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India’s October Exports YoY Growth Highest Among Asian Countries

India’s export growth accelerated 9.6% year-on-year in October which was boosted by strong exports in the jewelry and engineering sectors. In September, Indian exports grew 4.6%.

In China, the world’s second largest economy, exports dropped 7.3% year-on-year in October, which is an improvement from September’s 10% year-on-year decline according to official data.

Taiwan exports surged 9.4% in October year-on-year buoyed by strong demand for semiconductor products according to government statistics. Taiwan’s October export data includes shipments deferred from September when exports contracted 1.8% due to a reduced number of working days to typhoons.

Philippine exports rose 5.1% in September year-on-year after 17 straight months of year-on-year decline.

Indonesia, South-East Asia’s largest economy, saw exports grow by 4.6% in October year-on-year mainly supported by rising prices of coal, rubber and crude palm oil. Indonesia’s exports dropped 0.59% in September year-on-year.

Singapore’s exports slumped 12% in October after registering a 5% drop the previous month according to figures released by International Enterprise (IE) Singapore. Non-oil domestic exports (NODX) were impacted by falling electronic exports (which fell 6%) and non-electronic exports (which dropped 14.6%).

Japan’s exports dropped in 6.9% year-on-year September marking the 12th straight month of export declines.

In Malaysia, September exports dropped 3% year-on-year according to the Statistics Department. In August, exports had increased 1.5%.

South Korea also saw falling exports in October, declining 3.2% year-on-year. This was however an improvement from the 5.9% decline in September. South Korea posted its first year-on-year export growth in 20 months in August when exports grew 2.6% year-on-year that month.

Export growth (year-on-year), October and September 2016, selected Asian countries - LD Investments

At 9.6%, India posted the highest year-on-year export growth rate in October among Asian countries.

Philippines Posts Fastest 3Q2016 GDP Growth In Asia

After recording a 6.9% growth rate in 1Q2016 and 7% growth in 2Q2016, data released by the Philippines Statistics Authority showed that Philippines notched a 7.1% year-on-year GDP growth rate in the third quarter of 2016 (July-September), emerging as the fastest growing Asian economy during the period. This is the fastest quarterly growth rate since the second quarter of 2013 when Philippines posted a 7.6% growth rate.

Philippines’ growth outpaced quarterly growth in China (6.7%), Vietnam (6.4%),
Indonesia (5.2%) and Malaysia (4.3%). 2016 third quarter GDP growth stood at 2.7% in South Korea, 2.2% in Japan, 2.06% in Taiwan and 0.6% in Singapore.

3Q2016 year-on-year GDP growth (%), selected Asian countries - LD Investments

At 7.1% Philippines posted the fastest 3Q2016 GDP growth in Asia.

India has yet to publish third quarter data. India notched 7.1% growth in 2Q2016.

According to the Philippines Statistics Authority (PSA), the services sector posted a 6.9% growth rate in the third quarter of 2016 (slightly lower than last year’s 7.2% growth), while industry accelerated to 8.6% (compared with 6.1% last year) and after five consecutive quarters of decline, the agriculture sector grew 2.9% (compared with a 0.1% decline last year).

Philippines has enjoyed robust FDI inflows this year. Data released this month show Philippines’ FDI inflows in August increased 32% year-on-year, bringing the year-to-date (January-August) tally to 71%. Philippine president Duterte’s four-day state visit to China last month resulted in investment commitments of US$ 15 billion, which is nearly three times the total FDI inflows to the Philippines last year according to data from the “World Investment Report 2015” published by UNCTAD (United Nations Conference on Trade and Development).
At US$ 5.23 billion, Philippines’ FDI inflows last year lagged its major South-East Asian counterparts, namely Singapore (US$ 65.26 billion), Indonesia (US$ 15.50 billion), Vietnam (US$11.80 billion), Malaysia (US$11.12 billion) and Thailand (US$10.84 billion). Four members of the 10-member ASEAN group had lower FDI inflows than Philippines last year, namely Myanmar (US$2.82 billion), Cambodia (US$1.70 billion), Laos (US$1.22 billion) and Brunei (US$0.17 billion).

FDI inflows, South-East Asian countries, 2015 (US$ billions) - LD Investments

At US$ 5.2 billion, Philippines’s FDI inflows in 2015 lagged its major South-East Asian counterparts specifically Singapore, Indonesia, Vietnam, Malaysia and Thailand.

Three Eurozone Countries Among Top 10 Countries With Highest Bad Debt Ratio

Of the top 10 countries in the world with the highest bank bad debt to gross loans ratio, three are eurozone countries – Cyprus, Greece and Italy. Two of them, Cyprus and Greece, rank within the top five.
San Marino, one of the world’s smallest countries and one of the world’s oldest republics, had the highest bad-loan ratio in the world in 2015 with 46% of total loans classified as non-performing according to data from The World Bank.

San Marino, which uses the euro as its official currency is not a eurozone member. A traditional tax haven for dodgers, the landlocked European country’s financial sector-oriented economy suffered a sharp contraction since the beginning of the global financial crisis partly due to a massive outflow of non-resident deposits.

Ratio of bank NPL to gross loans in 2015, selected countries - LD Investments

San Marino had the highest bank bad debt to total loan ratio in 2015.

Since the 2008 financial crisis, Cyprus, Greece and Italy saw steep increases in bad debt. Currently, the bad debt ratio in all three countries along with Portugal exceed 10% of total loans which is considerably higher than the U.S. where even at the height of the 2008-2009 financial crisis, it was only 5%.
The Monte dei Paschi di Siena, the world’s and Italy’s oldest bank which traces its origins to 1472, is Italy’s most troubled financial institution. An EU-wide stress test of 51 banks conducted by the European Banking Authority (EBA) this year found the Italian bank to be the weakest from the assessment.

Bank non-performing loans to gross loans (%), 2008-2015, selected European countries - LD Investments

Eurozone countries Cyprus and Greece are among the top five countries with the highest bad debt ratio.

Elsewhere around the world, while China has been getting much attention lately for its rising bad loans, India’s bad debt ratio has also been on an uptrend since 2009 and currently stands at 5.8% of total loans, considerably higher than China’s 1.5% figure. India’s bad debt situation is impeding the country’s ability to extend credit; gross bank lending grew by 9.3% in the six months to March this year compared with an average growth rate of 20% between 2010 and 2012.

Bank non-performing loans to gross loans (%) ratio, 2008-2015, selected Asian countries - LD Investments

India has seen a steep increase in the proportion bad debt tot total loans since 2008.

Over in the Americas, Latin America’s largest economy, Brazil, is currently in a recession, having contracted by 3.8% last year, leading to a rise in bad debt at Brazilian banks.

Bank non-performing loans to gross loans (%), 2008-2015, selected North and South American countries - LD Investments

With its economy in recession, Brazil has seen an increase in bad debt.

 

China: Record-Breaking Outbound M&A YTD 2016

China’s surge in outbound M&A activity this year is helping drive Asian annual outbound M&A to record levels, hitting a high of US$ 200 billion between January to September 2016, surpassing 2015’s full year M&A Asian outbound deal value of US$ 199.6 billion according to data from Mergermarket. The data includes recent purchases such as Zhongwang International’s US$ 2.3 billion acquisition of U.S. aluminum manufacturer Aleris which was announced in August this year.

Asia outbound M&A deal value (US$ billion)

Driven by China’s booming outbound M&A activity, Asian outbound M&A deal value for the first nine months pf 2016 has surpassed last year’s total Asian outbound M&A deal value.

With 173 deals worth US$ 128.7 billion, China has accounted for 64.3% of Asian outbound M&A value so far this year. Nearly 60% of China’s outbound M&A deal value (US$ 76.5 billion) and volume (101 deals) went into European businesses.

US$ 72.3 billion worth of Chinese outbound M&A deals have been made in businesses in the Industrials and Chemicals sector commanding the lion’s share of Chinese outbound investment so far this year.

Chinese outbound M&A deal value by sector (%) Jan-Oct 2016

36% of Chinese outbound M&A involved businesses in the Industrials and Chemicals sector while 27% of deals were in the Technology sector.

China’s outbound M&A deal value between January and October this year has increased 228% from the same period last year according to data from Bloomberg.

China total outbound M&A deal value - LD Investments

China’s outbound M&A deal value for the first ten months of 2016 is more than double compared to the total M&A deal value in 2015.

India, China Non-Cash Payments Per Capita Among The Lowest In The CPMI Countries

Cash is still the dominant mode of transaction for Indians and Chinese currently. According to a report released last month by the Bank for international Settlements (“Statistics on payment, clearing and settlement systems in the CPMI countries – Figures for 2015”) India’s and China’s non-cash payment transactions per capita are among the lowest in the CPMI countries.

11 non-cash transactions were made per inhabitant in India in 2015, which is lower than China which recorded 17 non-cash transactions per inhabitant in 2014 (data for 2015 is unavailable) and Russia which recorded 106 transactions per inhabitant in 2015. Non-cash transactions per capita was 403 for the United States in 2014 (data for 2015 is unavailable).

At 728 non-cash transactions per capita, Singapore has one of the highest non-cash transactions per inhabitant among the CPMI member countries, ranking higher than the United States, United Kingdom, Sweden and Switzerland.

Non-cash transactions per capita, selected countries, 2014 and 2015

Non-cash transactions per capita in India and China are among the lowest in the CPMI countries while Singapore has one of the highest.

 

BMW Keeps Top Spot As Leading Luxury Car Brand In The United States In 2015

German luxury car maker BMW maintained its position as the leading luxury car brand in the United States selling 346,023 vehicles in 2015, marking its fourth straight year at the top of the rankings.

Luxury car sales in the United States, 2015 - LD Investments

BMW retained the crown as the biggest seller of luxury cars in the United States in 2015 for the fourth straight year.

 

By growth rate however, Land Rover (owned by India’s Tata Motors) led the pack with a 37% sales growth rate for the year, followed by Volvo (owned by China’s Zhejiang Geely Holding Group). Audi (owned by Germany’s Volkswagen) appeared to be little affected by the emissions-cheating scandal, posting a strong sales growth of 11.1% for the year.

Luxury car sales growth in the United States, 2015 - LD Investments

U.S. sales of Tata Motors-owned Land Rover jumped 37% in 2015.

India – Fastest Growing Domestic Air Passenger Market In 2015

India’s domestic air passenger market grew the fastest year on year in 2015 posting an 18.8% growth rate over 2014.

Data from the 60th edition of the World Air Transport Statistics (WATS) shows that domestic airlines in India flew 80 million passengers in 2015, making India’s domestic air passenger market nearly five times smaller than China’s which flew 394 million passengers, and 8 times smaller than the United States’ which flew 708 million passengers the same year. Russia flew 47 million domestic air passengers making India’s domestic air passenger market nearly two times bigger than Russia’s.

At 18.8%, India's domestic air passenger market recorded the highest year-on-year growth rate in the world in 2015.

At 18.8%, India’s domestic air passenger market recorded the highest year-on-year growth rate in the world in 2015.

India Car Sales Surge 9.8% in 2015

According to data from the Society of Indian Automobile Manufacturers (SIAM), India’s passenger car sales jumped 9.8% in 2015 to 2,034,015 units, crossing 2 million units for the first time. The previous high was 1,998,703 units in 2012.
Low oil prices, improving consumer sentiment and lower interest rates (down 75 basis points) have helped boost sales.
“Positive consumer sentiment, new launches and increasing disposable incomes are driving the growth in car sales…With RBI cutting repo rate by 75 bps this fiscal, lower interest rates on passenger vehicle loans helped support demand,” according to the Society of Indian Automobile Manufacturers Association.

 

India passenger car sales annual growth rate, 2011-2015 - LD Investments