Malaysia’s industrial production surged to 6.2% y-o-y in November, outpacing October’s growth of 4.2% y-o-y and reaching its highest level since expanding 6.7% y-o-y in July 2015. The surge was led by accelerating growth in the manufacturing sector of 6.5% y-o-y, manufacturing sector of 4.7% y-o-y, and electricity sector of 9.7% y-o-y.

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170116.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 9 - 13 January 2017

Consumer prices in the People’s Republic of China’s (PRC) rose 2.1% year-on-year (y-o-y) in December, down from a 2.3% y-o-y increase in November, due to slower y-o-y increases in food, tobacco, and liquor prices, which rose 2.2% y-o-y in December compared with 3.2% y-o-y in November. On a month-on-month (m-o-m) basis, consumer prices rose 0.2% m-o-m in December, up from a 0.1% m-o-m gain in November. Producer price inflation in the PRC accelerated in December, climbing to 5.5% y-o-y from 3.3% y-o-y in November. On a m-o-m basis, producer prices rose 1.6% m-o-m in December after growing 1.5% m-o-m in November.

*     Last week, the Monetary Policy Board of the Bank of Korea decided to maintain its base rate at 1.25%. The central bank cited improvements in the global economic recovery while also noting risks, including the direction of the economic policies of the new United States government, the pace of United States Federal Reserve rate hikes, and rising trade protectionism.

*     Malaysia’s industrial production surged to 6.2% y-o-y in November, outpacing October’s growth of 4.2% y-o-y and reaching its highest level since expanding 6.7% y-o-y in July 2015. The surge was led by accelerating growth in the manufacturing sector of 6.5% y-o-y, manufacturing sector of 4.7% y-o-y, and electricity sector of 9.7% y-o-y.

*     The PRC’s exports in renminbi-denominated terms grew 0.6% y-o-y in December after rising 5.9% y-o-y in November, while imports rose 10.8% y-o-y in December compared with 13.0% y-o-y in November. The PRC reported a trade surplus of CNY275.4 billion for the month of December. Japan’s current account surplus narrowed to JPY1.4 trillion in November from JPY1.7 trillion in October, mainly due to the decline in the trade surplus and the primary income account surplus. The Philippines’ exports in November dropped 7.5% y-o-y to USD4.7 billion, reversing the 7.6% y-o-y increase in October.

*     Foreign exchange reserves in Indonesia climbed to USD116.4 billion at the end of December from USD111.5 billion at the end of November. Preliminary data showed that the Philippines’ gross international reserves fell USD406.1 million in December to USD81.0 billion at the end of the month. Despite the decline in December, gross international reserves still exceeded the USD81.5 billion recorded at the end of December 2015.

*     Mapletree Investments—a leading real estate development, investment, and capital management company owned by Singapore’s state investor, Temasek Holdings—issued 2017’s first public SGD-denominated notes, which also marked the first public hybrid issuance in Asia this year. The offer comprised SGD625 million of perpetual bonds and was priced with a coupon rate of 4.50%. The issued bonds can only be called after year 5, with a 100-basis-points, one-time step-up and distribution rate reset after year 10.

*     Yields fell for all tenors in Indonesia, the Republic of Korea, Singapore and Viet Nam,and fell for most tenors in the PRC, Hong Kong, China, Philippines and Thailand following a decline in US yields.  Yields were mixed in Malaysia.     The 2-year versus 10-year yield spread rose in most markets except in Hong Kong, China and Singapore.

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