AsianBondsOnline Newsletter (6 July 2015)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20150706.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 29 June - 3 July 2015

Consumer price inflation in Indonesia rose to 7.3% year-on-year (y-o-y) in June from 7.2% y-o-y in May. The accelerating inflation rate was due to faster price increases in all expenditure groups amid higher demand with the beginning of Ramadan in June. In the Republic of Korea, inflation stood at 0.7% y-o-y in June, after posting a 0.5% y-o-y increase in May, buoyed by y-o-y price hikes in eight out of 12 expenditure categories. Thailand’s Consumer Price Index fell 1.1% y-o-y in June, marking the sixth consecutive month of y-o-y declines in the economy’s overall consumer prices. June’s decline was largely due to falling transport costs.

*     Viet Nam’s gross domestic product (GDP) growth accelerated to 6.4% y-o-y in 2Q15 from 6.1% y-o-y in 1Q14. This brought GDP growth for the first 6 months of the year to 6.3% y-o-y, compared with 5.2% y-o-y in the same 6-month period in 2014.    

*     The Republic of Korea’s current account surplus widened to US$8.7 billion in May from US$8.1 billion in April, due to narrowing in the deficit positions of the services account and the secondary income account, as well as a shift from deficit to surplus in the primary income account. Thailand’s current account surplus widened to US$2.1 billion in May from US$1.1 billion in April, mainly due to a monthly increase in the merchandise trade surplus.

*     The Republic of Korea’s merchandise trade surplus widened to US$10.2 billion in June from US$5.4 billion in the same period a year earlier, due to a slower y-o-y decline in exports than imports. Malaysia’s trade surplus narrowed to MYR5.5 billion in May from MYR6.9 billion in April as imports increased at a faster pace than exports. Viet Nam recorded a trade deficit of US$3.7 billion in the first 6 months of the year.

*     The People’s Republic of China’s (PRC) manufacturing Purchasing Managers Index (PMI) stood at 50.2 in June, the same level as in May, while the non-manufacturing PMI rose to 53.8 from 53.2. Singapore’s PMI inched up to 50.4 in June from 50.2 in May.  

*     Industrial production in Japan contracted 4.0% y-o-y and 2.2% month-on-month (m-o-m) in May. In the Republic of Korea, industrial production fell 2.8% y-o-y and 1.3% m-o-m in May. In Thailand, manufacturing production decreased 7.6% y-o-y in May, the third consecutive month of y-o-y declines.  

*     Hong Kong, China’s retail sales fell 0.1% y-o-y in May following a revised decline of 2.1% y-o-y in April.   

*     Last week, Fitch Ratings affirmed its A– long-term foreign currency issuer default rating and A long-term local currency issuer default rating for Malaysia. The outlook on both ratings were revised to stable from negative.

*     CP All in Thailand raised THB9.5 billion from a multi-tranche debenture sale last week. The debentures comprised a THB2.5 billion 3-year tranche at a coupon of 2.98%, a THB1.5 billion 5-year tranche at 3.65%, a THB3 billion 7-year tranche at 4.1%, and a THB2.5 billion 10-year tranche at 4.45%. 

*     Last week, government bond yields fell for all tenors in Indonesia; and for most tenors in Malaysia, Philippines, Thailand, and Viet Nam. Yield movements were mixed in the PRC; Hong Kong, China; the Republic of Korea; and Singapore. Yield spreads between 2- and 10-year tenors widened for all emerging East Asian markets except for the PRC, Indonesia, Malaysia, and the Philippines; while the yield spread remained unchanged in Thailand.

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