HIGHLIGHTS HIGHLIGHTS

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1 SEPTEMBER 2014 IN THIS ISSUE In the news Major economic indicators Daily exchange rates Fung Business Intelligence Centre 10/F LiFung Tower, 888 Cheung Sha Wan Road Kowloon, Hong Kong T: (852) F: (852) E: HIGHLIGHTS HIGHLIGHTS CAMBODIA» P.2 CAMBODIA» P.2 CAMBODIA» P.2 Approved Political deadlock investment comes triples to in an 1H13 end ILOBetter Garment Approved and Factories investment footwear Cambodia triples export in performance returns 1H13 to public varies disclosure by market of assessment ILOBetter Factory Factories findings Cambodia Cambodia releases returns the 31 to st public Synthesis disclosure and the of Wage 2assessment nd Transparency hikes expected findings Database in 2014 report Wage hikes expected in 2014 INDONESIA» P.3 INDONESIA» P.3 GDP grows by 5.1% yoy in 2Q14 INDONESIA» P.3 Agreement Antidumping signed duties with may EU be to certify imposed legality on filament of timbers yarn US$28 Transportation Agreement billion signed in deals cost with is signed expected EU to with certify to Chinese soar legality as companies fuel of timbers subsidies are Trade reduced US$28 balance billion improves in deals signed in August with as Chinese imports companies of capital goods slowed Trade balance improves in August as imports of capital goods THE slowed PHILIPPINES» P.4 PHILIPPINES Food prices» P.4 stoke up inflation PHILIPPINES EU buyers explore» P.4 sourcing opportunities from the country Manufacturing European Commission output grows to endorse by 18.3% GSP+ yoy in application August Daily Manufacturing minimum wage output in grows Metro by Manila 18.3% increases yoy August to 466 pesos Philippines THAILAND Daily minimum set» to P.5 wage apply in for Metro the EU Manila GSP+ increases schemeto 466 pesos GDP Philippines rebounds set to in apply 2Q14for the EU GSP+ scheme THAILAND Woolworths» P.6 plans to set up a sourcing office in Bangkok THAILAND GSP privileges» P.6 no longer granted by EU starting 2015 Growth forecast trimmed due to sluggish demand Exports Growth contract forecast in trimmed September due to sluggish demand VIETNAM» P.6 Special Exports Economic contract in Zones September along border under consideration Minimum wage set to rise 15.1% on average Special Economic Zones along border under consideration Garment exports gain market share in the US VIETNAM Leather» P.7 and footwear industries receive bulk orders transferred VIETNAM from China» P.7 National Wage Council proposes minimum wage hike of 15 17% National Wage Council proposes minimum wage hike of 15 Exports 17% grow by 17.5% yoy in JanuarySeptember Five Exports airports grow to by half 17.5% fees to yoy attract in JanuarySeptember carriers Five airports to half fees to attract carriers SOUTHEAST ASIA APRIL

2 POLITICAL DEADLOCK COMES TO AN END The ruling Cambodian People s Party (CPP) and the opposition Cambodia National Rescue Party (CNPR) reached an agreement on 22 July to share power in the National Assembly, putting an end to the nearly oneyearlong political deadlock. After negotiations with the CPP, leaders of the CNPR agreed to accept the disputedd election results and take their seats in the parliament. Under the terms of the agreement, the CNPR will have six members in the 13member permanent committee and five chiefs of the ten standing commissions in the National Assembly. A new composition of the ninemember National Election Committee has also come out, whichh comprises four members from each party and one consensus candidate. And both parties agreed to bring the next general election forward by several months before February The political resolution is expected to bring political stability back to the country and boost investor confidence. Besides, the strengthening of checks and balances in the legislative body is expected to propel reforms and improve governance. With 55 seats won in the parliament compared to CPP s 68 seats in July last year, the opposition CNPR has alleged election fraud, dismissed the results of the general election and boycotted the parliament. The deadlock led to a number of anti Before the government protests in Phnom Penh. political resolution, six opposition members were arrested and accused of leading a violent protest in midjuly that injured eight security guards. CAMBODIA. GARMENT AND FOOTWEAR EXPORT PERFORMANCE VARIES BY MARKET The country s total exports reached US$3.8 billion in 1H14, up by 20% compared to the same period last year, according to a report from the Ministry of Commerce as quoted by the media. Exports of garments and footwear, which accounted for almost 80% of the total exports of the country, surged by 16% yoy to reach US$2.9 billion in 1H14, but performances varied markedly by destination. While garment and footwear exports to the EU jumped by 32% yoy to reach US$1.1 billion in the period, those to the US witnessed a sudden declinee of 2% yoy to less than US$1.0 billion. Exports of garments and footwear to other markets rose by 25% yoy to US$0.8 billion in 1H14. The impressive growth came despite persistent industrial protests over minimum wage hike, working conditions and unpaid wages at several factories. The instability has put the country at risk of losing orders from western brands and retailers, particularly those from the US. Levi s Strauss and Target recently announced their intention to reduce sourcing from Cambodia. CAMBODIA. BETTER FACTORY CAMBODIA RELEASES THE 31 ST SYNTHESIS AND THE 2 ND TRANSPARENCY DATABASE REPORT The International Labour Organization s (ILO) Better Factory Cambodia (BFC) programme released its 31 st Synthesis Report on 30 June. The report covers compliance assessments conducted by the BFC on 362 garment factories and nine footwear factories between May 2013 and April The report reveals mixed performance in compliance with the Cambodian labour law. Although the report indicates slight improvements in proper payment of wages/benefits and high levels of compliance on fundamental rights, non compliance in areas related to worker s fainting SOUTHEAST ASIA SEPTEMBER

3 problems and workplace health and safety remains considerable. In addition, 4% of factories covered by the report hired child labour, doubling that of The report also indicates that none of the 108 strikes that took place during the reporting period complied with all legal requirements, and the number of strikes has increased threefold since The report concludes with the BFC s recommended actions and next steps for industry stakeholders including the Cambodian government, the Garment Manufacturer s Association in Cambodia, international buyers, employers and trade unions to help make positive changes within the local garment and footwear industries. The ILO also announced its second report on factorylevel compliance on 3 July based on BFC s online Transparency Database, whose coverage had been expanded from 51 factories to 151. According to the ILO s press release, three of the 12 factories in the Low Compliance Group have made 33 improvements and moved off the list. Meanwhile, onethird of the 92 factories on the Critical Issues list have made improvements on 21 basic legal requirements, with the number of violations of the group down 35% to 87 between April and June. These notable improvements were attributable to the reinstatement of the ILO s transparency reporting process. (The two reports can be accessed on GDP GROWS BY 5.1% YOY IN 2Q14 The country s real GDP growth inched down to 5.1% yoy in the AprilJune quarter, slower than the 5.2% yoy growth registered in the previous quarter, according to Statistics Indonesia (BPS). The growth also fell short of the earlier projection (5.3% yoy) by the central bank (Bank Indonesia). The slowdown was mainly caused by a decline in exports, especially in the exports of natural resource commodities, as the ban on export of certain unprocessed mineral ores has reached full force. In 2Q14, exports declined by 1.0% yoy. The main driver of economic growth in the second quarter was household consumption, as indicated by the improved sales in the food and beverage industry and the paper industry, according to Bank Indonesia. Consumer sentiment remained high because of the general elections. Investment in the construction sector also grew steadily. INDONESIA. ANTIDUMPING DUTIES MAY BE IMPOSED ON FILAMENT YARN Four domestic yarn producers have urged the Indonesian AntiDumping Committee (KADI) to place additional tariffs on foreign yarn companies who allegedly engaged in dumping practices in the Indonesian market between 2010 and The investigation reveals that several filament yarn companies from countries including South Korea, the Chinese Mainland, Taiwan, Malaysia, Thailand and India may be involved in dumping practices. Before the KADI investigation is concluded, the Minister of Industry has already signaled his support for the imposition of antidumping duties on the yarn in question. This indicates that the Indonesian government s industrial and trade policies will continue to be protectionist, as also witnessed in the imposition of the export ban on unprocessed mineral ores since the beginning of this year. While the antidumping duties, if imposed, will reduce imports of yarn so that the country may maintain a healthier balance of trade, it may also adversely affect downstream textile and garment manufacturers as the duties will increase production cost and thereby weaken their export competitiveness. This is especially the case as the domestic yarn industry is unable to supply adequate highquality yarn for exportoriented garment production. SOUTHEAST ASIA SEPTEMBER

4 INDONESIA. TRANSPORTATION COST IS EXPECTED TO SOAR AS FUEL SUBSIDIES ARE REDUCED In the revised state budget passed in June, the Indonesian government has reducedd the amount of subsidies allocated for diesel fuel and gasoline. On 31 July, the stateowned oil and natural gas corporation Pertamina announced that 60% of subsidized diesel fuel and 58% of subsidized gasoline allocated for this fiscal year had been consumed. The rest of the subsidized diesel fuel and gasoline are expected to be used up by 30 November and 19 December, respectively. In response to the foreseen shortage, Pertamina and the Indonesian Upstream Oil and Gas Regulatory Agency (BPH Migas) have decided to restrict the consumption of the two subsidized fuels, so that the existing stock can last until the end of the year. Under the new arrangements, sales of diesel fuel at subsidized price are forbidden in Central Jakarta starting on 1 August. Since 4 August, sales of subsidized diesel fuel have been limited in Java, Bali, Kalimantan and Sumatra from 8 am to 6 pm. From 6 August onwards, sales of gasoline at subsidized price at toll roads were also banned. As subsidized diesel fuel was sold at 5,500 rupiah per liter while nonsubsidized diesel fuel is far more expensive at 12,800 rupiah per liter, logistics cost may increase by as much as 70% after all subsidies have been used up, according to the Organization of Land Transportationn Owners (Organda). The higher cost will also be passed on to other sectors of the economy. Although consumption of subsidized diesel fuel is relatively small in Central Jakarta, and therefore the effect of the ban may not be immediately felt there, the restrictions could be applied nationwide in the near future if the government is determined to stick to the fuel subsidy quota. FOOD PRICES STOKE UP INFLATION Inflation in the Philippines, as measured by the yoy growth rate of the consumer price index (CPI), accelerated to 4.9% in July from 4.4% in the previous month, hitting the highest level since November Inflation in July was driven mainly by the prices of food and nonalcoholic beverages, which is weighted 39% in the CPI basket. Severe drought and strong typhoons disrupted the supply of rice, pushing inflation of food and nonalcoholic beverages up to 8.2% yoy in July from 7.4% yoy in June. Core inflation, which excludes food and energy prices, stood at 3.0% yoy in July, slightly higher than the 2.8% yoy growth recorded in June. The acceleration of inflationn was also attributable to the implementation of the daytime truck ban in Manila since February. The truck ban has caused congestion in the Manila Port, which handles one third of the country s inbound and outbound cargo. It now takes as long as a week to offload cargo in the Manila Port, and trucking cost has tripled to as much as 40,000 pesos (US$920) per trip, according to Alfredo Yao, president of the Philippine Chamber of Commerce and Industry. PHILIPPINES. EU BUYERS EXPLORE SOURCING OPPORTUNITIES FROM THE COUNTRY Two German distributors and three Spanish retailers are looking for garments and footwear suppliers in the country, according to a report prepared by the Department of Trade and Industry (DTI). Specifically, large distributors Ariston Nord West Ring (ANWR) and Katag AG are interested in sourcing footwear and garments, respectively, from the country. For the Spanish retailers, SOUTHEAST ASIA SEPTEMBER

5 department store chain El Corte Inglés is eyeing apparel and home textiles, Becara is interested in handbags and Mango is keen on sourcing apparel and fashion accessories from the country. In June, the DTI led a delegation to Europe, visiting Paris, Frankfurt, Stuttgart, Stockholm and Oslo, to promote the Philippines as a sourcing destination for brands and retailers there. The DTI has identified a number of products with high potential in the EU markets, including processed fruits and marine products, organic food, auto parts, highend garments, giftware, home furnishings and business process outsourcing (BPO) service. According to the National Statistics Office, the Philippines exported US$556.5 million worth of goods to the EU in June, up by 14.3% yoy. Nevertheless, it is worth noting that during the first six months of 2014, exports to the EU fell 1.5% yoy. PHILIPPINES. EUROPEAN COMMISSION TO ENDORSE GSP+ APPLICATION The Philippines was informed in July by the European Commission (EC) that the EC is going to endorse its application for the GSP plus scheme (GSP+), according to Adrian Cristobal Jr, undersecretary of the Department of Trade and Industry (DTI). The EC noted that the Philippines is ticking off the GSP+ checklist by ratifying and implementing the international conventions required. The DTI expects that the country will get the final approval from the EU Parliament by the end of this year, allowing Philippine exporters to take advantage of the trade preferences by early The GSP+ offers dutyfree access to 6,274 products to the EU market. According to preliminary estimates from the DTI, sectors with the biggest projected gains include animal or vegetable fats and oils, prepared foodstuffs, textiles and garments, footwear, headwear and umbrellas, and chemical products. The projected increase in exports will generate more than 267,000 new jobs in the agriculture and manufacturing sectors. In order to be well prepared for the GSP+, the DTI has convened a task force with industry stakeholders in cooperation with the EU s Trade Related Technical Assistance project. Workshops will be held to provide support to exporters on topics related to rules of origin, technical issues and business practice. GDP REBOUNDS IN 2Q14 Following a contraction of 0.5% yoy in 1Q14, Thailand s GDP expanded unexpectedly by 0.4% yoy in 2Q14, according to the National Economic and Social Development Board (NESDB). The expansion in the second quarter was attributable to the increase in both domestic and external demand. Household consumption rose by 0.2% yoy in 2Q14, compared to a fall of 3.0% yoy in the previous quarter. Total investment declined by 6.9% yoy in the period, better than the 9.3% yoy contraction seen in 1Q14. Net exports of goods and services also witnessed a much faster growth of 50.6% yoy in 2Q14 than the 29.1% yoy growth recorded in the previous quarter. The NESDB predicts Thailand s GDP to grow by % in It is expected that the economy will grow at a faster pace in the second half of the year due to improved confidence and the resumption of relative political stability, which brings government administration and budget disbursement back to normal. While several steps have been taken towards a return to democratic rule, ncluding the formation of the National Legislative Assembly and the appointment of the military leader General Prayuth Chanocha as the prime minister, it will take at least a year for the new constitution to be promulgated and a new election to be held. SOUTHEAST ASIA SEPTEMBER

6 THAILAND. WOOLWORTHS PLANS TO SET UP A SOURCING OFFICE IN BANGKOK Woolworths, the largest supermarket chain in Australia, plans to source more from Thailand. Organized by the Department of International Trade Promotion, Woolworths executives held business meetings with around 60 Thai companies in late July to explore sourcing opportunities. According to the local media, about 80% of those companies sell fresh food such as seafood, fruits and vegetables, and the rest supply general merchandise such as furniture, home decorations, electronics, toys, health and beauty products, and clothing. Currently, Woolworths sources general merchandise and processed food from Thailand. The Australian retailer also plans to set up a sourcing office of up to 10 people in Bangkok. It has opened similar offices in Hong Kong, Shanghai and Dhaka in recent years. It is reported that Woolworths is planning to source primarily general merchandise from Thailand, as sourcing food (particularly fresh food) locally from Australia remains a strong commitment from the retailer. THAILAND. GSP PRIVILEGES NO LONGER BY EU STARTING 2015 GRANTED As an uppermiddle income country during , as classified by the World Bank, Thailand is no longer a beneficiary under the EU s new Generalized Scheme of Preferences (GSP) since January this year. Following a oneyear transitional period, the country will lose all GSP privileges from the EU in January According to a study conducted by the Economic Intelligence Centre of the Siam Commercial Bank, 723 products will be subject to higher tariffs to the EU market starting Among them, frozen shrimp, octopus, motorcycles, apparel, plastics and refrigerator compressors will be severely affected due to their heavy reliance on tariff privileges. For example, exports of deepwater rose shrimp to the EU will face tariffs as high as 12% compare to the current 4.2% %, while tariffs on Thai apparel will increase to 12% from 9.6%. However, the study expects the overall impact on Thailand s exports to be low, as only 0.5% of the total exports will be affected. Exporters are preparing themselves for the reality postgsp. Apart from negotiating with EU buyers for higher prices to compensate for the tariff hike, some exporters are relocating their plants to neighbouring countries, such as Bangladesh, Cambodia, Laos and Myanmar, as those countries are GSP beneficiaries to the EU market. Meanwhile, they are pinning high hopes on the ThailandEU FTA, althoughh the negotiations could be delayed due to the political instability in Thailand. MINIMUM WAGE SET TO RISE 15.1% ON AVERAGE The National Wage Council, established in July 2013 to replace the Ministry of Labour as Vietnam s minimum wage oversight body, has agreed on a proposal to raise the minimum wage rates for 2015 by an average of 15.1%. If approved by the government, the change is expected to take effect on 1 January, The proposed minimum wage hike has taken into account inflation levels, the country s overall economic growth, current wage levels and the costs of necessities. At present, the regional minimum wages are only 70% of living wages, a gap which is targeted to be closed by 2017, according to Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs and Chairman of the National Wage Council. SOUTHEAST ASIA SEPTEMBER

7 Exhibit 1 Proposed monthly minimum wage by region 2015 (proposed) 2014 Increase Zone million dong (US$146) 2.7 million dong (US$127) 14.8% Zone million dong (US$130) 2.4 million dong (US$113) 14.6% Zone million dong (US$114) 2.1 million dong (US$99) 15.2% Zone million dong (US$104) 1.9 million dong (US$90) 15.8% Note: Zone 1 covers the urban parts of Hanoi and Ho Chi Minh City; Zone 2 is applicable to the rural areas of Hanoi and Ho Chi Minh City along with the urban sections of Can Tho City, Da Nang City and Hai Phong City; Zone 3 comprises provincial level cities and the districts of Bac Ninh Province, Bac Giang Province, Hai Duong Province and Vinh Phuc Province; and Zone 4 consists of the remaining localities. Currency conversions are based on the USD:VND spot rate published by Bloomberg on 18 August The impact of the minimum wage hike is expected to be minimal, as it is set much lower than the wages currently being paid. A survey of 2.5 million workers conducted by the Ministry of Labour, Invalids and Social Affairs last year revealed that their average wage was as high as 5 million dong a month. Besides, according to the Japan External Trade Organization (JETRO), the Japaneseaffiliated companies in Vietnam were paying manufacturing workers US$162 per month on average, excluding benefits, as of October VIETNAM. GARMENT EXPORTS GAIN MARKET SHARE IN THE US In 1H14, the US imported US$38.2 billion worth of knitted and woven garment products from around the world, representing a yearonyear increase of 3.0%, according to data from the US Department of Commerce. Our research reveals that garment exports from Vietnam has been gaining market share in the US, to the detriment of garment exports from Indonesia, Bangladesh and Cambodia. Vietnam s garment exports to the US witnessed a 15.6% yoy growth in 1H14, accounting for 11.1% of the US s total garment imports, a marked increase from the 9.9% share in 1H13. In contrast, the market share of Bangladeshi garment exports in the US dropped to 6.3% from 6.6% a year ago. The shift from lowercost production countries to Vietnam is attributable to the growing concerns from US consumers over social sustainability and compliance issues such as factory safety and working conditions. Exhibit 2 The US s imports of knitted and woven garment products US$ billion (market share) 1H12 1H13 1H14 World 35.9 (100.0%) 37.0 (100.0%) 38.2 (100.0%) China 12.4 (34.5%) 12.7 (34.2%) 12.8 (33.5%) Vietnam 3.3 (9.1%) 3.7 (9.9%) 4.3(11.1%) Indonesia 2.5 (7.0%) 2.6 (7.0%) 2.5 (6.5%) Bangladesh 2.2 (6.3%) 2.4 (6.6%) 2.4 (6.3%) India 1.7 (4.8%) 1.7 (4.7%) 1.8 (4.8%) Cambodia 1.2 (3.4%) 1.2 (3.3%) 1.2 (3.2%) Source: International Trade Administration, US Department of Commerce SOUTHEAST ASIA SEPTEMBER

8 VIETNAM. LEATHER AND FOOTWEAR INDUSTRIES RECEIVE BULK ORDERS TRANSFERRED FROM CHINA A number of the world s leading brands shifted their orders from factories in China and Bangladesh to Vietnam in the first half of this year, according to the Vietnam Leather and Footwear Association (LEFASO). Brands named by the Association as transferring large footwear and leatherwear orders to Vietnam include sportswear giants Nike, Adidas, Timberland and Puma, as well as French leatherwear brands Lancaster Paris and Sequoia Paris. Major footwear distributors Target Sourcing Services and Dansu Group were also said to be expanding investment in Vietnam. In addition to the cost advantage, Vietnamese footwear exports enjoy benefits offered by the revised EU Generalize System of Preferences (GSP) effective from January this year. In the latest scheme, tariff preferences to Vietnamese footwear products are resumed after being suspended for 5 years, sharpening the sector s competitiveness in the EU market. Tariffs imposed on footwear entering the EU are now less than 4%, down from 7.7% before the revision. The TransPacific Partnership (TPP) now under negotiation is also expected to provide opportunities for Vietnam s footwear and leatherwear exporters if and when the agreement is concluded. Under the TPP, these products will be able to enter key markets such as the US and Japan at preferential tariff rates. SOUTHEAST ASIA APRIL

9 Feb14 Mar14 Apr14 May14 Jun14 Jul14 Quarterly GDP (real yoy growth %) Production index of large and medium manufacturing (yoy growth %) Manufacturing PMI (HSBC) Real retail sales index (yoy growth %) Consumer price index* (yoy growth %) Exports (yoy growth %) 5.2(1Q14) (2Q14) Exports (FOB, US$ mn) Of which: Textile and textile products (US$ mn) Footwear (US$ mn) Furniture (US$ mn) Sports requisites (US$ mn) Imports (yoy growth %) Imports (US$ mn) 14, , , , , , , , , , , , , , ,721.1 * Starting from January 2014, the base year of consumer price index has changed to Data prior to 2014 use 2007 as the base year. Source: Statistics Indonesia, Bank Indonesia, HSBC PMI reports Feb14 Mar14 Apr14 May14 Jun14 Jul14 Quarterly GDP (real yoy growth %) Value of production index, manufacturing (yoy growth %) Volume of production index, manufacturing (yoy growth %) Producer price index (yoy growth %) Consumer price index (yoy growth %) Exports (yoy growth %) 5.6(1Q14) (2Q14) Exports (FOB,US$ mn) Of which: Woodcrafts and furniture (US$ mn) Garments (US$ mn) Imports (yoy growth %) Imports (FOB, US$ mn) Balance of trade (US$ mn) 4, , , , , , , , , , Source: National Statistics Office, National Statistical Coordination Board SOUTHEAST ASIA SEPTEMBER

10 Feb14 Mar14 Apr14 May14 Jun14 Jul14 Quarterly GDP (real yoy growth %) Industrial production index (value added weight, not seasonally adjusted), yoy growth % Producer price index (yoy growth %) Consumer price index (yoy growth %) Exports (yoy growth %) 0.5(1Q14) (2Q14) Exports (US$ mn) Of which: Knitwear (US$ mn) Woven garments (US$ mn) Toys, games and sports requisites (US$ mn) Imports (yoy growth %) Imports (US$ mn) Trade balance (US$ mn) 18, , , , , , , , , , , , , , , , ,102.1 Source: National Economic and Social Development Board, Office of Industrial Economics, Ministry of Commerce Feb14 Mar14 Apr14 May14 Jun14 Jul14 Quarterly GDP (real yoy growth %) Industrial production index (yoy growth %) Manufacturing PMI (HSBC) Retail sales of consumer goods and services (yeartodate, yoy growth %) Price index of materials used for production (yoy growth %) Producer price index for industrial products (yoy growth %) Consumer price index (yoy growth %) Exports (yeartodate, yoy growth %) 5.1(1Q14) (1Q14) 5.2(1Q14) (2Q14) (2Q14) 3.1(2Q14) Exports (US$ mn) Of which: Textiles & garments (US$ mn) Footwear (US$ mn) Wood & wooden products (US$ mn) Imports (yeartodate, yoy growth %) Imports (US$ mn) 9, , , , , , , , , , , , , , , , , ,965.0 Source: General Statistics Office of Vietnam, General Department of Vietnam Customs, HSBC PMI reports Macroeconomic data for Cambodia are not available as of the date of publishing SOUTHEAST ASIA SEPTEMBER

11 MARCH AUGUST 2014 CAMBODIAN RIEL USD:KHR official exchange rate 4,080 4,060 4,040 4,020 4,000 3,980 3,960 3,940 INDONESIAN RUPIAH USD:IDR buy rate 12,200 12,000 11,800 11,600 11,400 11,200 11,000 10,800 Source: National Bank of Cambodia Source: Bank Indonesia PHILIPPINE PESO USD:PHP BSP reference rate THAI BAHT USD:THB midrate Source: Bangko Sentral ng Pilipinas (BSP) Source: Bank of Thailand VIETNAMESE DONG USD:VND spot rate 21,400 21,350 21,300 21,250 21,200 21,150 21,100 21,050 21,000 Source: Bloomberg SOUTHEAST ASIA SEPTEMBER

12 THE FUNG BUSINESS INTELLIGENCE CENTRE The Fung Group is a privately held multinational group of companies headquartered in Hong Kong whose core businesses are trading, logistics, distribution and retailing. The Fung Group employs over 45,000 people across 40 economies worldwide, generating total revenue of more than US$22.6 billion in Fung Holdings (1937) Limited, a privately held business entity headquartered in Hong Kong, is the major shareholder of the Fung group of companies. The Fung Business Intelligence Centre, through its unique relationships, collects and analyses market data on China's economy, with special reference to sourcing, supply chains, distribution and retail. It also produces reports on sourcing and trading in other Asian countries and has recently expanded its research services on the global retail industry, where unprecedented change is being driven by technological innovation, the advent of multisales channels and greater supply chain efficiency. Serving as a knowledge bank for the Fung Group, the Centre also makes its market data and analysis available to businesses, scholars and governments around the world. It is an impartial thought leader on issues shaping the future of manufacturing, distribution, logistics and retailing in China, and retailing globally. It regularly provides advice and consultancy services to internal and external clients. CONTACT Fung Business Intelligence Centre 10/F LiFung Tower, 888 Cheung Sha Wan Road Kowloon, Hong Kong T: (852) F: (852) E: lfdc@lf1937.com Copyright 2014 The Fung Business Intelligence Centre. All rights reserved. Though the Fung Business Intelligence Centre endeavours to ensure the information provided in this publication is accurate and updated, no legal liability can be attached as to the contents hereof. Reproduction or redistribution of this material without prior written consent of the Fung Business Intelligence Centre is prohibited. SOUTHEAST ASIA APRIL