Monday, April 27, 2015

AsianBondsOnline Newsletter (27 April 2015)



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News Highlights - Week of 20 - 24 April 2015

Real gross domestic product (GDP) growth in the Republic of Korea was 0.8% quarter-on-quarter (q-o-q) and 2.4% year-on-year (y-o-y) in 1Q15. Real q-o-q growth in 1Q15 was up from the previous quarter’s 0.3% due to faster growth in household consumption and domestic investment. On the other hand, real y-o-y growth in 1Q15 was down from the preceding quarter’s 2.7% due to slower growth in household consumption and domestic investment, zero growth in total exports, and slower growth in the manufacturing sector.

*     Hong Kong, China’s consumer prices rose 4.5% y-o-y in March, after gaining 4.6% y-o-y in February, due to slower price increases for most consumer prices. Electricity, gas, and water prices rose 21.0% y-o-y in March compared with 21.8% y-o-y in February.  Housing rose 8.1% y-o-y in March compared with 8.2% y-o-y in February. 

*     The Republic of Korea’s Producer Price Index (PPI) fell 0.1% month-on-month (m-o-m) and 3.7% y-o-y in March. The m-o-m drop in the PPI was due to price declines in agricultural, forestry, and marine products; and utilities.

*     Consumer price inflation in Malaysia increased to 0.9% y-o-y in March from 0.1% y-o-y in February. The slight increase in inflation was mainly due to higher annual increases posted in the furnishings, household equipment, and routine household maintenance index (0.2% vs 0.1%); and the health index (3.6% vs 3.4%).

*     Singapore recorded deflation of –0.3% in March, the same pace as in February, on account of a slowdown in food inflation and lower accommodation costs.

*     In Singapore, manufacturing output contracted 5.5% y-o-y in March after declining 3.3% y-o-y in February. Four out of the six manufacturing clusters recorded a decline in output, led by the transport engineering cluster (–15.6%). Also, the biomedical manufacturing cluster (–8.5%), electronics cluster (–5.2%), and general manufacturing industries cluster   (–0.8%) all recorded lower output on a y-o-y basis.

*     Japan posted a trade surplus of JPY229.3 billion in March, a reversal from the trade deficit of JPY1.5 trillion posted in the same month a year earlier, as exports of goods increased and imports contracted. Exports of goods increased 8.5% y-o-y to JPY6.9 trillion, while imports contracted 14.5% y-o-y to JPY6.7 trillion.

*     Corporate debt issuance in the Republic of Korea climbed to KRW12,488.9 billion in March from KRW7,975.6 billion in February. In 1Q15, issuance rose to KRW27,644.4 billion, up 11.5% y-o-y.

*     Last week, Bumi Serpong Damai, an Indonesian property developer, priced US$225 million of 5-year bonds. The bonds were priced to yield 6.75% and were rated BB– by Fitch Ratings. Also last week, Industrial Bank of Korea sold a US$700 million 5-year bond at a coupon rate of 2.0%.

*     Yields fell for all tenors in the PRC,Malaysia and Thailand but rose for all tenors in the Republic of Korea-due to better GDP growth and Indonesia. Yields mostly rose in Hong Kong, China, Singapore and Viet Nam but were mixed for the Philippines. The 2-year versus 10-year spread rose for Hong Kong, China, the Republic of Korea and Viet Nam but fell for other markets.

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