HALISTER1: Philippine Senate to Prioritize Casino, Govt Wage Hike

Philippine Senate to Prioritize Casino, Govt Wage Hike

(Bloomberg) -- Incoming Senate to tackle inclusion of casinos among institutions monitored for money laundering and proposed wage increase for govt workers, Senate President Franklin Drilon tells DZMM radio.
  • Drilon, who’ll yield top senate post to Senator Koko Pimentel -- party mate of President-elect Rodrigo Duterte -- when 17th Congress opens in July, says he favors review of constitution
  • Lawmakers to debate death penalty reinstatement, economic measures including review of income tax structure
  • Chamber to also discuss possible postponement of village elections
  • NOTE: Head of Duterte Party is Set for Senate Presidency, Drilon Says Link
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aquilino Pimentel ((PHL)Senate)
Franklin Drilon (Republic of the Philippines)

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HALISTER: Remy Cointreau Forecasts Higher Profit as Cognac Sales Rebound

Remy Cointreau Forecasts Higher Profit as Cognac Sales Rebound

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
RCO FP (Remy Cointreau SA)

People
Luca Marotta (CLS Remy Cointreau SASU)
Philippe Guettat (Pernod Ricard Asia SASU)
Valerie Chapoulaud-Floquet (Remy Cointreau SA)

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HALISTER1: BOK RESEARCH ROUNDUP: Rate Cut Unlikely to Weaken Won For Long

BOK RESEARCH ROUNDUP: Rate Cut Unlikely to Weaken Won For Long

(Bloomberg) -- BOK’s unexpected rate reduction to record low of 1.25% is unlikely to weaken the won near-term due to limited room for further policy easing, analysts say.
  • Weakness over the longer term may resume ahead of an imminent Fed rate rise this year, they add
  • S.Korea unexpectedly cuts rate to support debt restructuring
  • BOK Governor Lee says decision was unanimous and economy isn’t showing clear recovery; adds Korea reaching lower rate limit
  • USD/KRW -0.1% to 1,155.70, erasing an earlier advance of as much as 0.3%
    • USD/KRW eyes 200-DMA resistance after BOK cuts rate, charts show
  • KRW onshore 2-yr interest-rate swap drops as much as 6 bps to 1.2850%, lowest on Bloomberg data dating back to 1999
  • Scotiabank (Gao Qi)
    • Knee-jerk response to rate cut is a weaker won, and the currency could underperform some regional currencies today
    • However, equity inflows will remain supportive until concerns over Fed’s tightening resurface
    • BOK will probably stay on hold in coming months
    • NOTE: Scotiabank’s economist Tuuli McCully predicted BOK’s rate cut today, according to June 3 research note; Scotia wasn’t included in Bloomberg survey of 18 analysts
  • Dai-ichi Life Research Institute (Toru Nishihama)
    • After today’s rate cut, investors may think BOK won’t be able to lower rates further while other central banks in the region such as Indonesia have room to ease policy
    • Won likely to outperform its regional peers on the back of this monetary policy outlook
    • Still expect won to decline vs dollar as expectations of a Fed rate increase grow again toward year-end
  • Capital Economics (Krystal Tan)
    • Further BOK rate cuts are possible in coming months even though Korean fiscal policy is expected to take the lead
    • Concerns about downside risks that corporate restructuring will pose to economy were likely a factor in today’s decision
    • Korean economy is already fragile and could use more support
    • NOTE: Industrial production dropped in April by most since July; inflation slowed to 0.8% y/y last month from 1.0% in April
  • Brown Brothers Harriman (Masashi Murata)
    • BOK’s unexpected rate reduction may spur expectations that export-driven Asian nations such as Taiwan, Singapore and Malaysia could seek a weaker currency
    • This is especially the case as doubts for stronger dollar is growing in the market
    • NOTE: Asian currencies strengthened vs dollar this month, led by yen, rupiah and won, as expectations diminished that Fed will raise rate as early as next week
  • Standard Chartered (analysts including Chong Hoon Park)
    • Long-end rates will likely fall further to new all-time lows given market expectations of one more rate cut in 2H
    • Maintain positive outlook on Korea Treasury bonds on sluggish growth and inflation outlook
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Chong Park (Standard Chartered PLC)
Krystal Tan (Capital Economics Asia Pte Ltd)
Masashi Murata (Brown Brothers Harriman & Co)
Qi Gao (Bank of Nova Scotia Asia Ltd/Singapore)
Toru Nishihama (Dai-ichi Life Research Institute Inc)

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HALISTER1: BOJ Likely Take Additional Easing in July Rather Than June: NRI

BOJ Likely Take Additional Easing in July Rather Than June: NRI

(Bloomberg) -- BOJ is unlikely to ease at June 15-16 meeting as overall economy is resilient and has not changed much since previous meeting in April, says Tetsuya Inoue, chief researcher at Nomura Research Institute and former BOJ official, in an interview on June 8.
  • BOJ’s July 28-29 meeting is more likely for additional monetary stimulus
  • There are some key events ahead of July meeting including U.K.’s EU referendum, FOMC meeting and Japan’s Upper House election
  • Yen’s level may also be key for BOJ’s action after events
  • If central bank adds stimulus, bank could cut negative rate on excess reserve by 10-to-20 bps and increase amount of ETF purchase
    • It may also be possible to introduce negative rates on loan program in July
  • With delayed sales-tax hike and bold economic steps, expected to include supplementary budget this autumn, BOJ may be required to keep pace with PM Abe’s economic policy by monetary stimulus
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Tetsuya Inoue (Nomura Research Institute Ltd)

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HALISTER1: INDIA RATINGS: Videocon Cut; Kesoram, Nagarjuna Hydro Raised

INDIA RATINGS: Videocon Cut; Kesoram, Nagarjuna Hydro Raised

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.
  • To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery
DOWNGRADES
  • Ario Infrastructure
    • Long-term bank facilities cut to D from BB at Care
    • Cites irregularity in servicing debt obligations
  • Dev Cotex
    • LT bank facilities cut to D from B at Care
    • Cites delay in debt repayment due to weak liquidity position
  • Gwalior Distilleries
    • LT bank facilities cut to B+ from BB- at Care
    • Cites delay in implementation of project
  • Lion Insulation
    • LT bank facilities cut to D from B at Care
    • Cites irregularity in servicing debt obligations
  • Medi Pharma Drug
    • LT loan facilities cut to BB from BB+ at Crisil
    • Cites deterioration in liquidity following withdrawal of capital, sizeable investments in real estate
  • OMR Mall Developers
    • LT loan facilities cut to D from BB- at Crisil
    • Cites delays in meeting interest obligation
  • Videocon
    • LT fund-based bank facilities cut to BB+ from A at Care
    • Cites significant deterioration in operational, financial performance
UPGRADES
  • Green Power Sugars
    • LT loan facilities raised to BB- from B at Crisil
    • Cites ramp up, stabilization of operations
  • Kesoram
    • LT bank facilities raised to A from A- at Care
    • Cites reduction of debt after successful transfer of unit Cavendish to JK Tyre for INR21.45b
  • Nagarjuna Hydro Energy
    • LT loan facilities raised to BBB from BBB- at Crisil
    • Cites sustained improvement in financial risk profile of the group due to steady cash flows, strong liquidity management
  • Vidya Wires
    • LT loan facilities raised to BBB- from BB+ at Crisil
    • Cites sustained ramp-up in scale of operations, improvement in profitability
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
KSI IN (Kesoram Industries Ltd)
VCLF IN (Videocon Industries Ltd)
0959959D IN (Green Power Sugars Ltd)
7177533Z IN (Medi Pharma Drug House)
0810154D IN (Nagarjuna Hydro Energy Pvt Ltd)

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HALISTER1: INSIDE ASIA: Currencies Rally; BOK Springs Surprise Rate Cut

INSIDE ASIA: Currencies Rally; BOK Springs Surprise Rate Cut

(Bloomberg) -- Asian currencies rally on continued dollar weakness; Bank of Korea unexpectedly cuts interest rate; Reserve Bank of New Zealand maintains monetary policy.
  • Markets in China and Hong Kong closed for public holiday
  • Dollar weakness continues on expectations Fed will hold off rate hikes until later this year, FPG Securities CEO Koji Fukaya says; although direction for Fed remains toward rate increase, dollar may stay sluggish for time being
  • Dollar Index declines for fifth day; probability of Fed rate hike on June 15 is 0% vs 22% a week ago; July hike 18% vs 54.8% on June 2
    • Brent crude gains for fourth day; MSCI Asia Pacific Index declines, set to snap four-day rally
  • South Korea’s won moves higher after sharp drop post rate cut; now in line for fifth straight day of gains; rate cut forecast correctly by only one of 18 economists in Bloomberg survey; rest expected BOK to hold; interest-rate swaps fall
    • More rate cuts possible in coming months, says Krystal Tan, Asia economist at Capital Economics; concerns about downside risks posed by corporate restructuring were likely a factor in BOK’s decision; Korean economy is fragile and could use some support
    • Rate cut may spur expectations that export-driven Asian nations will seek weaker currencies, according to BBH
  • New Zealand dollar rallies for third day
    • RBNZ maintains benchmark interest rate at 2.25%; analysts say RBNZ statement is slightly more upbeat and hints of small chance of just one more rate cut this year; research roundup here
    • RBNZ Governor Wheeler says RBNZ looking at measures to curb property investors
  • Yen heads for three-day rally; BOJ Deputy Governor Nakaso says BOJ monitoring liquidity, functioning of JGB market; will ease if necessary to hit 2% price target; NOTE: Biggest Bank Quitting Japan Bond Club Shows BOJ Crushing Market
    • Japan’s nine biggest life insurers increased hedges against dollar declines in fiscal half yr-ended March 31 even as costs of doing so climbed, according to latest earnings reports
    • April core machine orders fell 11% m/m vs est. -3%, +5.5% in March; decline in April factory orders suggests weak outlook on capital spending as corporate earnings slow, Credit Agricole says
    • Japanese bought net 893.9b yen overseas debt last week; NOTE: Japanese Buy Overseas Bonds as Wells Fargo Says Asia Bulls Rule
  • Offshore yuan steady with China and HK markets closed
    • May CPI +2.0% y/y vs est. +2.2%; PPI falls 2.8% y/y in May vs est. -3.2%; NOTE: China’s Factory-Gate Deflation Eases in Capacity-Cut Drive
  • Baht heading for eighth day of gains; Thai consumer confidence data for May due 10:30am local time; sentiment index slipped to 7-month low in April
    • Thailand has negative output gap, falling consumer prices, downside risks that “warrant additional monetary accommodation,” IMF said yday
  • Rupiah extends rally to sixth day, heading for longest rising stretch since period ending March 7
  • Philippine peso rises for seventh day, hits highest vs dollar in nearly eight months; growth in 2Q probably accelerated, Budget Secretary Abad says, according to Manila Bulletin
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
1206Z KS (Bank of Korea/The)

People
Koji Fukaya (FPG Securities Co Ltd)
Krystal Tan (Capital Economics Asia Pte Ltd)

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HALISTER1: PHILIPPINES PREVIEW: Exports Seen Contracting for 13th Month

PHILIPPINES PREVIEW: Exports Seen Contracting for 13th Month

(Bloomberg) -- Philippines’ exports probably contracted for the 13th straight month in April, according to economists’ forecasts.
  • Exports fell 4.7% y/y following -15.1% reading in March, according to median est. in Bloomberg survey; ests. range from -12.0% to +3.5%; data due at 9am local time tomorrow
  • March exports were worse than forecast, weighed down by a weak commodity sector, data released May 11 showed
  • Peso fell 1.7% vs dollar in April, biggest decline since Aug. 2015, to close at 46.885 per dollar
  • USD/PHP now at 45.880; another negative data print could see the pair rise to 46.465, low on June 3, in near term, thereby closing the breakaway gap formed between June 3 to June 6
  • NOTE: Andrew Robinson is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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