To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20150511.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx
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News Highlights - Week of 4 - 8 May 2015
Gross domestic product (GDP) growth in Indonesia slipped
to 4.7% year-on-year (y-o-y) in 1Q15 from 5.0% y-o-y in 4Q14 to record the
slowest pace of growth since 3Q09. Weak exports and falling crude oil prices
dragged down growth according to Statistics Indonesia. Government spending also
slowed to 2.2% y-o-y in 1Q15 from 2.8% y-o-y in 4Q14. On the other hand,
private consumption, which accounts for 56.0% of GDP, grew by 5.0% y-o-y, the
same pace as in 4Q14.
* The People’s
Bank of China lowered policy rates by 25 basis points (bps) to bring the
one-year lending rate to 5.1% and the one-year deposit rate to 2.25% with
effect on 11 May. This marked the third cut since November as PBOC aims to
boost the economy. Meanwhile, consumer price inflation in the People’s Republic
of China (PRC) increased to 1.5% y-o-y in April from 1.4% in March.
* The Purchasing
Managers Index (PMI) in Singapore stayed below the 50-point threshold for the
fifth month in a row, posting a reading of 49.4 in April. The PRC’s
non-manufacturing PMI slipped to 53.4 in April from 53.7 in March.
* Consumer price
inflation in Indonesia inched up to 6.8% y-o-y in April from 6.4% y-o-y in
March. The uptick was due mainly to increases in fuel costs and food prices. In
the Philippines, consumer price inflation eased further to 2.2% y-o-y in April
from 2.4% y-o-y in March. The lower inflation rate was mainly due to the slower
annual increase in the food and non-alcoholic beverages index.
* Malaysia’s
trade surplus widened to MYR7.9 billion in March from MYR4.6 billion in
February as exports increased at a more rapid pace than imports. Exports rose
25.0% month-on-month (m-o-m) in March to MYR66.5 billion, while imports
increased 20.6% m-o-m to MYR58.6 billion. The Republic of Korea’s current
account surplus widened to US$10.4 billion in March from US$6.4 billion in
February, led by a monthly increase in the merchandise trade surplus and a
monthly decline in the services account deficit, according to data from The Bank
of Korea.
* Last week, the
Monetary Policy Committee of Bank Negara Malaysia (BNM) decided to maintain the
overnight policy rate at 3.25%. BNM stated that the global economy is expected
to improve at a moderate pace. Meanwhile, the domestic economy continues to be
supported by domestic demand. Inflation eased in 1Q15 due to lower oil prices,
but is expected to increase with implementation of the Goods and Services Tax
(GST) on 1 April 2015, though it will be partially offset by continued low
global oil prices.
* Last week, the
Hong Kong Monetary Authority issued HKD1.5 billion worth of 10-year HKSAR bonds
via a reopening of an existing 10-year HKSAR bond. The bonds carry a coupon of
2.22% and were issued at an average yield of 1.851%. Shinsegae, a department
store operator in the Republic of Korea, sold a US$300 million 30-year bond.
The bond has a coupon rate of 2.625% and is priced at a yield of 125 basis
points above US Treasuries. The bond is callable in 5 years and has a guarantee
from Kookmin Bank. Fitch Ratings assigned the bond an expected rating of A.
* Government
bond yields rose last week for all tenors in Indonesia; and for most tenors in
Hong Kong, China; Malaysia; Philippines; Singapore; Thailand; and Viet Nam.
Yields fell for most tenors in the PRC and the Republic of Korea. Yield spreads
between 2- and 10-year tenors narrowed in the Republic of Korea, Philippines,
and Viet Nam; while spreads widened in the PRC; Hong Kong, China; Indonesia;
Malaysia; Singapore; and Thailand.
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