AsianBondsOnline Newsletter (21 October 2013)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20131021.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 14 - 18 October 2013

Gross domestic product (GDP) of the People's Republic of China (PRC) rose 7.8% year-on-year (y-o-y) in 3Q13 from 7.5% in 2Q13. In the first 9 months of the year, GDP growth reached 7.7% y-o-y, exceeding the government's full-year target of 7.5%. Industrial production grew 9.6% y-o-y in the first 9 months of the year versus 9.3% in the first 6 months. For the month of September, industrial production rose 10.2% y-o-y, slightly lower than August's 10.4%. Finally, investment in fixed assets rose 20.2% y-o-y in the first 9 months of the year.

*     On 14 October, the Monetary Authority of Singapore (MAS) announced that it will maintain its policy of a modest and gradual appreciation of the Singapore dollar's nominal effective exchange rate (NEER) policy band. The slope of the policy band and the level at which it is centered were also maintained. The Bank of Thailand's Monetary Policy Committee decided on 16 October to maintain its policy rate at 2.50%.

*     The PRC's retail sales rose 12.9% in the first 9 months of the year. Singapore's non-oil domestic exports (NODX) declined 1.2% y-o-y in September, following a 6.8% contraction in the previous month, due to a decrease in electronic NODX that outweighed the expansion in non-electronic NODX. Personal remittances from overseas Filipinos rose 6.6% y-o-y in January-August to reach US$16 billion, driven by an increase in remittances from land-based overseas workers with contracts of 1 year or longer.

*     On a seasonally adjusted basis, Singapore's retail sales rose 3.6% month-on-month (m-o-m) in August compared with July's revised 5.7% decline. Excluding motor vehicles, retail sales were up 3.3% m-o-m.

*     In the Republic of Korea, the producer price index fell 1.8% y-o-y in September, compared with a 1.3% drop in August. The faster y-o-y decrease largely stemmed from manufacturing industry product prices, which recorded a 3.1% fall in September after posting a 2.5% decrease in the previous month.

*     The central banks and ministries of finance of Indonesia and the Republic of Korea agreed on 12 October to establish a bilateral KRW-IDR swap arrangement. The size of the swap arrangement ranges up to KRW10.7 trillion-IDR115 trillion, which is equivalent to US$10 billion, and its effective period is 3 years with a possible extension upon a joint agreement by the two parties.

*     Asset-backed securities (ABS) issuance in the Republic of Korea amounted to KRW11.5 trillion in 3Q13, down 3.4% y-o-y, based on Financial Supervisory Service (FSS) data. At end-September, the outstanding stock of ABS was valued at KRW141.7 trillion.

*     Last week, Korea Development Bank (KDB) issued KRW200 billion worth of 3-year bonds at a coupon rate of 3.09%. Mitr Phol Sugar Corporation in Thailand raised THB7.50 billion from a triple-tranche debenture sale last week. Specifically, the Thai sugar company sold THB3.5 billion of 3-year debentures at a coupon of 3.98%, THB2.15 billion of 5-year debentures at a 4.53% coupon, and THB1.85 billion of 7-year debentures at a 5.02% coupon.

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