AsianBondsOnline Newsletter (11 November 2013)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20131111.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 28 October - 1 November 2013

Consumer price inflation in the People's Republic of China (PRC) rose slightly to 3.2% year-on-year (y-o-y) in October from 3.1% in September. The PRC's exports rose 5.6% y-o-y in October, recovering from September's 0.3% decline. PRC imports grew 7.6% y-o-y in October from 7.4% in September.  The trade surplus for the month of October was US$31.1 billion. Industrial production rose 10.3% y-o-y in October, higher than September's 10.2% increase. Retail sales grew 13% year-to-date (YTD) in October to CNY19.0 trillion from 12.9% in the first nine months of the year. 

*     Consumer price inflation in the Philippines rose marginally by 2.9% y-o-y in October, following a 2.7% gain in September. Meanwhile, in its Monetary Policy Committee meeting on 7 November, Bank Negara Malaysia (BNM) decided to keep its policy rate steady at 3.0%.

*     Indonesia's gross domestic product (GDP) growth rate fell to 5.6% y-o-y in 3Q13, from 5.8% in 2Q13, the slowest pace of growth in Indonesia since 2009. Domestic consumption continued to drive the economy, rising 5.5% amid high inflation as a result of the fuel price hike in June. Government consumption climbed 8.8% in the same period. Investment moderated to 4.5% y-o-y in 3Q13 while exports grew 5.3%. On a quarter-on-quarter (q-o-q) basis, the Indonesian economy grew 3.0%. The Purchasing Managers Index (PMI) in Singapore rose to 51.2 in October.

*     Malaysia's exports surged for the fourth consecutive month, rising 5.6% y-o-y to MYR63.3 billion in September from 13.0% in August. Total imports increased 2.8% y-o-y to MYR54.6 billion in September.  As a result, the trade surplus amounted to MYR8.7 billion in September- the highest since November 2012.

*     Net foreign investment in the Republic of Korea's local currency (LCY) bond market was negative for the third consecutive month in October, with foreign investors' net bond outflows amounting to KRW2.5 trillion for the month, based on Financial Supervisory Service (FSS) data.

*     Bangko Sentral ng Pilipinas (BSP) released last week  additional amendments to its manual of regulations on foreign exchange transactions including, among others, the following (i) allowing prepayment of BSP-registered short-term loans subject to documentary requirements; and (ii) BSP shall no longer require approval of private sector loans sourced from FCDUs (foreign currency deposit unit)/EFCDUs (expanded FCDU) that are directly funded from, or collateralized by, offshore loans or deposits of the lending banks.  

*     Last week, Hana Bank in the Republic of Korea priced US$300 million worth of 3-year floating-rate bonds. The bonds were priced at 112.5 basis points (bps) above LIBOR. In Thailand, Bangkok Expressway issued THB1 billion worth of 5-year bonds at a coupon rate of 4.7%.The bond was rated A by TRIS Rating.

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