AsianBondsOnline Newsletter (19 August 2013)

News Highlights - Week of 12 - 16 August 2013

Hong Kong, China's GDP grew 3.3% year-on-year (y-o-y) in 2Q13 compared to 2.9% in 1Q13.  This higher growth rate was driven mostly by an increase in domestic demand which grew 4.2% y-o-y, and added 2.8 percentage points to GDP growth.  Investments also recovered with gross domestic fixed capital formation rising 6.9% y-o-y, adding 1.8 percentage points to GDP growth.  Strong domestic conditions as well as improvements in the global economy has prompted a revision to the government's GDP forecast from 1.5%-3.5% to 2.5%-3.5%. In Singapore, ret ail sales declined 4.0% y-o-y in June compared with a revised 3.1% gain in May. Excluding motor vehicles, retail sales were up 2.6% in June.   

*     Bank Indonesia's (BI) Board of Governors decided to keep its benchmark rate steady at 6.5% in a meeting held on 15 August. The Republic of Korea's producer price index decreased 0.9% y-o-y in July. 

*     The Bank for International Settlements (BIS) Basel II capital ratio for domestic banks in the Republic of Korea fell slightly to 13.88% at end-June from 14.0% at end-March, according to Financial Supervisory Service (FSS) data released last week.

*     Over-the-counter (OTC) bond trading volume in the Republic of Korea fell 12.9% month-on-month (m-o-m) to KRW478.1 trillion in July, according to the Korea Financial Investment Association (KOFIA).

*     The Philippines' merchandise exports rose 4.1% y-o-y in June to US$4.5 billion. Singapore's non-oil domestic exports (NODX) contracted 0.7% y-o-y in July, following a revised 8.9% decline in the previous month.

*     Personal remittances from overseas Filipinos rose 6.2% y-o-y in the first half of 2013 to reach US$11.8 billion. For the month of June, remittances rose 5.7% y-o-y to reach US$2.1 billion, the highest monthly level so far this year.

*     On 15 August, Moody's Investors Service (Moody's) announced it is maintaining its stable outlook for Malaysia and it is also maintaining its ratings for LCY and FCY government bond at A3.

*     Last week, China Development Bank (CDB) priced a CNY30 billion multi-tranche bond comprising 1-, 3-, 5-, 7-, and 10-year tenors priced to yield 4.1685%, 4.3220%, 4.4311%, 4.5947%, and 4.6944%, respectively. SembCorp Industries-a leading energy, water, and marine group in Singapore-raised SGD200 million through the sale of a perpetual bond carrying a 5% coupon. Korea Finance Corporation priced US$500 million worth of 5-year bonds at a coupon rate of 2.875% last week.

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

*     WHAT'S NEW:  Please check out our new Financial Stability and Credit Indicators found in the Data Section of each market.