Economic Forum Industry News

ECB kept policy rate on hold    < 2014-05-03 >

The ECB maintained its refinancing rate at 0.25% in March. Besides, there was no additional monetary policy introduced after the meeting, which was much in line with our expectation. An expanded inflation projection confirmed that low inflation would stay longer than market previously expected. Current energy price was likely to exert downward pressure on price level, hence inflation projection for 2014 was revised 0.1 percentage point down to 1.0%YoY from the forecast made in December 2013. L

Eurozone PMI advanced while fragmentation remained    < 2014-01-24 >

Eurozone flash composite PMI stood at 53.2 in January 2014, compared with 52.1 in December 2013. Both manufacturing and service sub-index recorded an increase, growing to 53.9 and 51.9 from 52.7 and 51.0 respectively. With regard to individual countries’ performance, Germany manufacturing PMI hit 32-month high to 56.3 in January. Output and new export orders among all sub-categories contributed much to the growth, representing a virtuous circle in German manufacturing sector. However, job crea

Why Can Hong Kong’s Unemployment Rate Continue To Reach New Low?    < 2014-05-03 >

According to the latest statistics, the seasonally adjusted unemployment rate for Hong Kong from December 2013 to February 2014 dipped to 3.1%, a new low in this recovery cycle and the lowest in sixteen years. Given that the Hong Kong economy grew only 1.5% in 2012 and 2.9% in 2013, a pace slower than the past ten year average of 4.5% or the projected 3.5% trend growth in the medium term, the unemployment rate between 3.1% and 3.5% during the period suggests that there may be changes in Hong Ko

BoJ more confident on inflation commitment    < 2014-01-27 >

In BoJ’s meeting in December 2013, participants confirmed the improvement in domestic economy. In terms of monetary policy, recent upward inflation has made the bank governors somewhat comfortable that the inflation target of 2% could be achieved without additional monetary easing measures. Hence current monetary policy remained unchanged, with asset purchase at an annual pace of JPY 60-70tn and keeping its key policy rate in a range between 0.0%-0.1%. The overall economy was not that encourag

Japan trade deficit deterioration slowed down    < 2014-01-27 >

Japan trade deficit climbed to JPY 1302.1bn in December 2013 from that of JPY 1293bn in the previous month, stabilizing at a higher level. On a YoY basis, imports registered an increase of 24.3% while exports grew 15.3%, leaving trade deficit more than doubled (101.6% YoY) from the same period last year. With regard to exports by destinations, exports to China grew by 34.4% YoY, which was in parts from demand for autos bouncing back in 4Q13. The figure of the EU increased 22.8% YoY. Ireland am

ECB maintained status quo in policy rate    < 2014-02-03 >

ECB decided to keep its key policy rate unchanged after meeting on 6 February 2014. Currently the refinancing rate is maintained at a historically low level of 0.25% since November 2013. During the Q&A session, Mr. Draghi admitted that recent volatility in emerging markets may partly impact on the Eurozone market, but remained confident on the resilience of Eurozone recovery. In terms of the price level, he emphasized the difference between low inflation and deflation. Concerns on a declining

Fine-tuning China’s Growth Model Amid Economic Slowdown    < 2014-02-17 >

China recorded 7.7% real GDP growth in 4Q13, which is the same as the whole year’s growth rate, and the second consecutive year of less than 8.0% growth. It is also the second consecutive year when realized growth comes very close to the 7.5% target set out in the government’s working report, vastly different from previous years’ of outperformance. Regarding China’s growth prospects in 2014, the market views are divergent, with the mainstream forecasting continuous moderation instead of reaccel

Eurozone 4Q13 GDP grew 0.3%    < 2014-02-17 >

Eurozone 4Q13 GDP first estimate registered at 0.3%, compared to 0.1% in 3Q13. Among all member countries, GDP growth of Germany speeded up to 0.4% from 0.3%. France and Italy in 4Q13 both posted a growth of 0.3% and 0.1% respectively from 0.0% in the previous quarter.   The reading was slightly better than market consensus (0.2% for the Eurozone), which somewhat relieved concerns about the single currency economy. However, structural problems remained, including stubbornly high unemployment r

Japan 4Q13 GDP increased 0.3%    < 2014-02-18 >

Japan 4Q13 GDP growth registered at 0.3% QoQ, which was the same as that in 3Q13. The reading somewhat disappointed market as 4Q13 GDP was expected to reach 0.7% QoQ. For the whole year of 2013, the figure grew by 1.6% compared to 1.4% in 2012. Besides, GDP details might reveal that Abenomics was running out of steam. Among GDP components, Public investment was the major driver in 2013, which surged 11.4% compared to 2.8% in 2012. Many projects were related to infrastructures rebuilding after

Eurozone PMI retreated to 52.7    < 2014-02-21 >

Eurozone flash composite PMI in February retreated to 52.7 from 52.9, the final reading of January 2014. The decline was caused by manufacturing PMI, which edged down by 1 ppt to 54.0. Service PMI advanced to 51.7 in February from 51.6. In terms of individual countries’ performance, Germany manufacturing PMI slightly decreased to 54.7 in February, indicating a slower pace of expansion in production growth. Meanwhile, new orders and new exports orders increasing at faster pace suggests that bot

Japan January CPI declined 0.2% MoM    < 2014-02-28 >

Japan’s CPI in January 2014 posted a negative growth of -0.2% MoM for the first time over the past year, while the figure in the previous month was 0.0% MoM. Stripping out prices change in food and energy, the core inflation even declined 0.5% MoM. On a YoY basis, it registered at 1.4% increase, retreating from 1.6% one month ago, and core inflation stood at 0.7% YoY, the same as it was in December 2013. In terms of sub-categories, clothes and footwear prices dragged down the price level by pl

Eurozone February flash CPI stabilized at 0.8% YoY    < 2014-05-03 >

Eurozone price level stood at 0.8% YoY for the third consecutive month in February 2014 according to flash estimate. The headline figure was dampened by a further decline in energy prices that registered at -2.2% YoY in February, compared to -1.2% in January 2014. Moreover, food prices grew at a slower pace, increasing 1.5% YoY, 2 ppt down from the previous month. Stripping out food and energy, core inflation was trending upward over the past two months albeit mildly. The figure in February po

Acquisition enthusiasm down among Hong Kong businesses    < 2013-02-26 >

Only 18% of Hong Kong businesses plan to grow through acquisition in the next three years, down from 26% this time last year, according to the new research from the Grant Thornton International Business Report (IBR). The research revealed as many as 80% of local businesses confirm that they have no plan to execute an acquisition, significantly higher than their counterparts in mainland China (60%) and the global average of 63%. With the economic outlook has been so uncertain, Hong Kong busines

Coping with emerging technology risks    < 2013-02-26 >

One of internal audit’s primary responsibilities is to evaluate and improve the effectiveness of risk management processes. And in the universe of risks, those posed by emerging technologies are rapidly multiplying as these technologies become more sophisticated. The Hong Kong government has thrown HK$9 million at a new Cyber Security Centre in a bid to tackle the growing threat to critical IT systems and infrastructure. The centre is the step for the technology crime division to work more clo

Effective response to corporate fraud    < 2013-05-21 >

One of the greatest threats in business today is fraud. Consequences of fraud are often devastating, resulting in damage to a company’s reputation and brand value, a decline in investor confidence, a loss of market value, and severe civil and criminal penalties. In Hong Kong, recent examples of scandals in listed companies clearly illustrate the severity of the problem. Fraud is a threat in every business so businesses must learn to identify fraud in the first instance, deal with it effective

60% of Hong Kong businesses want more cross-border tax guidance – less eager than most regions    < 2013-02-21 >

New research from the Grant Thornton International Business Report (IBR) reveals that six out of ten Hong Kong businesses would welcome more global cooperation and guidance from tax authorities on what is acceptable and unacceptable tax planning, even if this provided less opportunity to reduce tax liabilities across borders. This is below both the Asia Pacific (67%) and global (68%) averages. Businesses in Hong Kong are less eager for more guidance among the 44 economies surveyed. Hong Kong’s

Managing innovative technologies: CloMoSo    < 2013-09-26 >

What is CloMoSo? CloMoSo is the convergence of the trendiest and hottest technologies that is being adopted by IT-savvy businesses to enhance communication and collaboration, and to leverage IT services instead of IT assets to increase flexibility and decrease costs. Clo: cloud computing Mo: mobile applications So: social media The CloMoSo phenomenon is happening at a much faster rate than big technology shifts of the past such as client/server and the internet. Company executives are

Private equity firms adapt to a “new road map” for fundraising    < 2013-12-10 >

Trade sales and secondary buyouts to become significant exit routes in China due to IPO block Private equity (PE) firms are having to be more flexible in order to maximise their chances of accessing capital. Firms appear to have now accepted new and tighter fee structures with an increasing number of firms conceding co-investment rights to Limited Partnerships (LPs). Shut down of IPO pipeline in China lead to increased use of trade sales and secondary buyouts as exit routes for private equi

Reducing Dependence on Single Customer and Supplier    < 2013-02-20 >

Many Chinese companies, especially Small and Medium-sized Enterprises (SMEs), all too often rely on a single customer for the majority of their business revenue. While this is natural in a start-up, overreliance on a single customer puts the supplier company at high risk, as effects from economic downturns could have a negative ripple effect to the suppliers business.  Many Chinese companies also rely on a small number of suppliers, which could potentially lead to a disruption in business cont

Hong Kong lags behind fellow Asian Tigers as a dynamic global economy while China stands out from its BRIC counterparts    < 2013-12-10 >

Australia has supplanted Singapore at the top of the Grant Thornton Global Dynamism Index (GDI) 2013, followed by Chile and China. Locally, Hong Kong has been surveyed for the first time and it ranks 16 globally and 8 in Asia Pacific. The GDI shows that Hong Kong now lags behind its two fellow Asian Tigers, Singapore (4th) and South Korea (5th) in Asia Pacific. China has risen 17 places compared with last year and it stands out from its BRIC counterparts. The index reveals that while the Chines

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