AsianBondsOnline Newsletter (8 July 2013)

News Highlights - Week of 1 - 5 July 2013

Consumer price inflation in Indonesia accelerated to 5.9% year-on-year (y-o-y) in June from 5.5% in May, as the fuel price hike that took effect on 22 June resulted in higher costs for transportation and food. In the Philippines, consumer price inflation increased to 2.8% y-o-y in June from 2.6% in May. In Thailand, consumer price inflation stood at 2.25% y-o-y in June, marginally lower compared with May's 2.27%.

*     Monthly exports from Indonesia contracted 4.5% y-o-y.  Imports were also down 2.2% y-o-y in May. The trade deficit amounted to US$590.4 million in May. Monthly exports from Malaysia plunged for the fourth consecutive month in May, dropping 5.8% y-o-y to MYR55.4 billion. Meanwhile, imports were also down 2.3% y-o-y to MYR52.9 billion, resulting in a trade surplus of MYR2.5 billion.

*     The People's Republic of China's (PRC) manufacturing Purchasing Managers' Index (PMI) fell to 50.1 in June from 50.8 in May. The PRC's non-manufacturing PMI fell to 53.9 in June from 54.3 in May. Hong Kong, China's PMI fell to 48.7 in June from 49.8 in May.  Singapore's PMI increased to 51.7 in June from 51.1 in May.  

*     Foreign investors' net investment in local currency (LCY) listed bonds in the Republic of Korea grew to KRW2.6 trillion in June from KRW1.4 trillion in May.

*     Hong Kong, China's retail sales growth fell to 12.8% y-o-y in May from a revised 20.7% growth rate in April.   

*     In the Republic of Korea, the outstanding balance of KRW-denominated loans granted by domestic banks stood at KRW1,124.6 trillion at end-May, up KRW6.7 trillion from a month earlier, according to Financial Supervisory Service data.

*     The Bank of Korea reported the results of its latest survey on bank lending practices last week: domestic banks are expected to maintain their "eased lending attitudes" in 3Q13, especially with respect to lending to small and medium-sized enterprises (SMEs) and households. On the other hand, the survey results revealed that domestic banks' lending to large corporations is expected to tighten slightly in 3Q13.

*     Japan's official reserve assets declined 0.9% m-o-m to US$1.24 trillion at end-June from US$1.25 trillion at end-May.  The Republic of Korea's foreign reserves declined to US$326.4 billion in June from US$328.1 billion in May, based on data from The Bank of Korea. 

*     China Development Bank (CDB) issued a multi-tranche CNY30 billion note. Tenors of 1, 3, 5, 7, and 10 years were priced to yield 3.9100%, 3.9799%, 4.0205%, 4.0866%, and 4.1700%, respectively, and were issued in amounts  of CNY7 billion, CNY4 billion, CNY6 billion, CNY7 billion, and CNY6 billion.

*     Korea National Oil Corporation (KNOC) priced a CHF240 million bond with a maturity of 5 years and 120 days, and a coupon rate of 1.625%.

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