Real gross domestic product (GDP) growth in Japan climbed to 0.5% quarter-on-quarter (q-o-q) in the first quarter (Q1) of 2017 from 0.3% q-o-q in the fourth quarter (Q4) of 2016. In Malaysia, the economy expanded faster than expected at 5.6% y-o-y in Q1 2017, buoyed by strong private consumption expenditure and investment, and a robust recovery in expor

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170522.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 15 - 19 May 2017

Real gross domestic product (GDP) growth in Japan climbed to 0.5% quarter-on-quarter (q-o-q) in the first quarter (Q1) of 2017 from 0.3% q-o-q in the fourth quarter (Q4) of 2016. In Malaysia, the economy expanded faster than expected at 5.6% y-o-y in Q1 2017, buoyed by strong private consumption expenditure and investment, and a robust recovery in exports. In Thailand, GDP growth accelerated to 3.3% y-o-y in Q1 2017 underpinned by strong growth in private consumption (3.2% y-o-y), exports of goods and services (6.6% y-o-y), and public investment (9.7% y-o-y). The Philippines’ GDP grew a weaker-than-expected 6.4% y-o-y in Q1 2017 versus 6.6% y-o-y in Q4 2016 and 6.9% y-o-y in Q1 2016. According to the National Economic and Development Authority, the slowing growth can be explained by high base effects that were generated by election-related spending in 2016. Further, the reorientation of government programs, which typically takes some time in a new administration, slowed publi  c spending during Q1 2017.

*     The People’s Republic of China’s (PRC)  industrial production grew 6.5% y-o-y in April, down from 7.6% y-o-y in March. In the Philippines, personal remittances sent by overseas Filipinos advanced 11.8% y-o-y in March, hitting a record high of USD2.9 billion.

*     In its meeting held on 17–18 May, Bank Indonesia’s Board of Governors decided to keep unchanged the 7-day reverse repurchase rate at 4.75%. Both the deposit facility rate (4.00%) and the lending facility rate (5.50%) were also kept steady.

*     Malaysia’s current account surplus narrowed to MYR5.3 billion in Q1 2017 from MYR12.5 billion in Q4 2016. The lower current account surplus was due to deficits posted in the services (MYR6.2 billion), primary income (MYR9.9 billion), and secondary income (MYR3.9 billion) accounts, offsetting the gain in the goods account (MYR25.3 billion).

*     Export growth in Indonesia eased to 12.6% y-o-y in April and import growth slowed to 10.3% y-o-y, resulting in a trade surplus valued at USD1.2 billion. Singapore’s non-oil domestic exports slightly declined in April, dipping 0.7% y-o-y.

*     Foreign demand for the Republic of Korea’s local currency bonds eased further in April, with foreign investors buying a net KRW1,375 billion of listed bonds, down from KRW2,607 billion in March. Cumulative bond inflows for the first 4 months of 2017 amounted to KRW10,833 billion.

*     On 19 May, Standard & Poor’s (S&P) Global Ratings raised Indonesia’s sovereign credit rating to investment grade. Indonesia’s long term sovereign credit rating was raised to BBB- and short term sovereign credit rating to A-3. The rating was given a stable outlook.

*     Sun Hung Kai Properties last week issued a USD500 million perpetual bond at a coupon rate of 4.45%. Total orders for the bond reached USD2 billion, with 88% of all investors coming from Asia.

*     Local currency government bond yields in emerging East Asia fell in Hong Kong, China; the Republic of Korea, and Viet Nam, and for most maturities in Indonesia, Malaysia, and Singapore, widely tracking the decline in yields of US treasuries. The only exceptions were in the PRC, where yields rose for most tenors, and for the Philippines and Thailand where yield movements were mixed. Except for the Philippines and Viet Nam, the spread between the 2- and 10-year maturities narrowed for all markets in the region.

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