AsianBondsOnline Newsletter (29 July 2013)

News Highlights - Week of 22 - 26 July 2013

The composite consumer price index in Hong Kong, China rose 4.1% year-on-year (y-o-y) in June following a 3.9% increase in May. Japan's consumer prices rose 0.2% y-o-y in June following a 0.3% decline in May. Consumer price inflation in Singapore climbed to 1.8% y-o-y in June from 1.6% in May. Viet Nam's consumer price inflation accelerated to 7.3% y-o-y in July from 6.7% in June.

*     Based on advance estimates of The Bank of Korea released last week, real gross domestic product (GDP) growth in the Republic of Korea accelerated in 2Q13, rising to 1.1% quarter-on-quarter (q-o-q) from 0.8% q-o-q in 1Q13, and to 2.3% y-o-y from 1.5% y-o-y in the previous quarter.

*     The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) decided last week to keep its policy interest rates-the overnight borrowing and lending rates-steady at 3.50% and 5.50%, respectively. 

*     Hong Kong, China's trade deficit widened to HKD49.7 billion in June as exports fell 0.2% y-o-y and imports climbed 1.4% y-o-y. Japan recorded a trade deficit of JPY180.8 billion in June as exports rose 7.4% y-o-y and imports surged 11.8% y-o-y. The Philippines' trade deficit narrowed to US$364 million in May as exports fell 0.8% y-o-y and imports dropped 2.4% y-o-y. Viet Nam registered a trade surplus of US$200 million in July as exports rose 9.9% y-o-y and imports increased 14.5% y-o-y.

*     In the Republic of Korea, sales growth of the major department stores accelerated to 4.1% y-o-y in June from 1.0% in May, according to the Ministry of Trade, Industry, and Energy. Manufacturing output in Singapore contracted 5.9% y-o-y in June following a 2.3% expansion in May. Viet Nam's retail sales growth accelerated to 12.8% y-o-y in July from 11.9% in June.

*     Tianjin Binhai Rural Commercial Bank in the People's Republic of China (PRC) priced CNY1.5 billion worth of 10-year bonds at a coupon rate of 6.5% last week. Total Access Communication, which is based in Thailand, issued THB5 billion worth of 3-year bonds at a coupon rate of 3.72%.

*     LCY corporate debt issues in the Republic of Korea were down 10.7% y-o-y in 1H13, leveling off at KRW58.2 trillion.

*     Korea Gas Corporation priced US$500 million worth of 5-year bonds at a coupon rate of 2.875% last week.

*     On 22 July, the Japan Credit Rating Agency (JCR) affirmed Indonesia's sovereign credit rating at BBB-. The outlook on the rating was stable.

*     Hong Kong, China recently released the Inland Revenue and Stamp Duty Legislation (Alternative Bond Schemes) (Amendment) Ordinance 2013, which revises tax regulations on Islamic bonds. Thailand's Securities and Exchange Commission (SEC) announced last week that the Capital Market Supervisory Board has approved an amendment to regulations governing the creation and management of Real Estate Investment Trusts (REITs).

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