AsianBondsOnline Newsletter (19 October 2015)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20151019.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 12 - 16 October 2015

Bank Indonesia’s Board of Governors decided on 15 October to keep its benchmark interest rate steady at 7.50% and to maintain the deposit facility rate and the lending facility rate at their current levels of 5.50% and 8.00%, respectively. The Bank of Korea’s Monetary Policy Board decided on 15 October to hold the base rate steady at 1.50%. The Monetary Authority of Singapore decided on 14 October to maintain its monetary policy stance by continuing with the “modest and gradual appreciation” of the Singapore dollar nominal effective exchange rate policy band. It also stated that it will reduce “slightly” the rate of appreciation. 

*     Consumer price inflation in the People’s Republic of China (PRC) moderated to 1.6% year-on-year (y-o-y) in September from 2.0% in August. Producer prices for manufactured goods in the PRC fell 5.9% y-o-y in September, the same rate of y-o-y decline as in August. In Japan, producer prices dropped 3.9% y-o-y in September after posting a 3.6% y-o-y decrease in August.   

*     Singapore’s gross domestic product growth moderated to 1.4% y-o-y in 3Q15 from 2.0% y-o-y in 2Q15 amid a contraction in the manufacturing sector and slower growth in the construction and services sectors.   

*     The PRC’s exports of goods fell 3.7% y-o-y and its merchandise imports dropped 20.4% y-o-y in September. Indonesia’s exports and imports declined 18.0% y-o-y and 26.0% y-o-y, respectively, in September. Singapore’s non-oil domestic exports rose 0.3% y-o-y in September following an 8.4% y-o-y decrease in August.  

*     Industrial production in Japan contracted 0.4% y-o-y in August following a 0.2% y-o-y increase in July. Industrial production growth in Malaysia eased to 3.0% y-o-y in August from 6.1% y-o-y in July.     

*     Foreign investor net bond sales in the Republic of Korea rose to KRW937 billion in September from KRW216 billion in August. The Philippines posted net foreign portfolio outflows of US$324 million in September following net outflows of US$543 million in August. Personal remittances from overseas Filipinos slipped 0.8% y-o-y to US$2.3 billion in August following an increase of 0.5% y-o-y in July.   

*     Agricultural Bank of China last week priced three green bonds: a US$400 million 3-year bond at a 2.125% yield, a US$500 million 5-year bond at 2.773%, and a CNY600 million 2-year bond at 4.15%. China Construction Bank priced a CNY1 billion 2-year bond in London last week, with the dim sum bond priced to yield 4.3%.  

*     The Bank of Korea last week revised downward its 2015 gross domestic product growth forecast to 2.7% from 2.8%, which was a previous estimate made in July, and also its 2015 inflation rate forecast to 0.7% from 0.9%.  

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

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