Monday, April 17, 2017

* Last week, Indika Energy Capital issued a 5-year bond, which is callable after 3 years, amounting to USD265 million and carrying a coupon rate of 6.875%. Jingrui Holdings, a property developer based in the PRC, raised USD400 million through the sale of a 3-year bond. The bond was priced to yield 8.0% and carried a coupon rate of 7.75%.


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News Highlights - Week of 10 - 14 April 2017

On 13 April, 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 but also noted risks, including the uncertain direction of policies in the United States and the eurozone, and the pace of Federal Reserve rate hikes. The Bank of Korea forecasts that annual gross domestic product (GDP) growth in 2017 will exceed the 2.5% estimate released in January. On 13 April, the Monetary Authority of Singapore decided to maintain the rate of appreciation of the Singapore dollar nominal effective exchange rate policy band at zero and held unchanged the width and level at which it is centered.

*     The People's Republic of China's (PRC) real GDP growth rose to 6.9% year-on-year (y-o-y) in the first quarter (Q1) of 2017 from 6.8% in the fourth quarter (Q4) of 2016. Based on advanced estimates of the Ministry of Trade and Industry, Singapore’s GDP growth eased to 2.5% y-o-y in Q1 2017 after expanding 2.9% y-o-y in Q4 2016. On a quarter-on-quarter and seasonally adjusted annualized basis, GDP growth fell 1.9% in Q1 2017 after jumping 12.3% in Q4 2016. In Malaysia, the Industrial Production Index grew 4.7% y-o-y in February compared with 3.5% y-o-y in January and 3.5% y-o-y in February 2016.

*     The PRC’s consumer prices rose 0.9% y-o-y in March from 0.8% y-o-y in February. On the other hand, producer prices edged lower, rising 7.6% y-o-y in March from 7.8% y-o-y in February, due to a slower rise in the prices of commodities such as iron ore and coal.

*     The PRC's exports rose 16.4% y-o-y in USD terms in March, following a 1.3% y-o-y decline in February, due to a recovery in global demand. Import growth softened, gaining 20.3% y-o-y in March after rising 38.1% y-o-y in the previous month. The PRC reported a trade surplus of USD23.9 billion in March. In the Philippines, export sales in February amounted to USD4.8 billion on an 11.0% y-o-y increase. February import receipts climbed 20.3% y-o-y to USD6.5 billion from the same period a year earlier. A trade deficit of USD1.7 billion was recorded in February, narrower than the deficit of USD2.5 billion in January but wider than the deficit of USD1.1 billion in February 2016.

*     Foreign demand for the Republic of Korea’s local currency bonds slowed in March with foreign investors buying a net KRW2,607 billion of listed bonds, down from KRW5,186 billion in February. Net bond inflows amounted to KRW2,878 billion for Korean Treasury Bonds and KRW5 billion for corporate bonds. A net outflow of KRW276 billion was recorded in March for Monetary Stabilization Bonds issued by the Bank of Korea. Cumulative bond inflows for Q1 2017 amounted to KRW9,458 billion.

*     Last week, Indika Energy Capital issued a 5-year bond, which is callable after 3 years, amounting to USD265 million and carrying a coupon rate of 6.875%. Jingrui Holdings, a property developer based in the PRC, raised USD400 million through the sale of a 3-year bond. The bond was priced to yield 8.0% and carried a coupon rate of 7.75%.

*     LCY government bond yields fell for all tenors in Indonesia, Malaysia, and Viet Nam and for most tenors in the Philippines and Singapore. Bond yields were mostly up in the PRC while yields were mixed in Hong Kong, China; the Republic of Korea, and Thailand. The spread between the 2- and 10-year tenors narrowed for most emerging East Asian markets except for Hong Kong, China; Indonesia; Malaysia; and Thailand.

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