Hong Kong, China’s gross domestic product (GDP) growth climbed to 1.7% year-on-year (y-o-y) in

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20160815.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 8 - 12 August 2016

Hong Kong, China’s gross domestic product (GDP) growth climbed to 1.7% year-on-year (y-o-y) in the second quarter (Q2) of 2016 from 0.8% y-o-y in the first quarter (Q1) of 2016. Malaysia’s GDP growth slowed to 4.0% y-o-y in Q2 2016 from 4.2% y-o-y in Q1 2016. The slower rate of expansion was primarily due to a contraction of 7.9% y-o-y in the agriculture sector, following a decline of 3.8% y-o-y in Q1 2016. Singapore’s GDP grew 2.1% y-o-y in Q2 2016, which was unchanged from Q1 2016. On a quarter-on-quarter and seasonally adjusted annualized basis, GDP expanded 0.3% in Q2 2016, a slight improvement from 0.1% growth in Q1 2016.

*     The People’s Republic of China’s (PRC’s) industrial production grew 6.0% y-o-y in July, down from 6.2% y-o-y in June. In Malaysia, industrial production growth accelerated to 5.3% y-o-y in June from 2.8% y-o-y in May. Philippine manufacturing production growth improved in June as the Value of Production Index rose 4.7% y-o-y following a 2.7% y-o-y uptick in May and growth in the Volume of Production Index accelerated to 8.5% y-o-y from 7.3% y-o-y.

*     Consumer price inflation in the PRC eased to 1.8% y-o-y in July from 1.9% y-o-y in June due to slower price increases for food items.

*     The Bank of Korea’s Monetary Policy Board decided on 11 August to keep the base rate steady at 1.25%. In the Philippines, the Monetary Board of the Bangko Sentral ng Pilipinas decided on 11 August to hold the interest rate on the overnight reverse repurchase facility steady at 3.0% and also kept unchanged the interest rates on the overnight deposit and lending facilities and the reserve requirement ratios.

*     The PRC reported a trade surplus of USD52.3 billion in July compared with USD48.1 billion in June. Japan’s current account surplus narrowed to JPY974 billion in June from JPY1.8 trillion in May, mainly due to a large decline in the primary income account surplus to JPY418 billion from JPY1.9 trillion. Philippine merchandise exports decreased 11.4% y-o-y in June, compared with a 3.8% y-o-y decline in May. 

*     The Republic of Korea’s foreign direct investment rose 21.6% y-o-y to USD21.8 billion in the first half of 2016. Net foreign direct investment inflows in the Philippines amounted to USD364 million in May, down from USD2.2 billion in April.

*     Foreign net bond investment in the Republic of Korea was valued at KRW0.6 trillion in July, a reversal from the net bond sales of KRW2.7 trillion recorded in June.

*     S&P Global Ratings announced on 8 August that it had raised its long-term sovereign credit rating on the Republic of Korea to AA from AA-, with a stable outlook, and affirmed its short-term rating at A-1+.

*     Local currency government bond yields fell all tenors in Indonesia, Malaysia, and Singapore, and for most tenors in the PRC and Viet Nam. On the other hand, yields rose for all tenors in Thailand. Yields were mixed in Hong Kong, China; the Republic of Korea; and the Philippines. The yield spread between the 2- and 10-year tenors narrowed for most emerging East Asian markets except for Hong Kong, China; Malaysia; the Philippines; and Thailand.

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