economics asia

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BRIEFEconomics Asia NEws, ANAlysis ANd CommENtAry

Wednesday

03.26.14www.bloombergbriefs.com

calendar (hong kong Time)

time event survey PriOrJN 7:50 Corp Serv Px Indx 0.8% 0.8%SI 13:00 Industr Prod MoM 4.0% -8.1%SI 13:00 Industr Prod YoY 12.5% 3.9%TH 14:30 Customs Exports 0.2% -2.0%TH 14:30 Customs Imports -2.0% -15.5%TH 14:30 Customs Trade Bal -$1400M -$2521MVN TBD Exports YTD YoY 13.4% 12.3%VN TBD GDP YTD YoY 5.2% 5.4%VN TBD Imports YTD YoY 16.0% 17.0%VN TBD Retail Sales YoY 11.6%

BCAL

WhaT To WaTch: Singapore industrial output probably rose 12.5 percent in February from a year earlier, 1 p.m. (See story, page 4.) Taiwan President ma Ying-jeou said hes willing to meet protesters in a bid to assuage anger over a China trade pact. Bank of Thailand releases minutes of its March 12 meeting.

economicS: Thai customs trade balance, 2:30 p.m. reserve Bank of australia governor glenn Stevens speaks in Hong Kong on the Australian and global economies, 11:30 a.m. reserve Bank of australias financial stability review, 8:30 a.m. reserve Bank of new Zealand publishes residential mortgage lending data, 10 a.m.

goVernmenT: President Barack obama sought to mend frayed ties between Japanese Prime minister Shinzo abe and South korean President Park geun hye as the three met following the Nuclear Security Summit in The Hague. The hong kong legislative council holds a meeting on the 2014-2015 government budget, 11 a.m.

comPanieS: malaysian airlines and Boeing records on Flight 370s maintenance and crew are being sought by a law firm representing the father of one of the missing flights passengers ahead of a possible barrage of litigation over the planes disappearance.

markeTS: indias rupee advanced for a third day. copper rose the most in 15 weeks. chinas gold imports from hong kong rose in February. (All times are local for Hong Kong.)

ASIA DAYBOOK: anne riley

singapore Output, BOt minutes, rBAs stevensQuoTe of The daYChina is headed for a partial, controllable and mini crisis. Theres tremendous room for the central government to fix the problems in local government debt. defaults must be allowed to restructure the debt, which will definitely happen as part of the reform measures in the second half of this year.

Li Daokui, former adviser to the Peoples Bank of China.

aSia on The groundWhy the decelerating pace of Chinas urbanization may exacerbate the countrys economic slowdown and may make it tougher to hit its targets. (See page 8.)

eQuiTY markeT

-1.0 -0.5 0.0 0.5 1.0 1.5 2.0

Dow Jones

S&P 500

NASDAQ

Bovespa

FTSE 100

CAC 40

DAX

Nikkei 225

Hang Seng

1-Day Change (%)Trading Volume (Standard Deviation From 6-Mo Avg)

Non-OECD countries are driving global crude demand because of faster economic growth and a greater reliance on energy-intensive industries. China, India and Indonesia posted average GDP growth of 6.7 percent in 2011 to 2013 compared with less than 3 percent for OECD members. OECD crude demand fell from 52 million barrels of oil per day in 2005 to 47 million last year. Grace Lee, Bloomberg Industries

China, india Lead Developing nations in Crude Demand

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55

2000 2002 2004 2006 2008 2010 2012 2014

Total OECD Demand Total Non-OECD Demand

Source: Bloomberg OMRSD401 Index , OMRSD701 Index

03.26.14 www.bloombergbriefs.com Bloomberg Brief | economics asia 2

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sPOtLiGHt sinGAPOre TAMArA HENDErSON, BlOOMBErG ECONOMIST

singapores Central Bank may ease in April

-0.4%SingaPore

dollarThe SGD has under-performed other Asian currencies (excluding Japan), which are up 0.6 percent on average against the USD this year.

-4%eQuiTieS

Singapores MSCI has trailed behind the MSCI World Index, which has fallen 0.3 percent this year.

0%houSe PriceS

Tapering and mea-sures by the authori-ties to curb speculation in the housing market have kept home prices stable.

0%gloBal food

PriceSSteady food prices, in-dicated by stable global food-price futures, should help contain inflation; food accounts for 22 percent of Singa-pores CPI.

-6bp10-Year goVT

Bond YieldSingaporean 10-year bond yields are little changed this year amid the well-signaled tapering of asset purchases by the U.S. Federal reserve.

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Singapore Core CPI 3M Rolling Average YoYSingapore CPI 3M Rolling Average YoYMAS S$NEER, Index

Source: Bloomberg

external headwinds, Sgd Strength Tamed inflation

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1.24

1.26

1.28

1.30

1.32

Apr-12 Oct-12 Apr-13 Oct-13Source: Bloomberg, Goldman Sachs

Weaker Band (Estimated)

Stronger Band (Estimated)

S$NEER Implied USDSGD

Sgd is Trading in the middle of the Band

The Monetary Authority of Singapore may reduce the slope of the band governing the nominal effective exchange rate {SNEER Index} , while leaving unchanged the modest and gradual appreciation bias.

Inflation dropped to 0.4 percent {SICPIYOY Index} and has scope to fall further owing to a multitude of obstacles to growth.

The March flash reading of Chinese manufacturing PMI sug-gests growth momentum will continue to slow in China, the city-states largest trading partner {ECTR SINGAPORE Total Trade}.

Higher yields related to the U.S. recovery and tapering by the U.S. Federal reserve may slow investment, especially in Singapores property market {URPIPRCY Index}.

High costs can be a deterrent to investors. The SGD on a real-effective-exchange-rate basis {WCRS REER} is among the least competitive currencies in emerging mar-kets, and Singapore has displaced Tokyo as the worlds most expensive city.

Heightened tensions over russias annexation of Crimea in-troduce geopolitical risk as an added challenge for risk appetite {CRIS}.

In Singapore, monetary conditions are adjusted by managing USDSGD against a basket of currencies within an undisclosed band. The MAS signals monetary policy shifts by changing the slope, width or center of the band. The MASs semi-annual policy decision will probably be announced on April 11 {ECO SI}.

asset PricesYear-to-date change


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FX teCHniCALs TAMArA HENDErSON, BlOOMBErG ECONOMIST

near-Term Technicals favor the krW

tiCKer LAst PriCerAnK

OverALL

teCHniCAL siGnAL

ADX BOLLinGer BAnD Dmi 14 mACD rsi 9 stOCHAstiCs50-DAy

smA200-DAy

smA50D vs

200D smAUSDTWD 30.572 1.1 trending buy buy sell 30.33 29.91 1.4%USDCNH 6.1851 0.6 strong trend buy 6.087 6.096 -0.2%USDTHB 32.580 0.4 buy buy 32.58 31.90 2.1%USDPHP 45.069 0.1 buy buy 44.91 44.01 2.0%USDMYR 3.3054 0.0 range buy buy 3.304 3.245 1.8%EURUSD 1.3826 -0.2 range buy sell 1.372 1.350 1.6%USDSGD 1.2679 -0.5 range buy 1.269 1.263 0.5%USDJPY 102.29 -0.5 range buy buy 102.4 100.6 1.8%AUDUSD 0.9163 -0.6 range buy buy 0.896 0.914 -2.0%USDINR 60.480 -0.8 range sell sell buy 61.84 61.62 0.4%USDIDR 11394 -1.1 trending sell buy 11811 11254 4.9%NZDUSD 0.8573 -1.8 trending buy sell 0.836 0.818 2.2%USDKRW 1079.5 -3.1 range buy buy 1071 1083 -1.1%

Source: Bloomberg Updated: 5:50 a.m. Hong Kong time.

Six popular technical trading rules, weighted by performance over the last 90 days, favor the krW against the nZd and TWd. The Rate of Change rule has performed best for uSdkrW over the last 90 days, earning 4.4 percent. cnh, idr, TWd and nZd are in established trends, in contrast with ranges for most other Asian currencies, according to ADX.NOTE: Technical signals are aggregated using weights based on daily performance over the last 3 months. Performance is assessed based on the trading rules 3-month return, Sortino ratio and win rate. The return must be above 2 percent; the Sortino ratio must be above 0.25; and the win rate must exceed 66 percent. Hover mouse over columns for Technical noTeS, including the triggers for buy and sell signals. (Open in browser: http://bit.ly/technical_notes.). To re-create or customize this table: XLTP Historical Technical Analysis Screener . Click Open to download into Excel.

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mArKet CALLs michael Smith, the head of ANZ

Banking Group, said the reserve Bank of Australia will probably try to weaken the nations currency, which rose today to a three-month high against the U.S. dollar. The so-called Aussie hasnt declined along with commodity prices in spite of the currencys links to raw materials, he said. Is it a little bit too high? Smith said. Probably it is and Im sure the reserve Bank governor will try to push it down a little bit.

Vaninder Singh, an economist at rBS, sees a 25 basis point increase to the Philippine key rate on March 27. Worries surrounding overheat-ing remain with credit growth likely to accelerate further, said Singh. Bangko Sentral ng Pilipinas will act earlier rather than later to contain inflation expectations, as the central bank has done in the past.

chen Xingdong, chief China economist at BNP Paribas, lowered forecasts for the onshore yuan throughout 2014. BNP estimates the currency will finish the first quarter at 6.29 per dollar. Chen said yuan depreciation may gradually cease in the second quarter and then weaken again in the third quarter as the slowing economy damps market sentiment. The bank predicts the yuan will end 2014 at 6.20 per dollar.

kathy matsui, chief Japan strat-egist at Goldman Sachs, lowered forecasts for Japanese stocks, citing the markets unanticipated weakness and limited near-term catalysts. The brokerage reduced its three-month target for the Topix index to 1,200 from 1,350, cut its six-month forecast to 1,300 from 1,375, and kept its 12-month target at 1,450. The indexs recent losses are due to a combination of overseas and domestic factors, with worries about foreign selling of shares also weighing on the market, Matsui said.

insiDe tHe COnsensus JENNIFEr BErNSTEIN, BlOOMBErG BrIEF

Singapores industrial production probably rose 12.5 percent in February from a year earlier, according to median forecast of 18 economists surveyed before todays release. Song Seng Wun, an economist at CIMB Group Holdings, ranked the second-most ac-curate predictor of Singaporean production by Bloomberg, sees the growth of city-states factory output at 8 percent. Thats the lowest of the estimates, which ranged from 8 percent to 19 percent. Singapores non-oil domestic exports rose 9.1 percent last month from the year before, more than the 7.2 percent gain predicted by economists, even as manufacturers shipped fewer electronics.

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Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14

Singapore Non-Oil Domestic Exports YoY

Singapore Industrial Production YoY

Source: Bloomberg

Singapore Exports Rose in February

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singapores Output Probably Grew 12.5% Last month

tOP rAnKeD eCOnOmists FOr sinGAPOre inDustriAL PrODuCtiOnrAnK AnALyst Firm FOreCAst As OF DiFFerenCe

1 Hak Bin Chua Bank of America Merrill Lynch

2 Song Seng Wun CIMB Research 8.0 3/18/14 -4.5

mOst reCent FOreCAstsAnALyst Firm FOreCAst As OF DiFFerenCe

Edward Wee Kok Lee Standard Chartered 16.9 3/24/14 4.4Frances Cheung Credit Agricole 12.1 3/24/14 -0.4Leong Wai Ho Barclays 13.9 3/24/14 1.4Leif Eskesen HSBC Singapore 10.8 3/24/14 -1.7Euben Paracuelles Nomura 9.7 3/24/14 -2.8Median Number of Economists 18 12.5High Prakash Sakpal ING Groep NV 19.0 3/20/14 6.5Low Song Seng Wun CIMB Research Pte Ltd. 8.0 3/18/14 -4.5

Source: Bloomberg


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americas

u.S. consumer confidence unexpect-edly climbed in March to the highest level in six years. The Conference Boards sentiment index rose to 82.3, the highest since January 2008 and exceeding all forecasts in a Bloomberg survey of econo-mists, from 78.3 in February, the New York-based private research group said.

Purchases of new homes in the u.S. fell in February to the lowest level in five months. Sales declined 3.3 percent to a 440,000 annualized pace, following a 455,000 rate in the prior month that was the strongest in a year, figures from the Commerce Department showed.

u.S. home prices rose 0.5 percent month on month and 7.4 percent year on year in January, according to a report from the Federal Housing Finance Agency. Separately, a report from S&P/Case-Shiller showed home values in 20 U.S. cities advanced in the year to January at the slowest pace since August.

u.S. President Barack obama urged russia to de-escalate the crisis over Ukraine or face the consequences of more sanctions if it encroaches further into the east of the country after its an-nexation of Crimea. President Vladimir Putin has to understand that theres a

choice to be made here, Obama told a news conference in The Hague.

mexicos January economic activity rose 0.83 percent year on year, the na-tional statistics agency reported, less than the 1.4 percent rise forecast by econo-mists ahead of the release.

colombias central bank will probably consider an increase in interest rates later this year as the economy continues to grow close to its potential and inflation ac-celerates, co-director adolfo meisel said.

europe

u.k. inflation slipped further below the Bank of Englands 2 percent target in Feb-ruary to its lowest rate in more than four years. Consumer prices rose an annual 1.7 percent, the least since October 2009, compared with 1.9 percent in January, the Office for National Statistics said.

german business confidence fell for the first time in five months. The Ifo insti-tutes business climate index, based on a survey of 7,000 executives, fell to 110.7 in March after reaching 111.3 the prior month, the highest level since July 2011.

hungarys central bank reduced the two-week deposit rate by 10 basis points to a record-low 2.6 percent, matching the median estimate in a Bloomberg survey.

OverniGHt BlOOMBErG NEWS

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currencieSArOunD tHe CLOCK(All times are Hong Kong time.)

europe3 p.m. A Gfk report on german con-sumer confidence in April will be released. Consumer sentiment may remain unchanged at 8.5, according to the median forecast of economists.

4:15 p.m. Swedens national insti-tute of economic research pub-lishes updated economic forecasts.

5 p.m. italian retail sales may have dropped 1.6 percent in January from a year earlier, economists predict.

9:30 p.m. Bundesbanks board member andreas dombret speaks at New York Stock Exchange.

10 p.m. European Union President herman Van rompuy speaks to European Parliament leaders on the outcome of the latest EU summits.

americas2 p.m. St. louis Federal reserve President James Bullard will speak at the Credit Suisse 17th Asian In-vestment Conference in Hong Kong.

8:30 p.m. u.S. durable goods orders probably climbed 0.8 percent in February after falling 1 percent in January.

9:45 p.m. A preliminary reading of markit u.S. Services Pmi may increase to 54 in March from 53.3 a month earlier.

10 p.m. u.S. Senate homeland Security and governmental af-fairs committee holds a hearing on cyber risks to critical infrastructure.

10:30 p.m. U.S. Treasury Secretary Jacob J. lew testifies at the House Financial Services Committee to dis-cuss the State of the International Financial System.


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OutsiDe AsiA BETH ANN BOVINO, STANDArD & POOrS rATING SErVICES

companies founded by immigrants, 2006-2012

Bioscience 11%

Computers/ Communication

6% Defense/

Aerospace 3%

Environmental 9%

Innovation/ Manufacturing

Related 45%

Semiconductors 4%

Software 22%

Source: Kauffman Foundation, Then and Now. Americas New Immigrant Entrepreneurs, Part VII; Standard & Poor's

immigration reform may Help Boost u.s. economic GrowthAs the drive for U.S. immigration reform

becomes more bogged down in election-year politics, one facet of the issue seems indisputable: An overhaul of the countrys immigration policy would be a boon to the worlds biggest economy.

A sweeping reform would further open U.S. borders to highly-skilled non-citizens who could lawfully enter the country permanently. Such reform could add about 3.2 percentage points to real GDP in the next 10 years (2015 to 2024) and would probably add even more to growth in the following decade.

Over time, immigration reform may sig-nificantly increase the number of working-age people in the U.S. An influx of young, skilled labor would spur economic growth, potentially add to innovation, and help offset the deleterious effects of an aging American population, among other things. If reform focused on highly skilled immi-grants, the effects on productivity, the tax base and even jobs would be even larger.

This would help cut about $150 billion in real terms from the deficit in 10 years and possibly even more in the following decade.

While many see immigration reform as a boost for the economic recovery, others are sure that immigrants steal U.S. jobs, depress wages and slow economic growth.

Some of these concerns are misplaced.The worry that immigrants are taking

American jobs assumes that they only affect the supply of labor. But new workers, whether they are new immigrants or new graduates, also affect demand. recently employed workers consume goods and services leading to more revenue, jobs and growth. U.S. immigrants typically comple-ment the native labor force; they dont substitute for American workers.

Immigrants also are particularly innova-tive. According to figures from The Partner-ship for a New American Economys June 2012 study, 75 percent of the nearly 1,500 patents awarded at the nations top 100 re-search universities went to projects at least partly headed by immigrants. Nearly all of those patents were in the STEM fields science, technology, engineering and mathematics. Eighteen percent of Fortune 500 companies had at least one founder who is foreign-born. These companies

generated $1.7 trillion in annual revenue and employed 3.6 million workers world-wide (Immigration law Policy Center).

Because immigrants create businesses and file patents at an especially high rate, this helps create jobs. According to an American Enterprise Institute 2011 study, from 2000-2007 each additional group of 100 foreign-born workers with an advanced degree was associated with 44 additional American jobs, and those foreign-born workers with STEM backgrounds were as-sociated with 262 additional jobs.

There may be some short-term down-sides to immigration reform. It will probably result in temporary imbalances in the skills and occupations that affect labor supply and demand. In particular, the increase in the demand for labor generally lags demand for goods and services. If capital available to workers didnt swell at the same pace, there would be a decrease in the marginal product of labor and, thus, lower wages on average. As a result, the unemployment rate may drift slightly higher and average wages lower for a few years than would be the case if there were no changes to immigration policy.

In our analysis, average wages will be slightly lower through 2024 than with no immigration reform, in part because new

immigrants earn lower wages than cur-rent residents on average. As businesses expand to absorb the larger force and efficiently meet increased demand from a larger population, wed expect to see a larger economy, with increased productivity and higher wages later. According to the Congressional Budget Office, wage gains over 2024-2033 would be 0.5 percent higher than with no reform and would be higher across all skill groups.

As an added benefit, the U.S. population would be younger on average. Immigration reform would add an estimated 13.7 million people to the country by 2033 just 6 per-cent of them age 65 or older, according to the Bipartisan Policy Centers October 2013 immigration study. The Census Bureau proj-ects that 20 percent of U.S. residents will be 65 or older in 2030. This is important in light of the strain that medical costs place on the public finances with an aging population.

Employment-based reform would provide a short-term solution to the current skills gap businesses face, giving long-term solutions like school-business partnerships which produce graduates with skills that meet business needs, getting graduates hired at a faster pace a chance to work.

Beth Ann Bovino is the chief U.S. economist at Standard & Poors Ratings Services.


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1D YoY 52W w Avg 52W FORW. LAST 1D CHG YoY 52W w Avg 52W 5Y%Chg %Chg Min l Last Max PE 12M YIELD BPS BPS Min l Last Max CDS

ASIA/PACIFIC ASIA/PACIFICMXAU Index Australia 1094.05 0.2% 7.2% 956 1116 14.3 GACGB10 Index Australia 4.12% -0.1 53.9 3.0 4.4 45.6MXCN Index China 58.30 2.2% -3.5% 51 66 8.6 GCNY10YR Index China 4.49% 0.0 90.0 3.4 4.7 97.0MXHK Index Hong Kong 11631.19 0.0% 0.5% 10,600 12380 14.6 HKGG10Y Index Hong Kong 2.31% -6.2 107.2 0.8 2.6 naMXID Index Indonesia 5472.06 -0.4% -4.1% 4,487 6149 13.7 GIDN10YR Index Indonesia 8.23% 9.4 275.2 5.4 9.2 183.5MXIN Index India 834.05 0.0% 14.3% 699 834 14.2 GIND10YR Index India 8.79% 0.5 84.5 7.1 9.2 naMXJP Index Japan 716.14 0.1% 10.5% 613 808 13.5 GJGB10 Index Japan 0.61% -0.5 4.8 0.4 0.9 50.2MXKR Index Korea 558.64 -0.4% -2.0% 509 605 8.9 GVSK10YR Index Korea 3.54% -2.5 66.3 2.7 3.8 61.0MXMY Index Malaysia 652.97 0.2% 11.1% 591 669 15.1 MGIY10Y Index Malaysia 4.12% -0.1 63.0 3.1 4.3 104.3MXPH Index Philippines 1079.43 -1.0% -0.9% 941 1224 18.4 PDSF10YR Index Philippines 4.63% -0.2 104.2 3.0 4.6 109.5MXSG Index Singapore 1641.19 -0.2% -5.7% 1,579 1823 na MASB10Y Index Singapore 2.50% -5.0 94.0 1.4 2.8 naMXLK Index Sri Lanka 643.31 -0.1% -2.7% 598 778 na GGSL10YR Index Sri Lanka 10.08% -18.8 -192.9 9.4 12.1 naTAMSCI Index Taiwan 305.86 0.8% 8.5% 273 309 na GVTW10YR Index Taiwan 1.62% 2.5 31.0 1.2 1.7 naMXTH Index Thailand 475.32 0.6% -9.7% 432 573 11.3 GVTL10YR Index Thailand 3.78% -1.4 26.0 3.3 4.4 130.5MXVI Index Vietnam 646.57 -1.0% 5.3% 509 662 naAMERICAS AMERICASMXUS Index U.S 1785.03 0.4% 20.5% 1,472 1799 15.7 USGG10YR Index U.S 2.75% 2.0 82.8 1.6 3.0 19.8MXBR Index Brazil 2117.38 1.1% -19.3% 1,916 2742 9.0 GEBR10Y Index Brazil 13.00% -15.8 319.7 9.4 13.4 174.2MXMX Index Mexico 6473.64 0.2% -11.4% 5,951 7772 16.6 GMXN10YR Index Mexico 6.25% -3.0 126.5 4.4 6.7 86.2MIDDLE EAST & AFRICA MIDDLE EAST & AFRICAMXZA Index South Africa 1174.06 1.0% 18.5% 916 1177 14.0 GSAB9YR Index *South Africa (9Y) 8.37% -7.2 177.6 5.8 8.8 200.1EUROPE (Euro Area) EUROPE (Euro Area)MXAT Index Austria 111.92 0.5% 0.6% 101 127 10.9 GAGB10YR Index Austria 1.85% 0.3 18.3 1.5 2.5 42.8MXBE Index Belgium 74.68 1.0% 8.4% 62 76 16.4 GBGB10YR Index Belgium 2.23% 0.5 0.6 1.9 2.9 44.3MXFI Index Finland 96.68 1.5% 24.9% 72 102 16.5 GFIN10YR Index Finland 1.89% 0.2 35.3 1.3 2.3 23MXFR index France 121.83 1.5% 16.3% 100 124 13.7 GFRN10 Index France 2.12% -0.2 10.2 1.7 2.6 52.3MXDE Index Germany 127.51 1.6% 15.3% 105 134 13.1 GDBR10 Index Germany 1.58% -0.1 25.0 1.2 2.0 23.4MXGR Index Greece 21.29 -0.1% 34.2% 12 22 29.0 GGGB10YR Index Greece 6.74% 1.8 -501.1 6.7 12.8 naMXIE Index Ireland 38.34 1.2% 29.2% 27 43 24.7 GIGB10YR Index Ireland 3.07% 0.1 na 3.0 4.3 81.7MXIT Index Italy 59.94 1.0% 30.1% 43 61 13.1 GBTPGR10 Index Italy 3.39% -1.7 -121.9 3.4 4.9 138.5MXNL Index Netherlands 98.49 1.3% 15.1% 82 102 14.1 GNTH10YR Index Netherlands 1.78% -0.8 0.1 1.5 2.5 34MXPT Index Portugal 55.89 1.3% 5.2% 47 57 18.4 GSPT10YR Index Portugal 4.20% -0.7 -186.9 4.2 7.5 207.0MXES Index Spain 109.65 0.7% 24.2% 81 116 14.4 GSPG10YR Index Spain 3.33% -2.0 -162.9 3.3 5.1 107.8EUROPE (Non-Euro EU) EUROPE (Non-Euro EU)MXDK Index Denmark 5856.30 0.3% 23.4% 4,322 6299 18.2 GDGB10YR Index Denmark 1.62% 1.2 9.7 1.3 2.2 24.2MXHU Index Hungary 799.37 0.2% -20.7% 749 1107 8.8 GHGB10YR Index Hungary 5.82% 0.0 -63.0 4.9 6.8 239.0MXPL Index Poland 1710.71 1.5% 5.3% 1,543 1852 13.7 POGB10YR Index Poland 4.26% 0.4 37.9 3.1 4.9 71.8MXSE Index Sweden 10256.85 1.2% 12.6% 8,495 10449 16.0 GSGB10YR Index Sweden 2.16% -2.7 27.5 1.6 2.7 16.2MXGB Index U.K 1945.62 1.3% 3.0% 1,783 2024 13.1 GUKG10 Index U.K 2.71% 2.2 90.5 1.6 3.1 24.5EUROPE (Non EU) EUROPE (Non EU)MXNO Index Norway 2626.44 0.7% 8.8% 2,256 2719 na GNOR10YR Index Norway 2.96% -7.7 72.4 2.0 3.3 13.7MXRU Index Russia 640.74 3.6% -17.8% 591 841 na MICXRU10 Index Russia 9.12% -19.3 179.4 6.7 9.8 254.0MXCH Index Switzerland 1078.79 1.3% 7.6% 938 1106 15.6 GSWISS10 Index Switzerland 0.95% -3.1 23.1 0.6 1.3 naMXTR Index Turkey 923973 1.7% -21.2% 866K 1327K 8.5 TGBY10T0 Index Turkey 6.48% 0.0 -329.0 na na 258.7

LAST 1D Chg YoY 52W w Avg 52W 1Y Z- LAST 1D YoY 52W w Avg 52W 1Y Z-PRICE bps/% bps/% Min l Last Max SCORE PRICE %CHG %CHG Min l Last Max SCORE

CHINA ASIA/PACIFICSHIF3M Index 3M SHIBOR 5.50% 0.0 162.0 3.9 5.8 1.1 AUD Curncy Australian Dollar 0.92 -0.1% -12.6% 0.9 1.1 -0.4CCSDO2 Curncy 2Y CNY IRS 2.98% 0.0 -5.0 2.9 3.1 0.2 CNY Curncy Chinese Renminbi 6.20 0.1% 0.2% 6.0 6.2 2.0BOCRYLD Index Avg Dim Sum Yield 4.34% -1.0 4.0 6.0 -0.7 HKD Curncy Hong Kong Dollar 7.76 0.0% 0.0% 7.8 7.8 -0.3JAPAN INR Curncy Indian Rupee 60.48 -0.5% -10.4% 53.8 68.8 0.0JY0003M Index LIBOR 3M 0.14% 0.0 -2.2 0.1 0.2 -1.7 IDR Curncy Indonesian Rupiah 11394.0 0.1% -14.6% 9692 12261 0.5TI0003M Index 3M TIBOR 0.21% 0.0 -3.8 0.2 0.3 -1.8 JPY Curncy Japanese Yen 102.27 0.0% -7.7% 93.0 105.3 0.8JYSW2 Curncy 2Y Yen Swap 0.19% 0.2 -3.3 0.2 0.3 -1.4 MYR Curncy Malaysian Ringgit 3.31 0.2% -6.2% 3.0 3.3 1.1OTHER NZD Curncy New Zealand Dollar 0.86 0.0% 2.1% 0.8 0.9 1.7AU0003M Index Australia 3M LIBOR 2.96% 0.0 -115.5 3.0 3.2 -1.3 PHP Curncy Philippine Peso 45.07 0.0% -9.4% 40.8 45.4 1.3HIHD03M Index Hong Kong 3M HIBOR 0.37% -0.4 -1.2 0.4 0.4 -2.7 SGD Curncy Singapore Dollar 1.27 0.0% -2.1% 1.2 1.3 0.7JIIN3M Index Indonesia 3M JIBOR 8.13% 0.7 323.1 4.9 8.1 1.2 KRW Curncy South Korean Won 1079.50 0.2% 2.9% 1050 1161 -0.4NSERO3M Index India 3M MIBOR 9.93% -3.0 27.0 8.2 11.6 0.6 LKR Curncy Sri Lankan Rupee 130.65 0.0% -3.0% 125.4 133.2 0.3KLIB3M Index Malaysia 3M KLIBOR 3.32% 0.0 11.0 3.2 3.3 2.2 TWD Curncy Taiwan Dollar 30.57 -0.1% -2.3% 29.4 30.6 2.3PREF3MO Index Philippines 3M PHIREF 1.15% -3.3 90.5 (1.1) 1.6 1.5 THB Curncy Thai Baht 32.58 0.0% -10.0% 28.7 33.1 1.0SIBF3M Index Singapore SIBOR 3M 0.41% 0.0 3.1 0.4 0.4 1.4 VND Curncy Vietnamese Dong 21095 0.0% -0.7% 20.9K 21.2K 0.2KWSWOOC Curncy S. Korea 3M OIS 2.49% 0.0 -32.0 2.5 2.8 -0.7 AMERICASSLBR3MON Index Sri Lanka 3M SLIBOR 8.35% -4.0 -443.0 8.4 12.8 -1.7 BRL Curncy Brazilian Real 2.31 -0.5% -12.9% 2.0 2.5 0.5BOFX3M Index Thailand 3M BIBOR 2.17% -0.3 -68.8 2.2 2.9 -2.4 CAD Curncy Canadian Dollar 1.12 0.0% -9.0% 1.0 1.1 2.0VNCD3MO Index Vietnam 3M VNIBOR 4.00% 0.0 -187.1 3.2 6.2 -1.4 MXN Curncy Mexican Peso 13.12 0.0% -5.9% 12.0 13.5 0.6OTHER (NON-ASIAN) MIDDLE EAST & AFRICA.TED3M Index 3M Ted Spread 18.9 0.0 -3.4 14.2 26.3 -1.0 ZAR Curncy South African Rand 10.74 0.0% -13.9% 8.9 11.3 1.1.LIBORIOS F Index 3M LIBOR OIS Spread 14.4 0.0 0.6 12.9 17.4 -1.5 EUROPE (Euro Area)JPEIPLSP Index EMBI+ Spread 350.6 -0.8 59.8 261.5 405.2 0.6 GBP Curncy British Pound 1.65 0.0% 9.1% 1.5 1.7 1.2

DKK Curncy Danish Krone 5.40 0.0% 7.3% 5.4 5.8 -1.4LAST 1D YoY 52W w Avg 52W RSI EUR Curncy Euro 1.38 0.0% 7.5% 1.3 1.4 1.4PRICE %Chg %Chg Min l Last Max 30D HUF Curncy Hungarian Forint 225.43 0.0% 4.9% 211.7 237.5 0.4

AGRICULTURAL NOK Curncy Norwegian Krone 6.03 0.0% -3.3% 5.7 6.3 0.3SPGCAGTR Index S&P GS Agricult. Index 694.4 0.0% -5.7% 589 742.6 65.1 PLN Curncy Polish Zloty 3.03 0.1% 7.2% 3.0 3.4 -1.2METALS RUB Curncy Russian Ruble 35.60 -1.4% -13.1% 30.8 36.6 1.9SPGCINTR Index S&P GS Ind Metal Index 1287.2 1.6% -12.9% 1,258 1468.3 44.9 SEK Curncy Swedish Krona 6.40 0.0% 1.4% 6.3 6.8 -1.2GC1 Comdty Gold 1311.0 0.0% -17.8% 1,195 1606 50.6 CHF Curncy Swiss Franc 0.88 0.0% 7.4% 0.9 1.0 -1.5ENERGY TRY Curncy Turkish Lira 2.22 -0.1% -18.1% 1.8 2.3 1.5SPGCENTR Index S&P GS Energy Index 1119.3 0.1% 3.5% 992 1188 49.6 OTHER CROSSESINDEXES AUDJPY Curncy AUD/JPY 93.70 0.0% 5.7% 86.7 105.2 0.1CRY Index CRB Index 300.8 0.4% 2.1% 272.3 307.6 58.1 GBPJPY Curncy GBP/JPY 169.1 0.0% -15.3% 140.8 174.4 1.2SPGSCITR Index S&P Commodity Index 4922.1 0.1% 1.1% 4,507 5103.5 52.7 EURJPY Curncy EUR/JPY 141.40 0.0% -14.1% 119.5 145.1 1.3DBLCDBAT Index DBIQ Diversified Ag 232.0 -0.1% 8.3% 199.6 238.2 66.2 CHFJPY Curncy CHF/JPY 115.9 0.0% -14.0% 98.4 118.5 1.4

Source: Bloomberg. Updated at 6:41 a.m. Hong Kong time

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The pace of migration of rural Chinese to cities, a dynamic hailed by Premier li Keq-iang as key to the nations development, is set to slow by a third in coming years, deepening economic-growth concerns.

A government report released this month projected a 6.3 percentage-point rise in the share of people living in cit-ies from 2013 to 2020 down from a 9.4-point gain the previous seven years. Nomura estimates that slower urbaniza-tion will slice as much as half a percent-age point from annual gross domestic product growth over the next half decade.

In the past 30 years we turned farmers into factory workers, triggering massive gains in productivity and hence growth, said Ken Peng, Asia Pacific investment strategist at Citigroups private-bank busi-ness. Now those gains are diminishing.

li, who asked an arm of Chinas cabi-net to work with the World Bank on an urban-planning strategy released today, is under increasing pressure to take steps to address weakening economic expansion. A private report yesterday indicated a fifth straight slowdown in manufacturing in the worlds second-largest economy.

The premier, who has advocated an urbanization-growth strategy for two decades, is up against a shrinking pool

of rural workers, rising local-government debt and unhealthy air pollution in almost all big cities. Diminishing returns from urbanization make it tougher to achieve economic goals including this years 7.5 percent expansion target.

A report from the World Bank and the State Councils Development research Center, which helped inform the govern-ments plan, recommends changes includ-ing on land use to spur more-efficient and denser cities. That can save China $1.4 trillion from a projected $5.3 trillion in infrastructure spending over the next 15 years, World Bank Chief Operating Officer Sri Mulyani Indrawati said.

You cannot go on with the same ur-banization model, Sri Mulyani said in a separate interview.

A Purchasing Managers Index from HSBC Holdings and Markit Economics dropped to an eight-month low in March, a preliminary report showed.

The slowdown is stoking speculation that China will accelerate spending or loosen monetary policy to aid growth. The government will have to take action soon, and possible moves include an-nouncing additional urbanization-related fiscal spending, said Shen Jianguang, chief Asia economist at Mizuho Securities.

China has shifted more than 300 million people into cities since 1995 about twice the population of russia and li must find a way to accommodate almost as many again from the countryside without further wrecking the environment. The nations 731 million metropolitan dwellers, already 1/10 of the worlds population, use three times more energy than their coun-tryside peers, according to the World Bank.

The government plans to steer city migration onto a more environmentally friendly and people-focused path, saying the greatest potential for expanding do-mestic demand lies in urbanization.

Kevin Hamlin with assistance from Xin Zhou and Stephen Engle

AsiA On tHe GrOunD BlOOMBErG NEWS

China urbanization Loses momentum as Growth Concern Deepens

chinas five national Transport corridors to Spur urbanization

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