AsianBondsOnline Newsletter (7 April 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140407.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

******************************************************************************

News Highlights - Week of 31 March - 4 April 2014

Consumer price inflation in Indonesia moderated to 7.3% year-on-year (y-o-y) in March from 7.8% in February amid lower food prices and a stable rupiah. In the Republic of Korea, consumer price inflation accelerated to 1.3% y-o-y in March from 1.0% in February due in part to larger price hikes for housing and utilities. For the Philippines, consumer price inflation eased to 3.9% y-o-y in March from 4.1% in February. Thailand's consumer price inflation inched up to 2.1% y-o-y in March from 2.0% in February.

*     The Republic of Korea's current account surplus widened to US$4.5 billion in February from US$3.3 billion in January on the back of a monthly increase in the merchandise trade surplus. The country's merchandise trade surplus continued to widen in March, leveling off at US$4.2 billion, as y-o-y export growth of 5.2% outpaced import growth of 3.6%. 

*     Indonesia's trade balance recorded a surplus of US$785 million in February following a deficit of US$444 million in January. Malaysia's trade surplus in goods widened 27.2% y-o-y to MYR10.4 billion in February, as y-o-y export growth of 12.3% eclipsed import growth of 9.5%. In Thailand, the current account surplus widened to US$5.1 billion in February from US$263 million in January largely due to the merchandise trade balance reverting to a surplus of US$3.9 billion from a deficit of US$857 million.

*     The People's Republic of China's (PRC) Purchasing Managers Index (PMI) for manufacturing inched up to 50.3 in March from 50.2 in February. In contrast, Singapore's PMI slipped to 50.8 in March from 50.9 in February. Retail sales in Hong Kong, China declined 2.3% y-o-y in February. Japan's industrial production contracted 2.3% m-o-m but expanded 6.9% y-o-y in February.

*     China Petrochemical Corporation (Sinopec) raised US$5.0 billion from a multi-tranche bond sale last week that comprised a (i) US$1.5 billion 3-year floating rate note, (ii) US$1.25 billion 3-year fixed rate bond with a 1.75% coupon,  (iii) US$1.0 billion 10-year bond with a 4.375% coupon, (iv) US$750 million 5-year bond with a 2.75% coupon, and a (v) US$500 million 5-year floating rate note.

*     Siam Commercial Bank in Thailand priced US$750 million worth of 5-year bonds at a coupon rate of 3.50% last week. Shinhan Bank in the Republic of Korea priced US$500 million worth of 3-year floating rate notes at a spread of 65 basis points above the 3-month US dollar LIBOR.

*     AVIC International priced CNH1.5 billion worth of 3-year bonds with a coupon rate of 4.8% while China Merchants Bank priced CNH1.0 billion of 3-year bonds at a 4.1% coupon last week.

*     The PRC announced last week measures aimed at supporting economic growth, including plans to sell CNY150 billion worth of railway bonds and an extension of preferential tax policies for small firms.

*     Government bond yields fell last week for all tenors in Indonesia and for most tenors in the Philippines and Thailand. Yields rose for all tenors in Viet Nam and for most tenors in the PRC; Hong Kong, China; Malaysia; and Singapore. Yield movements were mixed in the Republic of Korea. Yield spreads between 2- and 10-year maturities widened last week in Hong Kong, China; the Republic of Korea; Malaysia; the Philippines; and Singapore, narrowed in Indonesia, Thailand, and Viet Nam, and remained unchanged in the PRC. 

******************************************************************************