Pesek’s View From Asia – Bloomberg 07-31-13

Salient to Investors:

William Pesek writes:

Najib kept his Malaysian coalition in power with a giant spending spree that included smartphone rebates for youths, household electricity subsidies and higher wages for civil servants. Fitch said Malaysia’s public finances are its key rating weakness. It will be difficult to achieve the 3 percent deficit target in 2015 without bold actions, including cutting subsidies.

In India, the only way to stop the investor exit is bold steps to increase economic growth, narrow a record current-account deficit and improve India’s investment environment.

Grim predictions that Chinese GDP growth will dip below 5 percent are no longer looking so crazy. Since its high in 2009, the Shanghai Composite Index has been the world’s worst performer.

Japan got 2 votes of confidence from key foreign investors. Hedge fund Jana Partners took a stake in Japan Airlines. and Aflac is buying Japanese government debt in contrast to a plan last year to put less money into yen-denominated assets.

New Zealand’s business sentiment rose to the highest level since April 1999. Stephen Toplis at Bank of New Zealand proclaimed New Zealand was on fire!  and it is hard to disagree. 52.8 percent of NZ companies in July expect the economy will improve over the next 12 months, growth may soon exceed 4 percent, and employment and profit expectations remain buoyant – all despite a currency many believe to be overvalued and a Chinese slowdown.

Read the full article at http://www.bloomberg.com/news/2013-07-31/pesek-s-view-from-asia.html

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