AsianBondsOnline Newsletter (23 June 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140623.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 16 - 20 June 2014

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) decided to keep its key policy rates?the overnight borrowing and lending rates?steady at 3.50% and 5.50%, respectively. The reverse repurchase rate and repurchase rate were also kept steady. However, the Special Deposit Account (SDA) facility interest rate was raised by 25 basis points (bps) to 2.25% across all tenors, effective immediately. The Bank of Thailand’s Monetary Policy Committee decided on 18 June to keep the policy rate steady at 2.00%. Meanwhile, the State Bank of Viet Nam (SBV) devalued the Vietnamese dong by 1% against the United States (US) dollar for the first time in 12 months in a move to boost exports. SBV re-set its exchange rate for the US currency to VND21,246 per dollar from VND21,036.

*     Consumer price inflation in Malaysia slowed to 3.2% year-on-year (y-o-y) in May from 3.4% in April led by price increases in food and housing costs. Japan's merchandise trade deficit narrowed to JPY909.0 billion in May from JPY991.3 billion in the same month last year. Singapore’s non-oil domestic exports (NODX) contracted 6.6% y-o-y in May, following a 0.9% increase in April, due to lower exports of both electronic and non-electronic products.

*     Last week, the People’s Bank of China assigned China Construction Bank’s London branch and Bank of China's Frankfurt branch as clearings bank for offshore renminbi payments. Direct trading between the renminbi and the sterling was also authorized.

*     In the Philippines, personal remittances from overseas Filipinos rose 5.2% y-o-y in April to reach US$2.1 billion. Personal remittances to the Philippines in the first 4 months of the year totaled US$8.2 billion, up 6.2% y-o-y. 

*     The Producer Price Index (PPI) for the Republic of Korea remained unchanged in May on both a month-on-month (m-o-m) and year-on-year (y-o-y) basis. 

*     21Vianet Group last week issued a CNH2.0 billion 3-year bond priced to yield 6.875%. At the same time, the company launched a tender offer to buy back its existing CNH bond that matures in 2016. eSun Holdings, a Hong Kong, China media company, also sold a CNH650 million 4-year bond at a coupon rate of 8.375%. 

*     In Hong Kong, China, Wheelock and Company priced a US$500 million 3-year bond at a coupon rate of 4.75%, while Cheung Kong Infrastructure sold a US$300 million 3-year bond with a floating rate coupon. The coupon rate was set at the 3-month LIBOR plus 70 bps. The Noble Group issued a US$350 million perpetual bond at a coupon rate of 6.0%. In Thailand, Thanachart Bank issued THB13.0 billion worth of Basel III-compliant Tier 2 debenture with a tenor of 10.5 years and a coupon rate of 6.0% last week. 

*     Government bond yields fell last week for all tenors in the Republic of Korea and for most tenors in Hong Kong, China, Japan, and Malaysia. Yields rose for most tenors in the Philippines and for most tenors in Indonesia and Philippines-following BSP’s hike of SDA rates.  Yield movements fell in the long-end in Thailand, Singapore, and rose at the longer end and for the PRC. Yield spreads between 2- and 10-year maturities fell in all emerging East Asian markets except Hong Kong, China; Indonesia; and Viet Nam.

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