AsianBondsOnline Newsletter (24 February 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140224.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 17 - 21 February 2014

Consumer price inflation in Malaysia accelerated to 3.4% year-on-year (y-o-y) in January from 3.2% in December amid higher price hikes in food, transportation, and housing-related costs. Between December and January, the consumer price index rose 0.6%. In Hong Kong, China, overall consumer prices rose 4.6% y-o-y in January following a 4.3% increase in December. In the Republic of Korea, producer prices fell 0.3% y-o-y in January, after recording a 0.4% drop in December, but still rose 0.2% month-on-month (m-o-m).   

*     Singapore's real gross domestic product (GDP) growth moderated to 5.5% y-o-y in 4Q13 from 5.8% in 3Q13, while accelerating to 4.1% in full-year 2013 from 1.9% in 2012. The Ministry of Trade and Industry has maintained its growth forecast for 2014 at 2.0%-4.0%.  

*     The Bank of Japan's Policy Board decided on 18 February to (i) continue its money market operations that increase the monetary base at an annual pace of JPY60 trillion-JPY70 trillion, (ii) maintain its asset purchase program, and (iii) extend and expand the scale of its Stimulating Bank Lending Facility and Growth-Supporting Funding Facility.  

*     Japan's merchandise trade deficit widened to JPY2.8 trillion in January from JPY1.6 trillion a year earlier as import growth of 25.0% y-o-y outpaced export growth of 9.5%. Personal remittances from overseas Filipinos into the Philippines climbed 12.5% y-o-y to US$2.4 billion in December and rose 7.6% to US$25.1 billion for the full-year 2013. 

*     The Republic of Korea's external debt position rose 1.8% y-o-y to US$416.6 billion at the end of 2013. The foreign currency (FCY) borrowings of domestic banks in the Republic of Korea climbed to US$123.9 billion at end-2013 from US$116.9 billion at end-2012.

*     China Resources Land priced US$700 million worth of 10-year bonds at a coupon rate of 6% and US$400 million worth of 5-year bonds at a coupon rate of 4.375%. New World Development based in Hong Kong, China priced US$750 million worth of 7-year bonds carrying a coupon rate of 5.25% last week. Hong Kong, China issued HKD3 billion worth of 5-year government bonds at a coupon rate of 1.47% last week.

*     Last week, Shui On Development priced a CNH2.5 billion 3-year bond at a coupon rate of 6.875% while China Citic Bank priced a CNH1.5 billion 3-year bond at a 4.125% coupon.

*     The China Insurance Regulatory Commission (CIRC) last week issued new regulations easing investment restrictions for insurance companies, including removing limits on fixed-income investment holdings. The China Banking Regulatory Commission (CBRC) released new banking regulations last week requiring banks to maintain a liquidity coverage ratio of 100% by 2018. The current ratio requirement is set at 60% and will increase by 10 percentage points every year until 2018. 

*     The Bank of Korea and Reserve Bank of Australia signed a bilateral local currency swap agreement on 23 February for the exchange of local currencies between the two central banks of up to KRW5 trillion/AUD5 billion. Moody's Investors Service announced last week that it has affirmed Thailand's government bond rating at Baa1 with a stable outlook.

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

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