AsianBondsOnline News Highlights - Week of 7 - 11 October 2013

AsianBondsOnline's Electronic Newsletter: Weekly Debt Highlights

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20131014.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 7 - 11 October 2013

Bank Indonesia's (BI) Board of Governors decided to leave its policy rate steady at 7.25% in its meeting held on 8 October. The central bank also kept the lending facility and deposit facility rates steady at 7.25% and 5.50%, respectively. Meanwhile, The Bank of Korea's Monetary Policy Committee decided on 10 October to keep the base rate steady at 2.50%, forecasting that the global economy will sustain its recovery and the domestic economy will maintain a negative output gap and low inflationary pressures for the time being.

*     In the People's Republic of China (PRC), consumer price inflation accelerated to 3.1% year-on-year (y-o-y) in September from 2.6% in August.

*     The PRC's exports fell 0.3% y-o-y in September after posting 7.2% growth in August, while imports climbed 7.4% y-o-y in September after recording a 7.0% increase in August. Philippine merchandise export growth accelerated to 20.2% y-o-y in August from 2.3% in July. Japan's merchandise trade deficit widened to JPY994.0 billion in September from JPY521.3 billion a year earlier, while its current account surplus narrowed to JPY161.5 billion in August from JPY444.8 billion a year earlier.

*     Singapore's real gross domestic product (GDP) growth accelerated to 5.1% y-o-y in 3Q13 from 4.2% in 2Q13. In Malaysia, industrial production grew 2.3% y-o-y in August, down from revised 7.5% growth in July, while manufacturing sales climbed 5.1% y-o-y in August following a 3.9% increase in July. The Bank of Korea released last week its latest economic outlook for 2013 and 2014, maintaining its 2013 GDP growth rate forecast for the Republic of Korea at 2.8% while revising downward its 2014 growth forecast to 3.8%.

*     The Indonesian government raised IDR20.2 trillion last week from the sale of retail bonds with a coupon rate of 8.5% and a maturity of 3 years.

*     The PRC's Sinopec Group priced US$1.5 billion worth of 10-year bonds at a coupon of 4.375%, US$750 million of 5-year bonds at a 2.50% coupon, US$500 million of 30-year bonds at a 5.375% coupon, and EUR550 million of 7-year bonds at a 2.625% coupon last week.

*     Franshion Properties, a PRC property developer, priced a US$300 million 5-year Reg S bond at a yield of 5.375%, while another PRC property developer, China Properties Group, priced a US$150 million 3-year Reg S bond at a coupon rate of 13.5%.  Kookmin Bank in the Republic of Korea priced US$500 million worth of 3-year floating-rate notes at 125 basis points above 3-month LIBOR last week.

*     Net foreign bond investments in the Republic of Korea's local currency (LCY) bond market were negative for the second consecutive month in September, according to Financial Supervisory Service (FSS) data released last week, with foreign investors' net bond sales climbing to KRW2.4 trillion in September from KRW2.1 trillion in August.

*     BI announced last week that it will regulate the hedging activity of local residents and corporates based in Indonesia in order to deepen the country's foreign exchange market.

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