AsianBondsOnline Newsletter (4 April 2016)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20160404.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 28 March - 1 April 2016

Consumer price inflation in Indonesia rose marginally to 4.45% year-on-year (y-o-y) in March from 4.42% y-o-y in February, buoyed by a faster y-o-y increase in food prices. In the Republic of Korea, consumer price inflation slowed to 1.0% y-o-y in March from 1.3% y-o-y in February on the back of moderating increases in prices of food and non-alcoholic beverages, and an accelerated drop in transport prices. Thailand’s Consumer Price Index fell 0.5% y-o-y in March, marking the 15th consecutive month of y-o-y decline, largely due to falling energy prices.

*     Hong Kong, China’s exports and imports of goods fell 10.4% y-o-y and 10.1% y-o-y, respectively, in February. Its merchandise trade deficit leveled off at HKD33.1 billion for the month. The Republic of Korea’s merchandise exports and imports in March were down 8.2% y-o-y and 13.8% y-o-y, respectively, and its trade-in-goods surplus was valued at USD9.8 billion for the month.

*     The Republic of Korea’s current account surplus rose to USD7.5 billion in February from USD6.8 billion in January, largely due to a monthly decrease in the services account deficit. The current account surplus of Thailand widened to USD7.4 billion in February from USD4.1 billion in January amid a monthly increase in the merchandise trade surplus.    

*     The People’s Republic of China’s (PRC) Purchasing Managers Index (PMI) for manufacturing climbed to 50.2 in March from 49.0 in February, while its PMI for non-manufacturing rose to 53.8 from 52.7 in the same period. In the Republic of Korea, the Business Survey Index for manufacturing rose to 68 in March from 63 in February, while the non-manufacturing index climbed to 68 in March from 64 in February.

*     Industrial production in Japan decreased 6.2% month-on-month (m-o-m) in February, following an increase of 3.7% m-o-m in January. In the Republic of Korea, industrial production grew 3.3% m-o-m in February, a recovery from a 2.1% m-o-m contraction in January. Thailand’s manufacturing production shrank 1.6% y-o-y in February following a 3.5% y-o-y contraction in January.

*     Siam Cement, a conglomerate based in Thailand, issued THB25 billion worth of 4-year bonds at a 3% coupon last week. The bonds were rated A(tha) by TRIS Rating, a local credit rating agency in Thailand.  TPI Polene, a cement manufacturing firm in Thailand, issued a THB1.6 billion 5-year bond at a 4.35% coupon, a THB1.2 billion 6-year bond at 4.6%, and a THB2.645 billion 7-year bond at 4.8% last week; the bonds were all rated BBB+ by TRIS Rating.

*     Last week, Standard & Poor’s (S&P) affirmed its long-term sovereign credit ratings for the PRC and Hong Kong, China at AA- and AAA, respectively, and changed its outlook on both ratings to negative from stable. S&P also affirmed its A–/A-2 foreign currency and A/A-1 local currency sovereign credit ratings for Malaysia, and maintained a stable outlook on these ratings. Also, RAM Ratings affirmed its global sovereign ratings for Viet Nam at BB3 and maintained a stable outlook.

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

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