AsianBondsOnline Newsletter (17 February 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140217.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 10 - 14 February 2014

Malaysia's real gross domestic product (GDP) grew 5.1% year-on-year (y-o-y) in 4Q13 following 5.0% growth in 3Q13 on the back of buoyant domestic demand and exports, as well as robust performances in the manufacturing and services sectors. For full-year 2013, Malaysia's real GDP growth stood at 4.7%. Meanwhile, industrial production growth accelerated to 4.8% y-o-y in December from 3.8% in November. Japan's real GDP growth, on an annualized basis, slipped to 1.0% quarter-on-quarter (q-o-q) in 4Q13 from 1.1% in 3Q13. In Thailand, real GDP growth decelerated to 0.6% y-o-y in 4Q13 from 2.7% in 3Q13. In Singapore, retail sales fell 5.5% y-o-y in December after posting an 8.6% drop in November. 

*     Consumer price inflation in the People's Republic of China (PRC) stood at 2.5% y-o-y in January, the same rate as in December. Meanwhile, the decline in producer prices accelerated in January, with prices falling 1.6% y-o-y following a 1.4% contraction in the previous month.  

*     Bank Indonesia's (BI) Board of Governors decided on 13 February to keep the BI rate steady at 7.50%, and also maintain the lending facility and deposit facility rates at their current levels of 7.50% and 5.75%, respectively. The Bank of Korea's Monetary Policy Committee decided on 13 February to keep the base rate unchanged at 2.50%.  

*     Japan's current account deficit widened to JPY638.6 billion in December, largely due to a 111.9% increase in the merchandise trade deficit amid strong import demand and domestic consumption, as well as weak export markets. Malaysia's current account surplus expanded to MYR16.2 billion in 4Q13 from MYR9.8 billion in 3Q13, largely due to a quarterly increase in the merchandise trade surplus.

*     The PRC's merchandise trade surplus stood at US$31.9 billion in January, up from US$25.6 billion in December and US$28.1 billion in January 2013. Philippine merchandise exports grew 15.8% y-o-y and 7.1% month-on-month (m-o-m) in December. In Singapore, non-oil domestic exports fell 3.3% y-o-y in January after climbing 6.0% in December, while  electronic exports dropped 17.0% y-o-y in January after a 3.1% decline in December. 

*     The Republic of Korea incurred a budget deficit of KRW755.4 billion in 2013 and a public sector debt of KRW821.1 trillion in 2012, according to reports of the Ministry of Strategy and Finance (MOSF) released last week.

*     Export-Import Bank of Malaysia (MEXIM) priced a 5-year US$300 million sukuk (Islamic bond) at 140 basis points (bps) over United States (US) Treasuries, equivalent to a yield of 2.874%.

*     Thailand's Securities and Exchange Commission (SEC) announced last week that it would allow the offering of Association of Southeast Asian Nations (ASEAN) Collective Investment Schemes (CIS) to retail investors in Thailand, with the new regulation to take effect in 2Q14.

*     Government bond yields fell last week for all tenors in Indonesia and for most tenors in the PRC, the Republic of Korea, Malaysia,  Thailand, and Viet Nam. Yield movements were mixed in Hong Kong, China; the Philippines; and Singapore. Yield spreads between 2- and 10-year tenors widened in the PRC, the Philippines, Singapore, and Viet Nam while spreads narrowed in Hong Kong, China; Indonesia; the Republic of Korea; Malaysia; and Thailand. 

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