News Highlights - Week of 1 - 5 August 2016

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20160808.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 1 - 5 August 2016

Consumer price inflation in Indonesia stood at 3.2% year-on-year (y-o-y) and 0.7% month-on-month (m-o-m) in July as inflationary pressures were buoyed by Eid al-Fitr. In the Republic of Korea, growth in the Consumer Price Index (CPI) fell to 0.7% y-o-y in July from 0.8% y-o-y in June, induced partly by a sharper y-o-y drop in transport prices. In the Philippines, the y-o-y CPI inflation rate remained unchanged in July at 1.9%. In Thailand, consumer price inflation decelerated to 0.1% y-o-y in July from 0.4% y-o-y in June due to slower annual price increases in food and nonalcoholic beverages.

*     Indonesia’s real gross domestic product (GDP) growth accelerated to 5.2% y-o-y in the second quarter (Q2) of 2016 from 4.9% y-o-y in the first quarter (Q1) 2016 on the back of faster growth in household final consumption expenditure and in the agricultural sector. On a quarter-on-quarter (q-o-q) basis, real GDP grew 4.0% in Q2 2016 following a 0.4% contraction in Q1 2016.

*     The Bank of Thailand’s Monetary Policy Committee decided on 3 August to keep the policy rate at 1.50% and for monetary policy to remain accommodative.

*     The Republic of Korea’s merchandise trade surplus fell to USD7.8 billion in July from USD11.5 billion in June as exports of goods decreased at a faster monthly rate than merchandise imports. Malaysia’s merchandise trade surplus widened to MYR5.5 billion in June from MYR3.3 billion in May as exports of goods increased at a faster m-o-m pace than merchandise imports. 

*     The Republic of Korea’s current account surplus widened to USD12.2 billion in June from USD10.4 billion in May, induced by monthly increases in the surplus positions of the merchandise trade balance and primary income account.

*     Singapore’s Purchasing Managers Index stood at 49.3 in July, down from 49.6 in June, marking the 13th consecutive month that the manufacturing economy has contracted.

*     Lippo Karawaci, a real estate developer in Indonesia, raised USD260 million from a reopening of its existing US$-denominated bond maturing in 2022. The yield-to-maturity was set at 6.203%.

*     Japan Credit Rating Agency reported last week that it has affirmed its foreign currency long-term issuer rating and local currency long-term issuer rating for the Philippines at BBB+. The outlook for both ratings was affirmed as stable.

*     Local currency government bond yields fell for all tenors in the People’s Republic of China, and for most tenors in Hong Kong, China; Indonesia; and Thailand. On the other hand, yields rose for most tenors in the Republic of Korea and Malaysia while yields were mixed in the Philippines and Singapore. The spread between the 2- and 10-year maturities widened for most emerging East Asian markets except for Hong Kong, China; Malaysia; and Thailand where it narrowed.

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