Comprehensive country-by-country macroeconomic analysis, risk appraisals, latest market data and forecasts for Asia

 

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Key stories from this month's issue...

Industry Forecast - Multiple Headwinds For Local Banks - OCT 2014

Australasia & South Pacific September 2014 / Australia / Economy

We remain downbeat on the prospect for earnings growth in the Australian banking sector owing to a combination of economic fragilities stemming from high household debt and elevated property prices, as well as an increasing regulatory burden. The ongoing Financial System Inquiry, which looks to assess the systemic risks posed by Australia's highly-concentrated banking system, is likely to result in increased pressure to raise capital requirements at the expense of profit growth.

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Economic Analysis - Proposed Tax Revisions To Temporarily Boost Consumption - OCT 2014

China & North East Asia September 2014 / South Korea / Economy

We believe that the proposed revisions to Korea's tax code recently announced by the Ministry of Finance will lead to a temporary increase in domestic demand in 2015. However, we do not expect this increase to be sustainable as wage growth is likely to remain weak, and note that loopholes in the proposed revisions could instead lead to increased investment overseas.

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Political Risk Analysis - Government To Deal With Military To End Protests - OCT 2014

South Asia September 2014 / Pakistan / Political Risk

BMI View: Pakistan's Prime Minister Nawaz Sharif will withstand calls for his resignation by Pakistan Tehreek-e-Insaf (PTI) leader Imran Khan and cleric Tahir-ul-Qadri. However, the protests have weakened his authority, and an end to the demonstrations is likely to come as part of a deal with the powerful military elite to relinquish Sharif's control of foreign affairs, which will undermine relations with India and put Pakistan's fiscal reform progress in jeopardy.

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Risk Summary - Ratings Update - Myanmar - OCT 2014

South East Asia Vol 1 September 2014 / Myanmar / Economy

On August 11, the regional Mandalay government in Myanmar lifted a dusk-to-dawn curfew in the city as sectarian tensions began to ease. As we wrote previously, violence in Mandalay began in early July following an online rumour that led to clashes between local groups of Buddhists and Muslims. The clashes, which left at least two people dead and 17 injured, marked the spread of sectarian violence from more far-flung territories to one of Myanmar's most developed cities. While tensions have cooled for the time being, ethnic and religious tensions remain a major risk to social stability across the country.

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Risk Summary - Risk Summary - Malaysia - OCT 2014

South East Asia Vol 2 September 2014 / Malaysia / Economy

Incumbent Parti Keadilan Rakyat (PKR) president Datuk Seri Dr Wan Azizah Wan Ismail retained her post as party president in party elections that were marked by voting irregularities, factional infighting, and the sacking and suspension of several party members for violating PKR's election laws. We believe that her win will provide a certain degree of stability to the party that has been plagued by infighting and a lack of clear direction even as it seeks to establish itself and its Pakatan Rakyat coalition as a credible opposition to the ruling Barisan Nasional.

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