Latest news with #WeiLiangChang
The Star
17 hours ago
- Business
- The Star
Asian stocks, FX weaken on Mideast tensions; central bank meetings in focus
Most Asian stock markets retreated on Monday and currencies edged down against a resilient dollar as the escalating conflict between Israel and Iran weighed on risk sentiment, while investors braced for several central bank meetings this week. Bank Indonesia is set to announce its monetary policy decision on Wednesday, hours before the U.S. Federal Reserve, and is broadly expected to keep its benchmark interest rate steady after a surprise rate cut last month. The Bangko Sentral ng Pilipinas (BSP) is expected to cut its key policy rate by 25 basis points, while Taiwan's central bank is likely to maintain its interest rate given the strong performance of the tech-focused economy. Both central banks announce their rate decisions on Thursday. The Philippine peso weakened 0.4% on the day, while the Taiwanese dollar, which touched a fresh three-year high last week and is up more than 10% this year, edged up 0.2%. The Thai baht weakened 0.3%, and the Indian rupee inched down 0.1%. "Investors are cautious and watching if the Israel-Iran conflict could escalate and lead to disruptions in energy production and shipping. This could keep EM Asian currencies on the back foot against the USD," said Wei Liang Chang, FX and credit strategist at DBS. Most emerging Asian economies import the bulk of their oil requirements and an increase in crude prices weighs on current account deficits and hurts their currencies. Oil prices extended their rally after fresh strikes by Israel and Iran over the weekend stoked fears the conflict could widen and disrupt oil exports from the Middle East. Safe-haven flows into the greenback also kept Asian currencies under pressure. Malaysia stands out as the only net oil and gas exporter in the region. Its currency was flat on Monday. Regional equities were broadly lower, with stocks in Bangkok falling 1.2% to a more than two-month low. Stocks in Manila, Singapore and Kuala Lumpur fell between 0.3% and 0.6%. However, South Korean shares rose 0.9% after authorities vowed to closely monitor financial markets and deploy "immediate and bold measures" in case of heightened volatility. Analysts at Nomura said that while previous geopolitical events have typically caused only temporary market volatility, the recent strong rally in equities suggests a potential for de-risking and profit-taking. "Asian stocks could be particularly vulnerable through two channels: sustained higher oil prices impacting oil-importing countries; and risk-off sentiment affecting high-beta markets more severely." HIGHLIGHTS: ** China's May factory output slows, retail sales surprisingly upbeat ** G7 leaders in Canada to discuss Israel-Iran conflict, hope to avoid Trump clash ** BOJ's policy decision scheduled for Tuesday - Reuters
Yahoo
20-03-2025
- Business
- Yahoo
China Dollar Bond Deals Surge as Market Gloom Begins to Lift
(Bloomberg) -- China's $600 billion corporate dollar bond market is showing signs of resurgence, as optimism over artificial intelligence advances and recent government steps to ease the property crisis help boost confidence. ICE Eyes Massive California Tent Facility Amid Space Constraints How Britain's Most Bike-Friendly New Town Got Built The Dark Prophet of Car-Clogged Cities Washington, DC, Region Braces for 'Devastating' Cuts from Congress NYC Plans for Flood Protection Without Federal Funds Chinese firms have sold about $13 billion of dollar-denominated notes so far this year in publicly announced deals, according to data compiled Bloomberg. That's double the year-earlier total and the highest level since 2022. The pipeline is mostly driven by financial firms and local government financing vehicles, but some beaten-down companies including those from the property sector are returning to the market after a multi-year absence, building on momentum that emerged in November. The improving credit market sentiment comes as tech companies race to develop more AI products and Beijing takes steps to prevent property debt defaults. Meanwhile, worries that President Donald Trump's tariff policies could stunt US growth are prompting investors to look at options elsewhere. Wei Liang Chang, a strategist at DBS Bank Ltd., expects issuance to improve further this year. 'Investors are certainly receptive to new issuance by state-backed names, given the scarcity of Asian USD bonds in the market, and a need for diversification given US policy risks,' he said. In the secondary market, dollar notes issued by Chinese investment-grade companies are trading at tight spreads. In recent weeks, Tencent Holdings Ltd.'s notes due 2029 have been hovering around the tightest spread levels in at least five years, Bloomberg-compiled data show. Chinese high-yield dollar notes on average have the lowest premium relative to its US equivalents in seven months. 'Rough seas make skilled sailors,' said Gary Ng, a senior economist at Natixis, noting that the survivors in China's dollar bond market now have lower general credit risks. As the US market sees volatility due to Trump's policies, China may offer more stability at this stage, he added. While most defaulted Chinese developers are still grappling with sluggish property sales and difficult debt restructurings, some property-related companies are taking the plunge into new issuance. Just one month after the property sector saw its first dollar bond sale in two years, Beijing Capital Group Co., a locally state-owned firm that once derived about 40% of its revenue from real estate development, sold its first dollar bond since 2021, according to Bloomberg-compiled data. The $450 million bond was priced last week with book orders 10 times the issuance volume and at a coupon rate 60 basis points lower than the initial price guidance, signaling strong investor demand. Chinese dollar bonds will continue to outperform other regions in terms of spread, due to limited supply and onshore support, according to Ting Meng, senior Asia credit strategist at ANZ Bank China Co. There could be flows into the Greater China equity market, but she doubts if there would be significant movements into bonds, as spreads are too tight. Bloomberg's China investment-grade dollar bond index had its best month in more than a year in February in terms of total returns. The high-yield dollar bond index has already generated a 3.8% year-to-date return, beating its pan-European and US peers. Natixis's Ng says it is important to look at the composition of investors in these deals. 'Without the comeback of foreign investors, it is hard to say the sentiment has genuinely improved,' he said. --With assistance from Jackie Cai. The Real Reason Trump Is Pushing 'Buy American' Snap CEO Evan Spiegel Bets Meta Can't Copy High-Tech Glasses Nvidia Looks Past DeepSeek and Tariffs for AI's Next Chapter How Trump's 'No Tax on Tips' Could Backfire for the Working Class How America Got Hooked on H Mart ©2025 Bloomberg L.P. Sign in to access your portfolio
