China going step-by-cautious-step in economic overhaul Assessing China's economic reforms after six months, economists note that Beijing is tackling easier steps first and leaving more difficult, pain-inducing actions -- such as tearing down state monopolies and freeing interest rates -- for later. Nonetheless, the steps taken so far have moved the country significantly along the road to a more balanced economy, they say. Reuters (5/4) HSBC China manufacturing continues to shrink China's manufacturing sector marked a fourth month in contraction in April, with the final HSBC purchasing managers index at 48.1, up only a notch from the March reading of 48. "Both the new export orders and employment sub-indices contracted, and were revised down from the earlier flash readings. These indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum," said Qu Hongbin, HSBC's chief economist for China. Analysts now expect Beijing to consider more stimulus measures after sustained shrinkage in the sector. Bloomberg (5/5), The Wall Street Journal (tiered subscription model) (5/5), Xinhuanet.com (China) (5/5) IMF calls for overhaul of Philippine tax system The Philippine government needs to overhaul the nation's tax system and broaden its revenue base to match the systems of similarly developed nations and distribute the burden more equally, the International Monetary Fund says. "It also would be a level playing field for investment and corporate governance," said Shanaka Jayanath Peiris, the IMF's resident representative for the Philippines. Business World (Philippines) (5/4) German economy seen leading an improving Europe Germany will outpace the European economy this year and next, growing 1.8% and 2% with the help of plentiful financing for investment and a low inflation rate, according to the European Commission. The commission also forecast improving economies throughout Europe, but the estimate did not take into account any disruptive effects from the continuing crisis in Ukraine. Bloomberg (5/5)  | Bloomberg's Portfolio & Risk Analytics gives you everything you need to manage your portfolio in real-time. Find out more. | | | | |  | CFA Institute Japan Investment Conference | 2 July 2014 Learn insights from Japanese and international institutional investors and strategists at the Japan Investment Conference in Tokyo. Speakers include Richard Koo, Chief Economist of Nomura Research Institute and Prof. Avinash Persaud, Chairman of Intelligence Capital Ltd., etc. Register by 2 June 2014 and save JPY 10,000. | | | | | Regulators struggle to oversee shadow banking Global regulators are keen to establish oversight mechanisms to monitor shadow banking but say they need more data. "I think we have a long way to go to fully understand all the connectivities and subtleties of the financial system," said David Wright, secretary-general of the International Organisation of Securities Commissions. Reuters (5/2) | | Economic Trends & Outlook | U.S. service sector expands strongly in April More evidence emerged of an April thaw in the U.S. economy with a private purchasing managers index showing the service sector growing at its fastest rate in eight months. The Institute for Supply Management reading of 55.2 was up from 53.1 in March for the 52nd straight month of expansion. Reuters (5/5) China acts to lift service sector's share of trade China is looking to raise the service sector's share of trade to 20% from the current 12.8% and is taking active measures to speed the process. Favorable tax rates and subsidies are part of the plan. "Boosting the services trade is of great significance in speeding up the government's efforts to restructure the economy, improve the quality of economic growth and create more jobs for university graduates," said Commerce Ministry spokesman Yao Jian. The Wall Street Journal (tiered subscription model) (5/5) | | Capital Markets & Financial Products | Paradoxically, 30-year U.S. Treasurys in short supply Increased foreign buying and U.S. rules requiring pension funds to beef up their assets are causing a market shortage in 30-year Treasurys even as the Federal Reserve scales back its buying program. "The long bond is marching to the tune of its own drum. There is natural institutional demand," said David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto. Bloomberg (5/5) No shortage of business for China hedge funds at home China's hedge funds are in such demand at home that only a few are planning to branch out overseas. Hedge funds fall mainly under the category of sunshine investment trusts, of which there are about 2,500 with as much as 300 billion yuan in assets under management, mainly from high-net-worth individual investors and families. AsianInvestor.net (5/5) | Please contact one of our specialists for advertising opportunities, editorial inquiries, job placements, or any other questions.
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