AsianBondsOnline Newsletter (3 August 2015)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20150803.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 27 - 31 July 2015

Thailand’s current account surplus fell to US$0.9 billion in June from US$1.6 billion a year earlier due to a year-on-year (y-o-y) narrowing in the merchandise trade surplus. The merchandise trade surplus stood at US$2.0 billion in June, down from its June 2014 level of US$3.8 billion. The Republic of Korea's current account surplus rose to US$12.2 billion in June from US$8.6 billion in May led by monthly increases in the merchandise trade surplus and primary income surplus. Meanwhile, in July, the economy's merchandise exports and imports were down 3.3% y-o-y and 15.3% y-o-y, respectively.

*     In Hong Kong, China exports fell 3.1% y-o-y in June after falling 4.6% in May. Imports fell 2.0% y-o-y after falling 4.7% in the same period.  In Viet Nam, exports eased 9.5% y-o-y to total US$92.3 billion in the first 7 months of the year. On the other hand, imports rose at a much faster pace of 16.4% y-o-y to reach US$95.6 billion in January–July. A trade deficit amounting to US$3.4 billion was recorded in the first 7 months of the year. 

*     Consumer price inflation in Japan eased to 0.4% y-o-y in June from 0.5% y-o-y in May, primarily due to a more rapid y-o-y decline in the fuel, light, and water sub-index of –3.1% in June versus –1.7% in May. Moreover, the food sub-index posted a slower annual increase of 2.5% in June versus 3.1% in May.

*     Industrial production in Japan increased 2.0% y-o-y and 0.8% month-on-month (m-o-m) in June.  Industrial production in the Republic of Korea expanded 1.2% y-o-y and 2.3% m-o-m in June following contractions of 3.0% y-o-y and 1.6% m-o-m in May. The rebound was largely on the back of an improvement in manufacturing production.

*     Thailand’s manufacturing production contracted 8.0% y-o-y in June following a 7.6% y-o-y decrease in May, due to weak demand for manufactured goods and low private investment. Industrial production growth in Viet Nam inched up to 11.3% y-o-y in July, after posting 11.1% y-o-y growth in June.     

*     Last week, Standard & Poor’s affirmed its A–/A-2 foreign currency issuer default rating and A/A-1 local currency issuer default rating for Malaysia, with a stable outlook for both ratings.

*     Rating and Investment Information maintained its foreign currency issuer rating of BBB, with a stable outlook, and its foreign currency short-term debt rating of a-2 for the Philippines.

*     Shinhan Bank, based in the Republic of Korea, priced a CNY1.2 billion 3-year dim sum bond to yield 4.2% last week.  Charoen Pokphand Foods in Thailand issued a THB1.94 billion 8-year debenture with a yield of 3.97%, a THB3 billion 10-year debenture at 4.28%, and a THB2 billion 12-year debenture at 4.51%.

*     Government bond yields rose for all tenors in Indonesia, Malaysia and Viet Nam, and for most tenors in the People’s Republic of China (PRC), Hong Kong, China, the Republic of Korea and Thailand, following the rise of US interest rates and better industrial production in markets that released the data last week, except for Thailand.  The 2-year versus 10-year spread narrowed in the PRC and Singapore, was unchanged in the Philippines, and rose for most other emerging East Asian markets.

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