AsianBondsOnline Newsletter (18 November 2013)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20131118.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 11 - 15 November 2013

Bank Indonesia's (BI) Board of Governors decided to raise BI's benchmark interest rate by 25 basis points (bps) to 7.5% at its meeting on 12 November. BI also raised the lending facility rate and deposit facility rate by 25 bps each to 7.50% and 5.75%, respectively. In making its decisions, BI took note of the persistently large current account deficit amid concerns of widespread global uncertainty. Meanwhile, The Bank of Korea's Monetary Policy Committee decided on 14 November to maintain the base rate at 2.50%.

*     Hong Kong, China's GDP grew 2.9% year-on-year (y-o-y) in 3Q13.  Real gross domestic product (GDP) growth in Japan increased 0.5% quarter-on-quarter (q-o-q) in 3Q13.

*     Malaysia's economy recorded a y-o-y growth rate of 5% in 3Q13- the fastest pace in three quarters-from a revised 4.4% in 2Q13 driven by recovery of exports and strong domestic demand. Industrial production growth in Malaysia eased to 1.0% y-o-y in September  due to a fall in mining output. On a seasonally adjusted basis, Singapore's retail sales increased 0.5% month-on-month (m-o-m) in September.

*     Indonesia's current account deficit narrowed to US$8.4 billion (equivalent to 3.8% of GDP) in 3Q13. Japan posted a current account surplus of JPY587 billion in September, up from the JPY162 billion posted in August. Malaysia's current account surplus widened to MYR9.8 billion in 3Q13 from MYR2.6 billion in the previous quarter.  In the Philippines, merchandise exports rose 4.9% y-o-y in September to US$5 billion. Personal remittances from overseas Filipinos rose 6.6% y-o-y January-September to reach US$18 billion,

*     In the Republic of Korea, domestic banks' capital adequacy ratio under the Bank for International Settlements Basel II standards climbed to 14.25% at-end September from 13.87% at end-June.

*     On 12 November, the National Assembly of Vietnam (NA) approved the 2014 economic indicators for the 2014 budget, with a state budget deficit of VND224 trillion or 5.3% of GDP. The largest portion of the state budget was allocated for development investments and debt payments.

*     China Development Bank (CDB) last week said it plans to issue an exchange-listed bond.  The bond listing, if approved, will be the first exchange-listed bond from a bank.  The China Banking Regulatory Commission and China Securities Regulatory Commission  announced  on 8 November that banks will be allowed to issue bonds on the exchange. However, they said that the rules are meant to allow banks to issue bonds to boost regulatory capital.

*     The Industrial and Commercial Bank of China issued a CNH1.3 billion bond last week with a 3-year maturity and a coupon of 3.35%, as well as a CNH700 million bond with a 5-year maturity and a  coupon of 3.75%. Singapore's United Overseas Bank priced a SGD500 million Tier 1 perpetual issue to yield 4.75% last week. Vietnam Asset Management Company issued zero interest rate 5-year special bonds for Saigon-Hanoi Commercial Joint Stock Bank  with a total value of VND30.4 billion.

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