AsianBondsOnline Newsletter (2 February 2015)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20150202.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 26 - 30 January 2015

The Philippines' real gross domestic product (GDP) growth accelerated to 6.9% year-on-year (y-o-y) in 4Q14, following growth of 5.3% y-o-y in 3Q14 and 6.3% y-o-y in 4Q13. Growth in 4Q14 was mainly driven by the industrial sector, particularly manufacturing and construction, which expanded 9.2% y-o-y, following 7.6% y-o-y growth in 3Q14. The agriculture, forestry, and fishing sector posted 4.8% y-o-y growth, a reversal from the         –2.2% y-o-y decline in 3Q14. Meanwhile, growth in the services sector rose to 6.0% y-o-y in 4Q14 from 5.3% y-o-y in the previous quarter. For full-year 2014, real GDP grew 6.1%, down from 7.5% growth in 2013.  

*     In a meeting held on 28 January, the Monetary Policy Committee of Bank Negara Malaysia decided to keep its overnight policy rate unchanged at 3.25%. Also last week, the Monetary Authority of Singapore (MAS) decided to reduce the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, while keeping the width and the level at which it is centered unchanged. Meanwhile, the Bank of Thailand’s Monetary Policy Committee decided on 28 January to keep the policy interest rate steady at 2.00%. 

*     Hong Kong, China’s export growth rose to 0.6% y-o-y in in December from 0.4% y-o-y in November. Import growth slowed to 1.9% y-o-y in December from 2.4% in November. The weak export growth was due to declines in exports to Asia. The Republic of Korea's merchandise exports fell 0.4% y-o-y in January whereas merchandise imports dropped at a faster pace, by 11.0% y-o-y, leading the merchandise trade surplus to widen to US$5.5 billion for the month. The current account surplus stood at US$7.2 billion in December.  The Philippines posted a merchandise trade surplus of US$272 million in November, versus a US$1.3 billion deficit in the same month last year. Total merchandise exports increased 21.7% y-o-y in November and total merchandise imports declined 10.8% y-o-y. Thailand recorded a current account surplus in December amounting to US$5.5 billion, up from November's US$1.7 billion.

*     Consumer price inflation in Japan remained unchanged at 2.4% y-o-y in January. The commodity groups that posted higher annual increases include food (3.1% vs 2.9%) and furniture and household utensils (3.4% vs 3.3%). 

*     The People’s Republic of China’s manufacturing PMI fell to 49.8 in January from 50.1 in December, indicating a contraction in manufacturing activity. Industrial production in Japan increased 1.0% month-on-month (m-o-m) and 0.3% y-o-y in January. In Singapore, manufacturing output contracted for the second consecutive month in December, dipping –1.9% y-o-y after declining –2.1% y-o-y in November.  Manufacturing production in Thailand slipped 0.3% y-o-y in December.

*     Security Bank Corp., a universal and commercial bank in the Philippines, raised US$300 million from the issuance of 5-year senior unsecured notes. The notes carry a coupon of 3.95% and were assigned a BB+ bond rating by Standard & Poor’s.

*     Yields fell for all tenors in Indonesia, Malaysia and Viet Nam and for most tenors in the Philippines and Singapore, largely on the back of weaker growth expectations.  Yields rose in the PRC, Hong Kong, China and Thailand. The spread between 2- and 10-year yields narrowed in all markets in the region except for Japan, the PRC, Hong Kong, China and Indonesia.

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