News Highlights - Week of 23 - 27 September 2013
Emerging East Asian local currency (LCY) bond markets
continued to grow in 2Q13, but risks to the outlook are rising given the
prospects of tighter US monetary policy, slower economic growth in Asia, and
persistent capital outflows, according to the latest edition of the Asia Bond
Monitor (ABM). The quarter-on-quarter (q-o-q) growth rate for emerging East
Asian LCY bond markets in 2Q13 was 1.7%, down from 2.9% in 1Q13, as the
region's markets reached US$6.8 trillion in size. The full issue of the ABM is
available at http://asianbondsonline.adb.org/documents/abm_sep_2013.pdf?src=newsletter
* Consumer
prices in Hong Kong, China rose 4.5% year-on-year (y-o-y) in August from 6.9%
in July. In Japan, consumer prices rose 0.9% y-o-y in August, the fastest pace
recorded since 2008, following a 0.7% increase in July. Singapore's all-item
consumer price index (CPI) edged up 2.0% y-o-y in August, the fourth
consecutive monthly increase. In Viet Nam, inflation moderated to 6.3% y-o-y in
September from 7.5% in August.
* Hong Kong,
China's exports fell 1.3% y-o-y in August following a 10.3% rise in July.
Imports also fell 0.3% in August from an 8.3% increase in July. The Republic of
Korea's current account surplus fell to US$5.7 billion in August from US$6.8
billion in July. Meanwhile, Singapore's manufacturing output increased 3.5%
y-o-y in August, up from the revised increase of 3.0% in July. In Viet Nam, the
trade deficit came in at US$300 million in September after posting a US$604
million surplus in August.
* In the
Republic of Korea for the month of August; department store sales improved 6.6%
y-o-y following a 2.1% decline in July.
S&P has affirmed its foreign currency (FCY) and LCY credit ratings
for the Republic of Korea at A+/A-1 and AA-/A-1+, respectively, with a stable
outlook for both long-term ratings.
* Malaysia
raised MYR2.5 billion from issuing a 30-year bond, the longest-ever maturity on
offer in Malaysia. The bond was priced
to yield 4.935%. Country Garden, one of the largest property developers in the
People's Republic of China (PRC), raised US$750 million via a 7.5-year
high-yield bond last week. The bond carries a yield of 7.25% and has three
callable options after 4 years. Bangkok Bank based in
Thailand raised US$1 billion from 5- and 10-year bonds (US$500 million
each) carrying coupon rates of 3.3% and 5.0%, respectively.
* In the
Republic of Korea, Korea Hydro & Nuclear Power raised US$500 million from
the sale of a 5-year bond at a coupon rate of 2.875%. Woori Bank raised US$500
million from the sale of a 5-year bond at a coupon rate of 2.875%, while GS
Caltex priced US$400 million of 5-year bonds carrying a 3.25% coupon.
* Government
bond yields fell last week for most tenors in the PRC, the Philippines, and
Viet Nam, and rose for most tenors in Hong Kong, China; Indonesia; Malaysia;
and Singapore. Yield movements were mixed in the Republic of Korea, and
Thailand. Yield spreads between 2- and
10- year maturities widened in the PRC; Hong Kong, China; Indonesia; Malaysia; the Philippines; and
Viet Nam, while spreads narrowed in other emerging East Asian markets.
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