Page 6 - Reeftankers - Annexure B Sasfin

PART A

ECONOMIC AND MARKET OVERVIEW

China
PBoC: The benchmark interest rate in China was last recorded at 4.35 percent. It was last
cut by 25 basis points in October 2015. On March 22nd 2018, the People’s Bank of China
raised interest rates for open market operations by 5 basis points, hours after the Federal
Reserve's decision to tighten monetary policy. It is the first rise for the repo rate this year
following the appointment of Yi Gang as China's new central bank governor. The rate for 7-
day reverse repurchase agreements were raised to 2.55 percent from 2.50 percent. The
adjustment will help the market to shape reasonable interest rate expectations, and is a
normal response to the Fed's rate hike, the central bank said on its website.
Growth: China's gross domestic product grew by 1.4 percent quarter on quarter in the first
three months of 2018, easing slightly from an upwardly revised 1.6 percent expansion in the
previous period and matching market expectations. It was the weakest quarterly growth rate
since Q1 2016.

Unemployment: Unemployment Rate in China decreased to 3.90 percent in the fourth
quarter of 2017 from 3.95 percent in the third quarter of 2017.
Inflation: China's consumer price inflation fell to 2.1 percent year-on-year in March 2018
from a four-and-a-half-year high of 2.9 percent in the previous month and below market
consensus of 2.6 percent. Cost increased at a softer pace for both food and non-food
products. On a monthly basis, consumer prices declined by 1.1 percent in March, following a
1.2 percent rise in February and way above market expectations of a 0.5 percent fall. It was
the first monthly drop since last June.

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Investment Report Q1 2018