Search

This article assesses the impact of COVID-19 on ASEAN5 stock markets by applying dynamic panel regression models. Vaccine availability is a crucial factor in this respect. Before the availability of vaccinations, the stringent policy response to COVID-19 impacted stock returns, while, COVID-19 development, and related stringent policies, do not increase volatility. However, with vaccination drives currently in progress, the pandemic's impact is reducing in severity. Compared to previous financial crises, the current pandemic has a significant, but smaller, impact on ASEAN5 stock markets than the Global Financial Crisis (in terms of both return and volatility) and the taper tantrum (return only), while the impacts of other financial crises were limited. Our empirical results also suggest that local monetary and exchange rate policies could mitigate adverse impacts on regional stock markets. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of financial conditions, for example, cross‐border capital flows, interest rates and foreign exchange rates, on the well‐being of the real estate developers in five Association of Southeast Asian Nations economies. The study uses a Bottom‐up Default Analysis model to stress test their creditworthiness by reproducing the financial shocks during the global financial crisis, taper tantrum, and the U.S.‐China trade war and COVID‐19 pandemic. The median developers remain sound under the prescribed adversities. The performance is underpinned by their strong fundamentals and a conducive mix of monetary, foreign exchange, and open capital account policies by national authorities. [ABSTRACT FROM AUTHOR]

The quantitative easing policy adopted by the advanced economies since 2009 has led to an abundance in global liquidity. In the same period, the ASEAN-5 economies (Indonesia, Malaysia, the Philippines, Singapore and Thailand) have recorded strong capital inflows, particularly portfolio inflows. The asset prices, in particular, the house prices of these economies, have also experienced excess buoyancy. In this paper, the relationships among global liquidity, house prices and capital flows are studied. Empirically, capital inflows have a positive effect on the residential house prices of Indonesia, Malaysia, the Philippines and Singapore. After accounting for their own domestic demand (by using real GDP growth as a proxy), the capital inflows still have a positive impact in Indonesia and Singapore. The authorities of these economies have implemented similar macroprudential measures to safeguard financial stability and cool down speculative activities. The effectiveness of the measures is mainly the reduction in the transaction volume. [ABSTRACT FROM AUTHOR]

One argument for floating the Chinese renminbi (RMB) is to insulate China's monetary policy from the US effect. However, we note that both theoretical considerations and empirical results do not offer a definite answer on the link between exchange rate arrangement and policy dependence. We examine the empirical relevance of the argument by analysing the interactions between the Chinese and the US interest rates. Our empirical results, which appear robust to various assumptions of data persistence, suggest that the US effect on the Chinese interest rate is quite weak. Apparently, even with its de facto peg to the US dollar, China has alternative measures to retain its policy independence and de-link its interest rates from the US rate. In other words, the argument for a flexible RMB to insulate China's monetary policy from the US effect is not substantiated by the observed interest rate interactions. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]