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MARKET UPDATE FOR ASEAN+3 July 2013


MARKET UPDATE FOR ASEAN+3 1 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • The dollar gained for a third day to its strongest in more than three weeks versus the yen before a U.S. report forecast to show manufacturing rebounded, adding to signs the Federal Reserve may begin to trim bond purchases. The yen fell versus all its 16 major peers as data showed large Japanese manufacturers were the most optimistic in two years, reducing haven demand. The euro was 0.4 percent from the weakest in a month before the European Central Bank’s July 4 meeting. • Treasuries declined for a second day as economists predict data this week will show U.S. employers created almost as many jobs in June as in May, limiting demand for the safest securities. U.S. government securities handed investors a loss of 2.5 percent in the first six months of 2013, according to Bank of America Merrill Lynch data, the biggest decline since the first half of 2009. Treasuries fell after Federal Reserve Chairman Ben S. Bernanke said on June 19 that policy makers may begin slowing their bond purchases this year and end them in mid-2014. • Asian stocks outside Japan fell, with a regional index heading for its first decline in four days, after an official gauge of manufacturing activity in China expanded at the slowest pace in four months. The MSCI Asia Pacific excluding Japan Index fell 0.5 percent to 430.15 as of 5:19 p.m. in Tokyo, with seven of the 10 industry groups on the measure falling. The gauge last week posted its first quarterly slump in a year amid signs of an economic slowdown in China and after Federal Reserve Chairman Ben S. Bernanke said last month policymakers may start dialing down stimulus if the U.S. economy shows sustained improvement.

BREAKING NEWS GLOBAL • Employers in the U.S. probably created almost as many jobs in June as in the prior month as businesses grew more confident the economy will overcome the tax increases and government cutbacks that have restrained growth, economists said before reports this week. Payrolls grew by 165,000 workers after rising by 175,000 in May, according to the median forecast of 70 economists in a Bloomberg survey ahead of July 5 figures from the Labor Department. Other reports may show manufacturing is making little progress, while service industries are picking up. More jobs and the rebound in housing will probably keep shoring up Americans’ finances and confidence, sustaining spending even in the face of the two percentage-point increase in the payroll tax and the $85 billion in federal budget cuts that took effect earlier this year. Federal Reserve policy makers said last month that they’ll trim bond purchases before the end of the year if unemployment continues to fall. • Euro-area manufacturing output contracted less than initially estimated in June, adding to signs the currency bloc’s economy is beginning to emerge from a record-long recession. A gauge of manufacturing in the 17-nation euro area increased to 48.8 last month from 48.3 in May, Londonbased Markit Economics said today. That’s above an initial estimate of 48.7 on June 20. The gauge has been below 50, indicating contraction, since July 2011. Today’s PMI data followed an encouraging euro-zone economic confidence report for June that recorded the biggest jump since July 2010. The 17-nation economy’s 18-month recession probably ended in the second quarter, as the economy stagnated before returning to growth in the following three months, according to a Bloomberg News survey of economists.

REGIONAL • Two gauges of China’s manufacturing fell in June, underscoring a sustained slowdown in the nation’s economy as policy makers seek to rein in financial speculation and real-estate prices. An official Purchasing Managers’ Index dropped to 50.1, the lowest level in four months, from 50.8, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. A private PMI from HSBC Holdings Plc and Markit Economics was 48.2, the weakest since September. Readings

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above 50 signal expansion. In the latest signal that policy makers will tolerate slower expansion, President Xi Jinping said local officials shouldn’t be judged solely on their record in boosting gross domestic product. The Communist Party should instead place more importance on achievements in improving people’s livelihood, social development and environmental quality when evaluating the performance of officials. • Big Japanese manufacturers turned optimistic for the first time since September 2011, indicating confidence in Prime Minister Shinzo Abe’s reflationary policies even after stock market volatility. The quarterly Tankan index for large manufacturers rose to plus four in June from minus eight in March, the Bank of Japan said in Tokyo today. A positive figure means optimists outnumber pessimists. The median estimate of 22 economists surveyed by Bloomberg News was for a plus three reading. Large companies from all industries plan to increase capital spending 5.5 percent in this fiscal year as the government looks to promote business investment. Japan’s economy is strengthening, with data last week showing factory output rose the most since December 2011, retail sales climbed and core consumer prices ended a six-month slide. Abe’s task now is to put the world’s third-largest economy on a sustainable recovery path and spur private sector activity and wage growth. • Chinese central bank governor Zhou Xiaochuan said the country’s worst cash crunch in at least a decade is a reminder to lenders that they need to adjust their “asset businesses,” China Business News reported today. Commercial banks need to correct a tendency of boosting loan growth ahead of half-year performance reviews because it runs counter to the central bank’s policy goals, Zhou told the Shanghai-based newspaper in an interview. While the People’s Bank of China would step in if individual financial institutions were in extremely difficult situations, it doesn’t want banks to ignore the need for adjustments, Zhou was cited as saying. • Rising special mention loans are an early indicator that rapid loan growth is increasing the credit risks for Indonesian banks. That's according to a report that Standard & Poor Ratings Services released today, titled "Rising Credit Risks Could Reveal Vulnerabilities In Indonesian Banks." Special mention loans--or loans overdue for up to 90 days but yet to turn bad--have been increasing since 2011. This divergence from long-term trends suggests borrowers are increasingly experiencing repayment difficulties. A sustained increase in these loans is a leading indicator of weakened repayment prospects or a potentially deteriorating loan portfolio. "The main threat to asset quality stems from increased leverage in the private sector, aggressive regulatory measures to promote economic growth, and structural weaknesses in the banking industry," said Standard & Poor's credit analyst Ivan Tan. "All these factors could undermine the ability of the private sector to service debt in the long run." On the other hand, the ratio of reported nonperforming loans declined to 1.9% in 2012 from 6.1% in 2006, partly reflecting the denominator effect of rapid loan growth. • Singapore home prices climbed to a record in the second quarter as gains in suburban housing values accelerated, leading to new government measures on property loans at the end of last week. The island state’s private residential property price index rose 0.8 percent to 214.9 points in the three months ended June 30, extending a 0.6 percent increase in the first quarter, according to preliminary estimates released by the Urban Redevelopment Authority today. The pace of gain in suburban home prices more than doubled from the previous three months. Record home prices amid low interest rates raised concerns of a housing bubble and prompted the government to widen a four- year campaign in January to curb speculation prices in Asia’s second-most expensive housing market. Singapore on June 28 unveiled new rules governing how financial institutions grant property loans to individuals, extending efforts to curb excessive price increases. • Thailand’s rice policy committee decided to set support price for 100 percent unmilled, white rice at 15,000 baht a ton for the second harvest of 2012-2013, says Worawit Jumpeerath, budget bureau’s director general. The committee decided to maintain purchase limit of 500,000 baht per family, Worawit tells reporters. Deputy PM and Finance Minister Kittiratt na-Ranong tells news conference that the committee decided on 15,000 baht purchase price, reversing move to reduce it to 12,000 baht, as they want to take care of farmers’ quality of life. Deputy PM Kittiratt says reversal of purchase-price cut also based on information that there will be no more than 3 mln tons left to sell under second-harvest crop to Sept. 15. Kittiratt says the government will take fiscal discipline and farmers’ quality of life into consideration when setting the purchase price for main crop of 2013/2014.

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Deputy Commerce Minister Yanyong Phuangrach says the government has sold about 4 mln tons from state stockpile 1H and plans to sell 5 mln to 6 mln tons in 2H, which will generate about 72 bln baht. • Thai Prime Minister Yingluck Shinawatra dropped Commerce Minister Boonsong Teriyapirom from the Cabinet following criticism that a policy to buy rice at above-market rates jeopardized the country’s fiscal position. The move comes about a week after Yingluck cut guaranteed rice-purchase prices by 20 percent to stem losses the government estimates at about 137 billion baht ($4.4 billion) for last year. Moody’s Investors Service said on June 3 the subsidies hamper Thailand’s goal of achieving a balanced budget by 2017 and are negative for the nation’s sovereign ratings. Yingluck is aiming to bolster her government’s popularity after polls showed a decline in support and farmers protested at her office in Bangkok. Thailand’s finance ministry cut its 2013 economic growth forecast to as low as 4 percent on June 27 from 4.8 percent previously because of a slow recovery among trade partners and weaker private sector spending. Niwattumrong Boonsongpaisan, a minister in the premier’s office, will replace Boonsong. Mr. Kittiratt Na-Ranong remains the minister of finance. Ms. Benja Louicharoen, the first woman who took the top post at the country’s Customs Department, was appointed deputy finance minister. IFIs NEWS (compiled from their websites) ADB - Publication: “2013 Annual Evaluation Review” • Asia's resilience to shocks is being tested again by the turmoil on the world’s financial markets and a particularly destructive start to the monsoon season. Both threaten to worsen the impact on the region of prolonged weakness in the global economy, says Independent Evaluation at the ADB. Its Annual Evaluation Review 2013 highlights the growing risks and vulnerabilities that endanger the region’s hard-won socio-economic gains and success in reducing poverty. http://www.adb.org/news/financial-uncertainty-destructive-start-monsoon-highlight-asias-growingvulnerability (Press Release) http://www.adb.org/sites/default/files/2013-aer.pdf (Report) ADB and ADBI - Publication: “Low-Carbon Green Growth in Asia: Policies and Practices” • The ADB and ADBI have co-published a book which recognizes the imperativeness of low-carbon green growth for developing Asia, given that it is the world’s most populous region, with a rising share of global greenhouse gas emissions and also as the region most vulnerable to climate risks. “This book reviews low-carbon policy initiatives taken by Asian countries at the national, sectoral, and local levels, while assessing the achievements, identifying the gaps, and examining new opportunities.” http://www.adbi.org/book/2013/06/28/5773.low.carbon.green.growth.asia.policies.practices/ (Press Release) http://www.adbi.org/files/2013.06.28.book.low.carbon.green.growth.asia.pdf (Book) Basel Committee – Consultation: “Capital treatment of bank exposures to central counterparties” • On June 28, 2013, the Basel Committee on Banking Supervision, in close cooperation with the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO), have published their consultative paper on Capital treatment of bank exposures to central counterparties. This paper sets out proposals for calculating regulatory capital for a bank's exposures to central counterparties (CCPs) and is designed to replace an interim treatment for bank exposures to CCPs issued by the Basel Committee in July 2012. Comments on the proposals should be submitted by Friday September, 27 2013 by e-mail to: baselcommittee@bis.org. http://www.bis.org/press/p130628.htm (Press Release) http://www.bis.org/publ/bcbs253.pdf (Consultative Document) Basel Committee – Consultation: “The non-internal model method for capitalising counterparty credit risk exposures” • On June 28, 2013, the Basel Committee has published its consultative paper on The non-internal model method for capitalising counterparty credit risk exposures. This paper outlines a proposal to improve the methodology for assessing the counterparty credit risk associated with derivative transactions. The proposal would, when finalised, replace the capital framework's existing methods the Current Exposure Method and the Standardised Method. Comments on the proposals should be

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submitted by Friday September, 27 2013 by e-mail to: baselcommittee@bis.org. http://www.bis.org/press/p130628.htm (Press Release) http://www.bis.org/publ/bcbs254.pdf (Consultative Document) EMEAP – Press Release: 18th EMEAP Governors' Meeting • The 18th EMEAP Governors’ Meeting, which was chaired by Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, was held in Kuala Lumpur, Malaysia on June 29, 2013. The Governors shared their views on the ongoing uncertainties in the global economic environment, expressed their optimism on the resilience of the EMEAP economies and noted the report of the 44th EMEAP Deputies’ Meeting held in Guangzhou, China in April 2013. Discussions were also held on the progress made across a wide spectrum of EMEAP activities and the updates from the Monetary and Financial Stability Committee (MFSC) on its surveillance and research activities. On a final note, they accepted the offer of the Bank of Thailand to host the 19th EMEAP Governors' Meeting in 2014. http://www.emeap.org/emeapdb/upload/Press/PressRelease_2013.pdf MIGA and World Bank – Press Release: MIGA Approves new Facility for Conflict-Affected and Fragile Economies • At a signing ceremony held with donors in Washington on June 28, 2013, MIGA launched its ConflictAffected and Fragile Economies Facility. The Facility will use donor partner contributions together with MIGA’s guarantees to assume higher risk and insure more investment projects in conflict-affected and fragile economies. It will target high development impact projects that support economic growth and poverty reduction through job creation, infrastructure services, and access to financial markets. http://www.miga.org/news/index.cfm?stid=1837&aid=3522

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 28-Jun 1-Jul close China 6.23 6.14 6.14 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,004.00 10,004.00 9,928.00 Japan 86.75 99.14 99.14 99.59 Korea 1,064.40 1,142.06 1,142.06 1,132.30 Malaysia 3.06 3.16 3.16 3.16 Philippines 41.01 43.14 43.14 43.12 Singapore 1.22 1.27 1.27 1.27 Thailand 30.59 31.05 31.05 30.99 Vietnam 20,840.00 21,205.00 21,205.00 21,183.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

% change 0.07 0.01 0.77 -0.45 0.86 -0.13 0.03 0.08 0.19 0.10

2013 YTD (%chg) 1.6 -0.1 -2.8 -12.3 -6.1 -4.1 -5.3 -3.7 -2.1 -1.6

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STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

28-Jun 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

OVERNIGHT LENDING RATE (%) 28-Jun 1-Jul bps change 4.860 3.500 -136.00 0.086 0.086 0.00 4.450 4.450 0.00 0.093 0.093 0.00 2.500 2.500 0.00 3.000 3.000 0.00 1.085 -0.803 -188.80 0.048 0.048 0.00 2.500 2.500 0.00 0.800 1.000 20.00

1-Jul

% change

1,995.2 20,803.3 4,777.5 13,852.5 1,855.7 1,775.2 6,526.6 3,144.1 1,451.9 480.0

0.81 0.00 -0.86 1.28 -0.41 0.10 0.95 -0.20 0.00 -0.23

2013 YTD (%chg) -12.1 -10.8 9.9 33.3 -8.6 6.0 11.4 -1.8 3.2 14.7

3-MONTH INTERBANK LENDING RATE (%) 28-Jun 1-Jul bps change 5.439 5.295 -14.40 0.381 0.381 0.00 5.358 5.361 0.29 0.230 0.230 0.00 2.690 2.690 0.00 3.200 3.200 0.00 0.711 0.608 -10.30 0.373 0.374 0.08 2.601 2.601 0.00 3.350 3.740 39.00

CREDIT DEFAULT SWAP (IN BPS) 27-Jun 28-Jun bps change China 117.56 116.56 -1.00 Hong Kong SAR 56.09 56.09 0.00 Indonesia 208.19 200.84 -7.35 Japan 80.79 79.33 -1.46 Korea 91.17 90.19 -0.98 Malaysia 120.48 120.47 -0.01 Philippines 127.02 127.02 0.00 Thailand 120.51 120.49 -0.02 Vietnam 239.04 238.92 -0.12 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 28-Jun 1-Jul Gold Spot (in US$ per 1,234.5 1,241.8 ounce) Sources: Bloomberg & Thomson Reuters Datastream CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

% change 0.59

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

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SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

26-Jun

27-Jun

3.580 2.121 7.228 0.845 3.420 3.686 4.398 2.757 3.770 8.871

3.600 2.075 7.116 0.844 3.410 3.671 4.277 2.757 3.730 8.871

bps change

2013 YTD (bps)

2.000 -4.600 -11.200 -0.100 -1.000 -1.500 -12.100 0.000 -4.000 0.000

38.000 167.900 231.000 65.900 43.000 48.600 16.160 242.700 53.500 -77.900

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

2013

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun n.a n.a n.a n.a n.a 140.8 n.a n.a 172.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.0 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 2.0 15.6 2.1 2.5 4.8 2.2 2.6 -

Reserves over short-term debt

(US$bn) (US$bn) China 3,442.7 540.9 6.4 Hong Kong SAR 305.7 752.6 0.4 Indonesia 105.1 44.6 2.4 Japan 1,250.2 2,147.9 0.6 Korea 328.1 126.7 2.6 Malaysia 141.4 32.9 4.3 Philippines 82.0 9.8 8.4 Singapore 258.4 964.3 0.3 Thailand 172.8 63.0 2.7 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

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DATA RELEASES FOR THE DAY Economies

China China Indonesia Indonesia Indonesia Indonesia Indonesia Korea Korea Korea Korea Korea Korea Korea Thailand Thailand

Indicators

Manufacturing PMI HSBC Manufacturing PMI Consumer Confidence Index (yoy%) Core Inflation (yoy%) Exports (yoy%) Imports (yoy%) Total trade balance USD mn CPI MoM CPI YoY Core CPI YoY Exports Imports Trade Balance (USD mn) HSBC Manufacturing PMI Core CPI (yoy)% Core Consumer Price Index (yoy)%

Period

Jun Jun Jun Jun May May May Jun Jun Jun Jun Jun Jun Jun Jun Jun

Last

Previous

50.1 48.2 5.90 3.98 -4.5 -2.2 -590 mn -0.1 1.0 1.4 -0.9 -1.8 5516 mn 49.4 2.25 0.88

50.8 49.2 5.47 3.99 -9.1 -3.7 -1616 mn 0.0 1.0 1.6 3.2 -4.8 6026 51.1 2.27 0.94

SELECTED ECONOMIC RELEASES CALENDAR (24 – 28 JUNE 2013) Expected Release Date

7/1/2013

7/2/2013 7/3/2013

7/4/2013 7/5/2013

Economies

THAILAND THAILAND INDONESIA HONG KONG HONG KONG SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG THAILAND HONG KONG PHILIPPINES JAPAN PHILIPPINES MALAYSIA MALAYSIA THAILAND MALAYSIA

Indicators

Core CPI (YoY)% Consumer Price Index (YoY)% Consumer Confidence Index Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Exchange Reserve (USD bn) China HSBC Services PMI Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index Consumer Confidence Economic Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Consumer Price Index (YoY)% Exports YoY% Imports YoY% Foreign Reserves (USD bn) Foreign Reserves (USD bn)

Period

Jun Jun Jun May May Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun May May Jun 28 Jun 28

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

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MARKET UPDATE FOR ASEAN+3 2 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks rose, with the regional benchmark index heading for a fifth day of gains, after U.S. manufacturing expanded faster than expected. The MSCI Asia Pacific Index gained 0.9 percent to 132.01 as of 5:45 p.m. in Tokyo, with about three shares rising for every two that fell. The gauge last week capped its first quarterly slump in a year amid signs of an economic slowdown in China and after Federal Reserve Chairman Ben S. Bernanke said policy makers may start dialing down stimulus if the U.S. economy shows sustained improvement. Japanese stocks rose, with the Topix index capping the biggest four-day rally since April, as the yen weakened after U.S. manufacturing expanded more than expected.

The dollar climbed to the highest in almost a month against the yen as signs of improvement in the U.S. economy buoyed speculation the Federal Reserve will start scaling back asset purchases this year. The greenback approached the strongest level in almost a month versus the euro before a report economists said will show factory orders gained by the most in three months. Data this week is forecast to indicate a drop in the unemployment rate as companies in the world’s biggest economy continued to add jobs.

The cost of borrowing in Hong Kong’s Dim Sum bond market jumped the most on record in June, climbing to an all-time high as China’s worst cash squeeze in at least a decade spurred concern an economic slowdown will worsen. The average yield on the securities surged 153 basis points, or 1.53 percentage points, to 5.06 percent, the most since the Deutsche Bank S&P/DB ORBIT Index was introduced at the start of 2011.

BREAKING NEWS GLOBAL •

American manufacturing rebounded in June as orders picked up, with the Institute for Supply Management’s U.S. manufacturing index climbing to a three-month high of 50.9 from 49 in May, the Tempe, Arizona-based group said today. A reading of 50 is the dividing line between expansion and contraction. Shares in the world’s biggest economies rose as the data bolstered optimism for a pickup in global growth in the second half of the year. At the same time, a decline in China’s purchasing manager’s index showed a credit squeeze in the world’s second-largest economy poses a risk to the outlook.

Australia’s central bank left its key interest rate at a record low, saying a slide in the currency may continue. The local dollar declined. Governor Glenn Stevens and his board kept the overnight cashrate target at 2.75 percent, the Reserve Bank of Australia said in a statement today in Brisbane, as predicted by 25 of 28 economists surveyed by Bloomberg News. The Aussie “remains at a high level” and may “depreciate further over time, which would help to foster a rebalancing of growth,” Stevens said. A 12 percent decline in the Australian dollar last quarter has helped buoy manufacturing sentiment, easing pressure on the governor to cut rates again. Policy makers lowered borrowing costs by 2 percentage points since late 2011, seeking to shift growth toward employment-intensive industries such as construction as mining investment wanes.

REGIONAL •

The Bank of Japan will discuss upgrading its assessment of the nation’s economy by using the word “recover” for the first time in more than two years, people familiar with the central bank’s discussions said. The bank, which says the economy has been “picking up” in its current assessment, will consider stronger language at a two-day meeting ending July 11, according to the people, who asked not to be named because the talks were private. In 2010, the next step up was “starting to recover moderately.” Raising the assessment for a seventh straight month could aid efforts by Prime Minister Shinzo Abe and central bank Governor Haruhiko Kuroda to boost confidence in a sustained

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Japanese recovery. Maintaining economic momentum would help Abe in an upper-house election due this month as he tries to consolidate support for the package of monetary and fiscal stimulus and business deregulation termed Abenomics. •

China said it started anti-dumping and anti-subsidy probes on wines imported from the European Union following a request from domestic producers. The probe, which started yesterday, will include investigations of subsidies for EU wines given in 2012 and the impact on China’s wine industry between January 2009 and the end of last year, the Ministry of Commerce said in a statement on its website. The checks are in response to a May 15 request from the China Alcoholic Drinks Association on behalf of the domestic wine industry, according to the statement.

China’s overnight money-market rate dropped to a one-month low on speculation the central bank used targeted injections to ease the worst cash squeeze on record. Around 50 transactions for overnight funds in the interbank market were recorded at rates of 4 percent or less in the final 90 minutes of trading in Shanghai over the past five days, data compiled by Bloomberg show. The People’s Bank of China hasn’t conducted any repurchase-agreement operations today, according to a trader required to bid at the auctions.

The World Bank cut its forecast for Indonesia’s economic growth this year as it anticipates cooling domestic demand and commodity exports. Growth in Southeast Asia’s largest economy will probably slow to 5.9 percent, from an earlier forecast of 6.2 percent, according to a quarterly report released in Jakarta today. The Washington-based lender also lifted its annual inflation forecast to 7.2 percent, after the government raised fuel prices last month. The World Bank estimates adds to predictions that Indonesia’s first price increase for subsidized fuel in five years will damp expansion. Easing investment growth and exports that have declined for more than a year add to the challenge, with a persistent trade deficit contributing to a 3 percent drop in the rupiah this year.

The Philippine peso snapped a five-day advance on speculation the central bank intervened, suggesting the monetary authority judged the currency’s gains to be excessive. Government bonds due 2031 declined. The peso climbed 1.2 percent last week, the most in a year, as foreign funds turned net buyers of local shares for the first time in June, according to exchange data. Central bank Governor Amando Tetangco said today that the authorities will monitor price actions in the market as well as flows.

Mitsubishi UFJ Financial Group Inc. is seeking to acquire a controlling stake in Thailand’s Bank of Ayudhya Pcl through a tender offer later this year, two people with knowledge of the matter said. Japan’s biggest bank is in talks with shareholders, including General Electric Co., which owns about 25 percent of the lender, to decide on terms of the deal, the people said, asking not to be identified as the information is private. An agreement could be reached as soon as this month, after which the Bank of Tokyo-Mitsubishi UFJ Ltd. unit is likely to hold a board meeting to approve the purchase, one person said. The purchase, potentially the largest of a Thai bank, would give Mitsubishi UFJ a bigger foothold to expand retail and corporate banking in Southeast Asia. Japan’s biggest banks are buying assets in faster-growing markets to counter shrinking loan profitability at home.

Vietnam's civil servants, members of the armed forces and socio-political organizations staff enjoy an increase of 9.5 percent to their monthly minimum wage effective from July 1, reported state-run Vietnam News Agency (VNA) on Tuesday. Quoting sources from a new government decree issued on July 1, the VNA reported that under which, the wage rises by 100.000 Vietnamese dong (VND) (4.076 U.S. dollars) from the previous 1.050. 000 VND (50 U.S. dollars). The decree stated the adjustment was based on the budget's capacity, consumer price index and the country's economic growth. This is the fifth minimum wage increase in the past five years. In 2009, it was 650.000 VND (30.9 U.S. dollars). In 2010, it climbed to 730.000 VND (34.7 U.S. dollars); in May 2011, to 830. 000 VND (39.5 U.S. dollars), and a year later it rose 26.5 percent to 1.050.000 VND (50 U.S. dollars).

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IFIs NEWS (compiled from their websites) ADBI – Working Paper: “How Important are Exports and Foreign Direct Investment for Economic Growth in the People's Republic of China?” • The ADBI has publicised the captioned working paper. “The global financial crisis and the recent growth slowdown in the People's Republic of China (PRC) have led to questions about the sustainability of the PRC's growth. The commonly used argument is that the PRC is too dependent on external demand and that it needs to rebalance its economy toward domestic consumption. In this paper, the authors propose two measures that provide a more accurate estimate of the vulnerability of the PRC economy to external shocks, in the form of sudden drops in exports and foreign direct investment (FDI). Based on their findings, the authors conclude that the PRC economy remains highly dependent on external demand in the form of exports and FDI, and rebalancing the economy toward domestic demand has not yet been achieved.” http://www.adbi.org/files/2013.07.01.wp427.exports.fdi.economic.growth.prc.pdf World Bank – Publication: “Indonesia Economic Quarterly, July 2013: Adjusting to Pressures” • The World Bank has issued the captioned publication. “Although monetary and fiscal policies have been responsive, other pressures are emerging, requiring readiness for further policy adjustments to safeguard macroeconomic stability and maintain Indonesia's growth momentum,” says Ndiamé Diop, World Bank Lead Economist. “Maintaining flexible yet predictable and well-communicated macroeconomic policies will help Indonesia navigate through this period of significant uncertainty.” http://www.worldbank.org/en/news/press-release/2013/07/02/indonesia-adjusting-to-pressures (Press Release) http://www.worldbank.org/en/news/feature/2013/07/02/indonesia-economic-quarterly-adjusting-topressures (Feature Story) http://www.worldbank.org/content/dam/Worldbank/document/EAP/Indonesia/IEQ-Jul2013Full%20report-English.pdf (Report) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 2012 close 1-Jul 2-Jul close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,004.00 9,928.00 9,936.00 Japan 86.75 99.14 99.66 99.75 Korea 1,064.40 1,142.06 1,132.30 1,134.03 Malaysia 3.06 3.16 3.16 3.17 Philippines 41.01 43.14 43.12 43.32 Singapore 1.22 1.27 1.26 1.27 Thailand 30.59 31.05 30.93 30.92 Vietnam 20,840.00 21,205.00 21,180.00 21,188.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

2013 YTD (%chg) 1.6 -0.1 -2.8 -12.4 -6.2 -4.1 -5.7 -3.6 -1.9 -1.6

% change -0.01 0.01 -0.08 -0.09 -0.15 -0.05 -0.46 -0.15 0.03 -0.04

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

1-Jul 1,995.2 20,803.3 4,777.5 13,852.5 1,855.7 1,775.1 6,526.6 3,140.9 1,451.9 480.0

2-Jul 2,006.6 20,658.7 4,738.1 14,098.7 1,855.0 1,771.0 6,448.2 3,172.1 1,460.5 489.8

% change 0.57 -0.70 -0.82 1.78 -0.04 -0.23 -1.20 0.99 0.59 2.04

2013 YTD (%chg) -11.6 -11.4 9.0 35.6 -8.7 5.8 10.0 -0.9 3.8 17.1

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OVERNIGHT LENDING RATE (%) China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

1-Jul 3.500 0.086 4.450 0.093 2.500 3.000 -0.803 0.065 2.500 1.000

2-Jul 4.000 0.084 4.429 0.090 2.500 3.000 -0.195 0.065 2.500 0.900

3-MONTH INTERBANK LENDING RATE (%)

bps change 50.00 -0.29 -2.07 -0.25 0.00 0.00 60.80 0.00 0.00 -10.00

1-Jul 5.295 0.381 5.361 0.230 2.680 3.200 0.608 0.374 2.601 3.740

2-Jul 5.211 0.381 5.368 0.230 2.680 3.200 0.285 0.374 2.601 3.675

bps change -8.40 -0.07 0.72 0.00 0.00 0.00 -32.30 0.00 0.00 -6.50

CREDIT DEFAULT SWAP (IN BPS) 28-Jun 1-Jul bps change China 116.56 116.08 -0.48 Hong Kong SAR 56.09 56.08 -0.01 Indonesia 200.84 196.16 -4.68 Japan 79.33 76.88 -2.45 Korea 90.19 89.71 -0.48 Malaysia 120.47 119.02 -1.45 Philippines 127.02 122.19 -4.83 Thailand 120.49 119.04 -1.45 Vietnam 238.92 238.93 0.01 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 1-Jul 2-Jul Gold Spot (in US$ per 1,252.5 1,262.1 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change 0.76

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

28-Jun 3.600 2.075 7.116 0.844 3.410 3.671 4.277 2.757 3.730 8.871

1-Jul 3.600 2.075 7.111 0.885 3.510 3.683 4.254 2.572 3.730 8.860

bps change

2013 YTD (bps)

0.000 0.000 -0.500 4.100 10.000 1.200 -2.300 -18.500 0.000 -1.100

38.000 167.900 230.500 70.000 53.000 49.800 13.860 224.200 53.500 -79.000

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INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

2013

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun n.a n.a n.a n.a n.a 140.8 n.a n.a 172.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.0 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 2.0 15.6 2.1 2.5 4.8 2.2 2.6 -

Reserves over short-term debt

(US$bn) (US$bn) China 3,442.7 540.9 6.4 Hong Kong SAR 305.7 752.6 0.4 Indonesia 105.1 44.6 2.4 Japan 1,250.2 2,147.9 0.6 Korea 328.1 126.7 2.6 Malaysia 141.4 32.9 4.3 Philippines 82.0 9.8 8.4 Singapore 258.4 964.3 0.3 Thailand 172.8 63.0 2.7 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

Page 5 of 6


DATA RELEASES FOR THE DAY Economies

HONG KONG HONG KONG

Indicators

Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)%

Period

Last

May May

Previous

12.2 12.8

19.4 20.7

SELECTED ECONOMIC RELEASES CALENDAR (24 – 28 JUNE 2013) Expected Release Date

7/1/2013

7/2/2013 7/3/2013

7/4/2013 7/5/2013

Economies

THAILAND THAILAND INDONESIA HONG KONG HONG KONG SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG THAILAND HONG KONG PHILIPPINES JAPAN PHILIPPINES MALAYSIA MALAYSIA THAILAND MALAYSIA

Indicators

Core CPI (YoY)% Consumer Price Index (YoY)% Consumer Confidence Index Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Exchange Reserve (USD bn) China HSBC Services PMI Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index Consumer Confidence Economic Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Consumer Price Index (YoY)% Exports YoY% Imports YoY% Foreign Reserves (USD bn) Foreign Reserves (USD bn)

Period

Jun Jun Jun May May Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun May May Jun 28 Jun 28

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 6 of 6


MARKET UPDATE FOR ASEAN+3 3 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • Stocks fell around the world, led by Portugal as the nation’s 10-year bond yield surpassed 8 percent for the first time since November after two ministers quit the government. The MSCI All-Country World Index dropped 0.7 percent to 355.54 at 10 a.m. in London. Standard & Poor’s 500 Index futures slid 0.6 percent. • Emerging-market stocks fell, heading for the biggest drop in more than a week, as growth in Chinese service industries slowed and consumer shares sank amid surging oil prices. The MSCI Emerging Markets Index lost 1.6 percent to 916.99 at 2:56 p.m. in Hong Kong, poised for the biggest drop since June 24. • The euro weakened for a second day against the dollar as a slump in Portuguese bonds after the resignation of two ministers from the nation’s government reignited speculation Europe’s debt crisis is worsening. The 17-nation currency dropped the most in two weeks versus the yen as borrowing costs also increased in Spain and Italy. The yen strengthened against all of its 16 major counterparts as declines in stocks boosted demand for Japan’s currency as a haven. The Dollar Index rose for a second day before reports that economists said will show U.S. companies increased hiring in June and service industries expanded. • Crude oil surged, with West Texas Intermediate exceeding $100 a barrel for the first time in nine months, on shrinking U.S. stockpiles and concern political turmoil in Egypt will lead to Middle East supply disruptions. Futures rose as much 2.6 percent in New York after climbing to the highest settlement price in 14 months. Crude inventories fell by 9.4 million barrels last week, the American Petroleum Institute said yesterday. A government report today may show a 2.25 million drop, according to a Bloomberg News survey. Egypt’s President Mohamed Mursi rejected an ultimatum by the armed forces to solve the country’s political impasse, fanning concern that unrest may interrupt oil shipments through the Suez Canal or Suez-Med pipeline.

BREAKING NEWS GLOBAL • Barclays Plc, Deutsche Bank AG, and Credit Suisse Group AG had their credit ratings lowered by Standard & Poor’s as new rules and “uncertain market conditions” threaten their business. Longterm counterparty credit ratings for the three banks were cut to A from A+, S&P said yesterday in a statement. The ratings company also affirmed its A long-term rating and A-1 short-term rating on UBS AG, according to the statement. The outlook for all four companies is stable. The four European lenders are among the most exposed to proposed rules that could reduce revenue from trading and investment banking operations, the ratings firm said. Banks are still in recovery from the 2008 financial crisis, which drove some economies into recession and spawned new regulations and legal probes. • The race is on to corner the overseas trade in China’s yuan, with an organization that represents Frankfurt’s financial industry predicting the European Central Bank will get a swap deal valued at four times that obtained last week by the U.K. The ECB, based in the German finance capital, may obtain a swap agreement with the People’s Bank of China valued as much as 800 billion yuan ($130 billion), according to lobby group Frankfurt Main Finance. A deal would give euro-area central banks access to yuan funds to backstop companies doing business in the world’s second-largest economy, and would dwarf the 200 billion-yuan agreement signed June 24 by the Bank of England. • The euro-area May unemployment rate was revised up to 12.2 percent from a previously reported 12.1 percent, according to the European Union’s statistics office in Luxembourg. “Due to an error in the loading of French data, yesterday’s news release on unemployment has been revised,” Eurostat said in an e-mailed statement today. “The French unemployment rate has been revised upwards by 0.5 percentage point for May 2013. As a result, the EU and euro-area aggregates have been revised

Page 1 of 7


upwards by 0.1 percentage point. The trend in the European aggregates is unchanged.” France’s jobless rate was revised up to 10.9 percent from 10.4 percent, according to Eurostat. • U.K. services unexpectedly accelerated to its fastest pace in more than two years in June, evidence the economic recovery is gaining strength. A gauge of activity rose to 56.9 from 54.9 in May, Markit Economics and the Chartered Institute of Purchasing and Supply said in an e-mailed statement today in London. That’s the strongest reading in 27 months. Economists had forecast 54.5 in June, according to the median of 33 estimates in a Bloomberg News survey. Readings above 50 indicate expansion. • Sweden’s central bank kept its main interest rate unchanged and stuck to a forecast for tightening to start in the second half of next year after a krona sell-off helped bring inflation closer to target. The repurchasing rate was kept at 1 percent for a third consecutive meeting, the Stockholm-based bank said today in a statement. The decision was forecast by 18 of the 19 economists surveyed by Bloomberg, with one predicting a cut. The bank said it sees the rate at an average of 1 percent in the third quarter and 0.9 percent in the fourth quarter, maintaining a small chance for a reduction. • Australian retail sales rose less than economists forecast in May as consumers cut spending on dining out and household goods. Sales gained 0.1 percent to A$21.8 billion ($20 billion) from a month earlier, when they fell a revised 0.1 percent from an earlier reported 0.2 percent increase, the Bureau of Statistics said in Sydney today. The result compares with the median forecast in a Bloomberg News survey of 23 economists for a 0.3 percent advance. Reserve Bank of Australia Governor Glenn Stevens and his board cut borrowing costs by 2 percentage points between November 2011 and May to 2.75 percent, joining global counterparts in embracing record-low rates. The RBA is trying to rebalance the economy away from mining regions in the north and west as investment wanes, and stimulate growth in manufacturing, residential construction and retail in the south and east.

REGIONAL • Japan, the world’s largest pork importer and Asia’s biggest buyer of beef, may agree to remove duties on meat after joining U.S.-led trade talks this month, a former adviser to Prime Minister Shinzo Abe said. Abe won’t be allowed to exclude more than 5 percent of products during the negotiations, said Masayoshi Honma, a professor of agricultural economics at the University of Tokyo who advised Abe during his first term as prime minister in 2007. Tariff elimination would expand opportunities for companies ranging from U.S. meat shipper Tyson Foods Inc. to New Zealand dairy exporter Fonterra Cooperative Group Ltd., while cutting costs for domestic food makers Nippon Meat Packers Inc. and Meiji Holdings Co. It could also rally opposition from Japanese farmers as the Liberal Democratic Party faces an upper house election this month that’s set to test the electorate’s support for policies dubbed Abenomics. • China’s stocks fell for the first time in four days, led by financial and industrial companies, as growth in services industries slowed and investors speculated initial public offerings will resume this quarter. Leading indicators like PMI suggest the economy is still weak. The slowdown in service industries underscores Premier Li Keqiang’s challenge in achieving sustainable growth across the world’s second-biggest economy through increasing consumption and reducing reliance on exports and investment. Service industries accounted for 45 percent of gross domestic product last year, according to the statistics bureau, up from 41 percent in 2003. The official non-manufacturing PMI from the National Bureau of Statistics and the China Federation of Logistics and Purchasing fell from 54.3 in May to the second-lowest reading since March 2011, when Bloomberg started tracking the data. Another service PMI released today by HSBC Holdings Plc and Markit Economics rose to 51.3 last month from 51.2 in May. A reading above 50 indicates expansion. • China’s overnight money-market rate dropped for a ninth day, the longest run of declines since March, as the worst cash crunch on record eased. An index compiled by the operations office of the People’s Bank of China shows that cash supply isn’t inadequate, the Financial News, which is owned by the central bank, reported today. The monetary authority has refrained from selling bills since June 20, when both the overnight and seven-day repurchase rates climbed to all-time highs. • The won declined the most in two weeks as a weakening yen threatened South Korea’s export outlook and after data showed the nation’s foreign-exchange reserves fell. Government bonds

Page 2 of 7


dropped. While the won gained 1 percent in the past five days, the yen dropped 3 percent to 100.79 per dollar, potentially damaging the earnings of Korean exporters that compete against Japanese rivals overseas. South Korean reserves fell to $326.4 billion at the end of June, the lowest since November, the central bank said in a statement. Overseas funds sold more local stocks than they bought today, adding to $8 billion in net sales this year through yesterday. • Indonesia’s bonds declined, pushing the 10-year yield to the highest level since September 2011, while stocks sank to a one-week low on concern the central bank will raise borrowing costs next week. Bank Indonesia will strengthen its policy mix at a monthly board meeting on July 11 as a preemptive measure against accelerating inflation due to a June 22 increase in fuel prices, Governor Agus Martowardojo said in a statement on the monetary authority’s website yesterday. The central bank is likely indicating it will raise the floor for its deposit facility rate, or Fasbi, from the current 4.25 percent, Destry Damayanti, chief economist at PT Bank Mandiri, said today. • Palm oil gained for the first time in six days after West Texas Intermediate crude surged above $100 a barrel for the first time since September, boosting demand for vegetable oils as biofuel feedstock. The contract for September delivery advanced as much as 0.8 percent to 2,357 ringgit ($740) a metric ton on the Bursa Malaysia Derivatives, before trading at 2,350 ringgit by 3:21 p.m. in Kuala Lumpur. Futures yesterday closed at the lowest price for the most active futures since May 21. Palm for local physical delivery in July was at 2,360 ringgit, data compiled by Bloomberg show. A record 5.6 million tons of palm was used for fuel in 2012, according to Oil World, a Hamburg-based research company. • Banks from Australia, South Korea and Japan have shown interest in subsidiary licenses in Thailand, Bank of Thailand Senior Director Anupap Kuvinichkul says. Applications must be submitted by yearend; No applications have been received so far. The Central bank will select 5 banks within 1Q next year and will forward to finance ministry for approval; and names of banks winning licenses to be announced by June. Thai banks will also be able to compete. Currently, foreign banks’ share of industry in Thailand stands at 10%. Furthermore, existing foreign bank branches will be allowed to upgrade to subsidiary status. • Vietnam’s Statistic Office recalculates annual GDP growth with new base year of 2010, changing from base-year 1994 previously, according to GSO email. GDP growth for 2011 is revised to 6.24%; 2010 GDP is 6.42%: GSO. IFIs NEWS (compiled from their websites) IFC- Press Release: IFC Finances ENN Energy to Reduce Diesel Consumption, Supporting China’s Greener Growth • IFC is investing $150 million in China’s leading gas distributor, ENN Energy Holdings Ltd., to reduce diesel use and carbon emissions by funding its construction of one of the world’s largest networks of stations supplying liquefied natural gas, a cheaper and more environmentally friendly fuel source. “This project will lower fuel costs and reduce greenhouse gas emissions, benefitting end users and society as a whole," said IFC Executive Vice President and Chief Executive Officer Jin-Yong Cai. "It will also be an example for other regions in China and other countries looking to benefit from greater access to liquefied natural gas.” http://ifcext.ifc.org/ifcext/pressroom/ifcpressroom.nsf/0/C1E34D14BA82664085257B9D000F725B World Bank – Publication: “Lao PDR Economic Monitor June 2013: Sustaining Growth, Maintaining Macroeconomic Stability” • The World Bank’s latest Lao PDR Economic Monitor published on July 2, 2013 highlights recent key economic, budget and sector developments: effectiveness and transparency of mining revenues, public spending on health, and net economic benefits of sanitation interventions in Lao PDR. Resilient regional economic growth and strong domestic demand is expected to facilitate Lao PDR’s robust economic growth this year. Lao PDR’s economy is expected to grow at 8% in 2013, fueled by growth from the services, hydropower, construction, and food processing sectors. http://www.worldbank.org/en/news/press-release/2013/07/02/lao-pdr-economic-monitor-june2013-sustaining-growth-maintaining-macroeconomic-stability (Press Release)

Page 3 of 7


http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/07/01/000112742_2013070 1175355/Rendered/PDF/791580WP0P13260Box0377356B00PUBLIC0.pdf (Report) http://www.worldbank.org/en/country/lao/publication/lao-pdr-economic-monitor-june-2013sustaining-growth-maintaining-macroeconomic-stability (Key Findings) Previous wk's 2-Jul 3-Jul close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.75 7.75 Indonesia 9,793.00 10,004.00 9,935.00 9,977.00 Japan 86.75 99.14 100.63 99.77 Korea 1,064.40 1,142.06 1,134.03 1,143.75 Malaysia 3.06 3.16 3.17 3.19 Philippines 41.01 43.14 43.32 43.48 Singapore 1.22 1.27 1.27 1.27 Thailand 30.59 31.05 30.97 31.09 Vietnam 20,840.00 21,205.00 21,190.00 21,210.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.7 0.0 -3.2 -12.5 -7.0 -4.7 -6.0 -4.2 -2.4 -1.7

% change 0.05 -0.01 -0.42 0.86 -0.85 -0.60 -0.36 -0.22 -0.39 -0.09

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

2-Jul 2,006.6 20,658.7 4,728.7 14,098.7 1,855.0 1,771.9 6,448.2 3,173.3 1,464.0 489.8

OVERNIGHT LENDING RATE (%) 2-Jul 3-Jul bps change 4.000 3.070 -93.00 0.084 0.086 0.29 4.429 4.399 -3.07 0.090 0.095 0.50 2.500 2.500 0.00 3.000 3.000 0.00 -0.195 0.564 75.90 0.064 0.064 0.00 2.500 2.500 0.00 0.900 0.833 -6.70

3-Jul 1,994.3 20,147.3 4,577.2 14,055.6 1,824.7 1,769.2 6,480.1 3,129.5 1,441.7 487.4

% change -0.61 -2.48 -3.20 -0.31 -1.64 -0.15 0.50 -1.38 -1.52 -0.51

2013 YTD (%chg) -12.1 -13.6 5.3 35.2 -10.2 5.6 10.6 -2.3 2.4 16.5

3-MONTH INTERBANK LENDING RATE (%) 2-Jul 3-Jul bps change 5.211 5.148 -6.30 0.381 0.381 0.00 5.368 5.364 -0.43 0.230 0.230 0.00 2.680 2.680 0.00 3.200 3.200 0.00 0.285 0.373 8.80 0.374 0.373 -0.08 2.601 2.602 0.08 3.675 3.675 0.00

Page 4 of 7


CREDIT DEFAULT SWAP (IN BPS) 1-Jul 2-Jul bps change China 116.08 112.20 -3.88 Hong Kong SAR 56.08 56.04 -0.04 Indonesia 196.16 187.14 -9.02 Japan 76.88 74.40 -2.48 Korea 89.71 84.30 -5.41 Malaysia 119.02 114.64 -4.38 Philippines 122.19 118.34 -3.85 Thailand 119.04 115.89 -3.15 Vietnam 238.93 234.26 -4.67 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 2-Jul 3-Jul Gold Spot (in US$ per 1,243.4 1,248.3 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change 0.39

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Moody's Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

Fitch A+ AA+ BBBA+ AAABBBAAA BBB+ B+

1-Jul 3.600 2.075 7.111 0.885 3.510 3.683 4.254 2.572 3.730 8.860

2-Jul 3.600 2.099 7.226 0.894 3.420 3.590 4.223 2.442 3.720 8.950

bps change

2013 YTD (bps)

0.000 2.400 11.500 0.900 -9.000 -9.300 -3.100 -13.000 -1.000 9.000

38.000 170.300 242.000 70.900 44.000 40.500 10.760 211.200 52.500 -70.000

Page 5 of 7


INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

2013

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun n.a n.a n.a n.a 326.4 140.8 n.a n.a 172.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.0 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 2.0 15.6 2.1 2.5 4.8 2.2 2.6 -

Reserves over short-term debt

(US$bn) (US$bn) China 3,442.7 540.9 6.4 Hong Kong SAR 305.7 752.6 0.4 Indonesia 105.1 44.6 2.4 Japan 1,250.2 2,147.9 0.6 Korea 328.1 126.7 2.6 Malaysia 141.4 32.9 4.3 Philippines 82.0 9.8 8.4 Singapore 258.4 964.3 0.3 Thailand 172.8 63.0 2.7 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

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DATA RELEASES FOR THE DAY Economies

SOUTH KOREA CHINA INDONESIA

Indicators

Foreign Exchange Reserve (USD bn) China HSBC Services PMI Danareksa Consumer Confidence

Period

Last

Jun Jun Jun

Previous

326.44 51.3 90.4

328.10 51.2 91.4

SELECTED ECONOMIC RELEASES CALENDAR (24 – 28 JUNE 2013) Expected Release Date

7/1/2013

7/2/2013 7/3/2013

7/4/2013 7/5/2013

Economies

THAILAND THAILAND INDONESIA HONG KONG HONG KONG SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG THAILAND HONG KONG PHILIPPINES JAPAN PHILIPPINES MALAYSIA MALAYSIA THAILAND MALAYSIA

Indicators

Core CPI (YoY)% Consumer Price Index (YoY)% Consumer Confidence Index Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Exchange Reserve (USD bn) China HSBC Services PMI Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index Consumer Confidence Economic Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Consumer Price Index (YoY)% Exports YoY% Imports YoY% Foreign Reserves (USD bn) Foreign Reserves (USD bn)

Period

Jun Jun Jun May May Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun May May Jun 28 Jun 28

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7


MARKET UPDATE FOR ASEAN+3 5 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS • The dollar strengthened to a five-week high and U.S. stock-index futures advanced before data forecast to show the nation’s jobs market improved. Portuguese bonds gained while silver led metals lower. The Dollar Index, which tracks the currency against six major peers, rose 0.9 percent to 83.936, the highest level since May 29, at 9:30 a.m. in London. • Asian stocks rose, with the regional index on course for a second week of gains, as European policy makers signaled they will keep interest rates low for longer. The MSCI Asia Pacific Index gained 1.1 percent to 132.02 as of 4:36 p.m. in Hong Kong, with all of its 10 industry groups climbing. European stocks were little changed, with the Stoxx Europe 600 Index heading for its biggest weekly rally in two months, as investors awaited data on the American labor market. U.S. index futures and Asian shares climbed.

BREAKING NEWS GLOBAL • President Mario Draghi said the European Central Bank expects to keep interest rates low for an “extended period” as he tries to restrain market borrowing costs, in a new departure for an institution averse to setting policy in advance. With ECB officials today leaving their main refinancing rate at 0.5 percent, Draghi fleshed out their outlook for monetary policy after investors pushed up long-term bond yields, threatening the region’s economic recovery. The statement came on the same day that the Bank of England also tried to manage investor expectations in Mark Carney’s first week as governor. “The Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time,” Draghi said at a press conference in Frankfurt. “What the Governing Council did today was to inject a downward bias in interest rates for the foreseeable future. Our exit is very distant.” The remarks followed a surge in Portugal’s 10-year bond yield above 8 percent for the first time since November and a signal from the Federal Reserve that it may soon pull back monetary stimulus. • Portuguese Prime Minister Pedro Passos Coelho said his government will have the support of the CDS party after the leader of that coalition partner submitted his resignation as foreign affairs minister this week. “It was a personal decision that does not involve the CDS party’s support for the government,” Coelho told reporters in Lisbon after holding meetings with CDS party leader Paulo Portas today. “A way will be found to guarantee the government has political support from the CDS party and in that manner ensure political stability. As head of government I will now seek from the two parties a reinforcement of political support for the government.” Coelho, who leads the Social Democratic Party, said Portuguese President Anibal Cavaco Silva will also assess the “situation.”

• Pakistan and the International Monetary Fund agreed on a $5.3 billion loan to boost the nation’s

depleted currency reserves, as Prime Minister Nawaz Sharif tries to stabilize a struggling economy. The government presented a “very robust reform” agenda to secure the assistance, Finance Minister Ishaq Dar said at a joint briefing with the IMF in Islamabad yesterday. The program of credit needs final approval from the lender’s board, its Pakistan mission head Jeffrey Franks said. A plunge of about 40 percent in the reserves in the past year to $6 billion has left Pakistan with enough to cover only about two months of imports, central bank data shows. The slide has weighed on the rupee and adds to other challenges facing Sharif, which include energy shortages and a Taliban insurgency in the northwest. The currency touched a record low this week.

REGIONAL NEWS • Record sales of foreign bonds by Japanese investors are signaling a bottom for the yen to traders who are trimming bets on further declines in the year’s worst-performing major currency. Investors in the Asian nation offloaded 10.6 trillion yen ($106 billion) of foreign debt in the first half of 2013, the

Page 1 of 8


most since at least 2001, according to Ministry of Finance data. Futures traders reduced bets on a yen drop versus the dollar to the least in four months last week and options protecting against gains in the Japanese currency are trading at a premium. • Japanese consumers’ inflation expectations remained at 3 percent for a second quarter in June, in a sign that Bank of Japan Governor Haruhiko Kuroda’s reflationary drive may be succeeding. People expect prices to climb 3 percent over the next 12 months, the same as in March, according to the median result in a Bank of Japan survey released today in Tokyo. The indicator doesn’t include the effects of a planned increase in the sales tax to 8 percent in April from the current 5 percent. Kuroda is counting on unprecedented monetary easing to encourage spending and credit demand. The nation is still far from achieving the bank’s 2 percent inflation target in 2 years, with consumer prices falling or unchanged in the 13 months through May. • China’s State Council, headed by Premier Li Keqiang, pledged to maintain a reasonable supply of money and credit to the economy after a cash crunch last month sent interbank borrowing rates to the highest on record. The State Council reiterated it will follow a “prudent” monetary policy stance, in a seven-page statement released in Beijing today before a briefing with officials from the People’s Bank of China and China Banking Regulatory Commission. Policy makers in the world’s second-biggest economy are trying to reassure investors after turmoil in the country’s money markets roiled global stocks last month. • Hong Kong builders will put the brakes on home sales for the rest of the year after government curbs to rein in prices sapped demand, according to Bocom International Holdings Co. and Centaline Property Agency Ltd. Builders including Sun Hung Kai Properties Ltd. and Cheung Kong Holdings Ltd. sold about 4,320 new units for HK$40 billion ($5.2 billion) in the first half, both the lowest since the second half of 2008, according to figures compiled by realtor Centaline. Developers are holding off sales after property transactions in the city plunged to a two-decade low in the second quarter in response to a doubling of stamp duties on buyers and sellers, and tightened regulations on marketing material of new apartments. Home prices have dropped 2 percent from a historic high in March, after having more than doubled since early 2009. • South Korea’s government and central bank may step in to bolster the nation’s faltering corporate bond market as surging yields spur losses for investors and securities firms while sales stagnate. Benchmark yields for three-year AA- rated corporate notes rose 43 basis points to 3.31 percent last quarter, the biggest increase in almost five years, after the U.S. Federal Reserve laid out a plan to dial back record stimulus. • Foreign funds posted the biggest monthly sell-off of South Korean stocks in almost two years in June on uncertainties over the Fed’s stimulus exit strategy, according to e-mailed statement from Financial Supervisory Service. Overseas investors net sold 5.1t won of stocks, the biggest monthly selloff since Aug. 2011, according to the the FSS. The U.S. was the biggest seller of South Korean stocks for 5 mos. in a row, followed by the U.K. Foreign ownership of won-denominated bonds rose for a fifth month in June on safer asset preference, while global funds net purchased 2.6t won in South Korean debt in June, boosting holdings to 101.2t won, or 7.5% of listed notes. • South Korea will provide Cambodia with 200 million U.S. dollars loan for road and dam projects, according to Cambodian Ministry of Foreign Affairs on Friday. Cambodian deputy prime minister and foreign minister Hor Namhong and South Korean ambassador to Cambodia Kim Han-soo will sign the loan agreement in the presence of Cambodian Prime Minister Hun Sen next Wednesday, a statement said. The four-year loan package was offered to rehabilitate three lines of national roads and rural roads in nine provinces and build a multipurpose dam between northwestern Battambang and Pursat provinces. The loan agreement is announced just a few weeks ahead of Cambodia’s general election, which will be held on July 28. • Malaysia’s exports fell for a fourth month as the country shipped less crude petroleum and fewer electronics products, the Trade Ministry says in statement today. Exports to U.S., Japan and EU declined from a year earlier, while imports dropped 2.3% in May y/y. The trade surplus widened to 2.45 billion ringgit in May from a revised 1.04 billion ringgit in April.

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• In the Philippines, “June inflation of 2.8% “supports our assessment of manageable inflation and the appropriateness of our current policy stance,” Bangko Sentral ng Pilipinas Governor Amando Tetangco says in mobile-phone message. The BSP is to continue to monitor external developments, particularly changes in monetary policies, assessments in demand conditions by advanced economies, he says. “We will monitor the impact of these factors on global and domestic investor sentiment and growth dynamics to see if there is any need to adjust our own policy settings.” Inflation was 2.6% in May, unchanged from 13-month low in April; BSP target is 3%-5% this year, while the Peso has fallen more than 5% this yr, third worst performer in region in past 3 months. • The Bangko Sentral ng Pilipinas allows registration by custodian banks of non-resident investments in Philippine stocks, it says in e-mailed statement. This allows with prior approval, conversion by nonresident issuers of peso proceeds from share sales of Philippine stocks, as well as prepayment of BSPregistered short-term loans. Furthermore, it waives document requirements to support reports on importations, and also includes measures to broaden investment options, allow freer capital movement. IFIs NEWS (compiled from their websites) BIS- Working Paper: “Credit and growth after financial crises” •

The BIS has publicised the captioned working paper. “We find that declining bank credit to the private sector will not necessarily constrain the economic recovery after output has bottomed out following a financial crisis. In these crises the change in bank credit, either in real terms or relative to GDP, consistently did not correlate with growth during the first two years of the recovery. In the third and fourth year, the correlation becomes statistically significant but remains small in economic terms. The lack of association between deleveraging and the speed of recovery does not seem to arise due to limited data. In fact, our data shows that increasing competitiveness, via exchange rate depreciations, is statistically and economically significantly associated with faster recoveries. Our results contradict the current consensus that private sector deleveraging is necessarily harmful for growth.” http://www.bis.org/publ/work416.htm

IFC – Press Release: IFC, NAFMII Hold Workshop in Beijing to Promote China’s Securities Market Development •

On July 4, 2013, the IFC and National Association of Financial Market Institutional Investors (NAFMII) co-hosted a workshop in Beijing, China whereby regulators, banks, securities and law firms, and credit rating agencies convened for a discussion on international best practices in securitization and its role in China’s capital markets development. “IFC became one of the first foreign issuers of renminbi-denominated bonds and has been providing Chinese enterprises with long-term financing through the domestic foreign exchange market. NAFMII is a close partner of IFC in China and has been committed to promoting the deeper development and innovation of the domestic capital market,” said Mr Jingdong Hua, IFC’s vice president and treasurer. “Going forward, we need to work together to introduce more advanced market instruments and provide financing to small and medium enterprises.” http://ifcext.ifc.org/ifcext/pressroom/ifcpressroom.nsf/0/86D3A5CB7FB3DA3D85257B9E002DF1E1 IMF – Press Release: Italy – Concluding Statement of the IMF Mission for the 2013 Article IV Consultation: “Beyond Austerity: Priorities For Reviving Growth” •

The IMF has publicised the 2013 Article IV Consultation Concluding Statement pertaining to its’ Mission to Italy. The following is an excerpt of the statement: “The authorities have taken bold steps since the late 2011 crisis to strengthen the public finances and transform the economy. The difficult reforms were necessary to restore confidence and bring Italy back from the brink. But growth prospects remain weak, unemployment is unacceptably high, and market sentiment is still fragile, underscoring that the task is far from complete. The new government has started to build on the steps taken to tackle Italy’s structural problems. Accelerating the momentum for reform will be essential to jumpstart growth and create jobs. Europe will also need to play its part with actions to address financial fragmentation and strengthen further the currency union.” http://www.imf.org/external/np/ms/2013/070413.htm

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Vietnam National Committee for International Economic Cooperation and World Bank – Publication: “Trade Facilitation, Value Creation, and Competitiveness: Policy Implications for Vietnam’s Economic Growth” • On July, 4 2013, the Vietnam National Committee for International Economic Cooperation and World Bank have co-published the above-stated report. The report noted that Vietnam has posted a strong trade performance in a difficult external environment – exports rising 34 percent in 2011, 18 percent in 2012 and nearly 20 percent in the first quarter of 2013. It was also highlighted that with trade becoming a major contributor to economic growth, Vietnam’s future export growth must be based on enhancing competitiveness and capturing greater value addition. http://www.worldbank.org/en/news/press-release/2013/07/04/vietnam-must-base-future-exportgrowth-on-enhancing-competitiveness-and-capturing-greater-value-added-said-latest-tradefacilitation-report (Press Release) http://www.worldbank.org/en/news/feature/2013/07/04/trade-facilitation-value-creation-andcompetitiveness-policy-Implications-for-Vietnam-8217-s-Economic-Growth (Key Findings of the Report) http://www.worldbank.org/en/news/speech/2013/07/04/Trade-Facilitation-Value-Creation-andCompetitiveness-Policy-Implications-for-Vietnam-8217-s-Economic-Growth (Transcript of the speech delivered by Ms Victoria Kwakwa, Country Director, World Bank Vietnam in a workshop at Hanoi, Vietnam on July 4, 2013)

Page 4 of 8


FOREIGN CURRENCY EXCHANGE RATES

Previous wk's 4-Jul 5-Jul close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.75 7.75 Indonesia 9,793.00 10,004.00 9,943.00 9,945.00 Japan 86.75 99.14 100.04 100.03 Korea 1,064.40 1,142.06 1,138.45 1,142.50 Malaysia 3.06 3.16 3.18 3.19 Philippines 41.01 43.14 43.43 43.38 Singapore 1.22 1.27 1.27 1.28 Thailand 30.59 31.05 31.08 31.14 Vietnam 20,840.00 21,205.00 21,233.00 21,238.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.6 0.0 -2.9 -12.7 -6.9 -4.8 -5.8 -4.3 -2.6 -1.9

% change -0.12 -0.01 -0.02 0.01 -0.35 -0.11 0.12 -0.16 -0.19 -0.02

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

4-Jul 2,006.1 20,468.7 4,581.9 14,018.9 1,839.1 1,771.3 6,464.3 3,147.1 1,430.9 487.2

OVERNIGHT LENDING RATE (%) 4-Jul 5-Jul bps change 3.310 3.380 7.00 0.086 0.083 -0.36 4.386 4.364 -2.14 0.070 0.090 2.00 2.500 2.500 0.00 3.000 3.000 0.00 0.882 0.104 -77.80 0.063 0.063 0.00 2.500 2.500 0.00 0.775 0.767 -0.80

5-Jul

% change

2,007.2 20,854.7 4,602.8 14,310.0 1,833.3 1,772.9 6,500.5 3,172.4 1,433.5 485.7

0.05 1.89 0.46 2.08 -0.32 0.09 0.56 0.80 0.18 -0.32

2013 YTD (%chg) -11.5 -10.5 5.9 37.7 -9.7 5.9 10.9 -0.9 1.8 16.1

3-MONTH INTERBANK LENDING RATE (%) 4-Jul 5-Jul bps change 5.029 4.939 -9.00 0.381 0.381 0.00 5.369 5.369 0.07 0.230 0.230 0.00 2.670 2.670 0.00 3.200 3.200 0.00 0.619 0.508 -11.10 0.373 0.373 0.00 2.602 2.602 0.00 3.400 3.400 0.00

CREDIT DEFAULT SWAP (IN BPS) 3-Jul 4-Jul bps change China 122.41 121.94 -0.47 Hong Kong SAR 56.07 56.08 0.01 Indonesia 208.12 208.12 0.00 Japan 75.15 75.64 0.49 Korea 93.14 93.62 0.48 Malaysia 125.34 125.34 0.00 Philippines 127.97 128.93 0.96 Thailand 124.87 124.87 0.00 Vietnam 246.12 246.11 -0.01 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag.

Page 5 of 8


4-Jul 5-Jul Gold Spot (in US$ per 1,249.9 1,234.7 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change -1.21

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

3-Jul 3.510 2.159 7.376 0.885 3.470 3.559 4.271 2.481 3.660 8.959

4-Jul 3.600 2.304 7.344 0.869 3.460 3.547 4.179 2.468 3.760 8.767

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

bps change

2013 YTD (bps)

9.000 14.500 -3.200 -1.600 -1.000 -1.200 -9.200 -1.300 10.000 -19.200

38.000 190.800 253.800 68.400 48.000 36.200 6.360 213.800 56.500 -88.300

2013

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun n.a 303.5 n.a 1,238.7 326.4 140.8 81.6 n.a 170.8 n.a

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EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.0 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 2.0 15.6 2.1 2.5 4.8 2.2 2.6 -

Reserves over short-term debt

(US$bn) (US$bn) China 3,442.7 540.9 6.4 Hong Kong SAR 305.7 752.6 0.4 Indonesia 105.1 44.6 2.4 Japan 1,250.2 2,147.9 0.6 Korea 328.1 126.7 2.6 Malaysia 141.4 32.9 4.3 Philippines 82.0 9.8 8.4 Singapore 258.4 964.9 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

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DATA RELEASES FOR THE DAY Economies

HONG KONG PHILIPPINES PHILIPPINES PHILIPPINES JAPAN MALAYSIA MALAYSIA MALAYSIA THAILAND

Indicators

Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn) Consumer Price Index (YoY)% Core Consumer Price Index (YoY)% Official Reserve Assets (USD bn) Exports YoY% Imports YoY% Trade Balance (USD bn) Foreign Reserves (USD bn)

Period

Last

Jun Jun Jun Jun Jun May May May Jun 28

Previous

303.5 81.6 2.8 2.9 1238.7 -5.8 -2.3 2.45 170.8

305.7 82.9 2.6 3.0 1250.2 -3.3 9.2 0.94 172.8

SELECTED ECONOMIC RELEASES CALENDAR (24 – 28 JUNE 2013) Expected Release Date

7/1/2013

7/2/2013 7/3/2013

7/4/2013 7/5/2013

Economies

THAILAND THAILAND INDONESIA HONG KONG HONG KONG SOUTH KOREA CHINA INDONESIA INDONESIA HONG KONG THAILAND HONG KONG PHILIPPINES JAPAN PHILIPPINES MALAYSIA MALAYSIA THAILAND MALAYSIA

Indicators

Core CPI (YoY)% Consumer Price Index (YoY)% Consumer Confidence Index Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Exchange Reserve (USD bn) China HSBC Services PMI Net Foreign Assets (IDR Tln) Foreign Reserves (USD bn) Purchasing Managers Index Consumer Confidence Economic Foreign Currency Reserves (USD bn) Foreign Reserves (USD mn) Official Reserve Assets (USD bn) Consumer Price Index (YoY)% Exports YoY% Imports YoY% Foreign Reserves (USD bn) Foreign Reserves (USD bn)

Period

Jun Jun Jun May May Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun May May Jun 28 Jun 28

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 8 of 8


MARKET UPDATE FOR ASEAN+3 9 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS 

Asian stocks rebound as Yen weakness boosts Japan shares. The MSCI Asia Pacific Index gained 1.6 percent to 131.46 as of 4:13 p.m. in Hong Kong, with all 10 industry groups on the gauge climbing. The measure fell 10 percent through yesterday from a five-year high on May 20 amid concern the U.S. Federal Reserve will begin tapering stimulus as China’s economy slows and Japan puts off unveiling economic reform policies until after upper house elections later this month. The euro strengthened for a third day against the yen after EU reaches Greek aid agreement. The euro strengthened 0.4 percent to 130.46 yen at 8 a.m. London time. Meanwhile, the dollar weakened against most of its 16 major peers amid speculation the Federal Reserve Chairman Ben S. Bernanke will provide further guidance on plans to scale back asset purchases. The euro has gained 4.6 percent this year, the second-best performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. WTI crude trades near 14-month high before U.S. inventory data, and as bloodshed in Egypt stoked concern that Middle Eastern exports may be disrupted. Futures were little changed in New York after closing at a 14-month high on July 5 as the relative strength index signaled prices may have advanced too quickly. Crude stockpiles probably dropped by 3.1 million barrels last week, according to a Bloomberg News survey before government data to be released tomorrow. Egypt’s army yesterday shot dead at least 51 supporters of deposed President Mohamed Mursi, the highest daily death toll since his ouster.

BREAKING NEWS GLOBAL NEWS 

U.K. manufacturing unexpectedly shrank in May amid a drop in output of pharmaceuticals and metals. Factory output fell 0.8 percent from April, when it declined 0.2 percent, the Office for National Statistics said today in London. The median forecast of 25 economists in a Bloomberg News survey was a 0.4 percent rise. Overall industrial production was unchanged, thanks to an increase in oil and gas production. A separate report showed the goods-trade gap was little changed at 8.5 billion pounds in May. Exports rose 1.5 percent while imports climbed 1.3 percent. An improvement in the deficit with European Union nations offset a deterioration in trade with the rest of the world. Greece wins release of aid. European governments agreed to release 3 billion euros ($3.9 billion) of aid for Greece, seeking to buy enough financial calm to prevent another debt-crisis showdown until after Germany’s elections in September. Greece will get 2.5 billion euros this month and the rest in October, as long as Prime Minister Antonis Samaras’s tottering coalition delivers on economic reforms and cuts to spending. Greece can also count on recouping 2 billion euros in central bank profits on Greek bonds and on 1.8 billion euros from the International Monetary Fund. Consumer borrowing in the U.S. climbed in May by the most in a year as Americans put more purchases on their credit cards and took out more school and automobile loans. The $19.6 billion increase in credit followed a revised $10.9 billion gain the previous month that was less than initially reported, Federal Reserve figures showed today in Washington. The median forecast in a Bloomberg survey called for a $12.5 billion advance.

Page 1 of 7


REGIONAL 

Cambodia looks to export rice to Brunei. Cambodia will start exporting rice later this year to Brunei Darussalam for the first time, according to a deal signed between officials on Saturday in Phnom Penh. With its first shipment expected in November, the Baitong Rice Export Company and the Federation of Cambodian Rice Millers Association will send 3,000 tonnes of fragrant rice to Brunei. The deal’s amount places Brunei among the top 15 importers of Cambodian rice, according to official data. Rice exports have increased 127 per cent to just under 147,000 tonnes in the past five months of this year when compared to the same period in 2012. The output is well on its way to smashing the figure of about 205,000 tonnes for the entire 12 months of last year. China’s inflation stayed subdued in June while a decline in factory-gate prices extended its longest streak in a decade. The consumer price index rose 2.7 percent from a year earlier, the National Bureau of Statistics said today in Beijing, compared with a median estimate of 2.5 percent in a Bloomberg News survey and a 2.1 percent gain in May. Prices of food rose 4.9 percent from a year earlier in June, the statistics bureau said today, after a 3.2 percent gain in May. Meanwhile, producer prices fell 2.7 percent. China’s central bank tightens rules on interbank bond trading. The rules require all transactions to be conducted through the National Interbank Funding Center as it seeks to boost transparency. Transactions including forward deals and repurchases can’t be reversed or changed once agreed between the two parties, the People’s Bank of China said in a statement posted on its website today. Clearing agencies should not engage in settling trades outside the interbank market, according to the statement. Alterations to bond ownership, such as inheritance that are not related to trading, must be supported by legal documents explaining the nature of the transaction, it said. Indonesian lawmakers chose Hendar as central bank deputy governor. He has been a bureau chief of monetary policy, executive director of monetary management, and is currently an assistant governor specializing in payment systems, money circulation and information system management at the central bank. Commission XI, a parliamentary panel for financial affairs, selected Hendar after a vote at a meeting late yesterday in Jakarta, said Commission Chairman Emir Moeis. The appointment will have to be confirmed at a plenary session of parliament. Myanmar's Ministry of Construction plans to establish a housing bank loan to support low income earners and government workers who need money to buy houses. Ten percent of the population currently live in the former capital Yangon where the government is planning a series of low-cost housing projects to deal with increasing urban populations. The government is making a plan to use the saving fund system to buy a home with government funds in addition to instalment plan. Vietnam garment exports remain on target. The textiles and garments industry is approaching its US$19.5 billion export target for this year after receiving sufficient orders to meet the goal, according to Le Tien Truong, vice chairman of the Viet Nam National Textile and Garment Group (Vinatex). Viet Nam's total export turnover for textiles and garments in the first half of this year surpassed $8.9 billion, a 14.5 per cent increase year-on-year, the Viet Nam Textile and Apparel Association (VITAS) reported. The South Korean market saw the highest growth of 32 per cent, with export turnover topping $660 million and accounting for 7.5 per cent of the sector's total shipments, the association said. The US and EU are currently Viet Nam's largest markets for textiles and garments, with revenue of $3.94 billion and $1.29 billion respectively, followed by Japan at $1.1 billion. Page 2 of 7


IFIs NEWS (compiled from their websites) Basel Committee – Consultation: “The regulatory framework: balancing risk sensitivity, simplicity and comparability” 

On July 8, 2013, the Basel Committee on Banking Supervision has published a Discussion Paper on The regulatory framework: balancing risk sensitivity, simplicity and comparability to initiate discussions on the stated topic within the Basel Capital Standards. The released paper discusses the reasons behind the evolution of the current framework and outlines the potential benefits and costs that arise from a more risk sensitive methodology. It also discusses ideas that could possibly be explored to further reform the framework with the objective that it continues to strike an appropriate balance between the complementary goals of risk sensitivity, simplicity and comparability. Comments on the paper should be submitted by Friday October 11, 2013 by e-mail to baselcommittee@bis.org. http://www.bis.org/press/p130708.htm (Press Release) http://www.bis.org/publ/bcbs258.pdf (Discussion Paper)

BIS’s Irving Fisher Committee – Working Paper: “Optimizing Checking of Statistical Reports” 

The BIS’s Irving Fishing Committee has publicised the above-stated working paper. http://www.bis.org/ifc/publ/ifcwork11.htm

IFC – Press Release: IFC Assists Philippine Government in Conducting Bid for Airport Expressway to Improve Transport Access 

IFC assisted the Philippines’ Department of Public Works and Highways in conducting a successful bid for a public-private partnership to build an elevated toll road that connects Manila’s three airports and improves transport access for 100,000 passengers daily. “Through our public-private partnership team, we are glad to help enhance the government’s capacity to prepare well-developed projects that will attract private investments and achieve its intended economic development objectives,” said IFC Resident Representative Jesse Ang. http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/DC85FB3CC397675585257BA20033A 571

IMF, G20 and FSB– Press Release: G-20 Officials Welcome Progress in implementing the G-20 Data Gaps Initiative 

The IMF, G20 and FSB have published the stated piece of news article. http://www.imf.org/external/np/sec/pr/2013/pr13251.htm (Press Release) http://www.imf.org/external/np/g20/pdf/102909.pdf (Report endorsed by the G-20 Finance Ministers and Central Bank Governors in November 2009: “The Financial Crisis and Information Gaps”)

IMF– Press Release: 2013 Article IV Consultation with the Euro Area Concluding Statement of IMF Mission •

The IMF has publicised the 2013 Article IV Consultation Concluding Statement pertaining to its’ Mission to Euro Area. http://www.imf.org/external/np/ms/2013/070813.htm

IMF– Press Release: Statement by the European Commission (EC), European Central Bank (ECB) and IMF on Greece 

The IMF, EC and ECB have published a joint statement pertaining to their Mission to Greece. http://www.imf.org/external/np/sec/pr/2013/pr13250.htm

IMF– Working Paper: Can a Government Enhance Long-Run Growth by Changing the Composition of Public Expenditure? 

The IMF has publicised the above-stated working paper. http://www.imf.org/external/pubs/ft/wp/2013/wp13162.pdf Page 3 of 7


World Bank– Press Release: New World Bank Vice President for East Asia and Pacific Visits the Philippines 

Mr Axel van Trotsenburg, World Bank Vice President for East Asia and Pacific (EAP), will visit the Philippines this week to confer with the country’s leaders on how the Bank could best align its emerging assistance strategy with the country’s inclusive growth agenda in the next three years. Boosted by the strong performance of manufacturing and construction as well as increased consumer and government spending, the Philippine economy grew by 7.8 percent in the first quarter of 2013, the highest in East Asia. http://www.worldbank.org/en/news/press-release/2013/07/08/new-world-bank-vicepresident-for-east-asia-and-pacific-visits-the-philippines

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 8-Jul 9-Jul close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,004.00 9,956.00 9,983.00 Japan 86.75 99.14 100.97 101.24 Korea 1,064.40 1,142.06 1,152.28 1,141.73 Malaysia 3.06 3.16 3.21 3.19 Philippines 41.01 43.14 43.72 43.45 Singapore 1.22 1.27 1.28 1.28 Thailand 30.59 31.05 31.41 31.29 Vietnam 20,840.00 21,205.00 21,243.00 21,231.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

% change 0.07 -0.01 -0.27 -0.27 0.92 0.68 0.62 0.06 0.38 0.06

2013 YTD (%chg) 1.7 -0.1 -3.3 -13.7 -6.8 -4.8 -6.0 -4.5 -3.1 -1.8

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

8-Jul 1,958.3 20,582.2 4,433.6 14,109.3 1,816.9 1,762.9 6,318.9 3,155.5 1,404.6 482.8

OVERNIGHT LENDING RATE (%) 8-Jul 9-Jul bps change 3.200 3.000 -20.00 0.083 0.084 0.07 4.343 4.336 -0.72 0.073 0.090 1.75 2.500 2.500 0.00 3.000 3.000 0.00 -0.989 -0.204 78.50 0.025 0.025 0.00 2.500 2.500 0.00 0.800 0.775 -2.50

9-Jul 1,965.5 20,683.0 4,403.8 14,472.9 1,830.4 1,766.5 6,327.0 3,182.9 1,415.1 485.5

% change 0.37 0.49 -0.67 2.58 0.74 0.21 0.13 0.87 0.74 0.57

2013 YTD (%chg) -13.4 -11.3 1.3 39.2 -9.9 5.5 8.0 -0.6 0.5 16.1

3-MONTH INTERBANK LENDING RATE (%) 8-Jul 9-Jul bps change 4.794 4.723 -7.10 0.381 0.381 0.00 5.369 5.379 1.00 0.230 0.230 0.00 2.660 2.660 0.00 3.200 3.200 0.00 0.552 0.360 -19.20 0.373 0.373 0.00 2.602 2.602 0.00 3.300 3.400 10.00

Page 4 of 7


CREDIT DEFAULT SWAP (IN BPS) 5-Jul 8-Jul bps change China 119.03 119.03 0.00 Hong Kong SAR 55.57 55.57 0.00 Indonesia 209.19 209.19 0.00 Japan 73.67 73.67 0.00 Korea 90.19 90.19 0.00 Malaysia 121.95 121.95 0.00 Philippines 126.05 126.05 0.00 Thailand 121.98 121.98 0.00 Vietnam 246.15 246.15 0.00 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 8-Jul 9-Jul Gold Spot (in US$ per 1,237.0 1,254.2 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change 1.39

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

5-Jul 3.610 2.330 7.379 0.863 3.510 3.544 4.525 2.566 3.760 8.959

8-Jul 3.600 2.534 7.434 0.884 3.610 3.544 4.429 2.641 3.810 9.035

bps change

2013 YTD (bps)

-1.000 20.400 5.500 2.100 10.000 0.000 -9.600 7.500 5.000 7.600

38.000 213.800 262.800 69.900 63.000 35.900 31.360 231.100 61.500 -61.500

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012 31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

2013 31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun n.a 303.5 98.1 1,238.7 326.4 136.1 81.6 259.8 170.8 n.a

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EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Short-term external debt

Reserves over short-term debt

(US$bn) (US$bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.6 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

CHINA CHINA

Indicators

Consumer Price Index (YoY)% Producer Price Index (YoY)%

Period

Jun Jun

Last

Previous

2.7 -2.7

2.1 -2.9

SELECTED ECONOMIC RELEASES CALENDAR (8 – 12 JULY 2013) Expected Release Date

7/8/2013

7/9/2013 7/10/2013

7/11/2013

7/12/2013

Economies

INDONESIA JAPAN JAPAN SINGAPORE CHINA CHINA CHINA CHINA CHINA SOUTH KOREA PHILIPPINES SOUTH KOREA JAPAN THAILAND CHINA CHINA INDONESIA JAPAN SOUTH KOREA MALAYSIA THAILAND SINGAPORE SINGAPORE JAPAN

Indicators

Consumer Confidence Index Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD mn) Consumer Price Index (YoY)% Producer Price Index (YoY)% Trade Balance (USD bn) Exports YoY% Imports YoY% Unemployment Rate (SA)% Total Exports (YoY)% Bank Lending to HH (KRW Tln) Consumer Confidence Benchmark Interest Rate New Yuan Loans (RMB bn) Foreign Exchange Reserves (USD bn) Bank Indonesia Reference Rate% Machine Orders YOY% South Korea 7-Day Repo Rate % Overnight Rate % Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% Industrial Production YOY%

Period

Jun May May Jun Jun Jun Jun Jun Jun Jun May Jun Jun Jul 10 Jun Jun Jul 11 May Jul 11 Jul 11 Jul 5 2Q A 2Q A May F Page 6 of 7


JAPAN

Capacity Utilization (MoM)%

May F

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7


MARKET UPDATE FOR ASEAN+3 10 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS 

Asian stocks rose on speculation China will introduce measures to stimulate the economy after exports contracted by the most since 2009. The MSCI Asia Pacific Index added 0.9 percent to 132.63 as of 4:20 p.m. in Hong Kong, as the Bank of Japan begins a two-day policy meeting. All of the 10 industry groups on the gauge advanced, with about five shares falling for every four that rose. The gauge pared earlier gains of as much as 0.8 percent after Chinese exports unexpectedly fell in June. The yen advanced against all 16 of its major counterparts as signs of recovery in Japan’s economy damped prospects that the nation’s central bank will ease policy further this year. The yen gained versus the euro for a second day as the Bank of Japan began a two-day meeting. Japan’s currency appreciated 0.6 percent to 100.54 per dollar at 8:32 a.m. London time. The yen strengthened 0.4 percent to 128.74 per euro after reaching 128.22, the strongest since June 28. The shared currency rose from near a three-month low against the dollar before European Central Bank Executive-Board Member Joerg Asmussen speaks. He said yesterday policy will remain accommodative for an extended period. Gold declined after China’s exports unexpectedly fell in June and as investors await minutes from the Federal Open Market Committee’s meeting last month amid bets the central bank will begin reducing stimulus. Spot gold lost as much as 0.6 percent to 1,244.03 an ounce and was at $1,247.93 by 2:20 p.m. in Singapore, after rising 2.3 percent in the past two days. Bullion for August delivery was little changed at $1,246 an ounce on the Comex. Prices slumped 26 percent this year, set for the biggest annual drop since 1981, as some investors lost faith in the metal as a store of value.

BREAKING NEWS GLOBAL NEWS 

IMF reduces global growth outlook as U.S. expansion weakens. Global growth will be 3.1 percent this year, unchanged from the 2012 rate, and less than the 3.3 percent forecast in April, the Washington-based fund said yesterday, trimming its prediction for this year a fifth consecutive time. The forecast for global growth next year is 3.8 percent, down from 4 percent in the IMF’s April projections. Developing economies are seen growing 5 percent this year and 5.4 next year, each 0.3 percent lower than the IMF forecasts in April, though still faster than 4.9 percent expansion last year, according to the IMF. The IMF reduced its 2013 projection for the U.S. to 1.7 percent growth from 1.9 percent in April, while next year’s outlook was trimmed to 2.7 percent from 3 percent initially reported in April. It cited “the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the U.S. leads to sustained capital flow reversals.” The U.S. and China are meeting this week to find ways to balance a wider flow of investment and goods. The two-day U.S.-China Strategic and Economic Dialogue starting today in Washington is scheduled to be hosted for the first time by Treasury Secretary Jacob J. Lew and Secretary of State John Kerry and includes counterparts Vice Premier Wang Yang and State Councilor Yang Jiechi. All four have been on the job less than six months. Economic officials on both sides will press for detail on issues ranging from trade agreements to intellectual property,

Page 1 of 6


capital flows and monetary policies that are reaching a crossroads. In the economic talks, which include Federal Reserve Chairman Ben S. Bernanke, both sides will probe the other on its central bank policies. Job openings in the U.S. climbed in May and hiring picked up as U.S. companies grew more upbeat about the economy’s prospects for the second half of the year. The number of positions waiting to be filled increased to 3.83 million from the prior month’s revised 3.8 million, which was higher than initially estimated, the Labor Department said today in Washington. Openings are hovering close to a five-year high of 3.9 million reached in February. Another report showed more small businesses signaled they plan to add workers.

REGIONAL 

Brunei’s economy expanded by 0.9 percent in the first quarter of 2013 compared to the same period the previous year. According to the Department of Economic Planning and Development (JPKE), the growth was driven by to the expansion of both the non-oil and gas and the oil and gas sectors by 0.9 percent and 0.8 percent, respectively. By expenditures, capital formation grew the most, at 2.3 per cent year on year, followed by personal consumption expenditure at 1.8 per cent and exports of goods and services at 1.0 per cent. Meanwhile, government consumption expenditure and imports of goods and services declined year-on-year by 0.9 percent and 16.9 percent, respectively. China’s exports and imports unexpectedly declined in June. Overseas shipments fell 3.1 percent from a year earlier, the most since the global financial crisis, data from the General Administration of Customs showed in Beijing today, compared with the median estimate of a 3.7 percent gain in a Bloomberg News survey. Imports dropped 0.7 percent, while the median projection was for a 6 percent increase. The trade surplus was $27.1 billion for the month, compared with the median analyst estimate of $27.8 billion. South Korean businesses inspected factories at an industrial park in North Korea for the first time since April. Three negotiators from each side started talks at 10:30 a.m. at the Gaeseong industrial complex, about 10 kilometers (6 miles) north of the demilitarized zone, on starting work again at the zone and preventing future shutdowns, South Korea’s Unification Ministry said. Sixty businessmen inspected facilities for rain damage and pack up completed goods they left behind when North Korea shut Gaeseong April 8. Today’s meeting is “the first step toward building trust,” South Korea’s head negotiator Suh Ho said. Myanmar law giving its central bank autonomy due "within days". Myanmar is expected to enact a law within days that will give more autonomy to the central bank, which is currently part of the finance ministry, a senior official in the president's office said on Tuesday. Parliament passed the law on Monday and it now goes to the president. The most significant point in the new law is it will give the central bank greater autonomy so that it will be able to operate like other international central banks. The central bank governor and three deputy-governors will be nominated by the president and approved by parliament. Philippine merchandise exports continued to decline in May. The National Statistics Office (NSO) of the Philippines reported this morning that export earnings amounted to $4.89 billion, 0.8% lower compared to the same month last year. The decline was caused by lower shipments of machinery and transport equipment, ignition wiring sets, clothing, electronics and metal components. Electronics, which comprised 35% of the country's total exports in May, fell by 9.3%. Semiconductors, which comprised 85% of electronics exports, declined by 1.9%.

Page 2 of 6


Thailand kept its benchmark interest rate unchanged. The Bank of Thailand maintained its oneday bond repurchase rate at 2.5 percent, with monetary policy committee members voting unanimously to hold, it said in Bangkok today. The central bank said today growth will be less than 5 percent this year, compared with a current estimate of 5.1 percent, saying it will announce new forecasts on July 19. The authority will monitor the global economy and financial stability, and expects inflation pressure to remain benign on lower oil prices, Assistant Governor Paiboon Kittisrikangwan told reporters.

IFIs NEWS (compiled from their websites) IFC and CGAP – Publication: “Financial Access 2012: Getting to a More Comprehensive Picture” 

On July 9, 2013, IFC and the Consultative Group to Assist the Poor (CGAP) released the abovestated report which assesses the state of the financial inclusion globally. The report shows a clear—albeit still nascent—recovery from the financial crisis, with both growth rates of deposit and loan penetration picking up strongly in 2011. The growth rate of deposit accounts was higher than the growth rate of loan accounts, suggesting that after the crisis, people’s willingness to save may have been greater than their willingness to take on new loans. Data also show that higher-income countries tend to have more developed finance markets for small and medium enterprises than developing countries. In low-income countries, only a small percentage of enterprise loan accounts are held by Small and Medium-Sized Enterprises (SMEs). http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/494947E0855CB8C685257BA300557 122 (Press Release) http://www.cgap.org/sites/default/files/cgap_forum_FAS2012.pdf (Report)

IMF– Publication: “IMF World Economic Outlook (WEO) Update, July 2013 - Growing Pains” 

On July 9, 2013, the IMF has publicised its latest WEO update titled “Growing Pains”. The following is an excerpt of the summary of the report’s findings: “Global growth is projected to remain subdued at slightly above 3 percent in 2013, the same as in 2012. This is less than forecast in the April 2013 World WEO, driven to a large extent by appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as a more protracted recession in the euro area. Downside risks to global growth prospects still dominate: while old risks remain, new risks have emerged, including the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals. Stronger global growth will require additional policy action. Specifically, major advanced economies should maintain a supportive macroeconomic policy mix, combined with credible plans for reaching medium-term debt sustainability and reforms to restore balance sheets and credit channels. Many emerging market and developing economies face a tradeoff between macroeconomic policies to support weak activity and those to contain capital outflows. Macroprudential and structural reforms can help make this tradeoff less stark.” http://www.imf.org/external/pubs/ft/weo/2013/update/02/index.htm (Press Release) http://www.imf.org/external/pubs/ft/weo/2013/update/02/pdf/0713.pdf (WEO Update, July 2013 – Growing Pains) http://www.imf.org/external/pubs/ft/weo/2013/01/pdf/text.pdf (WEO, April 2013 - Hopes, Realities, Risks)

Page 3 of 6


FOREIGN CURRENCY EXCHANGE RATES Previous wk's 9-Jul 10-Jul close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,004.00 9,983.00 9,981.00 Japan 86.75 99.14 101.15 99.96 Korea 1,064.40 1,142.06 1,141.73 1,135.97 Malaysia 3.06 3.16 3.19 3.18 Philippines 41.01 43.14 43.45 43.43 Singapore 1.22 1.27 1.28 1.28 Thailand 30.59 31.05 31.24 31.26 Vietnam 20,840.00 21,205.00 21,243.00 21,236.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.6 -0.1 -3.3 -12.6 -6.4 -4.5 -5.9 -4.3 -3.0 -1.9

% change -0.08 0.00 0.02 1.19 0.51 0.25 0.04 0.20 -0.06 0.03

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

9-Jul

10-Jul

1,965.5 20,683.0 4,403.8 14,472.9 1,830.4 1,766.5 6,327.0 3,178.6 1,398.7 485.5

OVERNIGHT LENDING RATE (%) 9-Jul 10-Jul bps change 3.000 3.260 26.00 0.084 0.081 -0.21 4.336 4.325 -1.07 0.090 0.093 0.25 2.500 2.500 0.00 3.000 3.000 0.00 -0.204 -0.462 -25.80 0.036 0.036 0.00 2.500 2.500 0.00 0.775 0.775 0.00

% change

2,008.1 20,904.6 4,478.6 14,416.6 1,824.2 1,768.7 6,308.2 3,189.3 1,379.9 484.4

2.17 1.07 1.70 -0.39 -0.34 0.13 -0.30 0.33 -1.34 -0.22

2013 YTD (%chg) -11.5 -10.3 3.0 38.7 -10.2 5.6 7.6 -0.4 -2.0 15.8

3-MONTH INTERBANK LENDING RATE (%) 9-Jul 10-Jul bps change 4.723 4.704 -1.90 0.381 0.381 0.00 5.379 5.391 1.21 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.360 0.252 -10.80 0.373 0.373 0.00 2.602 2.602 0.00 3.400 3.400 0.00

CREDIT DEFAULT SWAP (IN BPS) 8-Jul 9-Jul bps change China 119.03 120.99 1.96 Hong Kong SAR 55.57 59.04 3.47 Indonesia 209.19 209.73 0.54 Japan 73.67 71.91 -1.76 Korea 90.19 89.20 -0.99 Malaysia 121.95 120.99 -0.96 Philippines 126.05 125.09 -0.96 Thailand 121.98 121.02 -0.96 Vietnam 246.15 246.33 0.18 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 9-Jul 10-Jul Gold Spot (in US$ per 1,251.4 1,254.3 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change 0.24

Page 4 of 6


CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

8-Jul

9-Jul

3.600 2.534 7.434 0.884 3.610 3.544 4.429 2.641 3.810 9.035

3.600 2.516 7.756 0.875 3.590 3.665 4.306 2.569 3.710 8.883

bps change

2013 YTD (bps)

0.000 -1.800 32.200 -0.900 -2.000 12.100 -12.300 -7.200 -10.000 -15.200

38.000 212.000 295.000 69.000 61.000 48.000 19.060 223.900 51.500 -76.700

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012

2013

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun n.a 303.5 98.1 1,238.7 326.4 136.1 81.6 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Reserves over short-term debt

(US$bn) (US$bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.6 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of

Page 5 of 6


4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

CHINA CHINA CHINA SOUTH KOREA PHILIPPINES SOUTH KOREA JAPAN THAILAND

Indicators

Trade Balance (USD bn) Exports YoY% Imports YoY% Unemployment Rate (SA)% Total Exports (YoY)% Bank Lending to HH (KRW Tln) Consumer Confidence Benchmark Interest Rate

Period

Jun Jun Jun Jun May Jun Jun Jul 10

Last

Previous

27.12 -3.1 -0.7 3.2 -0.8 469.9 44.3 2.50

20.43 1.0 -0.3 3.2 -12.8 465.1 45.7 2.50

SELECTED ECONOMIC RELEASES CALENDAR (8 – 12 JULY 2013) Expected Release Date

7/8/2013

7/9/2013 7/10/2013

7/11/2013

7/12/2013

Economies

INDONESIA JAPAN JAPAN SINGAPORE CHINA CHINA CHINA CHINA CHINA SOUTH KOREA PHILIPPINES SOUTH KOREA JAPAN THAILAND CHINA CHINA INDONESIA JAPAN SOUTH KOREA MALAYSIA THAILAND SINGAPORE SINGAPORE JAPAN JAPAN

Indicators

Consumer Confidence Index Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD mn) Consumer Price Index (YoY)% Producer Price Index (YoY)% Trade Balance (USD bn) Exports YoY% Imports YoY% Unemployment Rate (SA)% Total Exports (YoY)% Bank Lending to HH (KRW Tln) Consumer Confidence Benchmark Interest Rate New Yuan Loans (RMB bn) Foreign Exchange Reserves (USD bn) Bank Indonesia Reference Rate% Machine Orders YOY% South Korea 7-Day Repo Rate % Overnight Rate % Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% Industrial Production YOY% Capacity Utilization (MoM)%

Period

Jun May May Jun Jun Jun Jun Jun Jun Jun May Jun Jun Jul 10 Jun Jun Jul 11 May Jul 11 Jul 11 Jul 5 2Q A 2Q A May F May F

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 6 of 6


MARKET UPDATE FOR ASEAN+3 11 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks rose after Federal Reserve Chairman Ben S. Bernanke said the U.S. will continue to need stimulus and the Bank of Japan maintained its policy stance. The MSCI Asia Pacific Index rose 2.3 percent to 135.47 as of 2:30 p.m. in Hong Kong, the most since September. The gauge extended a recovery from a six-month low on June 25 to 8.4 percent. All 10 industry groups on the gauge climbed, with more than three shares gaining for each that fell. The dollar fell to the lowest in almost three weeks against the euro after Bernanke said inflation and unemployment rates show the economy still requires monetary stimulus. The U.S. currency declined versus all except one of its 16 major. The yen strengthened for a second day against the dollar after the Bank of Japan boosted its view of the economy at a policy meeting and refrained from adding monetary stimulus. The dollar declined 0.5 percent to $1.3042 per euro as of 8:51 a.m. in London after depreciating to $1.3207, the weakest level since June 21. The U.S. currency dropped 0.5 percent to 99.14 yen after sliding to 98.27 yen, the lowest since June 27. The yen was little changed at 129.33 per euro. West Texas Intermediate crude rose from the highest level in 15 months after U.S. stockpiles fell for a second week. Brent’s premium to WTI shrank to the narrowest since November 2010. Futures climbed as much as 0.9 percent after gaining 2.9 percent yesterday, the most in two months. Crude inventories dropped by 9.87 million barrels last week, according to Energy Information Administration data yesterday. WTI for August delivery increased as much as 93 cents to $107.45 a barrel in electronic trading on the New York Mercantile Exchange and was at $107.05 at 3:43 p.m. Singapore time. Brent for August settlement rose as much as 42 cents, or 0.4 percent, to $108.93 a barrel on the London-based ICE Futures Europe exchange.

BREAKING NEWS GLOBAL NEWS •

Bernanke backs stimulus for foreseeable future amid QE debate. “Highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy,” Bernanke said yesterday in response to a question after a speech in Cambridge, Massachusetts. The Fed chairman’s remarks came just three hours after the central bank released minutes of the June 18-19 gathering showing that about half of the 19 participants in the Federal Open Market Committee wanted to halt $85 billion in monthly bond purchases by year end. At the same time, the minutes showed many Fed officials wanted to see more signs employment is improving before backing a trim to bond purchases known as quantitative easing. Australia’s unemployment rate rose to the highest since 2009. The jobless rate climbed to 5.7 percent in June, the highest since September 2009 and up from a revised 5.6 percent a month earlier, the statistics bureau said in Sydney today, as more people sought work. The number of people employed advanced by 10,300 from May -- when employers cut a revised 700 workers - as full-time jobs declined by 4,400 and part-time employment increased by 14,800, the report showed. Job advertisements dropped 1.8 percent in June, the fourth straight monthly fall, Australia & New Zealand Banking Group Ltd. (ANZ) said in a July 8 report. Help-wanted notices declined in Western Australia, the center of the nation’s mining industry, as an investment boom wanes.

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Brazil signals world’s biggest key rate increase far from over. Brazil’s central bank raised the benchmark interest rate a third consecutive time and said it was giving continuity to the world’s biggest tightening cycle. The bank’s board, led by President Alexandre Tombini, yesterday raised the benchmark Selic rate by 50 basis points to 8.50 percent, as forecast by all 51 analysts surveyed by Bloomberg. The move led Itau Unibanco to reiterate its call for a rate increase in each of the three meetings left this year. Quickening inflation in Brazil is sapping economic growth and further driving away investors. Consumer prices rose 6.70 percent in June from last year, the fastest pace since October 2011, the national statistics agency said July 5. The central bank targets inflation at 4.5 percent, plus or minus two percentage points.

REGIONAL •

Bank Indonesia raised its key interest rate more than forecast to bolster a weakening currency and ease inflation pressures following the increased fuel prices last month. The central bank boosted the reference rate by 50 basis points to 6.5 percent, Governor Agus Martowardojo said in Jakarta today. The outcome was predicted by three of 19 economists surveyed by Bloomberg News, with the majority expecting a 25 basis-point increase. It also boosted the deposit facility rate to 4.75 percent from 4.25 percent. Price gains are expected to peak in July, Martowardojo said last week, citing seasonal factors including the observance of the fasting month of Ramadan in the world’s most populous Muslim nation. Gains in housing costs are also contributing to Indonesian inflation, prompting Martowardojo to say that the central bank is planning policies to quell rising property prices. The Bank of Japan refrained from adding to unprecedented monetary stimulus and raised its assessment of the economy. The BOJ stuck with a pledge to expand the monetary base by 60 to 70 trillion yen ($709 billion) per year, a statement released in Tokyo today showed. The economy is starting to recover moderately, the bank said. The bank maintained its April forecast that prices, excluding the effect of a planned sales tax increase, will rise 1.9 percent in the year starting April 2015. It trimmed some other forecasts for inflation and economic growth. The BOJ now sees inflation of 0.6 percent in the current fiscal year and 1.3 percent in the following 12 months. Japan recorded a net portfolio outflow during the week of June 30-July 6, 2013. The outflows were mainly due to large net purchases of foreign securities by residents. During that week Japan residents’ net purchases of foreign securities amounted to JPY 981 billion, of which JPY 973 billion was net purchases of bonds and notes. Meanwhile, non-residents posted a total of JPY 359 billion net purchases of Japanese securities, of which JPY 487 billion was from net purchases of equity securities, JPY 3.5 billion from net purchases in bonds and notes, and minus JPY 131.9 billion from net sales in money market instruments. The Bank of Korea (BOK) held its interest rate unchanged for a second straight month after cut in May to boost economy. Governor Kim Choong Soo and his board kept the benchmark sevenday repurchase rate at 2.5 percent, the central bank said in a statement in Seoul today. The BOK also revised up its forecast on the GDP growth to 2.8% for 2013 and 4.0% for 2014 from its forecasts in April at 2.6% for 2013 and 3.8% for 2014. Meanwhile, the government on June 27 boosted its growth forecast to 2.7 percent for this year from 2.3 percent in March, reflecting a 17.3 trillion won ($15.4 billion) extra budget and the quarter-percentage-point rate cut in May. It forecasts 1.7 percent inflation this year, below the central bank’s target range of 2.5 percent to 3.5 percent. Myanmar receives over US$ 423 million foreign investment. According to the Directorate of Investment and Companies Administration (DICA), foreign companies from five countries have

Page 2 of 6


invested over US$ 423 million in Myanmar between May 31st and June 30th of this year. The DICA said that companies from China, Thailand, Britain, Singapore and India invested in production and hotel sectors. The total investment from Thailand is US$ 379 million, Singapore US$ 23.68 million, Britain US$15.835 million, China US$ 4.1 million and India US$ 9.6 million. China remains the biggest investor in Myanmar with over US$ 14,185 million according to statistics this year. Vietnam rules out devaluing dong. Vietnam’s central bank said it has no plans for a repeat of last month’s dong devaluation, the first since 2011, and pledged to support the currency. “The State Bank of Vietnam affirms that it isn’t going to adjust its dong-dollar exchange rate and will take determined measures to stabilize the rate,” Deputy Governor Le Minh Hung said in a note posted on the State Bank of Vietnam’s website late yesterday. “That includes strong intervention,” he said, adding that foreign-exchange reserves “are at high levels.”

IFIs NEWS (compiled from their websites) IFC – Press Release: IFC Invests $5 million in Coursera to Expand Free Online Education in Emerging Markets •

IFC will invest $5 million to support the expansion of Coursera, a global platform for free online education classes that holds great potential for promoting access to high-quality university and vocational education for millions of students in developing countries. “Demand for education in developing countries is growing rapidly due to population growth and the rising share of students seeking university education,” said Elena Sterlin, IFC Senior Manager for Health, Education, and Services. “Coursera’s innovative model is a breakthrough in delivering low-cost university and continuing education to students through online courses.” http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/340DCE40345043C385257BA4004CB 38D

OECD and WTO – Publication: “Aid for Trade at a Glance 2013: Connecting to Value Chains” •

On July 8, 2013, the OECD and WTO have jointly publicised the above-stated report. The report indicates that the emergence of value chains strengthens the rationale for trade-related assistance and should reinvigorate the aid-for-trade debate. As developing countries seek greater participation in value chains, Aid for Trade programmes are helping them to achieve their economic growth, employment and poverty reduction objectives. “Aid for trade works, and it is making a difference,” OECD Secretary-General Angel Gurría said during a plenary address before the 4th Aid for Trade Global Review, at the World Trade Organisation in Geneva. “Mobilising aid flows to boost trade and help connect developing countries to global value chains is a good investment. The challenge today is maintaining momentum, fulfilling commitments, boosting results and making value chains accessible to all. An important next step would be the agreement of a comprehensive package of trade reforms, with a focus on trade facilitation.” http://www.oecd.org/newsroom/emergence-of-global-value-chains-strengthens-aid-for-tradeinitiative-oecd-says.htm (Press Release) http://www.oecd.org/dac/aft/aidfortradeataglanceconnectingtovaluechains.htm (Report) http://www.oecd.org/about/secretary-general/aid-for-trade-at-a-glance-2013.htm (Remarks made by Mr Angel Gurría, OECD Secretary-General at the 4th Global Review of Aid for Trade held in Geneva, Switzerland on July 8-10, 2013)

Page 3 of 6


FOREIGN CURRENCY EXCHANGE RATES

Previous wk's 10-Jul 11-Jul close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,004.00 9,981.00 9,973.00 Japan 86.75 99.14 99.68 99.41 Korea 1,064.40 1,142.06 1,135.97 1,122.39 Malaysia 3.06 3.16 3.18 3.17 Philippines 41.01 43.14 43.43 43.30 Singapore 1.22 1.27 1.27 1.26 Thailand 30.59 31.05 31.25 31.12 Vietnam 20,840.00 21,205.00 21,243.00 21,233.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.7 -0.1 -3.2 -12.1 -5.2 -4.2 -5.6 -3.5 -2.5 -1.9

% change 0.05 0.01 0.08 0.27 1.21 0.36 0.30 0.52 0.42 0.05

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

10-Jul

11-Jul

2,008.1 20,904.6 4,478.6 14,416.6 1,824.2 1,768.7 6,308.2 3,188.0 1,388.4 484.4

OVERNIGHT LENDING RATE (%) 10-Jul 11-Jul bps change 3.260 3.360 10.00 0.081 0.083 0.14 4.325 4.316 -0.93 0.093 0.095 0.25 2.500 2.500 0.00 3.000 3.000 0.00 -0.462 -1.205 -74.30 0.021 0.021 0.00 2.500 2.500 0.00 0.775 0.775 0.00

% change

2,073.0 21,437.5 4,604.2 14,472.6 1,877.6 1,781.2 6,407.4 3,248.9 1,439.3 484.5

3.23 2.55 2.80 0.39 2.93 0.70 1.57 1.91 3.66 0.01

2013 YTD (%chg) -8.6 -8.0 5.9 39.2 -7.6 6.4 9.3 1.5 2.3 15.8

3-MONTH INTERBANK LENDING RATE (%) 10-Jul 11-Jul bps change 4.704 4.696 -0.85 0.381 0.381 0.00 5.391 5.397 0.57 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.252 0.244 -0.80 0.373 0.374 0.08 2.602 2.602 0.00 3.400 3.600 20.00

CREDIT DEFAULT SWAP (IN BPS) 9-Jul 10-Jul bps change China 120.99 124.39 3.40 Hong Kong SAR 59.04 59.25 0.21 Indonesia 209.73 229.73 20.00 Japan 71.91 70.69 -1.22 Korea 89.20 90.67 1.47 Malaysia 120.99 124.87 3.88 Philippines 125.09 129.91 4.82 Thailand 121.02 124.42 3.40 Vietnam 246.33 251.03 4.70 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 10-Jul 11-Jul Gold Spot (in US$ per 1,259.7 1,284.2 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change 1.94

Page 4 of 6


CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Moody's

Fitch

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

9-Jul

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012

3.600 2.516 7.756 0.875 3.590 3.665 4.306 2.569 3.710 8.883

10-Jul 3.510 2.398 7.925 0.857 3.510 3.703 4.281 2.526 3.740 8.979

bps change

2013 YTD (bps)

-9.000 -11.800 16.900 -1.800 -8.000 3.800 -2.500 -4.300 3.000 9.600

29.000 200.200 311.900 67.200 53.000 51.800 16.560 219.600 54.500 -67.100

2013

31-Oct 30-Nov 31-Dec 31-Jan 28-Feb 31-Mar 30-Apr 31-May 30-Jun China 3,287.4 3,297.7 3,311.6 3,410.1 3,395.4 3,442.7 n.a n.a n.a Hong Kong SAR 301.7 305.2 317.3 304.7 304.8 303.8 306.5 305.7 303.5 Indonesia 110.3 111.3 112.8 108.8 105.2 104.8 107.3 105.1 98.1 Japan 1,274.2 1,270.9 1,268.1 1,267.3 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 Korea 323.5 326.1 327.0 328.9 327.4 327.4 328.8 328.1 326.4 Malaysia 138.3 139.1 139.7 140.2 140.3 139.7 140.3 141.4 136.1 Philippines 81.7 83.9 83.8 85.3 83.6 84.0 83.2 82.0 81.6 Singapore 254.2 255.8 259.3 258.8 259.1 258.2 261.7 258.4 259.8 Thailand 181.5 181.6 181.6 181.6 179.2 177.8 177.8 175.3 170.8 Vietnam 21.4 23.2 n.a n.a n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS* 3 months imports Import cover (Qtrs Short-term Int'l Reserves of goods & of imports Reserves over external debt services covered by short-term debt (US$bn) (US$bn) (US$bn) reserves) China 3,442.7 523.3 565.7 6.6 6.1 Hong Kong SAR 303.5 149.7 745.6 2.0 0.4 Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,238.7 80.1 2,147.9 15.5 0.6 Korea 326.4 155.1 126.7 2.1 2.6 Malaysia 136.1 57.1 32.9 2.4 4.1 Philippines 81.6 17.2 9.8 4.7 8.3 Singapore 259.8 118.2 968.3 2.2 0.3 Thailand 170.8 66.9 62.1 2.6 2.8 Vietnam 23.2 30.9 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of

Page 5 of 6


4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

INDONESIA JAPAN SOUTH KOREA

Indicators

Bank Indonesia Reference Rate% Machine Orders YOY% South Korea 7-Day Repo Rate %

Period

Jul 11 May Jul 11

Last

Previous

6.50 16.5 2.50

6.00 -1.1 2.50

SELECTED ECONOMIC RELEASES CALENDAR (8 – 12 JULY 2013) Expected Release Date

7/8/2013

7/9/2013 7/10/2013

7/11/2013

7/12/2013

Economies

INDONESIA JAPAN JAPAN SINGAPORE CHINA CHINA CHINA CHINA CHINA SOUTH KOREA PHILIPPINES SOUTH KOREA JAPAN THAILAND CHINA CHINA INDONESIA JAPAN SOUTH KOREA MALAYSIA THAILAND SINGAPORE SINGAPORE JAPAN JAPAN

Indicators

Consumer Confidence Index Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD mn) Consumer Price Index (YoY)% Producer Price Index (YoY)% Trade Balance (USD bn) Exports YoY% Imports YoY% Unemployment Rate (SA)% Total Exports (YoY)% Bank Lending to HH (KRW Tln) Consumer Confidence Benchmark Interest Rate New Yuan Loans (RMB bn) Foreign Exchange Reserves (USD bn) Bank Indonesia Reference Rate% Machine Orders YOY% South Korea 7-Day Repo Rate % Overnight Rate % Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% Industrial Production YOY% Capacity Utilization (MoM)%

Period

Jun May May Jun Jun Jun Jun Jun Jun Jun May Jun Jun Jul 10 Jun Jun Jul 11 May Jul 11 Jul 11 Jul 5 2Q A 2Q A May F May F

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 6 of 6


MARKET UPDATE FOR ASEAN+3 12 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks rose, with the regional benchmark index headed for its biggest weekly advance since April, amid optimism central bank stimulus and improving economic growth in the U.S. will buoy equities. The MSCI Asia Pacific Index advanced 0.2 percent to 135.38 as of 2:38 p.m. in Hong Kong, extending its rally to 8.3 percent from a six-month low on June 25. The gauge has climbed 3.1 percent this week as the Federal Reserve and the Bank of Japan signaled they will maintain measures to boost their economies. Asian currencies headed for their biggest weekly gain in 10 months after the Fed eased concern a reduction in stimulus. The Bloomberg-JPMorgan Asia Dollar Index rose 0.7 percent this week as Bernanke said July 10 that “highly accommodative”monetary policy will be needed for the “foreseeable future.” The gauge has lost 1.1 percent since May 22, when the Fed indicated its bond buying could be tapered. The won led gains and was set for its biggest weekly advance since 2011 as the Bank of Korea boosted the nation’s 2013 growth projection to 2.8 percent from an April estimate of 2.6 percent. Wheat heading for best week in two months as U.S. trims supplies. The contract for September delivery fell 0.3 percent to $6.81 a bushel on the Chicago Board of Trade at 1:50 p.m. after earlier rising 0.2 percent. Futures are heading for a 3.2 percent rise this week, the most since the five days to May 3. Stockpiles in the U.S., the largest shipper, will be 576 million bushels (15.68 million metric tons) at the end of the year to May 31, down from 659 million bushels projected last month, with an increase in exports forecast, said the Department of Agriculture. China will import 8.5 million tons in the year that began July 1, the most since 1995-1996, USDA data show.

BREAKING NEWS GLOBAL NEWS •

U.S. and European Union financial regulators took a step toward bringing derivatives trading under an integrated framework of global regulation designed to reduce risks in the $633 trillion swaps market. The accord, announced jointly yesterday in Brussels and Washington by the EU and the U.S. Commodity Futures Trading Commission, broke a deadlock over whether the U.S. could impose its rules on trades booked in Europe. Banks and other swaps traders said the deal reduces the chance they will be forced to comply with conflicting regulatory regimes. The CFTC is set to officially complete its guidance on the reach of its rules today after CFTC Chairman Gary Gensler and Mark Wetjen, a Democratic commissioner, resolved differences that had divided the commission’s three Democrats, according to four people with knowledge of their talks. The two reached agreement on the principles and were drafting a document with the details, the people said. India said to plan talks on overseas debt sale to aid rupee. India’s government plans to meet as many as eight bankers as it weighs selling debt abroad to raise dollars and help steady the rupee, according to two Finance Ministry officials with direct knowledge of the matter. Any issuance of sovereign dollar bonds for overseas investors would be the first in the nation’s history, while the country in 1998 and at the turn of the millennium sold foreign-currency debt to non-resident Indians. The rupee was the world’s worst performer against the dollar last

Page 1 of 7


month and touched an all-time low July 8, fueling concern India needs higher reserves to stabilize it. Standard & Poor’s raised its outlook on Ireland’s sovereign rating today, saying the government may exceed its targets for debt reduction as the economy recovers. The ratings company lifted the outlook on the nation’s BBB+ grade to positive from stable, it said in a statement today. There is a one-in-three chance the rating will be raised in the next two years. “Ireland could over-achieve its fiscal targets and reduce its government debt faster than we currently expect,” S&P said.“Ireland’s economic recovery is under way.”

REGIONAL •

Chinese Finance Minister Lou Jiwei signaled Chinese economy may expand less than the government’s target this year and that growth as low as 6.5 percent may be tolerable in the future. While the government in March set a 2013 growth goal of 7.5 percent, Lou said he’s confident in achieving a 7 percent rate this year. He spoke yesterday at the U.S.-China Strategic and Economic Dialogue in Washington. “We don’t think 6.5 percent or 7 percent will be a big problem,” Lou said at a press briefing in response to a question on whether there’s a limit on slower growth that officials will tolerate. “It’s difficult to give you a limit. But from the data we have, we have the confidence.” China’s money-supply growth trailed estimates in June while new local-currency loans were more than forecast. M2 money supply rose 14.0 percent, the People’s Bank of China said today in Beijing. That compared with the median economist estimate of 15.2 percent and a 15.8 percent pace in May. New yuan loans were 860.5 billion yuan ($140 billion) compared with the 800 billion yuan median analyst estimate and 919.8 billion yuan a year ago. Aggregate financing, the government’s broadest measure of credit, was 1.04 trillion yuan, down from 1.78 trillion yuan in June 2012. Japan’s utilities used less crude and fuel oil in June as the operation of two nuclear reactors and new coal-fired units helped them reduce reliance on more-expensive sources. Japan’s 10 regional power utilities consumed about 770,000 kiloliters of crude in June, down 27 percent from a year earlier, according to data released today by the Federation of Electric Power Cos. of Japan. Fuel oil usage fell 37 percent to about 744,000 kiloliters, the data shows. The 10 regional companies generated and purchased 70.91 billion kilowatt-hours of electricity last month, up 0.6 percent from a year earlier, according to the data. Warmer temperatures raised electricity demand for air conditioning, the federation said in a statement. Myanmar's president has signed a law giving the central bank more autonomy from the Finance Ministry and opening the way for development of the fledgling banking sector. Stateowned MRTV television reported the enactment by President Thein Sein late on Thursday. The law is part of a series of economic and political reforms pushed through by the quasi-civilian government of Thein Sein, in office since nearly half a century of military rule ended in March 2011. Rules governing the central bank have to be adopted within three months of the law coming into force. Singapore’s economy expanded more than economists estimated last quarter as manufacturing rebounded and services strengthened. Gross domestic product rose an annualized 15.2 percent in the three months through June from the previous quarter, when it grew 1.8 percent, the Trade Ministry said in a statement today. That compares with the median of 12 estimates in a Bloomberg News survey for an 8.1 percent expansion. GDP expanded 3.7 percent last quarter from a year earlier, better than the median estimate of 2 percent growth in

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a separate Bloomberg survey. The government forecasts growth of 1 percent to 3 percent in 2013. Rising local demand has shielded some Asian nations from an uneven global recovery, with Singapore’s jobless rate near a five-year low spurring private consumption. Singapore’s central bank fined 22 firms over money laundering. The Monetary Authority of Singapore also issued 47 warnings and reprimands and ordered “a few” financial firms to review their anti-money laundering framework, Lee Boon Ngiap, an assistant managing director at the regulator, said in a speech today. Lee didn’t identify the firms involved. Singapore tightened money laundering laws in an effort to guard its reputation as the hub of Asia’s private banking and offshore industry. The city made tax evasion a money laundering offense on July 1 and boosted the number of jurisdictions with which it trades information on tax issues by 11. Vietnam President Truong Tan Sang plans to visit the U.S. to meet President Barack Obama as the former foes seek closer economic and military ties. Obama will meet Sang on July 25 to discuss human rights, climate change and Trans-Pacific Partnership (TPP) trade talks, the White House said in a statement. Sang, who visited China last month, is one of the three senior-most leaders in Vietnam, with Prime Minister Nguyen Tan Dung running the government and Nguyen Phu Trong heading the Communist Party. In the TPP talks, Vietnam is looking to reduce tariffs on clothing and shoe exports to the U.S., said Adam Sitkoff, executive director of the American Chamber of Commerce in Vietnam. The U.S. wants Vietnam to stop giving preferential treatment to state-owned companies, he said.

IFIs NEWS (compiled from their websites) IFC – Press Release: IFC and China's Central Bank’s Think Tank Cooperate to Promote Inclusive Financing •

IFC and the Research Institute of Finance and Banking of China’s central bank have signed a cooperation agreement to jointly research optimal regulatory conditions that help making financing more readily available in China's underdeveloped rural areas and among small businesses. Under the agreement, IFC and the Research Institute of Finance and Banking will study international best practices and China’s market situation to identify an appropriate operating environment for rural and microfinance institutions and for innovative payment solution which can promote financial inclusion. “Financing needs in East Asia are enormous with an estimated credit gap of around $1 trillion for micro, small, and medium enterprises,” said IFC Executive Vice President and CEO Jin-Yong Cai. “IFC is committed to developing effective and inclusive financial systems that help address the unmet demand for credit, reduce poverty, and promote sustainable economic growth.” http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/0A3DDCDA91AF0CF985257BA50031 D416

IMF – Working Paper: “Determinants of Sovereign Bond Spreads in Emerging Markets: Local Fundamentals and Global Factors vs. Ever-Changing Misalignments” •

The IMF has publicised the captioned working paper. “We analyze the relationship between global and country-specific factors and emerging market debt spreads from three different angles. First, we aim to disentangle the effect of global and country-specific developments, and find that while both country-specific and global developments are important in the long-run, global factors are main determinants of spreads in the short-run. Second, we investigate whether and how the strength of fundamentals is related to the sensitivity of spreads to global factors. Countries with stronger fundamentals tend to have lower sensitivity to changes in global risk aversion. Third, we decompose changes in spreads and analyze the behavior of explained and unexplained components over different periods. We find that changes in spreads follow

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periods of tightening/widening, which are well-explained by the model; and the dynamics of the components of the unexplained residual follow all the major developments that impact market sentiment. In particular, we find that in the periods of severe market stress, such as during the intensive phase of the Eurozone debt crisis, global factors tend to drive changes in the spreads and the misalignment tends to increase in magnitude and its relative share in actual spreads.” http://www.imf.org/external/pubs/ft/wp/2013/wp13164.pdf World Bank – Publication: “Taking Stock: An Update on Vietnam’s Recent Economic Developments - July 2013” •

The World Bank has publicised the above-stated report and an infographic which depicts the recent economic development in Vietnam. The macroeconomic conditions in Vietnam are relatively stable and their external balances are strong. The economy is expected to grow at a moderate rate of around 5.3 percent during 2013 and 5.4 percent in 2014. Inflation is expected to increase to around 8.2 percent at the end of 2013. http://www.worldbank.org/en/news/feature/2013/07/12/taking-stock-july-2013-an-update-onvietnams-recent-economic-development-key-findings (Key Findings of the Report) http://www.worldbank.org/content/dam/Worldbank/document/EAP/Vietnam/Taking-StockJul2013-final-Eng.pdf (Report) http://www.worldbank.org/en/news/feature/2013/07/12/infographic-an-update-on-vietnamsrecent-economic-development-july-2013 (Infographic)

FOREIGN CURRENCY EXCHANGE RATES

Previous wk's 11-Jul 12-Jul close China 6.23 6.14 6.13 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,004.00 9,973.00 9,991.00 Japan 86.75 99.14 98.96 99.06 Korea 1,064.40 1,142.06 1,122.41 1,124.47 Malaysia 3.06 3.16 3.17 3.18 Philippines 41.01 43.14 43.30 43.40 Singapore 1.22 1.27 1.26 1.26 Thailand 30.59 31.05 31.10 31.17 Vietnam 20,840.00 21,205.00 21,233.00 21,222.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.5 -0.1 -3.4 -11.8 -5.4 -4.5 -5.9 -3.4 -2.7 -1.8

% change -0.11 -0.01 -0.18 -0.10 -0.18 -0.29 -0.23 -0.32 -0.22 0.05

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,979.2 20,803.3 4,818.9 13,677.3 1,863.3 1,773.5 6,465.3 3,150.4 1,451.9 481.1

11-Jul 2,073.0 21,437.5 4,604.2 14,472.6 1,877.6 1,781.2 6,407.4 3,248.9 1,447.0 484.5

OVERNIGHT LENDING RATE (%) 11-Jul 12-Jul bps change 3.360 3.300 -6.00 0.083 0.081 -0.14 4.316 4.904 58.79 0.095 0.093 -0.25 2.500 2.500 0.00

12-Jul 2,039.5 21,277.3 4,633.1 14,506.3 1,870.0 1,785.7 6,574.2 3,232.9 1,452.2 494.0

% change -1.62 -0.75 0.63 0.23 -0.41 0.25 2.60 -0.49 0.35 1.97

2013 YTD (%chg) -10.1 -8.7 6.6 39.5 -7.9 6.6 12.2 1.0 3.2 18.1

3-MONTH INTERBANK LENDING RATE (%) 11-Jul 12-Jul bps change 4.696 4.691 -0.45 0.381 0.382 0.07 5.397 6.046 64.93 0.230 0.230 0.00 2.650 2.650 0.00

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Malaysia Philippines Singapore Thailand Vietnam

3.000 -1.205 0.035 2.500 0.775

3.000 1.044 0.035 2.500 0.933

0.00 224.90 0.00 0.00 15.80

3.200 0.244 0.374 2.602 3.600

3.200 0.448 0.374 2.602 3.733

0.00 20.40 -0.01 0.00 13.30

CREDIT DEFAULT SWAP (IN BPS) 10-Jul 11-Jul bps change China 124.39 117.07 -7.32 Hong Kong SAR 59.25 57.80 -1.45 Indonesia 229.73 206.77 -22.96 Japan 70.69 67.74 -2.95 Korea 90.67 86.28 -4.39 Malaysia 124.87 118.52 -6.35 Philippines 129.91 121.20 -8.71 Thailand 124.42 119.53 -4.89 Vietnam 251.03 241.33 -9.70 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 11-Jul 12-Jul Gold Spot (in US$ per 1,286.0 1,276.2 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change -0.77

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Moody's

Fitch

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

SOVEREIGN BOND RATES (%, 5-YEAR) Previous wk's 2012 close close 3.220 3.270 China 0.396 1.148 Hong Kong SAR 4.806 6.336 Indonesia 0.185 0.355 Japan 2.980 3.320 Korea 3.185 3.329 Malaysia 4.115 3.165 Philippines 0.330 1.300 Singapore 3.195 3.400 Thailand 9.650 7.800 Vietnam Latest data are available on a one-day lag.

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

10-Jul 3.510 2.398 7.925 0.857 3.510 3.703 4.281 2.526 3.740 8.979

11-Jul 3.600 2.355 7.881 0.823 3.370 3.690 4.302 2.498 3.710 8.839

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

China Hong Kong SAR Indonesia Japan Korea Malaysia

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3

2012

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1

31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3

bps change

2013 YTD (bps)

9.000 -4.300 -4.400 -3.400 -14.000 -1.300 2.100 -2.800 -3.000 -14.000

38.000 195.900 307.500 63.800 39.000 50.500 18.660 216.800 51.500 -81.100

2013

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3

31-May n.a 305.7 105.1 1,250.2 328.1 141.4

30-Jun n.a 303.5 98.1 1,238.7 326.4 136.1

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Philippines 81.7 83.9 83.8 85.3 83.6 84.0 83.2 82.0 81.6 Singapore 254.2 255.8 259.3 258.8 259.1 258.2 261.7 258.4 259.8 Thailand 181.5 181.6 181.6 181.6 179.2 177.8 177.8 175.3 170.8 Vietnam 21.4 23.2 n.a n.a n.a n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves EXTERNAL LIQUIDITY RATIOS* 3 months imports Import cover (Qtrs Short-term Int'l Reserves of goods & of imports Reserves over external debt services covered by short-term debt (US$bn) (US$bn) (US$bn) reserves) China 3,442.7 523.3 565.7 6.6 6.1 Hong Kong SAR 303.5 149.7 745.6 2.0 0.4 Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,238.7 80.1 2,147.9 15.5 0.6 Korea 326.4 155.1 126.7 2.1 2.6 Malaysia 136.1 57.1 32.9 2.4 4.1 Philippines 81.6 17.2 9.8 4.7 8.3 Singapore 259.8 118.2 968.3 2.2 0.3 Thailand 170.8 66.9 62.1 2.6 2.8 Vietnam 23.2 30.9 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

SINGAPORE SINGAPORE JAPAN JAPAN

Indicators

GDP (YoY)% GDP (QoQ)% Industrial Production YOY% Capacity Utilization (MoM)%

Period

2Q A 2Q A May F May F

Last

Previous

3.7 15.2 -1.1 2.3

0.2 1.8 -1.0 1.6

SELECTED ECONOMIC RELEASES CALENDAR (8 – 12 JULY 2013) Expected Release Date

7/8/2013

7/9/2013 7/10/2013

7/11/2013

Economies

INDONESIA JAPAN JAPAN SINGAPORE CHINA CHINA CHINA CHINA CHINA SOUTH KOREA PHILIPPINES SOUTH KOREA JAPAN THAILAND CHINA CHINA INDONESIA JAPAN SOUTH KOREA

Indicators

Consumer Confidence Index Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD mn) Consumer Price Index (YoY)% Producer Price Index (YoY)% Trade Balance (USD bn) Exports YoY% Imports YoY% Unemployment Rate (SA)% Total Exports (YoY)% Bank Lending to HH (KRW Tln) Consumer Confidence Benchmark Interest Rate New Yuan Loans (RMB bn) Foreign Exchange Reserves (USD bn) Bank Indonesia Reference Rate% Machine Orders YOY% South Korea 7-Day Repo Rate %

Period

Jun May May Jun Jun Jun Jun Jun Jun Jun May Jun Jun Jul 10 Jun Jun Jul 11 May Jul 11

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7/12/2013

MALAYSIA THAILAND SINGAPORE SINGAPORE JAPAN JAPAN

Overnight Rate % Foreign Reserves (USD bn) GDP (YoY)% GDP (QoQ)% Industrial Production YOY% Capacity Utilization (MoM)%

Jul 11 Jul 5 2Q A 2Q A May F May F

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

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MARKET UPDATE FOR ASEAN+3 16 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS 

Japan’s Stock Index Outperforms Asia. Japan's Nikkei 225 hit a new seven-week high as the stock exchange resumed trade after being shut for a long weekend, closing 0.6 percent higher at 14,599. China’s Shanghai Composite Index added 0.3 percent while Indonesia’s Jakarta Stock Exchange Composite Index and Vietnam’s VN-Index closed at 0.2 percent and 0.4 percent higher than yesterday, respectively. Hong Kong’s Hang Seng Index advanced marginally at 0.04 percent. Among the losers, Korea’s Kospi dropped by 0.5 percent, Singapore’s Straits Times Index by 0.6 percent, Malaysia’s KLCI by 0.1 percent, the Philippines’ SE Composite Index 0.6 percent, and Thailand’s SET Index by 0.8 percent at 5.00 p.m. Singapore time.

Gold Drops for Third Day as Investors Await Bernanke Testimony. Gold declined for a third day on concern that gains last week may deter physical purchases, while investors weighed the U.S. Federal Reserve’s next move on monetary stimulus. Spot gold lost as much as 0.6 percent to $1,277.29 an ounce, and traded at $1,284.4 at 5.00 p.m. in Singapore. Gold for August delivery fell 0.4 percent to $1,278.30 an ounce on the Comex, after climbing 0.5 percent yesterday as U.S. retail sales rose less than expected in June, boosting the prospects for sustained stimulus. Holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, stood at 939.07 metric tons yesterday, unchanged for a third day.

BREAKING NEWS GLOBAL NEWS 

U.S. Consumers Hold Back as Retail Sales Moderate. American consumers kept their buying in check for goods other than automobiles in June, exercising a measure of self-restraint that indicates the economy ended the second quarter on a weak note. Sales at retailers climbed 0.4 percent last month, short of the 0.8 percent gain that was the median estimate of 82 economists surveyed by Bloomberg, according to Commerce Department figures issued today in Washington. Excluding the biggest gain at auto and parts dealers in seven months, demand was little changed from May. Manufacturing in the New York region, meanwhile, expanded in July at the fastest pace in five months as factories stabilized amid the slowdown in growth, other data showed today. The Federal Reserve Bank of New York’s general economic index climbed to 9.5, the highest since February, from 7.8 last month.

U.K. Inflation Accelerates Less Than Economists Forecast. U.K. inflation accelerated less than economists forecast in June as airfares and food costs offset an increase in fuel prices. Consumer prices rose 2.9 percent from a year earlier, compared with 2.7 percent in May, the Office for National Statistics said in London today. The median forecast of 31 economists in a Bloomberg News survey was 3 percent. Core inflation, which excludes food, alcohol, energy and tobacco, accelerated to 2.3 percent in June from 2.2 percent the previous month, matching the median forecast of economists. Retail-price inflation, used in wage talks and as a basis for the inflation-linked bond market, quickened to 3.3 percent from 3.1 percent. The Bank of England, which targets a 2 percent inflation rate, forecasts that price gains will cool toward the goal as one-time factors drop out of calculations.

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Australia’s Central Bank Says Rate Appropriate after Aussie Drop, Has Room to Cut. RBA said the currency’s decline and past interest-rate cuts meant its policy setting was appropriate even as it maintained room for future reductions, according to minutes of its July 2 meeting. Governor Glenn Stevens and his board lowered borrowing costs by 2 percentage points to a record-low 2.75 percent since late 2011, joining global counterparts in embracing low rates to help combat currency strength. He is aiming to rebalance growth as a mining-investment boom peaks and manufacturers struggle. A 12-percent decline in the Australian dollar last quarter eased pressure on the governor to cut rates again. “The inflation outlook, although slightly higher because of the exchange rate depreciation, could still provide some scope for further easing, should that be required to support demand,” the RBA said in the minutes today.

India’s Central Bank Tightens Policy to Arrest Rupee's Fall. The Reserve Bank of India increased the marginal standing facility rate and the bank rate to 10.25 percent from 8.25 percent late yesterday in Mumbai, according to a statement on its website. The monetary authority also said it will conduct open-market sales of government debt totalling 120 billion rupees ($2 billion) on July 18, a step that would drain cash from an economy expanding at the slowest pace in a decade. The RBI held its benchmark repurchase rate at 7.25 percent. India’s rupee advanced to a two-week high after the central bank raised two interest rates to support the currency which depreciated by more than 10 percent against the USD in the last two months. The RBI also said it will continue to closely monitor the situation and will take such other measures as necessary.

REGIONAL 

Brunei’s Banks are 'Adjusting' to New Rates. Financial institutions are coping with the new lending and deposit rates imposed by the country's central bank, said Terence Cuddyre, chairman of the Brunei Association of Banks. In March, the AMBD revised interest rates for loans, capping effective interest rate or annualised profit rate (EIR/APR) for residential financing at 4.5 per cent per annum. Credit facilities against fixed deposits under lien to the bank (excluding credit cards) are subject to a maximum of EIR/APR of 5.0 per cent, while a rate of 5.25 per cent was imposed on non-property credit facilities against property charged. A revised minimum savings deposit rate of 0.15 per cent per annum is now applicable for new and existing savings. The revised financing and deposit rates have been a "challenge" for several financial institutions, said Cuddyre, who is also the managing director of Citibank Brunei and cluster head for Brunei, Bangladesh and Sri Lanka.

China's Housing Demand Stays Buoyant Despite Policies. China's real estate sector showed strength in the first half of the year amid solid housing demand, despite government controls on the market and slowing economic growth. Total property investment in China in the first half of the year rose 20.3 percent compared with a year earlier to 3.68 trillion yuan (USD 599.3 billion), according to data released Monday by the National Bureau of Statistics, which is marginally slower than the 20.6 percent growth in the first five months of the year. Residential and commercial property sales totaled 3.34 trillion yuan in the January-June period, up 43.2 percent over a year earlier. Construction starts by area in the first half rose 3.8 percent from a year earlier to 959.01 million square meters, compared to a one-percent increase in the January-May period.

Indonesia’s Palm Reserves in Indonesia Seen Falling to Lowest in a Year. Palm oil inventories in Indonesia, the world’s largest producer, probably dropped in June to the lowest level in a year as domestic consumption and exports gained to meet increased demand for the Muslim month

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of Ramadan. Communal meals during the fasting month of Ramadan, which started on July 10 in Indonesia this year, typically boost total palm demand. Stockpiles contracted 7.7 percent to 2.4 million tons from May, the median of estimates from five plantation executives and a refiner compiled by Bloomberg showed. That’s the lowest since 1.85 million tons estimated in June 2012. Shipments rose 2.2 percent to 1.86 million tons and output gained 19 percent to 2.38 million tons compared with May, the median showed. 

Korea's Direct Investment in Foreign Shares Surges in H1. The amount of direct overseas stock investment by local investors reached USD 11.8 billion in the six-month period, up 25.26 percent from a year earlier, according to the Korea Securities Depository (KSD). Market watchers said the increase came as the growth of Korea’s stock market lagged far behind those of advanced countries, inducing local investors to scoop up overseas shares. Korean investors held $2.3 billion worth of U.S. shares over the January-June period, posting a near three-fold growth from a year earlier. Their equity investment in the eurozone and Japanese stock markets soared 8.5 percent and 31.8 percent, respectively, to reach $8.4 billion and $276.9 million. Local investors also increased their bets on Hong Kong and Chinese shares, which advanced 39.5 percent and 114 percent, respectively, to reach $568 million and $5.78 million.

Moody’s Sounds Concern on Singapore Banking. Moody’s on Monday lowered its outlook for Singapore’s banking sector from “stable”, where the outlook had been since 2010, to “negative”. The banks covered include the city-state’s three biggest: DBS, United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC), as well as Bank of Singapore, OCBC’s private banking arm. Together they account for about 60 per cent of bank deposits in Singapore. The move is an early warning sign over a build-up of household borrowing in the region, whose main economies are being driven less by exports and more by domestic demand, in part fuelled by years of low interest rates. Moody’s said rapid loan growth and rising property prices had “increased the probability of deterioration in the banks’ credit profiles under potential adverse conditions in the future”. The banks’ individual ratings were unchanged. All four are rated Aa1, making them among the highest-rated banks in the world.

Vietnam’s Banks Issue Low Interest Loans. Banks have begun to grant subsidized loans to lowincome borrowers and Government workers for buying homes under the VND 30 trillion (USD 1.43 billion) stimulus package. According to the Ministry of Construction, 30 property developers, of which three are State-owned enterprises, have been short-listed for being eligible for the loan program. Several projects to convert into social housing are also being evaluated, said the ministry, adding that the list of those eligible would be submitted to the State Bank of Vietnam (SBV) and commercial banks within two weeks. The ministry said that it would work with SBV to identify difficulties with procedures to speed up the granting of loans from the support package.

IFIs NEWS (compiled from their websites) ADB – Press Release: PINAI Fund to Finance Wind Power Project in Northern Philippines  The Philippine Investment Alliance for Infrastructure (PINAI), a fund which is partly financed by the ADB, is investing up to $85 million for a wind farm project in the northern part of the country. The 81-megawatt project – PINAI’s first investment ever – is a joint venture with AC Energy Holdings Inc., a wholly-owned subsidiary of Ayala Corporation, and UPC Renewables Partners (UPC) through UPC Philippines Wind Holdco BV. “We are delighted that PINAI has

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selected a green power project as its first investment. It is aligned with our objective of making the country’s growth more inclusive and sustainable,” said Janette Hall, Senior Investment Specialist at ADB’s Private Sector Operations Department. http://www.adb.org/news/pinai-fund-finance-wind-power-project-northern-philippines (Press Release) http://www.adb.org/projects/45929-014/main (Project Data Sheet (PDS): Overview of PINAI) ADB – Publication: “Asian Development Outlook 2013 Supplement: Softening Growth Prospects for Developing Asia”  Continued tepid demand from the major industrial economies coupled with slower growth in the People’s Republic of China (PRC) are weighing on the outlook for developing Asia, says a new ADB report. According to the latest Asian Development Outlook Supplement released on July 16, 2013 ADB has trimmed the 2013 growth forecast for its’ 45 developing member countries to 6.3% and cut their 2014 forecast to 6.4%. In April, ADB had predicted the region to grow 6.6% this year and 6.7% next year. “The drop in trade and scaling back of investment are part of a more balanced growth path for China, and the knock-on effect of its slower pace is definitely a concern for the region. But we are also seeing more subdued activity across much of developing Asia,” said ADB Chief Economist Changyong Rhee. http://www.adb.org/news/challenge-asia-maintain-growth-momentum-adb-report (Press Release) http://www.adb.org/sites/default/files/pub/2013/ado-supplement-july-2013.pdf (Report) http://www.adb.org/publications/asian-development-outlook-2013-supplement-softeninggrowth-prospects-developing-asia (Overview of the Report) IMF – Publication: “Spain: Financial Sector Reform—Third Progress Report”  On July 15, 2013, the IMF has publicised the above-stated report pertaining to the progress of the financial sector reform in Spain. Spain is undertaking a major program of financial sector reform with support from the European Stability Mechanism (ESM) which is in accordance with its’ request for financial assistance put forward to the European Financial Stability Facility (EFSF) on June 25, 2012 to support the on-going restructuring and recapitalization of its financial sector. This report provides information and analysis on the status of Spain’s financial sector reform program. http://www.imf.org/external/pubs/ft/scr/2013/cr13205.pdf MIGA – Press Release: Keiko Honda Takes Up Post as MIGA Executive Vice President  On July 15, 2013, Keiko Honda joined MIGA as its Executive Vice President. Ms Honda, a Japanese national, is the Agency’s sixth head in its 25-year history. She joins MIGA from McKinsey & Company where she was a Director and the company’s first woman senior partner in Asia. “I am very pleased to join MIGA and welcome this opportunity as the Agency strengthens its role with another record year in supporting investments into those countries that need it the most,” said Honda. “My top priority will be to carry on this significant work that helps end poverty, improve lives, and boost shared prosperity.” http://www.miga.org/news/index.cfm?stid=1837&aid=3537

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FOREIGN CURRENCY EXCHANGE RATES Previous wk's 15-Jul 16-Jul close China 6.23 6.14 6.14 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 9,991.00 10,074.00 10,103.00 Japan 86.75 99.22 99.86 99.67 Korea 1,064.40 1,124.47 1,121.88 1,118.00 Malaysia 3.06 3.18 3.19 3.19 Philippines 41.01 43.40 43.45 43.31 Singapore 1.22 1.26 1.26 1.26 Thailand 30.59 31.14 31.12 31.08 Vietnam 20,840.00 21,223.00 21,228.00 21,223.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.6 -0.1 -4.5 -12.4 -4.9 -4.8 -5.7 -3.2 -2.4 -1.8

% change 0.04 0.02 -0.29 0.19 0.35 0.09 0.32 0.05 0.13 0.02

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,039.5 21,277.3 4,633.1 14,506.3 1,870.0 1,785.7 6,574.2 3,236.1 1,453.7 494.0

15-Jul 2,059.4 21,303.3 4,635.7 14,506.3 1,875.2 1,786.7 6,620.0 3,236.8 1,455.4 494.1

OVERNIGHT LENDING RATE (%) 15-Jul 16-Jul bps change 3.300 3.000 -30.00 0.081 0.082 0.04 4.900 4.882 -1.79 0.095 0.073 -2.25 2.500 2.500 0.00 3.000 3.000 0.00 0.497 -0.570 -106.70 0.035 0.035 0.00 2.500 2.500 0.00 1.833 2.500 66.70

16-Jul

% change

2,065.7 21,312.4 4,644.0 14,599.1 1,866.4 1,784.6 6,583.6 3,218.0 1,444.2 496.2

0.31 0.04 0.18 0.64 -0.47 -0.12 -0.55 -0.58 -0.77 0.43

2013 YTD (%chg) -9.0 -8.6 6.8 40.4 -8.1 6.6 12.3 0.5 2.6 18.6

3-MONTH INTERBANK LENDING RATE (%) 15-Jul 16-Jul bps change 4.679 4.670 -0.82 0.382 0.383 0.07 6.097 6.085 -1.21 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.483 0.285 -19.80 0.376 0.376 0.03 2.602 2.602 0.00 4.350 5.000 65.00

CREDIT DEFAULT SWAP (IN BPS) 12-Jul 15-Jul bps change China 112.69 111.71 -0.98 Hong Kong SAR 56.31 56.33 0.02 Indonesia 210.62 207.74 -2.88 Japan 66.25 66.27 0.02 Korea 84.31 82.84 -1.47 Malaysia 115.13 113.66 -1.47 Philippines 117.39 118.37 0.98 Thailand 116.14 113.68 -2.46 Vietnam 236.63 236.07 -0.56 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 15-Jul 16-Jul Gold Spot (in US$ per 1,284.7 1,284.4 ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change -0.02

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CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 10-YEAR) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Note: Latest data are available on a one-day lag.

12-Jul

15-Jul

3.610 2.277 7.980 0.822 3.390 3.699 4.183 2.449 3.700 8.971

3.600 2.320 8.211 0.822 3.430 3.703 4.202 2.486 3.710 8.927

bps change

2013 YTD (bps)

-1.000 4.300 23.100 0.000 4.000 0.400 1.900 3.700 1.000 -4.400

38.000 192.400 340.500 63.700 45.000 51.800 8.660 215.600 51.500 -72.300

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012

2013

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun n.a 303.5 98.1 1,238.7 326.4 136.1 81.6 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (US$bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Reserves over short-term debt

(US$bn) (US$bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.6 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of

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4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

SELECTED ECONOMIC RELEASES CALENDAR (15-19 JULY 2013) Expected Release Date

7/15/2013

7/17/2013

7/18/2013 7/19/2013

Economies

CHINA CHINA CHINA CHINA KOREA SINGAPORE CHINA SOUTH KOREA SINGAPORE SINGAPORE MALAYSIA HONG KONG JAPAN JAPAN JAPAN SINGAPORE

Indicators

Industrial Production (YoY)% Retail Sales (YoY)% Real GDP (QoQ)% Real GDP (YoY)% FDI (YoY)% Retail Sales (YoY)% Actual FDI (YoY)% Producer Price Index (YoY)% Electronic Exports (YoY)% Non-oil Domestic Exports (YoY)% CPI YoY % Unemployment Rate SA% All Industry Activity Index (MoM) % Current Account Balance YOY% Current Account Total (JPY bn) Foreign Reserves (USD mn)

Period

Jun Jun 2Q 2Q 2Q May Jun Jun Jun Jun Jun Jun May May May Jun

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7


MARKET UPDATE FOR ASEAN+3 23 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Advance on China Growth, Fed Stimulus. Asian stocks rose, extending a twomonth high, after Premier Li Keqiang said China’s economy won’t grow any slower than 7 percent and as U.S. housing data damped concerns the Federal Reserve will reduce stimulus. The MSCI Asia Pacific Index climbed 1 percent to 137.35 as of 3:28 p.m. in Tokyo, with about four stocks rising for each that fell. The Shanghai Composite Index (SHCOMP) jumped 1.6 percent. China’s “bottom line” for gross domestic product growth is 7 percent and the nation can’t let growth go below that, Beijing News reported today, citing Premier Li’s comments at a recent meeting with economists and business people. Most European Stocks Climb as Royal KPN Gains. KPN jumped to a five-month high after saying it will sell its German mobile-phone business to Telefonica SA. Vivendi climbed the most in four months after saying it has held talks to sell a 53 percent stake in Maroc Telecom SA to Emirates Telecommunications Corp. Swatch (UHR) Group AG gained 1.8 percent after posting profit that beat estimates. The Stoxx 600 rose 0.1 percent to 300.53 at 9:04 a.m. in London, paring a gain of as much as 0.5 percent. Three stocks climbed for every two that dropped. Stocks rose for a fourth day yesterday as companies from UBS AG to Royal Philips Electronics NV reported increased profit. Standard & Poor’s 500 Index futures climbed 0.1 percent today, while the MSCI Asia Pacific Index advanced 1 percent. Goldman Reduces 12-Month Commodity Forecast After Crude’s Rally. Goldman Sachs Group Inc. pared its 12-month commodity return forecast to almost flat after oil rallied, sticking with a neutral recommendation on raw materials while predicting losses for gold and gains for base metals. The Standard & Poor’s GSCI Enhanced Commodity Index will return 0.1 percent over the period, the New York-based bank said in a report dated yesterday. That compares with a forecast gain of 2.3 percent over 12 months in a report on June 12.

BREAKING NEWS GLOBAL NEWS •

Bernanke Seen Tapering QE to $65 Billion in September in Survey. Federal Reserve Chairman Ben S. Bernanke in September will trim the Fed’s monthly bond buying to $65 billion from the current pace of $85 billion, according to a growing number of economists surveyed by Bloomberg News. Half of economists held that view in the July 18-22 survey, up from 44 percent in last month’s poll. Even as expectations of a September taper rose, 10-year Treasury yields continued to fall last week from an almost two-year high after Bernanke said reducing bondbuying wouldn’t constitute policy-tightening. “The markets have adjusted to the new information that the Fed is likely to reduce purchases over the near term, and they’ve come to terms with it,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. “Investors believe it won’t be a strong negative for the markets or the economy.” None of the 54 economists surveyed expects the Federal Open Market Committee to begin paring its purchases at its meeting scheduled for July 30-31. In its first trim, the FOMC will probably cut monthly bond buying by $20 billion, with purchases divided between $35 billion in Treasuries and $30 billion in mortgage-backed securities, according to the median estimate of economists.

Page 1 of 7


BRIC Bust Seen in Emerging Market Discontent with Growth. Stretched budgets and sluggish growth are putting emerging-market governments on a collision course with rising pressures from recently empowered middle classes for more spending and better services. From Jakarta to Brasilia, policy makers face the end to an era of abundant global liquidity that helped fuel the fastest expansion in three decades. In the eight weeks through July 17, investors pulled $40.3 billion from emerging-market bond and equity funds amid signs the Federal Reserve may begin reducing stimulus later this year. In 2012, $111 billion poured into these asset classes, according to EPFR Global in Cambridge, Massachusetts, which tracks money flows. The Fed’s plans didn’t trigger the slump -- after a decade of prosperity, the BRIC economies of Brazil, Russia, India and China (SHSZ300) have been slowing since 2010. Developing nations are punished more during downturns than their European counterparts because they depend on growth to mitigate social tensions, said Angel Gurria, secretary-general of the Organization for Economic Cooperation and Development. Merkel Makes Case for European Unity in Baltic Campaign Stop. Chancellor Angela Merkel pledged to keep Europe whole as she presses the euro area to become as competitive as Germany, honing her campaign message at a seaside rally in her home district two months before federal elections. Addressing a sun-drenched rally of her Christian Democratic Union in the Baltic Sea resort town of Zingst yesterday, Merkel said that growing up under Communism underpins her defense of European values. Europeans must stand together to compete in the global economy and to regulate financial markets, she said. “These are Europe’s treasures and we want to preserve them -- that’s why it’s worth standing up for Europe,” she told the crowd of about 1,500. “I and the CDU will fight for a Europe that’s fit for global competition but also a Europe that is our home, because that makes us stronger. Because how do we want to achieve goals -- how can we make sure that financial markets are regulated -- if we don’t speak with one voice in Europe?” Merkel, 59, is seeking a third term as leader of Europe’s biggest economy on the strength of shielding Germany from the worst of the euro-region debt crisis and presiding over the lowest unemployment in about two decades. While her bloc leads Peer Steinbrueck’s opposition Social Democrats by as many as 18 percentage points in polls, Germany’s electoral system means she needs a coalition partner to govern and cannot rely on victory.

REGIONAL NEWS •

China Sees 7% as Bottom-Line Growth Tolerable in Slowdown. Premier Li Keqiang’s government sees 7 percent growth as the bottom line for tolerance of an economic slowdown, Chinese news organizations reported, signaling the nation will act to support expansion if needed. Expansion below 7 percent won’t be tolerated because China needs to achieve a moderately prosperous society by 2020, according to a commentary published July 21 by the official Xinhua News Agency and credited to reporter Wang Yuewei. Li said at a recent meeting with economists that 7 percent is the “bottom line” and the nation can’t allow growth below that, the Beijing News reported today. Tepco Says Toxic Water Leaked to Sea From Fukushima Plant. Groundwater laced with radiation from melted reactors at the Fukushima Dai-Ichi atomic plant north of Tokyo has been leaking into the Pacific Ocean, raising concern the toxic water has been flowing into the sea since the disaster at the facility more than two years ago. Backtracking on previous comments, Tokyo Electric Power Co. (9501) confirmed the groundwater leaks last night, earning a rebuke from the government today to stop the leaks that Chief Cabinet Secretary Yoshihide Suga said

Page 2 of 7


were “serious.” Tepco, as the utility is known, suspected the breach after finding water levels in monitoring wells moving in sync with tidal flows, spokeswoman Kaoru Suzuki said by phone today. The operator doesn’t know when the leaks started or how much radiated water has drained into the ocean, she said. Water samples suggest contamination has been contained in the port area near the Fukushima plant, Suzuki said. Hyundai Files Police Complaint against Clash Activists. Hyundai Motor Co. (005380), South Korea’s largest automaker, filed a police complaint against 13 activists it says led a violent clash at its biggest assembly plant that left 82 employees injured. The three-hour dispute on July 20 between activists from the Korean Confederation of Trade Unions, an umbrella group of labor unions, and Hyundai security guards and managers caused about 2.2 billion won ($2 million) in damage, the Seoul-based carmakers said in an e-mail yesterday. About 100 people were injured in total, the trade union said on its website. Union workers at Hyundai, the subject of periodic wage protests including an August 2012 walkout that the company estimates to have cost a record 1.7 trillion won in lost production, weren’t part of the brawl. Some members of the group tried to use force to enter the plant in Ulsan, throwing bamboo sticks and stones at security personnel, who used fire hoses to keep them at bay, the automaker and labor body said. The company filed a complaint to Ulsan district police yesterday for obstruction of business and acts of violence, the company said today in an e-mailed response to Bloomberg. The police will begin an investigation, according to a policewoman at the Ulsan station, who asked not to be named, citing official policy. Indonesia Investment Rises at Slower Pace on Growth Concerns. Indonesia’s investment growth slowed last quarter and foreign firms are expected to turn more cautious this year, the country’s investment chief said. Total investment climbed 29.8 percent to 99.8 trillion rupiah ($9.8 billion) in the three months ended June 30 from a year earlier, the Investment Coordinating Board said in a statement in Jakarta today. In the first six months of 2013, investment rose 30.2 percent to 192.8 trillion rupiah from a year earlier. The World Bank cut its 2013 forecast for Indonesian growth to 5.9 percent this month. Policymakers in Southeast Asia’s largest economy are also struggling to contain inflation and a current-account deficit that has weakened the currency to a four-year low. Abenomics Boosts Singapore Bourse Profit. Singapore Exchange Ltd. (SGX) may post a 51 percent jump in fourth-quarter profit, the fastest growth in six years, as renewed interest in Japanese shares made it the No. 1 venue for trading Nikkei 225 Stock Average futures. SGX, as the operator of Southeast Asia’s largest stock market is known, will today report net income rose to S$92 million ($72.8 million) in the three months ended June 30 from S$61.07 million a year earlier, according to the average estimate by six analysts in a Bloomberg News survey. Japanese index futures contracts have become Singapore’s most actively traded, as Prime Minister Shinzo Abe’s reforms have spurred equities. Japan’s broader Topix index capped its biggest rally over three quarters in more than 30 years on June 30. The Nikkei 225 jumped 58 percent from Nov. 14, when elections that brought Abe to power were announced, through the end of June. The coalition led by Abe’s Liberal Democratic Party won a majority of upper house seats in elections this weekend. Thailand Boosts Solar Target by 50% to 3,000 Megawatt. Thailand will build 3,000 megawatts of solar power capacity by 2021, 50 percent more than previously announced, after approving new subsidized rates for rooftop and village-based projects. The government will work with the Village Fund, a state-run microcredit provider, to develop 800 megawatts of community-owned photovoltaic plants by the end of 2014, the Ministry of Energy said in a July 16 statement.In

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addition, 200 megawatts of rooftop installations built by the end of the year will be eligible for the special rates, it said. Half must be built on residential homes. Thailand follows Europe and Japan in offering feed-in tariffs, or fixed rates above the wholesale price of power, to attract investment into renewable energy. The country, which relies on fossil fuels for 80 percent of its energy consumption, seeks to build 13,927 megawatts of clean-energy capacity by 2021. IFIs NEWS (compiled from their websites) IMF – Policy Paper: “2013 Review of the Fund’s Transparency Policy” •

On June 24, 2013, the Executive Board of the IMF concluded the review of its’ Transparency Policy, based on a staff report titled 2013 Review of the Fund’s Transparency Policy. The paper discusses the IMF’s progress on transparency and issues that have emerged since the last review in 2009. The Executive Directors broadly agreed with the assessment and recommendations in the Staff Report as modified in Supplement 2. They noted that transparency is critical for the Fund to fulfill its mandate, and outlined its objectives. Specifically, transparency strengthens the effectiveness of the Fund by providing the public access to its views and deliberations, thus informing public debate and building traction for the Fund’s policy advice. Transparency supports the quality of surveillance and programs by subjecting the Fund to outside scrutiny. More generally, it enhances the Fund’s legitimacy by making it more accountable. http://www.imf.org/external/np/sec/pr/2013/pr13270.htm (Press Release) http://www.imf.org/external/np/pp/eng/2013/051413.pdf (Policy Paper published on May 14, 2013) http://www.imf.org/external/np/pp/eng/2013/051413a.pdf (Background Paper published on May 14, 2013 pertaining to the Policy Paper) http://www.imf.org/external/np/pp/eng/2013/051413b.pdf (Supplement 2: “Supplementary Information and Revised Proposed Decisions” published on June 17, 2013 pertaining to the Policy Paper)

UNCTAD – Press Release: Panel discusses Cambodia: bicycle industry challenges and the fate of trade benefits •

At a meeting entitled "Global value chains and rules of origin: Opportunities and challenges for Cambodia" which was held in Geneva, Switzerland on July 8, 2013, experts noted that Cambodia's expanding bicycle-manufacturing industry will face challenges if rules of origin for preferential tariffs are changed. The main topic of the meeting was the pending changes regarding rules of origin for exports to the European Union (EU) and Canada. Existing preferential trade rules have allowed Cambodia to enter new value chains and to diversify its export strategy from garments to higher-skill export products, especially bicycles. However, the EU and Canada are in the process of "graduating" countries from the UNCTAD’s Generalized System of Preferences (GSP) list, whereby with relevance to this list, Cambodia is entitled to enjoy favourable trade terms. UNCTAD is currently assisting the Government of Cambodia in complying with rules of origin requirements, and in developing trade policy options to address the country's current trade challenges. http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=578

FOREIGN CURRENCY EXCHANGE RATES Previous wk's 22-Jul 23-Jul close China 6.23 6.14 6.14 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,129.00 10,165.00 10,200.00 Japan 86.75 100.28 99.67 99.85 Korea 1,064.40 1,121.75 1,118.75 1,117.18 Malaysia 3.06 3.19 3.18 3.18 Philippines 41.01 43.33 43.24 43.20 Singapore 1.22 1.27 1.26 1.27 Thailand 30.59 31.08 30.93 30.96 Vietnam 20,840.00 21,223.00 21,223.00 21,228.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

% change 0.06 0.01 -0.34 -0.18 0.14 0.06 0.09 -0.40 -0.10 -0.02

2013 YTD (%chg) 1.6 -0.1 -5.4 -12.5 -4.8 -4.5 -5.4 -3.6 -2.0 -1.8

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STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,992.6 21,362.4 4,724.4 14,589.9 1,871.4 1,797.7 6,621.0 3,213.3 1,486.8 503.8

OVERNIGHT LENDING RATE (%) 22-Jul 23-Jul 3.400 3.500 0.082 0.084 4.850 4.850 0.070 0.073 2.500 2.500 3.000 3.000 1.006 0.309 0.037 0.037 2.500 2.500 3.860 4.662

22-Jul 2,004.8 21,416.5 4,679.0 14,658.0 1,880.4 1,797.7 6,627.4 3,234.4 1,481.8 506.2 bps change 10.00 0.14 0.00 0.25 0.00 0.00 -69.70 0.00 0.00 80.20

23-Jul

% change

2,043.9 21,915.4 4,767.2 14,778.5 1,904.2 1,805.3 6,743.2 3,251.4 1,506.4 504.3

1.95 2.33 1.88 0.82 1.27 0.42 1.75 0.53 1.66 -0.37

2013 YTD (%chg) -9.9 -6.0 9.7 42.2 -6.3 7.8 15.1 1.6 7.0 20.5

3-MONTH INTERBANK LENDING RATE (%) 22-Jul 23-Jul bps change 4.652 4.652 0.02 0.383 0.383 0.00 6.069 6.067 -0.14 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.496 0.524 2.80 0.376 0.376 0.00 2.600 2.600 0.00 4.775 5.125 35.00

CREDIT DEFAULT SWAP (IN BPS) 19-Jul 22-Jul bps change China 98.04 95.10 -2.94 Hong Kong SAR 52.36 52.34 -0.02 Indonesia 194.86 188.74 -6.12 Japan 64.27 63.28 -0.99 Korea 78.89 76.43 -2.46 Malaysia 105.37 101.96 -3.41 Philippines 110.64 104.84 -5.80 Thailand 106.37 103.46 -2.91 Vietnam 228.02 223.83 -4.19 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 22-Jul

23-Jul

Gold Spot 1,335.8 (in US$ per ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change

1,327.7

-0.61

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

Page 5 of 7


SOVEREIGN BOND RATES (%, 10-YEAR) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Note: Latest data are available on a one-day lag.

19-Jul

22-Jul

3.720 2.261 7.913 0.808 3.400 3.823 3.973 2.463 3.730 8.910

bps change

2013 YTD (bps)

4.000 -4.100 -9.200 -1.600 0.000 -1.900 0.800 -4.400 0.000 -2.600

54.000 182.400 301.500 60.700 42.000 61.900 -13.440 208.900 53.500 -76.600

3.760 2.220 7.821 0.792 3.400 3.804 3.981 2.419 3.730 8.884

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

2013

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun 3,500.0 303.5 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (USUSD bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Reserves over short-term debt

(USUSD bn) (USUSD bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.3 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

SINGAPORE

Indicators

CPI (YoY)%

Period

Jun

Last

Previous

1.8

1.6

Page 6 of 7


SELECTED ECONOMIC RELEASES CALENDAR (15-19 JULY 2013) Expected Release Date

7/22/2013 7/23/2013 7/24/2013

7/25/2013

7/26/2013

Economies

MALAYSIA HONG KONG SINGAPORE VIETNAM JAPAN JAPAN CHINA HONG KONG HONG KONG HONG KONG PHILIPPINES PHILIPPINES PHILIPPINES SOUTH KOREA SOUTH KOREA VIETNAM VIETNAM VIETNAM VIETNAM SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND

Indicators

Foreign Reserves (USD bn) CPI - Composite Index (YoY)% CPI (YoY)% CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % HSBC Flash China Manufacturing PMI Exports YoY% Imports YoY% Trade Balance (HKD bn) Budget Deficit/Surplus (PHP bn) Trade Balance (USD mn) Total Imports (YoY)% GDP (QoQ)% GDP (YoY)% Imports YTD (YoY)% Exports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index YoY % SK Consumer Confidence National CPI Ex Food, Energy YoY % National CPI YoY % Industrial Production YoY% Foreign Reserves (USD bn) Customs Exports (YoY)% Customs Imports (YoY)%

Period

Jul 15 Jun Jun Jul Jun Jun Jul Jun Jun Jun Jun May May 2Q P 2Q P Jul Jul Jul Jul Jul Jun Jun Jun Jul 19 Jun Jun

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7


MARKET UPDATE FOR ASEAN+3 24 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS 

Most Asian Stocks Fall as Preliminary China PMI Contracts. Most Asian stocks fell, with the regional benchmark index retreating from a two-month high, after a private survey showed China’s manufacturing contracting at a faster-than-estimated pace. The MSCI Asia Pacific Index fell 0.1 percent to 137.14 as of 2:20 p.m. in Hong Kong, reversing gains of as much as 0.2 percent. About five shares declined for every three that rose on the gauge. The measure dropped 4.9 percent through yesterday from this year’s high on May 20 amid signs China’s economic slowdown is deepening and concern the Federal Reserve will start tapering monetary stimulus as the U.S. economy improves. European Stocks Advance as Volvo, EasyJet Shares Jump. European stocks rose, rebounding from yesterday’s first drop in five days, as data signaled euro-area manufacturing is expanding for the first time in two years and companies from Volvo AB to EasyJet Plc posted results. U.S. index futures gained and Asian shares were little changed. The Stoxx Europe 600 Index added 0.5 percent to 300.85 at 9:06 a.m. in London. The gauge declined yesterday as a measure of U.S. manufacturing unexpectedly slumped. Standard & Poor’s 500 Index futures rose 0.2 percent today, while the MSCI Asia Pacific Index fell 0.1 percent. WTI Oil Fluctuates as U.S. Crude Stockpiles Seen Falling. West Texas Intermediate swung between gains and losses after data showed crude and fuel stockpiles shrank in the U.S., the world’s largest oil consumer, and China’s manufacturing slowed in July. Futures fluctuated in New York after rising 0.3 percent yesterday. U.S. crude inventories fell by 1.44 million barrels last week, the industry-funded American Petroleum Institute said. An Energy Information Administration report today will show supplies dropped by 2.8 million, according to a Bloomberg News survey. A preliminary gauge of China’s manufacturing from HSBC Holdings Plc and Markit Economics trailed forecasts..

BREAKING NEWS GLOBAL NEWS 

Boehner Signals Clash With White House on U.S. Debt Limit. Congressional Republicans are staking their ground in fiscal negotiations that once again could pose the threat of default or a government shutdown -- the recurring theme surrounding efforts to reduce the nation’s deficit since 2011. “We’re not going to raise the debt ceiling without real cuts in spending,” Boehner, an Ohio Republican, told reporters in Washington yesterday. President Barack Obama and Senate leaders are refusing to accept anything short of a clean debt-limit increase. “We will not negotiate over Congress’s responsibility to pay the bills that Congress ran up,” White House press secretary Jay Carney said when asked about Boehner’s remarks. Any discussion about raising the debt ceiling must start with the premise that “we are the United States; we do not default,” Carney said. “The president believes Republican leaders share that conviction.” Senate Majority Leader Harry Reid, a Nevada Democrat, said yesterday that Democrats are “not negotiating on the debt ceiling.” Congress should pass a debt-ceiling increase without any “hijinks” to ensure a stable economy, Senator Chuck Schumer, a New York Democrat, told reporters July 18. “Attaching other issues to the debt ceiling is playing with fire,” he said.

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Europe Manufacturing Expands for First Time in Two Years. Euro-area manufacturing unexpectedly expanded in July for the first time in two years, led by Germany, adding to signs the currency bloc’s economy is emerging from a record-long recession. A manufacturing index based on a survey of purchasing managers rose to 50.1 from 48.8 in June, London-based Markit Economics said today. That exceeds the median estimate of 49.1 in a Bloomberg News survey of 39 economists. A reading above 50 indicates growth. The euro-area economy, which has contracted for six quarters, probably stagnated in the three months through June and will return to growth this quarter, according to a separate Bloomberg survey of economists. The International Monetary Fund forecasts the bloc’s economy to shrink 0.6 percent this year. The euro erased losses against the dollar after Markit reported today that the manufacturing gauge for Germany, Europe’s largest economy, moved into growth territory for the first time since February. The single currency was trading at $1.3240 at 10:21 a.m. Brussels time. IMF’s Lagarde Drops Proposal to Back Argentina in Default Case. International Monetary Fund Managing Director Christine Lagarde withdrew a proposal to back Argentina in the country’s legal battle over its defaulted debt, citing opposition from the U.S., the fund’s largest shareholder. The decision comes three days after Lagarde said she’d recommend that the IMF board file its first-ever friend-of-the-court brief to the U.S Supreme Court in support of Argentina’s request for a review of a lower court ruling. The case involves holdout creditors from the nation’s $95 billion default in 2001. “The managing director’s recommendation was premised on U.S. support, as it would not be appropriate for the IMF to file this brief without that support,” the IMF said in an e-mailed statement. “The Fund remains deeply concerned about the broad systemic implications that the lower court decision could have for the debt restructuring process in general.” The South American nation contends that a federal appeals court in New York was wrong when it ruled in October that investors who accepted Argentina’s debt restructuring can’t be paid unless holders of defaulted bonds who rejected the plan are also paid. The holdouts are led by billionaire Paul Singer’s Elliott Management Corp. and its NML Capital Ltd. unit. The IMF said Lagarde’s decision came after the U.S. said that “at this stage” it no longer supported the filing.

REGIONAL NEWS 

China Manufacturing Weakens Further as Slowdown Deepens. China’s manufacturing weakened by more than estimated in July, according to a preliminary survey of purchasing managers that casts further doubt on the government’s ability to meet its annual economic growth (CNGDPYOY) target. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, if confirmed in the final report Aug. 1, would be the lowest in 11 months. Readings below 50 indicate contraction. A separate euro-area gauge showed manufacturing unexpectedly expanded this month. After facing down banks with a funding squeeze, China’s leaders yesterday pledged a five-year ban on construction of new office buildings for the government, the Communist Party and state enterprises. Premier Li Keqiang’s efforts to rein in credit, property prices, and officials’ extravagant spending risk worsening a slump even as state media say 7.5 percent growth is the lower limit for this year. Japan Sustains Export Growth on Yen as EU Shipments Increase. Japan’s exports (JNTBEXPY) rose for a fourth straight month in June as a weak yen made the nation’s products more competitive and shipments to the European Union rebounded. Exports gained 7.4 percent from a year earlier, the Finance Ministry said in Tokyo today. While the increase was the first for June shipments since 2010, shipping lines slid after the number missed the 10 percent median

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estimate of economists surveyed by Bloomberg News. While the yen’s 22 percent decline against the dollar over the past year is helping Prime Minister Shinzo Abe to build momentum for a sustained Japanese recovery, patchy global demand may cap the nation's trade gains. The government yesterday raised its assessment of Japan's economy for a third straight month, after an upper-house election victory that strengthens Abe’s hand for rolling out business deregulation. Rate Moves Fail to Save Rupiah as Deficit Stays. The Indonesian rupiah’s decline to a four-year low this week adds to evidence that two interest-rate increases and the first fuel-price boost in five years haven’t done enough to curb Indonesia’s current-account deficit. The central bank said yesterday it sees the rupiah moving to a new equilibrium, after the currency slid 1.3 percent to 10,200 a dollar, according to prices from local banks. That was the weakest level since July 2009. It will probably reach 10,240 a dollar by the end of 2013, according to the average prediction given in the past week by the four most-accurate rupiah forecasters in the past year. Southeast Asia’s biggest economy has suffered capital outflows even after policy makers increased the benchmark rate by 0.75 percentage point and raised subsidized fuel prices in the past two months. With elections next year making further moves to reduce subsidies more difficult, officials may have to rely on higher borrowing costs and a weaker rupiah to cool demand for imports that spurred a record $24 billion current-account gap in 2012. Mitsubishi UFJ Said to Seek Ayudhya Bank Stake for Thai Branch. Mitsubishi UFJ Financial Group Inc. (8306) is seeking to sell its Thai unit to Bank of Ayudhya Pcl in return for about 8 percent of Thailand’s fifth-largest lender, said three people with knowledge of the matter. Bank of Ayudhya would issue new shares to Mitsubishi UFJ, helping the Japanese bank’s effort to build a controlling stake in the lender, the people said, asking not to be identified as the details are private. The proposed sale would value the Mitsubishi UFJ business at about 18.2 billion baht ($588 million), based on Bank of Ayudhya’s market capitalization of 227.8 billion baht. Mitsubishi UFJ this month offered to buy as much as 75 percent of Bank of Ayudhya for $5.6 billion from shareholders including General Electric Co. (GE), which agreed to sell its 25 percent (BAY) stake to Japan’s largest lender. Mitsubishi UFJ is seeking to purchase as much an additional 50 percent of Bank of Ayudhya from other investors. Selling the business would allow Mitsubishi UFJ to comply with Thai rules that bar lenders from running more than one bank in the country. When it announced the deal to buy Bank of Ayudhya, Mitsubishi UFJ said it would hold talks with the Thai lender about integrating the Bangkok branch. Vietnam Stocks Fall the Most in 4 Weeks as Inflation Accelerates. Vietnamese stocks fell, with the benchmark index dropping the most in four weeks, after inflation accelerated at the fastest pace since May 2012. The Ho Chi Minh City Stock Exchange’s VN Index (VNINDEX) retreated 1.8 percent to 495.28 at 10:51 a.m. local time, poised for the sharpest decline since June 25. JointStock Commercial Bank for Foreign Trade of Vietnam tumbled 1.8 percent, the most since July 1. Bao Viet Holdings, the country’s biggest listed insurer, dropped 2 percent, poised for a second day of losses. Consumer prices rose 7.29 percent this month from a year earlier, according to data released by the General Statistics Office in Hanoi today. That compares with the median 7.1 percent estimate of six economists in a Bloomberg survey. Vietnam National Petroleum Corp., known as Petrolimex, the country’s biggest fuel retailer, raised prices of its most commonly used 92-RON gasoline by 1.9 percent on July 17.

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IFIs NEWS (compiled from their websites) ADBI – Working Paper: “Real Estate Valuation, Current Account, and Credit Growth Patterns Before and After the 2008-2009 Crisis” 

The ADBI has publicised the captioned working paper. “This paper explores the stability of the key conditioning variables accounting for real estate valuation before and after the crisis of 2008–2009, in a panel of 36 countries, for the period of 2005:I–2012:IV, recognizing the incidence of global financial crisis. Our paper validates the robustness of the association between the real estate valuation of lagged current account patterns, both before and after the crisis. The results are supportive of both current account and credit growth channels, with the animal-spirits and momentum channels playing the most important role in the boom and bust of real estate valuation.” http://www.adbi.org/files/2013.07.23.wp429.real.estate.valuation.after.2008.2009.crisis.pdf

BIS – Working Paper: “On the correlation between commodity and equity returns: implications for portfolio allocation”  The BIS has publicised the captioned working paper. “In the recent years several commentators hinted at an increase of the correlation between equity and commodity prices, and blamed investment in commodity-related products for this. First, this paper investigates such claims by looking at various measures of correlation. Next, we assess what are the implications of higher correlations between oil and equity prices for asset allocation. We develop a time-varying Bayesian Dynamic Conditional Correlation model for volatilities and correlations and find that joint modelling commodity and equity prices produces more accurate point and density forecasts, which lead to substantial benefits in portfolio allocation. This, however, comes at the price of higher portfolio volatility. Therefore, the popular view that commodities are to be included in one's portfolio as a hedging device is not grounded.” http://www.bis.org/publ/work420.pdf IMF – Policy Paper: “Quota Formula – Data Update and Further Considerations”  The IMF has publicised the captioned policy paper. “The quota database has been updated by one year through 2011. The results continue the broad trends observed in previous data updates. Following the outcome of the Quota Formula Review (QFR), the paper examines the concerns that have been expressed about the openness variable and explores possible approaches to addressing them. It also examines the possible links between variability and broader measures of balance of payments difficulties. On a concluding note, the paper presents a range of illustrative simulations involving possible reforms of the formula using the updated quota database. No proposals are presented at this stage, pending further feedback from the Executive Directors.” http://www.imf.org/external/np/pp/eng/2013/060513.pdf (Main Policy Paper) http://www.imf.org/external/np/pp/eng/2008/032108.pdf (Report of the Executive Board to the Board of Governors published on March 28, 2008 - Reform of Quota and Voice in the IMF) http://www.imf.org/external/np/pp/eng/2013/060713.pdf (Policy Paper published on June 7, 2013: Quota Formula - Data Update and Further Considerations – Statistical Appendix) http://www.imf.org/external/np/pp/eng/2013/060713.xls (IMF Quota Formula Variables - July 2013) IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with the Republic of Poland 

On July 17, 2013, the Executive Board of the IMF concluded the 2013 Article IV consultation with Poland. The Executive Directors emphasized that Poland’s sound macroeconomic management, strong fundamentals, resilient financial system, and adequate international reserves have helped preserve confidence in the country’s policies. The precautionary Flexible Credit Line arrangement has provided insurance against external risks. However, Directors noted that

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slower growth will require balancing support for the economy with the need to further build up policy buffers. http://www.imf.org/external/np/sec/pr/2013/pr13271.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13219.pdf (Staff Report: Republic of Poland 2013 Article IV Consultation) http://www.imf.org/external/pubs/ft/scr/2013/cr13220.pdf (Staff Report: Republic of Poland Selected Issues) http://www.imf.org/external/pubs/ft/scr/2013/cr13221.pdf (Staff Report: Republic of Poland Financial System Stability Assessment) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 23-Jul 24-Jul close China 6.23 6.14 6.14 6.14 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,129.00 10,200.00 10,263.00 Japan 86.75 100.28 99.43 100.10 Korea 1,064.40 1,121.75 1,117.18 1,112.82 Malaysia 3.06 3.19 3.18 3.19 Philippines 41.01 43.33 43.20 43.28 Singapore 1.22 1.27 1.26 1.27 Thailand 30.59 31.08 30.95 30.96 Vietnam 20,840.00 21,223.00 21,223.00 21,228.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.6 -0.1 -5.9 -12.7 -4.4 -4.8 -5.6 -3.7 -2.0 -1.8

% change 0.02 0.00 -0.61 -0.67 0.39 -0.34 -0.18 -0.28 -0.03 -0.02

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,992.6 21,362.4 4,724.4 14,589.9 1,871.4 1,797.7 6,621.0 3,213.3 1,486.8 503.8

OVERNIGHT LENDING RATE (%) 23-Jul 24-Jul 3.500 3.300 0.084 0.084 4.850 4.850 0.073 0.093 2.500 2.500 3.000 3.000 0.309 0.897 0.044 0.044 2.500 2.500 4.662 4.760

CREDIT DEFAULT SWAP (IN BPS) 22-Jul China 95.10 Hong Kong SAR 52.34 Indonesia 188.74 Japan 63.28 Korea 76.43 Malaysia 101.96

23-Jul 95.10 52.36 184.43 62.80 78.89 100.98

23-Jul 2,043.9 21,915.4 4,767.2 14,778.5 1,904.2 1,805.3 6,743.2 3,253.8 1,513.3 504.3

bps change -20.00 0.07 0.00 2.00 0.00 0.00 58.80 0.00 0.00 9.80

24-Jul 2,033.3 21,968.9 4,718.1 14,731.3 1,912.1 1,810.0 6,804.2 3,274.8 1,504.0 494.2

% change -0.52 0.24 -1.03 -0.32 0.42 0.26 0.90 0.65 -0.61 -2.00

2013 YTD (%chg) -10.4 -5.8 8.6 41.7 -5.9 8.1 16.1 2.3 6.9 18.1

3-MONTH INTERBANK LENDING RATE (%) 23-Jul 24-Jul bps change 4.652 4.661 0.93 0.383 0.383 0.00 6.067 6.067 -0.05 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.524 0.406 -11.80 0.376 0.374 -0.17 2.599 2.599 0.00 5.125 5.375 25.00

bps change 0.00 0.02 -4.31 -0.48 2.46 -0.98

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Philippines 104.84 102.90 -1.94 Thailand 103.46 101.98 -1.48 Vietnam 223.83 222.40 -1.43 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 23-Jul

24-Jul

Gold Spot 1,345.2 (in US$ per ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change

1,339.8

-0.40

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 10-YEAR) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Note: Latest data are available on a one-day lag.

22-Jul

23-Jul

3.760 2.220 7.821 0.792 3.400 3.804 3.981 2.419 3.730 8.884

3.750 2.227 7.461 0.785 3.400 3.798 3.965 2.419 3.750 8.943

bps change

2013 YTD (bps)

-1.000 0.700 -36.000 -0.700 0.000 -0.600 -1.600 0.000 2.000 5.900

53.000 183.100 265.500 60.000 42.000 61.300 -15.040 208.900 55.500 -70.700

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)

2012

2013

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun 3,500.0 303.5 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

China Hong Kong SAR

(USUSD bn) 3,442.7 303.5

3 months imports of goods & services (USUSD bn) 523.3 149.7

Short-term external debt (USUSD bn) 565.7 745.6

Import cover (Qtrs of imports covered by reserves) 6.6 2.0

Reserves over short-term debt 6.1 0.4

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Indonesia 98.1 51.8 44.6 1.9 2.2 Japan 1,238.7 80.1 2,147.9 15.5 0.6 Korea 326.4 155.1 126.7 2.1 2.6 Malaysia 136.1 57.1 32.9 2.4 4.1 Philippines 81.3 17.2 9.8 4.7 8.3 Singapore 259.8 118.2 968.3 2.2 0.3 Thailand 170.8 66.9 62.1 2.6 2.8 Vietnam 23.2 30.9 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

VIETNAM JAPAN JAPAN CHINA

Indicators

Period

Last

Previous

CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % HSBC Flash China Manufacturing PMI

Jul Jun Jun Jul

7.29 -180.8 7.4 47.7

6.69 -993.9 10.1 48.2

SELECTED ECONOMIC RELEASES CALENDAR (15-19 JULY 2013) Expected Release Date

7/22/2013 7/23/2013 7/24/2013

7/25/2013

7/26/2013

Economies

MALAYSIA HONG KONG SINGAPORE VIETNAM JAPAN JAPAN CHINA HONG KONG HONG KONG HONG KONG PHILIPPINES PHILIPPINES PHILIPPINES SOUTH KOREA SOUTH KOREA VIETNAM VIETNAM VIETNAM VIETNAM SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND

Indicators

Foreign Reserves (USD bn) CPI - Composite Index (YoY)% CPI (YoY)% CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % HSBC Flash China Manufacturing PMI Exports YoY% Imports YoY% Trade Balance (HKD bn) Budget Deficit/Surplus (PHP bn) Trade Balance (USD mn) Total Imports (YoY)% GDP (QoQ)% GDP (YoY)% Imports YTD (YoY)% Exports YTD (YoY)% Retail Sales YTD (YoY)% Industrial Production Index YoY % SK Consumer Confidence National CPI Ex Food, Energy YoY % National CPI YoY % Industrial Production YoY% Foreign Reserves (USD bn) Customs Exports (YoY)% Customs Imports (YoY)%

Period

Jul 15 Jun Jun Jul Jun Jun Jul Jun Jun Jun Jun May May 2Q P 2Q P Jul Jul Jul Jul Jul Jun Jun Jun Jul 19 Jun Jun

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

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MARKET UPDATE FOR ASEAN+3 25 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian Stocks Fall Second Day on Earnings before U.S. Data. Asia’s benchmark stock index fell for a second day as investors weighed corporate earnings and awaited U.S. economic data that may shed light on when the Federal Reserve will taper stimulus. The MSCI Asia Pacific Index lost 0.8 percent to 135.92 as of 5:30 p.m. in Tokyo, with all 10 industry groups on the measure falling. More than two stocks slid for each that rose. The MSCI measure gained 5.9 percent this year through yesterday with consumer discretionary shares rising the most and energy shares falling the most. The index traded at 13.4 times estimated earnings as of yesterday, compared with 15.3 times for the Standard & Poor’s 500 Index and 13.5 times for the Stoxx Europe 600 Index. European Stocks Decline Amid Earnings Reports; BASF Falls. European stocks declined as investors weighed earnings reports by companies from BASF SE to Michelin (ML)& Cie. and Roche Holding AG. U.S. stock-index futures and Asian shares also fell. The Stoxx Europe 600 Index fell 0.3 percent to 300.34 at 9:42 a.m. in London, after initially sliding as much as 0.3 percent. The benchmark rose to an almost eight-week high yesterday as data signaled Germany is leading a revival in euro-area manufacturing and companies posted results that exceeded estimates. Standard & Poor’s 500 Index futures slipped 0.3 percent today. The MSCI Asia Pacific Index lost 0.8 percent. German business confidence rose for a third month in July, data released today showed. The Ifo institute’s business climate index, based on a survey of 7,000 executives, rose to 106.2 this month from 105.9 in June. Economists in a Bloomberg survey had predicted an increase to 106.1. The volume of shares changing hands in companies on the Stoxx 600 was 23 percent lower than the average of the past 30 days, according to data compiled by Bloomberg. WTI Oil Drops for Second Day as U.S. Crude Production Increases. West Texas Intermediate fell for a second day, extending the biggest loss in more than a month as U.S. crude output surged to a 22-year high. Futures slid as much as 0.6 percent in New York after dropping 1.7 percent yesterday. U.S. production increased to 7.56 million barrels a day last week, the most since December 1990, according to the Energy Information Administration. Germany’s Ifo business confidence index for July rose. Data today may show U.S. durable goods orders climbed.

BREAKING NEWS GLOBAL NEWS •

Obama Says Budget Debate a Battle for Middle Class Future. President Barack Obama is shifting his attention to the budget battles looming later this year by casting his differences with congressional Republicans as a struggle over the future of middle-income Americans. “Our focus has to be on the basic economic issues that matter most to you, the people we represent,” Obama said at Knox College in Galesburg, Illinois, the first of two addresses he delivered yesterday. “And as Washington prepares to enter another budget debate, the stakes for our middle class and everybody who is fighting to get into the middle class could not be higher.” When members of Congress return from their August recess, they and the president will confront a host of decisions affecting the economy, including determining federal spending

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levels and raising the government’s $16.7 trillion debt limit. Republican lawmakers are demanding spending cuts in exchange for raising the debt limit while Obama argues for spending increases for infrastructure improvements, expanded educational opportunities and more support for research -- a recurring drama in fiscal negotiations since 2011. Obama will follow up his renewed effort with a speech today at a port facility in Jacksonville, Florida, making the case for improving the nation’s roads, bridges, airports and harbors. In the coming weeks he will break out other pieces of his economic agenda, such as policies to improve education and make college more affordable. German Business Confidence Rises for a Third Month. German business confidence rose for a third month in July, indicating that Europe’s largest economy is recovering as the 17-nation euro region tries to shake off its longest-ever recession. The Ifo institute’s business climate index, based on a survey of 7,000 executives, rose to 106.2 from 105.9 in June. Economists predicted an increase to 106.1, according to the median of 45 forecasts in a Bloomberg News survey. German unemployment unexpectedly declined in June and the nation led the first expansion in euro-area manufacturing in two years in July. The Bundesbank said this week that the domestic economy grew “strongly” in the second quarter, while warning of signs of a summer slowdown. The euro rose after the report before giving up its gains. The currency was at $1.3189, down 0.1 percent, at 10:35 a.m. in Frankfurt. Germany’s benchmark DAX stock index dropped 0.4 percent to 8343.26. Companies’ assessment of the current situation rose to 110.1 in July from 109.4, while a gauge of expectations fell to 102.4 from 102.5. U.K. Economic Growth Quickens to 0.6% as Recovery Gains. U.K. economic growth accelerated in the second quarter as all main industries showed expansion for the first time in three years, indicating Britain’s recovery is gaining traction. Gross domestic product increased 0.6 percent from the first quarter, when it rose 0.3 percent, the Office for National Statistics said in London today. That matched the median forecast of 37 economists in a Bloomberg News survey. Services, production, construction and agriculture all grew, the first time that has happened since the third quarter of 2010. From a year earlier, GDP rose 1.4 percent. Strengthening labor-market and retail-sales data in the past month have added to signs that the economy is on the mend after a recession that’s left GDP 3.3 percent below its peak in early 2008. The Bank of England will outline next month its approach to forward guidance on policy as new Governor Mark Carney looks to cement the economic rebound.

REGIONAL NEWS •

China’s Li Vows Support Measures from Rail to Tax Breaks. Chinese Premier Li Keqiang said the nation will speed railway construction, especially in central and western regions, adding support for an economy that’s set to expand at the slowest pace in 23 years. The State Council also yesterday approved tax breaks for small companies and reduced fees for exporters as it pledged to keep the yuan’s exchange rate “basically stable at a reasonable and balanced level,” according to a statement after a meeting led by Li. China plans a railway development fund, the government said. Additional spending would help the world’s second-largest economy, after the government signaled this week it will protect its 7.5 percent growth target for this year following a second straight quarterly slowdown. Economists surveyed by Bloomberg News cut expansion forecasts this month, reaching a new median estimate of 7.5 percent, which would be the lowest since 1990. Japan Seen Needing $50 Billion to Cushion Sales-Tax Rise. Japanese Prime Minister Shinzo Abe, now sitting on the biggest parliamentary majority in six years, faces the threat of political

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dissent within months as a planned sales-tax rise threatens to arrest an economic rebound. The world’s third-largest economy has 30 percent odds of tipping into the fourth recession since 2008 should Abe bump the consumption levy to 8 percent in April from 5 percent, according to the median of 23 estimates in a Bloomberg News survey. He’ll need a 5 trillion yen ($50 billion) fiscal package to cushion the impact of the increase, the survey showed. South Korea Growth Surges to Fastest in More Than Two Years. South Korea’s economy grew the most in more than two years, on stronger government spending and private consumption even as a slowdown in China clouds the outlook. Gross domestic product rose 1.1 percent in April-to-June from the previous quarter when it rose 0.8 percent, the Bank of Korea said today in a statement in Seoul. That was above the median 0.8 percent estimate of 13 economists surveyed by Bloomberg News. From a year earlier, Asia’s fourth-largest economy expanded 2.3 percent. President Park Geun Hye boosted spending and the central bank cut its key rate in May, buttressing the economy against a sluggish property market and slower growth in China, South Korea’s biggest trading partner. The central bank is counting on improving domestic demand and resilient exports to achieve forecasts for expansions of 2.8 percent this year and 4 percent next year, the fastest since 2010, when the economy was pulling out of a global slump. Philippines Holds Rate to Protect Growth as Global Risks Rise. The Philippines held its benchmark interest rate at a record low, joining nations from South Korea to Thailand in shielding growth as the global economy falters. Bangko Sentral ng Pilipinas kept the rate it pays lenders for overnight deposits at 3.5 percent, according to a statement in Manila today, as forecast by all 18 economists surveyed by Bloomberg News. It also held the rate on special deposit accounts at 2 percent, as predicted by 11 of 12 economists. President Benigno Aquino this week asked lawmakers to pass measures to boost business competitiveness and improve governance to sustain expansion. Exports have slipped and a growth slowdown in China has dimmed the region’s outlook, while a weakening peso led the central bank to raise its inflation forecasts today. Vietnam Gets Tough on State Firms in Economic Growth Push. Vietnam plans tougher rules to accelerate a revamp of state-owned enterprises, including firing chief executives, adding to efforts to clean up bad debt in the banking industry and revive the economy. The finance ministry is drafting “strong and suitable” measures to force state companies to sell stakes in non-core businesses, Dang Quyet Tien, deputy general director of the ministry’s corporate finance department, said in an interview in Hanoi yesterday. An asset management company run by the central bank begins operations tomorrow to help clean up almost $5 billion of bad debt. Vietnam’s government plans to complete a revamp of state enterprises by 2015 as it struggles to revive the economy, which expanded at the slowest pace since at least 2005 last year. Delayed structural reforms of banks and state companies could undermine investors’ confidence and worsen the nation’s growth prospects, the World Bank said in a report this month.

IFIs NEWS (compiled from their websites) IFC – Press Release: IFC Helps the Philippines Build Sustainable and Cost-efficient Buildings •

IFC and the Philippines Department of Public Works and Highways met this week to discuss measures to build and operate more sustainable and cost-efficient buildings, which when implemented are expected to cut the buildings’ annual power consumption by up to 20 percent and carbon emission by as much as 25 percent. The meeting came two months after IFC signed

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a cooperation agreement with the department to advise it on developing sustainable building regulations for the National Building Code. “IFC supports the Philippines in its move to build green and smart structures and adopt practices that use energy and other resources efficiently,” said Hans Shrader, IFC’s senior operations officer. “This will reduce the impact of our buildings on the environment and promote healthy living conditions.” http://ifcext.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/D24078ED9FE8E71885257BB300156 767 FOREIGN CURRENCY EXCHANGE RATES Previous wk's 24-Jul 25-Jul close China 6.23 6.14 6.14 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,129.00 10,263.00 10,301.00 Japan 86.75 100.28 100.27 99.89 Korea 1,064.40 1,121.75 1,112.82 1,116.11 Malaysia 3.06 3.19 3.19 3.20 Philippines 41.01 43.33 43.28 43.36 Singapore 1.22 1.27 1.27 1.27 Thailand 30.59 31.08 31.00 31.09 Vietnam 20,840.00 21,223.00 21,223.00 21,226.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.6 -0.1 -6.3 -12.6 -4.7 -5.1 -5.8 -3.7 -2.4 -1.8

% change 0.02 0.00 -0.37 0.38 -0.29 -0.28 -0.18 -0.04 -0.29 -0.01

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,992.6 21,362.4 4,724.4 14,589.9 1,871.4 1,797.7 6,621.0 3,213.3 1,486.8 503.8

OVERNIGHT LENDING RATE (%) 24-Jul 25-Jul 3.300 3.400 0.084 0.084 4.850 4.850 0.093 0.093 2.500 2.500 3.000 3.000 0.897 0.573 0.072 0.072 2.500 2.500 4.760 4.590

CREDIT DEFAULT SWAP (IN BPS) 23-Jul China 95.10 Hong Kong SAR 52.36 Indonesia 184.43 Japan 62.80 Korea 78.89 Malaysia 100.98 Philippines 102.90

24-Jul 102.44 53.34 193.00 63.28 81.84 104.39 106.78

24-Jul 2,033.3 21,968.9 4,718.1 14,731.3 1,912.1 1,810.0 6,804.2 3,274.8 1,501.4 494.2 bps change 10.00 0.00 0.00 0.00 0.00 0.00 -32.40 0.00 0.00 -17.00

25-Jul 2,021.2 21,901.0 4,674.1 14,562.9 1,909.6 1,808.4 6,800.1 3,235.7 1,466.6 491.8

% change -0.60 -0.31 -0.93 -1.14 -0.13 -0.09 -0.06 -1.19 -2.32 -0.49

2013 YTD (%chg) -10.9 -6.1 7.5 40.1 -6.0 8.0 16.0 1.1 4.2 17.6

3-MONTH INTERBANK LENDING RATE (%) 24-Jul 25-Jul bps change 4.661 4.660 -0.09 0.383 0.383 0.00 6.067 6.056 -1.02 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.406 0.718 31.20 0.374 0.376 0.17 2.599 2.599 0.00 5.375 5.300 -7.50

bps change 7.34 0.98 8.57 0.48 2.95 3.41 3.88

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Thailand 101.98 105.39 3.41 Vietnam 222.40 226.19 3.79 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 24-Jul

25-Jul

Gold Spot 1,322.1 (in US$ per ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change

1,312.6

-0.72

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 10-YEAR) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Note: Latest data are available on a one-day lag.

23-Jul

24-Jul

3.750 2.227 7.461 0.785 3.400 3.798 3.965 2.419 3.750 8.943

3.850 2.268 7.601 0.775 3.430 3.769 3.960 2.486 3.850 8.828

bps change

2013 YTD (bps)

10.000 4.100 14.000 -1.000 3.000 -2.900 -0.500 6.700 10.000 -11.500

63.000 187.200 279.500 59.000 45.000 58.400 -15.540 215.600 65.500 -82.200

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

2013

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun 3,500.0 303.5 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves China Hong Kong SAR Indonesia

(USUSD bn) 3,442.7 303.5 98.1

3 months imports of goods & services (USUSD bn) 523.3 149.7 51.8

Short-term external debt (USUSD bn) 565.7 745.6 44.6

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9

Reserves over short-term debt 6.1 0.4 2.2

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Japan 1,238.7 80.1 2,147.9 15.5 0.6 Korea 326.4 155.1 126.7 2.1 2.6 Malaysia 136.1 57.1 32.9 2.4 4.1 Philippines 81.3 17.2 9.8 4.7 8.3 Singapore 259.8 118.2 968.3 2.2 0.3 Thailand 170.8 66.9 62.1 2.6 2.8 Vietnam 23.2 30.9 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

HONG KONG HONG KONG HONG KONG PHILIPPINES PHILIPPINES PHILIPPINES SOUTH KOREA SOUTH KOREA VIETNAM VIETNAM

Indicators

Exports YoY% Imports YoY% Trade Balance (HKD bn) Budget Deficit/Surplus (PHP bn) Trade Balance (USD mn) Total Imports (YoY)% GDP (QoQ)% GDP (YoY)% Imports YTD (YoY)% Exports YTD (YoY)%

Period

Last

Previous

Jun Jun Jun Jun May May 2Q P 2Q P Jul Jul

-0.2 1.4 -49.7 -8.5 -364 -2.4 1.1 2.3 15 14.3

-1.0 1.7 -44.3 -13.2 -1020 7.4 0.8 1.5 17.4 16.1

SELECTED ECONOMIC RELEASES CALENDAR (15-19 JULY 2013) Expected Release Date

7/22/2013 7/23/2013 7/24/2013

7/25/2013

7/26/2013

Economies

MALAYSIA HONG KONG SINGAPORE VIETNAM JAPAN JAPAN CHINA HONG KONG HONG KONG HONG KONG PHILIPPINES PHILIPPINES PHILIPPINES SOUTH KOREA SOUTH KOREA VIETNAM VIETNAM SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND

Indicators

Foreign Reserves (USD bn) CPI - Composite Index (YoY)% CPI (YoY)% CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % HSBC Flash China Manufacturing PMI Exports YoY% Imports YoY% Trade Balance (HKD bn) Budget Deficit/Surplus (PHP bn) Trade Balance (USD mn) Total Imports (YoY)% GDP (QoQ)% GDP (YoY)% Imports YTD (YoY)% Exports YTD (YoY)% SK Consumer Confidence National CPI Ex Food, Energy YoY % National CPI YoY % Industrial Production YoY% Foreign Reserves (USD bn) Customs Exports (YoY)% Customs Imports (YoY)%

Period

Jul 15 Jun Jun Jul Jun Jun Jul Jun Jun Jun Jun May May 2Q P 2Q P Jul Jul Jul Jun Jun Jun Jul 19 Jun Jun

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The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

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MARKET UPDATE FOR ASEAN+3 26 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS 

Asia Stocks Fall Led by Japan Stocks Before Earnings Peak. Asian stocks fell, with the regional benchmark index paring its longest weekly winning streak since January. Japanese shares fell the most in six weeks ahead of the busiest week of earnings. The MSCI Asia Pacific Index lost 0.7 percent to 135.12 as of 3:35 p.m. in Tokyo, with about two stocks dropping for each that rose. The measure has gained 0.2 percent this week, heading for a five-week advance. U.S. data showed mixed clues as to when the Federal Reserve may taper stimulus. European Stocks Climb as LVMH, Kering Report Faster Sales. European stocks rose, heading for their longest stretch of weekly gains this year, as companies from LVMH Moet Hennessy Louis Vuitton SA to Kering SA reported faster quarterly sales growth. U.S. index futures fluctuated, while Asian shares declined. LVMH, which owns Louis Vuitton and Christian Dior, rallied 4.8 percent. Kering, the owner of Gucci, advanced 4.2 percent. Vivendi SA climbed 2.9 percent after selling its controlling stake in Activision Blizzard Inc. (ATVI) to the company and a group led by its chief executive officer for $8.17 billion. Air France-KLM Group added 1.8 percent. The Stoxx Europe 600 Index rose 0.3 percent to 300.48 at 9:41 a.m. in London, paring a gain of as much as 0.7 percent. The gauge headed for a weekly advance of 0.2 percent, its fifth consecutive gain. It has rallied 5.4 percent this month as the Federal Reserve said its stimulus program remained flexible. Standard & Poor’s 500 Index futures lost less than 0.1 percent, while the MSCI Asia Pacific Index fell 0.6 percent. WTI Poised for Weekly Drop as China Cuts Manufacturing Capacity. West Texas Intermediate was poised for the first weekly drop in more than a month amid rising crude output in the U.S. and speculation that China’s plans to cut excess manufacturing capacity will curb fuel demand. Futures fell as much as 0.8 percent, heading for a weekly loss of 3.1 percent. China ordered more than 1,400 companies in 19 industries to cut excess production capacity this year, part of efforts to shift toward slower, more-sustainable economic growth. U.S. oil output surged to a 22-year high while refiners cut processing, government data showed on July 24. Prices will extend their decline next week, a Bloomberg News survey of analysts predicted. WTI for September delivery fell as much as 88 cents to $104.61 a barrel in electronic trading on the New York Mercantile Exchange and was at $104.84 as of 9:40 a.m. London time. The volume traded was 40 percent below the 100-day average. Brent for September settlement slid 53 cents to $107.12 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $2.35 to WTI, from $2.16 yesterday. Brent fell below the U.S. grade in intraday trading July 19 for the first time since August 2010.

BREAKING NEWS GLOBAL NEWS 

Blankfein Says Lack of Business Risk Constrains U.S. Growth. Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd Blankfein said a lack of U.S. business appetite for risk is constraining a recovery in the world’s largest economy. The “U.S. feels like it is recovering but I wouldn’t say that it is quite healthy yet,” Blankfein told a business group today in Sydney. “It is a very poor time to take risk and without risk taking there is less growth.” Economic growth in the

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U.S. will slow to 1.8 percent this year from the 2.2 percent expansion in 2012, according to economists surveyed by Bloomberg. Mergers and acquisitions, while improved, haven’t fully recovered since the global financial crisis, said Blankfein, whose firm topped the world rankings for takeover advice in the first half of 2013. Deal transactions worldwide reached about $490 billion in the second quarter, up 3 percent from the previous three months. They were down about 10 percent compared with the same period in 2012, according to data compiled by Bloomberg. Global rule changes aimed at the finance industry are set to continue as society opts for more regulation and less risk-taking following the global crisis, Blankfein said. Draghi Pledge One Year On Rescues Bonds Not Economy. A year ago today, Mario Draghi pledged to save the euro and unblock credit to companies. His job is only half done. Bond yields down from panic levels across the region are proof of the European Central Bank president’s success in promising “whatever it takes” to preserve the common currency. Even after he crafted an unprecedented plan to buy the bonds of distressed nations, companies in countries such as Spain are still struggling to obtain funding, suggesting his aim of ending financial fragmentation remains elusive. While Draghi proved on July 26 last year that the central bank has the power to change the course of the region’s crisis at a stroke, record-low interest rates haven’t reached those members of the 17-nation euro region most in need. That leaves investors and entrepreneurs seeking another policy lightning bolt from the central bank that may not come. U.K. Treasury Failures May Hit Equitable Life Holders. More than 200,000 Equitable Life Assurance Society policyholders risk not receiving compensation they’re entitled to, lawmakers said. By setting arbitrary dates for the beginning and end of payments to reimburse more than 1 million people who lost their savings when Equitable Life failed in 2000, the Treasury failed to properly plan its operation, the House of Commons Public Accounts Committee said in a report published today. Savers who cannot be located in time for the end of payments in March 2014 may therefore not get any money, the cross-party panel said. Equitable Life struggled to stave off collapse after the House of Lords ruled in 2000 it couldn’t abandon promises to policyholders to pay bonuses it could no longer afford. The ruling left the company with a 1.5 billion-pound hole in its accounts, forcing it to cut policy payouts.

REGIONAL NEWS 

China Cuts Capacity in Some Industries to Reshape Economy. China ordered more than 1,400 companies in 19 industries to cut excess production capacity this year, part of efforts to shift toward slower, more-sustainable economic growth. Steel, ferroalloys, electrolytic aluminum, copper smelting, cement and paper are among areas affected, the Ministry of Industry and Information Technology said in a statement yesterday, in which it announced the first-batch target of this year to cut overcapacity. Excess capacity must be idled by September and eliminated by year-end, the ministry said, identifying the production lines to be shut within factories. China’s extra production has helped drive down industrial-goods prices and put companies’ profits at risk, while a survey this week showed manufacturing weakening further in July. Premier Li Keqiang has pledged to curb overcapacity as part of efforts to restructure the economy as growth this year is poised for the weakest pace since 1990. Japan Prices Rise Most Since ’08 in Boost for Abe. Japan consumer prices rose the most since 2008 in June, an early sign that the world’s third-biggest economy may be starting to shake off 15 years of deflation. Consumer prices excluding fresh food increased 0.4 percent in June from a year earlier, the statistics bureau said in a statement today. The median estimate of 29

Page 2 of 7


economists was for a 0.3 percent gain, a Bloomberg News survey showed. Excluding energy as well, prices dropped 0.2 percent, continuing more than four years of declines. As Prime Minister Shinzo Abe’s policies weaken the yen and energy costs rise, the increase in consumer prices could stoke inflation expectations and encourage companies and consumers to spend more, bolstering the economic recovery. After April’s unprecedented monetary easing, the next challenge for Abe is to loosen constraints on the labor market and companies to achieve sustained growth and a goal of 2 percent inflation. Rupiah Has Worst Week Since 2011 as Central Bank Allows Decline. Indonesia’s rupiah fell by the most since September 2011 this week as the central bank allows a more rapid slide toward levels quoted in the offshore market. Government bonds declined. The currency is moving toward a new equilibrium that is in line with economic fundamentals, Bank Indonesia said in a July 23 statement after the rupiah dropped the most in 13 months that day. The 2012 currentaccount deficit was the largest since 1996, while the country recorded trade shortfalls in seven of the eight months through May, official data show. Foreign-exchange reserves dropped below $100 billion in June for the first time since February 2011, according to the central bank. Philippine Bonds, Peso Rise as Moody’s Signals Possible Upgrade. Philippine seven-year sovereign bonds headed for a fourth weekly gain and the peso climbed after Moody’s Investors Service placed the nation’s credit rating on review for a possible upgrade. Representatives from Moody’s will visit the Philippines next week and may join Standard & Poor’s and Fitch Ratings in awarding the nation investment-grade status as soon as this quarter, central bank Governor Amando Tetangco said in a Bloomberg Television interview today. Deputy Governor Diwa Guinigundo said yesterday that some of the funds Bangko Sentral ng Pilipinas ordered banks to withdraw from its special-deposit accounts by the end of July may be used to purchase bonds. The yield on the 7.75 percent bonds due February 2020 fell four basis points, or 0.04 percentage point, to 3.32 percent from a week ago, the lowest level since June 7, according to a midday fixing at Philippine Dealing & Exchange Corp. It has dropped 77 basis points in the last four weeks. Philippine local-currency government notes are the best performing in Southeast Asia this month, providing a return of 2.6 percent, compared with a 3.3 percent loss in Indonesia, indexes compiled by HSBC Holdings Plc show. Obama Meets Vietnam Leader as Human Rights Weigh on Trade. President Barack Obama and Vietnamese President Truong Tan Sang met as their nations intensify trade talks opposed by U.S. labor leaders and human rights advocates who say the Southeast Asian nation must do more to protect workers and political dissidents. While the U.S. and Vietnam are among a dozen working toward an agreement by year-end on a free-trade accord to link an area with about $26 trillion in annual economic output, the agenda for Obama and Sang included human rights, climate change and working with other countries to put pressure on China, protect maritime security and ease South China Sea disputes.

IFIs NEWS (compiled from their websites) FSB – Press Release: FSB to hold workshop on a common data template for global systemically important banks  The FSB has developed a common data template for global systemically important banks to address key information gaps and to provide the authorities with a strong framework for globally assessing potential systemic risks. Prior to making final recommendations to the FSB on Phase 2 and 3 of the initiative, the FSB Data Gaps Working Group plans to hold an international workshop

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in New York on October 2 and 3, 2013 with representatives from the major banks and national banking associations. http://www.financialstabilityboard.org/publications/r_130725.pdf IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation on Euro Area Policies  On July 23, 2013, the Executive Board of the IMF concluded the 2013 Article IV consultation with the Euro Area. Executive Directors commended Euro Area Authorities for the actions taken at both the regional and national levels, which have stabilized financial markets and reduced tail risks related to a euro break up. They acknowledged, in particular, progress toward building a banking union, enhancing the firewall, and strengthening fiscal governance. Directors noted that these efforts have reinforced the authorities’ commitment to preserve the integrity of monetary union. http://www.imf.org/external/np/sec/pr/2013/pr13275.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13231.pdf (Staff Report: Euro Area Policies: 2013 Article IV Consultation) http://www.imf.org/external/pubs/ft/scr/2013/cr13232.pdf (Staff Report: Euro Area Policies: Selected Issues Paper) FOREIGN CURRENCY EXCHANGE RATES Previous wk's 25-Jul 26-Jul close China 6.23 6.14 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,129.00 10,301.00 10,291.00 Japan 86.75 100.28 99.29 98.67 Korea 1,064.40 1,121.75 1,116.11 1,111.33 Malaysia 3.06 3.19 3.20 3.21 Philippines 41.01 43.33 43.36 43.27 Singapore 1.22 1.27 1.26 1.26 Thailand 30.59 31.08 31.04 31.11 Vietnam 20,840.00 21,223.00 21,226.00 21,213.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.7 -0.1 -6.2 -11.5 -4.3 -5.4 -5.6 -3.3 -2.5 -1.8

% change 0.05 0.01 0.10 0.63 0.43 -0.29 0.21 0.14 -0.23 0.06

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 1,992.6 21,362.4 4,724.4 14,589.9 1,871.4 1,797.7 6,621.0 3,213.3 1,486.8 503.8

OVERNIGHT LENDING RATE (%) 25-Jul 26-Jul 3.400 3.700 0.084 0.084 4.850 4.850 0.093 0.075 2.500 2.500 3.000 3.000

25-Jul 2,021.2 21,901.0 4,674.1 14,562.9 1,909.6 1,808.4 6,800.1 3,235.7 1,456.7 491.8

bps change 30.00 0.00 0.00 -1.75 0.00 0.00

26-Jul 2,010.9 21,969.0 4,658.9 14,130.0 1,910.8 1,807.6 6,763.6 3,236.1 1,471.2 493.9

% change -0.51 0.31 -0.33 -2.97 0.06 -0.04 -0.54 0.01 1.00 0.44

2013 YTD (%chg) -11.4 -5.8 7.2 35.9 -5.9 7.9 15.4 1.1 4.5 18.1

3-MONTH INTERBANK LENDING RATE (%) 25-Jul 26-Jul bps change 4.660 4.667 0.69 0.383 0.383 0.00 6.056 6.059 0.29 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00

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Philippines Singapore Thailand Vietnam

0.573 0.041 2.500 4.590

0.608 0.041 2.500 4.429

3.50 0.00 0.00 -16.10

0.718 0.376 2.599 5.300

0.406 0.375 2.598 4.550

-31.20 -0.05 -0.08 -75.00

CREDIT DEFAULT SWAP (IN BPS) 24-Jul 25-Jul bps change China 102.44 110.25 7.81 Hong Kong SAR 53.34 53.83 0.49 Indonesia 193.00 207.77 14.77 Japan 63.28 64.78 1.50 Korea 81.84 86.26 4.42 Malaysia 104.39 107.30 2.91 Philippines 106.78 116.46 9.68 Thailand 105.39 111.25 5.86 Vietnam 226.19 236.66 10.47 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 25-Jul

26-Jul

Gold Spot 1,333.8 (in US$ per ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change

1,329.1

-0.35

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

SOVEREIGN BOND RATES (%, 10-YEAR) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Note: Latest data are available on a one-day lag.

24-Jul 3.850 2.268 7.601 0.775 3.430 3.769 3.960 2.486 3.850 8.828

25-Jul 3.600 2.354 7.894 0.802 3.520 3.792 3.973 2.531 3.870 8.852

bps change

2013 YTD (bps)

-25.000 8.600 29.300 2.700 9.000 2.300 1.300 4.500 2.000 2.400

38.000 195.800 308.800 61.700 54.000 60.700 -14.240 220.100 67.500 -79.800

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)

2012 China Hong Kong SAR Indonesia Japan Korea Malaysia

31-Oct 3,287.4 301.7 110.3 1,274.2 323.5 138.3

30-Nov 3,297.7 305.2 111.3 1,270.9 326.1 139.1

2013 31-Dec 3,311.6 317.3 112.8 1,268.1 327.0 139.7

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3

31-May n.a 305.7 105.1 1,250.2 328.1 141.4

30-Jun 3,500.0 303.5 98.1 1,238.7 326.4 136.1

Page 5 of 7


Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

85.3 258.8 181.6 n.a

83.6 259.1 179.2 n.a

84.0 258.2 177.8 n.a

83.2 261.7 177.8 n.a

82.0 258.4 175.3 n.a

81.3 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (USUSD bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Reserves over short-term debt

(USUSD bn) (USUSD bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.3 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND VIETNAM VIETNAM

Indicators

SK Consumer Confidence National CPI Ex Food, Energy YoY % National CPI YoY % Industrial Production YoY% Customs Exports (YoY)% Customs Imports (YoY)% Foreign Reserves (USD bn) Retail Sales YTD (YoY)% Industrial Production Index YoY %

Period

Last

Previous

Jul Jun Jun Jun Jun Jun Jul 19 Jul Jul

105 -0.2 0.2 -5.9 -3.38 3.01 171.17 12 7

105 -0.4 -0.3 2.1 -5.25 -2.14 170.6 11.9 6.5

SELECTED ECONOMIC RELEASES CALENDAR (15-19 JULY 2013) Expected Release Date

7/22/2013 7/23/2013 7/24/2013

7/25/2013

Economies

MALAYSIA HONG KONG SINGAPORE VIETNAM JAPAN JAPAN CHINA HONG KONG HONG KONG HONG KONG PHILIPPINES PHILIPPINES PHILIPPINES SOUTH KOREA

Indicators

Foreign Reserves (USD bn) CPI - Composite Index (YoY)% CPI (YoY)% CPI (YoY) % Merchnds Trade Balance Total (JPY bn) Merchnds Trade Exports YoY % HSBC Flash China Manufacturing PMI Exports YoY% Imports YoY% Trade Balance (HKD bn) Budget Deficit/Surplus (PHP bn) Trade Balance (USD mn) Total Imports (YoY)% GDP (QoQ)%

Period

Jul 15 Jun Jun Jul Jun Jun Jul Jun Jun Jun Jun May May 2Q P

Page 6 of 7


7/26/2013

SOUTH KOREA VIETNAM VIETNAM SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND VIETNAM VIETNAM

GDP (YoY)% Imports YTD (YoY)% Exports YTD (YoY)% SK Consumer Confidence National CPI Ex Food, Energy YoY % National CPI YoY % Industrial Production YoY% Foreign Reserves (USD bn) Customs Exports (YoY)% Customs Imports (YoY)% Retail Sales YTD (YoY)% Industrial Production Index YoY %

2Q P Jul Jul Jul Jun Jun Jun Jul 19 Jun Jun Jul Jul

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7


MARKET UPDATE FOR ASEAN+3 29 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks decline for fourth day. Asian stocks dropped, with the regional benchmark index heading for a fourth day of declines, after the yen strengthened and resources shares slid after China’s industrial profit slowed. The MSCI Asia Pacific Index sank 1.6 percent to 133.28 as of 5:12 p.m. Tokyo time, with about four shares falling for each that rose. Hong Kong’s Hang Seng Index slid 0.5 percent, while China’s Shanghai Composite Index declined 1.7 percent. South Korea’s Kospi Index fell 0.6 percent and the Nikkei 225 plunged 3.3 percent.

WTI crude declines for a second day as discount to brent widens. West Texas Intermediate crude fell for a second day, extending the first weekly drop in more than a month. WTI’s discount to London-traded Brent futures widened for a fourth day. Futures slid as much as 0.6 percent after losing 3.1 percent last week.

BREAKING NEWS GLOBAL NEWS •

U.S. paring debt sales vindicates anti-austerity since 2008. For the first time in three years, the U.S. Treasury will announce plans to begin reducing debt sales in a victory for stimulus over austerity. Government sales will be cut by $40 billion to $100 billion over the next year when the Treasury announces its quarterly funding needs July 31, a survey of the 21 primary dealers that are obligated to bid at U.S. bond auctions shows. Smaller sales may contain yields as Federal Reserve Chairman Ben S. Bernanke prepares to reduce the $85 billion a month of bond buying that has supported the economy. The budget deficit has fallen to about half what it was in 2009 and gross domestic product may grow next year at the fastest pace since 2006. By contrast, the euro area’s economy is shrinking as governments pursue austerity measures in the face of debt turmoil.

Europe banks get set for dividend lift if regulators allow. A clutch of European banks are primed to lift dividends to put them back on the radar of yield-hungry investors after years spent using cash to repair balance sheets. HSBC, UBS, BNP Paribas, Standard Chartered, Swedbank and other banks in Switzerland, France and Sweden could lead the way back to bigger payouts. But obscuring the route for banks with excess cash is a stubborn regulatory fog, meaning investors in Europe may have to wait until 2014 or later for more juicy rewards, later than an expected pick-up in the United States. Bank dividends have been a casualty of the financial crisis, since when regulators have proposed a wide array of capital ratio plans to protect taxpayers from future bank bailouts.

Spain's banks face uphill battle despite dramatic profits boost. The dramatic earnings turnaround boasted by four Spanish banks obscures the uphill battle they still face to contain bad debts, grow their businesses and increase shareholder value against the backdrop of one of Europe's most challenging economies. Bailed-out Bankia last week announced it had swung to a 200 million euros profit in the first half of 2013 against a 4.5 billion euros loss a year earlier. Bankinter increased earnings more than four-fold, La Caixa more than doubled its profits and

Page 1 of 6


Sabadell's were up 37 percent. Banco Popular was the only one of last week's Spanish bank reporting quintet to report a fall in earnings, down 3 percent. Sharply lower provisions for soured property loans were the rising tide that lifted almost all boats, and are expected to do the same for Spain's flagship international banks Santander and BBVA, whose results are due out this week. Impairments for those property loans peaked in 2012, as the Spanish authorities passed laws forcing banks to make greater provisions. Popular's impairments continued to rise in the first half of 2013 as small companies struggled with debts and more real estate companies fell into arrears. REGIONAL NEWS •

Kuroda sees Japan economy weathering planned sales tax rise. Bank of Japan Governor Haruhiko Kuroda indicated little concern that a planned sales-tax rise would derail an economic rebound as Prime Minister Shinzo Abe considers whether to proceed with the move. “A twostep sales tax increase won’t give major damage to growth in Japan’s economy,” Kuroda said in a speech today in Tokyo, referring to the BOJ’s growth forecasts. “We consider a downturn in overseas economies to be the largest risk factor to the outlook for economic activity and prices.” The comments are Kuroda’s most direct yet on the potential impact of a boost in the levy, weeks before officials decide whether to go ahead with the first step -- raising it to 8 percent in April from the current 5 percent. While Finance Minister Taro Aso has said the government needs to proceed, Abe advisers including Koichi Hamada have expressed caution. Any jump in concern about the sustainability of Japan’s public debt burden would add to pressure on a government debt market already facing the prospect of the end of 15 years of sustained consumer-price declines.

China orders government debt audit as growth risks rise. China will start a nationwide audit of government debt this week as the new Communist Party leadership investigates the threats to growth and the financial system from a record credit boom. The State Council, under Premier Li Keqiang, ordered the review, the National Audit Office said in a statement yesterday. The office suspended other projects for this “urgent” work requested on July 26 and will send staff to provinces and cities this week. The new leadership oversaw a showdown with state-owned lenders last month as the People’s Bank of China engineered a cash squeeze to pressure banks to better manage their liquidity and assets.

Indonesia coffee sales seen slumping as beans rot in rain. Coffee shipments from Indonesia, the third-largest producer of the robusta variety, will probably drop the most in six years as wetter-than-usual weather rots beans and cuts the harvest. Sales may plunge 19 percent to 6 million bags this year. Output may slide to 9.58 million bags from 11.04 million, the median of eight shipper estimates shows. Deliveries from farms in Indonesia are down 28 percent from last season because of the wet weather.

Ruling party wins narrowly in Cambodian vote. Prime Minister Hun Sen's ruling Cambodian People's Party won 68 of 123 seats in the legislature, compared with 55 seats for the main opposition party. This is a significant decline from the 90 seats held by the ruling party since 2008, ending its two-thirds majority. More than 9 million of Cambodia's 15 million people were eligible to vote. The National Election Committee is expected to release official results within the next few days. The Cambodia National Rescue Party, a merger of several opposition parties led by former Finance Minister Sam Rainsy, scored points with voters with calls to increase

Page 2 of 6


youth employment, end land disputes and stem corruption. Observers said this appeared to be Cambodia's least-violent balloting since a 1991 cease-fire in the conflict-racked country ended decades of civil war and genocide. Voters have gone to the polls five times since 1993, when the United Nations organized landmark elections. •

France promises Malaysia no palm oil 'discrimination'. French Prime Minister Jean-Marc Ayrault assured Malaysia that European rules on declaring product ingredients would not "discriminate" against palm oil, the target of environmentalists over its ecological impact. Malaysia is second only to Indonesia in the production of palm oil, which is blamed for the destruction of huge swathes of rainforest to make way for vast plantations of the palm trees from which the edible oil is derived. The French Senate last year approved a quadrupling of the tax on palm oil despite protests from major producing nations Malaysia and the Ivory Coast, but the move was later rejected by France's lower house. Ayrault said his government did not support the tax hike, but warned that under forthcoming European legislation it would soon be mandatory to list all the oils in products.

Myanmar-China gas pipeline goes into operation. Gas has started flowing to China through a pipeline from Myanmar in a major project that highlights their economic links even as political ties weaken. The 793-kilometre (492-mile) pipeline runs from Kyaukpyu on Myanmar's west coast, close to the offshore Shwe gasfields, and across the country. It enters southwest China at Ruili, near areas where heavy clashes between the rebel Kachin Independence Army and the Myanmar military were reported earlier this year. The pipeline has been years in construction and went into operation on Sunday at a ceremony in Mandalay. A parallel oil pipeline is also part of the project, with the China National Petroleum Corporation (CNPN) the major partner in both assets.

IFIs NEWS (compiled from their websites) IMF – Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with the United States • On July 24, 2013, the Executive Board of the IMF concluded the 2013 Article IV consultation with the United States. Executive Directors welcomed the improvement in the underlying conditions of the U.S. economy, which bodes well for a gradual acceleration of growth, while noting that the balance of risks to the outlook remains tilted to the downside. Directors broadly agreed that accommodative monetary policy continues to provide essential support to the recovery, but cautioned that its financial stability implications should be carefully assessed. They stressed that strong macroprudential oversight and supervision of the financial system remain essential. http://www.imf.org/external/np/sec/pr/2013/pr13277.htm (Press Release) http://www.imf.org/external/pubs/ft/scr/2013/cr13236.pdf (Staff Report: United States – 2013 Article IV Consultation) http://www.imf.org/external/pubs/ft/scr/2013/cr13237.pdf (Staff Report: United States – Selected Issues Paper) http://www.imf.org/external/np/tr/2013/tr072613.htm (Transcript of a Conference Call pertaining to United States 2013 Article IV Review)

Page 3 of 6


FOREIGN CURRENCY EXCHANGE RATES Previous wk's 26-Jul 29-Jul close China 6.23 6.13 6.13 6.13 Hong Kong SAR 7.75 7.76 7.76 7.76 Indonesia 9,793.00 10,291.00 10,291.00 10,275.00 Japan 86.75 98.21 98.21 97.98 Korea 1,064.40 1,111.33 1,111.33 1,110.68 Malaysia 3.06 3.21 3.21 3.23 Philippines 41.01 43.27 43.27 43.30 Singapore 1.22 1.26 1.26 1.27 Thailand 30.59 31.14 31.14 31.17 Vietnam 20,840.00 21,213.00 21,213.00 21,215.00 Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

2013 YTD (%chg) 1.6 -0.1 -6.1 -10.9 -4.2 -5.9 -5.7 -3.6 -2.7 -1.8

% change -0.01 0.00 0.16 0.23 0.06 -0.57 -0.07 -0.16 -0.10 -0.01

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,010.9 21,969.0 4,658.9 14,130.0 1,910.8 1,807.6 6,763.6 3,236.1 1,476.7 493.9

OVERNIGHT LENDING RATE (%) 26-Jul 29-Jul 3.700 3.770 0.084 0.085 4.850 4.850 0.075 0.093 2.500 2.500 3.000 3.000 0.608 0.287 0.042 0.042 2.500 2.500 4.429 4.644

26-Jul 2,010.9 21,969.0 4,658.9 14,130.0 1,910.8 1,807.6 6,763.6 3,236.1 1,476.7 493.9 bps change 7.00 0.07 0.00 1.75 0.00 0.00 -32.10 0.00 0.00 21.50

29-Jul

% change

1,976.3 21,850.2 4,580.5 13,661.1 1,899.9 1,798.8 6,717.7 3,236.0 1,457.3 485.7

-1.72 -0.54 -1.68 -3.32 -0.57 -0.49 -0.68 0.00 -1.32 -1.67

2013 YTD (%chg) -12.9 -6.3 5.4 31.4 -6.5 7.4 14.6 1.1 3.5 16.1

3-MONTH INTERBANK LENDING RATE (%) 26-Jul 29-Jul bps change 4.667 4.671 0.40 0.383 0.383 -0.04 6.059 6.059 0.00 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.406 0.406 0.00 0.375 0.375 0.00 2.598 2.598 0.00 4.550 5.429 87.90

CREDIT DEFAULT SWAP (IN BPS) 25-Jul 26-Jul bps change China 110.25 108.80 -1.45 Hong Kong SAR 53.83 53.56 -0.27 Indonesia 207.77 203.58 -4.19 Japan 64.78 65.01 0.23 Korea 86.26 84.78 -1.48 Malaysia 107.30 108.55 1.25 Philippines 116.46 111.62 -4.84 Thailand 111.25 109.80 -1.45 Vietnam 236.66 239.11 2.45 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 26-Jul Gold Spot 1,333.2 (in US$ per ounce) Sources: Bloomberg & Thomson Reuters Datastream

29-Jul 1,330.5

% change -0.20

Page 4 of 6


CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Fitch

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

SOVEREIGN BOND RATES (%, 10-YEAR) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Note: Latest data are available on a one-day lag.

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

25-Jul

26-Jul

3.600 2.354 7.894 0.802 3.520 3.792 3.973 2.531 3.870 8.852

3.720 2.312 7.967 0.792 3.520 3.817 3.973 2.502 3.880 8.775

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

bps change

2013 YTD (bps)

12.000 -4.200 7.300 -1.000 0.000 2.500 0.000 -2.900 1.000 -7.700

50.000 191.600 316.100 60.700 54.000 63.200 -14.240 217.200 68.500 -87.500

2013

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun 3,500.0 303.5 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (USUSD bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Reserves over short-term debt

(USUSD bn) (USUSD bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.3 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

Page 5 of 6


DATA RELEASES FOR THE DAY Economies

Indicators

SOUTH KOREA SOUTH KOREA

Business Survey- Manufacturing Business Survey- Non-Manufacturing

Period

Aug Aug

Last

Previous

73 67

78 69

SELECTED ECONOMIC RELEASES CALENDAR (29 JULY-02 AUG 2013) Expected Release Date

7/29/2013 7/30/2013

7/31/2013

8/1/2013

Economies

SOUTH KOREA SOUTH KOREA JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND THAILAND THAILAND HONG KONG INDONESIA THAILAND HONG KONG HONG KONG SOUTH KOREA JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA CHINA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA

Indicators

Business Survey- Manufacturing Business Survey- Non-Manufacturing Industrial Production YOY% Current Account in (USD mn) Industrial Production (YoY)% Industrial Production (MoM)% Job-To-Applicant Ratio Jobless Rate % Unemployment Rate (sa)% Business Sentiment Index Total Exports YOY% Total Imports YOY% Current Account Balance (USD mn) Total Trade Balance (USD mn) Govt Mthly Budget Surp/Def (HKD bn) Consumer Confidence Index Core CPI (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% Ext Trade - Export (YoY)% Ext Trade - Imports (YoY)% HSBC Manufacturing PMI PMI Manufacturing HSBC Manufacturing PMI Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)% Money Supply - M2 (YoY)%

Period

Aug Aug Jun P Jun Jun Jun Jun Jun 2Q P Jun Jun Jun Jun Jun Jun Jul Jul Jun Jun Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jun Jul Jun Jul Jun Jul Jun

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 6 of 6


MARKET UPDATE FOR ASEAN+3 30 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks rise as Japanese exporters gain on weak yen. Asian stocks rose, with the regional benchmark index heading for its first advance in five days, as Japanese exporters gained after the yen weakened, offsetting a bigger-than-estimated decline in Japanese factory output. Japan’s Topix index rose 1.8 percent to close higher for the first time in five days. The benchmark Nikkei 225 Stock Average climbed 1.5 percent. Hong Kong’s Hang Seng Index increased 0.5 percent. South Korea’s Kospi Index added 0.9 percent, while Singapore’s Straits Times Index added 0.3 percent.

WTI declines for third day as U.S. economic growth seen slowing. West Texas Intermediate oil fell for a third day, trimming the biggest monthly advance in almost a year before a government report that may show U.S. economic growth slowed in the second quarter. Futures dropped as much as 0.4 percent in New York. WTI for September delivery declined as much as 38 cents to $104.17 a barrel in electronic trading on the New York Mercantile Exchange and was at $104.32. Brent for September settlement slid as much as 27 cents, or 0.3 percent, to $107.18 a barrel on the London-based ICE Futures Europe exchange. Prices have risen 5 percent this month.

BREAKING NEWS GLOBAL NEWS •

US money market funds return to EU banks. US money market funds have nearly doubled their allocations to European banks over the past 12 months, in a sign of improving investor sentiment towards the region. In the first half of the year, the 10 biggest US money market funds allocated about 15 percent of their $652bn in assets to short-term deposits and debt securities with eurozone banks. That represents an increase of nearly 90 percent since June 2012, when fears over a eurozone break-up were at their peak. US money market funds have traditionally been an important source of short-term dollar funding for banks across Europe. But, in 2011, they were among the first big investors to withdraw money as the crisis in the eurozone escalated. French banks have been the main recipients of money market funds’ recent largesse. Fitch Ratings said actions by the Frankfurt-based European Central Bank were key to maintaining investor confidence in the eurozone.

Spain economy seen stabilising in Q2, growth to remain elusive. Spain's two-year slump is close to coming to an end, official data is expected to show, but with weak real economic data and new austerity casting a long shadow, a sustained recovery may still be far off. The National Statistics Institute publishes first quarter preliminary economic output figures on Tuesday, which the Bank of Spain has forecast will show the contraction easing to 0.1 percent from a fall of 0.5 percent a quarter earlier. Following the Bank of Spain data, Economy Minister Luis de Guindos was quick to announce that the recession, the second since 2009, had ended, but economists are less convinced. The central bank saw output remaining flat over the next 12 months and warned the economy remained very sensitive to adverse shocks, particularly on the Page 1 of 7


fiscal side. Spain's economy first slipped into recession in 2008 after a burst property bubble badly undermined the foundations of one of the country's key pillars of growth - construction sending unemployment to new record-highs and depressing business. Since then, dire domestic demand has been further hit by tax hikes and spending cuts aimed at balancing the budget. While latest PMI surveys and encouraging unemployment data for the second quarter suggest Guindos' optimism may be founded, earnings for the first half of the year posted by Spain's biggest firms over the last few days offered a mixed picture. •

IMF approves $2.3 billion aid for Greece. The International Monetary Fund approved a further 1.7 billion euros in funds for Greece’s bailout program after completing the fourth review of the cash-strapped euro zone state. Greece last week adopted the last piece of legislation its international lenders required to release the next batch of rescue loans, after two months of wrangling over unpopular measures to overhaul the economy. The total funds from the IMF, the European Commission and the European Central Bank comprise 5.8 billion euros. The IMF also confirmed lenders would modify Greece’s September target for how much money it needs to get from privatizing state firms, after Athens struggled to sell natural gas distributor DEPA in June. The European Union announced the move earlier on Monday, saying Greece would now need to make only 1.6 billion euros from privatizations, down from 2.6 billion euros. But Athens will now have to recoup that money next year to ensure it stays on course to lower its debt.

REGIONAL NEWS •

China central bank injects funds, eases fears of repeat cash crunch. China's central bank injected funds into money markets via open market operations on Tuesday for the first time since February, easing fears of another cash crunch ahead of the month end after a severe cash squeeze in June caused market panic. Market participants and investors in adjacent markets have been keeping a close eye on China's interbank money market after the central bank allowed a credit crunch to occur in late June as a warning against risky lending practices. Shortterm money rates in China have been rising steadily in recent weeks as the end of July approached and Chinese companies and banks stocked up on cash to make dividend payments and get books in order. The injection, a 17 billion yuan ($2.77 billion) issuance of seven-day reverse bond repurchase agreements, marked the first time the central bank had engaged in open market operations since June 20 and the first time it had issued reverse repos, which inject funds instead of draining them, since early February. However, the central bank set the seven-day reverse repo rate at 4.4 percent, much higher than the last official guidance rate of 3.35 percent, setting a relatively high floor for the market rates the contract can trade at.

Japan factory output drops, but recovery seen intact. Japan’s factory output fell by the most in more than two years in June although the labour market improved, a sign Prime Minister Shinzo Abe’s pro-growth policies are bearing fruit but still have far to go to establish a durable recovery. The first fall in industrial production in five months largely reflected manufacturers trying to avoid inventory build-up, and they forecast a brisk pick-up in July. The best levels of unemployment and job availability since 2008 augur well for the private spending that Abe has sought to trigger through aggressive monetary and fiscal stimulus since he took office in December. The batch of data serves as the six-month scorecard for Abe, who is seeking to strike a balance between reviving growth and fiscal consolidation, while facing a tough decision on whether to go ahead with a planned sales tax hikes from next year. The 3.3 percent

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month-on-month fall in industrial output was the largest since March 2011, when a massive earthquake and tsunami ripped through Japan's northeast coastal areas, Ministry of Economy, Trade and Industry data showed on Tuesday. Manufacturers expect output to rise 6.5 percent in July and fall 0.9 percent in August. •

South Korea's current account surplus narrows in June. South Korea's current account showed a surplus of $7.24 billion in June, down from a record high in May due to a slight dip in exports, state data showed Tuesday. Asia's fourth largest economy last posted a current account deficit back in January 2012 and the June figure took the cumulative surplus for the first half of this year to $29.7 billion. The monthly total was lower than the record $8.64 billion posted in May, as exports of key items including memory chips and mobile devices slowed, according to data from the Bank of Korea. Exports, which account for about half of the country's overall economy, fell to $46.7 billion in June from $48.3 billion a month earlier, the central bank said. The current account on the balance of payments, which includes imports and exports in goods and services plus all other current transfers, is the broadest measure of South Korea's trade with the rest of the world. Imports also fell to $40.7 billion, from $42.4 billion in May, as weak overseas demand saw South Korean firms lower raw material imports.

China’s provinces trail growth targets in slowdown signal. Most Chinese provinces reported first-half growth below annual targets that in some instances were already lower than last year’s goals, underscoring the breadth of the nation’s slowdown. The statistics highlight the risk of missing the year’s nationwide 7.5 percent expansion goal as official concern over localgovernment financing threatens to curb funding for investment. China’s State Council, led by Premier Li Keqiang, this month ordered an audit of government debt, underscoring dangers to the economy from local borrowing.

Indonesia’s Budget deficit in 2014 to reach around Rp 154t. Finance Minister Chatib Basri said the budget deficit in the 2014 state budget was predicted to reach around Rp 154 trillion (US$14.9 billion). “The deficit accounts for 1.49 percent of gross domestic product,” he said. The minister said the deficit was calculated according to state revenue, which was set at Rp 1,700 trillion, and state spending of around Rp 1,800 trillion. According to Chatib, the government will set its macro-economic assumptions for the 2014 state budget based on the range decided upon at a meeting between the government and the House of Representatives’ budget committee last month. Macro-economic assumptions for the 2014 state budget include economic growth of 6.4 to 6.9 percent, inflation of between 3.5 to 5.5 percent, rupiah exchange rate of Rp 9,600 to Rp 9,800 per US dollar and the three-month treasury bill rate of 4.5 to 5.5 percent.

Thailand’s Finance Ministry sounds GDP alert. The Finance Ministry says full-year economic growth may end up near the lower end of an estimated range of 4-5 percent on weak exports, anaemic consumption and dwindling private investment. To achieve 4 percent growth, GDP must grow by at least 4.4 percent in the third and fourth quarters, assuming that secondquarter growth comes in lower than the 4% forecast, Ekniti Nitithanprapas, deputy directorgeneral Ekniti Nitithanprapas, deputy director-general of the Fiscal Policy Office, said. Mr Ekniti's remark underscored the recent forecast by National Economic and Social Development Board deputy secretary-general Porametee Vimolsiri that economic growth is likely to stand at 4 percent this year. For its part, the Bank of Thailand on July 19 sharply cut its projection from 5.1

Page 3 of 7


percent to 4.2 percent. Swelling household debt is depressing purchasing power and domestic consumption. Thailand's household debt is now 80 percent of GDP, due to a lengthy period of accommodative monetary policy, easy credit and the state's (now lapsed) first-time car buyer scheme. While policymakers pinned hopes on the government's investment in 2 trillion baht in infrastructure projects and a 350-billion-baht water management scheme to boost the economy in the second half, it remains doubtful whether any spending at all will begin this year. IFIs NEWS (compiled from their websites) ADBI – Working Paper: “Banking Crises and "Japanization": Origins and Implications” •

The ADBI has publicised the captioned working paper. “Japan's "two lost decades" perhaps represent an extreme example of a weak recovery from a financial crisis, and are now referred to as "Japanization." More recently, widespread stagnation in advanced economies in the wake of the global financial crisis led to fears that Japanization might spread to other countries. This study examines the dimensions of Japanization—including low trend growth, debt deleveraging, deflation, and massive increases in government debt—and analyzes their possible causes— including inadequate macroeconomic policy responses, delayed banking sector restructuring, inadequate corporate investment, loss of industrial competitiveness, a slowdown in total factor productivity (TFP) growth due to excessive regulation and economic rigidities, and an aging society.” http://www.adbi.org/files/2013.07.29.wp430.banking.crises.japanization.origins.implications.p df IMF – Press Release: IMF Completes Fourth Review Under Extended Fund Facility (EFF) Arrangement for Greece, Approves €1.72 Billion Disbursement •

On July 29, 2013, the Executive Board of the IMF completed the fourth review of Greece’s performance under an economic program supported by an EFF arrangement approved on March 15, 2012 which is part of a joint package of financing with euro area member states amounting to about €173 billion over four years. The completion of this review enables the disbursement of SDR 1.51 billion to Greece (about €1.72 billion, or US$2.29 billion), which would bring total disbursements under the arrangement to SDR 7.21 billion (about €8.24 billion, or US$10.94 billion). The following is an excerpt of the statement made by Ms Christine Lagarde, IMF Managing Director and Chair upon the completion of the Executive Board Discussion: “The Greek authorities have continued to make commendable progress in reducing fiscal and external imbalances. However, progress on institutional and structural reforms, in the public sector and beyond, has still not been commensurate with the problems facing Greece. Greater reform efforts remain key to an economic recovery and lasting growth.” http://www.imf.org/external/np/sec/pr/2013/pr13280.htm (Main Press Release) http://www.imf.org/external/np/sec/pr/2012/pr1285.htm (Press Release No 12/85 dated March 15, 2012: “IMF Executive Board Approves €28 Billion Arrangement Under Extended Fund Facility for Greece”)

FOREIGN CURRENCY EXCHANGE RATES 2012 close China Hong Kong SAR

6.23 7.75

Previous wk's close 6.13 7.76

29-Jul 6.13 7.76

30-Jul

% change 6.13 7.76

0.01 0.02

2013 YTD (%chg) 1.7 -0.1

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Indonesia 9,793.00 10,291.00 10,275.00 10,274.00 Japan 86.75 98.21 97.96 98.06 Korea 1,064.40 1,111.33 1,110.68 1,113.81 Malaysia 3.06 3.21 3.23 3.23 Philippines 41.01 43.27 43.30 43.39 Singapore 1.22 1.26 1.27 1.27 Thailand 30.59 31.14 31.18 31.25 Vietnam 20,840.00 21,213.00 21,220.00 21,183.00 Note: Negative values indicate depreciation and positive values indicate appreciation.

0.01 -0.10 -0.28 0.02 -0.21 -0.07 -0.22 0.17

-6.0 -10.9 -4.5 -5.9 -5.8 -3.7 -2.9 -1.6

STOCK MARKET INDEX 2012 close China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,010.9 21,969.0 4,658.9 14,130.0 1,910.8 1,807.6 6,763.6 3,236.1 1,476.7 493.9

OVERNIGHT LENDING RATE (%) 29-Jul 30-Jul 3.770 3.660 0.085 0.085 4.850 4.850 0.093 0.070 2.500 2.500 3.000 3.000 0.287 -0.038 0.077 0.077 2.500 2.500 4.644 4.686

29-Jul 1,976.3 21,850.2 4,580.5 13,661.1 1,899.9 1,798.8 6,717.7 3,237.0 1,454.3 485.7 bps change -11.00 0.00 0.00 -2.25 0.00 0.00 -32.50 0.00 0.00 4.20

30-Jul

% change

1,990.1 21,954.0 4,605.4 13,869.8 1,917.1 1,795.2 6,728.0 3,247.3 1,457.5 488.5

0.70 0.48 0.54 1.53 0.90 -0.20 0.15 0.32 0.22 0.59

2013 YTD (%chg) -12.3 -5.8 6.0 33.4 -5.6 7.2 14.8 1.4 3.6 16.8

3-MONTH INTERBANK LENDING RATE (%) 29-Jul 30-Jul bps change 4.671 4.667 -0.40 0.383 0.383 0.04 6.059 6.060 0.07 0.230 0.230 0.00 2.650 2.650 0.00 3.200 3.200 0.00 0.406 0.315 -9.10 0.375 0.375 0.00 2.598 2.598 0.00 5.429 5.125 -30.40

CREDIT DEFAULT SWAP (IN BPS) 26-Jul 29-Jul bps change China 108.80 109.27 0.47 Hong Kong SAR 53.56 52.84 -0.72 Indonesia 203.58 203.04 -0.54 Japan 65.01 64.76 -0.25 Korea 84.78 85.28 0.50 Malaysia 108.55 109.27 0.72 Philippines 111.62 111.62 0.00 Thailand 109.80 110.27 0.47 Vietnam 239.11 236.68 -2.43 Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag. 29-Jul

30-Jul

Gold Spot 1,328.1 (in US$ per ounce) Sources: Bloomberg & Thomson Reuters Datastream

% change

1,323.8

-0.32

CREDIT RATINGS China Hong Kong SAR Indonesia Japan

S&P

Moody's

Fitch

AAAAA BB+ AA-

Aa3 Aa1 Baa3 Aa3

A+ AA+ BBBA+

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Korea Malaysia Philippines Singapore Thailand Vietnam

A+ ABBBAAA BBB+ BB-

Aa3 A3 Ba1 Aaa Baa1 B2

SOVEREIGN BOND RATES (%, 10-YEAR) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Note: Latest data are available on a one-day lag.

AAABBBAAA BBB+ B+

26-Jul

29-Jul

3.720 2.312 7.967 0.792 3.520 3.817 3.973 2.502 3.880 8.775

bps change

2013 YTD (bps)

-12.000 -2.100 2.600 0.400 -5.000 3.800 -0.600 -4.000 1.000 12.500

38.000 189.500 318.700 61.100 49.000 67.000 -14.840 213.200 69.500 -75.000

3.600 2.291 7.993 0.796 3.470 3.855 3.967 2.462 3.890 8.900

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

2013

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun 3,500.0 303.5 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (USUSD bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Reserves over short-term debt

(USUSD bn) (USUSD bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.3 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

JAPAN

Indicators

Industrial Production YOY%

Period

Jun P

Last

Previous

-4.8

-1.1

Page 6 of 7


SOUTH KOREA SOUTH KOREA SOUTH KOREA JAPAN JAPAN

Current Account in (USD mn) Industrial Production (YoY)% Industrial Production (MoM)% Job-To-Applicant Ratio Jobless Rate %

Jun Jun Jun Jun Jun

7237.3 -2.6 0.4 0.92 3.9

8638.8 -1.4 -0.4 0.90 4.1

SELECTED ECONOMIC RELEASES CALENDAR (29 JULY-02 AUG 2013) Expected Release Date

7/29/2013 7/30/2013

7/31/2013

8/1/2013

Economies

SOUTH KOREA SOUTH KOREA JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND THAILAND THAILAND HONG KONG INDONESIA THAILAND HONG KONG HONG KONG SOUTH KOREA JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA CHINA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA

Indicators

Business Survey- Manufacturing Business Survey- Non-Manufacturing Industrial Production YOY% Current Account in (USD mn) Industrial Production (YoY)% Industrial Production (MoM)% Job-To-Applicant Ratio Jobless Rate % Unemployment Rate (sa)% Business Sentiment Index Total Exports YOY% Total Imports YOY% Current Account Balance (USD mn) Total Trade Balance (USD mn) Govt Mthly Budget Surp/Def (HKD bn) Consumer Confidence Index Core CPI (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% Ext Trade - Export (YoY)% Ext Trade - Imports (YoY)% HSBC Manufacturing PMI PMI Manufacturing HSBC Manufacturing PMI Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)% Money Supply - M2 (YoY)%

Period

Aug Aug Jun P Jun Jun Jun Jun Jun 2Q P Jun Jun Jun Jun Jun Jun Jul Jul Jun Jun Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jun Jul Jun Jul Jun Jul Jun

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

Page 7 of 7


MARKET UPDATE FOR ASEAN+3 31 July 2013, 17:00 local time SGT (UTC+8) MARKET DEVELOPMENTS •

Asian stocks dropped before U.S. economic growth data and the conclusion of a Federal Reserve policy meeting. The MSCI Asia Pacific Index dropped 0.8 percent to 132.71 as of 5:55 p.m. in Tokyo. Japan’s Topix index and the benchmark Nikkei 225 Stock Average both closed 1.5 percent lower. South Korea’s Kospi index lost 0.2 percent and Singapore’s Straits Times Index slid 0.5 percent. Hong Kong’s Hang Seng Index lost 0.3 percent while the Shanghai Composite Index gained 0.2 percent, its second day of advance.

The Japanese yen gained as much as 0.4 percent against the dollar. Thailand’s baht headed for a fourth monthly drop, the longest losing streak since 2008, on concern an economic slowdown in China will hurt the Southeast Asian nation’s exports. Malaysia’s ringgit declined and bonds extended losses after Fitch Ratings cut the nation’s credit outlook to negative from stable, citing rising debt levels and a lack of budgetary reform.

WTI trades near four-week low as discount to Brent crude narrows. West Texas Intermediate oil traded near the lowest price in almost a month after dropping the most in a week. New York crude’s discount to London-traded Brent futures narrowed for the first time in six days. Futures were little changed in New York after slipping 1.4 percent yesterday, trimming their biggest monthly advance since August 2012. U.S. crude inventories decreased by 740,000 barrels last week. A government report today is forecast to show supplies slid by 2.45 million barrels.

BREAKING NEWS GLOBAL NEWS •

Obama urges business tax rewrite to help spur new jobs. President Barack Obama, prodding Congress to consider fresh economic proposals after two years of gridlock, called for restructuring business taxes so long as the initial revenue generated goes toward job creation. Obama is putting aside for now the deficit-reduction formula that has eluded lawmakers for two years, a package of increased tax revenue and entitlement curbs. Instead, the president is saying he’ll support simplifying the corporate tax code with lower rates, with a one-time increase in revenue devoted to spending on manufacturing innovation, worker training and infrastructure improvements that create jobs. Republicans quickly dismissed the White House plan.

Spain’s economy on track for return to growth. The Spanish economy may finally be about to turn the corner, with official estimates showing that gross domestic product fell by just 0.1 percent in the second quarter – the slowest rate of decline in almost two years. The estimate, released on Tuesday by Spain’s national statistics office, comes as the clearest sign yet that the country is on track for a return to economic growth in the second half of the year. Government officials have insisted repeatedly that the country’s painful two-year recession is about to end, as a surge in exports gradually offsets still-insipid domestic demand and the continuing fall in public spending. Several analysts said the government’s prediction was indeed likely to come

Page 1 of 6


true. But they also cautioned that Spain was heading for a sluggish recovery at best, with the economy still weighed down by high unemployment, lack of credit and fast-rising levels of public debt. REGIONAL NEWS •

Japan mulls deficit cut as sales-tax debate intensifies. Japan is considering an 8 trillion yen ($82 billion) target for budget-deficit cuts over the next two years as officials debate how to proceed with a sales-tax increase that threatens to damage an economic rebound. The goal is based on the assumption that the consumption levy is raised as planned to 8 percent in April, from 5 percent now, according to two government officials who asked not to be named per government policy. Prime Minister Shinzo Abe’s administration plans to release its mediumterm fiscal plans, and a final decision on the sales levy, later this year. With a report today showing little sign of the wage gains Abe needs to bolster his reflation campaign, policy makers face the challenge of reining in the world’s largest public debt burden without derailing growth. Economy Minister Akira Amari said officials will canvass with “experts” on how to implement the tax hike enacted by the previous administration.

China’s leaders vow steady growth with economic reforms. China’s ruling Politburo pledged to stabilize growth while pressing on with economic reforms after exports fell by the most since the global financial crisis and manufacturing and investment cooled. Authorities will maintain steady second-half expansion amid “extremely complicated domestic and international conditions,” the official news agency said after a meeting led by President Xi Jinping. China will keep a prudent monetary policy and a proactive fiscal stance. China is targeting 7.5 percent growth this year, a goal that could be under threat after a second straight quarterly slowdown. Authorities also want to counter mounting debt risks, with policy makers ordering an audit of government borrowing this month and engineering a money-market cash squeeze in June to encourage banks to better manage liquidity.

Bank of Thailand chief backs megaprojects. BoT governor Prasarn Trairatvorakul said the government’s planned investment in its 2-trillion-baht infrastructure development megaprojects will strengthen the country's economic growth potential in the long-term. Mr Prasarn said government is right to try and mobilise the economy through infrastructure overhaul projects because it will lead to a sustainable economic growth, so long as the projects are executed properly and transparent. It is currently unnecessary to stimulate domestic consumption, because people will continue to spend money with or without stimulus measures, the central bank chief said. Given the choice between boosting the economy through investment or by increasing domestic consumption, using investment to drive growth is better, on the condition that projects are worthwhile and transparent, he added.

Vietnam emerges as consumer goods’ “new star”. The Vietnamese CAGR which measures the consumers’ spending growth rate in 2011-2020 is believed to be the highest among ASEAN countries, reaching 8 percent, which is even higher than that of Indonesia and Malaysia at 5 percent, and Thailand and Singapore at 4 percent. The reports by international market survey firms recently all have said Vietnam has emerged as a promising consumer goods market. A BMI’s report has estimated that the food consumption growth rate of Vietnam in 2012-2017 is 9.43 percent, while the canned food consumption growth rate would be 5.17 percent and

Page 2 of 6


sweets 4.65 percent. As for drinks, the coffee turnover growth rate is 8.47 percent, while the figure of 6.96 percent has been projected for fizzy drinks. With the youngest population in the world (56 percent of people are less than 30 years old, according to Nielsen), the total spending of Vietnamese consumers is expected to be double to $173 billion by 2020. Nielsen, in its recent report about fast moving consumer goods FMCG, showed that by the third quarter of 2013, the growth rate of the Vietnamese market had reached 23 percent, outstripping the big markets such as India or China. IFIs NEWS (compiled from their websites) Vienna 2 Initiative –Publication: “Central, Eastern and South Eastern Europe (CESEE) Deleveraging Monitor” The Vienna 2 Initiative Steering Committee 1 met in Luxembourg on July 17, 2013 to discuss deleveraging trends, work to address asset quality issues in emerging Europe and the implications for the proposed EU resolution framework on emerging European economies, including non-EU member countries. The following is an excerpt of the summary of the report: “Funding reductions of western banks to CESEE excluding Russia and Turkey picked up in the first quarter of 2013. Private sector credit growth remained weak, with the exception of the Commonwealth of Independent States (CIS) countries and Turkey, and loan-to-deposit ratios declined further. There is a concern that the deterioration in market sentiment vis-à-vis emerging market countries that started in late May may intensify funding reductions” http://www.imf.org/external/np/sec/pr/2013/pr13282.htm (Press Release by IMF) http://www.worldbank.org/en/news/press-release/2013/07/30/reviving-credit-growthexternal-funding-withdrawal-emerging-europe (Press Release by MIGA and World Bank) http://www.imf.org/external/np/sec/pr/2013/pdf/pr13281.pdf (Report published on July 26, 2013: “CESEE Deleveraging Monitor”)

FOREIGN CURRENCY EXCHANGE RATES Previous 30-Jul 31-Jul wk's close 6.23 6.13 6.13 6.13 China 7.75 7.76 7.76 7.75 Hong Kong SAR 9,793.00 10,291.00 10,274.00 10,257.00 Indonesia 86.75 98.21 98.03 97.64 Japan 1,064.40 1,111.33 1,113.81 1,123.28 Korea 3.06 3.21 3.23 3.24 Malaysia 41.01 43.27 43.39 43.45 Philippines 1.22 1.26 1.27 1.27 Singapore 30.59 31.14 31.26 31.33 Thailand 20,840.00 21,213.00 21,180.00 21,175.00 Vietnam Note: Negative values indicate depreciation and positive values indicate appreciation. 2012 close

% change 0.04 0.01 0.17 0.40 -0.84 -0.57 -0.14 -0.01 -0.22 0.02

2013 YTD (%chg) 1.7 -0.1 -5.9 -10.5 -5.3 -6.4 -6.0 -4.0 -3.2 -1.6

1

The European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), IMF, World Bank Group, and European Commission are members of the Steering Committee as well as Italy, Romania, and Albania which represent home and host authorities respectively and UniCredit, Raiffeisen Bank International, and Eurobank which currently represent the parent banks involved in the Vienna 2 Initiative. The Committee is chaired by Marek Belka, President of the National Bank of Poland.

Page 3 of 6


STOCK MARKET INDEX 2012 close China (SSE Composite) Hong Kong SAR (Hang Seng) Indonesia (JCI) Japan (Nikkei 225) Korea (KOSPI 200) Malaysia (FBMKLCI) Philippines (PSEi) Singapore (STI) Thailand (SET) Vietnam (VNINDEX)

China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

2,269.1 22,656.9 4,316.7 10,395.2 1,997.1 1,689.0 5,812.7 3,167.1 1,391.9 413.7

Previous wk's close 2,010.9 21,969.0 4,658.9 14,130.0 1,910.8 1,807.6 6,763.6 3,236.1 1,476.7 493.9

30-Jul

31-Jul

1,990.1 21,954.0 4,608.5 13,869.8 1,917.1 1,795.1 6,728.0 3,245.5 1,435.4 488.5

1,993.8 21,883.7 4,610.4 13,668.3 1,914.0 1,772.6 6,639.1 3,230.4 1,409.5 491.9

OVERNIGHT LENDING RATE (IN %) 30-Jul 31-Jul bps change 3.660 3.730 7.00 0.085 0.084 -0.14 4.850 4.850 0.00 0.070 0.071 0.05 2.500 2.500 0.00 3.000 3.000 0.00 -0.038 1.012 105.00 0.053 0.053 0.00 2.500 2.500 0.00 4.686 4.500 -18.60

SOVEREIGN BOND RATES (%, 10-YEAR Sovereign) Previous wk's 2012 close close 3.220 3.610 China 0.396 2.277 Hong Kong SAR 4.806 7.980 Indonesia 0.185 0.822 Japan 2.980 3.390 Korea 3.185 3.699 Malaysia 4.115 4.183 Philippines 0.330 2.449 Singapore 3.195 3.700 Thailand 9.650 8.971 Vietnam Latest data are available on a one-day lag

29-Jul 3.600 2.291 7.993 0.796 3.470 3.855 3.967 2.462 3.890 8.900

% change 0.19 -0.32 0.04 -1.45 -0.16 -1.25 -1.32 -0.46 -1.81 0.68

2013 YTD (%chg) -12.1 -6.1 6.1 31.5 -5.8 5.8 13.3 0.9 0.1 17.6

3-MONTH INTERBANK LENDING RATE (IN %)

30-Jul 4.667 0.383 6.060 0.230 2.650 3.200 0.315 0.375 2.598 5.125

30-Jul 3.750 2.331 8.021 0.797 3.460 3.904 3.975 2.473 3.980 8.861

31-Jul 4.665 0.383 6.071 0.230 2.650 3.200 0.335 0.374 2.598 6.000

bps change -0.25 0.00 1.07 0.00 0.00 0.00 2.00 -0.12 0.00 87.50

bps change 15.000 4.000 2.800 0.100 -1.000 4.900 0.800 1.100 9.000 -3.900

2013 YTD (bps) 53.000 193.500 321.500 61.200 48.000 71.900 -14.040 214.300 78.500 -78.900

CREDIT DEFAULT SWAP (IN BPS) 29-Jul 30-Jul bps change 109.27 110.74 1.47 China 52.84 52.85 0.01 Hong Kong SAR 203.04 207.80 4.76 Indonesia 64.76 64.77 0.01 Japan 85.28 85.77 0.49 Korea 109.27 112.69 3.42 Malaysia 111.62 113.56 1.94 Philippines 110.27 113.70 3.43 Thailand 236.68 240.44 3.76 Vietnam Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. Latest data are available on a one-day lag

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30-Jul Gold Spot (in US$ per ounce) Sources: Bloomberg & Datastream

31-Jul

1,326.4

% change

1,331.9

0.42

CREDIT RATINGS China Hong Kong SAR Indonesia Japan Korea Malaysia Philippines Singapore Thailand Vietnam

S&P

Moody's

Fitch

AAAAA BB+ AAA+ ABBBAAA BBB+ BB-

Aa3 Aa1 Baa3 Aa3 Aa3 A3 Ba1 Aaa Baa1 B2

A+ AA+ BBBA+ AAABBBAAA BBB+ B+

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION)

2012

31-Oct 30-Nov 31-Dec China 3,287.4 3,297.7 3,311.6 Hong Kong SAR 301.7 305.2 317.3 Indonesia 110.3 111.3 112.8 Japan 1,274.2 1,270.9 1,268.1 Korea 323.5 326.1 327.0 Malaysia 138.3 139.1 139.7 Philippines 81.7 83.9 83.8 Singapore 254.2 255.8 259.3 Thailand 181.5 181.6 181.6 Vietnam 21.4 23.2 n.a Note: Data for China and Vietnam refer to FX reserves

31-Jan 3,410.1 304.7 108.8 1,267.3 328.9 140.2 85.3 258.8 181.6 n.a

2013

28-Feb 3,395.4 304.8 105.2 1,258.8 327.4 140.3 83.6 259.1 179.2 n.a

31-Mar 3,442.7 303.8 104.8 1,254.4 327.4 139.7 84.0 258.2 177.8 n.a

30-Apr n.a 306.5 107.3 1,258.0 328.8 140.3 83.2 261.7 177.8 n.a

31-May n.a 305.7 105.1 1,250.2 328.1 141.4 82.0 258.4 175.3 n.a

30-Jun 3,500.0 303.5 98.1 1,238.7 326.4 136.1 81.3 259.8 170.8 n.a

EXTERNAL LIQUIDITY RATIOS* Int'l Reserves

3 months imports of goods & services (USUSD bn) 523.3 149.7 51.8 80.1 155.1 57.1 17.2 118.2 66.9 30.9

Short-term external debt

Import cover (Qtrs of imports covered by reserves) 6.6 2.0 1.9 15.5 2.1 2.4 4.7 2.2 2.6 -

Reserves over short-term debt

(USUSD bn) (USUSD bn) China 3,442.7 565.7 6.1 Hong Kong SAR 303.5 745.6 0.4 Indonesia 98.1 44.6 2.2 Japan 1,238.7 2,147.9 0.6 Korea 326.4 126.7 2.6 Malaysia 136.1 32.9 4.1 Philippines 81.3 9.8 8.3 Singapore 259.8 968.3 0.3 Thailand 170.8 62.1 2.8 Vietnam 23.2 10.0 Notes: * Based on latest available data Import cover is computed by dividing international reserves with 3-month worth of imports of goods and services using latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data are as of 4Q 2012, except for Indonesia and Korea, which are 1Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

DATA RELEASES FOR THE DAY Economies

SINGAPORE THAILAND THAILAND THAILAND

Indicators

Unemployment Rate (sa)% Business Sentiment Index Total Exports YOY% Total Imports YOY%

Period

2Q P Jun Jun Jun

Last

Previous

2.1 49.9 -3.5 0.9

1.9 53.9 -5.1 -4.9

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THAILAND THAILAND HONG KONG

Current Account Balance (USD mn) Total Trade Balance (USD mn) Govt Mthly Budget Surp/Def (HKD bn)

Jun Jun Jun

-664 588 -16.7

-1051 535 -7.8

SELECTED ECONOMIC RELEASES CALENDAR (29 JULY-02 AUG 2013) Expected Release Date

7/29/2013 7/30/2013

7/31/2013

8/1/2013

Economies

SOUTH KOREA SOUTH KOREA JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA JAPAN JAPAN SINGAPORE THAILAND THAILAND THAILAND THAILAND THAILAND HONG KONG INDONESIA THAILAND HONG KONG HONG KONG SOUTH KOREA JAPAN SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA SOUTH KOREA CHINA CHINA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA INDONESIA

Indicators

Business Survey- Manufacturing Business Survey- Non-Manufacturing Industrial Production YOY% Current Account in (USD mn) Industrial Production (YoY)% Industrial Production (MoM)% Job-To-Applicant Ratio Jobless Rate % Unemployment Rate (sa)% Business Sentiment Index Total Exports YOY% Total Imports YOY% Current Account Balance (USD mn) Total Trade Balance (USD mn) Govt Mthly Budget Surp/Def (HKD bn) Consumer Confidence Index Core CPI (YoY)% Retail Sales - Volume (YoY)% Retail Sales - Value (YoY)% Foreign Exchange Reserve (USD bn) Official Reserve Assets (USD bn) Consumer Price Index (YoY)% Consumer Price Index (MoM)% Core Consumer Price Index(YoY)% Ext Trade - Export (YoY)% Ext Trade - Imports (YoY)% HSBC Manufacturing PMI PMI Manufacturing HSBC Manufacturing PMI Total Trade Balance (USD mn) Inflation NSA (MoM)% Exports (YoY)% Core Inflation (YoY)% Total Imports (YoY)% Inflation (YoY)% Money Supply - M2 (YoY)%

Period

Aug Aug Jun P Jun Jun Jun Jun Jun 2Q P Jun Jun Jun Jun Jun Jun Jul Jul Jun Jun Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jun Jul Jun Jul Jun Jul Jun

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.

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Market Update for ASEAN+3 July2013