AsianBondsOnline Newsletter (2 December 2013)

News Highlights - Week of 25 - 29 November 2013

In Japan, consumer price inflation remained unchanged in October at 1.1% year-on-year (y-o-y). In the Republic of Korea, consumer price inflation rose to 0.9% y-o-y in November from 0.7% in October. In Singapore, consumer price inflation accelerated to 2.0% y-o-y in October from 1.6% in September. In Viet Nam, consumer price inflation eased to 5.8% y-o-y in November-the slowest pace since September 2012-from 5.9% in October.

*     The Bank of Thailand's Monetary Policy Committee on 27 November  reduced its policy rate by 25 basis points (bps) to 2.25%.

*     In the Republic of Korea, the current account surplus widened 45.4% m-o-m to a record-high US$9.5 billion in October, while the merchandise trade surplus climbed 24.0% m-o-m to US$7.0 billion for the month. Meanwhile, Thailand recorded a surplus in its current account amounting to US$375.7 million in October after registering a deficit of US$534.4 million in September.

*     Exports from Hong Kong, China rose 8.8% y-o-y in October to HKD323.1 billion, following a 1.5% increase in September. Imports also rose 6.3% y-o-y in October, after a slight 0.4% gain in September, to HKD361.2 billion. As a result, Hong Kong, China registered a trade deficit of HKD38.1 billion in October. In the Philippines, the trade deficit widened to US$665 million in September from US$516 million a year earlier. The Philippines' real gross domestic product (GDP) expanded 7.0% y-o-y in 3Q13, following revised 7.6% growth in 2Q13.

*     Retail sales in Hong Kong, China rose 6.3% y-o-y in October following a 5.0% jump in September. In the People's Republic of China (PRC), the manufacturing Purchasing Managers' Index (PMI) was 51.4 in November, unchanged from October. In Japan, industrial production increased 0.5% month-on-month (m-o-m) and 4.7% y-o-y in October. Industrial production in the Republic of Korea rebounded in October as the industrial production index expanded 2.0% m-o-m and 3.0% y-o-y for the month. In Thailand, manufacturing dropped 4.0% y-o-y in October, following a 2.9% y-o-y decrease in September. 

*     Standard & Poor's (S&P) downgraded its rating outlook for four Malaysian banks last week-CIMB Group Holdings Bhd., AmBank (M) Bhd., RHB Bank Bhd., and RHB Investment Bank Bhd.-to negative from stable on rising economic risk. S&P also lowered its long-term Association of Southeast Asian Nations (ASEAN) regional scale rating for CIMB Group to axBBB+ from axA- and affirmed the axA-2 short-term rating.

*     The Indonesian government raised US$190 million from its first sale of US$-denominated bonds targeted for the domestic market.The bonds carry a coupon of 3.5% and were priced to yield 3.51671%.  Last week, Road King Infrastructure priced a CNH2.2 billion 3-year bond at a yield of 6.0%, and Vanke Real Estate also priced a CNH1 billion 5-year bond at yield of 4.5%.

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