MARKET UPDATE FOR ASEAN+3

October 2013

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MARKET UPDATE FOR ASEAN+3 1 October 2013, 17:00 local time SGT (UTC+8)

MARKET DEVELOPMENTS

Asian stocks rise as investors weigh U.S. shutdown, Japan tax. Asian stocks rose, paring

yesterday’s slump that was the biggest in a month, as investors weighed the impact of a U.S.

government shutdown and Japan’s decision to proceed with a sales-tax increase. Across Asia,

Thailand stock led the rise and posted a growth of 1.7 percent, followed by Indonesia JCI’s 0.7

percent gain. In Japan, Nikkei 225 gained 0.2 percent.

Ringgit leads Asian advance as dollar weakens on U.S. shutdown. Malaysia’s ringgit rallied,

leading gains in Asia, as the dollar weakened on a partial U.S. government shutdown. Sovereign

bonds advanced. The ringgit strengthened 0.7 percent to 3.2356 per dollar as of 5:13 p.m. in

Kuala Lumpur. Meanwhile, the Yen strengthened 0.5 percent while Indonesia Rupiah and

Philippine Peso gained 0.4 percent. Both Singapore Dollar and Thai Baht gained 0.3 percent.

WTI Crude drops a third day as U.S. Government shutdown begins. West Texas Intermediate

slid for a third day as part of the U.S. government shut down over a budget stalemate,

threatening to slow the economy and reduce demand in the world’s largest oil consumer.

Futures dropped as much as 0.5 percent after a 4.9 percent loss last month. A midnight deadline

in Washington passed after lawmakers failed to approve a funding bill.

BREAKING NEWS

GLOBAL NEWS

US Government shutdown begins as Congress divides on spending (Bloomberg). The U.S.

government began its first partial shutdown in 17 years, idling as many as 800,000 federal

employees, closing national parks and halting some services after Congress failed to break a

partisan deadlock by a midnight deadline. Congressional leaders have scheduled no further

negotiations on spending legislation, raising concerns among some lawmakers that the

shutdown could bleed into the more consequential fight over how to raise the U.S. debt limit to

avoid a first-ever default after Oct. 17.

Euro-Area jobless rate unexpectedly declines as recovery builds (Bloomberg). Euro-area

unemployment unexpectedly retreated from a record, as the currency bloc’s economic recovery

gained momentum. The jobless rate fell to a revised 12 percent in July from a record 12.1

percent a month earlier, and held at that level in August, the European Union’s statistics office

in Luxembourg said today. Economists forecast the rate to remain at 12.1 percent, according to

the median of 30 estimates in a Bloomberg News survey. Unemployment among young people

fell to 23.7 percent in August after two months at 23.8 percent.

Italy in disarray as Draghi pledge keeps nation from brink (Bloomberg). Italy’s government is

on the verge of collapse and two of its most senior executives have lost the confidence of

shareholders. Thanks to Mario Draghi’s promises, bond investors see the turmoil as more of a

blip than a crisis. Yields barely budged yesterday even after Prime Minister Enrico Letta spent

the weekend fighting Silvio Berlusconi’s efforts to topple his government. Intesa Sanpaolo SpA,

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Italy’s second biggest bank, replaced its chief executive officer and Telecom Italia SpA CEO

Franco Bernabe is preparing to resign.

RBA holds key rate at record-low 2.5% as house prices climb (Bloomberg). Australia’s central

bank left its benchmark interest rate unchanged at a record low, saying earlier cuts are still

filtering through the economy and already driving up asset prices. Governor Glenn Stevens and

his board kept the overnight cash-rate target at 2.5 percent, the Reserve Bank of Australia said

in a statement today in Sydney, as forecast by all 33 economists surveyed by Bloomberg.

REGIONAL NEWS

China manufacturing growth Sept. hits 17-month high (Xinhua). China's factory activity set a

record high in 17 months in September, an official survey showed, indicating a stable economic

rebound. China's purchasing managers' index for the manufacturing sector rose to 51.1 percent

in September from 51 percent in August, the National Bureau of Statistics and the China

Federation of Logistics and Purchasing said on Tuesday. It was the third consecutive month for

the index to climb month on month and the figure has set a record high since May 2012. Zhang

Liqun, researcher at the Development Research Center of the State Council, said the new data

edged up slightly but the growth rate was not sharp, indicating a weak rebound momentum.

Japan Prime Minister Shinzo Abe says Japan will raise sales tax in April as planned (Kyodo).

Prime Minister Abe said Tuesday the government will raise Japan's sales tax rate in April to 8

percent from the current 5 percent as planned, ending nearly a year of public speculation over a

tax increase that some experts warn could undermine the country's nascent economic recovery.

Abe, meeting with executives from the ruling coalition at his office, also said he intends to

provide an economic stimulus package to ease the possible negative impact on businesses and

households from the consumption tax hike. "In order to maintain confidence in (the fiscal policy

of) Japan and establish a social security system that is sustainable for future generations, I have

made a decision to raise the sales tax rate to 8 percent from 5 percent on April 1, 2014," Abe

said at the meeting.

Japan big manufacturers' sentiment rises to highest level in 6 years: Tankan (Kyodo). The

business confidence index among large Japanese manufacturers increased in September from

three months earlier to plus 12, its highest level since December 2007, the Bank of Japan said

Tuesday, supporting Prime Minister Shinzo Abe's decision to raise the nation's sales tax in April

as planned. The Tankan survey's headline index measuring sentiment among big manufacturers

such as carmakers and high-tech firms improved for the third straight quarter, as the yen's

weakness lifted exporters' earnings. It was also the highest level since the collapse of U.S.

investment bank Lehman Brothers Holdings Inc. in September 2008 that brought about the

global financial crisis.

Laos raises profile at UN General Assembly (Vientiane Times). Addressing the 68th Session of

the UN General Assembly (UNGA) in New York on Saturday, Deputy Prime Minister and Minister

of Foreign Affairs, Mr Thongloun Sisoulith, said Laos attaches great significance to creating a

peaceful environment and safeguarding political stability for national development, with a view

to graduating from LDC status. The Lao government has deployed its utmost efforts to pursue a

consistent foreign policy and promote international cooperation at all levels. To continue

fulfilling its international obligations, the government has presented candidatures for

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membership in the Human Rights Council for the term 2016-2018 as well as membership in the

Executive Board of the UN Development Programme/UN Population Fund (UNFPA) for 2016-

2018.

Myanmar President pointed out systematic management on foreign assistant resources

(President Office news). President of the Republic of the Union of Myanmar U Thein Sein

delivered an address at the meeting of international grants/loans management central

committee at the meeting hall of the Union Government office at the Presidential Palace here

today. The President pointed out systematic management on aid, interest-free loan, low

interest loan and foreign direct investment for ensuring effective development aid so that more

aid and investment will go to the country.

Singapore home prices rise at slowest pace in six quarters (Bloomberg). Singapore home prices

increased at the slowest pace in six quarters after the government introduced new loan

measures to cool prices in Asia’s second-most expensive housing market. The island-state’s

private residential property price index rose 0.4 percent to a record 216.2 points in the three

months ended Sept. 30, after it climbed 1 percent in the second quarter, according to

preliminary figures released by the Urban Redevelopment Authority today. That’s the smallest

gain since the first quarter of 2012, when the index dropped 0.1 percent.

IFIs NEWS (compiled from their websites)

IMF- Report: Executive Board Discusses 2013 Low-Income Countries Global Risks and

Vulnerabilities

The exercise provides a cross-cutting analysis of the economic vulnerabilities of LICs, delivers a

richer coverage of developments in LICs, and provides useful information to other international

financial institutions (IFIs) and donors that provide financial resources to LICs. The 2013 report

enhances granularity in the presentation of results, focusing on four sub-groups of countries: oil

exporters, fragile states, small states, and other (core) LICs as well as additional analysis of

frontier LICs that are rapidly integrating into global financial markets.

http://www.imf.org/external/np/sec/pr/2013/pr13376.htm

World Bank- Press Release: Lao PDR Receives US$20 Million from the World Bank to Further

Strengthen Poverty Reduction Efforts

The World Bank’s Board of Executive Directors today approved US$20 million in financing for

Lao PDR’s Ninth Poverty Reduction Support Operation (PRSO 9). This program will support policy

and institutional reforms that enable the sustainable management of revenues from the natural

resources sector to deliver improved public services.

http://www.worldbank.org/en/news/press-release/2013/09/30/lao-pdr-receives-us20-million-

from-world-bank-further-strengthen-poverty-reduction-efforts

Asian Development Bank - Press Release: Myanmar Plans Electricity Expansion with Assistance

from ADB, Japan

The Asian Development Bank (ADB), through $2.85 million in grant financing from the Japan

Fund for Poverty Reduction (JFPR), will help the Government of Myanmar formulate a long-term

energy plan and prepare to expand and upgrade its power grid.

http://www.adb.org/news/myanmar-plans-electricity-expansion-assistance-adb-japan FOREIGN CURRENCY EXCHANGE RATES

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2012 close

Previous wk's close

30-Sep 1-Oct % change 2013 YTD

(%chg)

China 6.23 6.12 6.12 6.12 -0.01 1.8

Hong Kong SAR 7.75 7.76 7.76 7.75 0.02 -0.1

Indonesia 9,793.00 11,184.00 11,406.00 11,360.00 0.40 -15.0

Japan 86.75 98.17 98.27 97.76 0.52 -10.7

Korea 1,064.40 1,110.04 1,074.64 1,073.56 0.10 -0.9

Malaysia 3.06 3.28 3.26 3.24 0.74 -6.2

Philippines 41.01 44.58 43.48 43.31 0.39 -5.7

Singapore 1.22 1.27 1.26 1.25 0.30 -2.5

Thailand 30.59 32.15 31.24 31.15 0.28 -2.6

Vietnam 20,840.00 21,155.00 21,113.00 21,115.00 -0.01 -1.3 Note: Negative values indicate depreciation and positive values indicate appreciation.

STOCK MARKET INDEX

2012 close

Previous wk's close

30-Sep 1-Oct % change 2013 YTD

(%chg)

China (SSE Composite) 2,269.1 2,098.4 2,174.7 2,174.7 0.000 -4.2

Hong Kong SAR (Hang Seng) 22,656.9 21,731.4 22,859.9 22,859.9 0.00 -1.9

Indonesia (JCI) 4,316.7 4,195.1 4,316.2 4,345.9 0.69 0.0

Japan (Nikkei 225) 10,395.2 13,388.9 14,455.8 14,484.7 0.20 39.3

Korea (KOSPI 200) 1,997.1 1,926.4 1,997.0 1,998.9 0.10 -1.6

Malaysia (FBMKLCI) 1,689.0 1,727.6 1,768.6 1,769.0 0.02 5.6

Philippines (PSEi) 5,812.7 6,075.2 6,191.8 6,197.8 0.10 5.7

Singapore (STI) 3,167.1 3,028.9 3,167.9 3,181.2 0.42 -0.6

Thailand (SET) 1,391.9 1,294.3 1,383.2 1,406.9 1.71 0.0

Vietnam (VNINDEX) 413.7 472.7 492.6 492.2 -0.08 17.7

OVERNIGHT LENDING RATE (IN %)

3-MONTH INTERBANK LENDING RATE (IN %)

30-Sep 1-Oct bps change 30-Sep 1-Oct bps change

China 4.000 4.000 0.00 4.670 4.670 0.00

Hong Kong SAR 0.099 0.099 0.00 0.386 0.386 0.00

Indonesia 5.700 5.700 0.00 7.159 7.159 0.00

Japan 0.080 0.068 -1.25 0.230 0.229 -0.09

Korea 2.500 2.500 0.00 2.650 2.650 0.00

Malaysia 3.000 3.000 0.00 3.210 3.210 0.00

Philippines 0.637 0.644 0.70 0.206 0.145 -6.10

Singapore 0.052 0.052 0.00 0.374 0.383 0.84

Thailand 2.500 2.500 0.00 2.602 2.604 0.23

Vietnam 2.517 2.700 18.30 4.714 4.743 2.90

SOVEREIGN BOND RATES (%, 10-YEAR Sovereign)

2012 close

Previous wk's close

27-Sep 30-Sep bps change 2013 YTD

(bps)

China 3.220 3.610 4.050 4.050 0.000 83.000

Hong Kong SAR 0.396 2.277 2.193 2.125 -6.800 172.900

Indonesia 4.806 7.980 8.228 8.490 26.200 368.400

Japan 0.185 0.822 0.684 0.688 0.400 50.300

Korea 2.980 3.390 3.440 3.420 -2.000 44.000

Malaysia 3.185 3.699 3.761 3.762 0.100 57.700

Philippines 4.115 4.183 3.777 3.844 6.700 -27.140

Singapore 0.330 2.449 2.378 2.340 -3.800 201.000

Thailand 3.195 3.700 3.940 3.920 -2.000 72.500

Vietnam 9.650 8.971 8.842 8.930 8.800 -72.000 Latest data are available on a one-day lag

CREDIT DEFAULT SWAP (IN BPS)

27-Sep 30-Sep bps change

China 83.83 88.24 4.41

Hong Kong SAR 48.41 49.40 0.99

Indonesia 241.31 255.36 14.05

Japan 62.04 64.03 1.99

Korea 74.22 78.16 3.94

Malaysia 121.42 129.66 8.24

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Philippines 114.50 122.21 7.71

Thailand 125.56 133.56 8.00

Vietnam 268.08 276.47 8.39 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

30-Sep 1-Oct % change

Gold Spot (in US$ per ounce)

1,329.0 1,331.0 0.15

Sources: Bloomberg & Datastream

CREDIT RATINGS

S&P Moody's Fitch China AA- Aa3 A+

Hong Kong SAR AAA Aa1 AA+

Indonesia BB+ Baa3 BBB-

Japan AA- Aa3 A+

Korea A+ Aa3 AA-

Malaysia A- A3 A-

Philippines BBB- Ba1 BBB-

Singapore AAA Aaa AAA

Thailand BBB+ Baa1 BBB+

Vietnam BB- B2 B+

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2013

31-Jan 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul 31-Aug 30-Sep

China 3,410.1 3,395.4 3,442.7 3,534.5 3,514.8 3,496.7 n.a n.a n.a

Hong Kong SAR 304.7 304.8 303.8 306.5 305.7 303.6 299.9 303.9 n.a

Indonesia 108.8 105.2 104.8 107.3 105.1 98.1 92.7 93.0 n.a

Japan 1,267.3 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 1,254.0 1,254.2 n.a

Korea 328.9 327.4 327.4 328.8 328.1 326.4 329.7 331.1 n.a

Malaysia 140.2 140.3 139.7 140.3 141.4 136.1 137.8 134.8 135.1

Philippines 85.3 83.6 84.0 83.2 82.0 81.3 83.2 82.9 n.a

Singapore 258.8 259.1 258.2 261.7 258.4 259.8 261.1 261.9 n.a

Thailand 181.6 179.2 177.8 177.8 175.3 170.8 172.9 172.2 171.2

Vietnam 27.8 28.2 28.0 27.2 26.6 n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves

EXTERNAL LIQUIDITY RATIOS*

Int'l Reserves

3 months imports of goods & services

Short-term external debt

Import cover (Qtrs of imports

covered by reserves)

Reserves over short-term debt

(US$bn) (US$bn) (US$bn)

China 3,496.7 523.3 565.7 6.7 6.2

Hong Kong SAR 303.9 141.5 745.6 2.1 0.4

Indonesia 93.0 55.0 46.3 1.7 2.0

Japan 1,254.2 79.2 2,052.2 15.8 0.6

Korea 331.1 151.4 119.6 2.2 2.8

Malaysia 135.1 58.5 37.3 2.3 3.6

Philippines 82.9 17.2 9.8 4.8 8.5

Singapore 261.9 126.5 970.0 2.1 0.3

Thailand 171.2 66.9 62.1 2.6 2.8

Vietnam n.a 31.3 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 the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 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 Indicators Period Last Previous

China PMI Manufacturing Sep 51.1 51.0

Japan Jobless Rate % Aug 4.1 3.8

Japan Job-To-Applicant Ratio Aug 0.95 0.94

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South Korea Consumer Price Index (YoY)% Sep 0.8 1.3

South Korea Consumer Price Index (MoM)% Sep 0.2 0.3

South Korea Core Consumer Price Index(YoY)% Sep 1.6 1.3

South Korea Ext Trade - Export (YoY)% Sep -1.5 7.7

South Korea Ext Trade - Imports (YoY)% Sep -3.6 0.8

Indonesia Total Trade Balance (USD mn) Aug 132 -2309

Indonesia Exports (YoY)% Aug -6.3 -6.1

Indonesia Total Imports (YoY)% Aug -5.7 6.5

Indonesia Inflation (YoY)% Sep 8.4 8.79

Indonesia Core Inflation (YoY)% Sep 4.72 4.48

Indonesia Inflation NSA (MoM)% Sep -0.35 1.12

Thailand Consumer Price Index (YoY)% Sep 1.42 1.59

Thailand Core CPI (YoY)% Sep 0.61 0.75

SELECTED ECONOMIC RELEASES CALENDAR (30 SEPT - 04 OCT 2013)

Expected Release Date Country Indicators Period

10/1/2013 Japan Job-To-Applicant Ratio Aug

Japan Jobless Rate % Aug

Indonesia Consumer Confidence Index Sep

Thailand Core CPI (YoY)% Sep

Thailand Consumer Price Index (YoY)% Sep

South Korea Consumer Price Index (YoY)% Sep

South Korea Consumer Price Index (MoM)% Sep

South Korea Core Consumer Price Index(YoY)% Sep

South Korea Ext Trade - Export (YoY)% Sep

South Korea Ext Trade - Imports (YoY)% Sep

China PMI Manufacturing Sep

Indonesia Total Trade Balance (USD mn) Aug

Indonesia Inflation NSA (MoM)% Sep

Indonesia Exports (YoY)% Aug

Indonesia Core Inflation (YoY)% Sep

Indonesia Total Imports (YoY)% Aug

Indonesia Inflation (YoY)% Sep

10/2/2013 Philippines Budget Deficit/Surplus (PHP bn) Aug

10/3/2013 Hong Kong Retail Sales - Volume (YoY)% Aug

Hong Kong Retail Sales - Value (YoY)% Aug

Indonesia Net Foreign Assets (IDR Tln) Sep

Indonesia Foreign Reserves (USD bn) Sep

Thailand Consumer Confidence Economic Sep

10/4/2013 South Korea Foreign Exchange Reserve (USD bn) Sep

Thailand Foreign Reserves (USD bn) Sep 27

HONG KONG Purchasing Managers Index Sep

Malaysia Exports YoY% Aug

Malaysia Imports YoY% Aug

Philippines Consumer Price Index (YoY)% Sep

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

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MARKET UPDATE FOR ASEAN+3 3 October 2013, 17:00 local time SGT (UTC+8)

MARKET DEVELOPMENTS

Most Asia stocks rise on China services as investors weigh U.S. talks. Asian stocks rose after a

gauge of China’s services industries jumped to a six-month high and as investors watched for

progress on ending a budget impasse that has shut down the U.S. government. Thailand SET led

the rise and advanced 1.3 percent, followed by Hang Seng’s 1 percent and Indonesia JCI’s 0.7

percent. Philippines PSEi advanced 0.4 percent, boosted by an upgraded rating. Nikkei 225 slid

slightly 0.1 percent, Singapore STI and Vietnam VNI dropped 0.2 and 0.4 percent respectively.

Dollar falls to 8-month low versus Euro on shutdown; Yen drops. The dollar slid to the weakest

level in eight months versus the euro as the U.S. government’s partial shutdown added to

concern that growth will slow and prompt the Federal Reserve to delay tapering monetary

stimulus. Against the USD, Malaysia Ringgit gained 1 percent, Philippines gained 0.7 percent,

Indonesia Rupiah and Korea won advanced 0.5 and 0.4 percent respectively. On the other hand,

Japanese Yen weakened 0.4 percent.

WTI drops after biggest gain in two weeks as oil stockpiles rise. West Texas Intermediate fell

after the biggest gain in two weeks as U.S. crude stockpiles increased twice as much as forecast.

Brent’s premium to New York oil widened from the narrowest in more than a week. Futures slid

as much as 0.5 percent in New York after jumping 2 percent yesterday to the highest price since

Sept. 20. U.S. crude inventories climbed by 5.5 million barrels last week, Energy Information

Administration data showed. They were forecast to rise by 2.5 million in a Bloomberg News

survey.

BREAKING NEWS

GLOBAL NEWS

White House meeting fails to end stalemate that led to shutdown (Bloomberg). The first face-

to-face talks between President Barack Obama and congressional leaders failed to break the

budget logjam as a partial U.S. government shutdown entered its third day. The Oval Office

meeting yesterday evening ended with both sides reiterating their positions and the points

they’ve been making for days, raising the prospect of a prolonged standoff over the government

shutdown and raising the U.S. debt limit. Democrats, including Obama, say Republicans must

end the shutdown and raise the debt ceiling as a precondition to talks on broader budgetary

disputes. Republicans want to use the fiscal deadlines to extract changes to Obama’s health-

care law.

ECB Draghi said to task Panel to mull bank liquidity (Bloomberg). Mario Draghi has asked a

European Central Bank panel to study options for new bank funding measures, as policy makers

try to figure out how to deal with any future liquidity shortages, two euro-region central bank

officials said. While the ECB president insisted that the institution “stands ready to act according

to need,” the governing council agreed that a technical committee should examine the size and

maturity of new long-term refinancing operations, as well as other instruments, the officials

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said yesterday, speaking on condition of anonymity because the matter is confidential. The

panel has no set date for a verdict, one official said.

Recovery in Euro zone services sector picks up in September: PMI (Reuters). Markit's Euro

zone Services Purchasing Managers Index (PMI), a monthly survey of businesses, rose to 52.2 in

September from August's 50.7, little changed from a preliminary reading of 52.1. Readings

above 50 signify growth. Growth in services companies, comprising the vast bulk of the euro

zone's private sector, increased at the fastest pace since June 2011, offsetting a slightly slower

pace of expansion in manufacturing last month. Germany again led the expansion, while

services firms in the bloc's next largest economies - France and Italy - returned to growth after

more than a year in the red. Spanish services businesses, however, disappointed slightly,

slipping back into contraction after achieving modest growth in August.

REGIONAL NEWS

China proposes establishing Asian infrastructure investment bank (Xinhua). Chinese President

Xi Jinping on Wednesday proposed to establish an Asian infrastructure investment bank to

promote interconnectivity and economic integration in the region. Xi put forward the proposal

during talks here with his Indonesian counterpart, Susilo Bambang Yudhoyono. Beijing stands

ready to offer financial support for infrastructure construction in developing countries in the

region, including members of the Association of Southeast Asian Nations, Xi said. The new bank,

he added, will cooperate with existing multilateral development banks to make full use of their

respective advantages and jointly promote the sustained and stable growth of the Asian

economy, Xi said.

Indonesia, China boost economic ties as Xi arrives (Channel News Asia). Beijing and Jakarta

signed a series of economic agreements on Wednesday as Chinese President Xi Jinping began a

trade-focused trip to Indonesia, his first visit to Southeast Asia since taking power. Like its Asian

peers Japan and South Korea, China is seeking to strengthen its presence in the booming

Indonesian economy, which has been a leading destination for foreign investment in recent

years. During his two-day trip, Xi, who took power in March, will on Thursday become the first

foreign leader to address the Indonesian parliament.

Philippine investment-grade climb complete as Moody’s raises (Bloomberg). The Philippines

won a rating upgrade from Moody’s Investors Service, completing the nation’s ascent to

investment rank as President Benigno Aquino leads a growth resurgence that’s outpacing the

rest of Southeast Asia. The rating on Philippine government debt was raised one level to Baa3,

Moody’s said in a statement today, citing “robust economic performance,” ongoing fiscal and

debt consolidation, political stability and improved governance. The outlook on the rating is

positive. Stocks and the peso rose.

TPP countries to waive total ban on fishing subsidies (Kyodo). The 12 countries involved in the

Trans-Pacific Partnership free trade negotiations are now planning not to ban fishing subsidies

except those that obviously lead to overfishing, negotiation sources said Thursday. The United

States has been calling for a general ban on fishing subsidies, but with many countries

disagreeing, the members are arranging a limited ban proposed by Japan, the sources said. The

move comes as ministers of the TPP countries began their three-day discussions on tariffs and

Page 3 of 6

other key issues that require political decisions so that their leaders can announce a broad

agreement on the pact at a summit next week.

IFIs NEWS (compiled from their websites)

IMF - Press Release: Concludes 2013 Article IV Mission to Lao P.D.R.

An IMF mission team led by Mr. Ashvin Ahuja visited Vientiane to conduct the 2013 Article IV

consultation discussions with the Lao P.D.R. during August 28–September 12. At the conclusion

of the mission, Mr. Ahuja issued the following statement: “Since the global financial crisis, the

Lao economy has been growing at an average annual rate of 8 percent, supported by brisk credit

expansion and robust foreign direct investment (FDI) inflows. The country has also made

significant progress toward achieving the Millennium Development Goals (MDGs). A tightening

of macroeconomic policies is urgently needed to reduce vulnerabilities, replenish international

reserves and engineer a soft landing. Fiscal policy needs to be put back on a consolidation path

during the next few years.”

http://www.imf.org/external/np/sec/pr/2013/pr13383.htm

IMF - Transcript of a Press Conference: the Analytic Chapters of the Global Financial Stability Report

This time around, the two chapters focus on two crucial types of policies: those aimed at

reinvigorating credit growth and those that affect bank funding structures, both of which may

have long term implications for financial stability. In Chapter 2 the IMF take a close look at the

policies in place to restart credit markets. To do this the IMF tried to get under the surface and

identify the factors influencing the constraints on bank credit growth. In Chapter 3, the IMF

examine how bank funding structures are changing and whether the set of regulatory reforms

affecting them are making banks, or more generally the financial system, more stable.

http://www.imf.org/external/np/tr/2013/tr100213.htm

World Bank - Press Release: Developing Countries to Receive Over $410 Billion in Remittances in 2013

Remittances to the developing world are expected to grow by 6.3 percent this year to $414

billion and are projected to cross the half-trillion mark by 2016, according to revised estimates

and forecasts issued today by the World Bank. India and China alone will represent nearly a

third of total remittances to the developing world this year. Remittance volumes to developing

countries, as a whole, are projected to continue growing strongly over the medium term,

averaging an annual growth rate of 9 percent to reach $540 billion in 2016.

http://www.worldbank.org/en/news/press-release/2013/10/02/developing-countries-remittances-2013-world-bank

Page 4 of 6

FOREIGN CURRENCY EXCHANGE RATES

2012 close

Previous wk's close

2-Oct 3-Oct % change 2013 YTD

(%chg)

China 6.23 6.12 6.12 6.12 0.01 1.8

Hong Kong SAR 7.75 7.76 7.75 7.75 0.00 0.0

Indonesia 9,793.00 11,184.00 11,357.00 11,296.00 0.54 -14.5

Japan 86.75 98.17 97.36 97.78 -0.43 -10.7

Korea 1,064.40 1,110.04 1,074.04 1,069.66 0.41 -0.6

Malaysia 3.06 3.28 3.23 3.20 1.02 -5.0

Philippines 41.01 44.58 43.40 43.11 0.67 -5.2

Singapore 1.22 1.27 1.25 1.25 -0.08 -2.3

Thailand 30.59 32.15 31.27 31.24 0.09 -2.9

Vietnam 20,840.00 21,155.00 21,125.00 21,125.00 0.00 -1.3 Note: Negative values indicate depreciation and positive values indicate appreciation.

STOCK MARKET INDEX

2012 close

Previous wk's close

2-Oct 3-Oct % change 2013 YTD

(%chg)

China (SSE Composite) 2,269.1 2,098.4 2,174.7 2,174.7 0.000 -4.2

Hong Kong SAR (Hang Seng) 22,656.9 21,731.4 22,984.5 23,214.4 1.00 -0.4

Indonesia (JCI) 4,316.7 4,195.1 4,387.6 4,417.1 0.67 1.6

Japan (Nikkei 225) 10,395.2 13,388.9 14,170.5 14,157.3 -0.09 36.2

Korea (KOSPI 200) 1,997.1 1,926.4 1,999.5 1,999.5 0.00 -1.6

Malaysia (FBMKLCI) 1,689.0 1,727.6 1,770.4 1,771.7 0.08 5.8

Philippines (PSEi) 5,812.7 6,075.2 6,362.3 6,387.7 0.40 9.0

Singapore (STI) 3,167.1 3,028.9 3,152.6 3,146.0 -0.21 -1.7

Thailand (SET) 1,391.9 1,294.3 1,409.0 1,427.3 1.30 1.4

Vietnam (VNINDEX) 413.7 472.7 494.4 492.3 -0.42 17.7

OVERNIGHT LENDING RATE (IN %)

3-MONTH INTERBANK LENDING RATE (IN %)

2-Oct 3-Oct bps change 2-Oct 3-Oct bps change

China 4.000 4.000 0.00 4.670 4.670 0.00

Hong Kong SAR 0.101 0.103 0.22 0.386 0.386 0.00

Indonesia 5.697 5.694 -0.36 7.160 7.176 1.57

Japan 0.090 0.068 -2.20 0.229 0.229 0.00

Korea 2.500 2.500 0.00 2.660 2.660 0.00

Malaysia 3.000 3.000 0.00 3.210 3.210 0.00

Philippines 0.557 -0.158 -71.50 0.070 0.033 -3.70

Singapore 0.056 0.056 0.00 0.393 0.391 -0.26

Thailand 2.500 2.500 0.00 2.605 2.605 0.08

Vietnam 2.600 2.543 -5.70 4.700 5.175 47.50

SOVEREIGN BOND RATES (%, 10-YEAR Sovereign)

2012 close

Previous wk's close

1-Oct 2-Oct bps change 2013 YTD

(bps)

China 3.220 3.610 4.050 4.050 0.000 83.000

Hong Kong SAR 0.396 2.277 2.125 2.148 2.300 175.200

Indonesia 4.806 7.980 8.338 8.178 -16.000 337.200

Japan 0.185 0.822 0.664 0.648 -1.600 46.300

Korea 2.980 3.390 3.430 3.410 -2.000 43.000

Malaysia 3.185 3.699 3.765 3.752 -1.300 56.700

Philippines 4.115 4.183 3.856 3.848 -0.800 -26.740

Singapore 0.330 2.449 2.377 2.326 -5.100 199.600

Thailand 3.195 3.700 3.930 3.820 -11.000 62.500

Vietnam 9.650 8.971 8.862 8.903 4.100 -74.700

Latest data are available on a one-day lag

Page 5 of 6

CREDIT DEFAULT SWAP (IN BPS)

1-Oct 2-Oct bps change

China 88.24 85.79 -2.45

Hong Kong SAR 49.41 48.88 -0.53

Indonesia 255.37 248.82 -6.55

Japan 64.03 62.28 -1.75

Korea 78.16 75.20 -2.96

Malaysia 129.66 130.63 0.97

Philippines 122.21 119.32 -2.89

Thailand 133.56 132.11 -1.45

Vietnam 276.47 274.22 -2.25 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-Oct 3-Oct % change

Gold Spot (in US$ per ounce)

1,316.0 1,313.2 -0.22

Sources: Bloomberg & Datastream

CREDIT RATINGS

S&P Moody's Fitch China AA- Aa3 A+

Hong Kong SAR AAA Aa1 AA+

Indonesia BB+ Baa3 BBB-

Japan AA- Aa3 A+

Korea A+ Aa3 AA-

Malaysia A- A3 A-

Philippines BBB- Baa3 BBB-

Singapore AAA Aaa AAA

Thailand BBB+ Baa1 BBB+

Vietnam BB- B2 B+

INTERNATIONAL RESERVES (END-MONTH, IN USD BILLION) 2013

31-Jan 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul 31-Aug 30-Sep

China 3,410.1 3,395.4 3,442.7 3,534.5 3,514.8 3,496.7 n.a n.a n.a

Hong Kong SAR 304.7 304.8 303.8 306.5 305.7 303.6 299.9 303.9 n.a

Indonesia 108.8 105.2 104.8 107.3 105.1 98.1 92.7 93.0 n.a

Japan 1,267.3 1,258.8 1,254.4 1,258.0 1,250.2 1,238.7 1,254.0 1,254.2 n.a

Korea 328.9 327.4 327.4 328.8 328.1 326.4 329.7 331.1 n.a

Malaysia 140.2 140.3 139.7 140.3 141.4 136.1 137.8 134.8 135.1

Philippines 85.3 83.6 84.0 83.2 82.0 81.3 83.2 82.9 n.a

Singapore 258.8 259.1 258.2 261.7 258.4 259.8 261.1 261.9 n.a

Thailand 181.6 179.2 177.8 177.8 175.3 170.8 172.9 172.2 171.2

Vietnam 27.8 28.2 28.0 27.2 26.6 n.a n.a n.a n.a Note: Data for China and Vietnam refer to FX reserves

EXTERNAL LIQUIDITY RATIOS*

Int'l Reserves

3 months imports of goods & services

Short-term external debt

Import cover (Qtrs of imports

covered by reserves)

Reserves over short-term debt

(US$bn) (US$bn) (US$bn)

China 3,496.7 523.3 565.7 6.7 6.2

Hong Kong SAR 303.9 141.5 745.6 2.1 0.4

Indonesia 93.0 55.0 46.3 1.7 2.0

Japan 1,254.2 79.2 2,052.2 15.8 0.6

Korea 331.1 151.4 119.6 2.2 2.8

Malaysia 135.1 58.5 37.3 2.3 3.6

Philippines 82.9 17.2 9.8 4.8 8.5

Singapore 261.9 126.5 970.0 2.1 0.3

Thailand 171.2 66.9 62.1 2.6 2.8

Vietnam n.a 31.3 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 the latest available data from balance of payments statistics. Short-term debts are liabilities due in 1 year or less; data is as of 1Q 2013, except for Indonesia and Korea, which are as of 2Q 2013, and Vietnam, which is end-2011. For Vietnam, the figure refers to Private Creditor and not short-term debt.

Page 6 of 6

DATA RELEASES FOR THE DAY Economies Indicators Period Last Previous

Hong Kong Retail Sales - Volume (YoY)% Aug 7.2 8.9

Hong Kong Retail Sales - Value (YoY)% Aug 8.1 9.5

Thailand Consumer Confidence Economic Sep 67.9 69.5

SELECTED ECONOMIC RELEASES CALENDAR (30 SEPT - 04 OCT 2013)

Expected Release Date Country Indicators Period

10/1/2013 Japan Job-To-Applicant Ratio Aug

Japan Jobless Rate % Aug

Indonesia Consumer Confidence Index Sep

Thailand Core CPI (YoY)% Sep

Thailand Consumer Price Index (YoY)% Sep

South Korea Consumer Price Index (YoY)% Sep

South Korea Consumer Price Index (MoM)% Sep

South Korea Core Consumer Price Index(YoY)% Sep

South Korea Ext Trade - Export (YoY)% Sep

South Korea Ext Trade - Imports (YoY)% Sep

China PMI Manufacturing Sep

Indonesia Total Trade Balance (USD mn) Aug

Indonesia Inflation NSA (MoM)% Sep

Indonesia Exports (YoY)% Aug

Indonesia Core Inflation (YoY)% Sep

Indonesia Total Imports (YoY)% Aug

Indonesia Inflation (YoY)% Sep

10/3/2013 Hong Kong Retail Sales - Volume (YoY)% Aug

Hong Kong Retail Sales - Value (YoY)% Aug

Thailand Consumer Confidence Economic Sep

10/4/2013 South Korea Foreign Exchange Reserve (USD bn) Sep

Thailand Foreign Reserves (USD bn) Sep 27

HONG KONG Purchasing Managers Index Sep

Malaysia Exports YoY% Aug

Malaysia Imports YoY% Aug

Philippines Consumer Price Index (YoY)% Sep

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