To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170710.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx
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News Highlights - Week of 3 - 7 June 2017
Consumer price inflation in Indonesia inched up to 4.4%
year-on-year (y-o-y) in June from 4.3% y-o-y in May as all major subindexes
climbed at a faster pace. In the Republic of Korea, inflation eased slightly to
1.9% y-o-y in June from 2.0% y-o-y in May. Consumer price inflation in the
Philippines was 2.8% y-o-y in June, down from 3.1% y-o-y in May. In Thailand,
consumer prices dipped again in June, falling 0.05% y-o-y after decreasing
0.04% y-o-y in May. June’s decrease in Thailand was mainly due to the 0.7%
y-o-y drop in prices of food and nonalcoholic beverages, which comprise 36.1%
of the Consumer Price Index.
* On 5 July, the
Monetary Policy Committee of the Bank of Thailand voted unanimously to keep the
policy rate unchanged at 1.50%. The committee assessed that Thailand’s economy
continues to improve based on a better outlook for exports and a gradual
expansion in domestic demand. On 7 July, the State Bank of Vietnam, cut by 25
basis points its refinance rate to 6.25% and the discount rate to 4.25%. The
rate cut, which comes into effect on 10 July, aims to boost economic growth and
help contain inflation.
* Since rising
above the 50-point threshold in September 2016, Singapore’s Purchasing Managers
Index maintained its momentum in June, increasing to 50.9 from 50.8 in May. The
rise can be attributed to improvements in new orders and new exports, factory
output, and inventory.
* The Republic
of Korea’s current account surplus widened to USD5.9 billion in May from USD3.9
billion in April. Despite the smaller trade-in-goods surplus posted in May from
a month earlier, the larger current account surplus was due to the smaller
deficits recorded in all other accounts. Malaysia’s export growth strengthened
in May, expanding 32.5% y-o-y for a monthly export total of MYR79.4 billion.
Import growth also remained strong in May at 30.4% y-o-y for a monthly import
total of MYR73.9 billion. The trade balance registered a surplus of MYR5.5
billion in May, lower than the MYR8.7 billion surplus in April.
* Last week, the
Japan Credit Rating Agency affirmed the Philippines’ foreign currency and local
currency long-term issuer rating of BBB+ and maintained a stable outlook. Japan
Credit Rating Agency stated that the affirmation reflected the economy’s robust
gross domestic expansion that is being driven by strong domestic demand, a
sound external position supported by declining external debt and the
accumulation of foreign exchange reserves, and a continued reduction of the
government’s debt burden.
* Olam
International, a leading agribusiness company with its holding company
headquartered in Singapore, last week issued SGD300 million worth of perpetual
non-call notes priced at par to yield 5.5%. The bond issuance was Olam
International’s fifth this year and the eighth issuance of perpetual bonds in
the Singapore dollar bond market in 2017.
* Malaysia’s
foreign reserves amounted to USD98.9 billion at the end of June, up from
USD98.0 billion at the end of May. The reserve position is enough to cover 7.9
months of retained imports and is equivalent to 1.1 times the amount of
short-term external debt.
* Local currency
government bond yields rose for most tenors in the PRC; Hong Kong, China;
Indonesia; the Republic of Korea; Malaysia; and the Philippines. Yields rose
for all tenors in Singapore. Meanwhile, yields fell for most tenors in Thailand
and Viet Nam. Yield spreads between the 2-year and 10-year tenors widened in
all markets except in Indonesia, Malaysia, and Viet Nam.
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