and Andreas Vogelsanger who have more than 75 years combined experience managing investments in frontier markets, Asia and around the world.
Asia's major economies, China and Japan, are poised for a year of slowing growth and central bank transitions. Elsewhere in the region, the outlook is more mixed and in most of ASEAN, tepid private demand will keep rate hikes off the table.
Business Monitor Key Views on Asia's economic, political and infrastructure a...Wei Xiang Tay
This month we've done something a little different. The first half is the general macro outlook (global + regional), and the second half, a slightly deeper dive into the infra sector, looking at key markets within APAC. This monthly presentation has a great mix of economics, politics and sectors analysis.
Asia's major economies, China and Japan, are poised for a year of slowing growth and central bank transitions. Elsewhere in the region, the outlook is more mixed and in most of ASEAN, tepid private demand will keep rate hikes off the table.
Business Monitor Key Views on Asia's economic, political and infrastructure a...Wei Xiang Tay
This month we've done something a little different. The first half is the general macro outlook (global + regional), and the second half, a slightly deeper dive into the infra sector, looking at key markets within APAC. This monthly presentation has a great mix of economics, politics and sectors analysis.
From the Desk of the CEO.
The heat is on. While many of us have been vacationing in cooler climes, the Sensex has kept itself rather busy, gaining another 4% during the month of May. The upmove has come largely on the back of better-than-expected corporate results and expectations of a good monsoon. Markets are also taking cognisance of various indicators like improved auto sales, higher steel and cement offtake, public infrastructure spending, etc. which are positive signs of an imminent economic recovery.
Crude prices have silently crept up and are currently hovering at the $50 level, almost double from the January lows. So despite the adverse implications of higher crude prices on the Indian economy, there seems to be some positive correlation between crude prices and the equity markets. Though this pattern may not have always played out in the last few decades, the first few months of 2016 certainly seem to indicate so. The main reason for this is the significantly high weightage that the Energy sector has in indices the world over. When oil plummeted to sub-$30 levels, it seriously impacted the profitability of some of the world’s biggest corporations, not only causing their stock prices to fall sharply, but also impacting the broader markets in general. It also indicated a global recessionary trend, thus affecting investor sentiment and causing them to become nervous and risk-averse. The bounce back in crude has brought the price to a level that makes it profitable for companies to drill, creating a sense of well-being for both, the Energy sector as well as the countries whose economies are dependent solely on oil. Where crude prices go from here remains to be seen.
After several quarters of benign inflation, the WPI rose to 0.34% while retail inflation soared to 5.39% in April 2016. This, coupled with higher oil prices would make it difficult for Governor Rajan to announce a rate cut at the next RBI policy meeting on 7th June. Across the globe however, Janet Yellen’s comments on improving economic data in the US has the markets believing that a rate hike by the US Federal Reserve is a high possibility during its next meeting in mid-June. The outcome of Britain’s referendum on Brexit is also an event that we will be closely watching.
With markets factoring in all the good news for now, conventional logic says that short term investors need to be cautious. But when the stock market catches momentum, all negative predictions may be proven wrong.
There are of course, many more bulls than bears when it comes to a 1 year plus view. Long term investors may continue their investments and look to buy into any dips.
Wish all of you a happy monsoon season.
This work is based on my 10 minutes presentation on analysis of monetary policy of Nepal. Hope you will get overview of monetary policy that Nepal Rastra Bank has exercised during different periods in Nepal.
I would love to get your feedback for further improvements, If you have any, plz write email skbhattarai99@gmail.com
After the uncertainty of the Brexit verdict got over, the market rallied in the last week. The market got off on the
wrong foot on the day of the Referendum results and corrected by almost 1000 points. But the market soon
realized that the renewal in trade agreement between UK and Euro is not going to happen anytime soon and it will
take around 1-2 years. India being an emerging nation, the impact of this event is quite limited. After this the
market resumed its upt uptrend. Since budget, the nifty is up by 1000 points, and in percentage terms it has gained
22%. We should remember that it is still 10% off of the it’s all time high, which was achieved in March 2015.
• Despite the fact that the PE multiple of the Indian Markets is 17 – 18 times, the FIIs continue to invest in India on
account of better growth prospects, better earning visibility. India is the only trillion dollar economy which is
growing on 7.5%, which makes it a lucrative long term story.
Similar to Monthly Asia Presentation May 2015 (20)
2. www.bmiresearch.com
• Global: Differentiation Needed
• Asia: Slowdown In Growth
• Asia: Private Consumption To Rise
• Asia: FX Weakness Positive For Remittances
• China: No Growth Surprise Here
• Japan: Emerging From Recession…Just
• Indonesia: Rebalancing Continues
• Thailand: Regressing From Democracy?
Outline
3. www.bmiresearch.com
2015-2019 = BMI forecasts. Source: National statistical agencies, BMI
Global growth will accelerate slightly
from 2.8% in 2014 to 3.0% in 2015:
• However, there is a growing need to
differentiate between regions and
countries.
• Most major emerging markets (EMs)
and some key developed markets are
in the slowdown phase of the
economic cycle.
• Other countries, such as Brazil and
Russia, are in full-blown recession,
and have not yet bottomed.
• Many developed markets, in contrast,
are enjoying better economic times
than in recent years, with the US and
the Eurozone on track to post their
best real GDP.
2014e 2015 2016 2017 2018 2019
Global 2.8 3.0 3.1 3.2 3.2 3.2
United States 2.4 2.9 2.6 2.4 2.3 2.4
Eurozone 0.8 1.2 1.4 1.4 1.4 1.5
China 7.4 6.7 5.9 5.9 5.9 5.9
Real GDP Growth, %
Global: Differentiation Needed
Where Are We In The Cycle?
4. www.bmiresearch.com
2015-2019 = BMI Forecasts, * = BMI calculation 2013
Asia: Slowdown In Growth Ahead
Economic activity in Asia will slow
slightly over the coming years
• Growth will average 4.8% over the
next five years, compared with the
average 5.4% in the past five.
• A structural slowdown in China and
weak growth in Japan will help to drive
this trend given the region’s
dependence on them for demand.
• Despite the aggregate slowdown,
some countries will see growth
accelerate over the next five years.
• Indonesia and Vietnam will grow by an
average 6.5% and 6.4%, up from 6.0%
and 5.8%, respectively. India’s growth
will remain unchanged, averaging
7.0% over the next five years.
Slower Growth Ahead
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
APAC Emerging Asia Asia ex Japan ASEAN 10 ASEAN 5
2010-2014
2015-2019
0
10
20
30
40
50
60
Exports to China & Japan % of Total*
5. www.bmiresearch.com
2015-2017 = BMI forecasts; * = Real Private consumption Growth
Private Consumption To Rise
The rebalancing away from export and
investment-led growth will see private
consumption play a larger role.
• Private consumption in Asia will grow
by an average 5.8% a year out to
2024.
• This will eclipse the global rate of 3.5%
per annum over the same period.
• As a result, Asia’s share of global
private consumption will rise from
about 27% in 2014 to 34% in 2024.
• The fastest growing markets will be
China, India, Indonesia, the Philippines
and Vietnam which have a combined
population of 3.1bn people, equivalent
to 43% of the world’s population.
2012 2013 2014 2015 2016 2017
China 8.0 8.0 8.6 8.2 8.0 8.0
India 5.5 6.2 6.5 6.5 6.3 6.3
Indonesia 5.3 5.3 5.3 4.8 6.3 7.0
Philippines 6.6 5.7 5.4 5.2 5.2 4.8
Real Private Consumption Growth, %
Asia To See Strong Growth In Private Consumption*
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2005-2014 2015-2024
Asia Global
6. www.bmiresearch.com
2015-2017= BMI forecasts; Source: World Bank
FX Weakness Positive For Remittances
The combination of a pick-up in growth
in developed countries and a stronger
dollar will see remittances rise.
• Several Asian economies still remain
dependent on remittances to support
private consumption.
• Key countries include the Philippines,
Sri Lanka and Bangladesh with
remittances accounting for 9% of GDP.
• The strengthening US dollar will add a
tailwind in local currency terms,
helping to offset some of the loss in
consumer purchasing power.
• These remittances also play a vital role
in these countries’ current account
dynamics.
2012 2013 2014 2015 2016 2017
Philippines 2.8 4.3 4.4 4.4 4.6 4.5
Sri Lanka -6.6 -3.9 -3.4 -3.1 -3.1 -2.8
Bangladesh -0.3 1.6 0.9 -1.3 -1.4 -1.5
Vietnam 5.8 5.6 4.6 4.3 3.6 3.3
Current Account Balance, % of GDP
Remittances Are A Key Anchor
-1%
1%
3%
5%
7%
9%
11%
Philippines
SriLanka
Bangladesh
Kiribati
Vietnam
Pakistan
Fiji
India
Remittances as a share of
GDP in 2013 (%)
7. www.bmiresearch.com
2015-2017= BMI forecasts
China: No Growth Surprise Here
Chinese real GDP growth came in at 7.0%
in Q115, its slowest pace since 2009 and
we forecast it to fall to 6.7% in 2015.
• The economy is weakening on the
back of over capacity, falling house
prices, a stronger exchange rate, high
levels of debt and weak profitability.
• Currently there is a clear trade off
between the government’s reform
drive and economic growth.
• Large fiscal stimulus is unlikely given
funding constraints at the state and
local level.
• The PBoC will have to do the heavy
lifting, but changes to the RRR and
interest rates will not the solve
structural problems in the economy.
2012 2013 2014 2015 2016 2017
Real GDP growth 7.7 7.7 7.4 6.7 5.9 5.9
Fiscal Balance %, of GDP -1.6 -1.3 -0.9 -0.5 -0.2 0.0
Current Account, % of GDP 2.3 1.9 1.6 1.4 1.2 0.9
Policy Rate, % eop 6.00 6.00 5.60 5.00 5.00 5.00
Key Macro Indicators
Structural Slowdown In Play
6
7
8
9
10
11
12
13
Q200
Q101
Q401
Q302
Q203
Q104
Q404
Q305
Q206
Q107
Q407
Q308
Q209
Q110
Q410
Q311
Q212
Q113
Q413
Q314
Real GDP % chg y-o-y
4qma
8. www.bmiresearch.com
2015-2017 = BMI forecasts
Japan: Emerging From Recession…Just
Japan has emerged from recession, but
will continue to see sub-par growth.
• We forecast real GDP to remain below
1.0% over the coming years.
• Falling real incomes, an ageing
demographic profile and slow fiscal
consolidation will weigh on the
economy.
• Although the weakening yen will
benefit exporters and has seen the
trade balance improve, it will weigh on
the purchasing power for the majority
of the economy.
• That said, tax cuts on corporate profits,
reforms to corporate governance and
productivity-boosting measures will
help at the margin.
Slow Recovery Ahead
2012 2013 2014e 2015 2016 2017
Real GDP growth 1.8 1.6 0.0 0.8 0.7 0.7
Fiscal Balance %, of GDP -9.3 -8.9 -7.6 -8.2 -7.6 -6.8
Current Account, % of GDP 1.0 0.7 0.5 1.4 1.3 1.0
Policy Rate, % eop 0.10 0.10 0.10 0.10 0.10 0.10
Key Macro Indicators
-12
-10
-8
-6
-4
-2
0
2
4
6
8
Real GDP Growth %
9. www.bmiresearch.com
2014, estimates 2015-2017 = BMI forecasts
Indonesia: Rebalancing Continues
Indonesia continues to see a rebalancing
in the external accounts, which will bode
well for stability, investment and growth.
• Growth will pick up from 5.3% in 2015
to almost 7.0% by 2017.
• The trade and current accounts have
continued to strengthen due to a
weaker currency, tighter monetary
policy and lower fuel subsidies.
• The country’s fiscal profile will improve
as the government pursues subsidy
reform.
• Investment should also pick up as the
government frees up fiscal resources
to invest in infrastructure projects, and
domestic and foreign investment rises.
Rebalancing First, Then Growth
2012 2013 2014 2015 2016 2017
Real GDP growth 6.3 5.8 5.0 5.3 6.5 6.8
Fiscal Balance %, of GDP -1.8 -1.7 -2.4 -2.4 -1.9 -1.8
Current Account, % of GDP -2.8 -3.3 -3.0 -2.3 -2.0 -1.6
Policy Rate, % eop 5.75 7.50 7.75 7.00 7.00 7.00
Key Macro Indicators
-10000
-8000
-6000
-4000
-2000
0
2000
4000
Q108
Q308
Q109
Q309
Q110
Q310
Q111
Q311
Q112
Q312
Q113
Q313
Q114
Q314
Q115
Current Account USDmn
Trade Balance USDmn
10. www.bmiresearch.com
2015-2017 = BMI forecasts
Thailand: Regressing From Democracy?
Although we forecast an economic
recovery from 0.7% in 2014 to 3.5% in
2015, political risks are rising.
• The military junta in place since May
2014 continues to consolidate power,
and there is a growing risk that the
country remains military-governed for
longer than expected.
• Given the increasingly politicised army,
there is the risk that Thailand slides
into a political state similar to that seen
in Myanmar, wherein the military
retains a significant political influence.
• Should such a risk play out, the
political and economic future of the
country could be significantly
undermined.
Political Risk A Problem
2012 2013 2014 2015 2016 2017
Real GDP growth 6.5 2.9 0.7 3.5 4.1 4.1
Fiscal Balance %, of GDP -4.3 -2.4 -2.3 -1.7 -1.1 -0.5
Current Account, % of GDP -0.4 -0.6 3.8 4.4 4.9 5.0
Policy Rate, % eop 2.75 2.25 2.00 1.50 1.75 1.75
Key Macro Indicators
50.0
55.0
60.0
65.0
70.0
75.0
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Short Term Political Risk Index
Long Term Political Risk Index
