Asia Monitor

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...

Currency Forecast - NZD: Technicals And Fundamentals Suggest Weakness - MAR 2015

Australasia & South Pacific February 2015 / New Zealand / Finance

BMI View: We forecast the NZD to average USD0.7200/NZD in 2015 and USD0.6800/NZD in 2016. The break below support is a very bearish technical signal which should put the New Zealand dollar's external vulnerabilities into focus. The Reserve Bank of New Zealand continues to talk down the currency, and expectations of interest rate hikes are reversing, both of which should be NZD negative.

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Risk Summary - Hong Kong - MAR 2015

China & North East Asia February 2015 / Hong Kong / Political Risk

At a January meeting between high level Chinese and US military personnel, Hong Kong was for the first time named as one of Beijing's 'Core Interests'. The mention signals an ongoing shift in Beijing's classification of Hong Kong following 2014's 'Occupy' protests. Beyond Beijing's notable involvement in Hong Kong's ongoing electoral reform initiatives, the Communist Party of China (CPC) has also been asserting its claim to the territory in the face of perceived criticism from western democracies. As such, the declaration of Hong Kong as a core interest can be viewed as a warning that Beijing will not tolerate foreign involvement in the city-state's political affairs.

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Risk Summary - Nepal - FEB 2015

South Asia January 2015 / Nepal / Political Risk

Nepal will continue to be courted by China and India over the coming years, as the two Asian giants seek to expand their sphere of influence in South Asia and the Indian Ocean. We believe the struggle for dominance between Beijing and New Delhi will allow Nepal to reap economic gains, mainly in the form of investment, over the coming years. Indeed, China and India have increased their investment in Nepal to help the country develop its hydropower sector. In addition, following bilateral talks between China and Nepal on December 26, 2014, Beijing reportedly pledged to boost financial aid to Nepal by more than five folds, from the current RMB15bn to about RMB80bn, to assist the latter with its socio-economic development.

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Risk Summary - Laos - MAR 2015

South East Asia Vol 1 February 2015 / Laos / Political Risk

While Laos will continue to enjoy political stability under the one-party rule of the Lao People's Revolutionary Party (LPRP), we believe political liberalisation will be hard to achieve. This owes to the strong desire of the LPRP to maintain its tight grip on power through continued political oppression. During Christmas in 2014, the Laotian government launched a crackdown on the Hmong Christians, an ethnic minority group in Laos. This latest crackdown speaks to the poor human rights record in the country, which we believe will likely not see any major improvement over the coming years. We believe the unending political oppression will jeopardise foreign aid and investment inflows to the country.

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Risk Summary - Indonesia - MAR 2015

South East Asia Vol 2 February 2015 / Indonesia / Economy

Indonesia

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