ASEAN Speaks

U.S. next jobs report on Fri June 4 will signal if employment data is trending above the 3M moving average of 520k monthly additions, potentially fuelling inflation concerns and impacting outcome of June 17 FOMC meeting. Back in ASEAN, with Thailand’s central bank rates at almost zero, what else can Thailand do to pump prime its economy in the wake of another COVID breakout? As Malaysia enters into a nationwide total lockdown, will the government impose loan moratorium extensions?

Malaysia makes the difficult choice of accepting the stricter MCO 3.5 vs a total lockdown. Bond markets was relatively steady despite the 92bp m/m increase in US core CPI but Huarong’s de-rating remains a persistent cause for concern for the offshore debt markets. Malaysia’s CPO sector is losing price competitiveness as Indonesia’s revamped progressive tax rates are giving palm oil refiners a comparative cost advantage. Will a repeat of 2012 low utilisation and high CPO inventories lead to a 30% collapse in CPO prices?

As inflation data accelerates, the US central bank will have to decide if it is to change its monetary policy stance to control inflation. Asset dislocations will likely rise; what are the key signposts to watch for ASEAN capital markets? Among regional peers, Singapore’s stock market performance has been stellar. How will rotations flow?

ASEAN’s stock market performance continues to diverge. What are the determinants that will change this narrative for fund flows? Malaysia just wrapped up its OPR meeting on May 6. What effect does the re-imposition of mobility restrictions have on its policy rate outlook. Singapore's banking sector has just concluded its Q1 earnings season, are Sing banks still in pole position relative to regional peers?

USD could see temporary support in the interim as a new mutant wave of COVID-19 resurgence threatens India and Asia. This podcast will also explore migrant worker flows and its impact on real estate markets, crude oil trends and Thailand’s petrochemical sector, and Malaysia’s construction sector.

Inflation trends in Singapore are increasingly visible from the properties segment. The spectre of property cooling measures may lead to risks of premature tightening by regulators. Thailand’s property measures on the other hand are more supportive, which underpins Maybank Kim Eng’s positive view of the sector. Philippines stock market is the worst performing ASEAN market, but deep value is emerging.

Following the recent ratings cut in Huarong’s bonds, credit markets are unnerved by the possibility that China may actually let the state-backed distressed debt manager go into default. Over in Singapore, with the impending announcement of a cabinet reshuffle, will SGX’s strong performance and momentum come to an abrupt halt? Join us in this week's ASEAN Speaks podcast.

Today we focus on ESG investing and find out what the scorecard looks like for Malaysian corporates and says about its ESG readiness. We also get a preview of MAS’s inflation stance and what our FX strategist is forecasting for the Sing dollar. In technology, Applied Materials just held its investor day and the group remains positive over the wafer fab equipment industry. With Intel and TSMC recently making announcements to invest in capacity, what are the key risk parameters to watch and is it too early to take profit on wafer fab equipment manufacturers in ASEAN? Philippines’ Financial Institutions Strategic Transfer (FIST) Act was recently signed into law, enabling financial institutions to free up assets for lending by allowing the transfer of NPL/NPAs to asset management firms. Who are the beneficiaries?

As the fallout from Archegos Capital appears contained and with US strong macro fundamentals hogging the limelight, capital markets moved to risk on environment, at least temporarily. This week, we assess if Malaysia’s central bank will likely tighten given their higher inflation outlook for 2Q21. With US 10 year treasuries closing out last Fri unchanged, will it continue to consolidate in this range and do we anticipate the current credit environment to re-attract ringgit bond flows? With strong news flow on electric vehicles, which manufacturing bases in ASEAN will benefit the most from this theme?

As markets brace after Archegos' fire sale of $20b worth of stocks last Friday, Asian markets seem to have held up well on Mon’s open. Malaysia’s Ministry of Finance has revised Malaysia’s budget deficit to 6% of 2021 GDP; will this lead to the introduction of capital gains tax as market grapevine suggests? As the Federal Reserve prepares to do away with restrictions on bank dividends and buybacks, are there signs that Singapore banks will follow suit? Intel announced that it will spend $20b to build 2 fabrication plants in Arizona, including a plan to serve third party and fabless chip designers. Will this swing the balance with TSMC and who are the supply chain winners in ASEAN?