AsianBondsOnline Newsletter (9 December 2013)

News Highlights - Week of 2 - 6 December 2013

Consumer price inflation in the People's Republic of China (PRC) moderated to 3.0% year-on-year (y-o-y) in November from 3.2% in October. Indonesia's consumer price inflation inched up to 8.4% y-o-y in November from 8.3% in October amid price hikes for electricity, processed food, and healthcare. In the Philippines, consumer price inflation accelerated to 3.3% y-o-y in November from 2.9% in October on the back of higher annual price increases for food and non-alcoholic beverages, housing, transport, and utilities. In Thailand, consumer price inflation rose to 1.9% y-o-y in November from 1.5% in October amid faster annual price increases for both food and non-food items.        

*     The Republic of Korea's real gross domestic product (GDP) growth stood at 1.1% quarter-on-quarter (q-o-q) and 3.3% y-o-y in 3Q13, based on preliminary estimates from The Bank of Korea. 

*     The PRC's trade surplus widened to US$33.8 billion in November from US$31.1 billion in October. Indonesia posted a trade surplus of US$42 million in October, a turnaround from a revised US$803 million trade deficit in September. Malaysia's trade surplus narrowed to MYR8.2 billion in October from MYR8.7 billion in September. Viet Nam's trade surplus narrowed to US$50 million in November from US$101 million in October. 

*     Singapore's Purchasing Managers Index (PMI) stood at 50.8 in November, down from its October level of 51.2. In Viet Nam, industrial production expanded 5.7% y-o-y in November, while retail sales grew 12.6% y-o-y in January-November.

*     Last week BCA Finance priced a IDR300 billion 3-year medium-term note (MTN) carrying a coupon rate of 8.2%. This was the first Indonesian corporate bond to be issued with a guarantee from the Credit Guarantee and Investment Facility (CGIF). Meanwhile, Thailand auctioned an inflation-linked bond last week worth THB5 billion. The 15-year bond carries a coupon rate of 1.25% with current average yield of 2.4%. 

*     Local currency (LCY) corporate bond issuance in the Republic of Korea soared 36.4% month-on-month (m-o-m) in October led by monthly increases in issuance of asset-backed securities, bank debentures, and bonds issued by non-bank financial companies. 

*     The BIS and Tier 1 capital ratios of bank holding companies in the Republic of Korea stood at 13.3% and 10.5%, respectively, at end-September, higher than the end-June ratios of 13.0% and 10.4%. 

*     Last week, Hong Kong Exchanges and Clearing Limited (HKEx) and Singapore Exchange (SGX) signed a memorandum of understanding, agreeing to cooperate in several areas of common interest, including promoting the internationalization of the renminbi. 

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