AsianBondsOnline Newsletter (4 May 2015)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20150504.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 27 April - 4 May 2015

Consumer price inflation in Japan inched up to 2.3% year-on-year (y-o-y) in March from 2.2% in February on the back of accelerating increases in food, transport, and utilities costs. On a month-on-month (m-o-m) basis, Japan’s Consumer Price Index (CPI) rose 0.4% in March following a 0.2% drop in February. In the Republic of Korea, consumer price inflation stood at 0.4% y-o-y in April, the same rate of change in March. Between March and April, the CPI of the Republic of Korea inched up 0.1%. Thailand’s CPI fell 1.0% y-o-y in April.

*     The Bank of Japan’s Policy Board decided on 30 April to continue with its money market operations of increasing the monetary base at an JPY80 trillion annual pace and to maintain its asset purchase program, which includes purchasing Japanese Government Bonds at an annual pace of JPY80 trillion. 

*     The Bank of Thailand’s Monetary Policy Committee decided on 29 April to lower the policy rate by 25 basis points from 1.75% to 1.50% in order to support Thailand’s economic recovery.

*     Hong Kong, China’s exports of goods decreased 1.8% y-o-y in March while merchandise imports fell 2.7% y-o-y in the same month. The Republic of Korea’s exports and imports of goods fell 8.1% y-o-y and 17.8% y-o-y, respectively, in April. Philippine merchandise exports contracted 3.1% y-o-y while importable goods expanded 11.2% y-o-y in February. Thailand’s merchandise exports and imports declined 4.3% y-o-y and 6.2% y-o-y, respectively, in March.  

*     Thailand’s current account surplus narrowed to US$2.2 billion in March from US$3.5 billion in February as the services and income account shifted to a deficit from a surplus position.   

*     The Purchasing Managers’ Index (PMI) of the manufacturing sector in the People’s Republic of China (PRC) stood at 50.1 in April, the same level as in the previous month.    

*     Industrial production in Japan contracted 0.3% m-o-m and 1.2% y-o-y in March due to output reductions in electrical machinery, petroleum and coal products, and fabricated metals. In the Republic of Korea, industrial production fell 0.4% m-o-m and 0.1% y-o-y in March because of a decline in manufacturing output. Thailand’s manufacturing production fell 5.6% m-o-m and 1.8% y-o-y in March due to weak domestic and foreign demand for manufactured goods.

*     Three state-owned companies in the PRC tapped the G3 currency bond market last week: (i) China National Offshore Corporation (CNOOC), which raised US$3.8 billion from a triple-tranche US$-denominated bond sale comprising a US$1.5 billion 5-year bond with a 2.625% coupon, a US$2.0 billion 10-year bond at 3.5%, and a US$300 million 30-year bond at 4.2%; (ii) Beijing Enterprises, which issued a EUR500 million 5-year bond carrying a 1.435% coupon; and (iii) Yuexiu Transport Infrastructure, which raised EUR200 million from its sale of a 3-year bond at 1.625%. Meanwhile, CLP Power Hong Kong Financing priced a US$300 million 10-year bond at 3.125%.

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

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