News Highlights - Week of 6 - 10 May 2013

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20130513.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 6 - 10 May 2013

Indonesia’s real GDP growth stood at 6.0% year-on-year (y-o-y) in 1Q13, which was slightly lower than the 6.1% growth posted in 4Q12. Growth in 1Q13 was driven by private consumption and investment. On a quarter-on-quarter (q-o-q) basis, Indonesia’s GDP grew 1.4% in 1Q13 following a 1.5% contraction in 4Q12. Hong Kong, China’s real GDP grew 2.8% y-o-y in 1Q13.  In Malaysia, industrial production fell a marginal 0.2% y-o-y in March following a 5.2% contraction in February. In Viet Nam, industrial production rose 5.8% y-o-y and 1.6% month-on-month (m-o-m) in April.

*     Consumer price inflation in the People’s Republic of China (PRC) accelerated to 2.4% y-o-y in April from 2.1% in March. Philippine consumer price inflation moderated to 2.6% y-o-y in April from 3.2% in March.

*     The Bank of Korea’s Monetary Policy Committee decided to reduce the 7-day repurchase rate by 25 basis points to 2.50% during its 9 May meeting. Bank Negara Malaysia decided on 9 May to leave the overnight policy rate unchanged at 3.00%.

*     The PRC’s exports rose 14.7% y-o-y in April after a 10.0% gain in March, and import growth climbed to 16.8% from 14.1%. Malaysia’s exports fell 2.9% y-o-y while imports rose 7.0% in March. Philippine exports rose 0.1% y-o-y in March. Japan’s current account surplus widened to JPY1,251.2 billion in March from JPY637.4 billion in February.

*     Net foreign bond investment into the Republic of Korea amounted to KRW2.1 trillion in April, up from KRW1.5 trillion registered in March, based on Financial Supervisory Service (FSS) data. The largest net foreign bond investment flows for the month came from France, the United States, and Thailand.

*     Last week the People’s Bank of China sold CNY10 billion worth of 3-month bills. Hong Kong, China issued HKD3 billion worth of 3-year government bonds at a coupon rate of 0.34%. First Real Estate Investment Trust (First REIT), which is sponsored by Indonesian property company PT Lippo Karawaci Tbk., priced SGD100 million worth of fixed-rate notes to become the first Indonesian REIT to raise funds in the Singapore dollar bond market.

*     In Hong Kong, China, Greentown China Holdings issued CNH2.5 billion worth of 3-year bonds at a coupon rate of 5.625%, and fashion retailer I.T. sold CNH1 billion worth of 5-year bonds carrying a 6.25% coupon.

*     Harvest Operations Corporation, a subsidiary of Korea National Oil Corporation, priced US$630 million worth of 5-year bonds at a coupon rate of 2.125%. Hutchison Whampoa issued EUR1.75 billion of perpetual bonds at a coupon rate of 3.75%.

*     The State Administration of Foreign Exchange of the PRC issued new rules to manage capital flows last week, linking banks’ lower limit on the net open position (NOP) to the Reference loan-to-deposit ratio (LDR). A bank’s lower limit on NOP will be adjusted if its LDR exceeds the Reference LDR.

*     Government bond yields fell last week for all tenors in Malaysia and for most tenors in the PRC, Thailand, and Viet Nam. Yields rose for most tenors in Hong Kong, China; Indonesia; the Republic of Korea; the Philippines; and Singapore. Yield spreads between 2- and 10-year tenors widened in Hong Kong, China; the Republic of Korea; the Philippines; Singapore; and Viet Nam, while spreads narrowed in the PRC, Indonesia, Malaysia, and Thailand.

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