AsianBondsOnline Newsletter (2 June 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140602.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 26 - 30 May 2014

The Philippines' real gross domestic product (GDP) grew 5.7% year-on-year (y-o-y) in 1Q14, lower than the 6.3% growth posted in 4Q13. Growth in 1Q14 was driven by the services sector, which expanded 6.8%, and the industry sector, which grew 5.5%. On the other hand, the agriculture sector grew only 0.9%. By expenditure type, household spending increased 5.8%, capital formation expanded 7.7%, government consumption climbed 2.0%, and total exports and total imports recorded annual growth rates of 12.6% and 8.0%, respectively.

*     Consumer price inflation in Japan accelerated to 3.4% y-o-y in April from 1.6% in the previous month, buoyed by faster annual price hikes in most major items in the Consumer Price Index (CPI).

*     The Republic of Korea's current account surplus stood at US$7.1 billion in April, down from the previous month's surplus of US$7.3 billion. Furthermore, the country's merchandise exports contracted 0.9% y-o-y in May after recording a 9.0% growth in April while its merchandise import growth eased to 0.3% y-o-y in May from 5.0% in April. Thailand's current account balance shifted to a deficit of US$643 million in April from a surplus of US$2.9 billion in March.

*     Hong Kong, China's merchandise trade deficit widened to HKD55.3 billion in April from HKD50.4 billion in March. The Philippines' merchandise trade deficit narrowed to US$146 million in March from US$253 million in the same period in the previous year. Viet Nam's merchandise trade shifted to a deficit of US$400 million in May from a surplus of US$811 million in April.

*     The Purchasing Managers Index (PMI) for the manufacturing sector in the People's Republic of China (PRC) climbed to 50.8 in May from 50.4 in April. Japan's industrial production expanded 4.1% y-o-y, but fell 2.5% month-on-month (m-o-m) in April. In the Republic of Korea, industrial production rose 2.4% y-o-y and 0.1% m-o-m in April.

*     Singapore's manufacturing output growth slowed to 4.6% y-o-y in April from 12.1% in March, as output in the electronics sector contracted 8.8%. Thailand's manufacturing production fell 3.9% y-o-y in April following a 10.5% contraction in March. In Viet Nam, industrial production growth eased slightly to 5.9% y-o-y in May from 6.0% in April.

*     Kaisa Group, a property developer in the PRC, priced US$400 million worth of 5-year bonds at a coupon rate of 9.0%. The government of Indonesia raised IDR2.4 trillion from a 2-year floating-rate retail savings bond sale last week. The coupon rate for the first 3-month period (30 May-20 August) was set at 8.75%.

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

*     The upcoming issue of the Asia Bond Monitor (ABM) will be released and available for download on 4 June at 8:30 a.m. (HKT) on the AsianBondsOnline website.

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