AsianBondsOnline Newsletter (6 January 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140106.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

******************************************************************************

News Highlights - Week of 30 December 2013 - 3 January 2014

Consumer price inflation in Indonesia rose marginally to 8.38% year-on-year (y-o-y) in December from 8.37% in November due mainly to hikes in food and transportation costs during the holiday. Meanwhile, in the Republic of Korea consumer price inflation stood at 1.1% y-o-y in December, down slightly from the revised 1.2% inflation recorded in November. In Thailand, consumer price inflation moderated to 1.7% y-o-y in December from 1.9% in November on the back of lower y-o-y hikes in prices for food and non-alcoholic beverages.

*     Hong Kong, China's exports rose 5.8% y-o-y in November to HKD325.5 billion following 8.8% growth in October. Imports also increased 5.2% y-o-y to HKD370.1 billion following 6.3% growth in October. As a result, Hong Kong, China reported a trade deficit of HKD44.6 billion for November. Indonesia reported a trade surplus for the second consecutive month in November at US$776.8 million, up significantly from a revised trade surplus of US$24.3 million a month earlier. The Republic of Korea's current account surplus narrowed to US$6.0 billion in November from US$9.5 billion in October. In full-year 2013, the Republic of Korea's merchandise trade surplus rose to a record-high US$44.2 billion, as merchandise exports climbed 2.2% to US$559.7 billion and merchandise imports fell 0.8% to US$515.5 billion

*     Singapore's real gross domestic product (GDP) expanded 4.4% y-o-y in 4Q13 based on advance estimates from the Ministry of Trade and Industry. However, on a quarter-on-quarter (q-o-q) seasonally adjusted annualized basis, the Singaporean economy contracted 2.7% in 4Q13.

*     The People's Republic of China's (PRC) manufacturing Purchasing Managers Index (PMI) fell to a 4-month low of 51.0 in December from 51.4 in November. Moreover, non-manufacturing PMI also fell for the second straight month in December-to 54.6 from 56.0 in November-due to a slowdown in the construction and services sectors. In the Republic of Korea, manufacturing production contracted 1.3% y-o-y and 0.1% month-on-month (m-o-m) in November, a reversal from y-o-y and m-o-m expansion in October. Hong Kong, China's retail sales growth accelerated to 8.5% y-o-y in November from 6.3% in October.

*     As part of efforts to deepen Indonesia's domestic foreign exchange market, Bank Indonesia announced new regulations to expand currency swap facilities for hedging transactions last week. The new regulations, which will take effect on 3 February, aim to minimize exchange rate risks and increase investment activities in Indonesia.

*     The PRC's consolidated public debt reached CNY30.3 trillion in June 2013, as reported by the National Audit Office. By category, direct government debt (including local governments) reached CNY20.7 trillion, credit guarantees totaled CNY2.93 trillion, and contingent liabilities amounted to CNY6.65 trillion.

*     Shanghai Chengtou last week issued a US$200 million 3-year floating rate bond. The bond was priced at a 300-basis-point spread over the 6-month LIBOR rate. China Development Bank (CDB) issued CNY8 billion worth of 2-year bonds at 5.8% and CNY4 billion of 5-year bonds at 5.84% on the Shanghai Stock Exchange. The bonds are the first exchange-trade bonds issued by a bank.

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

******************************************************************************

Tell Us What You Think

For comments and suggestions on our website, please contact us at asianbonds_feedback@adb.org