Friday, April 21, 2017

BI Continues To Hold Key Policy Rate In April

Economic Research
21 April 2017
Indonesia

Economic Update




Bank Indonesia’s (BI) board of governors held the BI 7-day (reverse) repo rate – the benchmark policy rate – unchanged at 4.75% on 20 Apr. We believe the Central Bank could maintain its key policy rate in 2017 on:
1. Moderate inflationary pressure;
2. Manageable current account deficit.


Economist:  Rizki Fajar| +6221 2970 7065

RAM Ratings has reaffirmed the AAA/Stable rating of CJ Capital Sdn Bhd’s (CJ Capital or the Company) RM114 million Sukuk Murabahah (2010/2020) (the Sukuk).

Published on 21 Apr 2017.

RAM Ratings has reaffirmed the AAA/Stable rating of CJ Capital Sdn Bhd’s (CJ Capital or the Company) RM114 million Sukuk Murabahah (2010/2020) (the Sukuk). The rating reflects the highly predictable cashflow, the strength and legality of the transaction’s key governing documents, the low level of counterparty risk and the tight structural features and restrictive covenants of the facility.
During the review period, an annuity payment from CJ Capital’s counterparty – the Johor State Government (the State) – was slightly delayed by 2 weeks, as a result of unforeseen restructuring at State Secretary Johore (Incorporated) (JSSI) which saw a change in the department issuing annuity payments and the implementation of a new IT system. 
RAM expects annuity payments to be back on schedule going forward, given the completion of the restructuring exercise as well as the track record of timely payments for the past 7 years. Further, a 5-month gap between the scheduled dates of annuity payments and the dates of principal and profit payments on the Sukuk provides the Company with an adequate time buffer.
Wholly owned by Cahaya Jauhar Sdn Bhd (CJSB), CJ Capital was set up as a funding conduit to raise the Sukuk. CJSB, a 60:40 joint venture between UEM Land Berhad and the State via Permodalan Darul Ta’zim Sdn Bhd, was awarded the contract for the development and maintenance of Kota Iskandar (the Project), the State’s new administrative centre in Iskandar Puteri. In return for the construction and execution of variation orders for the first phase of the Project, CJSB is entitled to receive RM15 million in annuity payments from JSSI for 10 years.

Analytical contact
Wang Wai Wah
(603) 7628 1110
waiwah@ram.com.my
Media contact
Padthma Subbiah
(603) 7628 1162
padthma@ram.com.my

Our base case for second round face-off (is also a result that is expected by consensus): Macron vs. Le Pen. Under this scenario, we expect EUR to remain in recent range of 1.0620 – 1.08, with bias to the upside. B





FX Flash
by Saktiandi Supaat


FX Research





Our base case for second round face-off (is also a result that is expected by consensus): Macron vs. Le Pen. Under this scenario, we expect EUR to remain in recent range of 1.0620 – 1.08, with bias to the upside. But the margin matters. A huge lead by Macron may see EUR much firmer. Deviation from market expectation could see EUR swing either way for instance a scenario without Macron in the second round face-off (such as Fillon vs. Melenchon or Le Pen vs. Melenchon) is expected to be ...

MARC BECOMES A STRATEGIC PARTNER TO JAPAN CREDIT RATING AGENCY, LTD



On April 20, 2017, MARC signed a Memorandum of Understanding (MOU) to enter into a strategic partnership with Japan Credit Rating Agency, Ltd (JCR). The MOU sets out the framework for future cooperation between the two credit rating agencies in facilitating cross-border debt issuances by Japan and Malaysia-domiciled issuers as well as investment in the cross-border securities offerings in their respective debt markets.

JCR is a leading credit rating agency in Japan with more than 60% coverage of Japanese companies that solicit credit ratings. JCR’s global scale ratings are recognised in the US and European Union as it is registered with the US Securities and Exchange Commission (SEC) and certified by the European Securities and Markets Authority (ESMA), respectively. 

Both MARC and JCR have been expanding their respective global footprints by actively building networks with other credit rating agencies through similar strategic alliances. MARC presently has ties with JCR's partner in India, CARE Ratings and Pakistan-based JCR-VIS Credit Rating Co. Ltd, a company in which JCR has an investment. MARC and CARE Ratings are also the founding members of Europe-based and ESMA-certified rating agency, ARC Ratings S.A. MARC currently provides technical assistance to Bahrain-based Islamic International Rating Agency (IIRA) and Bangladesh-based domestic rating agency Emerging Credit Rating Ltd (ECRL). 

Prior to this MOU, MARC had entered into a similar collaborative partnership with JCR Eurasia Rating, a Turkey-based credit rating agency, in which JCR also has an investment.


For more information about the strategic partnership, please contact:
Ahmad Feizal, +603-2082 2211 / feizal@marc.com.my 

April 21, 2017

Singapore’s NODX grew 15.2% YoY in 1Q17, thanks to steep gains in semiconductor shipments and exports of electrical machinery & equipment, chemicals and mineral oils & products, in

Economic Research
21 April 2017
Singapore

Economic Update




Singapore’s NODX grew 15.2% YoY in 1Q17, thanks to steep gains in semiconductor shipments and exports of electrical machinery & equipment, chemicals and mineral oils & products, in particular to China. Going forward, we expect NODX to slow in 2H17, after a projected strong gain in 1H17. We expect NODX to expand 3.9% in 2017, compared to a 3.2% drop last year, underpinned by:
1.   Growing semiconductor demand, supported by the cyclical smartphone super-cycle, as well as accelerating adoption in the automotive and IoT sectors; 
2.   Stronger economic growth in the US and other developed countries, which tend to drive Singapore’s capital goods exports;
3.   Improving commodity prices, which would support ASEAN and other emerging markets’ economic growth.


Economist:  Ng Kee Chou | +603 92802179

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