Вы находитесь на странице: 1из 3

PP 7767/09/2010(025354)

Economic Highlights
Global
•MARKET DATELINE

2 April 2010

1 US Real GDP Will Continue To Expand In 1Q 2010, After


Manufacturing Activities Picked Up In March

2 Euroland’s Manufacturing Activities Picked Up In March

3 Japan’s Manufacturing Activities Eased Marginally In


March

4 China’s Manufacturing Activities Rebounded In March

5 India’s Manufacturing Activities Moderated In March

6 Indonesia Inflation And Exports Moderated, But Economic


Growth Remains Intact

Tracking The World Economy...

Today’s Highlight

US Real GDP Will Continue To Expand In 1Q, After Manufacturing Activities Picked Up In March

The US Purchasing Managers Index (PMI) of the Institute for Supply and Management (ISM) for the manufacturing sector
rose to 59.6 in March, the highest in more than five years and from 56.5 in February. Readings above 50 indicate the
sector is expanding while readings below 50 denote contraction. This suggests that manufacturing activities expanded
at a faster pace during the month, on account of a pick-up in production, new orders, supplier deliveries. These were
aided by higher new export orders, indicating that US manufacturing sector also benefited from a recovery in economies
abroad. Indeed, manufacturers have become more confidence and started to build inventories for the first time in March,
following 46 months of contraction. As a result, manufacturers increased their recruitment during the month, albeit at
a more moderate pace, in anticipation of a pick-up in demand given an improvement in economic outlook. Input costs,
however, picked up in March, pointing to an upward price pressure.

A PMI in excess of 42, over a period of time, generally indicates an expansion of the overall economy, according to the
ISM. Therefore, the PMI indicates growth for the 11th consecutive month in the overall economy, as well as expansion
in the manufacturing sector for the eighth consecutive month. As a whole, the readings suggest that the US economy
will likely continue to expand in 1Q 2010, after recording a strong growth in the 4Q. Indeed, based on the past
relationship between the PMI and the overall economy, the ISM indicates that the average PMI for 1Q 2010 corresponds
to a real GDP growth of 5.4%.

The Euroland Economy

Euroland’s Manufacturing Activities Picked Up In March

◆ Euroland’s Purchasing Manager Index (PMI) for manufacturing sector rose to 56.6 in March, better than the
preliminary number of 56.3 reported earlier and 54.2 in February. This was the sixth straight month of increase

Peck Boon Soon


(603) 9280 2163
Please read important disclosures at the end of this report.
bspeck@rhb.com.my

Page 1 of 3
A comprehensive range of market research reports by award-winning economists and analysts are
exclusively available for download from www.rhbinvest.com
2 April 2010

and the highest in more than three years, suggesting that manufacturing activities continued to expand and at a
faster pace during the month. Stronger growth in manufacturing activities was underpinned by higher production
and new orders. This will likely help the Euroland to sustain its economic growth in 1Q 2010, after slowing down
to +0.1% qoq in the 4Q.

Asian Economies

Japan’s Manufacturing Activities Eased Marginally In March

◆ Japan’s Purchasing Managers Index (PMI) for the manufacturing sector eased marginally to 52.4 in
March, from 52.5 in February. The index was still above the 50 threshold suggesting that manufacturing activities
are still expanding, but growth momentum is moderating. Output was slower, while new orders increased modestly
and retrenchment eased during the month. Export orders, however, climbed to 55.7 in March, the highest in almost
six years, indicating that the Japanese economy continued to rely on exports to drive growth. As a whole,
manufacturing activities moderated slightly in 1Q 2010, suggesting that the Japanese economy will continue to
grow during the quarter, albeit at a more moderate pace.

China’s Manufacturing Activities Rebounded In March

◆ China’s Purchasing Managers Index (PMI) for the manufacturing sector rebounded to 55.1 in March,
from 52.0 in February and compared with 55.8 in January. This suggests that manufacturing activities expanded
at a faster pace, as factories resumed their production after the Chinese New Year celebration break. The pick-
up was on account of higher output, new orders, backlogs of work and supplier delivery time. These were aided
by an increase in new export orders and inventories rebuilding during the month. As a result, manufacturers
recruited more workers to meet rising production. Input prices, however, picked up in March, pointing to an upward
price pressure. As a whole, the readings suggest that economic activities in China will likely sustain its
expansion into 1Q 2010, after accelerating to 10.7% yoy in the 4Q, on the back of a recovery in exports and
the implementation of the economic stimulus packages by the government.

India’s Manufacturing Activities Moderated In March

◆ India’s Purchasing Managers Index (PMI) for the manufacturing sector eased to 57.8 in March, from 58.5 in
February. The moderation was reflected in weaker expansion in both output and new orders. Despite the
moderation, the index level was the second highest in one and a half years, suggesting that manufacturing
activities in India are still expanding at a reasonably fast pace during the month. This implies that India’s
economy will likely sustain its growth in 1Q 2010, after slowing down to 6.0% yoy in the 4Q. Stronger economic
growth, coupled with an acceleration in inflation rate, prompted India’s Finance Minister Mukherjee to reverse some
of the tax cuts initiated in 2009 in the budget tabled on 26 February. This includes raising the excise tax on almost
all consumer products to 10%, from 8% and increased customs duty on overseas purchases of crude oil. Similarly,
the Reserve Bank of India, in an unscheduled move, raised its key policy rate by 25 basis points to 5.0% on 19
March. Indeed, the Reserve Bank of India also left the door open for a further increase in its April policy review.

Indonesia Inflation And Exports Moderated, But Economic Growth Remains Intact

◆ Indonesia’s inflation rate moderated to 3.4% in March, from +3.8% in February. This was the slowest increase in
three months, providing Bank Indonesia with more room to keep its key policy rate stable in the near term. Bank
Indonesia indicated that it may keep its benchmark interest rate unchanged this year, as inflationary
pressure remains benign. “If the inflation rate hovers at around 5-6%, there is no urgency for the central bank
to raise the interest rate”, according to the Deputy Governor. The moderation was reflected in slower increases
in prices of food & processed food and clothing as well as the costs of housing, healthcare and transport.

◆ Separately, Indonesia’s exports, which account for about 29% of GDP, moderated to 57.1% yoy in February,
after surging by 59.3% in January. This was attributed to a slowdown in the exports of oil & gas, which eased
to 109.1% yoy in February, from +147.6% in January. A pick-up in the exports of non-oil & gas products, however,
mitigated the slowdown. Imports, on the other hand, picked up to 59.9% yoy in February from +43.8% in January.
This was the third consecutive month of increase, pointing to a pick-up in domestic demand. Stronger exports
growth in January-February, together with a resilient industrial activities, suggests that Indonesia’s economy will
likely sustain its growth in 1Q 2010, after strengthening to +5.4% yoy in the 4Q of last year.

A comprehensive range of market research reports by award-winning economists and analysts are Page 2 of 3
exclusively available for download from www.rhbinvest.com
2 April 2010

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI
and RHB Investment Bank Berhad (previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under
such circumstances as may be permitted by applicable law. The opinions and information contained herein are based on
generally available data believed to be reliable and are subject to change without notice, and may differ or be contrary to
opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This
report is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not
warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall
give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons may from time to time have an interest
in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual
financial circumstances and objectives of persons who receive it. The securities discussed in this report may not be suitable for
all investors. RHBRI recommends that investors independently evaluate particular investments and strategies, and encourages
investors to seek the advice of a financial adviser. The appropriateness of a particular investment or strategy will depend on an
investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents
accepts any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and
financing activities as well as providing investment banking and financial advisory services. In the ordinary course of its trading,
brokerage, banking and financing activities, any member of the RHB Group may at any time hold positions, and may trade or
otherwise effect transactions, for its own account or the accounts of customers, in debt or equity securities or loans of any
company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding
company and the respective directors, officers, employees and agents of each of them. Investors should assume that the
“Connected Persons” are seeking or will seek investment banking or other services from the companies in which the securities
have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been
reviewed by, and may not reflect information known to, professionals in other business areas of the “Connected Persons,”
including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have
received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive
factors and firm revenues.

A comprehensive range of market research reports by award-winning economists and analysts are Page 3 of 3
exclusively available for download from www.rhbinvest.com

Вам также может понравиться