AsianBondsOnline Newsletter (31 March 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140331.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

******************************************************************************

News Highlights - Week of 24 - 28 March 2014

The Republic of Korea's real gross domestic product (GDP) growth accelerated to 3.0% in 2013 from 2.3% in 2012, based on preliminary estimates from The Bank of Korea released last week. Annual real GDP growth in 2013 was bolstered by stronger growth in gross fixed capital formation on the expenditure side and by agriculture, forestry, and fishing;  manufacturing; construction; and services on the production side. On a year-on-year (y-o-y) basis, real GDP growth climbed to 3.7% in 4Q13 from 3.4% in 3Q13. Meanwhile, the Fiscal Policy Office of the Ministry of Finance in Thailand announced last week that it expects the domestic economy to grow 2.6% in 2014, a downward revision from its earlier projection of 4.0% announced in December. 

*     Industrial production in the Republic of Korea was down 1.8% month-on-month (m-o-m), but up 4.3% y-o-y, in February. In Singapore, manufacturing output grew 12.8% y-o-y in February, following revised growth of 4.4% in the previous month, mainly driven by the biomedical manufacturing sector, which grew 19.3%. Thailand's manufacturing activity continued to weaken as the manufacturing production index fell 4.4% y-o-y in February.

*     Hong Kong, China's exports fell 1.3% y-o-y in February while imports rose 6.8%. As a result, the trade deficit rose to HKD53.7 billion in February from HKD34.0 billion in the same period last year. The Philippines' trade deficit nearly doubled to US$1.4 billion in January from US$0.7 billion a year earlier as y-o-y growth in imports exceeded that for exports. Total exports rose 9.3% to US$4.4 billion, while imports increased 21.8% to US$5.8 billion.

*     Singapore's consumer price inflation eased to 0.4% y-o-y in February from 1.4% in January. In Viet Nam, consumer price inflation eased to 4.4% y-o-y in March-the slowest pace since November 2009-from 4.7% in February. In Japan, consumer price inflation in February slightly increased to 1.5% y-o-y from 1.4% in the previous month.

*     The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) decided to keep its key policy rates--the overnight borrowing and lending rates--steady at 3.5% and 5.5%, respectively. The reverse repurchase rate, repurchase rate, and BSP's special deposit account facility were also kept steady. Meanwhile, the reserve requirement was raised by 1 percentage point to 19.0% effective 4 April 2014.

*     Fitch Ratings last week affirmed the long-term foreign currency (FCY) and local currency (LCY) issuer default ratings of the Philippines at BBB- and BBB, respectively, with a stable outlook for both. The rating agency also affirmed the Philippines' senior unsecured FCY and LCY bonds at BBB- and BBB, respectively.

*     LCY corporate debt issues in the Republic of Korea amounted to KRW8.6 trillion in February, up 1.6% m-o-m, based on the Financial Supervisory Service report released last week.

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

******************************************************************************