Edition:
India

Rashmi Ashok

EMERGING MARKETS-Trump attack on Chinese apps adds to virus woes across Asia

07 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Asian FX to consolidate in near term - strategist * Malaysian ringgit up 1.2% for week, top performer * Rupiah slips 0.5% for week, coronavirus cases jump By Rashmi Ashok Aug 7 Tensions over a planned U.S. ban on major Chinese apps kept most Asian markets subdued on Friday, with Philippine stocks suffering an added blow from a jump in coronavirus infections that made its caseload the highest in Southeast Asia. Citing security concerns, President Donald Trump issued executive orders on Thursday that will ban U.S. transactions with ByteDance, the Chinese owner of the popular video-sharing app TikTok, and Tencent, owner of the WeChat app, in 45 days' time. Worries about whether China would retaliate through trade restrictions dented most currencies in early trade, with the Malaysian ringgit, often seen as a proxy for China's yuan, and trade-sensitive Singapore dollar and South Korean won all down. "It is much tougher for China to react in a manner that could jeopardise investment into the country. However, it seems likely that tensions will ratchet higher ahead of U.S. elections, a factor that could play badly for risk assets," Mitul Kotecha, senior emerging markets strategist at TD Securities, wrote in a note. "While Asian FX including the yuan have been supported by dollar weakness lately, USD/Asia may at the least be in for some short-term consolidation if not an outright increase in pressure as tensions worsen." The rising geopolitical tensions come at a time when a number of the region's developing economies are struggling with fresh coronavirus outbreaks. Philippine equities closed 1% lower after the country recorded a surge in infections late on Thursday, overtaking Indonesia as the worst-hit country in Southeast Asia. The spike in cases also followed dismal data on Thursday which showed gross domestic product plunged 16.5% in the second quarter. For the week, most Asian currencies are set for gains, having benefited from sustained dollar weakness. The ringgit was the top performer with a 1.2% weekly gain so far. Apart from some technical factors, Maybank attributed the ringgit's outperformance to recent stability in the yuan and oil prices, robust foreign inflows into domestic bonds and strong fiscal and monetary responses by the government to deal with the COVID-19 crisis. The Indonesian rupiah was the worst performer with a 0.5% weekly loss, as coronavirus cases spread unabated and a lockdown was placed in and around its capital, sparking worries about further economic fallout from the virus. HIGHLIGHTS ** In the Philippines, top index losers were Bank of the Philippine Islands down 4.5% and SM Investments Corp down 3.13% ** Top losers on the Singapore STI included Genting Singapore Ltd down 4.93% and Thai Beverage PCL down 4% ** Malaysia's 10-year benchmark yield inched up 0.8 basis points to 2.508%​​ while its 3-year benchmark yield climbed 0.6 basis points to 1.894%​​ Asia stock indexes and currencies at 0718 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.01 +2.92 -0.39 -5.61 China <CNY=CFX -0.11 +0.02 -0.96 9.96 S> India -0.04 -4.78 -0.16 -8.10 Indonesia -0.14 -4.93 -1.00 -18.6 2 Malaysia -0.05 -2.36 -0.13 -0.14 Philippines +0.16 +3.38 -0.96 -25.2 0 S.Korea <KRW=KFT -0.10 -2.39 0.39 7.01 C> Singapore -0.14 -1.90 -0.71 -21.1 6 Taiwan +0.44 +2.50 -0.66 6.93 Thailand -0.19 -3.98 -0.45 -15.9 9 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Subhranshu Sahu)

EMERGING MARKETS-Trump attack on Chinese apps adds to virus woes across Asia

07 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Asian FX to consolidate in near term - strategist * Malaysian ringgit up 1.2% for week, top performer * Rupiah slips 0.5% for week, coronavirus cases jump By Rashmi Ashok Aug 7 Tensions over a planned U.S. ban on major Chinese apps kept most Asian markets subdued on Friday, with Philippine stocks suffering an added blow from a jump in coronavirus infections that made its caseload the highest in Southeast Asia. Citing security concerns, President Donald Trump issued executive orders on Thursday that will ban U.S. transactions with ByteDance, the Chinese owner of the popular video-sharing app TikTok, and Tencent, owner of the WeChat app, in 45 days' time. Worries about whether China would retaliate through trade restrictions dented most currencies in early trade, with the Malaysian ringgit, often seen as a proxy for China's yuan, and trade-sensitive Singapore dollar and South Korean won all down. "It is much tougher for China to react in a manner that could jeopardise investment into the country. However, it seems likely that tensions will ratchet higher ahead of U.S. elections, a factor that could play badly for risk assets," Mitul Kotecha, senior emerging markets strategist at TD Securities, wrote in a note. "While Asian FX including the yuan have been supported by dollar weakness lately, USD/Asia may at the least be in for some short-term consolidation if not an outright increase in pressure as tensions worsen." The rising geopolitical tensions come at a time when a number of the region's developing economies are struggling with fresh coronavirus outbreaks. Philippine equities closed 1% lower after the country recorded a surge in infections late on Thursday, overtaking Indonesia as the worst-hit country in Southeast Asia. The spike in cases also followed dismal data on Thursday which showed gross domestic product plunged 16.5% in the second quarter. For the week, most Asian currencies are set for gains, having benefited from sustained dollar weakness. The ringgit was the top performer with a 1.2% weekly gain so far. Apart from some technical factors, Maybank attributed the ringgit's outperformance to recent stability in the yuan and oil prices, robust foreign inflows into domestic bonds and strong fiscal and monetary responses by the government to deal with the COVID-19 crisis. The Indonesian rupiah was the worst performer with a 0.5% weekly loss, as coronavirus cases spread unabated and a lockdown was placed in and around its capital, sparking worries about further economic fallout from the virus. HIGHLIGHTS ** In the Philippines, top index losers were Bank of the Philippine Islands down 4.5% and SM Investments Corp down 3.13% ** Top losers on the Singapore STI included Genting Singapore Ltd down 4.93% and Thai Beverage PCL down 4% ** Malaysia's 10-year benchmark yield inched up 0.8 basis points to 2.508%​​ while its 3-year benchmark yield climbed 0.6 basis points to 1.894%​​ Asia stock indexes and currencies at 0718 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.01 +2.92 -0.39 -5.61 China <CNY=CFX -0.11 +0.02 -0.96 9.96 S> India -0.04 -4.78 -0.16 -8.10 Indonesia -0.14 -4.93 -1.00 -18.6 2 Malaysia -0.05 -2.36 -0.13 -0.14 Philippines +0.16 +3.38 -0.96 -25.2 0 S.Korea <KRW=KFT -0.10 -2.39 0.39 7.01 C> Singapore -0.14 -1.90 -0.71 -21.1 6 Taiwan +0.44 +2.50 -0.66 6.93 Thailand -0.19 -3.98 -0.45 -15.9 9 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Subhranshu Sahu)

EMERGING MARKETS-Asian currencies, stocks hit as Trump widens app attack

07 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Yuan's fall hits most Asian currencies * Philippine stocks slip 1.2% as coronavirus cases surge By Rashmi Ashok Aug 7 Tensions over a planned U.S. ban on major Chinese apps hurt most Asian markets on Friday, with Philippine stocks taking an added hit after a jump in coronavirus infections lifted the country's case load to the highest in Southeast Asia. Malaysia's ringgit, often seen as a proxy for China's yuan, lost 0.3% while the South Korean won fell 0.4% as investors worried about further trade restrictions would be the end result of the tensions. Citing security concerns, President Donald Trump issued executive orders on Thursday that will ban U.S. transactions with ByteDance, the Chinese owner of the popular video-sharing app TikTok, and Tencent, owner of the WeChat app, in 45 days time. That sank Chinese markets in morning trade, and the rest of the region followed. The Singapore dollar, another trade- and China-sensitive currency, fell 0.3%. Apart from the obvious fallout to Tencent and ByteDance, Washington DC's moves are sure to ratchet up geopolitical tensions with Beijing once again, after a relatively quiet couple of weeks, said Jeffrey Halley, senior market analyst at OANDA. "We would expect the sell-off to gather pace as the day goes on, with investors reducing risk into what could be a fraught U.S. session," he said. The rising geopolitical tensions come at a time when a number of the region's developing economies are struggling with fresh coronavirus outbreaks. Philippine equities fell as much as 1% after the country recorded a surge in infections late on Thursday, overtaking Indonesia as the worst hit country in Southeast Asia. The capital Manila has been placed in a fresh lockdown. The spike in cases also followed dismal data on Thursday which showed gross domestic product plunged 16.5% in the second quarter. Thailand's baht also eased as it delayed plans for a "travel bubble" agreement with select countries with low infections, citing the second wave of cases. That will put pressure on its vital tourism industry and complicate efforts to revive a battered economy. The Malaysian ringgit trimmed initial losses after data was released showing industrial production fell a marginal 0.4% in June from last year, far from the 10.4% fall forecast by analysts surveyed by Reuters. The Indonesian rupiah eased, as the central bank bought 82.1 trillion rupiah ($5.63 billion) of government bonds in a private placement, the first transaction under a COVID-19 burden-sharing scheme with the government that some analysts say carries inflationary risks. HIGHLIGHTS ** In the Philippines, top index losers were Bank of the Philippine Islands down 3.66% and SM Investments Corp down 2.85% ** Top losers on the Singapore STI included Genting Singapore Ltd down 4.93% and Thai Beverage PCL down 4% ** Indonesian 10-year benchmark yields fell 1.6 basis points to 6.782%​​ while 3-year benchmark yields eased 0.2 basis points to 5.265%​​ Asia stock indexes and currencies at 0401 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan -0.07 +2.84 -0.93 -6.12 China <CNY=CFX -0.27 -0.14 -1.45 9.42 S> India 0.00 -4.74 -0.28 -8.22 Indonesia -0.14 -4.93 -0.78 -18.4 4 Malaysia -0.21 -2.53 -0.54 -0.56 Philippines -0.03 +3.18 -1.00 -25.2 3 S.Korea <KRW=KFT -0.37 -2.65 -0.11 6.48 C> Singapore -0.28 -2.03 -1.12 -21.4 9 Taiwan +0.40 +2.46 -0.87 6.70 Thailand -0.38 -4.17 -0.44 -15.9 8 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Lincoln Feast.)

EMERGING MARKETS-Asian currencies, stocks hit as Trump widens app attack

07 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Yuan's fall hits most Asian currencies * Philippine stocks slip 1.2% as coronavirus cases surge By Rashmi Ashok Aug 7 Tensions over a planned U.S. ban on major Chinese apps hurt most Asian markets on Friday, with Philippine stocks taking an added hit after a jump in coronavirus infections lifted the country's case load to the highest in Southeast Asia. Malaysia's ringgit, often seen as a proxy for China's yuan, lost 0.3% while the South Korean won fell 0.4% as investors worried about further trade restrictions would be the end result of the tensions. Citing security concerns, President Donald Trump issued executive orders on Thursday that will ban U.S. transactions with ByteDance, the Chinese owner of the popular video-sharing app TikTok, and Tencent, owner of the WeChat app, in 45 days time. That sank Chinese markets in morning trade, and the rest of the region followed. The Singapore dollar, another trade- and China-sensitive currency, fell 0.3%. Apart from the obvious fallout to Tencent and ByteDance, Washington DC's moves are sure to ratchet up geopolitical tensions with Beijing once again, after a relatively quiet couple of weeks, said Jeffrey Halley, senior market analyst at OANDA. "We would expect the sell-off to gather pace as the day goes on, with investors reducing risk into what could be a fraught U.S. session," he said. The rising geopolitical tensions come at a time when a number of the region's developing economies are struggling with fresh coronavirus outbreaks. Philippine equities fell as much as 1% after the country recorded a surge in infections late on Thursday, overtaking Indonesia as the worst hit country in Southeast Asia. The capital Manila has been placed in a fresh lockdown. The spike in cases also followed dismal data on Thursday which showed gross domestic product plunged 16.5% in the second quarter. Thailand's baht also eased as it delayed plans for a "travel bubble" agreement with select countries with low infections, citing the second wave of cases. That will put pressure on its vital tourism industry and complicate efforts to revive a battered economy. The Malaysian ringgit trimmed initial losses after data was released showing industrial production fell a marginal 0.4% in June from last year, far from the 10.4% fall forecast by analysts surveyed by Reuters. The Indonesian rupiah eased, as the central bank bought 82.1 trillion rupiah ($5.63 billion) of government bonds in a private placement, the first transaction under a COVID-19 burden-sharing scheme with the government that some analysts say carries inflationary risks. HIGHLIGHTS ** In the Philippines, top index losers were Bank of the Philippine Islands down 3.66% and SM Investments Corp down 2.85% ** Top losers on the Singapore STI included Genting Singapore Ltd down 4.93% and Thai Beverage PCL down 4% ** Indonesian 10-year benchmark yields fell 1.6 basis points to 6.782%​​ while 3-year benchmark yields eased 0.2 basis points to 5.265%​​ Asia stock indexes and currencies at 0401 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan -0.07 +2.84 -0.93 -6.12 China <CNY=CFX -0.27 -0.14 -1.45 9.42 S> India 0.00 -4.74 -0.28 -8.22 Indonesia -0.14 -4.93 -0.78 -18.4 4 Malaysia -0.21 -2.53 -0.54 -0.56 Philippines -0.03 +3.18 -1.00 -25.2 3 S.Korea <KRW=KFT -0.37 -2.65 -0.11 6.48 C> Singapore -0.28 -2.03 -1.12 -21.4 9 Taiwan +0.40 +2.46 -0.87 6.70 Thailand -0.38 -4.17 -0.44 -15.9 8 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Lincoln Feast.)

EMERGING MARKETS-Indian stocks rally, rupee flat as RBI keeps door open to rate cuts

06 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indian stocks climb after cenbank vows support, holds rates * Philippine markets had priced in harsh Q2 GDP data - analysts * Indonesian rupiah weakens, large fiscal spending planned in H2 By Rashmi Ashok Aug 6 India's rupee pulled back slightly while stocks rallied on Thursday after the country's central bank kept official rates on hold, but left the door open for more cuts to support an economy reeling from a surge in coronavirus cases. The consensus of analysts had leant towards a cut at the rate-setting meeting, although the Reserve Bank of India (RBI) is wrestling with a spike in inflation above its target, thanks to booming loan growth and a 10% drop in the value of the rupee. The RBI said it was watching for a "durable" reduction in inflation that could give it a window to use available policy space later if needed, and vowed to keep the policy stance accommodative for "as long as necessary to revive growth". "Our view is that inflation will drop sharply over the coming months as the collapse in demand more than offsets supply constraints," said Shilan Shah, senior India economist at Capital Economics, Singapore. "Indeed, the RBI has maintained its "accommodative" policy stance today and Governor (Shaktikanta) Das stated that further policy space is available. We are still forecasting a further 50 basis points of cuts before the end of the year." The rupee held its ground at around 74.850 against the dollar, while stocks rose around 1%. Elsewhere in Asia, a robust performance overnight on Wall Street helped most of the region's stock and currency markets gain, with the Taiwan dollar leading the pack, up 0.6%. Manila led the gains in stocks as investors brushed off data that showed the Philippines economy plunged by much more than expected in the second quarter, slipping into recession for the first time in three decades. "The market has widely priced in the double-digit contraction in 2Q GDP as the PSI has been lagging versus its peers," said Jennifer Lomboy, fund manager at First Metro Asset Management. The index is down about 25% so far this year, making it Asia's worst performer by a wide margin. The Indonesian rupiah was among the losers, falling in the wake of data that showed its economy shrank for the first time since 1999, prompting bets of further monetary easing. Finance Minister Sri Mulyani Indrawati's comments that the central bank and financial authorities would go "all out" to boost growth though aggressive fiscal spending in the second half helped stocks add almost 1%, but weighed on the rupiah. HIGHLIGHTS ** Investors stacked up bullish bets on most Asian currencies, a fortnightly Reuters poll found. ** In the Philippines, top index gainers were Puregold Price Club Inc up 4.17% and Manila Electric Co up 3.33% ** Top gainers on the Singapore STI included Yangzijiang Shipbuilding Holdings Ltd up 3.21% and Jardine Strategic Holdings Ltd up 3.1% Asia stock indexes and currencies at 0741 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.00 +2.88 -0.43 -5.24 China <CNY=CFX -0.15 +0.26 0.26 11.03 S> India +0.09 -4.66 1.30 -7.58 Indonesia -0.41 -4.80 1.14 -17.6 9 Malaysia +0.10 -2.32 0.78 -0.53 Philippines +0.04 +3.26 1.18 -24.4 7 S.Korea <KRW=KFT +0.45 -2.29 1.33 6.60 C> Singapore -0.01 -1.84 1.18 -20.4 9 Taiwan +0.16 +2.20 0.87 7.64 Thailand -0.29 -3.80 0.53 -14.9 0 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Arun Koyyur)

EMERGING MARKETS-Indian stocks rally, rupee flat as RBI keeps door open to rate cuts

06 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indian stocks climb after cenbank vows support, holds rates * Philippine markets had priced in harsh Q2 GDP data - analysts * Indonesian rupiah weakens, large fiscal spending planned in H2 By Rashmi Ashok Aug 6 India's rupee pulled back slightly while stocks rallied on Thursday after the country's central bank kept official rates on hold, but left the door open for more cuts to support an economy reeling from a surge in coronavirus cases. The consensus of analysts had leant towards a cut at the rate-setting meeting, although the Reserve Bank of India (RBI) is wrestling with a spike in inflation above its target, thanks to booming loan growth and a 10% drop in the value of the rupee. The RBI said it was watching for a "durable" reduction in inflation that could give it a window to use available policy space later if needed, and vowed to keep the policy stance accommodative for "as long as necessary to revive growth". "Our view is that inflation will drop sharply over the coming months as the collapse in demand more than offsets supply constraints," said Shilan Shah, senior India economist at Capital Economics, Singapore. "Indeed, the RBI has maintained its "accommodative" policy stance today and Governor (Shaktikanta) Das stated that further policy space is available. We are still forecasting a further 50 basis points of cuts before the end of the year." The rupee held its ground at around 74.850 against the dollar, while stocks rose around 1%. Elsewhere in Asia, a robust performance overnight on Wall Street helped most of the region's stock and currency markets gain, with the Taiwan dollar leading the pack, up 0.6%. Manila led the gains in stocks as investors brushed off data that showed the Philippines economy plunged by much more than expected in the second quarter, slipping into recession for the first time in three decades. "The market has widely priced in the double-digit contraction in 2Q GDP as the PSI has been lagging versus its peers," said Jennifer Lomboy, fund manager at First Metro Asset Management. The index is down about 25% so far this year, making it Asia's worst performer by a wide margin. The Indonesian rupiah was among the losers, falling in the wake of data that showed its economy shrank for the first time since 1999, prompting bets of further monetary easing. Finance Minister Sri Mulyani Indrawati's comments that the central bank and financial authorities would go "all out" to boost growth though aggressive fiscal spending in the second half helped stocks add almost 1%, but weighed on the rupiah. HIGHLIGHTS ** Investors stacked up bullish bets on most Asian currencies, a fortnightly Reuters poll found. ** In the Philippines, top index gainers were Puregold Price Club Inc up 4.17% and Manila Electric Co up 3.33% ** Top gainers on the Singapore STI included Yangzijiang Shipbuilding Holdings Ltd up 3.21% and Jardine Strategic Holdings Ltd up 3.1% Asia stock indexes and currencies at 0741 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.00 +2.88 -0.43 -5.24 China <CNY=CFX -0.15 +0.26 0.26 11.03 S> India +0.09 -4.66 1.30 -7.58 Indonesia -0.41 -4.80 1.14 -17.6 9 Malaysia +0.10 -2.32 0.78 -0.53 Philippines +0.04 +3.26 1.18 -24.4 7 S.Korea <KRW=KFT +0.45 -2.29 1.33 6.60 C> Singapore -0.01 -1.84 1.18 -20.4 9 Taiwan +0.16 +2.20 0.87 7.64 Thailand -0.29 -3.80 0.53 -14.9 0 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Arun Koyyur)

EMERGING MARKETS-Indian rupee steady, stocks climb as central bank seen cutting rates

06 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Economists divided on RBI decision, lean towards rate cut * RBI decision, comments on moratorium expected around 0630 GMT * Thai baht weak after BOT warns against baht strength * Philippine economy dives into recession in Q2 By Rashmi Ashok Aug 6 The Indian rupee firmed and stocks climbed on Thursday in the run up to the Reserve Bank of India's policy decision, expected to be a close call, with economists leaning slightly towards a rate cut. The RBI is seen cutting rates by 25 basis points to help boost growth despite inflationary pressures, as coronavirus cases continue unabated and businesses struggle to recover from large-scale lockdowns. A decision on a moratorium on loan repayments, currently set to expire by end-August, is also expected. "With contention over loan moratoriums, and move to help with debt restructuring, softer interest rates may be desired. - especially insofar that public debt burdens are also set to mount significantly," analysts at Mizuho wrote. Debt financing is a big concern, given that India's federal fiscal deficit touched a record $88.5 billion in the second quarter, 83.2% of the target for the whole current fiscal year, due to coronavirus-led spending. Mizuho leans towards a 25 basis point cut, expecting the RBI to strike a judicious balance between preventing a solvency crisis for businesses hit by cash-flow shock or P&L damage and an adverse impact on local banks' balance sheets. "A weaker USD backdrop may help quell worries of rupee wobbles, if rate cuts are deemed to have gone too far," they added. The RBI's decision is expected around 0630 GMT. The dollar continued its decline after weak U.S. jobs data overnight, helping most Asian currencies notch firm gains, led by the Taiwan dollar. The Indonesian rupiah struggled after Wednesday's data showed its economy shrank for the first time since 1999 in the second quarter, which prompted bets of more rate cuts. Later into the day, Finance Minister Sri Mulyani Indrawati said the central bank and financial authorities would go "all out" to support growth, vowing to boost fiscal spending in the second half to avoid another contraction. This stepped up pressure on the rupiah, which tumbled last month after Bank Indonesia agreed to help the government fund a huge fiscal deficit by buying bonds without receiving interest, a move many analysts say carries inflationary risks. Thailand's baht edged lower after its central bank on Wednesday voiced concern that currency strength could affect economic recovery, and warned it would take the "necessary steps" to deal with it. Philippine stocks edged lower after data showed the country's economy plunged by much more than expected in the second quarter, falling into recession for the first time in 29 years. HIGHLIGHTS ** Indonesian 10-year benchmark yields fell 2.9 basis points to 6.803%​​ while 3-year benchmark yields eased 0.2 basis points to 5.316%​​ ** In the Philippines, top index gainers were Puregold Price Club Inc up 4.27% and Security Bank Corp up 3.45% ** Top gainers on Thailand's SETI included Thai-German Products up 16.67% and Sriracha Construction adding 14.88% Asia stock indexes and currencies at 0432 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.06 +2.94 -0.39 -5.19 China <CNY=CFX -0.13 +0.28 -0.38 10.32 S> India +0.17 -4.58 0.58 -8.24 Indonesia -0.48 -4.87 0.85 -17.9 2 Malaysia +0.10 -2.32 0.53 -0.78 Philippines +0.06 +3.28 -0.09 -25.4 2 S.Korea <KRW=KFT +0.33 -2.41 0.96 6.21 C> Singapore +0.01 -1.82 0.90 -20.7 1 Taiwan +0.52 +2.57 0.76 7.52 Thailand -0.23 -3.73 0.14 -15.2 3 (Reporting by Rashmi Ashok in Bengaluru; editing by Richard Pullin)

EMERGING MARKETS-Indian rupee steady, stocks climb as central bank seen cutting rates

06 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Economists divided on RBI decision, lean towards rate cut * RBI decision, comments on moratorium expected around 0630 GMT * Thai baht weak after BOT warns against baht strength * Philippine economy dives into recession in Q2 By Rashmi Ashok Aug 6 The Indian rupee firmed and stocks climbed on Thursday in the run up to the Reserve Bank of India's policy decision, expected to be a close call, with economists leaning slightly towards a rate cut. The RBI is seen cutting rates by 25 basis points to help boost growth despite inflationary pressures, as coronavirus cases continue unabated and businesses struggle to recover from large-scale lockdowns. A decision on a moratorium on loan repayments, currently set to expire by end-August, is also expected. "With contention over loan moratoriums, and move to help with debt restructuring, softer interest rates may be desired. - especially insofar that public debt burdens are also set to mount significantly," analysts at Mizuho wrote. Debt financing is a big concern, given that India's federal fiscal deficit touched a record $88.5 billion in the second quarter, 83.2% of the target for the whole current fiscal year, due to coronavirus-led spending. Mizuho leans towards a 25 basis point cut, expecting the RBI to strike a judicious balance between preventing a solvency crisis for businesses hit by cash-flow shock or P&L damage and an adverse impact on local banks' balance sheets. "A weaker USD backdrop may help quell worries of rupee wobbles, if rate cuts are deemed to have gone too far," they added. The RBI's decision is expected around 0630 GMT. The dollar continued its decline after weak U.S. jobs data overnight, helping most Asian currencies notch firm gains, led by the Taiwan dollar. The Indonesian rupiah struggled after Wednesday's data showed its economy shrank for the first time since 1999 in the second quarter, which prompted bets of more rate cuts. Later into the day, Finance Minister Sri Mulyani Indrawati said the central bank and financial authorities would go "all out" to support growth, vowing to boost fiscal spending in the second half to avoid another contraction. This stepped up pressure on the rupiah, which tumbled last month after Bank Indonesia agreed to help the government fund a huge fiscal deficit by buying bonds without receiving interest, a move many analysts say carries inflationary risks. Thailand's baht edged lower after its central bank on Wednesday voiced concern that currency strength could affect economic recovery, and warned it would take the "necessary steps" to deal with it. Philippine stocks edged lower after data showed the country's economy plunged by much more than expected in the second quarter, falling into recession for the first time in 29 years. HIGHLIGHTS ** Indonesian 10-year benchmark yields fell 2.9 basis points to 6.803%​​ while 3-year benchmark yields eased 0.2 basis points to 5.316%​​ ** In the Philippines, top index gainers were Puregold Price Club Inc up 4.27% and Security Bank Corp up 3.45% ** Top gainers on Thailand's SETI included Thai-German Products up 16.67% and Sriracha Construction adding 14.88% Asia stock indexes and currencies at 0432 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.06 +2.94 -0.39 -5.19 China <CNY=CFX -0.13 +0.28 -0.38 10.32 S> India +0.17 -4.58 0.58 -8.24 Indonesia -0.48 -4.87 0.85 -17.9 2 Malaysia +0.10 -2.32 0.53 -0.78 Philippines +0.06 +3.28 -0.09 -25.4 2 S.Korea <KRW=KFT +0.33 -2.41 0.96 6.21 C> Singapore +0.01 -1.82 0.90 -20.7 1 Taiwan +0.52 +2.57 0.76 7.52 Thailand -0.23 -3.73 0.14 -15.2 3 (Reporting by Rashmi Ashok in Bengaluru; editing by Richard Pullin)

EMERGING MARKETS-Thai stocks jump as BOT says economy recovering

05 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * BOT holds rates, says Q2 GDP seen better than forecast * Focus next on Reserve Bank of India's policy decision on Thursday By Rashmi Ashok Aug 5 Thai stocks turned positive on Wednesday after its central bank held interest rates as expected and predicted second-quarter output would be better than forecast, while warning it was ready to quell gains for the baht. The bank, which already has rates at a record low of 0.5%, said exports were gradually recovering and expected inflation back on target next year, while saying it does not want the baht to rise "too fast" and has the tools to act. Thailand's economy relies heavily on its exports, which have already fallen sharply in the pandemic, and appreciation of the currency now would make its products more expensive and less competitive globally. BOT also kept the door open for further easing with its range of monetary tools, if necessary, which sparked talks of the central bank turning to unconventional measures to manage the economy. "This may sustain the noise about quantitative easing (QE) and yield-curve control, however, I think it will remain a noise rather than becoming a reality in the near term," ING economist Prakash Sakpal said. "The negative interest rate is just a far cry for an emerging economy and it's unlikely to serve the purpose of boosting the demand. Absent any more easing via policy rates, or QE, we are in for a prolonged policy stalemate," Sakpal added. Bangkok shares climbed 0.5% in response, while the baht held its gains against the dollar. Currencies and stocks across Asia were all higher, with the ringgit, the won and the Taiwan dollar all up. Indonesian stocks ticked lower after data showed the economy shrank by a sharper-than-expected 5.32% in the second quarter, the first time since 1999. The index later recovered to gain 1%, while the rupiah barely budged. The Reserve Bank of India meets on Thursday, with consensus split between a cut or hold to interest rates. Soaring coronavirus cases, a plunge in manufacturing output and lower chances of further fiscal stimulus due to deteriorating public finances all build a case for further monetary accommodation, analysts at ING said. Analysts at DBS Research said they did not anticipate a cut now, but predicted 50 basis point reduction in the second half on mounting downside risks to growth. Perhaps as important as the decision will be the RBI's guidance on a moratorium on loan repayments, which is set to expire by August-end, and what that means for Indian banks struggling with bad debts, they said. HIGHLIGHTS ** Top gainers on the Thailand's SETI included JCK International PCL up 14.52% and Global Consumer PCL up 14.29% ** Thailand's 10-year government bond yields fell 2 basis points to 1.2%​​ while 3-year benchmark yield rose 1 basis point to 0.56%​​ ** In the Philippines, top index gainers were BDO Unibank Inc up 4.42% and Semirara Mining and Power Corp up 4.4% Asia stock indexes and currencies at 0814 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan -0.02 +2.73 -0.26 -4.83 China +0.33 +0.16 0.17 10.74 India +0.19 -4.71 0.15 -8.69 Indonesia +0.21 -4.41 1.03 -18.6 1 Malaysia +0.55 -2.55 -0.10 -0.91 Philippines +0.12 +3.30 1.01 -25.3 6 S.Korea +0.45 -2.73 1.40 5.20 Singapore +0.18 -1.90 1.29 -20.9 4 Taiwan +0.11 +2.03 0.73 6.71 Thailand +0.23 -3.52 0.66 -15.2 0 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Rashmi Aich)

EMERGING MARKETS-Thai stocks jump as BOT says economy recovering

05 Aug 2020

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * BOT holds rates, says Q2 GDP seen better than forecast * Focus next on Reserve Bank of India's policy decision on Thursday By Rashmi Ashok Aug 5 Thai stocks turned positive on Wednesday after its central bank held interest rates as expected and predicted second-quarter output would be better than forecast, while warning it was ready to quell gains for the baht. The bank, which already has rates at a record low of 0.5%, said exports were gradually recovering and expected inflation back on target next year, while saying it does not want the baht to rise "too fast" and has the tools to act. Thailand's economy relies heavily on its exports, which have already fallen sharply in the pandemic, and appreciation of the currency now would make its products more expensive and less competitive globally. BOT also kept the door open for further easing with its range of monetary tools, if necessary, which sparked talks of the central bank turning to unconventional measures to manage the economy. "This may sustain the noise about quantitative easing (QE) and yield-curve control, however, I think it will remain a noise rather than becoming a reality in the near term," ING economist Prakash Sakpal said. "The negative interest rate is just a far cry for an emerging economy and it's unlikely to serve the purpose of boosting the demand. Absent any more easing via policy rates, or QE, we are in for a prolonged policy stalemate," Sakpal added. Bangkok shares climbed 0.5% in response, while the baht held its gains against the dollar. Currencies and stocks across Asia were all higher, with the ringgit, the won and the Taiwan dollar all up. Indonesian stocks ticked lower after data showed the economy shrank by a sharper-than-expected 5.32% in the second quarter, the first time since 1999. The index later recovered to gain 1%, while the rupiah barely budged. The Reserve Bank of India meets on Thursday, with consensus split between a cut or hold to interest rates. Soaring coronavirus cases, a plunge in manufacturing output and lower chances of further fiscal stimulus due to deteriorating public finances all build a case for further monetary accommodation, analysts at ING said. Analysts at DBS Research said they did not anticipate a cut now, but predicted 50 basis point reduction in the second half on mounting downside risks to growth. Perhaps as important as the decision will be the RBI's guidance on a moratorium on loan repayments, which is set to expire by August-end, and what that means for Indian banks struggling with bad debts, they said. HIGHLIGHTS ** Top gainers on the Thailand's SETI included JCK International PCL up 14.52% and Global Consumer PCL up 14.29% ** Thailand's 10-year government bond yields fell 2 basis points to 1.2%​​ while 3-year benchmark yield rose 1 basis point to 0.56%​​ ** In the Philippines, top index gainers were BDO Unibank Inc up 4.42% and Semirara Mining and Power Corp up 4.4% Asia stock indexes and currencies at 0814 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan -0.02 +2.73 -0.26 -4.83 China +0.33 +0.16 0.17 10.74 India +0.19 -4.71 0.15 -8.69 Indonesia +0.21 -4.41 1.03 -18.6 1 Malaysia +0.55 -2.55 -0.10 -0.91 Philippines +0.12 +3.30 1.01 -25.3 6 S.Korea +0.45 -2.73 1.40 5.20 Singapore +0.18 -1.90 1.29 -20.9 4 Taiwan +0.11 +2.03 0.73 6.71 Thailand +0.23 -3.52 0.66 -15.2 0 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Rashmi Aich)

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