AsianBondsOnline Newsletter (17 March 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140317.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 10 - 14 March 2014

The Bank of Thailand's Monetary Policy Committee decided on 12 March to reduce the policy rate by 25 basis points (bps) to 2.00%. Bank Indonesia's Board of Governors decided to keep its benchmark rate steady at 7.50%. Bank Indonesia also left the lending facility rate unchanged at 7.50% and the deposit facility rate at 5.75%. Meanwhile, The Bank of Korea's Monetary Policy Committee decided to keep its base rate steady at 2.50%. The Bank of Japan (BOJ) announced that it would maintain its monetary easing measures.     

*     The People's Bank of China (PBOC) on 15 March, widened the daily trading band by which the renminbi can trade against the US dollar.  The renminbi can now trade 2% above or below the daily reference rate. Previously the trading limit was set at 1%.

*     Consumer prices in the People's Republic of China (PRC) rose at a slower pace in February, gaining 2.0% year-on-year (y-o-y) compared with 2.5% in January. 

*     In February the PRC reported its first trade deficit since April 2013 due to the Lunar New Year holiday. Exports in February fell 18.1% y-o-y while imports rose 10.1%. As a result, the PRC reported a trade deficit of US$23.0 billion in February.

*     Exports from Malaysia rose 12.2% y-o-y to MYR64.0 billion in January, following 14.4% y-o-y growth in December.  Imports rose 7.2% y-o-y in January to MYR57.6 billion. As a result, the trade surplus reached MYR6.4 billion. In the Philippines, merchandise exports rose 9.3% y-o-y in January to US$4.3 billion.  Singapore's non-oil domestic exports (NODX) increased 9.1% y-o-y in February. On a seasonally adjusted basis, NODX increased 7.2% m-o-m.

*     Retail sales growth in the PRC slowed to 11.8% y-o-y in January-February from 13.6% in December. On a seasonally adjusted m-o-m basis, Singapore's retail sales slightly increased by 0.6% in January.

*     Malaysia's industrial production index (IPI) rose 3.6% y-o-y in January following a 1.7% rise in the previous month.

*     Beijing Infrastructure Investment issued a US$300 million 5-year bond last week. The bond was issued at a coupon rate of 3.625% and priced to yield 3.705%. 

*     The Indonesian government raised US$350 million from the sale of US$-denominated bonds for the domestic market.    The bonds carried a maturity of 3 years and a coupon of 3.5%. The bonds were priced to yield 2.77%.  Singapore's United Overseas Bank (UOB) raised US$800 million from the sale of its first Basel III-compliant US$-denominated subordinated bond. The 10.5-year bond carries a coupon rate of 3.75% and is callable after 5.5 years. 

*     Government bond yields fell last week for most tenors in Indonesia, the Republic of Korea, the Philippines, Singapore, Thailand, and Viet Nam, and yield movements were mixed in the PRC; Hong Kong, China; and Malaysia. Yield spreads between 2- and 10- year maturities widened in the PRC, Indonesia, Thailand and Viet Nam, while spreads remain unchanged in Singapore and narrowed in other emerging East Asian markets.

*     The upcoming issue of the Asia Bond Monitor (ABM) will be released on 20  March in Jakarta, Indonesia and will available for download on the AsianBondsOnline website.

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