AsianBondsOnline Newsletter (30 May 2016)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20160530.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 23 - 27 May 2016

Hong Kong, China’s consumer prices rose 2.7% year-on-year (y-o-y) in April after gaining 2.9% y-o-y in March.    The government expects inflation to remain contained in the near-term due to overall low global inflation and minimal domestic cost pressures. Consumer prices in Japan fell 0.3% y-o-y in April following a decline of 0.1% y-o-y in March. Singapore’s consumer prices declined 0.5% y-o-y in April, the 18th consecutive month of deflation. Consumer price inflation accelerated in Viet Nam to 2.3% y-o-y in May from 1.9% y-o-y in April.

*     Singapore’s economy expanded 1.8% y-o-y in the first quarter of 2016, the same pace of growth as in the previous quarter. Output in the manufacturing sector declined 1.0% y-o-y following a decline of 6.7% in the previous quarter, while output in the construction and service sectors expanded 6.2% y-o-y and 1.8% y-o-y, respectively.

*     Hong Kong, China’s exports fell 2.0% y-o-y in April after declining 7.0% y-o-y in March.  Imports fell 4.5% y-o-y after declining 5.8% y-o-y in the same period. Hong Kong, China reported a trade deficit of HKD31 billion in April.  Japan’s trade surplus widened to JPY823 billion in April from JPY754 billion in March as imports contracted at a faster pace than exports. The Philippines’ merchandise trade deficit widened to USD1.7 billion in March from USD1.1 billion in February.

*     In Viet Nam, industrial production growth slowed to 7.8% y-o-y in May from 7.9% y-o-y in April. 

*     Singapore Exchange is increasing the range of bonds available to retail investors with the introduction of a bond seasoning framework that will give retail investors access to wholesale bonds initially offered to institutions and accredited investors.

*     The People’s Republic of China (PRC) last week issued a CNY3 billion bond in London.  The bond has a maturity of 3-years and was priced to yield of 3.28%. 

*     Several PRC-based companies tapped the international bond market last week via multi- tranche issues. China Development Bank priced a dual-tranche US dollar bond.  The 5-year USD1 billion tranche was priced at a coupon rate of 2.125% and a yield of 2.201%, and the 10-year USD600 million tranche was given a coupon of 3.0% and a yield of 3.052%. China Huarong Asset Management priced a triple-tranche bond deal worth USD2.5 billion. The sale comprised a 3-year bond worth USD700 million priced to yield 2.8% and carrying a coupon rate of 2.75%, 5-year bond worth USD900 million priced to yield 3.358% and carrying a coupon rate of 3.25%, and a 10-year bond worth USD900 million priced to yield 4.733% and carrying a coupon rate of 4.625%. Three Gorges sold USD1.5 billion from a dual-tranche bond deal. The bond sale comprised a 5-year bond worth USD500 million carrying a coupon of 2.30% and a 10-year bond worth USD1.0 billion carrying a coupon of 3.15%.

*     Yields mostly fell in Hong Kong, China as inflation fell following stabilization in food prices, Indonesia, Philippines and Viet Nam, but rose mostly in the PRC, Singapore-as GDP growth was steady and following US yield curve movements, and in Thailand.  In the Republic of Korea, yield curve movements were mixed, while yields rose for all tenors in Malaysia as the yield curve tracked US yields. The 2-year versus 10-year yields fell in Hong Kong, China, the Republic of Korea and Thailand but rose in other markets.

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