AsianBondsOnline Newsletter (28 October 2013)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20131028.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 21 - 25 October 2013

Hong Kong, China's consumer prices rose 4.6% year-on-year (y-o-y) in September, a slight uptick from the 4.5% increase in August. In Japan, consumer prices rose for the fourth consecutive month in September, with the y-o-y inflation rate leveling off at 1.1% after it stood at 0.9% in August. In Malaysia, consumer price inflation accelerated to 2.6% y-o-y in September -the highest in 20 months- from 1.9% in August. Consumer price inflation in Singapore eased to 1.6% y-o-y in September from 2.0% in August. In Viet Nam, consumer price inflation moderated to 5.9% y-o-y in October from 6.3% in September and 7.5% in August.

*     The Monetary Board of Bangko Sentral ng Pilipinas (BSP) decided on 24 October to maintain ithe overnight borrowing rate (reverse repurchase facility) at 3.50% and the overnight lending rate (repurchase facility) at 5.50%.

*     The Republic of Korea's real gross domestic product (GDP) growth accelerated to 3.3% y-o-y in 3Q13 from 2.3% in 2Q13, based on advance estimates of The Bank of Korea released last week. Industrial production growth in Singapore accelerated to 9.3% y-o-y in September from 4.0% in August. The Bank of Thailand revised downward its GDP growth forecasts for 2013 and 2014 to 3.7% (from 4.2%) and 4.8% (from 5.0%), respectively. 

*     Hong Kong, China's exports and imports of goods grew 1.5% and 0.4% y-o-y, respectively, in September, an improvement over y-o-y declines of 1.3% and 0.2% in August. Japan's merchandise trade deficit widened to JPY932.1 billion in September from JPY568.2 billion in the same month last year.  The Philippine trade deficit in goods narrowed to US$961 million in August from US$1.4 billion in the same month in 2012.

*     China Overseas Finance raised US$1.5 billion from the sale of 5-, 10-, and 30-year bonds valued at US$500 million each and offering coupon rates of 3.375%, 5.375%, and 6.375%, respectively. Haitong Securities priced US$900 million worth of 5-year bonds carrying a coupon of 3.95%. The Aluminum Corporation of China issued US$350 million worth of perpetual bonds at a coupon rate of 6.625%. SK Broadband in the Republic of Korea priced US$300 million of 5-year bonds at a coupon rate of 2.875% last week.

*     The Bank of Korea and Bank Negara Malaysia announced on 20 October the establishment of a 3-year KRW-MYR swap arrangement with a size of up to KRW5 trillion-MYR15 billion. On 22 October, the People's Republic of China (PRC) and Singapore agreed on initiatives to strengthen cooperation on financial sector development and regulation. One of these initiatives calls for the PRC to extend its Renminbi Qualified Foreign Institutional Investor (RQFII) program to Singapore, with an aggregate quota of CNY50 billion.  

*     Malaysia announced last week its 2014 budget, in which it covers economic activity, fiscal management, human capital, and urban and rural development. One of the highlights in the budget is that the Securities Commission will introduce the "Framework of Socially Responsible Sukuk Instrument" that aims to finance "sustainable and responsible" investments.

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