AsianBondsOnline Newsletter (16 February 2015)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20150216.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 9 - 13 February 2015

Malaysia’s gross domestic product (GDP) growth accelerated to 5.8% year-on-year (y-o-y) in 4Q14 from 5.6% in 3Q14. Growth in 4Q14 was boosted by the mining and quarrying sector, which expanded 9.6% y-o-y in 4Q14 following a 1.4% gain in the prior quarter. Services sector growth was also strong, rising 6.4% y-o-y in 4Q14 after growing 6.2% y-o-y in 3Q14. For full-year 2014, GDP expanded 6.0%, up from 4.7% growth in 2013.

*     Industrial production growth in Malaysia climbed to 7.4% y-o-y in December after gaining 4.8% y-o-y a month earlier. In Singapore, retail sales growth slowed to 2.6% y-o-y in December from 6.6% y-o-y in November.

*     The People’s Republic of China’s (PRC) consumer price inflation fell to 0.8% y-o-y in January, a 5-year low, from 1.5% y-o-y in December. The slower increase in consumer prices was driven by a decline in food prices, which increased 1.1% y-o-y in January.

*     In the Philippines, 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 4.0% and 6.0%, respectively.

*     Indonesia’s current account deficit stood at US$6.2 billion (2.8% of GDP) in 4Q14, compared with US$7.0 billion (3.0% of GDP) in 3Q14. For full-year 2014, the current account deficit narrowed to US$26.2 billion (2.9% of GDP) from US$29.1 billion (3.2% of GDP) a year earlier. Japan’s current account surplus narrowed to JPY187 billion in December from JPY433 billion in November, mainly due to a decrease in the primary income account surplus. For full-year 2014, the current account surplus narrowed to JPY2.6 trillion from JPY3.2 trillion in 2013. In Malaysia, the current account surplus narrowed to MYR6.1 billion in 4Q14 from MYR7.6 billion in 3Q14, on account of much higher deficits in the primary income and services accounts. On a full-year basis, however, the current account surplus climbed to MYR49.5 billion in 2014 from MYR39.9 billion in 2013. In the Philippines, merchandise exports contracted 3.2% y-o-y to US$4.8 billion in December.

*     Last week, Standard and Poor’s (S&P) affirmed Malaysia’s long term foreign currency ratings at A and short-term foreign currency rating at A-2.

*     The Government of the Republic of Korea recorded a deficit of KRW0.8 trillion in 2014, according to the Ministry of Strategy and Finance. The net income of securities companies in the Republic of Korea rose to KRW1.7 trillion in 2014 from KRW259 billion in 2013, on the back of higher earnings from proprietary bond trading, according to the Financial Supervisory Service.

*     Last week, Evergrande Real Estate Group priced a 5-year Reg S bond, which is callable in 3 years, to yield 12.0%. The issue size was US$1.0 billion and the bond was given a rating of B1 from Moody’s and BB– from S&P.

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

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