AsianBondsOnline Newsletter (12 May 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140512.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 5 - 9 May 2014

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) raised the reserve requirement ratio by 1 percentage point to 20.0% effective 30 May. Meanwhile, key policy rates -the overnight borrowing and lending rates- were kept steady at 3.5% and 5.5%, respectively. The reverse repurchase rate, repurchase rate, and BSP's special deposit account facility were also kept unchanged.

*     Bank Indonesia continued to maintain a neutral policy stance as it kept its benchmark rate steady at 7.50% for the sixth consecutive month. Bank Indonesia also held steady the lending facility rate at 7.50% and the deposit facility rate at 5.75%. The Bank of Korea  decided to maintain the base rate at 2.50%.     Bank Negara Malaysia (BNM) decided to maintain its overnight policy rate at 3.0%.

*     In the People's Republic of China (PRC), consumer prices rose 1.8% year-on-year (y-o-y) in April, lower than the consumer price rise of 2.4% in March. In the Philippines, consumer price inflation increased slightly to 4.1% y-o-y in April from 3.9% in March.

*     Indonesia's gross domestic product growth continued below 6.0% y-o-y in 1Q14 as economic growth slowed to 5.2%, compared with 5.7% in 4Q13.

*     In Hong Kong, China's retail sales fell 1.3% y-o-y in March versus the retail sales growth in January-February of 6.7%.  

*     Singapore's Purchasing Managers Index (PMI) ended at 51.1 in April, up from a reading of 50.8 in the previous month.

*     Malaysia's exports rose 10.4% month-on-month (m-o-m) to MYR65 billion in March.  Philippine merchandise exports registered positive growth in March, with increases of 11.2% y-o-y and 12.2% m-o-m. 

*     Standard & Poor's (S&P) upgraded its long-term sovereign credit rating for the Philippines last week to BBB from BBB-, and its short-term rating to A-2 from A-3, with a stable outlook. 

*     Foreign investors' net bond investment into the Republic of Korea climbed to KRW1.3 trillion in April from KRW1.15 trillion in March, based on a Financial Supervisory Service (FSS) report released last week. 

*     Sinochem Group priced a 3-year CNH2.5 billion bond at a yield of 3.55%. PowerChina priced a 3-year Reg S CNH1.5 billion bond to yield 4.2%. Both bonds were issued in Hong Kong, China. Agricultural Bank of China issued a 2-year CNH1.2 billion Reg S bond at a yield of 3.25%. The bond was listed on the Frankfurt stock exchange. Bank of China issued a CNH1.5 billion 3-year bond at a yield of 3.5%. The bond was listed on the Luxemburg stock exchange.

*     Government bond yields fell last week for all tenors in the PRC and the Republic of Korea, and for most tenors in Hong Kong, China; the Philippines; and Singapore. Yields rose for most tenors in Indonesia and Malaysia, and yield movements were mixed in Thailand and Viet Nam. Yield spreads between 2- and 10-year maturities widened in Indonesia and Viet Nam, while spreads were unchanged in Singapore and narrowed in the rest of the emerging East Asian markets.

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