Asia Roundup
Global Bond Selloff Threatens Turmoil in Weakest Asian Economies
Three of Asia’s most vulnerable economies are showing rising strains as their central banks come under pressure to tighten policy even as the economic hit from the Iran-war oil shock deepens, Bloomberg reported.
Indonesia, the Philippines and India are already grappling with capital outflows and free-falling currencies as Middle East tensions hurt consumers and companies alike. Now, global bond ructions are piling on further pressure.
Higher US bond yields drive up the dollar and reduce the appeal of emerging-market assets, fueling capital outflows from Asia. That raises the burden of servicing dollar-denominated debt and pressures central banks to raise interest rates to defend their currencies and boost the appeal of local debt, even as domestic growth is set to weaken.
SP Group Fundraising Includes Milestones Linked to Tata Sons Monetization in 18 Months
Shapoorji Pallonji Group (SP Group)’s fundraising includes milestones linked to a possible listing of Tata Sons or a settlement agreement within 18 months, The Economic Times reported.
The Indian group owns a roughly 18% stake in Tata Sons and has called for the public listing of the holding company.
SP Group’s fundraising includes its first-ever USD tranche of $1 billion, which is expected to carry yields of around 14%.
Alongside the dollar tranche, the group is also raising rupee debt of around INR 150-160 billion ($1.6-1.7 billion), which is expected to price around 18.95% – revised upward from an earlier guidance of 18.75%, according to ET.
UzNIF’s IPO and Dual Listing in London and Tashkent
Cleary Gottlieb represented the National Investment Fund of the Republic of Uzbekistan (UzNIF), as issuer, and the Ministry of Economy and Finance of the Republic of Uzbekistan, as selling shareholder, on UzNIF’s IPO and dual listing of global depositary receipts (GDRs) on the London Stock Exchange and ordinary shares on the Tashkent Stock Exchange.
The offering raised $603.6 million (before any exercise of the over-allotment option), according to the law firm’s press release.
Indonesia Roundup
Indonesia Plans to Tighten State Control Over Commodity Exports
Indonesia plans to tighten control over commodity exports including coal and palm oil, as the government seeks to clamp down on tax evasion and bolster a plunging rupiah, Bloomberg reported, citing people familiar with the matter.
The government is planning to create a new state entity to manage exports of the commodities in order to crack down on under-invoicing. The agency would be supervised by Danantara, the sovereign wealth fund that reports directly to President Prabowo Subianto, and could be announced by the president as soon as Wednesday.
Indonesia Kicks Off Latest Foreign Bond Sale as Pressure Builds
Indonesia started marketing its latest dollar bond offering on Tuesday and flagged that a euro-denominated tranche may follow when London markets open, as the Iran conflict stokes concerns about the nation’s economic vulnerability.
Indonesia has already tapped investors in both markets this year, in addition to the yen and China’s local-currency, raising the equivalent of billions of dollars. The government is marketing five-year and 10-year bonds on Tuesday.
Acrostics Asia is an independent credit intelligence provider that delivers forward-looking insights across Asian sovereigns, private credit and restructurings.