AsianBondsOnline Newsletter (10 June 2013)

News Highlights - Week of 3 - 7 June 2013

Last week, ADB's Asia Bond Monitor June 2013 edition was released. According to the quarterly report, emerging East Asia's LCY bond market expanded 12.1% y-o-y to reach US$6.7 trillion at the end of 1Q13. The continued growth of emerging East Asia's LCY bond market reflects a more optimistic investor outlook and improved financial market indicators.

*     In the People's Republic of China (PRC), consumer prices rose 2.1% year-on-year (y-o-y) in May from 2.4% in April. Consumer price inflation in Indonesia and Thailand slowed in May to 5.5% and 2.3% year-on-year (y-o-y), respectively, due to lower food prices in both countries. In the Philippines, inflation remained steady at 2.6% y-o-y in May, although prices of food and non-alcoholic beverages and housing-related costs increased at a more rapid pace than in April. 

*     The PRC's exports rose marginally at 1% y-o-y in May while imports fell slightly by 0.3%. In Malaysia, the trade surplus narrowed to MYR0.94 billion. Exports dropped 3.3% y-o-y to MYR55.8 billion. Exports from Indonesia dropped 9.1% y-o-y in April following a revised 12.9% decline in March. Imports fell 3.7% y-o-y, which resulted in a trade deficit for Indonesia of US$1.7 billion versus a revised US$138 million trade surplus recorded in March. 

*     Hong Kong, China's purchasing managers' index (PMI) fell marginally from 49.9 in April to 49.8 in May. Singapore's manufacturing PMI rose to 51.1 in May from 50.3 in April.  Meanwhile, Singapore's electronics PMI strengthened slightly to 51.4 in May from 51.2 in April. The Bank of Korea revised downward the 1Q13 real gross domestic product (GDP) growth rate of the Republic of Korea to 0.8% quarter-on-quarter (q-o-q) from its advance estimate of 0.9% released on 25 April.

*     The Shenzhen Stock Exchange announced that it will launch a trial program allowing small and medium-sized enterprises to issue private placement exchangeable bonds.    

*     The Philippine government is considering issuing Retail Treasury bonds (RTBs) in the second half of 2013 to take advantage of high levels of liquidity in the market. 

*     Foreign investors' net investment in local currency (LCY) bonds in the Republic of Korea amounted to KRW1.4 trillion in May, according to the Financial Supervisory Service (FSS), down from April's net bond investment inflows of KRW2.1 trillion.

*     Last week, Bumi Serpong Damai, an Indonesian-based property developer, issued IDR1.75 trillion worth of 5-year bonds. The bonds carry a coupon of 8.375%.   Huaneng Corp. priced a US$400 million 5-year Reg S bond at a coupon rate of 3.375% and a yield of 3.427%. China Eastern Airlines priced a 3-year CNH8.7 billion bond at a coupon of 3.875%. The International Bank for Reconstruction and Development (IBRD) issued a CNH1.7 billion 1-year bond at a yield of 2.0%. 

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