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Asean Macro Weekly
Looking for a lift
With most of Asean taking Tuesday off to celebrate the birth, enlightenment
and passing of Buddha, the coming week is fairly light on macro cues. The
data release of importance will be Malaysia’s 1Q11 GDP on Wednesday.
Malaysia’s economy remains, in our view, on a strong growth path and should
register 1Q11 GDP growth of 5.0% YoY. Supply-side indicators suggest
momentum in the manufacturing sector remains supportive despite relatively
poor industrial production readings in recent months. Service sector activity
should also register a reasonable expansion on the back of strong consumer
demand and a gradual global economic recovery. That said, a less favourable
statistical base hints there may be some moderation in services expansion
from 4Q10. On the demand side, a favourable statistical base hints at a
further surge in investment spending, which should be re-enforced by the
positive signs suggested by capital goods imports. Additionally, the
persistence of a low interest rate environment, combined with strong real
income growth in 2010 suggests consumer spending will also prove
supportive of sequential and annual GDP expansion.
Malaysia will also report April CPI data shortly before the GDP data on
Wednesday. Macquarie expects a reading of 3.3% YoY, led primarily by
further increases in food prices. Food price increase will remain a combination
of weather-related factors and higher global oil prices pushing up transport
costs along the supply-chain. Non-food inflation is also expected to quicken
on the back of further increases in RON 97 petrol prices but, as RON 95
prices remain stable, domestic pass through to food prices and other index
components is likely to be limited. Despite this, Malaysia’s core CPI has
accelerated sharply in recent months, supporting the recent rate hike. As this
appears likely to remain elevated in the months ahead, we suspect this will
support our view for a further 50bp of rate hikes by end-2011.
Philippine remittances will be reported on Monday and should hint at
supportive private consumption spending in GDP data due at the end of the
month. The absolute value should prove to be a monthly record and should
also see a seasonal surge from February’s US$ 1.5bn reading.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asean Macro Weekly
Looking for a lift
With most of Asean taking Tuesday off to celebrate the birth, enlightenment
and passing of Buddha, the coming week is fairly light on macro cues. The
data release of importance will be Malaysia’s 1Q11 GDP on Wednesday.
Malaysia’s economy remains, in our view, on a strong growth path and should
register 1Q11 GDP growth of 5.0% YoY. Supply-side indicators suggest
momentum in the manufacturing sector remains supportive despite relatively
poor industrial production readings in recent months. Service sector activity
should also register a reasonable expansion on the back of strong consumer
demand and a gradual global economic recovery. That said, a less favourable
statistical base hints there may be some moderation in services expansion
from 4Q10. On the demand side, a favourable statistical base hints at a
further surge in investment spending, which should be re-enforced by the
positive signs suggested by capital goods imports. Additionally, the
persistence of a low interest rate environment, combined with strong real
income growth in 2010 suggests consumer spending will also prove
supportive of sequential and annual GDP expansion.
Malaysia will also report April CPI data shortly before the GDP data on
Wednesday. Macquarie expects a reading of 3.3% YoY, led primarily by
further increases in food prices. Food price increase will remain a combination
of weather-related factors and higher global oil prices pushing up transport
costs along the supply-chain. Non-food inflation is also expected to quicken
on the back of further increases in RON 97 petrol prices but, as RON 95
prices remain stable, domestic pass through to food prices and other index
components is likely to be limited. Despite this, Malaysia’s core CPI has
accelerated sharply in recent months, supporting the recent rate hike. As this
appears likely to remain elevated in the months ahead, we suspect this will
support our view for a further 50bp of rate hikes by end-2011.
Philippine remittances will be reported on Monday and should hint at
supportive private consumption spending in GDP data due at the end of the
month. The absolute value should prove to be a monthly record and should
also see a seasonal surge from February’s US$ 1.5bn reading.
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