Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Capex responds to the cycle
Slower growth in CY11
This report contains detailed forecasts for the economies that we cover across
Asia, and the latter section sets out the prospects for individual economies.
Growth should slow significantly in CY11–12 after the post-crisis rebound of
2009–10, but it will need continued policy tightening to limit inflation risks,
especially in the light of the recent reacceleration of activity.
Capex pushed by capacity shortages
Economies that are starting to experience capacity shortages usually exhibit
some consistent features. A deteriorating trade balance is one sign of tight
capacity and, of course, accelerating inflation is another. However, we also need
to think of the next step in the process, where firms invest more aggressively in
order to expand capacity.
Investment grows even with excess capacity
Although it might seem counter-intuitive, in the early stages of the cycle, capital
spending starts to recover even when there is excess capacity. This currently
applies to the developed world, where there is an incentive for investment due to
technological change and shifts in spending patterns.
Boost to capex from growth pickup
Regional growth across Asia re-accelerated heading into 2011. This implies a
challenge to policy-makers, in terms of controlling inflation risk. However, it also
implies the need to increase investment in order to expand capacity more
broadly, which is already evident in data on machinery orders.
A serious inflation overshoot followed by aggressive policy tightening would spell
trouble for the investment cycle, even if there are capacity shortages. However,
underlying inflation pressures remain relatively well contained in most cases.
Shifting pattern of FDI
For many economies, foreign direct investment (FDI) is an important element in
the capital spending cycle. The impact on the balance of payments has become
decreasingly important, but FDI still involves technology transfers and trade
linkages. Emphasis has shifted from China towards the rest of the region.
Structural pressure for more or less capex
Aside from the cyclical boost to capital spending that comes from capacity
shortages and an improvement in the expected return on new investment, some
economies in the region have structural pressures for a more persistent change
in the investment-to-GDP ratio. This particularly applies to Asean and China.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Capex responds to the cycle
Slower growth in CY11
This report contains detailed forecasts for the economies that we cover across
Asia, and the latter section sets out the prospects for individual economies.
Growth should slow significantly in CY11–12 after the post-crisis rebound of
2009–10, but it will need continued policy tightening to limit inflation risks,
especially in the light of the recent reacceleration of activity.
Capex pushed by capacity shortages
Economies that are starting to experience capacity shortages usually exhibit
some consistent features. A deteriorating trade balance is one sign of tight
capacity and, of course, accelerating inflation is another. However, we also need
to think of the next step in the process, where firms invest more aggressively in
order to expand capacity.
Investment grows even with excess capacity
Although it might seem counter-intuitive, in the early stages of the cycle, capital
spending starts to recover even when there is excess capacity. This currently
applies to the developed world, where there is an incentive for investment due to
technological change and shifts in spending patterns.
Boost to capex from growth pickup
Regional growth across Asia re-accelerated heading into 2011. This implies a
challenge to policy-makers, in terms of controlling inflation risk. However, it also
implies the need to increase investment in order to expand capacity more
broadly, which is already evident in data on machinery orders.
A serious inflation overshoot followed by aggressive policy tightening would spell
trouble for the investment cycle, even if there are capacity shortages. However,
underlying inflation pressures remain relatively well contained in most cases.
Shifting pattern of FDI
For many economies, foreign direct investment (FDI) is an important element in
the capital spending cycle. The impact on the balance of payments has become
decreasingly important, but FDI still involves technology transfers and trade
linkages. Emphasis has shifted from China towards the rest of the region.
Structural pressure for more or less capex
Aside from the cyclical boost to capital spending that comes from capacity
shortages and an improvement in the expected return on new investment, some
economies in the region have structural pressures for a more persistent change
in the investment-to-GDP ratio. This particularly applies to Asean and China.
No comments:
Post a Comment