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01 April 2010
Specialty Chemicals (Chemicals) / MARKET WEIGHT
March China PMI Data Rebounds, Chemical
For the first time this year, the China PMI data for March came in at the
sweet spot of investor expectations, rising 3.1 p.p. sequentially to 55.1.
The components driving the numbers were also positive as the new order index
(which is more forward looking), increased 4.4 p.p. to 58.1 (driven by a rebound
in non-infrastructure spending), the output index increased 4.1 p.p. to 58.4, and
stocks of finished goods rose 1 p.p. to 48.3. The new export orders index
increased 4.2 p.p. to 54.5, the strongest level seen since October 2009,
indicating the external trading sector is strong.
Our CS Economist for non-Japan Asia, Dong Tao, believes the set of data
is consistent with their on-ground observations, mainly that consumption in
the third and fourth tier cities or towns is very robust, export orders are strong
and the property sector is still robust. Overall, the team believes that the China
economy remains very solid and the risk of a double-dip is small.
As for new orders, the March index posted double-digit increases for new
orders of tobacco (+28.7 p.p.), textile (+32.1 p.p.), oil refining & cooking (+26.4
p.p.) and chemical fiber rubber & plastics (+21.3 p.p.)
With regard to the two chemical segm