[obrolan-bandar] Credit Crunch Broadening: More Collateral Damage in 2009
dari morgan stanley global forum untuk merecek kondisi ( scenario ) terburuk di masa yad..biar view nya imbang perhatikan kalimat2 yang saya bold.. Asean Economics Credit Crunch Broadening: More Collateral Damage in 2009 November 12, 2008 By Chetan Ahya Deyi Tan | Singapore Shweta Singh | India Factoring in a Broadening of Credit Crunch in 2009 Financial markets have deteriorated rapidly since early October. We no longer feel comfortable with our ASEAN GDP growth forecast of 3.5%Y for 2009 and are now lowering it by 1.5pp to 2.0% to reflect a higher degree of collateral damage from the credit crunch. The credit problem is turning out to be more severe, and not only in terms of the depth of the impact in the epicenters of the developed world. Liquidity problems are also reaching the shores of emerging markets, and tight credit conditions are no longer a problem faced only by the private sector. Below, we outline the extension of the credit crunch in terms of depth, geography and sectors: . From financial markets to real economy: The transmission from credit market deterioration to the real economy is leading our US and Europe economists to further downgrade their GDP forecasts for 2009 from -0.2%Y and 0.2%Y, respectively, to -1.3%Y and -0.6%Y. As a result, we now expect the industrial world to contract 0.9%Y in 2009 from 0.1%Y previously, with ramifications for trade demand for ASEAN. The industrial world accounts for 52% of the global economy, and the US, EU and Japan still constitute around 28% of ASEAN's export market demand. . From developed world to emerging markets: The credit crunch is not just being felt in developed economies. The impact is also percolating in the emerging markets as the supply of risk capital reverses. Risk-aversion will deprive emerging markets of capital, and the real economy implications would be all the more severe if growth had been credit-dependent over the past few years. Export demand from emerging markets had been one of the last dominos to fall in the de-coupling story. Global demand destruction and the spillover into commodity prices were already negatively affecting the terms of trade for commodity-producing EMs. The further shutting of the liquidity tap will deliver a double-whammy, in our view. Anecdotally, EM commodity producers are seeing an increase in defaults by end-market wholesale traders. Traders are now finding it hard to break even, as spot prices have fallen significantly from the contracted prices. This will likely create a vicious cycle, leading banks to pull back further on letters of credit (LCs) at a time when they are already in short supply. This not only has the indirect impact of slowing export demand from EM. ASEAN economies such as Indonesia are also directly affected as their CPO contracts are defaulted on. . From private sector to sovereigns: The credit crunch is no longer localized in the private sector; it is now also infecting sovereign debt. In this regard, the nationalization of the pension fund in Argentina aggravated sentiment, particularly for emerging market sovereigns. ASEAN sovereign CDS spreads have since retraced their steps, but they remain 150-450bp above the levels seen in January 2008. Specifically, ASEAN economies with a relatively higher share of external public debt and perceived currency vulnerability (Indonesia) have seen a disproportionately bigger widening in their sovereign CDS spreads. On the other hand, Malaysia and Thailand have seen a relatively smaller increase in their CDS spreads, from 43bp and 57bp, respectively, in early 2008 to 210bp in November 2008. Unless the government has a pristine balance sheet, the spillover of the credit crunch from the private to the public domain - and consequently higher costs of fiscal financing - is likely to undermine how aggressively ASEAN governments can engage in fiscal pump-priming. Assessing ASEAN in a Three-Factor Framework As developed economies likely contract in 2009, ASEAN economies will face their most difficult test since 2001. To set the context, while the 1997-98 financial crisis had its epicenter in the East, this credit crunch was not made in Asia. The debt supercycle in the US saw American financial institutions, GSEs, corporates and households leveraging up. However, ASEAN economies (government, corporates and households) have deleveraged coming out of the 1998 crisis. Bank credit (as a percentage of GDP) fell from 60-166% of GDP at the peak to 25-100% in 2007. Government debt similarly fell from peak levels of 61-93% of GDP to 35-42% in 2007. Macro imbalances such as the current account deficits that most ASEAN economies were running prior to the 1998 crisis had also given way to either a surplus or a milder deficit. To the extent that macro problems are not domestic in ASEAN, better fundamentals will enable ASEAN to quickly regain its footing once the
Re: [obrolan-bandar] Credit Crunch Broadening: More Collateral Damage in 2009
Terima kasih Pak Meizal. Info yg bermanfaat sekali. Saya juga akan perhatikan si MS ini. Note yg paling Jelas : *Based on the above three criteria, the pecking order for ASEAN macro vulnerability in a downcycle would be Indonesia (most pain),* followed by Singapore, Malaysia and then Thailand (lesser pain). The BIG Question is ? *Morgan Stanley Asia, anak usaha Morgan Stanley asal AS yang hampir bangkrut itu, baru saja membuka cabang di Indonesia dengan membawa bendera PT Morgan Stanley Asia Indonesia (MSAI). MSAI telah mengantongi lisensi operasi sebagai sekuritas di Indonesia dari Badan Pengawas Pasar Modal dan Lembaga Keuangan (Bapepam-LK).* Why MS open a Branch in The Most Pain Country ? Would it be another JPM-SUN Jilid II ? Regards 2008/11/12, meizal [EMAIL PROTECTED]: dari morgan stanley global forum untuk merecek kondisi ( scenario ) terburuk di masa yad..biar view nya imbang perhatikan kalimat2 yang saya bold.. Asean Economics Credit Crunch Broadening: More Collateral Damage in 2009 November 12, 2008 By Chetan Ahya Deyi Tan http://www.morganstanley.com/views/gef/team/index.html| Singapore Shweta Singh | India *Factoring in a Broadening of Credit Crunch in 2009* Financial markets have deteriorated rapidly since early October. We no longer feel comfortable with our ASEAN GDP growth forecast of 3.5%Y for 2009 and are now lowering it by 1.5pp to 2.0% to reflect a higher degree of collateral damage from the credit crunch. The credit problem is turning out to be more severe, and not only in terms of the depth of the impact in the epicenters of the developed world. Liquidity problems are also reaching the shores of emerging markets, and tight credit conditions are no longer a problem faced only by the private sector. Below, we outline the extension of the credit crunch in terms of depth, geography and sectors: • *From financial markets to real economy:* The transmission from credit market deterioration to the real economy is leading our US and Europe economists to further downgrade their GDP forecasts for 2009 from -0.2%Y and 0.2%Y, respectively, to -1.3%Y and -0.6%Y. As a result, we now expect the industrial world to contract 0.9%Y in 2009 from 0.1%Y previously, with ramifications for trade demand for ASEAN. The industrial world accounts for 52% of the global economy, and the US, EU and Japan still constitute around 28% of ASEAN's export market demand. • *From developed world to emerging markets:* The credit crunch is not just being felt in developed economies. The impact is also percolating in the emerging markets as the supply of risk capital reverses. Risk-aversion will deprive emerging markets of capital, and the real economy implications would be all the more severe if growth had been credit-dependent over the past few years. Export demand from emerging markets had been one of the last dominos to fall in the de-coupling story. Global demand destruction and the spillover into commodity prices were already negatively affecting the terms of trade for commodity-producing EMs. The further shutting of the liquidity tap will deliver a double-whammy, in our view. Anecdotally, EM commodity producers are seeing an increase in defaults by end-market wholesale traders. Traders are now finding it hard to break even, as spot prices have fallen significantly from the contracted prices. This will likely create a vicious cycle, leading banks to pull back further on letters of credit (LCs) at a time when they are already in short supply. This not only has the indirect impact of slowing export demand from EM. ASEAN economies such as Indonesia are also directly affected as their CPO contracts are defaulted on. • *From private sector to sovereigns:* The credit crunch is no longer localized in the private sector; it is now also infecting sovereign debt. In this regard, the nationalization of the pension fund in Argentina aggravated sentiment, particularly for emerging market sovereigns. ASEAN sovereign CDS spreads have since retraced their steps, but they remain 150-450bp above the levels seen in January 2008. Specifically, ASEAN economies with a relatively higher share of external public debt and perceived currency vulnerability (Indonesia) have seen a disproportionately bigger widening in their sovereign CDS spreads. On the other hand, Malaysia and Thailand have seen a relatively smaller increase in their CDS spreads, from 43bp and 57bp, respectively, in early 2008 to 210bp in November 2008. Unless the government has a pristine balance sheet, the spillover of the credit crunch from the private to the public domain – and consequently higher costs of fiscal financing – is likely to undermine how aggressively ASEAN governments can engage in fiscal pump-priming. *Assessing ASEAN in a Three-Factor Framework* As developed economies likely contract in 2009, ASEAN economies will face their most difficult test since 2001. To set the context, while the 1997-98
