News Highlights - Week of 27 - 31 May 2013

News Highlights - Week of 27 - 31 May 2013

Emerging East Asia's local currency (LCY) bond markets continued to expand in 1Q13, according to the upcoming issue of the Asia Bond Monitor to be launched on 4 June. Growth in the region's LCY bond markets reflected the continuing recovery of the East Asian economy during the first several months of 2013, supported by a more optimistic investor outlook and improvements in major financial market indicators.    

*     Philippine real gross domestic product (GDP) growth accelerated to 7.8% year-on-year (y-o-y) in 1Q13 following revised 6.8% growth for full-year 2012. The People's Republic of China's (PRC) manufacturing purchasing managers' index (PMI) rose to 50.8 in May from 50.6 in April. Industrial production rose 0.8% month-on-month (m-o-m) in the Republic of Korea and 1.7% m-o-m in Japan in April, while increasing 4.6% m-o-m in Viet Nam in May.

*     The Bank of Thailand's Monetary Policy Committee decided to lower the policy interest rate by 25 basis points to 2.50% during its meetings held on 28-29 May. 

*     Consumer price inflation in the Republic of Korea fell to 1.0% y-o-y in May from 1.2% in April. In Japan, consumer prices fell 0.7% y-o-y in April following a 0.9% drop in March.  

*     Hong Kong, China's merchandise exports grew 9.0% y-o-y and merchandise imports rose 7.7% in April. The Republic of Korea's exports grew 3.2% y-o-y while imports fell 4.8% in May. Viet Nam's exports climbed 15.1% y-o-y and imports increased 16.8% in the first 5 months of the year (January-May).

*     The Republic of Korea's current account surplus narrowed to US$4.0 billion in April from US$4.9 billion in March. Thailand posted a  current account deficit of US$3.4 billion in April.

*     The Ministry of Finance of the Lao People's Democratic Republic issued THB1.5 billion worth of 3-year bonds at a coupon rate of 4.5% last week in Thailand. 

*     In Singapore, Standard Chartered priced CNY1 billion worth of 3-year bonds at a coupon rate of 2.625%, while HSBC priced CNY500 million of 2-year bonds at a re-offer yield of 2.25%. The Hong Kong, China branch of the Bank of China issued the first CNH certificate of deposit last week using the CNH HIBOR as its base rate.  

*     Korea Development Bank priced JPY20 billion of 2-year bonds at a 0.54% coupon, JPY6.5 billion of 5-year bonds at a 0.89% coupon, and JPY3.5 billion of 3-year bonds at a 0.66% coupon last week. Korea Finance Corporation priced AUD300 million worth of 4-year floating-rate notes at 127 basis points above the bank bill swap reference rate last week. 

*     The Philippines recorded a fiscal surplus of PHP36.8 billion in April, while the January-April fiscal deficit leveled off at PHP29.7 billion. 

*     Retail sales growth in Hong Kong, China accelerated to 20.7% y-o-y in April from revised 9.8% growth in March. Viet Nam's retail sales rose 11.9% y-o-y in January-May.

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

******************************************************************************